Stay in School until the Job Market Improves?
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Philip Brewer For decades it's been a common strategy that's worked out pretty well: If the job market is crappy when you graduate, find a way to stay in school for a year or two—add a second major, go to grad school, find a post-doc. This time, that's not looking like such a good idea. (See also: A Society of Fear)
It used to be, even though an extra year or two of school meant a year or two when you were hardly earning any money, you'd still come out ahead—because the higher starting salary you got entering the job market at a more favorable time would be the base for all your future raises.
That worked great in the days when being a student merely meant that you were broke. Now, being a student means you're going into debt to the tune of tens of thousand dollars a year. If that's what you're doing, you're probably digging yourself a hole that you'll never be able to earn your way out of.
Only time will tell what the new winning strategy will be, but my best guess is that you'll still want to avoid beginning your career during a severe downturn. You'll just want to do it without adding to your debt load.
If you can mark time without growing your debt—for example, as a grad student with an adequate fellowship or assistantship—then go ahead.
If you can't stay in school without taking on even more debt, consider making a temporary entry into the job market. Don't begin your career, but find some paid work that lets you support yourself. Then, when the market looks like it's finally turning around, do something to mark a break with your temporary work and then begin your career.
The obvious thing to mark that break would be to go back to school for the second major or the advanced degree, but that's hardly the only choice. Others would be to take on an internship, do an open-source project, volunteer at a non-profit, start a small company, or write a book.
The point of the break is simply to make it clear that what you were doing before wasn't a failed career, but was rather (like a string of post-docs) just something that you were doing before beginning your career. (My article Fund Your Own Sabbatical is on-topic here. The issues, in terms of taking a break and then reentering the job market, are largely the same.)
The way we fund undergraduate eduction in this country is already leading to a whole cohort of new workers who will be permanently indebted. With a bad job market tempting them to stay in school, the unavoidable additional debt load is just going to make things worse. It's reasonable to be leery about entering the job market during a downturn, but taking on even more debt is not a better choice.
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I see this as an excuse for kids to just stay in college longer and enjoy the party life for a few more years. This is only going to hurt them in the long run, as they won't know what hard work actually means.
Hahaha, oh my. If you're partying hard in college, you're doing it wrong. I will have had two weeks off this school year (Sept->Sept), the week of Christmas through New Year's (spent with family) and the week before school starts (plan to spend sleeping). College or not, I still need to pay my bills. My friends in majors where relevant student jobs are less forthcoming work for minimum wage. If they're lucky it'll be in the restaurant industry so they can take home leftovers to eat at the end of the day. Even with that level of frugality, they need to take out loans because there's only so much you can work with a full course load. The only kids partying are the ones with rich parents, and it's not like they'll ever need to learn what hard work means anyway. Maybe it was free and easy when you went to school, but college has gotten a lot more expensive since then.
Great article! I think you make a good point in that the advice to "stay in school until the job market improved" only made sense when the costs of education weren't so high. It's becoming so expensive that people are barely able to afford getting a Bachelors degree, let alone pay for a Masters (for which it is harder to get funding) or get a PhD (which can be difficult unless you are basically willing to forego 5 years of earnings). It's a tough call these days!
I would also suggest going to a community college while working, perhaps part-time. You can learn practical skills that way. Going back to school for another degree in this job climate is like doubling down while gambling. I finished grad school last year and found a job after six months (and only through networking). Some of my peers are still looking or going back to school for a third degree. My salary's at the bottom end of what I consider acceptable, not much more than I was earning with a bachelor's. I am very, very lucky my parents were able and willing to let me live with them and support me financially until I could get back on my feet.
Bernard, that's an extremely ignorant and cynical generalization; I'm guessing you're from an older generation that never experienced this kind of hardship. I worked through both my graduate and undergraduate studies and did not party at all. Unlike our parents, whose parents gave them prosperity and security, my generation has been gifted with debt and uncertainty. Your generation could get a decent job with a bachelor’s, paid for by selling ice cream on the beach in the summers- if you chose to work- because all you had to pay for were your textbooks (at least in California). For the same starting job, your generation deems someone from my cohort inadequate without a master’s and several internships, never mind that the UC system raised its tuition by 33% last year.
We've already been hurt enough in the long run by the messed up economy and dysfunctional government we've inherited, thanks.
Your subtlety in using the University of Illinois' "Alma Mater" statue as imagery for this article is not lost on me.
I was just trying to find a picture that said "higher education," and I happened to have a picture of the Alma Mater statue....
Wise words. One of my students just completed her MA in English and is going to have to repay 70,000 in debt! She told me that she took the max in loans to finance a lifestyle of meals out etc.
Interestingly, I met a bunch of people in France this summer who are back in school--but in France that's OK (for them, at least, not sure about the economy as a whole) because tuition, housing, and meals are all subsidized.
The advice in this post is extremely unhelpful and potentially even damaging. The decision to enter or not enter the job market should not be based on aggregate job market data but an individual's learned skill set relative to his peers in the same industry along with their individual situation.
If one is worried about entering the job market with an initial salary lower than if they entered when the economy was doing better, they should focus their attention on improving their skills and/or learning how to find new jobs paying the market rate. When the economy picks up and salaries rise with it, people should focus on learning how to find those risen salaries... learn to negotiate, learn to network, find a niche market. Instead of worrying about market conditions that are out of your control, focus on areas that you can improve upon... don't decide to go back school or take a job in an unrelated industey simply because the market is down.
Those are all good ideas, and it's certainly true that every person does not get get the average salary. But I've seen data that suggests beginning your career when the job market is down results in lower starting salaries, and that the resulting lower starting point is not completely overcome even 15 years later. The difference is large enough that you come out ahead waiting a year or two, if that means that starting salaries are better.
Of course, spending those two years improving your skill set is a better idea than just marking time—but if doing so costs so much money that you have to go further into debt, marking time may be a better choice.