If you graduated college between 2007 and 2010, you were most likely a Millennial and found yourself crushed underneath the economic problems due to the TARP bailouts stemming from the chaos in the financial sector. Many Millennials in this bloc never financially recovered and some continue to suffer to this day in their lives and careers because the transition from ‘university’ to the the ‘work world’ was severely interrupted.
I have been warning at Shoebat.com that COVID-19 and the existing chaos in the financial sector- which was not healed from that time but only worsened -could have the same effect on Zoomers graduating in the same period. Sure enough, in a disturbing repeat of the previous decade, Zoomers graduating today are finding themselves in a similar position, with a mountain of debt and few to no job prosects.
America’s youngest workers started the year with a rare opportunity to slingshot their careers in the hottest job market in decades.
They’ll end 2020 facing some of the nation’s bleakest employment prospects and the most volatile job market ever for recent college graduates.
The unemployment rate for young people age 20 to 24 was 12.5% in September, the highest among adults. Joblessness for them peaked at nearly 26% at the height of the pandemic in April — quadruple the level two months earlier — a bigger jump than in any previous recession back to the 1940.
Although the overall U.S. labor market is gradually improving, it remains far below its pre-pandemic health. Jobless claims fell to 787,000 in the week ended Oct. 17 at the same time that the number of Americans on extended unemployment benefits rose, according to Labor Department data.
Economists say the longer that young people are forced to delay their careers, the worse their prospects will be in the future to hold a job, accumulate wealth, or even get married or start a family.
The labor market of 2020 is a gallery of shattered expectations and the fate of young people like Filipczyk could stifle the long-run potential for the economy, which needs a growing labor force to expand.
“There is a structure to the labor market — if you miss the entrance, how do you get back in?” said Julia Coronado, founder of MacroPolicy Perspectives LLC. “If you veer off the career path by necessity, how do you get back into the pipeline?”
The dramatic swings in unemployment this time around for adults in their early 20s illustrate how volatile the job market is for graduates and non-graduates alike.
For recent college graduates, unemployment during the pandemic peaked at 20% in June, the highest of any age group with at least a bachelor’s degree, Labor Department data show. That compares with a 13% peak in the recovery following the last recession.
To be sure, workers under the age of 20 saw an even bigger spike in unemployment rates and young people typically always get hit hard during a downturn.
Long periods of unemployment, or working part-time gigs or temporarily in jobs outside their desired fields, can jeopardize young professionals’ future salary increases and opportunities for them to build key relationships.
“They take jobs that will help them live and pay the bills, and when times get better they try and switch over to a preferred career path,” said Ernie Tedeschi, a policy economist at Evercore ISI. “They haven’t built the skills and the professional networks and that puts them at a persistent professional disadvantage.”
During prior recessions, recent graduates were able to build connections through coffees and other in-person networking events. But that’s more difficult during a global pandemic. Otherwise-normal parts of job hunting, like interviewing in person, are also more complicated.
The longer the pandemic drags on, the larger the backlog of young people, according to Economic Policy Institute senior economist Elise Gould. Older workers could take jobs that would typical go to entry-level applicants, Gould said.
Employers “don’t necessarily even have to pay more to get workers with more experience,” Gould said. “So those young workers may be left out.”
Job seekers who face high unemployment rates at the start of their careers may endure lower salaries during the first decade of their professional lives, said Jesse Rothstein, an economist and professor at the University of California at Berkeley who recently wrote a paper about the impact on college graduates in the wake of the 2008 financial crisis.
Employment rates for those who graduated college in the aftermath of the 2008 financial crisis remained significantly lower over the past decade compared with older workers, Rothstein found. The last recession also prompted many young people to go back to school, while others changed professions frequently. (source)
Read all of the above carefully, because this is all true. There are many Millennials who can speak to this, and the only difference between the horrible situation that many of them endured is only distinguished by period in history but not the essence of what transpired. The job market is absolutely vicious, merciless, does not care at all for most people approaching it as a common man, and is eviscerating people entirely who are increasingly turning to struggle for basic survival or to engage in debauchery to do it (such as OnlyFans accounts). The economy resembles more of the former USSR in and economic sense than of what the USA is supposed to be.
The only advantage that the Millennials have on the Zoomers in this regard is time- more time to pay off debt, and more time to work in an already badly damaged economic system. They are both on the same continuum, and will both suffer. However, it is possible that the Zoomers may suffer more than even the Millennials because they are experiencing a trend that began over a decade ago and has just been amplified since as a part of the overall larger trends of debt, economic decline, and chaos resulting from it.
I have continually warned that life is going to get a lot harder in the US. Be ready, because the current problems with the younger generation will be reflected in the older ones as well, and they will consume the whole nation in their own time.