TOPICS > Economy

For New College Grads, Jobs Outlook Better but Far From Great

May 4, 2012 at 12:00 AM EDT
After a promising start earlier this year, U.S. job growth slowed for a third month in April with just 115,000 jobs added and the unemployment rate dipping slightly to 8.1 percent. Jeffrey Brown discusses the numbers and outlook for college grads with Brandeis University's Catherine Mann and Drexel University's Paul Harrington.
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JUDY WOODRUFF: After a promising start at the beginning of the year, job growth in the United States slowed again last month.

The Labor Department revised upward the number of jobs created in previous months, but reported only 115,000 new jobs came on-stream in April.

New jobs were added last month, but fewer than expected. And the unemployment rate dipped to a three-year low of 8.1 percent, but mainly because frustrated job-hunters stopped looking.

Speaking at a Virginia high school today, President Obama focused on some positive signs.

PRESIDENT BARACK OBAMA: After the worst economic crisis since the Great Depression, our businesses have now created more than 4.2 million new jobs over the last 26 months.

JUDY WOODRUFF: But the president did acknowledge that challenges remain.

BARACK OBAMA: There’s still a lot of folks out of work, which means that we have got to do more.

JUDY WOODRUFF: Minutes after the April jobs numbers were made public this morning, the presumptive Republican presidential nominee, Mitt Romney, appeared on FOX News, and criticized the president, calling the numbers very disappointing.

MITT ROMNEY (R): Well, we should be seeing numbers in the 500,000 jobs created per month. This is way, way, way off from what should happen in a normal recovery.

JUDY WOODRUFF: Beyond the latest government numbers, a new report from the Pew Charitable Trust captured a portrait of long-term unemployment. It found nearly 30 percent of unemployed Americans have been jobless for a year or more.

Young adults are particularly feeling the brunt. More than one in five people between the ages of 20 and 24 have been out of work that long. That’s a statistic that this year’s graduating classes are hoping to avoid repeating.

SARAH DEVEUX, George Mason University: I have two interviews next week. I’ve had a number. No bites so far. I’m hopeful, but a little discouraged.

NORA MONTALEGRE, George Washington University: I remember a lot of my engineering friends have had jobs since like January, but many of my other friends don’t have anything lined up and they plan to move back home. So, it’s kind of on both sides of the spectrum. So, hopefully, things look up for me.

(LAUGHTER)

JUDY WOODRUFF: Even those fortunate enough to have already secured a job admit the process has become more daunting.

ELLIOT UPIN, George Washington University: It’s a crapshoot when it goes down to it, because you really don’t know what you’re going to get. But you just need one interview. So, I mean, 70, 80 resumes, you hear nothing back, you get disheartened, but you just got to keep going with it.

BRIAN ROWE, assistant director, George Washington University Career Center: In my 12 years here at G.W., this has been the busiest semester for student appointments.

JUDY WOODRUFF: Brian Rowe is assistant director of The George Washington University’s Career Center.

BRIAN ROWE: The students who are graduating now, they began their college careers in 2008, when things started, you know, being really bad. So they have been bombarded with messages of — pretty negative messages about employment and the economy. So they’re very concerned.

They’re not demoralized, but they understand that it’s a challenge and that they need to do something about it.

JUDY WOODRUFF: For some, that’s meant being more flexible when opportunities become available.

RADLEIGH SMITH, George Mason University: I will move to Colorado or New Mexico or wherever you have to go. But, yes, I will go to the job.

JUDY WOODRUFF: And while the overall economy struggles, college seniors may actually have reason to be a bit optimistic. A survey by the National Association of Colleges and Employers found businesses expect to hire 10 percent more graduates than they did last year.

JEFFREY BROWN: For more on today’s jobs report and the outlook for college graduates and other young people, we turn to Catherine Mann, professor at the Brandeis International Business School, and Paul Harrington, director of Drexel University’s Center for Labor Markets and Policy, which advises student career-planning organizations and consults with companies on their hiring needs.

Well, Catherine Mann, not a great report this month, right? Give us an overview.

CATHERINE MANN, professor of economics, Brandeis University International Business School: Right, Jeff, it was a little bit soft. It was certainly much less than was expected by — the consensus was for 160,000. We only ended up with 130,000 at the private sector.

I think that where we really saw some softness was in some sectors that in the past have been the robust ones. There was softness in the temporary worker category. There was softness in health. There was softness in hospitality. All of those sectors actually added about half as many jobs as they had added over previous months.

On the other hand, there were some bright spots, too. Business professional and technical continued to be robust, so generally speaking, not what we would hope to see at this point in the recovery, especially given the rate of growth of GDP, but some bright spots.

JEFFREY BROWN: All right, so, Paul Harrington, I gather you’ve been out, even today, talking to companies. What do they tell you about what they see in hiring?

PAUL HARRINGTON, director, Drexel University’s Center for Labor Markets and Policy: Well, I think the outlook for college grads is a little bit better than — this year than last year, but it’s still not very bright.

You know, firms’ preferences towards hiring new workers are not strong. They tend to — actually, we are seeing a lot of growth in the hiring of older workers compared to young people. So — and the overall job outlook for kids is better than last year, but just not great.

JEFFREY BROWN: Are there — staying with you, are there certain majors or disciplines more in demand now, anything that gives us hints about the broader — the broader economy?

PAUL HARRINGTON: Yeah, I think there are.

When you take a look, where we really had very strong demand in my mind is around the information technology, computer science areas, you know, these really strong math-proficient areas. And we find across-the-board demand. Health — health firms like these people, insurance companies, finance firms, strong demand for graduates out of those very complicated information technology programs, computer science programs.

And I also think engineering demand, as we’ve seen that rebound in manufacturing, that has firmed up a lot as well. So those math-dominant fields really have been pretty strong. But for kids coming out in business, even the health fields now, we’re seeing weakness. So outside of those really math-proficient, engineering, information technology fields, we’re not seeing a lot of strength.

JEFFREY BROWN: Well, Catherine Mann, of course, you are on a college campus, as well as being an economist locking at these things, right?

CATHERINE MANN: Right.

JEFFREY BROWN: How has the downturn in the last few years impacted young people, who is getting work, what kind of work and when they get it?

CATHERINE MANN: Well, I think first we have to recognize that the unemployment rate for college graduates is at 4 percent. And that’s half of the overall rate for the economy.

So we have to remember that going to college and coming out with a degree that’s useful, you know, really prepares you for a job market that perhaps is soft for everybody else. So, you know, stay in school, it still is the right thing to do in order to get a job.

But I think what we need to be telling our graduates is, is that there isn’t a hiring season in June. You don’t come out of college and say now I’m ready to take a job. I think you have to be looking for your job starting much earlier. Firms are simply not inventorying workers. They absolutely are not to going to have people hanging around looking for something to do.

They will hire a worker when they get a contract. And then they need a worker right away. And what that means is you have to be looking all the time. You have to be working your networks all the time. You need to be working with your alumni office, who works at the company that you might want to work at, because all these jobs that become available and are open internal to a company, it’s people who are already there, who know about those job openings.

If you’re in contact with them, you have first dibs. And that’s the way that people are getting jobs these days.

JEFFREY BROWN: Well, Paul Harrington, do you see the young people you work with understanding this? Do you see them adjusting to this?

PAUL HARRINGTON: Yes. Well, I think it’s fair.

First, you need to point out that the overall unemployment rate of 4 percent for college grads, that is among college grads over the age of 25. Therefore, the malemployment rate, the fraction of all kids coming out of college who don’t get a job in the college labor market, it is between 35 and 40 percent.

And so for those youngsters, we are seeing them move into traditional high school labor market jobs in retail, insurance and the like. I think there is this growing realization among kids that they have got to be more career-focused. When firms are engaged in hiring activities, they are looking for somebody who is focused and directed and who has a lot of work experience.

So bringing — trying to figure out how to use your curricular and extracurricular experiences towards focusing on a postgraduate outcome I think is absolutely essential now. And we have got too many kids treating college like four years at camp.

JEFFREY BROWN: Malemployment? Explain that a little more.

PAUL HARRINGTON: Well, what that really is, is a case where a kid graduates from college, but doesn’t get access to a college labor market job. So they end up in a much lower-paying job in perhaps retail trade as a cashier, part-time salesmen, maybe in a clerical position in an insurance company.

And when you take a look at the earnings experiences of kids who get professional, technical, managerial high-level sales job in the college level market relative to kids who work in these kind of non-college labor market segments, their earnings differences are 65, 70 percent.

In our research, we find that almost all the gains to a college degree accrue to those individuals that get a college labor market job.

JEFFREY BROWN: I see.

So, Catherine Mann, of course, that leads into this fear that people who start late have a hard time ever making it up, right, in the job market?

CATHERINE MANN: Well, there are problems. I mean, you know, it’s absolutely the case that your first job does matter.

And the first job that you have can make a difference for your career earnings over your lifetime. So it does mean that when you go into the job market, you have to have skills that companies want right away. The notion that a company is going to train you for a job in that company, that’s — you know, that’s 1970s. And it may be very sad, but it in fact is very true.

So having skills that are applicable in the workplace and presenting yourself as this is what I can do for you right now is exactly what has to happen in this college labor market.

JEFFREY BROWN: All right, Catherine Mann and Paul Harrington, thank you both very much.

JUDY WOODRUFF: For more on the jobs numbers, check out our website for Paul Solman’s own measure of unemployment, which includes the underemployed. That’s on our Making Sense page.