What is the purpose of a college education? Ask most parents and they'll tell you that it's to equip our progeny for a job (or, more hopefully, a career) doing what sons and daughters are skilled and motivated to do. I've dedicated a few posts here recently to the job market, citing economic trends and resources. In thinking back to when my son and daughter graduated from college, and comparing their job successes to today's market, the most obvious issue to emerge is timing.
My son graduated in 1999 with his degree in electrical engineering from the New Jersey Ivy. That was during the peak of the dot-com bubble and things were good. He had completed some summer technical internships and had a handsome handful of offers from prominent companies who wooed him with fancy interviews complete with limo pickups at the airports. Our daughter is the liberal arts type and got her English degree from a national liberal arts college in Pennsylvania. She was hired into the publishing realm at graduation in 1995. We were happy parents. But what's the latest news on the situation out there today, as hoards of new graduates hit the streets?
College Grads Flood U.S. Labor Market With Diminished Prospects
Ten months after graduating from Ohio State University with a civil-engineering degree and three internships, Matt Grant finally has a job -- as a banquet waiter at a Clarion Inn near Akron, Ohio.
“It's discouraging right now," said the 24-year-old, who sent out more than 100 applications for engineering positions. “It's getting closer to the Class of 2010, their graduation date. I'm starting to worry more."
Schools from Grant's alma mater to Harvard University will soon begin sending a wave of more than 1.6 million men and women with bachelor's degrees into a labor market with a 9.9 percent jobless rate, according to the Education and Labor departments. While the economy is improving, unemployment is near a 26-year high, rising last month from 9.7 percent in January-March as more Americans entered the workforce.
The graduates' plight has been the subject of high-level discussions within President Barack Obama's administration, which so far has concluded the best response is to focus on reviving overall employment and bolstering assistance for higher education, said Peter Orszag, the White House budget director.
“What's clear is that there is harm to those who graduate at the wrong time through no fault of their own, which is one reason why it is so important to improve the jobs market," Orszag said. “That is the bottom line here."
The scramble for jobs may depress earnings of new and recent college graduates for years to come and handicap their future career opportunities, according to Lisa Kahn, an assistant professor of economics at Yale University's School of Management in New Haven, Connecticut. It also might hurt Democrats in the November Congressional elections, as the young voters who helped propel the party to power in 2008 grow disenchanted with their economic prospects.
Students who graduated in the early 1980s -- when two recessions drove unemployment to a peak of 10.8 percent -- suffered wage losses of more than $100,000 in the next 15 years compared with those who came into the job market during the decade's boom years, according to Kahn's research.
“They get shifted down into a lower level and lower pay scale," she said. “They are working for worse firms, they're not learning as many skills and they're not moving up the career pyramid as quickly."
The average salary offered to bachelor's degree candidates this year is $47,673, 1.7 percent less than 2009, when the economy already was in recession, according to data compiled from campus job-placement offices by the National Association of Colleges and Employers in Bethlehem, Pennsylvania.
“More so in the last year to 18 months than at any time, we have seen applicants from prior graduating classes looking for the kind of entry-level jobs we're recruiting for," said Dan Black, director of campus recruiting for Ernst & Young LLP, a professional-services firm headquartered in New York. “There are a lot more cohorts competing with each other: '09 with '10, probably '10 with '11."
Unemployment among people under 25 years old was 19.6 percent in April, the highest level since the Labor Department began tracking the data in 1948. Their economic travails may haunt Democrats in the November midterm elections. The youthful voters who helped propel the party to victory in the 2006 Congressional elections and gave the 2008 Obama campaign much of its vibrancy are showing signs of waning enthusiasm.
Democrats held a 62 percent to 30 percent advantage over Republicans in 2008 among “millennials," born after 1980, according to the Pew Research Center for the People & the Press in Washington D.C. Their 32-point margin shrank to 18 points this year, with 55 percent leaning Democratic and 37 percent Republican, based on polls taken from January through April.
“It's definitely tamped down the energy and the excitement and activism that the Obama campaign had sparked among that entry-level age group," said Democratic strategist Joe Trippi, who advised Howard Dean's 2004 campaign and is working with candidates in several midterm races.
Even graduates of elite and graduate universities feel the impact. A new listserv of “Hot Opportunities" Harvard's career-services office began compiling in March garnered 1,000 student subscribers in its first two days.
“This is the first year we have seen such a demand for our services this close to graduation," said Robin Mount, director of the office in Cambridge, Massachusetts.
Thirty-three percent of Harvard's graduating seniors had accepted a job as of commencement last year, down from 51 percent the year before. The survey results for this year's class haven't been released.
On-campus recruiting at schools of business declined 65 percent during the fall job-interview season, according to the MBA Career Services Council in Tampa, Florida. Peter Giulioni, assistant dean and executive director of MBA Career Services at the University of Southern California's Marshall School of Business in Los Angeles, said he is encouraging this year's graduates to be more flexible in the jobs they seek.
“Whereas in the past maybe 10 percent of my students had to go with their Plan B, about 30 percent are now," he said.
There are lessons to be learned from adversity, though. For example, take this highly interesting thread from th College Confidential discussion forum, entitled What I learned in my year of unemployment. Here's the initial post:
I graduated a liberal arts school called Colgate last year and just wanted to write a post about some of my thoughts on the job market and grad school, hopefully it'll help 2010 grads understand the reality of the situation a little better.
I've been home for a full year come May, living with the parents and unemployed. I had just above a 3.0 and partied (extensively) while at school, no special accomplishments or awards to color my resume. Since last May, I've applied to at least 100 different jobs, ranging from secretarial work all the way up to $70K/year consultancy positions that I honestly thought I deserved! The ONLY jobs I ever get called back for are either a) sales positions to sell life insurance, b) $8/hr menial labor jobs, or c) total scams that promise "$500-$2000/week! work at home!"
So I switched my tactics. Sending out resumes won't work. I decided to go to the companies myself and meet with them face to face. maybe, i thought, the interpersonal aspect of it would give my candidacy a stronger boost? But I was totally shocked to learn that the job market had gotten so tough that there were now unemployed MBAs and JDs with tens of thousands of dollars of student loans to repay working UNPAID internships at these companies! i couldn't believe it! People in their late 20's/early 30's who needed to move out of their parents house and start their lives were giving away free labor and/or supplementing this new lifestyle by working nights at starbucks! Businesses have discovered that there is virtually no difference in terms of skills and results between a brand new liberal arts school grad and an unpaid intern. If they can both do similar work, why choose the one you'd have to pay? entry-level jobs that were typically the learning grounds for new grads to get their feet wet are now going to the unemployed/laid-off workers who have more experience, less entitlement issues, and greater desperation for anything that could one day lead to a fulltime job.
i kept in touch with many of my friends from HS and college to see if they had any better luck, and the replies were really a mixed bag. I think that my friends can fall into 5 or so categories after college. They were either a) working for their dad/mom/a relative, b) traveling if they could afford it, c) going to grad school/applying to grad school, or d) living at home unemployed and looking, or e) were one of the lucky ones to have jobs they earned either through our school's alumni connections or by studying their butts off in school or maybe both.
i won't get into aspects of their social lives. but you can probably imagine how much more difficult it has become for grads to try to maintain some semblance of a social life on top of their employment/unemployment stresses.
from what i've seen, the smartest kids were the ones who knew exactly what they wanted to do in life and maintained a tunnel-vision focus on achieving it. you know, the kids you kinda feel jealous of if you have no idea what you want to do, but they've wanted to be teachers or journalists since they were like 2. they interned at the same place every single summer...or aggressively sought out each alumni connection they could in their desired field...etc. they used their time in college very wisely. the rest of us who didn't know what we wanted to do but still felt entitled to at least a $40K job after college are now sitting at home and wondering what went wrong. you're now 22 or 23 and back in that same room you lived in as a hormonally-imbalanced/authority-hating/rebel-without-a-cause high school teenager. it sucks. a lot.
there are, of course, a lot of caveats to what I wrote because this is all just one man's opinion. from the job postings i've seen over the past year, there is plenty of demand for anybody with computer science/programming/web design/accounting skills or majors. Computer literacy is no longer something "preferable" but pretty much required. Being as familiar as possible with microsoft office/html/java/basic/c++/python/keynote/whatever is a strong plus.
But for the rest of you fellow liberal arts majors, the best advice i'd like to give is to first and foremost figure out what you'd like to do. it doesn't have to be perfectly accurate...but perhaps start with a field you're interested in. Then apply some tunnel-vision discipline and find every way possible into that field. I would NOT recommend law school if you don't have any interest in law. I have seen WAY too many unemployed law school students who are working at starbucks and interning for free saddled with $30-100K in debt. not a good way to start your life. go to every alumni connection meeting, meet with a career advisor three times a week, call up alumni who are working in your field, if you still have some time, study hard and bring up your GPA, work on interesting projects so you can develop some kind of "portfolio" to show employers, and start applying as soon as possible.
Sending out your resume is one of the least effective job hunting methods I know. I learned this the hard way. Asking friends/family/alumni for jobs/leads is probably the best way. Don't feel like you're above asking a friend's parents if they can find something for you.
So, is the glass half empty or half full? What's your perspective? Post your comments here and/or on College Confidential. We would like to know.
Be sure to check out all my admissions-related articles and book reviews at College Confidential.