Just last month, APUS honored some 2,800 students who successfully completed their degree programs. The ceremony was a very nice one and the excitement of the students who attended was obvious. Fast on the heels of such exuberance, however, is the daunting task of locating jobs for those who were not already employed as many of our students are. Across the nation, many recent college graduates are finding it increasingly difficult to find a job.
The global economic crisis is certainly no secret. It has remained one of the most prominent headlines in American newspapers and on news programs for at least the last couple of years. As recent college graduates are finding out, the economic crisis is having a dramatic effect on companies and entire industries in which many were hoping to find jobs after graduating.
In April, the most recent month for which data is available, the Bureau of Labor Statistics reported that the unemployment rate rose from 8.5 percent to 8.9 percent, increasing the number of unemployed persons in the United States to 13.7 million. As companies find themselves struggling to meet the financial restraints placed on them by a dwindling economy, many have announced significant layoffs in recent months. As the New York Times reported in a January 27 article, 62,000 jobs were cut by U.S. and foreign companies on January 26 alone. Some of the most significant layoffs occurred at Caterpillar (20,000 jobs lost), Sprint Nextel (8,000 jobs lost), and Texas Instruments (3,400 jobs lost). Interestingly, the article predicted that the unemployment rate would peak at 8.3 percent by 2010. Considering April’s unemployment numbers, it is easy to see that the economic downturn has taken its toll on employment and will likely continue to do so for some time.
The Nielsen Company recently reported that between the third and fourth quarters of 2008, “the U.S. added 1.25 million workers to the unemployment roster, an average of 417,000 per month,” noting that that figure represents “roughly the equivalent of taking jobs from the entire labor force of a market like Albuquerque or Tulsa each month.” The company also reported that the demographic group with the fastest growth in unemployment is among those with a college degree.
For those recent college graduates able to find employment, there may be years of less than average salaries ahead. A May 9 article in The Wall Street Journal predicts that “even those who land jobs will likely suffer lower wages for a decade or more compared to those lucky enough to graduate in better times.” The article cites the research of Lisa Kahn, an economist at the Yale School of Management, who found that during the recession of the early 1980s (which many economists agree is comparable to today’s economic crisis) “for each percentage-point increase in the unemployment rate, those with the misfortune to graduate during the recession earned 7% to 8% less in their first year out than comparable workers who graduated in better times.” An article in The Washington Post from January of this year notes that in November of 2008, the unemployment rate among those with a college degree or higher reached 3.1 percent; at the same time, the national unemployment rate was 6.7 percent. The article notes that since “unemployment rates tend to lag behind other economic indicators, analysts think unemployment among college-educated workers is likely to surpass 4 percent, which would be the highest rate since the Bureau of Labor Statistics began tracking unemployment by education level in 1970.” This is a daunting possibility for recent college grads and those approaching graduation within the next several years.
There is a ray of hope in all of this doom and gloom, however. While they may find it difficult to immediately find a job earning a decent salary, recent college graduates are still better off than those of the same age range with only a high-school diploma. According to The Wall Street Journal article cited above, “The unemployment rate in April among four-year college graduates between 20 and 24 years old was 6.1 percent; among those the same age with only high-school diplomas, it was 19.6 percent.” In addition, despite the economic downturn, many industries are still reporting substantial profits. The Fortune 500 2009 annual ranking of America’s corporations notes that in 2008 several industries reported continued growth in revenues. Not surprisingly, four of the top five industries reporting growing revenues were within the energy sector, including pipelines, petroleum refining, mining, and oil and gas equipment and services.
Interestingly, even though many economists state that even those with college degrees are finding it difficult to land a job, college enrollments are up since the beginning of the recession. One analyst contends that as individuals lose their jobs, the decision to go back to school becomes easier since there are no concerns over losing income as a result of enrollment. Additionally, even though many college graduates are finding it difficult to land a job, they are still better off in the job market than their non-college-educated peers. There appears to be little consensus among economists as to when the recession will end. Ideally, those who chose to return to college will be rewarded at graduation with a recovering economy and job market.