Where have all the jobs gone?

Joe Heigert is preparing for finals for what will be his second to last semester at SIUE.  He is a good student, “Mostly A’s a few B’s here and there.”  He’s ready to be done with school and get out into the “real world.”  When asked what he wants to do when he gets done his answer is simple and pretty much the same among most students preparing for graduation.  “I just want to get a job so I can start paying my student loans.”  Just like most students he couldn’t imagine investing all this time and money and not being able to find a job when he finally finishes his degree. 

I’m almost done with my degree at Benedictine University and it hadn’t even occurred to me that I might not be able to find a job when I’m out.  As of late though I have been hearing more and more from recent graduates that they have been unsuccessful at finding a job in their field.  This is almost a nightmarish scenario to those that are up to their neck in student loans.  I decided to start asking around and see how recent graduates I know have been faring in our current job marker. 

The first person who brought this issue to my attention was my sister, Laurie McPherson.  Laurie was in national honors society in High School and went to Eastern Illinois University for 4 years.  She got a Bachelors degree in Psychology from EIU and then moved back home to Springfield to begin her job search.  “The first two or three jobs I applied for just didn’t me call back, so I got a job as a bartender to pay the bills in the mean time.” This seems to be what happens with a lot of recent college graduates.  “Soon I was being told that they either found someone more qualified, or a Masters Degree was required for the position.”  Soon after this she decided to go back to school and is now getting her Masters at UIS. 

After hearing this I began to think that maybe it was just the field that she was in.  Could it be that the field of Psychology just has more positions that require a Masters Degree, and less that require Bachelor’s degrees?  I decided to ask some people in different fields about their job search after recent graduation. 

Timothy Baker Jr. spent two years at Springfield and then transferred to Western Illinois University where he graduated in 2009.  Tim earned a Bachelor’s degree in criminal justice. “I was really excited to get out into the workforce and start my career.”  Tim started applying for jobs immediately after graduation.  “I was working at the pizza place I had been working at since high school, and just waiting to find my new job.”  He had interviews here and there, but never got the call back that he was waiting for.  “After six months, I decided that I needed a job that paid more than delivering pizzas.”  Tim went on to work for Allied Waste picking up trash for awhile, and now sells windows.  “It pays the bills, but it doesn’t require a degree and isn’t what I want to do for the rest of my life.  Tim is still on the lookout for a job that will utilize his degree. 

It was obviously not just the Psychology field that was hurting for jobs; there were lots of graduates in all fields that were having trouble finding a job after graduation.  This is a very scary thing to think about considering the fact that with most student loans you have to start paying back within six months of graduation.

 After talking around to some people I decided to get some more facts.  I came across an article from the New York Times that was all about the struggle recent graduates are having at finding a job in their field.  The article opened my eyes to a shocking statistic.  In 2010 only 56% of graduates had a degree by the following spring.  This doesn’t say too much until you see that in 2006 and 2007 that number was 90%.  It is incredible to me that in a matter of two years the number of college graduates finding jobs dropped by 34 percent.  As if this wasn’t bad enough the article goes on to discuss that even if you do find a job the average starting salary for a four year college graduate is down 10% from 2006 and that is without factoring in inflation.  The next person I talked to showed how real this statistic really is.

I talked to Kate Valasek next. Kate went to ISU for four years and earned a Bachelor’s degree in political science.  She graduated in 2009.  It took her almost a year to find a job in her field.  She worked as a bartender and a waitress during the time before she found her job.  In 2010 she finally got a job as a state employee here in Springfield.  “I was really excited to finally get a job that had something to do with my degree.”  That was until she started getting her pay checks.  “I had recently moved out of my parents house, gotten a new car, and was paying my student loans back.  So I had plenty of bills to pay.”  Her salary at her state job was so low that she recently started waitressing again at nights and on the weekends and says that she is making more money waitressing than she does at her career.  “It would feel like a waste of a degree if quit my state job and waitressed full time.”  So in the meantime Kate will wait and hope for a promotion, raise, or another opening in her field. 

This lack of a job market could probably be blamed mostly on our current recession.  I’m sure the market is also flooded with degrees seeing that more and more people are getting their degrees every year.  It is still something that is hard to digest for the students paying extremely high tuition every year. I just hope I will be one of the lucky ones and not fall victim to this shrunken job market. 

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Michael Lewis

Michael Lewis’ new book "Boomerang: Travels in the New Third World", takes a look at the financial crisis in Europe that appears to be looming over the U.S.  According to his book it started in the United States, then moved to Europe, and now appears to be looping back to us.  Hence the title Boomerang.  For our assignment we are to look at articles from Vanity Fair written by Lewis talking about a certain nation involved in the crisis.  These stories are about Iceland, Greece, Ireland, Germany and California.  These are all places effected by the crisis.  Lewis calls them all a part of a financial disaster tour. 

            The first of the articles I read was called “California and Bust.”  Obviously it is about California.  The beginning of this article features a Wall Street analyst named Meredith Whitney. According to Whitney who correctly predicted Citigroup having to cut their dividend back in 2007 said that this crisis is something that the people of the United States should be worried about in the next 12 months.  Everyone is afraid that the U.S. won’t pay back the money they’ve borrowed.  According to Whitney there isn’t much of a chance of the actual states defaulting because they can always just pass their problems down to the county and city level.  Everyone freaked out in response to this and the municipal bond marked completely tanked.  According to the article from 2002 to 2008 the states debts had doubled.  According to the article “they had also systematically underfunded their pension plans and other future liabilities by a total of nearly $1.5 trillion.”  Underfunded health-care plans, a reduction in federal dollars available to the states, and the depression in tax revenues caused by a soft economy also contributed to the debts the states were amassing.  Each of these things was creating multi-trillion dollar deficits.  According to Whitney it wasn’t the states who would default it, because they had the option to get the money from the individual cities.  From what I can gather the problem is that in America we tend to borrow as much money as we can, without worries about how we are going to pay back.  The way we look at it the more money we borrow the more we can make.  According to Whitney the states would fair differently after the crisis really hits the United States.  She said that the companies would obviously head to the stronger cities because that would be where they would flourish the best.  If the companies moved, the people would follow for the jobs.  All the people leaving the weaker cities would only make the problems worse.  The people who could not afford to move to the stronger cities would really suffer.  This makes it so that the common people would suffer the most for the mistakes made by the states.  The article said that the states that hurt the most would be the ones that borrowed the most.  Whitney said that the scariest of all the states was hands down California. 

            The next part of the article moves from a normal boring article about finance, and changes the style to more of the travel writing style noted on the assignment sheet.  Lewis begins speaking of his meeting with Governor Schwarzenegger.  He paints this vivid picture of his meeting with the governor and their bike ride.   Before he even gets into their discussion Lewis gives you this great description of their bike ride, the people of Santa Monica beach, and their discussion.  Lewis’ talk with the governor revealed a lot.  As before the issue is how Americans borrow in order to live life a certain way, with disregard as to how they will pay it back.  This was shown perfectly when Arnold talks about how in 2011 the average Californian was in a debt of $78,000 up against an income of $48,000. 

            The next person interviewed was Mayor Chuck Reed.  According to Mr. Reed, San Jose owes city employees so much money that if it cut its debt in half it would still end up being broke.  Reed showed a little of glimpse of what the future would be like.  There are two solutions to San Jose’s problem default or drastically cut back on their public services.  This was shown by a few figures.   Reed told Lewis that when he came into office the cities pension cost was $73 million.  This year it would cost $245 million, and in three years time it would cost $400 million.  In order to afford this San Jose cut its city employees from 7,450 to 5400 employees.  This dropped the figure down to the number of people it was employing in 1988.  This doesn’t seem like that big of a deal until you read on to realize in 1988 the city had a quarter of the population.  Reed goes on to say that by 2014 the city will only be able to afford 1600 public employees.  Lewis even quotes him as saying “There is no way to run a city with that level of staffing.”  When asked if he could raise taxes Reed says no way.  He explains that this problem happened as a result of the city spending all the money that was there without any thought as to how they were going to keep it up.  No one wants to pay the money back so rather than doing this they just keep cutting public services such as days the library is open and laying off firefighters and police officers.  The interview with Mayor Reed really opened my eyes to what is going on and why this is such a hard problem to fix.  How can you make an entire culture of people change the way they live? This article was really well written; I especially liked how he put it into blocks, one for each interview.  It was almost like a compilation of a bunch of smaller stories. 

            The next article I chose to read was Wall Street on the Tundra.  This article is about Iceland.  According to the article, Iceland went bust on October 6, 2008.  It has apparently gotten so bad its debt is 8 and a half times the GDP, the people are hoarding food, and there are even reports of people blowing up their cars for insurance money.  Mr. Lewis interviewed a man who had been flown into Iceland to decide whether or not money could be lent to them, even though they are a bankrupt nation.  The man is used to doing work in countries in Africa that were somewhat 3^rd world countries.  For this man this was a whole new experience because unlike the 3^rd world countries he was used to Iceland is extremely well to do, well educated, and very rational nation.   The article says that Iceland’s three biggest banks had assets of only a few billion dollars, about 100 percent of its gross domestic product. Over the next three and a half years they grew to over $140 billion and were so much greater than Iceland’s G.D.P. that it made no sense to calculate the percentage of it they accounted for. It was, as one economist put it to me, “the most rapid expansion of a banking system in the history of mankind.”   From 2003 to 2007 the U.S. stock market doubled, while the Icelandic stock market multiplied itself times 9.  This figure alone is startling.  A professor at an Icelandic University was talking about how hundreds of students moved from studying whatever they had been studying to studying finance.  This doesn’t seem like that big of a deal until Lewis goes on to say that Iceland that has a population about the size of Peoria.
            I felt a strong correlation between the problems of the two places discussed in these articles.  It is a bunch of intelligent people who got caught up in making as much money as possible and didn’t think about the consequences.  This is one of the problems of capitalism, the human error.  It is human nature to be greedy and to keep grabbing up as much as we can without regard to how it is going to impact our financial future.  Lewis does a great job at writing.  This is a topic that seems to be somewhat boring at best to most people, yet the way he is able to put these stories together and to show what could come from this really makes for an interesting read.  Between his vivid descriptions of the culture of the places he is, or his ability to really open your eyes to what could happen as a result of the mistakes that were are making, Lewis is a very skilled journalist.