Unemployment Rate High: The Worst Time to Graduate from College
With laid-off investment bankers snapping up jobs in retail and MBAs barely worth the paper they’re printed on, college seniors are approaching graduation day with a mixture of dread and resignation.
As a recent graduate from a university rated “Most Selective” by US News & World Report, Tyler was understandably disappointed when he landed in a cubicle-drone job that barely pays minimum wage—that is, until he was laid off and ended up substitute teaching for even less.
With a double-major in Spanish and psychology and a strong GPA, he thought for sure he was on the fast track to a career in event planning, a field he'd secured a summer internship in, palling around with the stars of CNBC. But with corporations scaling back their parties and conventions (lest they be associated with seamy AIG-style taxpayer-funded beach junkets), Tyler found himself working in loss-prevention for Brookstone for $10.50 an hour. Then he was laid off. Now he’s substitute teaching for $10 an hour.
"I'm applying for jobs now that I wouldn't have even considered when I started this thing," he says.
Layoffs have flooded the job market with grizzled veterans more motivated than your average 22 year old with nothing but a beer-and-Bisquick habit to support.
Stories like this are permeating college campuses like a bad smell. Today, ulcers caused by downsizing aren’t reserved for middle-aged corporate suits two decades into their careers. The sudden collapse of the financial sector has devalued MBAs that were still prized only six months ago, and Ivy League grads with heaps of student loans are fighting over jeans-folding gigs at Forever 21. On campus, my fellow students and I absorb these stories with dread. And those of us closest to graduation – the ones who would normally be enjoying the doldrums of senioritis—are sitting on pins as graduation day approaches and the job market shrivels before our eyes.
The race for internships has grown more competitive as sophomores, and even freshmen, realize that they’ll need every possible leg up in a job market that most college students don't believe will be much better by the time they graduate. For upperclassmen, the "seek out the shelter of grad school" option also seems poised to be less popular than it has been in past recessions, as soaring debt loads create a desire to get to work – any work – and start digging out of the hole as soon as possible.
Still, college students aren't hunkering down too much: As I write this on a Saturday, my dorm room is vibrating with techno music from next door, and the maintenance people will still have steady work hauling out beer cans on Monday morning. Keystone Light, of course, but college students have always opted for the most affordable path to inebriation. College is still a good time, but the job market is making life miserable for students once they face the realities of a post-graduation world.
Layoffs near the top have flooded the job market with stiff competition for recent grads: grizzled veterans with decades of experience and connections—not to mention families to feed and mortgages to pay—are understandably more motivated than your average 22 year old with nothing but a beer-and-Bisquick habit to support. And it’s not just Wall Street swimming with the accomplished unemployed. In February, 651,000 jobs disappeared, bringing the national unemployment total to around 12.5 million. Many of these unemployed are now competing with younger people for jobs that both would have thought beneath them not so long ago.
First-time claims for unemployment benefits recently rose 5.7 percent to 667,000—the highest such figure since 1982. But many recent college graduates who can't find jobs don't qualify because they weren't employed to begin with. This can leave them far worse off than the laid-off, with no safety to fall into.
For their part, colleges and their career counseling offices are trying to ramp up their job placement efforts. But if people aren’t hiring, it all amounts to not much more than a pep talk. New York University offered a seminar called "Recession-Proof Your Job Search” that included tips like—not even kidding—try to work in a recession-proof industry like alcohol. The University of Nebraska gives students information on jobs working for the federal government, which continues to grow at a torrid pace.
Lindsey Pollak, the author of Getting from College to Career: 90 Things to Do Before You Join the Real World, says that many companies are taking advantage of a desperate workforce, making "temporary to permanent" job offers and then eliminating people a few hours before they would have become full-time.
Pollak says that most college students aren't aware of just how hard the job market is right now. "If you go out looking for a job saying, 'I only want to work at one of the top-five investment banks,’ that might not happen. It doesn’t mean you won't end up at a company like Goldman Sachs, but you might have to start somewhere else and not unnecessarily limit yourself."
The most important point that Pollak makes is if the best job a graduate can find right now is working as a barista or office clerk, it’s not a disaster. "I've spoken to many recruiters and no one is going to fault you for what you need to do to get through this," she says.
For other students, the sinking economy is increasing interest in jobs whose low-pay, high-karma profile used to make them less sexy than higher-paying jobs in fields like investment banking. Apparently it’s easy to be altruistic when no one else is offering you a job, and nonprofits are reporting large increases in applications. Teach for America has seen its applicant pool rise by 50 percent over 2007 and the Peace Corps is up 16 percent.
Is this a new wave of Obama-inspired community service, or just would-be investment bankers looking to take a few years to build their resumes, earn a small but steady paycheck and continue with their more lucrative plans once the Dow is back over 10000? Probably a combination of both.
Joy, a University of Massachusetts sophomore, came to college with a passion for English but opted to major in marketing instead, mindful of the weak job market for English majors. Now marketing majors aren't in demand either, and she's wondering whether her career-minded major choice will backfire. Graduating business majors polled by BusinessWeek magazine universally expressed no regrets about their choice of a major and some said that their backgrounds in finance gave them an ability to understand the current crisis that others don't. (Though if that's true, I’m not clear on why business backgrounds didn’t save us from this recession.)
There’s one potential upside: If college grads seize this opportunity to hone their survival skills, they could develop a sense of resourcefulness that they wouldn't have acquired coming of age in a bull market. Skills such as how to scheme overtime hours from a tight schedule, how to network, and how to pluck gigs from a picked-over job market can only help them once things get better.
For now, though, enrollment at bartending schools is up, as college students gravitate toward one skill they’ve always been able to rely on: knowing how to make a stiff drink.
Zac Bissonnette is an editor with AOL Money & Finance and its new personal finance site WalletPOP.com. He is a sophomore at the University of Massachusetts Amherst.