Economy Dips, But Jobs Still Beckon

Economic indicators have suggested that in the third quarter of 2000, the booming economy of the last few years slowed, expanding at the most sluggish pace in four years.

The NASDAQ has had its worst year since its inception, falling 38 percent since the beginning of 2000. The market decline led to a drop in consumer confidence that manifested itself in slow Christmas season retail sales.

But University Career Services Director Marcia Harris said seniors should not panic yet.

"I think (graduating seniors) should be concerned enough not to assume it's a good economy, and they'll have multiple job offers," she said. "But I don't want to scare students by saying we're getting into a recession. We've seen dramatic downturns, and this doesn't appear to be one yet."

Harris stressed that a large number of businesses are still contacting UCS to request interviews and to publicize job offers. For the past several years, college graduates have had the luxury of entering a labor market in need of workers.

But Harris said UNC graduates are usually able to find jobs, even in times of economic decline. "Our students tend to do well in almost any economy," Harris said. "We do surveys every year, and back in the early 1990s when the economy was tough, six months after graduation only 7 percent (of graduates) were still looking for jobs."

Economics Professor Michael Salemi said it is too soon to tell if the dip in the economy will become a recession. He said that while lagging holiday retail sales indicate an economic slowdown, the Federal Reserve Board's decision to cut interests rates by 0.5 percent on Jan. 3 might give the economy "a soft landing."

"It's certainly too early to be hitting the panic button," Salemi said.

But in times of economic decline, some seniors fear that newly hired employees often will be the first to go. "I think it is probably one of the first things companies do is try to cut costs to save decreasing revenues," said senior business major Seth Blackley, who has accepted a job with McKinsey Consulting but is concerned about how the economy will affect his job security.

And there is an indication that employment security is increasingly important to job-seeking seniors. Harris said that in 1998 roughly 8 to 9 percent of UNC graduates went into risky ventures such as Internet companies and startups. She said that number dropped to 5 percent last year, and she expects it to be 5 percent or less this year.

"In 1998, when all the dot-coms started going public, and people were reading about people making millions in stock options, it looked really good to some students," Harris said.

She said the recent heavy press coverage of failing online firms has convinced some students to be more cautious.

"Taking a post that was heavily dependent on stock market performance is a lot like going to a casino," Salemi said. "Some folks had a good turn at the table, and it's unlikely to happen again. If I was looking at a job at a dot-com, I'd be focusing more on what salary they would pay me."

The large number of Internet companies going under partly influenced senior Steven Broughton's decision to take a job with Tivlli, a company owned by IBM.

"I wanted to make sure I picked a company I felt secure in," said Broughton, a computer science major from New Bern. "I guess job security is more important than salary."

The University Editor can be reached at udesk@unc.edu.