This will be my last post over here, so let me express my gratitude to Hardknocks and Angel for giving me a wider platform to post my scribbles. Also, thanks to you all for not flaming me in the comments - though I suppose it could still happen. In any event, everyone is welcome to stop by my place any time - it's basically the same material I posted here, but with more swearing and insults.
With that said, the BLS report on payroll employment for March is either coming out tomorrow or was just released (depending on when this gets posted). The consensus estimate is an increase of 200,000 payroll jobs. Of course, the vast majority of any increase is due to hiring short-term workers for the Census - the consensus for private employment is a much more subdued 40,000.
But whether the numbers show a big gain, a small gain, or even a loss of jobs, keep in mind that the monthly results are mostly noise. Much more important is the long-term trend. For that, the Minneapolis Fed maintains its Recession in Perspective site. It's fun to play around with some of the features, and the chart below compares job loss and recovery across some recent recessions.
Barry Ritholtz notes that "If the 2007-09 Recession end up being anything like the 2001 recession, we are still 4 or 5 years away from a full jobs recovery back to employment levels prior to the crash." Scary as that is, those overeducated, overindebted, and underemployed readers of this blog, may "prefer" to think of it another way.
For every month of those 4-5 years of elevated unemployment, thousands of 20 and 30 somethings are going to sit for the LSAT, GMAT, MCAT, or GRE, and sign up for a lifetime of crippling debt that they never would have considered in a normal job market. Sitting in class praying for a recovery before they receive their degree, so that they might at least have a shot - however slim - at the middle-class life so many could take for granted a few decades ago. And when it all goes south, they'll sit at their computers - while reading this blog and dodging calls from Sallie Mae - and wonder how they could have been so wrong. Think the MBA, JD, MD, and PhD markets are saturated now? Just give it a few years.
I leave you with that thought to mull over as I bid you farewell.
Best,
AFEP
Posts
Thank you for all of your excellent and informative posts. I really enjoyed them all. What you mention towards the end of your post is so important for people to understand.
ReplyDelete"For every month of those 4-5 years of elevated unemployment, thousands of 20 and 30 somethings are going to sit for the LSAT, GMAT, MCAT, or GRE, and sign up for a lifetime of crippling debt that they never would have considered in a normal job market. Sitting in class praying for a recovery before they receive their degree, so that they might at least have a shot - however slim - at the middle-class life so many could take for granted a few decades ago. And when it all goes south, they'll sit at their computers - while reading this blog and dodging calls from Sallie Mae - and wonder how they could have been so wrong. Think the MBA, JD, MD, and PhD markets are saturated now? Just give it a few years."
Thank you for saying this. The economists can say that the recession has ended (for the banksters maybe) all they want, but the struggle won't end for most Americans for a decade if not longer. The current administration has not responded appropriately with a stimulus bill that would have created the necessary job growth to stop the bleeding. Now we have a "jobless recovery" and more people entering school without the understanding of what they will face in 3-5 years. There will be a lot of young people who will never find a decent full time job and the situation is worse for anyone with a graduate or professional degree.
Well, the "brilliant legal scholars" and their puppets think that the legal market will recover shortly. (Of course, this is based solely on wishful thinking.)
ReplyDeleteThanks for filling in the past few days. These scam-blogs are starting to pick up some steam. And, yes, things will get worse as legions of people are seeking "refuge" in graduate school. This will create a huge bottleneck. For instance, why will law firms want to hire Class of 2009 grads, when they can pick up fresh JDs in 2011 or 2012.
And working for free - so someone else can make money off your labors - is foolish. It does not help you pay your loans and other bills. And it also shows an unwillingness to accept reality or to put food in your family's fridge. At least, burger-flipping JDs show that they are smart and humble enough to support themselves and their families.
I have a term for this--the Education Arms Race. In an attempt to outdo their similarly-situated competitors, people flood into the colleges seeking higher-level degrees to trump the qualifications of other people.
ReplyDeleteDecades ago a high school education was sufficient to be able to earn a middle class living, and people who had college degrees were a rarity. (Ironically, people who go into the trades with just a high school education today are doing better than many with college education.) Then everyone started going to college. Then Bachelors degrees became a dime-a-dozen, and so people then flooded into the graduate and professional schools in order to increase the sizes of their arsenals (their college credentials). Now lawyers and MBAs are a dime a dozen and it isn't uncommon to find people who have more than one advanced degree.
In a time of recession, the opportunity cost of going to school decreases, and so even more people will flood into the universities seeking to retrain and reeducate for non-existent job positions.
Today, higher education is very much an arms race. In reality the number of college-education-requiring jobs has not increased nor does our society really need all that many people who are college-educated. The end result is not additional solid middle class jobs for the populace, just an increased amount of debt and underemployment. It is destructive and wasteful, and it is harming people's lives and our nation's economy.
To quote Spaceballs,
ReplyDeleteDarth Helmet: "Ludicrous Speed! GO!"
Darth Helmet: "Stop this thing!"
Colonel Sandurz: "We can't stop, it's too dangerous we have to slow down first!"
Darth Helmet: "Bullshit! Stop this thing!"
*Crash*
Just replace above mentioned section from traveling at light speed, to the Baby Boomers fucking up one last thing their parents gave them, education ensuring a decent middle class.
Thanks for the kind words HK, happy to help out.
ReplyDeleteCouldn't agree more with all four comments. A tremendous debt-based bubble has been building in education for at least a decade. The next 5 years will likely be the blow-off top. The closest analogy being the housing market circa 2005-2007.
Unfortunately, you can't walk away from educational debt the way you can from most mortgage debt. Unless you leave the country, that is.
Agree completely on this one. The worst is yet to come for the education bubble. The outdated "education or bust" mantra still lives and is living very well, thanks to the current re-pression. Teen-lemmings are being led of a cliff by the masses.
ReplyDeleteAnd to sum up Frank the Underemployed Professional's comments, college is the new high school.
Everyone is conveniently forgetting about IBR, which caps the students payments at 10% of their income. (or 15% of their "disposable" income, which is usually roughly the same).
ReplyDeleteNobody will be starving or homeless because they are paying all their income to loan repayments.
In addition, although loan balances cannot be discharged in bankruptcy, they will be forgiven in 20 or 25 years, or even 10 if your work qualifies.
People going into higher ed nowadays have nothing to worry about on the loan repayment front. Absolutely nothing.
Stop the fear mongering. If you want to counter any IBR arguments, please do so. I personally think that there is indeed an oversupply of PhDs, MBAs, JDs, etc. But they will not be screwed over because of loan repayments. It'll be a grand waste of their time and all, but loan repayments are not an issue anymore. Aside from the possibility that Republicans take over and reverse IBR, I dont see any problems with taking out 100k in federal loans to fund school. At least not for the student himself. For the govt, well, that's another story.
federalz loanz. whatz aboutz ze privatez onez.
ReplyDelete