Graduating in a Recession and the Career Consequences

Due to the current economic situation, it is known that everyone is concerned about the possibility of a recession. However, the best time to start preparing for this is now so that you can be ready to deal with the situation if a downturn occurs. So, let’s first understand how the recession affects students’ lives.

What is the Recession? 

A recession is a slowdown in economic activity that spreads across the country or world and lasts for a few months. Basically, in simple terms, it is the decline in economic activity. It is the period when people start to cut back their spending on the overall demands of services. Because of this, companies start laying off their employees, resulting in a contraction of economic activity. With the increase in unemployment, students start quitting school or college.

What Consequences Come while Graduating during a Recession?

The short-term and long-term career effects of graduating during a recession:

Graduating during a recession results in significant initial losses in earnings. These losses, which initially amount to approximately 9% of yearly earnings, gradually diminish, halving within five years but not vanishing until approximately ten years after graduation.

Earnings losses from temporary high unemployment rates are exceptionally minimal for workers with two or more years of work experience and most significant for new entrants into the labour market. Graduates experience the lowest expected earnings and lose significantly more than those at the top.

Not only do job opportunities go downward, but many companies also start to pull back the number of employees. Sometimes, employees need to work for lower wages than the actual ones. During a recession, finding a job, keeping a job or getting a promotion is difficult.

Moreover, a contraction in budget inversely affects education and students’ life in many ways. Many courses, student activities and programs are cutbacks entirely because of a reduction in funding.

While recessions can be difficult, they can also be an opportunity to prepare for significant life changes by enrolling in college.

Diminishing funding leads to declining opportunities like student loans, aid and employment. This also results in increasing college tuition and fees. 

But since it is part of the business cycle, we all need to deal with it. Let’s move to the possibilities in a recession if you graduate, lose your job, or work on lower salaries.

How to Manage and Overcome Recession?

Here are some ways through which you can manage and overcome the recession: –

Have an Emergency fund

Have the extra cash because a recession can drastically alter your financial situation. If you always keep plenty of emergency funds, congratulations, you have solved it halfway. 

It will not only make your money retain its full value during market turmoil, but having cash as a liquid allows you to access funds quickly if you lose your job or face a lower salary.

And if you don’t have a good emergency fund, start cancelling a vacation or postponing an unnecessarily expensive renovation project.

Start Upskilling

There is no guarantee of your full-time job, so it would be great if you start arranging additional sources of income as a side hustle. It can be freelancing jobs in content writing, copywriting, consulting, or affiliate marketing. Diversifying your income stream can diversify your investment and reduce your anxiety.

Don’t Sell Stocks

Many people may want to exit the stock market or reduce their investments until things improve. That is what it means to try to time the market. It is impossible to predict when to leave and when to return. But if you can still manage expenses, try not to sell them because there may be a chance you will regret it after the completion of the recession. 

Diversifying Your Investments

This may sound funny to some because making a livelihood isn’t easy during the recession. However, cautiously investing can benefit you later. You can start investing in high-quality companies with good cash flow, low debts, strong balance sheets, and industries that have historically performed well during difficult economic times.

Remember to avoid investing in highly leveraged, cyclical, or speculative companies, as these companies are the most likely to perform poorly during difficult economic times. 

Continuing Your Education in Recession

Recession creates a profound impact on human lives, especially for those students who are deciding to pursue higher education. But why should individuals continue it or not? Because experiencing an economic downturn may also change individual attitudes and approaches towards further studies.

However, graduating during the recession is undoubtedly not easy. Continuing to pursue education and getting a master’s degree is a great way to put yourself in the best possible position as the economy begins to recover, more jobs become available, and new jobs that align with your degree and qualifications are created.

Look Beyond Layoff

Suppose you are an employee or student who loses your full or part-time job. Then you need to figure it out calmly. Start looking for other job opportunities or learning new skills. 

Today many ed-tech companies offer a fantastic collection of courses, discussions with the peer community and expert interviews. You can take these free online courses to help you upskill yourself. So now, whether expansion or recession, online courses bring remote learning, which can result in learning and development. 

Conclusion

Students graduating during a recession face many difficulties in taking steps further. But that doesn’t mean it can not be overcome and managed. Taking steps cautiously can make things better.

It is never too late to restart or grow. Invest in and reinvent yourself by pursuing a career in nursing, business, education, and many others. If you are looking to upskill with courses or continue your education, 21K School can help you to gain them quickly.