Report Card: The Job Market
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PAUL SOLMAN: The traditional ticket to job security in America: A degree from business school.
SPOKESMAN: Okay guys, you’re going out and earning six figures.
PAUL SOLMAN: Instead of the traditional “cheese,” the dean of Rutgers business school in Camden, new jersey, used the carrot of wealth to get his four-year grads and MBA’s to smile for the camera in the teeth of a grim reality: A jobless economic recovery. No matter how good these kids look though, they consider their job prospects as dreary as the weather. On a scale of one to ten sort of with your voices– so I guess it’s “yay” to “uhh” or something like that– what’s the job market out there like at the moment?
GROUP: Uhhh! ( Laughter )
PAUL SOLMAN: Statistics explain the economy is recovering, but economic growth has been no higher than population growth. And with consumers loath to spend, making companies afraid to expand, jobs have been shrinking. MBA-to-be William Campbell:
WILLIAM CAMPBELL: The job market out there, it’s pretty tough right now — not like when my mom was in college or my brother was in college. Like, you really have to work for yours.
PAUL SOLMAN: How many resumes have you sent out?
WILLIAM CAMPBELL: Right now, I would say I’ve sent out 105. You know, you might have this degree, but they want more out of you. They want more than just that degree, they want, like, you know, experience. They want, you know, leadership experience, management, things like that.
PAUL SOLMAN: And often these days, even that’s not enough.
JENNIFER ARATEN: Because there’s a lot of places that have hiring freezes, budgetary freezes. So even if you’re completely qualified, they’re not hiring.
PAUL SOLMAN: What’s your own experience been?
JENNIFER ARATEN: I have an undergrad in journalism from Brandeis University. I’ve worked in… actually on television for three years, and now I have an MBA in marketing and management. So I’m looking to sort of combine both and do marketing and television. So I need a job people. Help me out.
PAUL SOLMAN: Since Jennifer Araten arrived at Rutgers two years ago, the U.S. economy has lost 2.7 million jobs, though President Bush’s 2002 economic report predicted a gain of three million jobs. The official jobless rate is up about a third to roughly 6.1 percent; for those ages 20-24, it’s 10 percent. The Camden grads, though, may be better off than their counterparts from more famous schools. Most of them were already working to put themselves through school, says career counselor Jim Moreno.
JIM MARINO, Rutgers Camden Career Center: I think that gives them a clear advantage over the student who goes away to a school like a Notre Dame or even a Princeton or whatever, and they’re coming back to their home state. And if they haven’t made those connections during the course of their college, they’re at a distinct disadvantage in terms of the local market.
PAUL SOLMAN: Meanwhile, across the river in Philadelphia sits Temple University where 5,000 seniors graduates the day before. The campus was quiet but at the career center, run by Chet Rispoli, it has been that way all year.
CHET RISPOLI, Temple University Career Center: This is our interview suite. These are all interview rooms.
PAUL SOLMAN: The little rooms.
CHET RISPOLI: In a busy time, this is a very busy area, students waiting for the next interview. In many cases, we have a number of employers in one day coming in.
PAUL SOLMAN: But there’s not a soul here.
CHET RISPOLI: As you can see, there is not much going to right now which is pretty indicative of what is going on in terms of recruiting. Last year recruiting was down 37 percent nationally, and this year it is probably close to that. It has been two weeks since we’ve had a recruiter in here.
PAUL SOLMAN: Really?
CHET RISPOLI: And this typically would be the busiest season.
PAUL SOLMAN: There has been so little traffic here, the clock hadn’t been sprung forward for daylight’s savings time, a month before after the fact.
CHET RISPOLI: I’ve never seen it like this.
PAUL SOLMAN: Back at the pre-commencement pep rally, the Rutgers dean tried to reassure the crowd.
RUTGERS DEAN: You guys have achieved, you have done well. We applaud you for being our students and for going out and representing Rutgers University. So congratulations on your great achievements.
PAUL SOLMAN: But it’s hard to rally much pep when even your commencement speaker, biotech CEO Marvin Sampson can’t give you much encouragement.
MARIN SAMPSON, CEO, SICOR, Inc.: What profound advice can I share with you? I recently saw a quote that sums up how I feel about advice. If it’s free, it’s advice. If you pay for it, it’s counseling. If you can use either one, it’s a miracle.
PAUL SOLMAN: So what are new college grads doing, applying to graduate school. Law school applications are up more than 20 percent since 2001. Med school applications have reversed to a seven-year decline. Princeton economist Alan Krueger.
ALAN KRUEGER, Economist: It is not unusual when you have a recession for people to spend more time in school. That’s actually one of the silver linings of a recession. We’ve seen an enormous surge of applicants to graduate schools even in programs like economics.
PAUL SOLMAN: What is the number at Princeton’s?
ALAN KRUGER: I think we had over 800 applicants this year.
PAUL SOLMAN: For how many?
ALAN KRUEGER: We shoot for a class of around 25 students.
PAUL SOLMAN: Eight hundred applicants for twenty-five slots?
ALAN KRUEGER: That’s right.
PAUL SOLMAN: Larry Katz says the ratio is comparable at Harvard. Does he also think it’s a silver lining of the jobless recovery?
LARRY KATZ, Economist: Yes, but there are only a fixed number of slots in graduate school in the short run so more people who would have gone to work going to graduate school mean fewer people who already went to work are able to get into graduate school. And so we don’t really change the situation that much.
PAUL SOLMAN: Moreover, research shows entering a jobless job market has long-term consequences for earnings. Via videophone, we interviewed Michigan economist John DiNardo.
JOHN DiNARDO, Economist: Take two people who have the same skills and the same aptitudes and we can watch the people ten years into their job, the person who got their job when the unemployment rate was high will typically have 10 percent lower wages than the same person who got their job when the unemployment rate was low.
PAUL SOLMAN: You mean all else equal?
JOHN DiNARDO: All else equal. I mean if I were looking for a job right now, I would be fairly gloomy myself.
PAUL SOLMAN: You would be gloomy?
JOHN DiNARDO: Yes. And that’s why I’m very happy to be here in Ann Arbor with a job with tenure.
PAUL SOLMAN: Our interview itself was a sign of the times. The money we saved by not flying to Ann Arbor, hiring another crew there for the whole day, is the type of productivity gain getting the same output using less labor that’s squeezing the job market in almost every profession. But no matter how hard it is for college graduates right now, Alan Krueger reminded us, it’s even worse for those without a college degree.
ALAN KRUEGER: The unemployment rate for high school dropouts is 8 percent. For high school graduates 6 percent.
PAUL SOLMAN: College?
ALAN KRUEGER: Graduates about 3 percent.
PAUL SOLMAN: For those with advanced degrees, it’s even lower. So college remains a relatively good investment.
CHET RISPOLI: I saw a report recently that said that over the course of a lifetime, the difference between a high school graduate and college graduate in terms of income was about three quarters of a million dollars. And that was an average.
PAUL SOLMAN: It’s this economic reality that has half of all kids in the U.S. enter college these days. It’s why single mom Jennifer Sabatini had to put herself through school. A degree is no guarantee in the anxious spring of 2003.
JENNIFER SABATINI: I can’t even count how many resumes I’ve sent and how to many companies I’ve sent.
PAUL SOLMAN: Do you think you have a much better chance of getting a job now that you have your degree?
JENNIFER SABATINI: I hope. I mean that’s the whole reason why I came to school.
PAUL SOLMAN: The whole reason many of this year’s million or so graduating seniors went to college, to get a good job. Unfortunately, these kids who came in with the economic boom, are going out into the bust of the so-called jobless recovery.