Young and Jobless: How the Job Market is Hurting Recent Grads' Futures

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Published December 12, 2012

| FOXBusiness

Like many Americans, David Morris is struggling to make ends meet. He is working two part-time jobs, one at his local grocery store for $10 an hour, and -- ironically -- as an administrative assistant to job-search companies when needed. 

At 26, Morris has big plans for his career, to put his Master’s degree in Public Policy and undergraduate degree in economics to work, but almost a year into his job hunt and with no full-time job offers, he is losing hope. 

“I’ve been working at least four to five hours a day job hunting in between my part-time activities and I’ve also been learning how to market myself better….I am constantly thinking about it because I am tired of my current situation.”

Morris isn’t alone in his struggle to find gainful employment. Recession-era graduates face a bleak labor market and the possibility of becoming unemployed or underemployed as the economy continues its jobless recovery. A May Rutgers University study shows that over the last five years, only 51% of graduates from a four-year college program currently hold a full-time job, and that those who graduated between 2006 and 2011 make an average of $3,000 less than their peers who entered the market in 2008.

Click here to watch more about college graduates struggle to find work 

To make matters worse, students are graduating with a record level of debt, topping $870 billion in June -- an average of nearly $27,000 per person. With little or no paycheck, recent grads are having to rearrange their life plans.

“Young adults that don’t have a steady paycheck or strong prospects don’t do certain things like buy their own place, go back to school or even start a family or change jobs or cities,” says Matthew Faraci, Senior Vice President for Communications at Generation Opportunity. He cited a recent study his organization conducted that 84% of young people ages 18-29 now might delay or not make at all a major life change or move forward on a major purchase due to the current state of the economy.

With $92,000 in student loan debt, Morris moved back home with his parents and isn’t able to make his monthly installments, something he is eager to start doing.

“I had imagined that by this point I would be pretty much secured in my life, paying my own way, maybe dating and starting my own family..but right now the best I can do is work for $10 an hour at a grocery store. If that isn’t tragic enough, [one] of my co-workers is a former legal assistant who has a [government] clearance and the bread guy has a PhD in engineering. Turns out I am not the only one who is being left behind.”

Entering the labor market during tough economic times with the I’ll-take-anything-I-can-get approach can have adverse long-lasting effects, including reduced wages over a lifetime, less experience and advancement opportunities and increased unemployment in the long term.  

Studies show that under-employment early in a career can leave a lasting wage scar that remains into middle age and that spending one year unemployed before age 24 can mean making 23% less than someone who finds employment right away.  A 2010 Dartmouth study shows that unemployment out of college increases a person’s odds of being unemployed later in life.

 “Where you start has a lot to do with where you end up in the American economy. A bad start is not a good thing,” says Anthony Carnevale, director and research professor of the Georgetown University Center on Education and the Workforce.

Being under-employed or working part-time makes it harder to repay loans and working a job that doesn’t match skills and education can not only impact career trajectory but also emotional state.

“It is much more difficult to develop a professional profile on paper and be competitive for long-term employment opportunities when working in series of part-time jobs. It also can increase stress levels and lead to depression and low self-esteem,” says Paul Conway, former chief of staff of the Department of Labor.

Morris applies to about 15 jobs a week and has been called back for three different positions only to have the opportunity evaporate because of budget issues. “I’ve had more than 20 interviews with firms that really looked like a match for my skills, but so far I’ve been raising my hopes only to get it crushed. It’s truly one of the lowest feelings I can possibly imagine.”

Experts agree that holding any job -- even in an unrelated field -- is better than remaining unemployed, but stress that it is important to continue to network and look to get the most experience out of the opportunity.

“If you're going to enter the labor market it's always good to get in and get going because you get work experience; almost any job requires a certain amount of learning and interacting with others,” says Carnevale. However, he advises that if recent grads can avoid entering the market they should continue their education. “Continue to build your human capital and build yourself as an asset and become more valuable by staying in school or getting additional training somehow.”

Even if the economy recovers enough to create an adequate amount of jobs to create growth, recent grads might be facing an uphill battle throughout their careers. “Even if the economy picks up in three to four years, this age group will find themselves competing for middle-level positions from people who started 10 years before them but weren’t able to progress during the recession,” explains Conway. “And that is going to be a tough battle since the older workers will have more much experience.”

Morris recognizes that the longer he stays out of the workforce the more his skills atrophy, which is why he blogs to enhance his writing skills, attends weekly job-search seminars and is always looking at improving his social networking skills.

For current college students looking nervously ahead, Carnevale advises picking your major thoughtfully.

“The majors with the highest earning returns are in engineering…science is also good and anything to do with computers and electronics is good. The second tier is the business degrees: business economics, finance, accounting--everything except hospitality. Next you fall into a set of degrees that are the middle of the road: teaching, social work, anything that you work for a public institution. Truthfully, sadly, people who spend their lives serving others make the least money in the American economy.”

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http://www.foxbusiness.com/personal-finance/2012/12/12/young-and-jobless-how-job-market-is-hurting-recent-grads-futures/