Recession does long-term damage to new careers
By: Leah Fabel
Examiner Staff Writer
July 6, 2009
College students with the bad luck to graduate during the worst recession in decades will likely find themselves playing catch-up on wages throughout their careers.
Each 1 percent increase in the unemployment rate at the time of graduation "impl[ies] an initial wage loss of 6 to 8 percent" compared with graduates in more flush times, according to a recent study by Yale School of Management professor Lisa Kahn.
Kahn's data showed that even 15 years after graduation, the loss of wages was about 2.5 percent, and graduates who entered the work force during tough times were slightly less likely to have achieved career milestones such as tenure or major promotions.
"This is suggestive that workers who graduate in bad economies are unable to fully shift into better jobs after the economy picks up," Kahn wrote.
Economists note that part of the problem is financial pressure to find anything at all, even if it's not in the desired career field, or it barely pays the bills.
"It used to be common that graduates had multiple offers in place, and that's not happening now," said Economic Policy Institute researcher Kathryn Edwards. "So they won't be able to negotiate for higher wages. And it makes economic sense that if you start lower, you're more likely to end lower."
Some recent grads, however, remain hopeful that their career field is on the verge of taking off.
Scott Laeser graduated in May 2008 with a master's degree from Yale University in environmental science and policy and is currently an unpaid intern with the White House Council on Environmental Quality.
Though the search for a stable and salaried job has thus far fruitless, Laeser said he's in the right arena.
"I'm in a field that will continue fairly regularly to hire people as climate change policy becomes a bigger part of our economy," he said.
