A negative economic shock
Luca Flabbi is a labor economist and associate professor in the Economics Department at UNC who studies differences in the labor market by gender.
He said the U.S. is experiencing the largest loss of jobs it has experienced in about 50 to 60 years.
“It’s a massive negative shock that’s much more than the 2008 times,” he said. “We have to go back to 1929 to be at this level.”
Because of this, searching for a job now is really difficult, he said.
“It’s really … it’s really bad luck now to be on the market,” he said. “There are less jobs and there is a lot of uncertainty.”
But Flabbi said college graduates are in a much better position than the average person looking for a job, given that such graduates would be pursuing primarily skilled-level jobs that can accommodate remote work.
Research published by the Brookings Institution concurs, suggesting that disparities by education level among unemployment levels exists in the economic fallout. According to the data, the unemployment rate between February and April increased the most among those with a high school degree or less, followed by those who attended some college but had not graduated.
Roderick Lewis, senior associate director of University Career Services, said in an email that there are also discrepancies regarding unemployment between varying industries.
“Jobs that are most impacted are ones that are emanating from specific industries that are most affected by the pandemic because they were primarily reliant on face to face interaction, and were not essential goods/services types of industries,” he said.
Industries that can leverage technology to deliver their goods, services or experiences, he said, are actually growing and posting many jobs on online platforms such as Handshake.
In this sense, Flabbi said there are some benefits created by the pandemic for the highly educated and highly skilled labor force — the sector to which UNC graduates actively seeking employment would belong.
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One such benefit, he said, is job experimentation. Because jobs are limited, recent graduates might be open to pursuing other careers. Another includes the flexibility, in terms of location, associated with working remotely.
Lewis said the greatest challenge UCS has experienced this semester is not a shortage of job opportunities for students — but rather virtual fatigue and the mental stress the pandemic has inflicted.
“That has significantly impacted student participation and engagement with career services programming and events,” he said. “It seems counterintuitive, because everyone assumes that the job market fears would drive students in droves to career services across campus. However, this is not happening here, nor is it happening at other university campuses according to my counterparts.”
The pros and cons of graduate school
Flabbi also said students may choose to pursue graduate school. This occurs because the opportunity cost of doing so is lower, since the value of the next best alternative, potential income from entering the job market, is lower.
The number of applications received by UNC's Graduate School increased between 2006 and 2010, according to data from the Office of Institutional Research & Assessment — suggesting that applications to the Graduate School increased as the Great Recession began and progressed.
Because of this and the current state of the economy, Dean of the Graduate School Suzanne Barbour said she expects to see an uptick in applications next year.
“It’s not uncommon when times are tough, quite frankly, that folks rather than going out onto the job market decide to go to graduate school as well,” she said.
She said doing so is possibly worthwhile for students who have the flexibility after their college graduation to increase their work value, if applicable to their future career. But she said though graduate school can be an incredibly valuable experience, it’s not for everyone right out of college — even in a pandemic.
Even in a tough labor market, Barbour said, it may be valuable for some students to spend time getting to know themselves better and building skill sets needed for their future careers through workshops, LinkedIn certificates and non-degree credentials before considering graduate school.
“If you don't go to graduate school immediately after undergraduate, that doesn't mean the door is closed,” she said.
Flabbi said he’s hoping the labor market will experience a fairly quick rebuttal, but that it depends on whether the country will experience another wave of COVID-19 clusters.
“There is hope that the rebound may be quick, say by the time we have a vaccine,” he said.
If there’s a vaccine by spring 2021, Flabbi said he expects the labor market to experience some improvement by next fall.
There are currently more than 100 COVID-19 vaccine candidates under development, with many in the human trial phase, according to the World Health Organization.
Regardless, Flabbi said there is research that suggests that graduating in a recession has some permanent effects on the financial and professional outlook of a person.
But the permanence of those effects will depend on how long the economy stays in the recession.
“The world’s changing quickly, and I think the workforce and workers are going to have to change quickly as well,” Barbour said.
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