The Recession’s Impact on the Job Market

1. The Recession’s Impact on the Job Market By: Jessica, Kelly, Jennifer, Natalie, and Jordaan

2. General Overview • In 2007, the worst recession hit since the Great Depression • Ever since, college graduates have lived in fear that they may not find a job after graduation • This recession has affected the US job market in general and also the ability for college graduates to find jobs • As of the end of 2009, the recession officially ended; however, employment is the last factor to recover after a recession and it also takes the longest to recover

3. High Unemployment Rates • During the recession, thousands of qualified and capable people were laid of with years and years of experience • That means that even though hiring is starting to pick up again, graduating seniors are forced to compete with these experienced applicants • According to the National Association of Colleges and Employers, employers expect to hire 22% fewer graduating seniors in 2010 than in 2008 • The unemployment rate as of March, 2010 was 9.7%

4. High Unemployment Rates- 2008 • At the end of 2008, the unemployment rates for college graduates were at an all time high • In November of 2008, the Labor Department reported that the business and professional sectors cut 136,000 jobs, the largest amount of jobs cut in one month ever, according to an article published by Jessica Dickler in CNN Money (2008) • In September of 2008, 3.1% of college graduates with a bachelor’s degree were unemployed; while the overall unemployment rate rose to 6.6% • Through November of 2008, the labor Department reported that a total of 1.9 million jobs were lost

5. High Unemployment Rates- 2009 • In April of 2009, the rate of jobless college graduates was 4.3% • According to the National Association of Colleges and Employers, 2 million college graduates were unemployed at that time due to hiring freezes most companies were implementing because of the severe recession • One area of employment that was thriving was governmental positions

6. High Unemployment Rates- 2010 • Employers that attend job fairs do not have as many entry-level positions as they normally have and they come mostly to recruit summer interns • Going to be a competitive and difficult job search • Graduates may have to settle for a job rather than their dream jobs

7. Job Placement • Not only have students accepted non-major related jobs and lower paying jobs, but many have also been required to search longer for their jobs • Students are led to believe that companies will want to hire them after they have completed a degree • Shaken by unsteady economic conditions • Graduates who find jobs during the poor economic conditions may earn significantly less than similar graduates who found jobs before the economic problems

8. Job Placement cont. • The benefits of earning a degree still outweigh the costs • According to the Wall Street Journal article the March unemployment rate for graduates with a bachelor’s degree is 7.2% compared to the rate of 21.9% for high school only graduates • Graduates may have difficulties finding employment related to their studies • Graduates’ qualifications will enable them to find temporary work while they wait for the economy to recover

9. Job Placement cont. • Recent graduate, Trina Thompson filed a suit against her college in 2009 because she is unable to find full time employment after three months • Monroe College, New York • She wants the school to require the companies on their e-recruitment list to contact students and provide more opportunities to those without a perfect grade point average • Thompson is suing for $75,000 to serve as compensation for her tuition and stress during the unsuccessful job search

10. The Advantages of a College Degree • Based on averages from the 2009-2010 academic year: • Average tuition for a public two-year college is $2,544 • Public four-year university is $7,020 • Private institution is $26,273

11. Advantages cont. • The median annual salary of workers with a high school diploma was $32,552 • For workers who had completed some college or obtained an associate’s degree, the median annual salary was $37,752 • Difference of just over $5000 for the higher educated workers • Survey respondents who graduated with a bachelor’s degree had a median annual salary of $53,300 • Over $20,000 more per year than the salaries of those with only high school diplomas • Those with a four-year college education made 61.5% more than those with only a high school diploma

12. The Loan Situation • The average college debt after graduation for the class of 2007 was $22,700 • Graduating with close to $23,000 in student loans may seem daunting for many students with the lack of jobs currently available • With large amounts of debt, securing a loan for a car or mortgage may be hard, if not impossible, if no step is taken to lessen the student loan debt • Not only do student loans hurt one’s credit, they also become more expensive to pay off when interest rates jump • With a poor credit rating, the desired mortgage may not be able to be obtained and retirement savings may need to be used in order to pay off debt

13. Loans cont. • Ways to pay off debt: • 1) Students are used to living an inexpensive lifestyle so continuing this way of life for a few years while paying off debt will be beneficial for their futures • Living with a roommate will cut expenses. • 2) Continue to make the minimum payments until other, more expensive debt can be paid off • Consolidating loans into a 15 or 20 year repayment plan takes care of this, allowing students to tackle credit card fees and personal loans or car loans • 3) Set up retirement savings and an emergency fund • 4) Slowly increase payments toward loans • These steps are especially beneficial for students in today’s economy where jobs are harder to come across and pay scales are lower, yet loans still need to be paid off

14. Alternative Jobs in Alternative Markets • Some industries are thriving • Health care • Education • Government • Alternative 1: Graduate schools • Many students are choosing this path straight out of their undergraduate schools • Number of applications is increasing and it is tougher to get into graduate programs

15. Alternatives cont. • Alternative 2: Join one of many life-enhancing organizations such as the Peace Corps or Doctors without Borders • Added benefit of working for one of these organizations is that students can get receive aid on towards student debt payments • Alternative 3: Find a part-time or full-time internship to boost resumes and get a foot in with a company • Students ideally start as interns and then work their ways into full-time positions once the company has openings

16. Grad School in the Tough Economy • As long as a student remains in school, loans can be deferred until graduation • The debate of whether students should wait a few years before going to graduate school or whether they should go straight away is one that is frequently discussed

17. Grad School cont. • Pro’s • Being a student already comes naturally”. • Students do not need to reacquaint themselves with being a student • Student’s study skills will most likely be much sharper • Fewer obligations • In most cases, students do not have families, mortgages, or very expensive bills if they enter graduate school immediately after earning their bachelor’s degree

18. Grad School cont. • Con’s • No real-world experience before going to graduate school • After having worked in the field for a few years, one will better understand what it is they truly want to do and get a degree in • Employer may be willing to pay for a portion, if not all, of the schooling, as long as they will come back to work full-time for them after graduating

19. Are Students Switching Majors? • One popular topic of discussion when it comes to the poor job market is whether it is causing students to switch their majors to areas that they feel would be more safe and profitable • David Replogle, of the University of Virginia, identifies that certain majors are more profitable for future graduates but doesn’t suggest that they change majors • Students should look at degree programs in health care, technology, green energy and education suggesting that these jobs are recession proof

20. Switching Majors cont. • Students are not switching their majors but taking great caution when choosing their majors in starting their degree programs • Students are hoping the majors they originally chose will be beneficial once they graduate and once the job market recovers • Aiding their decisions to stick with their majors is negative feedback from older peers that did switch and wish that they had not

21. Conclusion • Recession has had severe effects on college graduates over the last few years • The poor job market will take time to recover, meaning graduates in the next couple of years will also be effected • The economic downturn specifically in the job market has led to: • Extremely high unemployment rates for college graduates • Graduates accepting jobs outside of their degree and that offer lower pay • Students looking at alternative options.

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25. Questions? p.s. Sorry to ruin your mornings.