For many students graduating in May, the first semester of senior year is an anxious time, as they weigh the options for their career paths and where they would like to settle for the future. Adding to the anxiety of students still looking for jobs, recent labor statistics have worried some policy experts about a possible recession come 2020.
Patrick McHugh is a policy analyst with the Budget & Tax Center, a project of the N.C. Justice Center. McHugh said he has seen clear signs of the economic challenges facing North Carolina, including slowed job growth and increased unemployment figures through 2019.
Between 2014 and 2016, employment growth in North Carolina exceeded 2 percent a year. That figure has been reduced to about 1.5 percent thus far in 2019, while North Carolina’s unemployment rate stood at 4.1 percent in September, compared with the national rate of 3.5 percent.
Still, McHugh acknowledges the tremendous uncertainty in the future of the economy.
“Nobody really knows, this is not something where anyone is 100 percent sure one way or the other and I’m not going to claim to have some special insight that nobody else has,” McHugh said. “That said, it’s certainly the case that there’s a lot of risk factors out there.”
Entering an uncertain job market
Kyle Taperek graduated from UNC in 2009, during the Recession, and recalls the impact of the 2008 recession on the job search for many of his peers.
For Taperek, one of the lasting memories from graduating during the recession was seeing friends who had attended UNC and completed difficult majors graduate and settle for low-wage retail positions.
“I think at that point, when I started hearing about that and how they were like, ‘Oh I’m going to take this,’ or ‘I’m going to take this, I don’t know what else I’m going to get,’” Taperek said. “Seeing the angst and the fear on that end, of the uncertainty of what they might be able to get, I do remember that vividly.”
Taperek pursued a different path from many of his classmates and now lives in Phop Phra, Thailand with his wife, also a graduate of UNC, where they work at a refugee school.
The uncertainty of the market has led some UNC seniors, such as Lachlan Gabriel, an advertising major from Atlanta, to consider alternative options in the case of a recession in 2020.
“My plan would be to invest in myself and continue to gain skills,” Gabriel said. “I already knew that it was one of my goals to attend business, design or architecture school as a graduate program if I thought it was something that would benefit me in the future.”
Gabriel has also explored the idea of living abroad for a time, having recently applied for his Irish citizenship, but realizes that he ultimately wants to pursue an entrepreneurial path.
“I’m looking for a video, photo or marketing role in the fashion and music industry out of school, but that would be a temporary thing,” Gabriel said. “I have aspirations to work for myself. So I want to travel for a little bit and maybe get some inspiration for what I want to do after that.”
Other UNC seniors, such as Nick Hebert, a management and society major from Chapel Hill, are less concerned about the prospect of a recession impacting job prospects. The only city Hebert is considering for work in North Carolina is Raleigh, which both Wolf and McHugh agree should be largely shielded from the major effects of a recession.
“I think my main thing is just trying to first secure a full time job before a recession hits,” Hebert said. “It would be definitely harder to find an entry-level job once a recession hits, whether that’s in North Carolina or not.”
Hebert said that after he has spent some time working, he would like to come back to Chapel Hill to raise a family.
The optimistic outlook
Some experts retain optimism that a recession this time around would not have the magnitude of repercussions that Taparek and the class of 2009 experienced upon graduation. Ali Wolf, director of economic research at Meyers Research, LLC, said that while an economic recession is inevitable, North Carolina’s employment statistics are not as concerning as some believe.
“The unemployment rate during the boom times of the mid-2000s didn’t hit as low as the levels today,” Wolf said. “Job growth numbers are bound to slow as the economy reaches full employment because it’s harder for companies to find qualified workers. A key measure I like to look at is high-income job growth. Raleigh, for example, has grown 2 percent year-over-year for these types of jobs. That suggests a healthy labor market.”
Wolf puts the probability of a recession over the next 12 months at 40 percent. Wolf lists the uncertainty fueled by the trade war, slowed global growth and the manufacturing sector — which she says is already mired in recession — as major indicators of an impending overall recession.
Whether seniors like Hebert or Gabriel end up in living in North Carolina, elsewhere in the United States or even Thailand remains to be seen. With 2020 being an election year, national economic policy could still change, which gives those like McHugh hope.
“Yes, we have fundamental economic challenges,” McHugh said. “But they are the consequence of choices, and we can make better choices in the future and build an economy that’s better for us.”
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