Job Opportunities for College Graduates Expected to Increase
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RAY SUAREZ: As college seniors get ready to enter the job market in the days ahead, there was some good news from the broader labor market on Friday. The government reported that 274,000 new non-farming jobs were created in April, far more than expected by many economists. The unemployment rate remains steady at 5.2 percent.
That news comes as nearly two million graduates prepare to receive their degrees this spring, more than 1.3 million will earn their bachelor’s degrees, another 670,000 will earn associate’s degrees or other two-year credentials. So how does this hiring season look, and what’s the larger economic climate for young adults entering the workforce?
We get answers from Marilyn Mackes, executive director of the National Association of Colleges and Employers. It represents more than 1,800 career service offices at colleges and schools around the country, and 1,300 employers; and Anya Kamenetz, a writer for the Village Voice who has a regular column on this subject. It’s called Generation Debt: The New Economics of Being Young.
Well, Marilyn Mackes, for those who will be listening to their commencement speeches in the next couple of weeks, how does the world out there look?
MARILYN MACKES: Well, fortunately, it’s looking pretty good this year. In fact, we’re looking at a 13 percent increase in hiring from employers this year, as compared to last year. And just as a point of context, last year we saw an 11 percent increase over the previous two years where we saw no increases at all.
RAY SUAREZ: And is that not just increased job prospects, but also higher salaries as well?
MARILYN MACKES: Yes. We are looking at some increases in salaries. They are moderate increases at this point. But, for example, after the dot-com bubble burst, computer science, computer engineering, information system jobs, they all kind of took a dive in terms of salary. And now those salaries are looking at, you know, 7 to 10 percent increases.
RAY SUAREZ: Anya Kamenetz, how does that seemingly good news from the labor front mesh with what young workers are telling you?
ANYA KAMENETZ: Well, I think the statistics don’t necessarily jive with what people are seeing our there on the street because if you’re getting out of school this month and you’re looking at the job Web sites, you’re going to see new phrases like “long-term temporary” or “temporary to permanent.” And I think that for a lot of people, they’re worry that they have is not “can I find a job?” But “is it going to be a solid job, a real job with benefits and real prospects for advancement?”
And I think that right now, you know, up to 30 percent of the job market is in contingent labor, in temporary and short-term and part-time jobs without benefits. And so young people are really saying to themselves, “Maybe I’ll be able to find a job, but six months down the line, you know, there’s no real knowing what’s going to happen.”
RAY SUAREZ: Why do employers feel that they can do that, that temporary in the hope of permanent? Is it because the competition is so ferocious for each individual opening?
ANYA KAMENETZ: Well, I think it’s a decision that businesses are making. And young people know that they feel that they’re not necessarily being valued in the same way. And a lot of young people are willing to accept that they’re taking on a position without healthcare or that the hours aren’t as good as they would like because they have this hope and a lot of optimism for the future.
But as far as the employers, they’re just looking at cutting their costs for their employees. So they’re not necessarily going to be able to build the same kind of solid jobs that maybe our parents could have gotten.
RAY SUAREZ: So it sounds like even if people are getting jobs, they don’t feel themselves like they’re getting traction.
ANYA KAMENETZ: I think that that’s what I hear from people. I hear a lot of worries about maybe people were able to find a single job going out or even an internship in their field, but they don’t know if they’re really building anything. And I know a lot of people are hopping increasingly from job to job. And it’s really hard to feel like you’re building something for the future if you’re holding six or eight jobs within, you know, same number of years.
MARILYN MACKES: Ray, if I may, I’d like to add some comments.
RAY SUAREZ: Go ahead. Marilyn Mackes.
MARILYN MACKES: We actually, through the National Association of Colleges and Employers, we survey employers, we survey students, graduating students and alumni, and we also survey career centers on college and university campuses. And there’s no doubt that in recent years as the economy has suffered, that there’ve been — there’s been a greater concern among all of those parties about what the labor market holds and what kinds of opportunities there are going to be, what the salaries will be, what the benefits will be.
And it’s very interesting that when we survey graduating students, the whole idea of pension plans and medical benefits, health benefits, used to be that starting salary was the only issue they were concerned about and that’s no longer the case. The full compensation piece is important.
On the other hand, one of the interesting things that’s happening this year, when we surveyed our employers this year– and, you know, we have more — almost 2,000 employers that are part of our mix– one of the things they’re saying is that they’re finding it more and more competitive as the economy has gotten a little bit better, and as they’re trying to bring in some new blood, that they’re actually, in addition to increasing salaries, that they are also improving benefits.
For example, more than 40 percent are going to be offering signing bonuses. There will be increased benefits in terms of whether it’s vacation or, you know, recreational facilities, that sort of thing. So employers are not unaware of the needs and expectations that candidates have these days. I think the environment that we’re in is certainly very different than we might have seen, you know, five, six years ago when the job market was so extremely hot.
RAY SUAREZ: And at a time when — and I know we spoke back in those years when signing bonuses were becoming more common. They went away for a while, didn’t they?
MARILYN MACKES: Well, they certainly did decrease to only, you know, the very select people. And what we saw is in those days about 60 to 70 percent of the employers were offering signing bonuses. Last year we were at about 40 percent. This year the employers are projecting about between 40 and 45 percent.
RAY SUAREZ: Anya Kamenetz, one of the big changes in the graduate profile from earlier decades is how much debt young people are leaving school already bearing. How does that affect what they do in their first years out of school?
ANYA KAMENETZ: Well, I think it has a bigger impact than almost any other factor, Ray. And my column is called “Generation Debt” because debt is one of the most defining characteristics of my generation. I think the latest data show that 2004 graduates of four-year colleges are seeing $23,000 in student loan debt. And that’s an average of their graduating debt. And you can add several thousand dollars of credit card debt on top of that for many, many students. That’s the average again.
And with that at that level, I think a few years ago in the ’90s survey data was showing that young people weren’t really changing their decisions or their life paths because of debt. But just in the last two years, in 2003 and 2004, surveys are showing that people are postponing big decisions like buying a car or buying a house, and they may be constrained in looking for a job or in perhaps moving to a new city, even in starting a family because of the debt that’s weighing them down. And I think when you have an obligation like that where you’re making $300 a month in debt payments and servicing of your debt, you can’t necessarily take the kind of risks and the kind of bold entrepreneurship that, you know, is really important to getting ahead in today’s competitive market.
RAY SUAREZ: Marilyn Mackes, have you seen changes on your end of it that are shaped, as Anya suggests, by the debt that kids are leaving school with?
MARILYN MACKES: I think there’s no question what she’s describing is a reality that we see it as well through the career centers as they’re working with students and their making their plans after graduation. And in fact, in recent years we’ve read various articles, seen various stories about how graduating students are moving back home with mom and dad because of the cost. I think one of the things that’s happening is that — there are a couple of things happening.
One, students are in fact looking for experiential opportunities before graduation, not just for the career development aspect of it, but even for the financial aspect of it; that there are ways to supplement some of the costs, you know, to pay for some of the costs through some additional work experience and get that career-related work experience. I also think that what you have is as the students describe what their needs and expectations are, it isn’t just all about — I think Anya is very right — they can’t just worry about the content of the job. They also have to think about their lifestyle and what they’re going to be able to afford. So that’s become a very real part of the mix.
RAY SUAREZ: Anya Kamenetz, let’s talk a bit about those people who become part of the largest demographic in society, what the U.S. Census Bureau calls “some college.” They started but didn’t finish, have somewhere between 16 and 110 credits and don’t have a credential to go with the outlay.
ANYA KAMENETZ: Those are the kids that I am really most focusing on in my book. And they’re called “the forgotten majority.” And I think that what the reality of that looks like is something that Marilyn mentioned as a positive, which is that young people are working many more hours while they’re going to school than in previous decades. And what we see is a pattern where, you know, half of our college students today are over 25.
And what have they been doing for the last several years? They’ve been taking part-time classes at a community college. They’ve been working a low wage, overwhelmingly a low wage, retail job because half of our sector with the department stores, retail stores and fast-food stores are all under 24. So you have people working very low-wage, dead-end jobs while they’re trying to go to school at the same time. And it’s a very wearying cycle. It’s really a treadmill that people get onto for six or seven or eight or more years while they’re trying to finish up their degrees. And it’s really a worrying pattern, I think.
MARILYN MACKES: Yeah, I would say that would be a worrying pattern. I also think there are great opportunities for people to get some really great career-related work experience. More than 80 percent of the students graduating from college today have some form of internship, cooperative education, externship experience. So that getting work experience quite honestly is going to make people more competitive. It is definitely more challenging in terms of balancing one’s life.
RAY SUAREZ: And Marilyn Mackes, before we go maybe you could give us a quick survey of some of the most attractive fields for students who are entering the workplace.
MARILYN MACKES: Sure. It’s really a very good mix this year. It’s not just all in one area. We’re looking at everything from accounting to engineering disciplines, business, variety of different kinds of, you know, financial services, consulting, retail. Also, aerospace is picking up. And as you would imagine, I think, with the baby-boomer generation getting older, healthcare is becoming a bigger area of growth, as well as the concerns about security, the defense industry. That sort of thing is all experiencing growth right now.
RAY SUAREZ: Marilyn Mackes and Anya Kamenetz, thank you both.
MARILYN MACKES: You’re welcome. Glad to be here.
ANYA KAMENETZ: Thank you.