According to an article published by the Wall Street Journal on May 9, class of 2009 graduates will not only have a harder time finding a job, but will face a decade of lower wages compared to those who entered the job market in more prosperous times.
Economic research shows that the consequences of graduating in a downturn include lower earnings, a slower climb up the occupational ladder and a widening gap between the least- and most-successful graduates ‘mdash; which are long-lasting.
Yale School of Management economist Lisa Khan said the damage could linger for up to 15 years. Using the National Longitudinal Survey of Youth, a federal database, Khan tracked the wages of white men who graduated before, during and after the 1980s recession.
The Wall Street Journal concluded that those who graduate in a tough economy often end up with lower-wage, lower-skill jobs at less-prestigious firms or in firms outside their field of interest. Once the economy improves and they apply for better jobs, they must learn skills they should have been developing immediately out of college. Meanwhile, those who graduated in a better economy have already developed these skills and are able to attain better jobs.
Though college graduates are still better off than those with only a high-school diploma, the study showed that a college diploma is not an automatic ticket to upward mobility.
According to the National Association of Colleges and Employers, employers say they’ll hire 22 percent fewer college graduates this year than last year. Meanwhile, colleges are expected to see the highest number of graduates in a decade.
Many graduates looking to ride out the slump are going into public service or applying to graduate school. Graduate-school applications for the 2007-08 academic year went up 8 percent nationwide, according to the most recent numbers from the Council of Graduate Schools. Community-service networks AmeriCorps and Teach for America reported a significant spike in applications.