College seniors anxious about careers, future due to lack of internship opportunities amid high inflation
In the United States, there has been growing fear among politicians, economists and academics about an incoming recession in 2023. Factors that indicate a slowing economy are already affecting Lewis & Clark students and recent graduates in the job market.
A recession is generally recognized as a period of decline in economic activity that usually occurs in 2 consecutive economic quarters, specifically using the metric of a country’s real gross domestic product (GDP). To be declared a recession, it must also broadly influence the economy, not exclusive to one sector.
The National Bureau of Economic Research (NBER) is the renowned institution responsible for calling recessions. The NBER uses statistical measures including personal income, industrial production and unemployment rates, to determine if a recession is happening. The NBER has not yet reported we are in a recession.
Although NBER has not yet declared a recession, indicators do point to a recession. Currently, the U.S. labor market is showing signs of slowing which may indicate an oncoming recession. this means for consumers that prices are rising more slowly which is indicated by rising interest rates, slowing sales and slower price rises. This is particularly evident in the housing market.
Lewis & Clark Professor of Economics Clifford Bekar claims that the likelihood of very unlikely.
“There is no way to be sure one (a recession) is going to happen. In fact, I would put the balance of probability that we enter into a recession at less than 50%. I think I would put it less than 30% to be honest,” Bekar said. “… employment remains really strong. Aggregate demand remains really strong. Traditionally, we look to weakness in the labor market.”
April 2023 has seen a moderate increase in people filing new claims for unemployment benefits, indicating a gradual slowing down in the labor market, with the Federal Reserve’s year-long interest rate hiking campaign decreasing demand.
This leaves many college students and recent graduates in a difficult position in the job market. Many are left stressed and discouraged, as internships are either unpaid or do not offer enough to live and income has not risen with the cost of living.
For instance, an Economic Policy Institute analysis of Current Population Survey revealed that recent college graduates have had a difficult time finding jobs that provide health insurance. The percentage of college graduates who have employer-sponsored health insurance coverage fell from 61 percent in 1989 to 31 percent in 2012. Economic declines, like recessions, beg to ask many questions: How do college students survive a recession? Will my recession-era job last?
Sofia Seirmarco ’23 started looking for an internship in September 2022 for the Spring or Fall 2023 semesters. After applying for over ten positions at nonprofits and think tanks, she remained unsuccessful. Seirmarco, who hails from the San Francisco Bay Area, wanted to pursue an internship in tech. However, the tech world has been sent into a spiral following the Silicon Valley Bank (SVB) collapse and cryptocrash.
“A lot of companies, in general, not just in the tech sector, have completely chopped their internship programs entirely, or the only internships they are offering are very technical internships like software developing,” Seirmarco said. “It is difficult to break into the tech sector with having no real technical experience and it used to not be that difficult, honestly. I applied to all these think tanks and nonprofits, and never heard back from any of them. They are super competitive.”
Many college students are also relying on their parents for financial support, where a recession could definitely halter this exchange. This would leave many students to seek out higher paying jobs and working more hours which would not be sustainable for students qualified for Federal Work-Study. A recession would also restrict students’ capacity to go out with friends or participate in extracurriculars due to financial constraints.
Another hardship for college students is not hearing back from employers, given that there is much competition for internships.
“I never heard back. That is what I have been hearing from a lot of seniors is that there is kind of this trend of companies and orgs ghosting you. Not rejecting you, not furthering the process, offering an interview,” Seirmarco said. “Most of the people that I know do not actually have anything lined up for when they graduate and that’s scary.”
Will Toppin ‘23 wants to go into nonprofit social justice work after graduation. However, he will not be staying Portland after the summer which has made the job search a challenge.
“There are not a lot of nonprofit internships that are paid for just the summer. Usually, they want you for a year or more,” Toppin said. “I was looking around on Indeed and Linkedin and there were just a lot of things that I meet in, and then I went to the career center and they confirmed that unless I was going to stay in Portland for longer, I would not be able to find that exact thing.”
The startup community’s fear of a recession has been growing due to the SVB bank failure in March 2023. SVB was once one of the most prominent banks involved with companies in venture capital, life science, fine wine and cleantech, and its recent crash now increases fear of how fragile the economy is in 2023 and worries Wall Street of the same thing it saw with the 2008 financial crisis.
The U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation ensured depositors would be fully protected from financial losses by exceeding FDIC limits of up to $250,000 to prevent a further financial crisis. The bank failure has also led to a confused Federal Reserve that is trying to fight inflation and slow down the economy by increasing interest rates.
Following the SVB fallout, regional bank stocks continued to plunge. President Joe Biden responded to the crash on live television, saying that SVB and Signature Bank investors will not be able to rely on aid from the U.S. government.
“(Investors) knowingly took a risk and when the risk did not pay off, investors lose their money,” Biden said.
The future is uncertain if the U.S. will face a recession in the upcoming economic quarters. However, it is certain that college grads are scrambling for work in a flawed economy. Inevitability, this has highlighted growing economic inequality at home and abroad.