Home > Uncategorized > “Children of the Great Recession”

“Children of the Great Recession”

from David Ruccio

In a recently leaked audio file (from a private fundraiser in February), Hillary Clinton referred to them as “children of the Great Recession. . .living in their parents’ basement,” who “feel they got their education and the jobs that are available to them are not at all what they envisioned for themselves. And they don’t see much of a future.”*

Well, as it turns out, the children of the Great Recession, especially those who completed college in recent years, were right: the jobs that have been available to them have not been at all what they envisioned for themselves.


According to new research by Jaison R. Abel and Richard Deitz, unemployment among all workers, including college graduates, rose sharply during the Great Recession and continued to climb in the early stages of the recovery to levels not seen in decades.** It also increased dramatically for recent college graduates (whom the authors define as those with at least a bachelor’s degree who are 22 to 27 years old), doubling from about 3.5 percent before the recession to a peak of more than 7 percent in 2011. And even while unemployment among recent college graduates began to fall in late 2011, and to decline thereafter, it fell less steeply than for both college graduates as a whole and for all workers.


But high rates of unemployment only reveal part of the plight of recent college graduates during the second Great Depression. Many of them also found themselves underemployed, that is, working in jobs that did not require a college degree. Not all of them were working as baristas, of course, but their underemployment rate has consistently held well above the rate for all college graduates (which, historically, has hovered at around one-third)—climbing well into 2014, rising to more than 46 percent, a level not seen since the early 1990s. As Abel and Deitz explain,

This divergence between falling unemployment and rising underemployment among recent college graduates between mid-2011 and mid-2014 suggests that more graduates were finding jobs during this time, just not necessarily good ones.


The fact is, no matter how hard they tried, recent college graduates have had a difficult time finding jobs that met their degrees. That’s because, beginning in 2011, the demand for college jobs has fallen further and further behind postings for non-college jobs. According to the authors,

The steady growth of non-college jobs, coupled with the relatively soft demand for college graduates during this three-year period, appears to have forced many recent college graduates to take jobs not commensurate with their education. With the demand for college graduates rising again beginning in mid-2014, underemployment also started to come down. However, even with this modest improvement, 44.6 percent of college graduates—nearly one in two—found themselves underemployed in the early stages of their careers following the Great Recession.

What’s interesting is that recent college graduates, who were disappointed by the fewer and worse jobs they offered, for which they and their families had accumulated large amounts of student debt, did not choose the safe, mainstream option. They opted for a much-derided “idealism” and supported Sanders in much higher numbers than his self-identified “center-left/center-right” opponent.

For the last few decades, the value of a college degree has been economic and social dogma in the United States. Recent college graduates, who were forced to confront that dogma, were perhaps more prepared then to challenge other dogmas, including the political options presented by the American establishment.


*From Clinton’s perspective, underemployed Millennials’ support for Bernie Sanders betrayed “a deep desire to believe that we can have free college, free healthcare, that what we’ve done hasn’t gone far enough, and that we just need to, you know, go as far as, you know, Scandinavia, whatever that means, and half the people don’t know what that means, but it’s something that they deeply feel.”

**The charts from the Abel and Deitz research paper are updated on the Federal Reserve Bank of New York web site.

  1. October 10, 2016 at 6:38 pm

    Perhaps it is better to take on the world at an earlier age, rather than being shepherded through college and university, acquiring a “sheep” mindset in the process?

  2. October 13, 2016 at 10:01 am

    The pain of the recent college graduates will pass with time. Even if they never find jobs that fit their education. There are two other issues we should be concerned about. First, if these kids don’t get jobs in line with their education and thus acquire the experience to move up and take charge of the major engineering, social, and environmental projects we know are coming in the next 50 years, who will lead those efforts. Even more frightening, will these projects be lead instead by MIT, Harvard, Penn., etc. MBAs who as my father used to say, “don’t know shit from shinola?” The projects will thus be poorly designed, poorly executed, and never completed satisfactorily. And the nation as a whole will suffer. Perhaps it will mean the difference between a peaceful world where the US still holds a balance of control and a world in chaos and racial, social, and political turmoil. Second, will the anger of these underemployed and ignored citizens override their judgement? Will they just decide to set up a parallel society of their own and dump the “mainstream” in the nearest trash bin? And does that mean society has lost not only these “drop outs” but also their offspring? The potential consequences, all negative are frightening.

  3. robert locke
    October 13, 2016 at 11:50 am

    Your concerns, Ken, involve issues of firm governance and the institutionalization of higher education in the form of business school education. The firm governance issue could be tackled through the substitution of stakeholder rooted governance to replace director-primacy control, and the educational issue, by reducing the influence of mba education in the firm by making the firm, under stakeholder control, the decision-centered place not the business schools in matters of management. But on this blog, you cannot find any economists who seriously discussing these issues.

    • October 14, 2016 at 10:19 am

      Robert, your proposals won’t work in the US. They are not culturally acceptable in the US. Makes we wonder what might work in the US. Part of my work is with groups who are working on planning for these issues. We receive no cooperation from the Federal government and only modest and spotty support from state governments. The general response when we make presentations to government agencies and private businesses is that free markets will take care of these problems. Such markets “handling” of these issues historically has been delayed, confused, inefficient, and often creates new problems while only partially dealing with the original issues. And you’re correct about help from economists. We invite economists to our presentations. They almost never attend but when they do attend it’s just to point out to us how wrong our presentation is.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.