September 13, 2011

A False Sense of Job Security

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Both Capitol Hill and East Hill share a common obsession this week: jobs. On campus, upperclassmen are participating in the annual Career Fair in Barton Hall, while in Washington President Obama is preparing to send the American Jobs Act to Congress. For seniors, the week certainly evokes mixed emotions — the large number of corporations exhibiting at Barton is encouraging, however the struggling economy leads to diminished financial prospects. The precarious financial situation many college graduates find themselves in is serious, but students are certainly not among the primary beneficiaries of Obama’s legislation. At Cornell, we are fortunate to have favorable career placement; but it would be remiss not to recognize alarming employment trends and hope for a better legislative response.By now, most of you have probably heard of the American Jobs Act in some form. President Obama introduced the Act in a special joint session of Congress with the aim of “putting more people back to work and putting more money in the pockets of working Americans.” The Act incentives businesses to add jobs through payroll tax cuts, prevents layoffs, supports the hiring of veterans, funds infrastructure improvements, reforms unemployment insurance, and expands an existing payroll tax cut. Perhaps most ambitiously, the President plans to pay for the Act completely through reappropriations and deficit reductions.If successful, the Jobs Act could be exactly what President Obama needs to re-energize his disillusioned liberal following. Additionally, stimulating the economy through job creation seems noble and worthy, provided the necessary deficit reduction measures aren’t draconian. Many of the primary beneficiaries of the proposed legislation, including veterans, teachers and especially the long-term unemployed, are presently disadvantaged by economic conditions (particularly state and municipal budget shortfalls). They need all the help they can get. But so do students.   At the surface, the American Jobs Act doesn’t particularly impact students or new members of the labor force. Younger people will definitely benefit from infrastructure improvements, and young entrepreneurs will be greatly benefit from qualifying for unemployment insurance. In terms of direct benefits, the Act promises a fund for subsidizing the employment and training of low-income youth.Nowhere, though, is there mention of how to put young college graduates to work in jobs matching their educational attainment. No special incentives are given to employers in industries that hire young Americans and no effort is made to address potential spacial mismatch between the supply of college graduates and the demands of the labor market. A government website created for the Act highlights its impact on women, Latinos, African Americans and Low-Income Families. Again, any recognition of the predicament many recent college graduates face is absent.Perhaps one reason the government isn’t addressing students directly is that many of our job problems have only recently manifested. Historically, college graduates have had significantly higher earnings profiles and lower unemployment rates than Americans who only hold high school diplomas; but their employment prospects and earnings  have declined significantly in recent years.Recent data is certainly bleak. A study conducted from 2006 to 2010 by economists at Rutgers University found that only 56 percent of members of a nationally representative Class of 2010 had jobs upon graduation. The study also found that only 52 percent of those employed considered a college degree necessary for their first job. Earnings potential also declined — from 2006-2007, 28 percent of graduates earned a lot less than expected, while from 2009-2010 that figure increased to 39 percent. Add in the fact that student loan debt averages $20,000 for college graduates from 2006 to 2010, and you see college isn’t quite the safe investment it used to be. You won’t see Souvalki House or Green Hornet tabling at the Career Fair this week. According to a New York Times analysis of Labor Department data, however, some of the largest increases in employment of college graduates aged 25 to 34 were in the taxi and limousine, gas station, convenience store, and restaurant and bar industries. Fortunately, none of the “Employers Hiring the Most Cornellians,” according to the Class of 2010 Postgraduate Report, fall into any of those categories. Instead many leave the Hill to pursue careers at banks, consulting firms and in public service. A cursory glance of the employers recruiting at the Career Fair confirms this tendency, which isn’t exactly reassuring — Bank of America is preparing to lay off 30,000 employees and HSBC also plans to cut 30,000 jobs by 2013.In terms of employment, Cornellians fare much better than average college graduates but are not immune to the fluctuations of the labor market. It probably doesn’t hurt that, according to the Princeton Review, we have the 8th best career services department at any national university. Cornell Career Services compiles statistics on the postgraduate activities of students, and refers to those not employed or attending graduate school as pursuing “other endeavors.” The percentage of Cornell bachelor’s degree recipients in this category increased from 12.8 percent of the Class of 2008 to 16.9 percent of the Class of 2010. That spike probably hasn’t come from a sudden desire on the part of new graduates to “volunteer and travel.” Most likely, more of our Cornell brethren were unsuccessful in attaining employment or graduate school admission. It’s also important to note that survey responses are voluntary and only 72.5 percent of the Class of 2010 participated in the latest published report. Thus, the statistics are inherently biased and the real percentage of unemployed graduates is probably even higher.The tale of the struggling college graduate isn’t as popularly depicted in the media as that of the public school teacher, and certainly contrasts with the security and assurances of Career Fair exhibitors. As privileged as we are to attend Cornell and have many unparalleled opportunities, we can’t assume jobs will come with graduation. And neither can Washington. The Career Fair will probably lead to more opportunities for Cornellians than the American Jobs Act, but it won’t help all of us. We’re still waiting on a dream.Jon Weinberg is a junior in the School of Industrial and Labor Relations. He may be reached at [email protected]. In Focus appears alternate Wednesdays this semester.

Original Author: Jon Weinberg