Some 500,000 students have just graduated from Canada's postsecondary education system, and the great majority will be hoping to find a decent job and to embark upon a meaningful career.

Unfortunately, the employment prospects for many graduates are pretty dismal, for reasons that deserve serious reflection.

Not only are unemployment and underemployment for young people currently at high levels, there is a growing structural mismatch between educational achievement and the jobs that graduates are likely to find.

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Many pundits argue that students are essentially the authors of their own fate. Some fields of study offer great prospects, and others don't. Little sympathy is expressed for those who study to learn and pursue a passion, rather than carefully choose a vocational or professional course that leads directly to a good job.

But the problem is much deeper than the individual choices made by students.

As University of Massachusetts economist Nancy Folbre recently wrote in the New York Times, we no longer live in "the Golden Age of Human Capital." The supply of postsecondary graduates now greatly exceeds employer demand for their education and skills across a wide range of occupations.

When globalization and technological change hollowed out the ranks of middle-income blue-collar workers, young people were urged to invest in postsecondary education. That strategy generally paid off in the 1980s.

But now the same forces are affecting even highly educated professionals. For example, legal research is now technology rather than labour intensive, and work such as interpretation of medical images is being "offshored" to very highly educated workers in developing countries.

Here in Canada, this week's report on job quality by Benjamin Tal of CIBC Economics shows that, since the late 1980s, the number of full-time highly paid jobs (defined as paying a scant 15 per cent above the median hourly wage) has increased by just 5 per cent, while there has been a 40-per-cent increase in both low- and middle-wage jobs.

Intense competition for the stagnant pool of good jobs normally requiring high levels of education has kept a lid on wages for university graduates, while pushing many of them into jobs that do not normally require a postsecondary education.

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A Statistics Canada study recently reported that between 2000 and 2011, the wages of university graduates rose even more slowly than those of less-educated workers. The pay premium for a university graduate compared with a non-graduate has fallen to 41 per cent from 47 per cent for men, and to 55 per cent from 61 per cent for women. The premium has eroded most for younger workers.

Students know that a university education today is no guarantee of a good job and only offers a leg up in a brutally competitive job market. That is why many now combine a degree with a vocational qualification from a college, and that is why there are vastly more applications than there are places in postgraduate programs that seem most likely to offer a stepping stone to a career.

Students deserve informed advice and direction on how their educational choices relate to the job market, as well as financial support to ensure that they do not graduate with high levels of debt. The argument that high private returns from education justify high tuition fees no longer holds up for many graduates.

Beyond that, we should remind ourselves that a university education is valuable because it expands individual capabilities and has important non-economic benefits for democratic societies. The question of whether we want high levels of participation in a university education should not, Prof. Folbre argues, be reduced to economic returns to investment in "human capital."

Demand for highly educated workers in Canada is being dampened by ongoing cuts to public services, the continuing impact of the manufacturing crisis that affects many white-collar workers, overreliance on resource extraction as opposed to higher-value-added activities, and our general failure to foster the growth of a more innovative and knowledge-based economy.

The central issue we need to confront is that our economy, as currently organized, is not generating anywhere near enough good jobs that require a high level of education and skills. That problem is not going to be solved by lecturing students on the need to make better individual choices.

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Andrew Jackson is the Packer Professor of Social Justice at York University and senior policy adviser to the Broadbent Institute.