Young people entering job market in recent years feel crunch of bad timing.
At 23, he’s waited tables, driven tanks for the Israeli army, taken community college classes and taught Hebrew in St. Paul. Lately he’s been selling cosmetics from a kiosk at the Mall of America.
This fall he plans to pursue a degree in sports management at the University of Minnesota. But he’ll have to take on a lot of debt, and he’s not optimistic it will lead to a good-paying job.
“I have friends that still live at home because they’re paying off their student loans,” Ciuraru said. “You’re chained to your desk. And if you’re not, the debt gets bigger.”
People who finished high school or college in the past few years came into the job market at the wrong time. The economic downturn slashed pay for young workers and left more of them jobless, even after many went deep into debt to pay for college.
Economists believe they may never recover what they lost in wages and experience. The average Minnesotan under the age of 35 earns about $260 less per month than he or she would have earned at the end of 2005, according to the most recent figures from the Census Bureau. This is in contrast to workers over 35, for whom earnings held steady or rose over the same period.
“If we look over people’s likely future lives, when you’re part of a generation that comes in with a tough job market and your wages are not so great, you don’t recover,” said Richard Freeman, a Harvard University labor economist. “They are going to be at a permanently lower standard of living than they would have been had we either avoided this catastrophe or had we had a successful jobs recovery.”
Demand for college-educated workers probably peaked around 2000, and the decline since then has affected all young workers, Canadian economists Paul Beaudry and Benjamin Sand say.
As the number of college diplomas in the job market keeps rising, high-skilled workers are forced to take lesser jobs, “pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force altogether,” Beaudry and Sand wrote in 2013.
The phenomenon was partly hidden by the housing bubble in the 2000s, but then laid bare by its bursting.
“This has been a terrible decade,” said Phil Gardner, director of the Collegiate Employment Research Institute at Michigan State University. “There’s only been three years where employers have aggressively hired in the last 12 years.”
Morgan Moore, 28, realized in 2008, less than a year into law school at the University of Illinois, that he probably wouldn’t end up working as a lawyer.
He had hoped to work as legal counsel for a corporation, but the prospect grew distant as the economy sank into recession.
“That amount of time grew from five to 10 years, to longer than that, to maybe impossible,” Moore said. “So rather than wait and see, I decided to pursue other opportunities.”
He finished law school so he wouldn’t regret quitting, but when he graduated in 2011 he didn’t have the money for bar exam prep classes. He couldn’t find any work near Chicago, let alone at a law firm. So he spent the summer in his fiancée’s mother’s basement, collecting food stamps.
Ultimately he moved back to the Twin Cities, where he grew up, in search of any kind of work. He did part-time stints on the sales floor at Sears, at a Byerly’s grocery store and parking cars for a valet service.
In February 2012, he started selling cars full time. He doesn’t regret his expensive law degree, but it will take a long time to pay down his $80,000 in student debt. He has no plans to buy a house, and he had to sign up for health insurance through MNsure, the state exchange.
“Those of us who were negatively affected by the economy are faced with the consequences of a lost three or four years,” Moore said. “That’s definitely left an impact.”