Words by Michael Reschke
The Global Financial Crisis was a bad time for a lot of people. If you’ve seen The Big Short then you know the main drill. There was a subprime mortgage crisis that led to the global financial system almost crashing. If you want to know more about this though, pick up any textbook on macroeconomics written since 2008, or google it.
Today, I’m going to focus on an entirely different aspect of the GFC. One a little more relevant to us, as students, than the intricacies of the mid-2000s’ US housing market dynamics. We’ll look at something we really care about: getting a grad job.
The impacts of the GFC, as well as other financial crises, have a huge impact on the opportunities available to us when we graduate. This is less discussed — in part because most economists have forgotten about the chronic anxiety experienced by students as we pray that someone’ll be willing to give us a job.
I don’t think anyone will be surprised to know that the GFC killed grads’ chances of getting a grad offer. Employers stopped hiring grads because there was suddenly a pile of unemployed skilled people. Plus, grad salaries weakened. Even if you got a job, your starting salary was weaker — and you’d get smaller pay rises for the first decade of employment. People who graduate during a financial crisis on average get paid hundreds of thousands of dollars less over their lifetime. (That’s a lot of brunch).
Thankfully, this is a good news article. I’m not Trump’s biggest fan, but his first year in office has led to massive economic confidence in America (and they set the economic tone globally). Hence, Australia and Trumble (Trump’s pet name for the prime minister) have been doing pretty well. In fact, the unemployment rate now sits at 5.5% — the lowest it’s been in four years.
This means we’re living the dream. The unemployment rate is low, so all those skilled people who lost their jobs in the GFC have jobs now, and employers still need more people. So, the baby boomers who are running the big reputable employers have to scrounge around for employees: and they’re turning to the meme generation, us.
So, to everyone graduating now, go into the employment markets knowing that you’re a valued commodity. We have great graduate employment rates and strong starting salaries, especially graduates from UoA. My one piece of advice would be to consider applying outside of South Australia though — while this economic growth has been strong, it is centralised in Sydney and Melbourne.
And to everyone not graduating, I recommend that as an insurance (just in case there is a crisis between now and your graduation, and also because it’s the best way to make the most of your uni life) make sure you’re keeping on top of your studies and getting involved in the uni community. You can make a difference, do good work, and make sure that you’re looking employable for when you finish your degree.
In particular, if you’d like to get involved in the Economics Club, sign up to the Facebook group and tag along to some events.