Posting here will be a bit sporadic (as you no doubt have already noticed). My grandmother had a stroke and remains hospitalized, and it’s greatly shaken me. She and I are close. I also suspect my soda damage was more extensive than I thought. (Low power at 87 percent?) I’ll have to buy a new Mac.
I did read this article today in The Atlantic titled “How a New Jobless Era Will Transform America” by Don Peck that I wanted to share (h/t: Rod Dreher, who I don’t always agree with but always enjoy reading). Actually, my feelings on this article are about the same: I don’t always agree–the author of the piece is particularly critical of the so-called “Millenials” who graduated during the Aughts (2000s).
However, what particularly hit me hard, because I feel the same way, are these paragraphs, which I am generously quoting because they deserve to be read:
Lisa Kahn, an economist at Yale, has studied the impact of recessions on the lifetime earnings of young workers. In one recent study, she followed the career paths of white men who graduated from college between 1979 and 1989. 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 you add up all the earnings losses over the years, Kahn says, it’s as if the lucky graduates had been given a gift of about $100,000, adjusted for inflation, immediately upon graduation—or, alternatively, as if the unlucky ones had been saddled with a debt of the same size.
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.
“Graduates’ first jobs have an inordinate impact on their career path and [lifetime earnings],” wrote Austan Goolsbee, now a member of President Obama’s Council of Economic Advisers, in The New York Times in 2006. “People essentially cannot close the wage gap by working their way up the company hierarchy. While they may work their way up, the people who started above them do, too. They don’t catch up.” Recent research suggests that as much as two-thirds of real lifetime wage growth typically occurs in the first 10 years of a career. After that, as people start families and their career paths lengthen and solidify, jumping the tracks becomes harder.
This is the sort of thing I worry about incessantly. A past job of mine, which shall remain nameless, paid me lower than a Walmart greeter, so I’ve been at a disadvantage ever since. Employers look to see what you are previously paid, then pay accordingly. Is there a way to catch up?
Also interesting is a brief paragraph about people the economy have left behind: journalists, for one, and how they will need extra training to remain competitive. I already know this, but it’s brought into perspective that I need to do it now. What’s held me back before is not knowing what exactly to get it in…