By:
Roshawn Watson
The employment outlook for recent college grads has not been great this year. Unemployment, underemployment, and now salary declines have made this job season quite challenging. Generation Y have unfortunately found themselves as expendable shock troops in a campaign of corporate “downsizing.”
Generation Y Particularly Vulnerable in Recession
With the stock and real estate crashes, plummeting consumer confidence, and mass layoffs, Gen Y has been significantly impacted by this recession. Perhaps this comes as no surprise since recent college grads are typically hit harder during recessions, as they are amongst the first to be laid off and may have difficulty competing against laid-off workers with years of experience. The
Bureau of Labor Statistics recently reported that more than one million college graduates over the age of 25 lost their jobs in FY09, pushing the unemployment rate for their cohort to 4.8% in June, precisely double the rate of June, 2008. Note that the unemployment rate for those new graduates currently seeking jobs is already at 10.8%. Additionally, the National Association of Colleges and Employers said Tuesday that those who graduated with bachelor’s degrees in 2009 received a $48,633 average starting salary offer, down 1.2% from last year, according to a survey of 140 college and university career-services offices. This represents a stark change from 2008, when the average starting salary was 7.6% higher than those offered to the class of 2007 (
WSJ).
Of course, estimates of unemployment are subject to some errors. For example, the unemployment data have a number of problems that lead to an understatement of unemployment. For example, the data count as employed all people who are working part time but who would like to work full time. Since these people represent unused labor effort that is available, the unemployment rate understates the extent of unemployed resources in the economy. Another problem that causes the unemployment rate to understate the extent of unemployed resources is the “discouraged-worker” effect. If someone wants to work but becomes so convinced that there are no jobs available that he makes no effort to find work, he will be counted as “not in the labor force.” Since there will be more discouraged workers the more severe the recession, this factor will tend to dampen the fluctuations in the unemployment rate. No statistic is perfect, but it is important to keep these factors in mind when evaluating unemployment data.
Another consideration is that the salary data is based on surveying by university of recent graduates, which may be subject to all sorts of biases. A look at the actual survey question(s) and some demographics of the respondents would be helpful in interpreting this data. For example, it would be helpful to know whether there any differences in salary based on race, gender, geographical region, major in school, previous job experience and a variety of other factors that may potentially confound the interpretation of the data. It may be that they have corrected for these factors; however, it is not stated. It would also be helpful to see other summary statistics such as the median salary, as the average salary can be skewed by some of the higher earning students.
The psychological and financial impact of being a new graduate in the present job market can be staggering. Often, we forget that Generation Y may be particularly unprepared in this challenging job market. Although there are definitely signs of economic recovery, preliminary 2010 statistics show that employers still intend to cut hiring of new graduates by 7%. Although you definitely have to use your available resources (intellectual, social and economical) to find the right employment in today’s economy, the old mantra of work hard and everything will work out fine does not always immediately materialize in the present.
Thanks, Roshawn. While your blog never claimed to be the SUNNY TIMES, this article is a little saddening. I know you're not reporting doom and gloom, but lets balance the story out with a little optimism. My brother is a May 2009 college graduate who was just employed as a teacher in August 2009. He was employed during a state-wide hiring freeze. He even got his "dream" job. There are jobs out there and kids fresh out of college are getting them. Sure, this may be specific to certain careers. And sure, they number of kids finding gainful employment right after college might be down…but its happening.
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