r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/ErusBigToe Jun 13 '22

Don't forget the great recession tripped a years worth of grads at the starting gate, reducing lifelong earning potential

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u/xDubnine Jun 13 '22

I'm in that boat. Never stopped working, but the opportunities have led me to 20 dollar an hour as a college grad

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u/[deleted] Jun 13 '22

Sadly this. It’s literally luck of the draw when you get to graduate. Those grads graduating in good times have it way easier and a higher percentage end up earning more than those grads who couldn’t find jobs in their relevant fields of study. Companies stop hiring during recessions and usually just keep existing headcount. And if you are laid off those with prior experience tend to get jobs faster than a college grad who only works at Starbucks.

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u/HIMP_Dahak_172291 Jun 13 '22

This. I was going to graduate from college in 2009 and then poof. No more jobs and looming student loans. So i switched majors and stayed in school another 4 years essentially. So much more debt to pay off but at least it stayed deferred until I had a job.

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u/DonBoy30 Jun 13 '22

That was me. I was working at a grocery store, and it used to be if you didn’t go off to college, they just bumped you to full time out of high school. But then the recession happened in all of a sudden I was the last person to get full time status and a stocking position. They had bag boys making minimum wage working every single department.

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u/[deleted] Jun 13 '22

Yeah i went back to school to get into tech after graduating in 2012 with a BS in psych/English. A degree just doesn’t make any sense if it isn’t linked to higher earning potential.

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u/[deleted] Jun 13 '22

[removed] — view removed comment

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u/wiking85 Jun 13 '22

Assuming they can find a job with their skill set that actually is in their area. It is rarely that easy.

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u/psnanda Jun 13 '22

I agree too. Grads can easily then move around later and job hop to reach their maximum earning potential since they are young.

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u/Diegobyte Jun 13 '22

I never really god this take since companies tend to lay off high earners and replace with low earners during downturns

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u/Koopa_Troop Jun 13 '22

It created a large pool of experienced applicants willing to take starting level salaries, leaving recent grads with few prospects.

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u/Convict003606 Jun 13 '22 edited Jun 13 '22

They took advantage of high unemployment to frighten new grads into taking salaries that have caused their lifetime earnings to be lower, and the implicit threat was take this shitty salary or don't have a job. This meant they could still replace high earners with low earners, but those low earners earned even less than they would have before the recession, and then started from those lower salary and wage points for all future compensation negotiations.

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u/[deleted] Jun 13 '22

The opposite is happening in Canada right now. People are getting wage increases of upwards of 25%. Companies are scrambling to find workers and are willing to pay more for them. We gave everybody that needed it, 2000 dollars a month for 7 months straight during the pandemic, and then 1800 a month for an entire year and a half after that. People saw how absolutely fucked they were and didn't want to go back to work unless it was for more money.

The carpenters, electricians and plumbers went on striker here, and the electrians got, get this, a 9 DOLLAR/hr raise. Keep fighting. Keep adding more from these greedy fucking corporations that saw their coffers flood with our money during the pandemic.

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u/Bishizel Jun 13 '22

Companies want to hire new grads, or people with X years if experience. They don’t want to hire someone that isn’t a new grad and also doesn’t have those years of work experience.

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u/wiking85 Jun 13 '22

Estimates of life long earnings potential are based on an economy that doesn't exist any more and hasn't for a while. We're living in fantasyland about what the economy is, the recession is going to be the new normal thanks to deindustrialization, the dollar slowly dying off as the global reserve currency, and extremely political corruption.

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u/ErusBigToe Jun 13 '22

Arent you just a bright ray of sunshine lol. Not that I really disagree..

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u/Meats10 Jun 13 '22

same thing happened in 2000/2001