By the end of the current academic year, American schools will have conferred an estimated 3.7 million high-school diplomas, 1 million associate’s degrees, and 2 million bachelor’s degrees. Many of those 6-million-plus graduates will soon pursue another degree, but many others will enter a historically terrible labor market, and one that’s especially brutal for young workers. The class of 2020 has some extraordinarily rotten luck to graduate right now, and the unfortunate timing could set many of them back financially and professionally for years.
As of now, it’s not clear for just how long their progress will be stalled. “I would talk [in terms of] years,” Till von Wachter, an economist at UCLA who has studied how young workers fare during and after economic downturns, told me. “If [the economy] recovers in the first year, there’s some hope. If it’s bad into the spring of 2021”—an eventuality that seems more and more likely—“then these individuals should worry.”
The cause for worry is the record of previous graduates who stumbled into an inhospitable economic climate. Researchers have shown that the economic scars of graduating into a recession—sustained higher rates of unemployment (for high-school graduates) and lower earnings (for everyone) compared with peers graduating as little as a year or two earlier or later—can last for as long as 10 or 15 years. This bad luck may also be dangerous for people’s health: Workers who were launching their careers during the recession of the early 1980s were found to have a heightened risk of dying in middle age, often due to increased incidence of heart disease, lung cancer, or drug overdoses.
In line with previous research, the cohort that graduated into the most recent economic catastrophe, the Great Recession, is still struggling overall. According to a paper by Jesse Rothstein, an economist at UC Berkeley, the pay and employment rate of those who graduated from college during the downturn remained relatively low throughout the 2010s.
One big reason these events can be so professionally ruinous for new graduates is that hiring slows or halts. On the jobs site ZipRecruiter, the number of postings for entry-level jobs typically filled by college graduates has fallen 73 percent over the past three months, with the number of openings for internships declining similarly. “While hiring has slowed in every major industry and state since mid-February, the prospects are particularly bleak for new college graduates hoping to start their careers,” Julia Pollak, a labor economist at ZipRecruiter, told me.
On top of that, von Wachter said, “it is larger, higher-wage firms that stop hiring more than small, lower-wage firms.” Relatedly, many of those who do find work take jobs that pay less and don’t draw on skills related to their studies, out of necessity. They may get stuck in jobs like that until economic conditions improve, however long that takes, and then it eats up additional time to job-hop until they find a position that better suits them. Only then, often after years of delays, do they start making the professional progress that for many older or younger graduates commenced right out of college.
When interviewing members of the class of 2020 over the past month as they looked for jobs, I feared that I was witnessing the beginning of this damaging chain of events. Deni Budman, a 21-year-old who graduated from Boston University this month, told me that while her goal is to be a film or TV producer, she’s had to broaden her job search to include communications or administrative positions at “media-adjacent” companies. “No one’s out there making movies right now,” she said.
Even as she’s looked into other options, she said finding work is “definitely still tough.” “And also,” she reminded me, “I’ve never done this before.” When I spoke with her in late April, she was finishing up her last semester at home with her parents, in Norfolk, Virginia. “If I ever get sidetracked [from schoolwork], I’m looking for jobs and then a few hours have passed,” she said. “I’m trying not to let myself go down a rabbit hole.”
Students in some fields are reportedly more likely to be in this position than those in others. One expert on post-college hiring recently told The Wall Street Journal that financial, consulting, and accounting firms generally locked down their newest recruits last fall. Job searches in education, public relations, and creative industries, meanwhile, tend not to start in earnest until the spring semester, which this year was when the pandemic hit. College students in those domains are the ones who are likely having the most trouble now.
The outlook is even worse for high-school seniors who are entering the workforce this year. The possibility of a 10-to-15-year period of diminished labor-market prospects applies regardless of education level, but “lower-educated workers tend to have larger initial losses and a slower recovery,” von Wachter said.
Before the pandemic, Jayden, a 17-year-old finishing up high school in eastern Missouri, was hoping to go to college to become a mechanic and, before that, to find a related job, perhaps at an auto shop. (Jayden's last name has been omitted to protect her privacy.)
Now Jayden isn’t sure if she’ll be able to get that kind of job anytime soon. In the meantime, she’s going to continue with the fast-food job she’s had for her last two years of high school. “I don’t want to work [in fast food] forever, but I also don’t want to quit there if I don’t have a more career-based job,” she told me.
The amount of long-term harm that the current conditions will do to new workers depends on if, when, and how quickly the economy bounces back. “It is fair to assume at this point that the labor market will be in bad shape for the coming year—enough to put labor-market entrants at risk of the long-term effects we found from past recessions,” von Wachter said. “How the recovery of the economy will take place, and how that will affect unlucky labor-market entrants, is yet to be seen.”
Graduating right now is a particular form of bad luck, but those who finished school and joined the workforce in recent years aren’t lucky either. Young people, as a group, seem to be taking a harder hit economically than those in older generations. In March, a survey from the Pew Research Center found that 40 percent of Millennials, 36 percent of Gen Xers, and 25 percent of Baby Boomers said they or someone they lived with had lost a job or earnings because of the pandemic. The same was true for half of the oldest members of Gen Z, aged 18 to 23.
Paisley Simmons, a 24-year-old who graduated from North Carolina State University in 2017, had only been at her new job, a marketing position at a tech company in Durham, for four months when she was furloughed recently. Now, three years out of college, she’s picking up freelance-writing assignments to pay her bills but bringing in “definitely not even half” the money she made at her job, as well as missing out on the meaning she derived from work. She is applying for unemployment and had saved up some money for rainy days like these, but “if [this] were to last several more months, I would probably think about trying to look for other means of work,” she said.
The economic pain of the present crisis is also being felt by college students who are still working toward their degrees. Brandon Northrop’s goal was to move to California and get a tech job when he graduates from Colorado State University in 2021. “I feel like nothing’s set in stone anymore,” he told me. “What if jobs just start collapsing and we wind up in another Great Depression? What if … I think What if is the big phrase in my mind now.”
Since he left campus in March, Northrop has been living at home with his mom and grandmother in Fort Collins, Colorado, and can’t work his usual job at a campus dining hall. If he could find other work while at home, things “would be easier for me and for my family—it’s hard for my family to pay for an extra mouth to feed,” he said. But when he applied for a position at a local grocery store, he didn’t get it.
This group of younger adults—current students, recent graduates, and many Millennials too—could in the coming years lose out on important opportunities to build up wealth and savings, especially if they carry student debt. “Already before COVID hit, young adults were on a much lower trajectory of wealth accumulation than their parents and grandparents,” says Reid Cramer, a fellow at New America, a left-leaning think tank. “This is going to have a huge effect on the balance sheet of a whole bunch of young people, including those who are coming of age and coming out of postsecondary education … This young cohort is really going to be up against it, bookended by the Great Recession and the COVID-19 pandemic.”
One thing that many young college graduates do to seek refuge from economic turbulence is go to graduate school—the idea being that hopefully, they’ll emerge with sharper skills into improved conditions. But because the coronavirus pandemic took hold in the U.S. in the spring, those who weren’t already planning to attend will have difficulty enrolling later this year. Lufeng May Chen, in Kenyon College’s class of 2020, will enroll in a master’s program in the fall, and has watched her classmates scramble to line something up after graduation. “If I didn’t apply to graduate school in the first place, I do not know what I would be doing” now, she told me. “I definitely lucked out.”
Many graduating seniors are not so lucky, and are trying to figure out what, if anything, they can do to improve their lot. To a large extent, they aren’t in control of their own fate. Von Wachter listed out a series of policy fixes that might make things easier on young workers: student-debt forgiveness, new or expanded subsidies for college and graduate degrees, a government program that grants subsidies to employers for hiring young workers or perhaps pays young people to take on otherwise unpaid internships or volunteer work.
“The difficulties these workers are facing are not due to anything that has to do with them,” von Wachter said encouragingly, but he noted that “workers do have agency in trying to make judicious and proactive choices.” Advice from him and others boils down to: Be open to job opportunities you hadn’t envisioned for yourself, be open to living somewhere you hadn’t planned to, network hard even if no one is going to offer you a job right now, and consider volunteering or, further down the line, going to grad school. (And when students do get a job and the labor market is in better shape, von Wachter advised, they should be constantly scouting out other, better opportunities to make up for some of the time they lost.)
Max Brooks works at the career center at Southern Oregon University. When I asked him what guidance he’s been giving to graduating seniors lately, he said he’s encouraging them to polish their résumé, draft cover letters, practice their video-interview skills, build out their online professional presence, and take online classes that build the skills their desired employer is looking for. “None of those things pay the bills,” Brooks acknowledged, “but if you don't have work to do in the short term, can you prepare yourself to be as competitive of a candidate as possible when the opportunities do eventually come along?”
After being told in so many ways to lower their expectations, lots of students are feeling defeated. “I’ve been having an identity and existential crisis, like Did I do the wrong thing by even getting into this industry?” said Christina Chambers, who’s graduating from Penn State and pursuing a career in media law. “I know that my peers and I are feeling like if we take any sort of break, it’s detrimental to our careers, even if it’s a forced break,” said Claire Jilbert, who’s graduating from UC Berkeley.
This misfortune is arriving at a symbolically loaded point in their life. Jamie Talarico, a 30-year-old who finished her studies at Southern Oregon University in March, told me that she knows younger classmates who, with work hard to find, are turning to community and government resources like the Supplemental Nutrition Assistance Program, or SNAP. “There’s this sense of independence that we’re supposed to gain upon graduation,” she said. “It’s not easy to admit that we need things when we’re supposed to be at this point of independence.” That’s another sad consequence of the class of 2020’s terrible luck: They have already internalized some of their struggles as personal failings, even if rationally they know they’ve done nothing wrong.
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