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.
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.
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.
That means, career advisers say, that this year’s graduating class may have to change more than its spending habits. It may be time for a seismic shift in this generation’s sense of entitlement.
“They’re going to have to deal with a lot of rejection, and it’s this generation ... that hasn’t had to deal with much of that in their lifetime,” says Caroline Ceniza-Levine of SixFigureStart, a career consulting service. “The survival jobs – working at J Crew, bartending – those jobs are tough. It’s very competitive now to get a job at Starbucks. Experienced people are fighting for these retail jobs to stay afloat.”
[Editor's note: This company's name was corrected.]
And there’s another problem young grads face: a backlog of baby boomers.
Mr. Gardner says that even in recent economic downturns, college grads got offers because companies wanted to be ready for the boomer retirement exodus. “Boomers ... have put that card away for awhile,” he says. “They simply aren’t retiring, and they aren’t giving any indication of when they are going to retire.”
But some students say the collision of macro-level circumstances gives them some choices they didn’t expect.
Ellen Erikson, a photography major at Seattle University, says the economic uncertainty frees her to think about taking a teaching fellowship in Austria, or joining the Peace Corps. Nomin Chuluunkhuu, a senior at the University of San Francisco, is planning to open a pub in her native Mongolia. Scotty Fay, who graduated in December from the University of Massachusetts in Amherst, is waiting for Peace Corps marching orders, hoping to ride out the next 27 months practicing French and teaching biology in Guinea.
Mark Cannice, who runs the entrepreneurship program at the business school of the University of San Francisco, says Ms. Chuluunkhuu is not alone. His students, he says, are sensing that “any implicit contract between employers and employees” isn’t as strong as it used to be, which makes “the risk of entrepreneurship relative to a corporate job ... not as great as it may have seemed a year ago.”
Students say that none of the looming challenges will feel real until they’ve donned the cap and gown. “We’re a little bit in a bubble of college and [the economic situation] isn’t really a reality yet,” says Chloe Chessen, a psychology major in Seattle.
Ms. Fay says she wouldn’t worry about the job market even if she didn’t have a Peace Corps placement. “I don’t think we’ve realized how bad it is because we’re so cushioned,” she says of herself and her three brothers, all in college. “That comfort comes from knowing that if we excel and we’re able to keep ourselves working, we’ll be OK, we hope, because we haven’t experienced anything different than that,” says Fay, who worked two jobs on top of her full-time course load.
Whitfield says student optimism, like so much about the impact of the economic crisis, is all relative. The feeling on his campus, he says, is that most seniors are fortunate to live in Louisiana, where collegiate hires haven’t dropped as quickly as they have elsewhere.
“We’re not recession-proof,” he says, but adds gratefully, “We’re not Detroit down here.”