June 2, 2018

Graduating in 2020 Might be Brutal

If you are graduating around 2020 you're probably going to have a rough time.

The last recession ended in June 2009. The recession before that ended in November 2001. And the one before that ended March 1991. I could continue, but I think you see the pattern - the period between recessions is typically 5-10 years.

So, unless we're in a special time it is reasonable to expect a recession to begin sometime in the next 18-24 months. This estimation skips any economic analysis, but there are many economic prognosticators out there who feel we are overdue and think the data is creeping towards a slowdown.

If a recession starts in 18-24 months, equity markets (which are inherently discounting mechanisms) will adjust valuations in about 12-18 months. In other words, 2018 might be the last decent year for equity markets.

Unemployment, a lagging indicator, will generally be the last to reflect changing economic reality, depending on the industry. Employment in the investments business might track the equity markets, while manufacturing jobs may be more aligned to conditions in the real economy. Simply put, the jobs market might become much less welcoming in 12-24 months.

While this might sound like a lot of guesstimating, unfortunately that's the reality of economic forecasting. The point, however, is that things could start to get difficult in the near future and we need to make decisions today to protect our future selves.

Studies have shown that graduating into a weak jobs market can have a lasting impact on a person's career progression. I graduated from my undergrad and started my first full time job on September 10th, 2001. I remember because the next day the World Trade Center was attacked. Suddenly, after the attack, funding for projects dried up. Somehow I managed to cling to my job and have progressed since. However, I recall unemployed newly-minted MBA's applying to jobs answering phones. Because career progression is incremental, starting at a lower rung on the career ladder will slow career growth. In contrast, those who graduate into a strong labor market can often leapfrog directly into junior management-type positions.

If the economy indeed slows, the class of 2020 will have a tough time getting decent jobs. If you, or anyone you know, might be looking for work in 2020 I would suggest you start building your experience today. One or two years of relevant experience will help you stand out from other graduates. Moreover, you will also make valuable connections that  can help you find work in the future.

Before I graduated in 2001 I worked at the school consulting shop for a couple years. The pay was shit but the experience irreplacable. This helped me when it came to finding and keeping a job in the middle of the tech wreck of the early 2000s.

Even if you can't find a paying job, do something to start positioning your future self as an experienced candidate. Start a blog. Volunteer to consult for small businesses. Write articles related to your field for the school paper.

Do anything that extends your profile beyond your classes. Future you will thank you for the effort.

No comments:

Post a Comment

Free eBook: 40 Job Interview Red Flags