The Lost Generation of the Great Recession

Not long ago, a bachelor’s degree was considered a ticket to the middle class and a shield against the worst blows of a difficult economy and a tough job market. Not anymore, or, at least, not right now.

We are looking at the specter of a Lost Generation of young adults who, through no fault of their own, are entering a labor market with a severe shortage of decent entry-level jobs.

Consider these three news analyses:

Recession’s impact on college grads

Chris Isidore, writing for CNNMoney.com (via Yahoo!, link here), reports on the brutal effects of the recession on newly-minted college graduates:

About 60% of recent graduates have not been able to find a full-time job in their chosen profession, according to job placement firm Adecco.

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And the lack of steady income can also delay the start of their lives as independent adults. About a third of recent graduates are still living with their parents, Adecco found, with 17% saying they are financially dependent on their parents. Almost one in four say they are in debt.

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…[T]hose already hurt by the recession might not bounce back so quickly.

According to one study performed by Till von Wachter, an economics professor at Columbia University, the drag on income lasts for 10 years, on average.

Is college worth it?

Catherine Rampell, writing for the New York Times (link here), revisits the recurring question of whether college is worth the time and expense:

Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.

The next huge bubble to burst?

Along with the scarcity of jobs, new graduates are leaving college with unprecedented levels of student loan debt. Sarah Jaffe, writing for AlterNet (link here), asks if student loan repayment default rates are the next bubble to burst:

Currently, private as well as government-issued and guaranteed loans will stick with you even through bankruptcy proceedings, saddling far too many graduates with debt for life.

Still, bankruptcy reform is hardly a solution to the problems at hand. Imagine 18 percent of college graduates declaring bankruptcy when they can’t find a job, upon graduation, that allows them to make payments on their loans?

Small wonder that many are calling the student loan crisis a bubble possibly worse than the credit card or housing bubbles.

We need a student movement

Jaffe and others aptly raise the need for student activism to provide the necessary political punch to address this burgeoning crisis.

I see no other alternative. Many Baby Boomers may have cut their teeth on political activism, but I do not see this generation rising to help; instead, too many of them are figuring out how to finance their retirements and health care. Instead, it will be up to the younger folks to stand up for themselves.

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Related posts

A younger generation is doing a cost-benefit analysis on higher education

Young and jobless: A global crisis

Graduating into a recession

The Looming 21st Century Generation Gap: Economic Challenges Facing Younger Workers

7 responses

  1. On student debt: as Dr North succinctly put it “They leave college with a mortgage but no house!” (or words to that effect).

    Entrepreneurs create productive jobs but I don’t see how a ‘student movement’ might; can you please elucidate?

    • Argus, I agree wholeheartedly that job creation is key. But a politicized student movement can do a lot, too, including demanding more affordable higher education and public policies that do not unduly burden them with financing the retirement of previous generations.

      • “More affordable” — do you mean as in the price coming down, or more taxpayer funding?

        Now I’m interested in your connection between repaying student loans and “funding the retirement of previous generations”. Catchy, and should win a few unthinking votes—?

        How about if all taxpayer subsidies were removed—don’t you think the cost of education would come down?
        Of course I’m thinking ‘free market’ and ‘user pays’. Anything else is simply a cash cow for the unscrupulous; one that drives prices up. Just look at the price of tuition these days.

      • Argus, rather than engaging in what leads us to a predictable debate, I’ll simply acknowledge our differing opinions on the role of government and taxation! Thanks for lending a contrasting viewpoint to the discussion.

  2. Instead of raising the retirement age we should be lowering it to stop the log jam at the top and allow young people to get into the job market at the bottom. Get rid of the cap on Social Security and we can fund this(right now people that make more than $107,000 stop paying into Social Security). The military always has room to move people in and up by allowing people to retire with 20 yeras in( with pensions and health care most of us can only dream of) and by forcing most people to retire after 30 years. People move through and up the system.

    Too many out of work young people = higher crime rates, more depression, possibly more suicides and maybe radicalism — think Arab Spring. We love it when we can call unrest a move toward democracy — what will we call it when it hits us?

    • Trish, yes, all this talk of raising the retirement age will only serve (1) to keep people working later into their lives ; (2) to force people who do physical labor to work until their bodies give out; and consequently (3) restrict the flow of work opportunities for people at the entry level.

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