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Tuesday, July 27, 2021

The young and the jobless

Depressing. Discouraging. Dismal. These are the words that people use to describe the present condition of the American economy. But for the class of 2008, there is nothing gloomier than searching for jobs in a wobbling economy plagued by a rising unemployment rate. For more than 1 million graduating college students across the country who will join the labor force this year, the job prospects are ominous. It’s like looking for a stone in murky waters.

Although there has been no official acknowledgment from the Bush Administration that the world’s most powerful economy has already slipped into a recession, the evidence of it is becoming increasingly obvious. According to the latest U.S. Department of Labor statistics, unemployment rose from 4.8 percent to 5.1 percent last March. For five months in a row now, the private sector has lost a monthly average of 80,000 jobs.

As people are feeling poorer due to job loss and soaring gasoline and food prices, consumers are spending less and the economy is shrinking, which pushes firms to cut back employment. Even Federal Reserve chairman Ben Bernanke admitted to a congressional committee that output was not likely to “grow much over the first half of 2008 and could even contract slightly.”

For a graduating economics major like myself, such figures are absolutely disturbing. Not so long ago in my macroeconomic theory and labor economics classes, we were studying U.S. unemployment rates, which were very modest and reasonable during those times. Paradoxically, with the current unfavorable economic trend, I could possibly be a part of the already increasing unemployment rate statistics.

Whether it is a recession or not, college graduates will definitely be the biggest casualties of this economic downturn. Since there will be an enormous surplus of job seekers but scarce labor demand, employers could be more selective in hiring their workers. They could impose elevated standards and requirements such as the reputation of the school you graduated from and GPA competitiveness. Graduates of the UC system, for example, would have higher probability of getting considered for a position than graduates from an inferior and unknown school for that matter.

Companies could also limit their benchmark to just applicants with superior grades and reject those who have average or lower than average academic performance. This suggests that there is a mounting pressure on graduating college students to exert more effort in attaining excellent marks in what appears to be their last stand to impress employers academically.

In addition, human resource analysts are saying that one’s chances of securing a job with the current economic slowdown depend on his or her major. Some fields are suffering from the crisis while others are not affected at all. In the end, if your major belongs to a sector that is adversely impacted by the recession, you would still encounter a tougher job scene no matter how competitive your grades are and even if you are an alumnus of an Ivy League school or a top public university.

As hard-working students, we do not deserve to suffer the pernicious consequences of our government leaders’ futility in providing immediate feasible solutions to counter such a persisting economic threat. We did not spend four years of laborious coursework in college just to end up unemployed, or brutally compete for falling labor demand with countless graduates.

Although storms do not last forever, economic recovery does not happen overnight. It all depends on the resilience of the market forces and of course, on our leaders’ ability and resolve to avert further damage. Experts are confidently forecastingthat the weak economy will get better after the second half of the year. Hopefully, as youngbloods, our optimism could take us as far as that point.

 

REAGAN F. PARLAN welcomes your comments and suggestions at rfparlan@ucdavis.edu.

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