How a Recession Causes College Grads to Earn Less Money Their Entire Careers

People with college graduate degrees are facing limited job opportunities and lower possible incomes as the recession looms over our country and the economy. This recession may very well affect the lifetime earnings of the younger newly employed professionals. In a recent Yale study, that followed 1979-1989 college graduates on a career path, it was noted that for each percent increase in unemployment, the initial salary of new entrants into the work force with college graduate degrees fell approximately 7%.  Some graduates had nearly 25% lower income in their 1st year of work, than those who graduated in better economic times. The lower initial income is only one aspect.  The study found that even as much as 17 years later, their lower incomes persisted, and some were making as much as 10% less than their counterparts. Over the course of their career, the income difference could be nearly $100,000 between those with college graduate degrees getting a job in recession times and  grads getting a job in boom times. The study found the lower paid grads in mid career were less likely to be in a prestigious career, more likely to stay in their job, and therefore see less likely to enjoy significant income increases. This raises the possibility that people with college graduate degrees  who start in a low level, low paying job, may be viewed as having lower potential by employers when they seek other jobs. This situation creates career and income hurdles for these lower paid grads throughout their careers.

Studies also show there is a negative correlation to physical health and those who are not working.  Some reasons may be stress and unhappiness, and some may be poor health care due to a lack of economic resources.  Research has shown the affects of this can last a lifetime.  In looking at mortality rates of unemployed men from  the 1970’s - 1980’s, in Pennslyvania, it was found that there was an increase in mortality rates after these men lost their jobs.  Those who lost their job in their 30’s had a shorter lifespan than those who lost their jobs in their 50’s.

For people who have been working and then find themselves unemployed for a length of time, the affects linger long after they find do work, especially if the work is not as high paying or prestigious as their old work. People sometimes lose their identity if their ego is closely tied to their careers.  As frustration mounts from not finding suitable work, for long periods of time, a person can lose motivation and purpose and sense they have lost ground they will never regain.  It is disheartening to go backwards in your career. In a 2008 survey, over 50% of those polled, said that since 2003, they had made little or no forward progress, and in some cases went backwards in their career paths.     

The recession has greatly affected men. Approximately 6 million of the 8 million people who lost their jobs in 2008 were men. Construction, manufacturing and finance are male dominated industries and these are the areas that were most affected by the recession. Health care and education which are more female dominated industries were affected less.  In November 2009, nearly 20% of men in their prime ages for working (25-54) were unemployed.  The Bureau of Labor Statistics stated this is the highest number recorded since 1948. Women may hold the majority of jobs in the United States now.  

Statistics show that domestic abuse increases among unemployed men.  In addition many unemployed men are passive aggressive which is destructive to the relationship. Some women who work while the husband takes care of the kids become dissatisfied with their relationship.  Men very often identify themselves through their work more than women do, and when the work disappears there is a discernable loss. These statistics are not true for everyone, but unemployment damages marriages and creates challenges to relationships. 66% of divorces are initiated by women.  The recession is delaying some divorces due to the cost of the dissolution, but the divorce rate is expected to climb as the recession eases. Marriages where the husband and wife do not have college graduate degrees are even at greater risk. Additionally fewer couples get married during a recession. People usually want to get married when they have a job.

With all the stress that occurs from being unemployed, children too are affected. In less affluent homes, it can even affect nutrition as the family cuts back on healthy eating to save money.  These kids who have unemployed fathers seem to show more psychological issues too. The biggest negative affect of all this on poor kids is the instability within the family.

In another survey, 10% of those 35 and younger have moved back in with their parents due to the rough economic times. If this study pans out it means that a large portion of people with college graduate degrees are headed for rough times their entire life. As a society, it is important that we become aware of this to help them through these uncertain times, to help them keep their egos in tact and to help guide them towards a point that they themselves can aim towards better things in their long term future. The times of today, do not have to label and trap anyone who is unemployed now, for a lifetime. Not all people with college graduate degrees  have a diminished view due to the economy. Those graduates from IV League Colleges and other prestigious universities tend to make up the economic ground lost soon after a recession eases. The 2009 graduates from Princeton University found more employment in the financial sector than in any other business segment.

In another survey, 10% of those 35 and younger have moved back in with their parents due to the rough economic times. If this study pans out it means that a large portion of people with college graduate degrees are headed for rough times their entire life. As a society, it is important that we become aware of this to help them through these uncertain times, to help them keep their egos in tact and to help guide them towards a point that they themselves can aim towards better things in their long term future. The times of today, do not have to label and trap anyone who is unemployed now, for a lifetime. Not all people with college graduate degrees  have a diminished view due to the economy. Those graduates from IV League Colleges and other prestigious universities tend to make up the economic ground lost soon after a recession eases. The 2009 graduates from Princeton University found more employment in the financial sector than in any other business segment.

It is a long road to recovery and there is no magic formula to creating jobs for the mass amount of unemployed and new people with college graduate degrees who want to use their skills in the marketplace. Being unemployed for long periods of time takes it toll on the person and their family members.  Simply going back to work is not the whole solution. Certainly while there is no work, support groups and networking may be viable ways to help those who are out of work, or employed in low paying jobs.

People with college graduate degrees have high hopes for themselves and their future. Hard working and experienced employees who are currently unemployed face an uncertain future as well. Society has a responsibility to its productive members who can’t find work and are suffering emotionally and financially during the recession. Innovation, awareness and a sensitivity to the psychological toll the recession takes on the unemployed is important to realize.  People who are unemployed have a lot of issues they are wrestling with. Some don’t know which way to turn to ask for help. But if help were available, not just in terms of jobs, but in terms of emotional support too, maybe people would have alternatives to help them through difficult times in their careers.  For everyone who is waiting for their career to start or begin again, keep a positive attitude. Look at the big picture. Focus on the important people in your life, and try not to connect your ego to your work. People are valuable and worthy because of who they are, not for what they earn.