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The Department of Labor

Teach for America

AmeriCorp

Peace Corps

Job Market Tough For Grads
June 12, 2002

Most people see a college degree as a guarantee of a decent job. And in the economic boom of the late-nineties, most college grads had multiple job offers after getting their diplomas.

But members of the class of 2002 are learning that eager companies who embraced their older classmates just a few years ago are giving this year's grads the cold shoulder.

What is causing this job shortage and what are grads doing about it?

How things have changed

The number of jobs available to graduates depends upon the state of the economy.

From the mid- to late- 1990's, the economy was doing very well. Excited investors sank millions of dollars into new Internet and technology companies, creating plenty of high-paying jobs.

However, by the spring of 2000, the economy stopped growing and eventually started to decline. Some companies shut down, while others decided to stay safe by freezing new jobs or laying off workers instead.

While hundreds of thousands of college graduates and other people were looking for work, fewer new jobs were created in 2000 and 2001 than in years past. The result was an increase in joblessness to 6% in early 2002, the highest in nearly eight years.

Once a company starts to lay off workers, it takes a long time before it starts to hire again. Heads of businesses want to make sure that the economy is rebounding before they add jobs.

And Marilyn Mackes, executive director of the National Association of Colleges and Employers, told the NewsHour that 2002 will have a 36% decrease in job opportunities.

Diploma in hand

For recent college grads in particular, the news is even worse. College graduates may have their well-earned diplomas, but in a tight job market they can lose out to people with more job experience.

Workers with higher degrees and years of experience who were fired from their jobs often take lower-paying jobs over having no job at all - squeezing out all but the best of the new graduating classes.

Realizing that opportunity might not come knocking anytime soon, many grads are taking a creative approach. For some, that means settling for a low-paying job where they can at least earn a paycheck while waiting for job market conditions to improve.

Some are choosing to stay in school longer, heading to graduate school where they hope a higher degree might boost their resumes. Still other students are saving money by moving back home to live with their families.

And a growing number of graduates are discovering the benefits of volunteer service through organizations such as the Peace Corps or AmeriCorps, where grads get work experience helping needy communities, and can postpone paying back school loans.

What's the good news?

Fortunately for future graduates, there are signs that the economy is improving. And even now there are options, if grads know where to look.

The demand for some professions, like teaching and nursing, are at a high point. So, graduates interested in those jobs have a very good chance of becoming employed. And the U.S. government is hiring 16% more people than last year, offering a variety of opportunities in public service.

Also, despite the lack of "first-choice" jobs, the chances of someone with a college degree being unemployed are much lower than people with only a high school education.

Cecilia Conrad, a labor economist, said a college degree "is still one of the best assets you can have in this type of [job] market."

All of which is good news for the new graduates crossing the stage in their caps and gowns.

What do you think? What would you do if you were entering the job market this year?

--Contributed by Emily Birr