Recovery is NOT Around the Corner: The Challenge Facing Today’s College Graduates

Recovery is NOT Around the Corner: The Challenge Facing Today’s College Graduates

I hate to be the bearer of bad news on a 4th of July weekend, but this years college graduates are going to face a really tough job market for at least the next five years

The economic free fall that began last October is starting to ease, but that doesn’t mean the economy is going to start growing rapidly, and generating millions of new jobs, any time soon. The banks are still weak, the housing market is still fragile, and the crisis in the private sector is starting to spread to state and local governments. Only the recently passed stimulus package has prevented massive public sector layoffs across the nation, but the stimulus20is a one shot deal and within the next one or two years, hundreds of thousands, possibly millions of jobs in education, health care, corrections and other government functions are going to be lost as state governments have to radically cut programs and payrolls to avert bankruptcy. Unemployment is likely to rise to 11 or 12 percent, keeping consumer confidence, and consumer demand, at very low levels

In the past, the American economy could depend on easy credit to jump start consumer spending when unemployment was high, but that option is no longer there. Many credit card companies are on the edge of bankruptcy, and banks are still too fragile to resume lending to people without strong credit ratings and ample collateral. Businesses which survived the current crisis are finally able to get credit, but new business face an uphill battle convincing banks to invest in them. As for housing, large sections of the market are already glutted with foreclosed and abandoned properties, and until those properties are sold or rented, new construction, on any large scale, is not likely to take place

What this means, for recent college graduates, is that there is no sector of the economy, with the possible exception of health care and federal government employment, to which they can look to as a generator of a substantial number of new jobs. Even education, which produced tremendous job growth in the last ten years is going to be stagnant- bankrupt state governments are already instituting job freezes or laying off teachers.

To survive in this period, college graduates are going to have to take a page from their counterparts in the mid 70’s, who also faced grim economic conditions after a period of rapid growth. They are going to have to radically lower their expectations, as well as their expenses, and learn to live more frugally. What some of us did in the name of “communalism” the current generation can do in the name of “sustainability,” but the key is to create new living units, whether bound by family friendship or shared religious or political values, which radically reduce the costs of food housing and other necessities.

This is something I experienced first hand during those years. When my wife and I first moved to Park Slope in 1976, we formed a living cooperative with the family who lived upstairs from us. We shared house expenses, shared child care and had dinner together three nights a week. Next door to us was a commune, where no families had individual living quarters, and children were brought up collectively. We ate dinner at the commune at least one night a week. We took vacations the same way. For at least ten years, my wife and I spent every summer vacation sharing a house or condominium with another family in our cohort of friends who had young children. Even today, we rarely take vacations by ourselves. The idea of sharing living space, and child care responsibilities is something we view as making life more enjoyable, if we do it with people we like

At a certain point in time, the communal lifestyles we developed went out of fashion, especially as salaries for middle class professionals went up and all kind of new wealth was created in finance, real estate, and information services. But with professional salaries stagnant, and the finance and real estate sectors shredding jobs at a rapid rate, the dream of individual families affording their own private homes or apartments in their late twenties or early thirties is becoming increasingly unrealistic.

College graduates today would be wise to revisit communal and cooperative living arrangements, linking them to environmental sustainability, while developing transportation strategies ( bikes, trains etc) which reduce dependence on private automobiles. And with those strategies in place, young people can live well on a fraction of the income they thought they needed, and avoid the need to find a single professional niche in a time of fierce competition for a shrinking number of stable jobs. At this point in time, any combination of income producing activity, ranging from home or auto repair, to personal fitness, to child care, to home and office cleaning, to music instruction and production, to food preparation, in combination with whatever jobs people can find in health care, education, retail sales and business careers (reception, computer operations, accounting, paralegal etc) can create a sound basis for these experiments in group living

While this may, at first glance seem like a terrible defeat for a generation caught in a dismal economic niche, it may also be viewed as necessary adaptation to a world of finite resources and an important step in saving life on this planet

Whatever else you want to say about communalism, it saves energy as much as it saves space, and encourages cost reduction, and efficiency in areas ranging from home heating, to plumbing, to cooking to food production. I t also turns the living space and the community into a site of cultural and economic innovation as people invent satisfying ways of living and communicating that do not depend on new gadgets and great wealth.

Think about this, if we survive, as a species, people may look back on the era in American and world history, from the mid 1980’s till the Fall of 2008, as a complete aberration, a fantasy brought to life by a society gone made with selfishness and greed. How else will our descendants explain the SUV, the Hummer, the McMansion, the bling bling era in hip hop, the growth of upscale resort communities,, while billions of displaced people around the world live on the verge of starvation and two million people in the world’s wealthiest country live trapped in prison.

Today’s college graduates may still dream of boundless wealth and endless consumption, but those dreams are not a good match for the job market that they face. Rather than longing for a return to an era of rapid economic growth, they would do better to look at their counterparts in the mid 70’s for clues to how to live well in times of scarcity and combine it with their environmental consciousness to map out a blueprint to the future that brings the living conditions of the world’s middle classes more in line with those of the majority of the world’s population.

Mark Naison
July 2, 2009