May 28, 2003 -- Graduation day is supposed to be a joyful day for college seniors eager to start earning paychecks with their new degrees, but from Bunker Hill Community College in Boston to the University of North Carolina at Chapel Hill, the future is not so bright for the class of 2003.
With unemployment figures rising, new college graduates are setting off into a not-so-brave new world of cautious employers, limited job opportunities and so-so starting salaries.
According to the National Association of Colleges and Employers, 42.4 percent of surveyed employers plan to hire fewer new grads than they did last year. Overall, the association is predicting a 3.6 percent decline in opportunities for the class of 2003.
As if job opportunities weren't grim enough, more and more companies — many with skeletal staff levels due to the tough economy — are placing a premium on experience, and only want to hire people who require minimal training.
For those new grads who do get a job, starting salaries are mostly flat or slightly down. Those with computer science degrees will be offered salaries that, on average, are nearly 8 percent lower than the class of 2002 received.
Source: National Association of Colleges and Employers
To make matters more complicated, not only will 1.2 million new grads be competing against each other, but they will also be competing with nearly 9 million unemployed for only 3 million available positions. Additionally, according to the Bureau of Labor Statistics, unemployment for people ages 20-24 rose to 10.1 percent in April, up from 9.9 percent at this time last year and 7 percent in 2000.
Majority of Grads Pessimistic
In a recent poll by MonsterTRAK, many graduating seniors seem cognizant of the grim labor environment, with 53 percent reporting that they did not expect to receive any job offers when they graduate, compared to 23 percent in 2001.
Graduates' attitudes about their future professional experiences have changed dramatically over the past three years. According to a recent survey of business and computer science graduates in Atlanta, new grads no longer view themselves as free agents with the ability to constantly move from job to job seeking the best compensation and experience.
In 2000, 56 percent said they expected to be in their first job for less than one year. Today, only 2 percent have this expectation today, with the majority of graduates (58 percent) expecting to cling to that first precious job for one to three years.
Staying in School
Rather than leave school to face one of the toughest job markets in recent history, many graduating seniors are opting to keep their noses in a book for a few more years.
The Association of American Medical Colleges reports that applications to medical school increased for the first time in seven years. Law schools are also experiencing a boom in applications, up 10 percent this year after an 18 percent increase in 2002.
Additionally, the number of people taking the Graduate Record Exam — required for many masters and doctoral programs — is at its highest level ever.
Who Is Hiring?
Graduates seeking employment may want to focus on the following areas: sales (accounts for 23 percent of all current entry-level jobs), health care (10 percent) and Administrative and Support positions (8 percent).
Other strong sectors include restaurants and food service, customer service, retail, accounting, education and consulting. In the consulting field, there has actually been a 14 percent increase in entry-level hiring, which had cut hiring by 50 percent last year.
In a recent survey conducted by CollegeGrad.com, of more than 500 entry-level employers, representing more than 100,000 positions, the following companies led the way with the highest projected 2003 entry-level hires: Enterprise Rent-A-Car, Disney (the parent company of ABCNEWS, GEICO Direct, the Peace Corps and Boeing.
Who Is Not Hiring
The job market is especially bleak for engineers and those in technical fields, such as computer science, due the suffering technology and manufacturing sectors. In fact, manufacturers are cutting plans to hire new graduates by 8.5 percent.
These cuts are felt at campuses nationwide. For example, approximately 50 percent of 2003 graduates from the School of Engineering at the University of Wisconsin-Madison are still seeking job opportunities. Compare this to 1999 — the year the class of 2003 started college &3151; when the job-placement rate for graduating engineers was virtually 100 percent.
Hot Spots for Job Seekers
According to job site Monster, the top geographic regions for entry-level jobs are: California (15.6 percent of all entry-level jobs nationwide), Texas (7 percent), Florida (6.2 percent), New York (6 percent) and Illinois (5.7 percent).
Specific cities include: Los Angeles (4.1 percent of all entry-level jobs), Chicago (2.8 percent), Orange County (2.6 percent), Philadelphia (2.5 percent) and New York (2.5 percent).
Mellody Hobson is president of Ariel Capital Management (arielmutualfunds.com) in Chicago. Hobson is also is Good Morning America's personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributed to this report.