In the midst of the largest economic crisis since the Great Depression, graduating seniors may run into problems securing a job.
There are three big things that are going to happen. First, there is going to be a slow down in hiring. Second, there are going to be layoffs. Finally, this will lead to an excess supply of workers, said David Swenson, Iowa State University associate scientist in economics-agriculture and life sciences.
Its going to push down starting salaries, and its going to take a longer time to get a job. Although the expectation is, and all of the research says that the more education you have the more likely you are to weather this kind of downturn, Swenson said.
Job scarcity will also put pressure on young people to be more flexible in where they want to work, he said.
The question now is not only are you skilled to work and willing to work, but are you in a place that is demanding work? Swenson said.
The last time the market was low was in 2001, after Sept. 11, said Peter Orazem, university professor in economics-liberal arts and sciences.
The 2002 graduates, there were people who got job offers and stopped looking, then the firm reneged on that job offer. That was particularly true for people who were in the tech fields, Orazem said.
At the time, people in computer science and engineering suddenly had the market turn on them, but other areas of the economy werent seriously affected, Orazem said. This time, those in finance will have the market turn on them, he said.
The real question right now is, are the weaknesses in housing, construction and finance going to be spilling over into everything else? Orazem said. As things weaken the job market is going to get thinner.
Orazem said students are going to be the ones that are expendable to firms or companies because they arent a part of it yet.
The firm is going to be more interested in hanging onto the people that are there then bringing new people in, he said.
The employment picture has fallen every year of the month this year, but isnt terrible so far, Orazem said. He said there hasnt been more than a million jobs lost in an economy that has 146 million jobs.
That so far isnt a terrible job market, its not a good job market. You want to be in a job market that is actually growing, but it hasnt gone that south so far, Orazem said.
With the exception of construction and finance, he said the people that will be hit the hardest are people with a high school diploma or less.
Orazem mentioned the job fair and how, despite the economic crisis, there were still, from what he heard, a lot of firms there.
Lots of firms may come here at this time thinking that the market is going to be okay next spring, but still defer on making final decisions until they see how the market is turning around, he said. I mean, these last two weeks have been bloody. There are a lot of nervous people in all areas of the economy right now.
This is the first time that not only the U.S. economy is affected, but banks in Germany, France and England are nervous, and the Asian stock market is tanking as well, he said.
Some of the people who already have job offers might not want to bank on that, or make sure you are still talking to the firm to make sure they still want to live up to that offer, Orazem said.
However, people who have the kind of operating and management skills, such as plumbers, electricians and people in management information systems are in pretty good shape, Swenson said. He also mentioned teachers and those in healthcare shouldnt have trouble getting a jb.
Right now I would be worried if I was a young business graduate, especially if I was in finance, Swenson said.
Recent recessions havent lasted long about nine months but the worry is that this time it will last a lot longer, Swenson said.
If we use the past as a guide, we can expect it to last from nine to 15 months, but just because it ends doesnt mean that the economy is OK, Swenson said. We think in terms of three to nine months [after a recession ends] for the economy to stabilize and start growing.