Young & Jobless

By Julie Rawe

With two weeks to go before graduation ceremonies at the University of Washington, even a rare sunny afternoon in Seattle isn't enough to lighten Julia Kusian's mood. Kusian is coming to realize that a B.A. in psychology won't get her very far in this job market. While other students are playing Frisbee or napping on the lawn, Kusian, 21, has been handing out resumes all over town and getting rejected for even simple bartending or hostess positions, which she needs to tide her over while she prepares to apply to grad schools. "If I thought I could get a good job now with a decent salary," she says, "I wouldn't be going through all this."

Only two years ago, even liberal-arts majors like Kusian could expect multiple job offers from dotcoms and maybe even a signing bonus. Not now. College seniors are facing the worst employment market in a decade, often competing for entry-level jobs against laid-off workers with M.B.A.s and years of experience. This year's graduates were playing Little League the last time we had a recession. They picked their majors during the Internet bubble and continue to do most of their job searching online. But they are often finding that not even impressive diplomas and face-to-face networking can coax a job out of a sluggish economy.

Although first-time jobless claims fell slightly last month, economists are expecting that April's 6% unemployment rate--the highest in nearly eight years--will climb to 6.5% as 1.2 million new job seekers come streaming through their college gates and a million or so high school graduates start looking for full-time jobs. Since October, the unemployment rate has been hovering around 12% for workers ages 16 to 24, who are usually the first to be laid off. Diane Miller, 22, a zoology major who graduated in April from the University of Michigan at Ann Arbor, is looking for work in marine biology but observes wistfully, "A lot of people who were going to help me get a job are now having to worry about their own jobs."

Even mechanical-engineering major Elisabeth Rareshide, 22, who graduated last month with an A average from Rice University in Houston, had to scramble to find work. She set out looking for a job in renewable energy but broadened her search almost immediately--and by March had smiled and chatted her way through 30 on-campus interviews and sent out resumes to 50 other companies. "I quickly realized I was not going to get my dream job, and would be lucky to get a job at all," she says. The New Orleans native left last week for a six-month internship in South America to help design oil facilities for TECNA-Ecuador.

With any luck, the job market will be showing signs of life by the time Rareshide returns. But experts say it could take as long as 18 months before many young adults find their place in today's crawling-out-of-a-hole economy--which is being compared with the "jobless recovery" that followed the 1990-91 recession. Help could be on the way: the current rise in productivity and corporate profits should eventually spur hiring. But for now, productivity is surging because companies are squeezing more work out of fewer people, discouraging news for young adults stuck in the back of the hiring line.

Why are the young being hit so hard? Think of the job market as a big stepladder with layoffs forcing many workers to slip down a rung, leaving few vacancies at the bottom for new job seekers. Boomers are refusing to budge (i.e., retire) at a time when their kids--also members of an unusually large generation--are clamoring to climb aboard. At Parsons Brinckerhoff, a major engineering firm based in New York City, the turnover rate has been cut in half since last year, to less than 7%. "We're seeing the pig in the python here," says Parsons executive vice president John Ryan of the lingering boomers. While they are clogging up the system, young engineering grads--who remain in short supply--are getting fewer job offers and smaller salary increases.

Companies plan to hire 36% fewer college seniors this year than they did last year, according to a recent survey by colleges and employers. The situation is even worse for M.B.A.s. According to a Michigan State University survey, employers hired 45% fewer business-school graduates last year than they had projected. Scotty Andrews, graduate-placement director at the University of Miami's business school, estimates that less than a fourth of the members of this year's graduating class have jobs. "It seemed like every major company that had traditionally come to recruit canceled--Disney, IBM, Citicorp," he says. Cornell's business school has gone so far as to turn itself into a pseudo-consulting firm, peddling its jobless M.B.A.s as cut-rate temps.

There are a few bright spots. Accounting firms and the U.S. government are recruiting more graduates than they did last year. But those employment gains are offset by other sectors like the consulting industry, which is predicting it will hire 90% fewer college graduates this year. "We're now recruiting at more normal levels after a period of unusual growth," says a spokesman at McKinsey & Co.

The Sept. 11 terrorist attacks, coupled with an uninviting economy, have inspired many job seekers to opt for altruistic alternatives--which also happen to look good on a resume. AmeriCorps has seen a 75% increase in college graduates who want to participate in its yearlong community-service program. Applications are up 18% at the Peace Corps and have tripled at Teach for America. Some 14% of graduates from Spelman College in Atlanta applied for the teaching program, as did 7% from Yale. Jason Merker, 22, a business major who graduated with highest honors from Emory University, stopped interviewing for finance jobs after he saw Teach for America's brochure in November. "I didn't love all the job opportunities that were available, and this just felt right," says Merker, who this fall will start teaching elementary school in Washington. "And the skills are extremely transferable, whether I'm coming up with different ways to teach kids how to read or coming up with different solutions for a consulting client."

Marketing major Jonathan Mackey, who graduated in December from Butler University in Indianapolis, Ind., tried to compete for jobs against experienced sales professionals and M.B.A.s, and is now awaiting medical clearance for the Peace Corps. "My friends aren't doing a whole lot better," he says. "It's a relief to know it's not just me."

Many college seniors have decided to ride out the uncertain economy by staying in school longer than they had planned. Scores of honors graduates at Lehigh University, in Bethlehem, Pa., are taking the school's offer of a fifth year of tuition-free classes. Elsewhere, thousands of college students have to shell out big bucks to go to grad school. The number of students who took the Graduate Record Examinations, a requirement for many graduate programs, jumped 18% this year. But the glut of applicants has driven down acceptance rates, which at the University of Buffalo Law School, for example, have dropped to 30%, from 60% three years ago.

And at the end of the hiring queue, behind the horde of anxious college grads, are the high school students who lack either the money or the grades or the inclination for higher education. Northeastern University economist Andrew Sum points out that 1 in 10 teenagers lost a job during the recession. Meanwhile, the Bush Administration is trying to cut funding for federal job-training programs for young adults, even though independent studies have shown that for every dollar spent on programs for disadvantaged youth like Job Corps, society saves about $2 from increased productivity and lower costs related to crime and welfare. Jessica Collins, 21, had been making $6.50 an hour at McDonald's when, she says, she started selling drugs to make more money. Then an addict tried to trade her his daughter for a bag of cocaine, and Collins was shocked into going straight. She enrolled in a yearlong Job Corps program in Edinburgh, Ind., in which she learned to operate heavy equipment. Last week she started an apprenticeship that pays $15 an hour. "Job Corps saved my life," she says.

Alex Sowma, 18, is looking for money-making ventures, possibly in real estate, but for now works at a pizza-delivery call center in Cincinnati, Ohio. He has no plans for college. "At the end of four years, I don't want to owe an institution upwards of $50,000 and not have a guaranteed job," he says.

Grace Anderson-Smith, 22, is seeing his point. After graduating with a B.A. in economics from Wesleyan in May 2001, she has yet to find permanent work but is holding out hope that she won't have to settle for a dead-end job. She is still campaigning hard for something in marketing but is open to other options. "I've done everything you're supposed to do," she says. "I went to a good school, got good grades, played a sport, did a four-year internship and have been networking like crazy." After sending out more than 100 resumes and going on dozens of interviews, she has started giving resumes to people she meets at nightclubs and in coffee shops. When she spoke with TIME, this never-say-die job seeker asked if we could print her e-mail address in case potential employers read this article. Desperate times call for desperate measures, so if anyone out there has a job for Anderson-Smith or any of the others in this story, e-mail them at [email protected]

--With reporting by Elizabeth Coady/Chicago, Jeanne DeQuine/Miami, Deborah Fowler/Houston, Laura Randall/Cincinnati and Nathan Thornburgh/Seattle

With reporting by Elizabeth Coady/Chicago, Jeanne DeQuine/Miami, Deborah Fowler/Houston, Laura Randall/Cincinnati and Nathan Thornburgh/Seattle