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College Degree No Shield As More Jobs Are Slashed
In Far-Reaching Recession, Few Are Immune

By Annys Shin
Washington Post Staff Writer
Sunday, January 4, 2009

When Nena Razmara was laid off in November from her $70,000-a-year job with a high-end residential building supplier, she thought she would be working again by Christmas.

Having worked in residential construction for 20 years, she was used to finding work by flipping through her Rolodex.

"Usually it's three phone calls, three job offers, and off you go," she said.

The 45-year-old Woodbridge resident made her three phone calls. Then three more. But she still had no leads. For the first time since she graduated from college in the 1980s, she scoured help-wanted ads. She sent out more than 150 résumés and posted one on Craigslist under the heading, "I desperately need a job."

In ordinary times, a college degree goes a long way toward securing employment, even during a recession. It also offers some measure of job security: Workers with at least a college diploma are less likely to lose their jobs in down times. But college grads such as Razmara are now finding that a postsecondary education isn't necessarily enough.

In fact, labor economists say the unemployment rate for workers with a bachelor's degree or higher is poised to hit a record high. This recession is so far-reaching, they contend, few are immune from the consequences.

"In a flood everyone gets swept away," said Lawrence Mishel, an economist with the liberal Economic Policy Institute in Washington.

In November, the unemployment rate among workers with a college degree or higher reached 3.1 percent. While that figure is modest compared with the national unemployment rate of 6.7 percent -- and nowhere near the 10.5 percent unemployment rate among those without a high school diploma -- it hasn't been that high since 2003. Because the unemployment rate tends to lag behind other economic indicators, analysts think unemployment among college-educated workers is likely to surpass 4 percent, which would be the highest rate since the Bureau of Labor Statistics began tracking unemployment by education level in 1970.

College-educated workers have steadily become more vulnerable to economic downturns since the 1980s, as employers have resorted to cutting middle managers and older workers who may be more expensive. Older and more educated workers lost their jobs at a higher rate during the recession of the early '90s than in the recession of the early '80s, although younger, less-educated workers still had the highest rates of job losses, according to research by Princeton University economics professor Henry Farber.

College-educated workers "are more vulnerable than they used to be, but historically they've had an easier time in terms of how long it takes them to find a job," Farber said.

The current recession is proving to be broader than the previous two in 1990-91 and 2001, affecting a wider range of industries and workers, economists said.

Government data suggest that since March, the job market for college-educated workers has become weaker than their unemployment rate indicates, said Alan B. Krueger, another Princeton economist.

Last month, the number of college graduates working fell by 282,000, but the number of college graduates counted as unemployed rose by only 2,000 to 1.413 million. The Bureau of Labor Statistics deems people unemployed if they are out of a job but looking for work. The gap between the drop in the number of working college grads and the number counted as unemployed suggests to Krueger that college-educated workers are leaving the workforce by returning to school, retiring or joining the ranks of "discouraged workers" who have stopped looking for work.

David Adsit, 40, of Manassas is among those who officially dropped out of the workforce after he was laid off in the spring. He spent the summer doing volunteer work and resumed his job search a few weeks ago. Until now, the longest he had been unemployed was a week.

"Normally what I would do is post a résumé on CareerBuilder or Craigslist and I would have recruiters calling me left and right," he said. "These days finding a job is actual work. It's a full-time job."

Adsit, who started out as a mainframe programmer in the 1990s, said part of the reason he's had such a hard time is that prospective employers are demanding mastery of a wider range of tasks and security clearances that he doesn't have.

Corporate headhunters said employers can afford to be pickier than they were even just a few months ago because of a surge in qualified candidates.

"The job seekers we're seeing have stronger qualifications than we've seen in recent years based on advanced degrees, universities, and certifications and the reputations of the employers they've worked for," said Steve Kerrigan, east regional managing director of the Mergis Group, a national recruiting firm based in Fort Lauderdale, Fla., that specializes in placing engineering, accounting and finance and other professionals.

It's a job market that favors more experienced workers over recent graduates. David Norris, 54, of Exton, Pa., a veteran financial consultant who has an MBA, was laid off in 2001 and again last year. Seven years ago, he said, it took him 6 1/2 months to find another job. Since he lost his job in August following a merger, he has had five interviews, which yielded at least one solid prospect as a comptroller at a large manufacturing firm -- not a bad result considering he is applying for positions that pay the same low six-figure salary as his previous job or 15 to 20 percent more.

He attributes the relative ease of his most recent job search to the fact that he held a more senior position when he was laid off compared with when he was laid off in 2001. So he had access to networking groups that helped him find leads for higher-paying jobs.

For those who have had a harder time finding a job commensurate with their last one, there is another alternative to dropping out of the workforce: "trading down," or taking positions for which they are overqualified or that are completely outside of their field until the economy improves.

Recruiters who work with professionals have another name for it: being flexible.

"We're telling candidates . . . your next job may not have the title you want or the pay you want," said John Owen, Tysons Corner branch manager for Robert Half International, a national firm based in Menlo, Calif., that places accounting and finance professionals.

Then there's the barista with a biology degree or the dog walker with a master's in journalism.

Razmara, the residential building professional who was laid off, is considering trading down, too. Earlier this week, she lined up one job interview. In the meantime, though, she has bills to pay, so she has been talking to a company about delivering packages.

"I sat down and looked at my budget," she said. "I'm not one of these hoity-toity people who is going to sit here and wait for the tooth fairy."

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