Losing A Generation February 24, 2010Posted by Dwight Furrow in Current Events, Dwight Furrow's Posts, politics.
Tags: Conservative economics, unemployment
Via Brian Leiter, The Atlantic lays out the disturbing long-term consequences of our current recession and the failure to provide adequate stimulus to the economy—both, by the way, the consequences of a conservative ideology that may be back in power in 2010. Who better to put out a fire than an arsonist?
[I]n fact a whole generation of young adults is likely to see its life chances permanently diminished by this recession. Lisa Kahn, an economist at Yale, has studied the impact of recessions on the lifetime earnings of young workers […] She found that, all else equal, for every one-percentage-point increase in the national unemployment rate, the starting income of new graduates fell by as much as 7 percent; the unluckiest graduates of the decade, who emerged into the teeth of the 1981–82 recession, made roughly 25 percent less in their first year than graduates who stepped into boom times.
But what’s truly remarkable is the persistence of the earnings gap. Five, 10, 15 years after graduation, after untold promotions and career changes spanning booms and busts, the unlucky graduates never closed the gap. Seventeen years after graduation, those who had entered the workforce during inhospitable times were still earning 10 percent less on average than those who had emerged into a more bountiful climate. […]
When Kahn looked more closely at the unlucky graduates at mid-career, she found some surprising characteristics. They were significantly less likely to work in professional occupations or other prestigious spheres. And they clung more tightly to their jobs: average job tenure was unusually long. People who entered the workforce during the recession “didn’t switch jobs as much, and particularly for young workers, that’s how you increase wages,” Kahn told me. This behavior may have resulted from a lingering risk aversion, born of a tough start. But a lack of opportunities may have played a larger role, she said: when you’re forced to start work in a particularly low-level job or unsexy career, it’s easy for other employers to dismiss you as having low potential. Moving up, or moving on to something different and better, becomes more difficult….
The article goes on to provide evidence that people who don’t establish themselves in the job market within two years tend to suffer long-term psychological and physical damage that continues to inhibit their careers even if they eventually find steady work, suffering from increased rates of alcoholism, depression, mortality, and apathy.
I hope things turn around before our students hit the job market.
For political commentary by Dwight Furrow visit: www.revivingliberalism.com