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To Be or Not to Be ... an English Grad During a Big Recession?
Anxiety runs high in the Class of 2008, the first since 2001 to graduate into slowdown and possible recession. New grads feel especially vulnerable, since they are trying to break in while current employees are holding tight to the jobs the up-and-comers might fill.
Worse, there's growing evidence that the financial consequences of entering the job market during a recession could last from a decade to a lifetime, according to a number of depressing academic studies.
For example, those who took first jobs at such times had to settle for lower salaries and climb more rungs, according to Till von Wachter, Columbia University economics professor; Phil Oreopoulos, University of Toronto economics professor; and Andrew Heisz of Statistics Canada, who studied the fate of Canadian graduating classes of 1982-1999.
They found it took some 10 years for the recession-era grads to reach salary parity with grads who entered the workforce in flusher times.
"But if the recession is bad, it can take longer," said von Wachter.
Stanford Business School economics professor Paul Oyer's research found that MBAs who start investment-banking careers during bull markets will earn $1.5 million to $5 million more on average over a career than those who graduate during recessions. Even those who expediently work in other fields temporarily are less likely to ever become investment bankers.
Oyer finds the consequences can last 20 years. That's why, he said, bankers are not born to work on Wall Street, but made by circumstances.
Tickets to Ride ... Not!
Job offers have been rescinded. Compromise is in the air.
"People are willing to look for alternatives to what they had planned originally," said Nachmann. "There are trains that, if you don't catch them after the MBA, you'll never catch them, and you may not be able to work in what you like for the rest of your life."
Some fields are more resilient than others: Grads have been offered fewer financial-services jobs, but more in management consulting, according to Everette Fortner, career-development director at the University of Virginia's Darden School of Business.
And, at least companies still seem interested in hiring, which wasn't the case in 2001, according to Pamela Mittman, an assistant dean at New York University's Stern School of Business.
Less-well-trained graduates from less-prestigious schools, and those with less-marketable degrees -- woe to the English majors -- will have the hardest time getting a foothold in recessionary markets, said von Wachter.
But employment experts consider certain fields -- like health care, food services and mining -- virtually recession-proof. People need those items regardless of the economic climate, according to a Department of Labor analysis.
Construction, manufacturing and employment services are hardest-hit.
Sunny prospects for the health-care industry -- as prices soar and Americans age -- are one reason that freelance photographer Jason Sangster decided to switch to nursing. Heavy competition, an unpredictable schedule and, above all, instability, encouraged him to enroll in a University of Portland nursing program.
"I thought about the stability, being able to find a job anywhere, anytime, a job I would probably be very well-compensated for," he explained.
"Overall, I would consider nursing to be a rather recession-proof profession," agreed Brenda Morris, baccalaureate program director at Arizona State University's College of Nursing and Healthcare Innovation.
Even in 2001, Arizona nursing students had no trouble finding jobs, she said.
Education also seems sound, at least for now.
"We haven't seen a real dramatic impact for our graduates," said Michele Crew, career-services coordinator at Oklahoma State University's College of Education.
Since most jobs are found by word of mouth, building networks, cultivating relationships and pursuing internships are excellent strategies, careers writer Jason R. Rich advised of those seeking assistance.
The silver lining: Earnings of those who begin their first professional jobs in bad times do eventually recover.
"You spend 10 years of your life earning less," von Wachter pointed out, "and the summary of your lifetime earning is worse." But "people do catch up."
Eventually, he said, the financial disadvantages of graduating during a recession tend to fade away.