The Jobless Recovery Hits a New Victim: College Grads
For most of the last three years, one group has survived the economic downturn with minimal damage: college graduates.
Workers with an undergraduate degree saw unemployment rising only slowly, even as the rest of the economy tanked, with millions of jobs lost in industries like construction and manufacturing. College grads were as close as you could get to recession-proof.
Not anymore.
Figures from the Bureau of Labor Statistics show that unemployment among people under 25 with bachelor's degrees vaulted to 9.6% in December. That's up from 8.6% in November and 5.9% just two years earlier. A stagnant labor market means the country can't create enough jobs for the thousands of young people set to graduate this academic year.
A Degree Alone "Doesn't Cut It"
For the classes of 2010 and 2011, this means taking a practical approach to the job market. Instead of focusing on their grade-point average and waiting for offers to roll in, they have treat the job hunt as a major component of their education.
"The degree alone doesn't cut it," says Matthew Berndt, director of communications career services at the University of Texas at Austin. "That's a message that's coming home to students much more clearly now." Many of these students were freshmen at the height of the economic boom in 2006, and never thought they'd have to fight for jobs.
"I felt like I was a good student at school with an in-demand skill set," says Laura Kaufman, 22, an international relations major who has been unemployed since graduating from Michigan State University in spring 2010. "When you go into the actual job market, you're really thrown to the ground."
Employers Have Their Pick
Of course, The Great Recession has hit the prospects of most groups in the U.S., from immigrant construction workers to hedge fund managers. Still, young grads face a potent mix of economic problems, many of which were barely imaginable a few years ago.
Besides high unemployment, the slump in house prices and tumbling 401(k) plans have kept many older workers in their jobs after the time they planned to retire. That means fewer opportunities for younger workers. And with consumers still paying down debt more than 18 months after the recession officially ended, employers aren't always keen to take on new staff.
When jobs do open up, a glut of qualified workers sends in resumes. "It has gotten tougher," for young grads, says Harry Griendling, CEO of recruiting company DoubleStar. "Employers feel they can have the pick of the litter."
Smart Job-Hunting Pays Off
In this new environment, students have to fight for the job they want. Courtney Heim, 21, graduated from Bradley University in December. She had four different job offers in sales and marketing waiting for her -- she just had to pick which she wanted.
But it wasn't easy to get those offers. She spoke to every company that was hiring for sales/marketing positions at the Bradley career fair. She presented each recruiter with an industry-specific resume and a business card that showed her picture, GPA and a mini-resume on the back.
"I would go up, talk to them, give them my resume and right off the bat try to get an interview," Heim says. After speaking with a potential employer, she sent a thank-you letter. "I never sent an email, I always did a typed letter," Heim says. "It makes you stand out 10 times from everyone else, and it's a little piece of paper and 45 cents or whatever for a stamp."
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For those less fortunate or less aggressive, the job market can be a cruel place. More than one-third of college graduates are currently working at jobs that don't require a degree, according to Neeta Fogg of the Center for Labor Market Studies at Northeastern University.
As a result, many have spent tens of thousands of dollars on a degree to earn only slightly more than an 18-year old high-school graduate with no college experience. "The negative effect is not only earnings today, it's in the future," Fogg says. "You start at a lower level, and that gap is going to stay with you for a long, long time."
Michigan State grad Kaufman is currently searching for work in Philadelphia, living with her boyfriend and spending money she saved working part-time at college. As the cash runs low, she has cut out meals at restaurants and colors her hair at home, rather than paying for a salon. "I'm living extremely simply these days, that's for sure," Kaufman says.
Tough Time for All
Still, college grads have some positives. Large companies in industries such as banking and manufacturing are returning to campus-recruiting events after earning record profits in 2010. And young grads are much more able to relocate and accept lower wages than their older counterparts who have debt and families to maintain.
"I wouldn't say a college degree isn't worth it," Fogg says. "I'd just say this recession had decimated job opportunities for everyone."
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