Ripped from the Headlines: Who Loses a Job First in a Recession?

I came across an article written by Sibile Marcellus from Yahoo Finance back in late August and thought it might be worth mentioning in the CKQ. We try to pose good news and bad news from the world of college admission here… this, clearly, leans toward the bad side, but it is important to know nevertheless…

History tends to repeat itself. It may not be an exact match from event to event, but there is almost always a common thread or two that we can read and review to gain a better understanding of what events will take place in the future. In this instance, we can look at past examples of recession in the United States and claim two things quite clearly: 1) holding a Bachelor’s Degree or more tends to make it easier to keep and hold a job; 2) That said, young grads face a much more difficult time than those persons holding a degree for five or more years. If history does repeat itself, it will be young college grads who receive the bullworth of the pink slips from their employers.

The data also seems to suggest that these same recent grads will have the toughest time finding new work and work that they truly want to have.

So, should we be worried about a recession? The data says yes. Two key indicators lie in the U.S. manufacturing output (which fell nearly .4% from June to July and the annual number is down by .5% as of August) and the 10-year bond yield curve, which inverted in August. Is it important to know what that means? No, not really. What IS important is that when the yield curve has gone negative, it has been a precursor to the last seven recessions in this country, dating back to 1969.

The last time we had a recession was the nasty period from 2007-2009, which is marked by the financial crisis of 2008. While much of the country suffered during that period, recent college grads faired extra-poorly in that time frame. Recent grads in 2008, 2009 and 2010, in particular, showed a 6% loss in overall income, compared to similar college grads who graduated from college during a non-recessionary period. A few years later, those same 2008-2010 grads were still at a 5% income deficit compared to their peers.

So, what can be done? There’s some data to support the idea that a few degrees are more recession-proof than others (see Business Administration, Accounting, Math/Science-related degrees) but not a lot of predictability when it comes to who will be laid off first. As such, one thing to consider is how much debt you (or your family) will take on as part of the college process. Avoiding PLUS loans or non-essential borrowing is a good way to start. Finding schools that offer merit aid as part of the financial aid package is another. Third, which I don’t regularly subscribe to, is selecting schools that have high brand awareness for employers.

For those interested in seeing the full article, please follow this link:

https://finance.yahoo.com/news/these-people-are-most-likely-to-lose-their-jobs-first-in-a-recession-160247635.html