The Impact of a Recession on New Graduates

Today I read a short but polarising post from Matthew Yglesias (via a tweet from @jencorbett on Twitter - blog here). In response to a reader he went looking for information on the impact of a recession on the careers of new graduates. While it seems obvious that their short-term ability to find work would be seriously compromised due to less jobs and competition from experienced workers, he was also shocked to find that the long term impact was also horrific.

Indeed, the news is almost shockingly dismal. Research from Paul Oyer and Philip Oreopoulos, Till Von Wachter & Andrew Heisz suggests that the negative impact on earnings of first entering the labor force amidst a recession lasts anywhere from ten years to forever. 

Matthew goes on to explain that when he was a freshman in 1999 it was easy for people to get well-paid jobs because of the tech boom. But by 2003 that was long gone and the people who graduated then had more competition and therefore got lesser jobs and started in a less prestigious firm which can have a "life-long impact on your earnings". 

Where it really get's fun is how he ends the post:

Long story short, life is cruel and unfair, which is one of many reasons why we need economic and social justice and why talk about the infinite justice of market outcomes shouldn’t be taken too seriously.

Matthew is a great blogger, it's neat how he uses a real study to jump to his own experience and then uses that to make his final statement, which reflects his opinion not reality. Problem here is that if you're a recent grad and you believe his opinion then you are going to get yourself into a whole heap of dog dodo blaming "economic and social injustices" from keeping you from getting a good job or earning as much another person, or whatever.

The reality is that life is hard but your time of birth is not one of the social and economic injustices that society is going to fight to cure for you. To believe it's a social injustice that you're born at a certain time is so incredibly weird you're only going to mess yourself up thinking about it. So avoid reading things like this. Sure it might feel good to blame a larger entity than yourself at times, but just remember it won't make an iota of difference to changing your own situation. 

Comments

[RACHNA MADAN]

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