College seniors entering job market had a feast, now confront a famine

Andrew Cooper was relieved last fall when he landed a job as a full-time analyst at a major financial-services firm in Minneapolis.

It meant he could enjoy a relaxed senior year with the certainty that a job in his field was waiting for him after graduation, one that would provide him the money he needed to pay his student loans and begin building his post-college life.

Fast forward to a global pandemic that has changed everything, throwing 35 million Americans out of work in a matter of weeks as the economy plummeted into deep recession.

When he graduated in a virtual ceremony this month from the University of Minnesota, Cooper's certainty had evaporated with an e-mail informing him that his job offer had been pulled.

"It's definitely a blow," the 22-year-old said. "It's something you can't really prepare for."

The nearly 3 million students graduating with two- and four-year degrees were sailing into the start of their final semester set to enter one of the best job markets of the young century. Now, having finished their classes remotely after colleges across the country locked down, they must contend with the fallout from the most ferocious downturn in American economic history.

The effect of this unfortunate timing will be far-reaching.

"We have to understand how large the economic costs are," said V.V. Chari, an economist at the University of Minnesota. "Those who say, 'Well, a life is priceless,' should also understand they are condemning a whole generation of young people to substantially more hopeless lives for the next 60 years."

Key research on the subject, led by University of Toronto economist Philip Oreopoulos in 2012, found that a typical recession with a rise in the unemployment rate of 5 percentage points cuts new graduate earnings for the next decade and that "some workers never recover."

The current economic downturn is worse than typical. From February to April, the U.S. unemployment rate rose by more than 11 percentage points.

While the company that originally offered Cooper a job is keeping him on standby week to week, he is seeking out other options — in a more crowded pool of job seekers.

A perk of attending the University of Minnesota's Carlson School of Management, Cooper said, is that companies would show up on campus to recruit the students. Now, he's competing with a scrum of at least 40 applicants per posting.

"It's a lot more competitive," he said. "Now [I'm] being more aggressive."

Long-term effects

Landing a job is, of course, more difficult when the economy is contracting, and that struggle plays out among those newly entering the job market.

For students who graduated in 2015, the most recent data show that about three-fourths were employed two years after graduating, with 46% working full time, year-round.

Only 30% of students who graduated during the country's last recession — from 2006 to 2009 — were employed with a full-time, year-round job two years after finishing school, according to data from the Minnesota Department of Employment and Economic Development.

St. Olaf College senior Hannah Read, an environmental studies and economics major, intended to tackle the bulk of her applications for policy or nonprofit jobs during the second half of her last semester. A few months ago, she expected to have clear options to choose from heading into the job market after graduation. She could go to Washington, D.C., for a public-policy focus, or Denver for its outdoorsy scene, or stay near her hometown of Boston.

If she didn't get an immediate full-time position after school, she could take up a part-time job during the summer while she continued to look. While she has parental support to sustain her financially, she had hoped landing a job would mean becoming more independent.

But the jobs she expected would pop up in online listings didn't, which she said is likely due to the downturn. She was unsure where to turn — if she should apply only to short-term positions or keep trying for a longer-term one in her field. Now, she plans to pursue waitressing or another service-related job in Minnesota to be back near the friends she needed to leave behind from college.

Even her waitressing fallback — a job she often does in tandem with major-related work — is threatened. Thousands of servers are out of work in Minnesota, restaurants are shutting down permanently and the ones that stay in business will likely open slowly.

"It's really uncertain whether people are hiring for longer-term positions, and given the uncertainty of the timeline ... it's really unclear to me what I should be applying for," she said. "It's suddenly shifted my perspective on what might actually be in my best interest."

A way forward

Others have given up on the job market, opting for additional schooling instead.

Cameron Lulic, an economics major at the University of Minnesota, was applying for analyst jobs in February to start after he finishes up one more class this summer, but expected to walk in the ceremony this spring.

Lulic's applications to companies such as Starbucks, Target and Nordstrom have gone unanswered.

"These weren't jobs that I was like shooting for the stars for," he said. "These were the ones that I was like 'Oh, I for sure am very qualified for these.' "

Lulic has since abandoned pursuing a full-time job anytime soon; instead he is committing to pursuing a graduate program in the upcoming year.

"Two months before we graduate, just like everything crumbles between our fingers," said Lulic, who is from Inver Grove Heights and pays for his own education. "Incurring this extra debt is much more worth it than entering a job market that doesn't exist."

But the outlook isn't all so bleak for some soon-to-be graduates. Jake Beaver, a University of Minnesota finance major, accepted a position in October as a consultant at Optum, which is part of UnitedHealth Group. He will start his job in June. For him, the biggest uncertainty is whether he will work from a remote office when he starts, which he said would be a bit more difficult for a job that requires maintaining relationships with others.

"I would definitely be worried about only 100 percent working at home," Beaver said. "I would need that face-to-face interaction to get work done more efficiently."

For Andrew Cooper, despite his sudden job loss, he remains hopeful his personal plans are not set back more than a year.

In the meantime, he is refining his networking and job-searching skills and gaining insight into how to deal the harsher economic times as a job seeker.

"You've really just got to find some different solutions and areas to grow," he said.

Natalie Rademacher, a University of Minnesota student on assignment for the Star Tribune, contributed to this report.
Caitlin Anderson (caitlin.anderson@startribune.com) is a University of Minnesota student on assignment for the Star Tribune.