Current College Alumnae, Get Ready To Starve

By Author: Chris McClelland
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Graduates of the 2009 collegiate year are going out into the unfamiliar in the nastiest labor market since their parents graduated. Lots of graduates will get addicted to careers that have zero to do with their degree, if they get a job at all. With a nationwide average 9% unemployment rate, it is obvious that throwing additional job seekers into the marketplace does not give the greatest statistics for employment acquisition. Even worse, they will make poorer wages for at least the next decade, as opposed to individuals who graduated in improved times, such as 2006 and 2007, before the economy partly disintegrated.

For a good number of 2009 college graduates, fate will be the key. According to Lisa Kahn, a Yale School of Management economist, the damage that can be done to a new career by a recession can last for up to 15 years. She used the National Longitudinal Survey of Youth, a authority data base, to assess the effects of a recession on an individuals career by tracking wages of white men who graduated before, during and after the profound 1980s depression.

Kahn found that for every percentage-point increase ...
... in the unemployment rate, those who graduated and joined the workforce all through the recession earned 7% to 8% less in their fields than similar workers who graduated in healthier times. The effect persisted over countless years, with recession-era grads earning 4% to 5% less by their 12th year out of college, and 2% less by their 18th year out. Mainly, someone who graduated in December 1982 when the unemployment rate was at more or less 11% made, on average, 23% less his original year out of college and 6.6% less 18 years out than one who graduated in May 1981 at what time the unemployment rate was under 8%. For a typical worker, that would signify earning $100,000 less over the 18-year period.

According to economists and experts, one reason behind declining wage potential is that the quality of jobs available in a recession, and their accompanying wages, tend to suffer. High-end firms take on fewer people and drive down salaries because jobs are in high demand and people are possible to accept a job for less and less money. In turn, it also means that lots of graduates end up with lower-wage, lower-skill jobs at subordinate quality, less prestigious firms or in firms out of their field of interest. As soon as the economy picks up and they try for healthier jobs, these workers have to learn skills they should have been developing immediately out of college. In the meantime, colleagues who graduated in a healthier economy have by now developed these skills and progressed much further, making them more possible to receive a top position.

This year, employers will take on 22% fewer college graduates than last year, according to the National Association of Colleges and Employers, an organization of career counselors. At the same time, colleges are expected to see the record number of graduates in a decade. The normal starting salary for graduates who do get jobs, meanwhile, dropped to $48,515 this spring, down 2.2% from the same time preceding year. Not to worry though. College education was not for zilch. Collegiate level employees still make more than those with high school diplomas.
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