Now that events have had time to unwind, I am revisiting this conclusion. Does it hold up? Or should young people start hunting for garrets and devise new recipes for beans and rice?
Well, perhaps not quite yet. There will be better deals available on unheated garrets next winter.
No, I jest. Now let me attempt a serious answer, in multiple parts.
The first thing to note is that I’m more pessimistic about the economy than I was in mid-March, because I’m more pessimistic about the government’s response to covid-19 than I was in mid-March. The only way to restore the economy to its former splendor is to get the coronavirus under control. I don’t see many signs that we’re doing that, which leaves me with the (wan) hope that summer heat, and Americans’ sprawling lifestyles, will combine to help the virus peter out.
Since I’m not terrifically hopeful that the pandemic threat will recede on its own, I’m not expecting a rapid return to reasonably full employment or robust income growth. And having graduated from business school into the teeth of the 2001 recession, I know all too well that when unemployment numbers turn north, those hit hardest will be the people looking for that first job to give them a foothold on some career ladder. For however long the economic contraction lasts, recent graduates face sharply diminished prospects.
That said, I still don’t expect them to be hit as hard as the generation that faced 2008 with new diplomas in hand, for a few reasons:
1. Unemployment is so widespread that being without a job right now doesn’t send any particular signal about workers. So I don’t think employers would be as reluctant as they usually might be to hire someone with a gap on his or her résumé.
2. The recovery should be unusually rapid. Not as rapid as I’d have predicted two months ago but still much faster than in a normal recession, because there will be no lingering uncertainty about what a recovery means: As soon as we’ve controlled the virus threat, it will feel safe to resume normal activity. There will certainly be lingering effects from the closure of long-dying industries, along with viable businesses that simply ran out of capital before they ran out of recession. But the economic fundamentals should feel — and be — sound.
3. During the current job drought, the young have a huge advantage: If they do develop the coronavirus, they’re less likely than other groups to get seriously ill. So I’d expect to see them snatch up a disproportionate number of the jobs that get filled during the coming months.
4. Young workers today will have some respite from competing with new graduates compared with the cohorts that dealt with the past two recessions. Back then, people who lost jobs at the beginning of the recession struggled for a few years, waiting for the economy to recover — only to find that employers often preferred to hire brand-new graduates who hadn’t been scarred by the downturn. For people with undergraduate or advanced degrees, this competition got fiercer and fiercer as people who had trouble finding jobs during the recession piled into school. That’s likely to be less of a problem for the current crop of young graduates. Many current and future college students are likely to take a gap year rather than spend their senior year Zooming from their old bedroom; when things open up again, this educational pause should ease congestion in the entryway to the labor market.
If you’re in that cohort of youngsters, or parent them, these are probably not quite the ringing words of optimism you hoped for. But as long as we’re in the grip of a once-in-a-century pandemic, I’m afraid that these cautiously hopeful notes are the best that I, and they, are likely to manage.
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