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US grads' job expectations on hold

The class of 2009 makes adjustments in the face of a dearth of jobs and increasing interest rates on student loans and credit cards.

By Jina MooreCorrespondent / May 28, 2009

Tulane University students in New Orleans head into a US economy much less welcoming than when they enrolled in college.

Mary Knox Merrill/Staff

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New York

Anna Fulton never thought she’d land a cushy job with a high salary and plush perks right after college. That’s never been the path open to college seniors like her, with double majors in English and German.

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Last summer, as her business-major roommates at Pacific Lutheran University in Tacoma, Wash., landed internships with high-profile consulting companies, Ms. Fulton worked at a shipping and packaging firm. She was recruited by an employee with a degree in something even less practical: Norwegian.

But as graduation nears, it’s Fulton’s roommates who are feeling insecure.

“My roommates went into [business] to get a job right away and start making a lot of money,” Fulton says. “All of a sudden, they’re competing with people who have been working 20, 25 years who have been laid off.”

In the biggest financial crisis since the Great Depression, Fulton and her fellow students find themselves facing a tricky financial matrix: As job opportunities dwindle, their rent and grocery bills are high, their student loan and credit-card interest rates are climbing, and a night out costs so much that they stay home.

As the class of 2009 graduates, it is rethinking spending, saving, and the Millennial Generation’s aversion to jobs that involve offering “fries with that.”

Fulton and her friends started with their spending habits. As the economy worsens and graduation looms, she says, “We’re just not spending money on extra things. We’re cooking a lot more, eating out a lot less, and there have been a lot less random trips to Target.”

These aren’t typical traits of Fulton’s generation, says Michael Hais, coauthor of “Millennial Makeover: MySpace, YouTube, & the Future of American Politics.” “They’ve grown up in a consumer society.”

Accustomed by culture and habit to immediate gratification, the Millennials have tools most of their parents didn’t, like credit cards. And now they’re paying for them with “just-swipe-it”-induced debt. Eighty-four percent of undergraduates have at least one credit card, and median debt on those cards is up 55 percent, to $1,645, since last year, according to student lending institution Sallie Mae. A fifth of seniors carry more than $7,000 in debt.

Those are habits of an easier time, students say. “If you go back four years ... and you ask [today’s seniors], ‘Picture yourself in four years. What will the economy look like?’ I don’t think anybody would’ve guessed this,” says Kyle Whitfield, a Louisiana State University senior. “It’s like, pinch me, this isn’t really happening to me.”

A journalism major and editor of the campus newspaper, Mr. Whitfield says that as a freshman, he might have hoped for four or five job offers. He barely got one: an offer for a six-month paid internship.

“There’s a common denominator” across majors, Whitfield says, “and it’s that we’re not getting the kind of multiple job offers a lot of us would’ve expected.”

Even several years out, some observers say, today’s graduates may not have the jobs and financial freedom they envisioned as freshmen. The most optimistic research suggests graduates in a recession earn less than their recession-free counterparts for up to 10 years; some studies say those effects last a lifetime. While experts say it’s too soon to tell how the crisis might permanently alter job prospects and spending habits, all agree that it isn’t a short-term problem.

Graduates need “to keep their expectations in place while they endure the next couple of years,” says Phil Gardner, who directs the Collegiate Employment Research Institute (CERI).

CERI’s 2009 collegiate hiring report calls the entry-level job market a place of “quiet desperation.” Seven percent of the companies surveyed say they won’t hire anyone out of college this year – more than double the 2008 number. And 49 percent of companies say they’ll take fewer college grads this year than last.