Even before the Coronavirus pandemic hit the United States, experts were predicting that a recession would hit America by 2021. With social distancing mandates now in effect to dampen the spread of the virus, an economic downturn seems inevitable. Still, lingering questions remain. If you’re currently enrolled in college or have recently graduated, you’re probably wondering how the impending recession affects you and what you can do to make the best of this grim situation.
Let’s start with the basics.
What Is an Economic Recession?
Everyone knows that an economic recession is bad, but what does it really mean? Most economic experts define a recession as a widespread decline in economic activity that lasts more than a few months. Generally, this means consumers aren’t spending as much money, and businesses are hiring fewer employees. Reliable indicators of a recession include higher unemployment rates, a dip in retail sales, and a decline in real income.
Most economists believe the United States will tip into recession by 2021, a new survey shows, despite White House insistence the economy is sound.Washington Post (August, 2019)
How Likely Is A Coronavirus Recession?
Most economic experts agree that a coronavirus recession is inevitable. Amidst nationwide “stay-at-home orders,” people aren’t as free to spend money at restaurants, bars, and local shops. This directly affects the service industry. Other industries such as travel and entertainment, for instance, are taking an even harder hit due to restrictions on large gatherings.
Of course, rising unemployment numbers means consumers won’t have discretionary income to spend even when the quarantine is lifted. In fact, Americans may tighten their belts for the long term, long after some semblance of normalcy is restored.
How Will the Recession Affect Me?
When a recession hits, most everyone suffers to some degree. College students and recent graduates are among those individuals usually impacted the most, however. In this article, we’ll prepare you for five of the grim realities you can expect to face and how to find the silver lining.
Reality #1: You May Have to Finish School Online
Social distancing measures have forced colleges and universities across the nation to move their classes online. For students accustomed to attending lectures in person and relying on study groups to prepare for tests, this can be a shock to the system. At the extreme end of the spectrum, there are even students without personal computers and/or Internet access who will be forced to scramble together the resources necessary for distance education.
How to Make the Best of It: Hone Your Skills to Become More Employable
For traditional on-campus students, the switch to remote learning may be challenging, but there will be long-lasting rewards for those willing and able to adapt. Even before Covid-19 transformed our professional lives, employers noted high-tech aptitudes among some of the most highly-prioritized skills they look for during the hiring process.
As the crisis continues, we can expect more businesses to realize the benefits of telecommuting. It’s not a far-fetched notion to think that the professional landscape will be changed for the long-term, even after people are able to resume their normal lives. Finishing your degree online may help you hone these in-demand tech skills and prepare you for the revamped workforce.
Distance learning also requires a great deal of self-discipline and time management—these soft skills will also make you more employable when the economy bounces back.
Reality #2: You’ll Still Pay Full Tuition for Online Classes
Even as colleges are closing their actual doors to students, the vast majority of them will continue to charge full tuition, so you shouldn’t expect to get a discount just because your classes have moved online. If you usually live on campus, you may get a partial refund on your room and board, but tuition and fees will remain the same.
How to Make the Best of It: Take Remote Learning Seriously
Since you’re still paying the full amount for your course load, continue giving these classes your full effort as well. As tempting as it might be to see this as an extended vacation, you won’t be doing yourself a favor with this approach. In fact, you’ll just be cheating yourself.
Distance learning requires a lot of initiative. Many would argue that you’ll get out of it what you’re willing to put into it. Keep your studies atop your list of priorities. The only thing you should be eliminating from your school routine is your commute.
Reality#3: You May Take a Pay-Cut or Even Lose Your Part-Time Job
First, the good news: If you work on campus as part of a federal work-study program, you’ll likely keep your job even if you aren’t able to perform your regular duties on campus. The Office of Postsecondary Education has authorized colleges and universities to keep paying Federal Work Studies (FWS) students their regular wage, whether or not they can continue to perform their duties online.
If you have a job off-campus, though, you might not be so lucky. Even if you’re hopeful that you’ll keep your part-time job during the recession, it’s best to prepare for the worst-case scenario. The truth is that recessions tend to hit uneducated workers and college students the hardest. Companies who are dealing with a financial crisis are likely to lay off their part-time staff first. Those employees with the least amount of experience are among those at the highest risk of losing their jobs as well.
Plus, some industries such as hospitality and food service are impacted more than others. These are the very industries where you’re likely to find college students employed.
How to Make the Best of It: Focus on Your Studies and Accept Help
If you do take a pay-cut or get laid off, the best thing you can do is embrace the concept of education as a purpose. Whatever fulfillment or sense of identity you gained from your job, try to shift that same energy towards your schooling. This is the best thing you can do for your mental health; taking this approach can help you get through the pandemic and resulting recession with your sanity intact. Instead of dwelling on the fact that you’re not working, try to appreciate the extra time you have to focus on your coursework.
Laid-off and furloughed workers offered education and training as part of their severances or furlough periods will be more likely to come back to an organization when the situation improves.Forbes. (March, 2020)
Of course, your sanity alone won’t pay the bills. At the end of the day, lost wages will result in financial hardship—let’s be real. This isn’t the time to be prideful. While there are things you can do to cut expenses and tighten your financial belt, it’s not likely you’ll be able to go it alone. Accept help that’s offered to you, whether it be from your parents, community, or government.
Reality #4: You May Have to Keep Your Current Job After Graduation
If you’re lucky enough to keep your job while finishing your degree, then be prepared to keep this same job upon graduation—at least for a while. History has taught us that recent college grads don’t fare well during a recession. In fact, the National Association of Colleges and Employers reported a 22% decline in employment of fresh-out-of-university workers in the midst of the Great Recession that occurred just over a decade ago. There’s no reason to believe this recession will treat new grads any differently.
Translation? The industry you’ve spent the last four years preparing to work in may not be ready for you once you graduate. Realistically, it could be a year or two before your degree starts to pay off. During this time, you may have to keep the job you have, even if it’s not relevant to the career you’ve been training for.
How to Make the Best of It: Focus on Gaining Relevant Skills for the Future
These are bitter lemons, but you can still make lemonade; you might just have to get creative. Recent college graduates who are forced to keep menial jobs during the recession still have options. You could use this time to take professional development courses, become certified in a specialty area, or even go to grad school to advance your education.
Reality #5: You May Have to Accept a Low-Paying Position
Some industries do better than others during an economic downturn, so there’s still a chance you’ll get hired in your field of choice upon graduation. Even if you get lucky, though, you should lower your expectations in terms of salary. Employers aren’t likely to be offering sign-on bonuses, and they may be unable to pay their new-hires the same wages they did before the recession.
How to Make the Best of It: Grab a Side Gig
Even if you’re not getting paid what you expected to as a new-hire, there are still ways you can make ends meet. One of your best options is to grab a side gig. According to preliminary predictions, freelancers and “gigsters” may be among those who fare the best during the recession. This is good news for college students and recent graduates because it means that although full-time employment may be hard to come by, there are still opportunities to make money and gain professional experience.
The economy will recover from this virus-induced recession. How long the financial crisis will last and how bad it will get depends on how quickly we’re able to get the pandemic under control. There are still a lot of unknowns. Fortunately, there are also some recession-proof strategies you can implement now to better prepare yourself for life after quarantine.