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6 May, 2013 22:41

Student debt, job market creating 'generation of wage slavery'

Student debt, job market creating 'generation of wage slavery'

As the US economic forecast moves from fragile to cautiously optimistic, most young people are still searching for a paycheck. Over half of the Americans who graduated college in 2011 and 2012 are either unemployed or overqualified for their current job.

Poll results released last week reveal that 41 per cent of US college graduates from the past two years are working in positions that do not require a degree, according to a survey of 1,005 former students from consulting firm Accenture. Another 11 per cent of respondents said they are unemployed, seven per cent of which have not had a job since graduation. 

Almost two-thirds of those polled said they expected to need additional training before entering a career, while nearly fifty per cent believed their studies did not equip them for the working world.  

National unemployment remains stagnant at 7.6 per cent and graduates of 2011 and 2012 will soon be forced to compete with the graduating class of 2013 in the job hunt. 

Of those polled, 42 per cent expected to enroll in graduate school. Only 18 per cent of the class of 2013 thought finishing graduate school would be necessary. 

While useless school curricula and scarce job opportunities are the most obvious targets of blame for society’s disenfranchised youth, the cost of education and its corollary, student debt, have crippled an entire generation. Americans now owe more money on student loans than on credit cards, according to the Federal Reserve Bank of New York, as quoted by USA Today.

Reuters / Jim Young

Recent research has showed that students are borrowing twice as much as they did ten years ago (after adjusting for inflation). Lawmakers in Congress have given lenders, including the government, unprecedented collection power far more powerful than mortgage brokers and credit card companies. And student debt is one of the only kinds that can’t be unloaded in bankruptcy. 

Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married, and having children,” Mark Kantrowitz, publisher of FinAid.org, told USA Today. 

That assessment, echoed by other experts, has financial forecasters wondering if the US economy’s slow recovery might only be temporary. Nick Pardini, an investor and financial blogger, told the paper the current climate is “going to create a generation of wage slavery.”  

Two-thirds of 2011’s college graduates completed their higher education owing money, with debt ranging up to an average $26,600 per person – a five per cent increase from the year before, according to the Associated Press.

Still, college grads are in far superior shape than those without a degree, as 19.1 per cent of people with only a high school diploma were unemployed in 2011. 

In these tough times, a college degree is still your best bet for getting a job and decent pay,” said Lauren Asher, president of the Institute for College Access and Success. “But, as debt levels rise, fear of loans can prevent students from getting the education they need to succeed.” 

Despite the gloomy outlook for young people there is cause for hope overall. The US economy added 165,000 jobs in April, a boost from the monthly average of 138,000 over the six months prior. The growth could indicate that the slashed federal budget “does not mean recession,” John Silvia, a chief economist at Wells Fargo, told the Associated Press.