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It is one thing to have a job and lose it, but for a very large percentage of May’s college graduates even getting hired initially will be impossible. Moreover, contrary to popular belief about the American economy’s capacity to employ college educated workers, the Bureau of Labor Statistics consistently states the number of college graduates being sent to job opportunities exceeds the number of positions and virtually always has.

This is critical. People who have never had a job do not show up on unemployment statistics. People with masters degrees who are bagging groceries for minimum wage do not show up on unemployment statistics. Even if the market starts to recover it will be a long time before there is any pressure to increase wages, since you have to get all those never employed and under employed out of the system first. And with inflation, especially in terms of taxes and fuel, hammering the people pocket book and no ability to raise wages you will see a steady decrease in the US standard of living. That is not the kind of thing that gets presidents reelected.

To add to that, with the inflated cost of college education, many of these college graduates will be graduating with tens of thousands or even over a hundred thousand dollars of student loan debt. This debt can’t be discharged, even in bankruptcy.

The lessons for young people:

1. Choose your major carefully.

2. Don’t go to a more expensive school just because it’s “better” or “more prestigious.” Do graduates of the “better” school actually earn enough more money to make the extra cost for the degree worthwhile? The vast majority of employers in the vast majority of fields **really don’t care** if you got your degree from State U or an Ivy League school. They’re going to pay you the same salary. (If more people thought through that rationally, a lot of private schools would be forced to lower their tuition to attract students.)

3. Be very wary of taking student loans. Unless you are earning a degree in a limited access, demanding field that virtually assures you a very high-paying job immediately on graduation, student loans may cost you more in the long run. Here’s a link http://www.er-doctor.com/doctor_income.html to an analysis by an ER doc showing that it would take the average doctor 18-27 years to catch up financially with the average UPS driver, based on average salaries, lost working years for the doctor, and average student loan debt. (He said the pay back time is probably even longer since he didn’t factor in student loan interest!)

While doctors eventually end up ahead, many graduates who take large student loans to earn degrees in low demand or low salary fields will not. Financially, they would have been better off if they had finished high school and learned a skilled trade, or worked their way up from an entry level job.