“Worst recession in 300 years”: How graduates are coping with Covid-19 job market

Prospect Magazine

26 June 2020

They've had little advice from lecturers, heard nothing from employers, and graduation has largely been a "non-event." What's next?“Worst recession in 300 years”: How graduates are coping with Covid-19 job market

They've had little advice from lecturers, heard nothing from employers, and graduation has largely been a "non-event." What's next?“Worst recession in 300 years”: How graduates are coping with Covid-19 job market

Yousef Sharif, a final year politics student at University College London, had been hoping to get a graduate job at the public relations company where he interned last summer. But as the pandemic unfolded, he was told in an email in January that they were freezing hiring. “So, it’s just kind of a waiting game with them,” he said over the phone.

“In my mind, [studying] has been towards an end goal of getting a job once I graduate and starting off in a career and work my way up, but now it seems like that’s at least going to be delayed,” said Sharif.

Graduation has become a “non-event”
Nearly three months into lockdown, we have only begun to see how the current crisis, which has set off what the Bank of England says will be “the worst recession in 300 years”, might affect young people. Recent data shows that one third of 18 to 24-year-old employees, excluding students, have lost work since March, compared to one in six for those between the ages of 35 and 60. Those under 25, and young women in particular, are more likely than any other group to work in sectors directly affected by lockdown measures, such as hospitality and retail. Xiaowei Xu, an economist at the Institute For Fiscal Studies, told me a third of young people start their careers in those sectors for which demand will be low as long as the lockdown persists. “The question is what will happen when the first rung of people’s career ladders is taken away,” she said.

Job vacancies, a telling indicator of economic activity, are at their lowest since 2012, and the economy shows virtually no signs of recovery outside the health and social care sector. As for final year students, a survey revealed that two thirds of graduating students had seen applications paused or withdrawn due to the pandemic.

Olivia Pope, a 21-year-old law student at the University of Liverpool went through a six-stage application process before being offered a job at an airport regulator. In late March, she received an email saying that her job offer had been cancelled. “I have no written material, barely any advice or guidance from lecturers and the vast part of my belongings are still in Liverpool.” Now, she is working in a warehouse back home in Rugby, Warwickshire, while applying for jobs in the legal and government sectors, though she has “resigned to the fact they are unlikely to be fruitful.”

Alex Forsey, a 22-year-old design student at the Falmouth University, was going to travel to London for a graduate fair at the Design Museum. A designer specialising in the music industry, he planned to showcase a box full of printed record sleeves. “A steady flow of designers walk past,” he imagined wistfully; “the more famous ones obviously won’t have much time, but the ones that talk to every single student do go apparently.” Had it not been cancelled, the fair would have been “a trial run,” a networking opportunity, and the chance to enhance his portfolio ahead of job interviews.

Though graduation is often seen as a step towards adulthood, Forsey described the transition as “a non-event almost.” He had set his eyes on London, “very much where the action is,” but is now considering other options because the roles he thought he could go for “are very much at jeopardy of not being there when I arrive.”

Echoes of 2008
Today’s crisis inevitably echoes the last, even if this year’s graduating class only remembers it through what others told them. “I hear the stories from 2008, where, if you can’t get a job immediately then you start building a gap on your CV where it’s kind of hard to explain what happened,” Sharif said. “And even if you do have an explanation, like a global recession, it’s still not as attractive to employers if they are comparing you to a fresh graduate.”

A 2019 report by the Resolution Foundation revealed that students graduating between 2008 and 2011 were a third more likely to be in low-paid work and to remain in such a job seven years later compared to those who left education in better economic conditions.

“So, if your first job is a good job, then you learn things, you make connections, it’s a good stepping stone going forward,” said Dr Guy Michaels, an associate professor of Economics at London School of Economics. “Conversely, if people take time to land their first job, and the first job is not quite as good as they would have normally gotten, then that hinders their career development and shows over time.”

Economists say that early-career unemployment scars a person’s pay and prospects for years to come. An analysis by the Institute for Fiscal Studies showed that in 2018, people in their 30s were earning £2,100 a year less than people of the same age at the time of the last recession. Meanwhile, the wages of people over 60 had nearly recovered.

Important nuances
It is usually the case that young people are hit hardest by economic downturns. Yet, talking about the “Covid class of 2020” or a “lost generation” could erase important nuances. In the last recession, unemployment rose highest for young people with low-level qualifications, such as GCSE and below. Dr Charlie Ball, head of higher education intelligence at Graduate Prospects, said “it’s a really bad time to be leaving university right now, but it is a far worst time to be leaving education without a degree. It is far, far worse.”

For Dr Michaels, we are facing a terrible choice: “what are the trade-offs between opening and risking more people’s lives, or staying shut for longer and risking livelihoods?”

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