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Dazed and Confused
Graduating from university or college is supposed to be a celebratory event. Sadly, given all of the recent layoffs and hiring freezes in Canada, spring convocations probably won’t be so merry. Although this annual passage into quasi-adulthood is often regarded as a struggle for grads with generic arts degrees and diplomas, even business students will suffer in 2009.
Al Hawley is one of the many who believes his job-hunt efforts are futile: he will graduate with an arts degree in economics from the University of Guelph this spring and he’s having difficulty finding a job. To date, his hunt has demonstrated that only the top students—and those with connections—have any real chance of landing a job in their desired field. “I have an average degree from an average university,” he said, “What do you expect me to do?”
Hawley’s frustration isn’t unfounded: a group of researchers from the University of Toronto, Columbia University, and Statistics Canada who studied the effects of graduating in a recession [PDF] found that unemployment rates of young workers jumped by seven percentage points during Canada’s two major recessions in the 1980s and 1990s. This spike also affected grads who were lucky enough to find jobs—the over-supply of workers deflated wages, leading to “significantly lower” incomes relative to students who graduate during an economic boom. According to the study, this gap did narrow until the ninth year after graduation, when recession grads’ incomes reached parity with their luckier peers, but that’s still a lot of lost income that could be saved for big ticket items like a new car or a house.
It’s still far too early to predict how long this recession will last and how badly it will affect Canada. There is some relief for new college and university grads, though: one study has demonstrated that recessions hit working class jobs in Canada the worst [PDF] and that unemployment in white-collar jobs increases less significantly during these times. Then again, this historical trend could break if the federal Conservatives follow President-elect Obama’s infrastructure and construction spending plan.
It is precisely this uncertainty that is causing the deepest worry among this year’s graduates. A respite in hiring wouldn’t be so bad if everyone believed the economy would come back strong in the near future—if anything, it could give new grads a reason to travel at a low cost or to take a break between school and the rest of their life. But unfortunately, no one knows how long it’s going to last. Still, there is at least one group of students who will benefit from this scenario: those who opted against a full course load or who dropped a few classes during their undergrad experience. That victory lap is looking pretty sweet right now.
Photo by margot.trudell from the Torontoist Flickr Pool.