2012 College Graduates: Welcome to the Great Recession
After nearly fourteen years working in the field of investing, and sprinkling a bit of experience in banking, economic theory, and small business development, I can say that one of the things that brings me some long term satisfaction is knowing that I helped a lot of folks that left college and started their first job understand more about the importance of having a 401K or an IRA and saving for later in life. It makes me happy to know that those that I have helped college graduates over the years think about the bigger picture, about long term financial goals, and the short term things they can do now to achieve their dreams and goals.
I remember about four years ago, when I worked at another firm, that a client had I had worked with years ago had called up the company and had actually tracked me down to the specific department I was working in dealing with mostly high net worth clients. He had called to simply say “thank you.” I had forgotten working with him because it had been so long. I left work that day knowing that I had made an impact on a young man and his wife a few years before and advised them on how to save for college for their little girl. Well, that little girl grew up and got accepted into several colleges and chose one of the more costly ones in Ohio. Teaching them the value of a bit of sacrifice and discipline at the time meant that they family didn’t have a huge financial burden when that young lady went away to college.
That conversation only reaffirmed my reason for working in this business. It is about helping others to achieve things and learn the value of vision, goals and discipline. I thought of that family recently as I went through the usual economic reports on economic growth and unemployment. Today’s college graduates face a daunting economic challenge. They are facing what will likely be the highest unemployment rate in history for college graduates.
This years’ graduating class has an underemployment rate of nearly 20% according to the Bureau of Labor Statistics. There are 20.1 applicants for every job opening. There were about 1.7 million college graduates hitting the labor force this year, on top of all those with experience that are still out of work. I hate to stick with the same issue that I’ve harped on all year in these commentaries, but what the heck, I’m going to do it anyway. Debt is going to dictate the employment picture for the foreseeable future.
Before writing this I did some digging around on the Internet to find some information on what college graduates are facing this year. I found even more staggering data about graduates in 2010 who are still living at home with mom and dad because they can’t find a job. Take a moment to imagine what these kids are going through. All their lives they are spoon fed that they have to go to college to find a good job that pays well so they can save and buy a house with a two car garage and start a family of their own. They go through four years and come out with a diploma in a field they want to work in only to find that they are waiting months for a job and have over $100,000 is student loan debt, another $5,000 in credit card debt, the collection calls are coming in and they have to wonder why they started their adult lives behind the eight ball.