Last month, students across the nation put on their graduation caps, propped open their laptops, and attended a virtual college graduation. The COVID-19 pandemic has struck lives across the globe, altering daily life with the snap of omnificent fingers. Due to the novel circumstances of the pandemic, the pressing future of the American economy, job market, and welfare of the people are suddenly unclear. The COVID-19 pandemic has already proved to be more economically severe yet harder to predict than the 2008 Great Recession. More specifically, Spring 2020 graduates entering the workforce will face unprecedented challenges that may have detrimental effects on their futures.
What is Happening?
As the virus first swept panic across the U.S. and businesses began to close their doors, millions of Americans filed for unemployment. Job postings were deleted as businesses closed. Many of the businesses that remained partially active–restaurants serving take-out meals and retailers transitioning to online sales–were forced to furlough a portion of their employees. Internships, fellowships, and jobs that students were expected to start post-graduation were suddenly rescinded. These circumstances have left graduates without positions that would have jumpstarted their careers.
As of April 2020, 17.2% of Spring semester graduates were unsuccessful in finding work, compared to the 10.8% of graduates following the 2008 recession. Statistics of recent graduates and post-recession graduates show those who are hired are settling for lower salary jobs, often not in their degree subject area.
Similar to the 2008 Great Recession, unemployment has reached an all-time high of 14.7% in April 2020 compared to 10% in October of 2009. Two stimulus packages were passed between 2008-9, one worth $700 billion and the other just under $800 billion. In comparison, Congress passed a $3 trillion stimulus to aid the American population during this time of financial struggle. Piling onto the financial struggles of recent graduates, those who were claimed as dependents in the 2018 tax year did not receive the $1,200 Economic Impact Payment.
What Are the Predictions?
Although many links can be made between the Great Recession and the COVID-19 recession, it is important to recognize that predicting future trends of the economy post-pandemic is incredibly difficult due to the rapid rate of the shutdown. Never before has the United States experienced such a dramatic increase in unemployment applications, the closing of businesses, and economic chaos–a phenomenon Rogoff of Project Syndicate compares to “an alien invasion”.
Based on events following the 2008 Great Recession, it is expected that the population of recent graduates may struggle more than ever before with paying off student debt, affording rent, buying a home, and saving for retirement. With college tuition rising 68% since the 1999-2000 school year, graduates are swimming in debt. As student loan debt concurrently grew with tuition, graduates are faced with a financial dilemma–where to invest their money. As the burden of student debt looms over their heads, graduates are becoming less concerned with saving for retirement and resistant to take out a second loan for a mortgage. The post-pandemic recession may intensify these circumstances.
What is Uncertain?
What makes the Great Lockdown Recession unique, and what limits the predictions to be made from past recessions? The first, evident and shocking to us all, is the rapid rate of events of the pandemic. On February 24th, President Trump tweeted, assuring the public that the virus was “very much under control”. However, by March 16th, as the U.S. confirmed cases reached 5,145 with 91 deaths, the President announced nationwide guidelines of discretionary travel and social distancing. This rapid turn of events drastically contrasts the slow burn of the 2008 recession. Due to this, the lasting effects of the recession are murky. Gita Gopinath, Economic Counsellor of the IMF World Economic Outlook, writes:
“In normal crises, policymakers try to encourage economic activity by stimulating aggregate demand as quickly as possible. This time, the crisis is, to a large extent, the consequence of needed containment measures. This makes stimulating activity more challenging and, at least for the most affected sectors, undesirable.”
What Can We Do?
Before concluding that all hope is lost and financial struggling is inevitable, there are steps to take as an individual entering the workforce and a community. Graduates, although searching for work outside of your degree field may be disheartening and defeating, there is value in expanding your range of expertise. Focus on building experience with companies and services which have increased in demand since the mandatory shelter-in. Streaming services, grocers, seed distributors, construction companies, and internet services have become more essential to daily life than ever before. Use this time to network as much as possible. Reach out to coworkers, Greek life alumni, friends of family members, and so forth. In addition, clean up your digital footprint as employers will be solely focused on your online appearance and virtual interactions.
Colby College is leading the way, demonstrating how the community can support graduates towards their career goals. Colby College has goaled themselves with a 100% success rate in securing jobs for their graduates by utilizing their fundraising team to job search for each of their students. College President, David Greene states:
“We’re calling on all 30,000 of our alums and families to help out with all of this. We’ve surveyed all of our seniors to understand the type of jobs that they need. And then we’re turning our entire advancement team — they usually are raising money for us, but now they’re all job seekers, 45 of them are just focused on finding jobs for our seniors. And then we’ve got another 50 people on campus who are doing the same.”
Despite these extreme circumstances, there are many reasons for optimism. Graduates, you have completed a gigantic hurdle in your education and personal growth–congratulations! The Class of 2020 will prove to be one of determination and perseverance. https://pixabay.com/images/id-351603/