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Could Co-Ops Help Solve Our College Grad Employment Crisis?

Could Co-Ops Help Solve Our College Grad Employment Crisis?
Reuters

Before the Class of 2012 stepped off the dais and shed their caps and gowns, their prospects for a seamless transition into the American workforce looked poor. According to the Economic Policy Institute, the unemployment rate for recent college graduates (ages 21-24) hovered around 10 percent for the last year, while the underemployment rate (the proportion of grads that have either suspended their job search or aren’t working up to their capacity) was nearly double that at 19 percent.

Many 2012 grads are joining the existing ranks of jobless from the classes of 2009, 2010, and 2011. For those who do find gainful employment, their real wages are some 5 percent less than their peers who graduated in 2000.

The employment woes of these young adults have not been lost on college admissions consultants. For the first time, The Princeton Review has included a list of rankings dedicated to "Best Career Services" in its 2013 annual big book of leading U.S. colleges. Topping out this list, which is based on thousands of student surveys, is Boston’s Northeastern University. In particular, the school stands out for its strong embrace of cooperative (or "co-op") education.

Northeastern’s co-op program, which is one of the oldest and largest in the country, allows students, beginning in their sophomore year, to alternate semesters of academic study with semesters of full-time employment in fields relevant to their major. Roughly 100 U.S. colleges have co-op programs, including a number of technical schools, but only a few, like Northeastern, feature them prominently throughout their curricula. Other schools that do so include the University of Cincinnati, Drexel University, and the Rochester Institute of Technology.

While most Northeastern students pursue co-op work in Boston, the school has opportunities with companies, including Fortune 500 firms and start-ups, in over thirty states and roughly 60 countries. Students can pursue up to three co-op semesters if they’re on the school’s five-year track.

In this video, economics major Georgiy Kupovykh talks about his co-op experience at Brightcove, a Cambridge-based firm that produces an online video platform.

The ultimate question is, of course: what are the particular merits of co-op education? A 2007 report from the Memorial University of Newfoundland cites research showing that co-op students benefited from higher starting salaries and "significantly more responsible jobs" after school. Employers also benefited through better screening of new staff, hiring passionate employees, and increased cost savings. The report also indicates that co-op students believe their programs were both "positive and beneficial."

A more limited study from Ohio State University, which compares the industry success of students from co-op programs at automotive technical schools with those from traditional auto tech programs, found higher rates of co-op grads employed in jobs related to their college program than traditional counterparts, as well as higher salaries.

For its part, Northeastern reports that over 90 percent of its 2010 graduates were either employed or in grad school within 9 months of graduation, and that more than half of these grads received job offers from a previous co-op employer of theirs. But more detailed research would certainly be helpful in making these assessments. General data on job-placement rates for college grads is often "fuzzy." A lack of standards means that schools’ surveys can vary widely and often offer highly skewed portraits of employment prospects. As noted by the Chronicle of Higher Education, a 98 percent job placement rate may actually account for only 22 percent of the recent graduating class, and those jobs may include the underemployed and those in jobs that don’t require a college diploma.

In contrast, an alternative real-world job experience that seems to be garnering an increasing amount of disdain from current and former college students is the internship. Unlike co-ops, many internships are unpaid and often involve unskilled grunt work that does little to prepare for future paid work.

By U.S. fair labor standards, an unpaid intern can’t substitute for regular employees, and companies can’t derive an "immediate advantage" from intern labor. However, analysts say the enforcement of these standards is difficult and that there is little to prevent abuse.

Many interns are of course aware of this reality, but take the jobs because the unpaid internship is at least a foot-in-the-door and prevents what would otherwise be a dreaded resume gap.

"I knew this [internship] was going to be normal job and I wasn’t going to be paid for it," a particularly disgruntled former intern told the New York Times. "But it started kicking around in my mind how unjust this was. It’s become part of this unregulated labor market," he said.

Co-ops, in contrast, are typically a joint undertaking between the school and the employer and are, therefore, closely monitored and evaluated. According to participants, the full-time positions provide students with greater responsibility and offer a real sense of progression. Perhaps equally important, co-ops give employers a more structured opportunity to recruit at an early age, and identify their staffing needs—perhaps even creating a new job in the process.

"What Georgiy did in his role as a Northeastern co-op student," said Brightcove’s director of recruiting, Elaine Pappas, "was to demonstrate for us that we had a legitimate business need to, now, create a position that is going to be for someone who is two or three years out to school."

This post originally appeared on the Council on Foreign Relations' Renewing America blog.

Jonathan Masters writes on issues related to national security and civil liberties, and contributes to CFR's Renewing America blog. His work has appeared on the Huffington Post, The Atlantic, and CNN's Global Public Square blog. All posts »

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