College graduates made up only about 4% of the population of the United States in the 1930s, as the economy was driven by unskilled labor that did not require degrees. Nevertheless, the students emerging into the work force then were faced with the highest unemployment rates in the country’s history. The crisis peaked in 1933 with fully one quarter of Americans out of work. (At the time, the calculation included workers age 14 and up.) That nearly makes 9% unemployment seem like a walk in the park, doesn’t it?
The recovery that began early on in the year was not enough to help the lingering negative effects of a 1960 recession on the job market. The country lost millions of jobs, with unemployment as high as 6.8%. Although much of the job losses were for unskilled and older workers displaced by new technology, people with no work experience (i.e. college students) were also hit hard. Part of the problem was Baby Boomers born in the early ’40s reaching college graduation age at the same time and causing the size of the labor force to balloon and opportunities to decrease.
When the economy starting tanking in 2009, the comparisons to the woes of 1975 began to appear. It was the third year of recession started in 1973 by such political missteps as wage controls, which forced salaries up and employers to cut back. Unemployment rose to 9% in May, just as new grads were hitting the job market. An article in the Lawrence Journal-World dated March 31, 1975, referred to students being “considerably less optimistic” about the job market. A dean at the University of Kansas was quoted as saying, “Most companies aren’t looking for as many people. And students are a little antsy.”
The recession of the early ’80s made for a brutal time to be a job seeker. Between the summer of 1981 and the end of 1982, the U.S. economy lost 3.7 million (3.1%) of its jobs. “Job-market distress” — an unemployment indicator created by the Bureau of Labor Statistics to factor in part-time workers who want full-time work but become discouraged and quit — hit a high of 17.1%. It would be nearly 30 years before it approached such a mark again (2009, see below). Unemployment stayed over 10% for 10 months, maxing out at 10.8% in November.
The situation did not improve much in 1983. The unemployment rate for college graduates set a record of 3.9% in January. The overall unemployment rate, meanwhile, was 9.6% for the year, peaking at 10.2% in April, an oft-cited example of the worst unemployment rate in decades. The next month, when college students all over the country were donning caps and gowns, the “jobs-hard-to-get” index that measures people’s feelings on the difficulty in finding a job broke 50, a mark it would not hit again until 2011. Surveys found employers in agreement that the market for new grads was the worst since World War II.
The savings and loan crisis at the turn of the ’90s touched off a recession in mid-1990 to March 1991. Hiring immediately slid 13.3%, then 9.8% farther in ’91. By ’92, new grads were looking at a dismal job market. Hiring fell another 10%, and although gains were made in the second half of the year, unemployment ended up at 7.5%. Payroll jobs were cut, along with weekly hours. Companies like Aetna Life, Compaq, and Bell Atlantic laid off thousands of workers. The U.S. Bureau of Labor Statistics released a report in February 1993 entitled 1992: Job market in the doldrums.
The unfortunate class of 2009 were the first victims of the 2008 stock market crash that relieved companies of billions of dollars and with them, their ability to take on and pay new workers. Job offers plummeted 20% from the year before. By November, the unemployment rate for recent college grads soared past the 10% rate for the rest of the country to an incredible 16%. Stories of applications submitted to hundreds of employers with virtually no response became common. Newspapers were quick to break out the “worst job market in years” headline, technically true but soon to be made redundant.
Although the class of 2009 was the first to feel the effects of the 2008 market crash, 2010 grads faced a job market as bad or worse than theirs. And they had to contend with 2009 grads still looking for work by summer of 2010. People under 25 with college degrees faced an unemployment rate almost twice as high as that before the recession, not counting those who were underemployed. The labor force for their age group had shrunk by 1.1 million jobs. Average starting salaries fell 1.7% from the previous year. The overall unemployment rate would come out as 9.6% for the year, 0.3% higher than 2009.
Things began to look a little brighter in 2011, mainly because they couldn’t get much worse. But it was still a brutal job market college grads found themselves stepping into that year. The crummy unemployment rate of 9.1% was actually worse than it looked: the workforce participation rate fell to a 30-year low as discouraged job seekers gave up the hunt. And the rate of unemployment for workers in their 20s was visibly worse, hitting 12.8% in June. The average duration of consecutive unemployment also hit a historic record of 40 weeks.
Yes, we hate to break it to you, Class of 2012, but you’re graduating into one of the worst job markets in recorded U.S. history. The national unemployment rate is averaging 8.3% each month, and the story is even worse for recent college grads. More than 53% of workers 25 and under were unemployed or underemployed as of the most recent figures. While the national unemployment rate is trending down from recent highs, don’t get too excited; economists expect the rate to remain at or above 8% into 2014.