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YOU DECIDE: What's the future for new graduates?

May 27, 2010

MEDIA CONTACT: Dr. Mike Walden, 919.515.4671 or michael_walden@ncsu.edu


Dr. Mike Walden
Media representatives:For a high-resolution version of this photo, call 919.513.3127 or e-mail dave_caldwell@ncsu.edu.

Across North Carolina, thousands of high school and college students are finally getting their ultimate prize -- a diploma. After a summer break, some will continue their schooling by going on to college or graduate school. Others will stop their formal education and venture out into the real world of full-time work and responsibility.

For those graduates moving on to the office, factory or farm, what kind of work world will they find? The recent news hasn't been very encouraging. Unemployment is at a modern period high in North Carolina. Pay raises have been few and far between. And although economists do see some encouraging signs in the state's job market, progress will likely be slow.

So what's the pep talk I would give a fresh job entrant? What can I say that's positive and uplifting amidst so much relative gloom in today's economy?

To quote an old saying, my first point is "this too shall pass." The recession that has gripped our economy for most of the past two years will end; indeed, some economists say it already has. It will be succeeded by a period of economic growth. But this won't be the last recession. Recessions are part of the business cycle, in which economies grow for a while, then fall back (recede), then grow again, then recede and so on.

In other words, our economy doesn't move in a straight line. Workers should expect ups (good times) and downs (bad times). I remember my father -- who never completed high school and worked all his life in the construction industry -- recognizing this cycle. When the work was there, he'd take it, even if it meant 12- or 15-hour days. This was because he knew there would be many times when there would be no work. So my father would work and save for those inevitable rainy days. This is good advice!

Another piece of blunt economic advice is to remember that jobs aren't guaranteed. Businesses don't owe people jobs. A business hires workers for what the workers can do for the business, to help the business produce a product or service and make a profit. If the business owners can make a larger profit by substituting machinery or technology for workers, they'll do it.

What this harsh reality means is that workers must constantly prove themselves. They must always show the boss they are valuable and contribute to the bottom line. Often this requires the worker to look at things from the boss's perspective and recognize what the boss wants from workers. Also, workers need to be flexible, willing to change and eager to learn new techniques and skills.

Of course, I work with college students. Over the years, I've discovered two misconceptions about college degrees. One is that a college degree will guarantee a person a job. While it is true that the unemployment rate today for a college graduate is about half that for a high school graduate (5 percent vs. 11 percent), both have doubled since the recession began. Indeed, nationwide there are over 2 million unemployed workers with a bachelor's degree and 3 million jobless with an associate's degree.

The other myth is that a college degree is required to get a job in today's economy. About half the jobs today require a high school degree or less, and projections from the U.S. Department of Labor say the same will be true 10 years from now. So a person will be able to obtain a job without a college education. It's just that -- on average -- the job will pay much less. Jobs requiring a college degree pay almost twice as much.

My last message to today's graduates is: be excited! There's no question our economy faces challenges, and in many ways it's harder to work and succeed today than in previous decades. But there is an upside. In the past, the aftermath -- the period after an economic downturn -- has often been associated with major inventions, new industries and unpredictable opportunities. Many futurists think we're on the cusp of another such economic rebirth. It's easiest to see advances in technology, but there may be entirely new enterprises opened up in fields like nutrition, health care and medicine, transportation, energy and -- yes -- even manufacturing.

And if there's one thing that today's young people have going for them that earlier generations maybe didn't, it's their willingness to try new things. Today's high school and college graduates have probably been exposed to more change than any generation in history. Since more change is to come -- and to come more rapidly -- new workers may be better prepared than older generations to cope with and even embrace what's ahead.

So with their flexibility and openness, it can be argued that today's graduates are the perfect ones to be left with an uncertain future. I'm hopeful those of us who are much older will be around to decide!

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Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University's College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The Department of Communication Services provides his You Decide column every two weeks. Earlier You Decide columns are at http://www.cals.ncsu.edu/agcomm/writing/walden/decide.htm

Related audio files are at http://www.ncsu.edu/waldenradio/

Posted by Dave at May 27, 2010 03:14 PM