Work and adjustment to work are vital components of a smoothly functioning society. Currently, a growing imbalance between the collective level of educational attainment of American workers and the skill/knowledge requirements of existing jobs has created the potential for widespread social and economic problems in this country. Overeducation leads to job dissatisfaction, decreasing productivity, and, ultimately, to a crisis in public confidence. To counter the threat the current labor situation poses, several actions by the government and private sector may be appropriate. Business and educational organizations must adopt human relations policies responsive to the expectations of a well-educated labor force. The private sector should implement job rotation and job enrichment strategies, and establish participatory management. The government, which employs a high percentage of college graduates, should increase its total personnel. Alternatively, the government could curtail the supply of college graduates entering the labor force by raising college costs. Regardless of strategy employed, attention to the problems inherent in overeducation must be incorporated into public policy formation. (LP)