Economist on the Job Market
Friday, June 18th, 2010Several weeks ago the Economist ran a special on the job market for MBA graduates (see the first article in the series). According to the Economist, the job market for MBA graduates from the class of 2010 has been much better than feared.
I, like many others, thought that the job market for MBA grads would be worse in 2010 than 2009 (see Update on the Job Market, Visit to the FT, or Crisis for MBA Grads). But this was before the unprecedented fiscal and monetary stimulus, and the bailout of the banks.
The Economist tagline summarizes the current situation nicely:
Firms are starting to hire again, but the heady days for MBA’s are not yet back.
Viewed through the lens of MBA hiring, the unprecedented level of economic support provided by the Fed/Treasury seems to have been somewhat of a success. Students are getting jobs again, not quite at the rate that they were two years ago, …but certainly better than in 2009.
In the past, consulting and finance firms did by far the most hiring. The recession hit them both, but while recruitment by consultancies is almost back to the pre-recession level, finance positions have dried up.
So MBAs are looking for alternative employers, including unfashionable organisations that were neglected in the past.
This is consistent with my observations of the current job market for MBA grads. Finance jobs are not abundant, but some financial institutions have slowly started hiring again. With the finance industry largely (though not completely) shut, consultancies seem to be the most desired employer in the current environment. And I too have spoken with many students who have been more willing than in years past to expand their search to general management, marketing, accounting, and other non-finance fields. The MBA students I have spoken with have even been entertaining offers from governmental agencies.
And given likely regulatory changes in the finance industry, I expect this trend to continue in the coming years.
Interestingly however, while the job market for MBA grads has improved markedly from last year at this time, the market for college and high school grads remains in crisis (see Teens Suffering Most and College Grads Flood Labor Market).
From the Time article:
The job market is tough for everyone. But this recession has become a jobs disaster for 16-to-19-year-olds. “The numbers are incredible,” says Andrew Sum, head of the Center for Labor Market Studies at Northeastern University and a nationally recognized expert on teen employment. “Proportionally, more kids have lost jobs in the past few years than the entire country lost in the Great Depression.”
The retail and construction sectors, which are usually key employers of young workers, have been among the hardest hit. Manufacturing, another typical job source for those lacking a higher education or even a high school degree, is not the force in the economy it once was. The result: the teen unemployment rate neared 28% in October before falling slightly the next month. That’s the highest ever recorded since the Federal Government began tracking it, and it’s almost triple the 10% rate for all workers. Teens make up a relatively small portion of the 139 million people employed in the U.S., and by most accounts they would be better off staying in school than entering the workforce.
But things only look slightly brighter for those with an undergraduate degree. According to Bloomberg:
Schools…will soon begin sending a wave of more than 1.6 million men and women with bachelor’s degrees into a labor market with a 9.9 percent jobless rate, according to the Education and Labor departments.
The graduates’ plight has been the subject of high-level discussions within President Barack Obama’s administration, which so far has concluded the best response is to focus on reviving overall employment and bolstering assistance for higher education, said Peter Orszag, the White House budget director.
[But] Unemployment among people under 25 years old was 19.6 percent in April, the highest level since the Labor Department began tracking the data in 1948.
Taken together, I think these stylized facts speak to the gulf in economic recovery between Main Street and Wall Street.
Sphere: Related Content

