Prepare for the worst

Eight years ago, the U.S. economy was in freefall with no end in sight. The stock market crashed to its lowest point since 1997. Unemployment skyrocketed to 7.2 percent as 2.6 million more Americans lost their jobs. Foreclosures were up by 225 percent as banks took back people's homes. No one had seen a crisis like it since the Great Depression.

Starting in 2009, the U.S. economy has soared to new heights. While the memories of the Great Recession are still with us in 2017, I fear that my generation is forgetting its lessons.

As employers descend upon college campuses this fall to recruit new talent, I've noticed how most of my classmates are worried about getting a job, while few are concerned about keeping a job. But the next recession is coming. Therefore, I urge my fellow classmates to ask corporate recruiters the hard questions — such as those about retirement and job security, among others — so that they can prepare for harsh economic conditions like the Great Recession in the near future.

Historically, U.S. economic growth has been punctuated by recessions every few years. The National Bureau of Economic Research states that expansions typically last 58 months, with the longest period of growth occurring for 120 months in the 1990s. The current growth period is the third longest in U.S. history at 100 months, and has the potential to top the list if predictions are correct.

The good times, however, won't last forever. Even if the U.S. marginally breaks the historical record at 121 months, that places the next recession in the fall of 2019, just as today's juniors start their new jobs and sophomores begin looking for employment. Opinions differ on the next recession’s cause, but in the end, it will probably hit current college students.

Last month, I listened to my classmates' concerns about jobs at a variety of corporate recruiting events. Students invariably asked questions like, "What is your advice for the interview?" and, "What are my chances of being hired?" But not a single person asked about job security.

Since none of my fellow students were thinking about this issue, I tackled it myself. At a recent Goldman Sachs information session, I asked the recruiter, "In the event that I join the firm shortly before a recession, what are the chances that I will keep my job?" She immediately became defensive and subtly accused me of being a lazy worker for asking such a question. She wasn't the only one like this either. There were recruiters from several other firms who were either puzzled or hostile when I asked similar questions.

The recruiters likely weren't trained on how to respond to such questions, but students need to know this information because at least 14 percent of each graduating class go into finance-related careers. Goldman Sachs alone laid off 10 percent of its employees during the last recession. Altogether, the financial services industry fired nearly 460,000 workers between 2008 and 2012.

This not a problem specific to Wall Street, as layoffs occurred across all industries during the Great Recession. But anyone who goes to work for a big company should know up front whether it will hold onto them as a valuable employee or fire them as an expendable lackey to protect an executive's bonus during a recession.

The need to ask about job security is only compounded by the fact that young people are often the first to go in mass layoffs. As a group, they also suffer greater employment drops than the rest of the country. Over the course of the Great Recession, young adults’ employment dropped by six percent, compared to only four percent across all age groups.

Students should also consider retirement plans as they judge employers. Recently, a Wells Fargo survey found that 48 percent of millennials don’t have access to a 401(k)-type plan and 41 percent of those employed have not started saving for retirement. Even if millennials started saving for retirement now, they could lose much of it in the next recession. In 2008, for example, Americans on average lost 14 percent of their retirement savings.

Job and retirement security are only the tip of the iceberg. There are still dozens of other job-related issues now that, while probably not at the forefront of a college senior's mind, will matter when the next recession hits either before graduation or shortly thereafter. With the looming threat, it may be better in the short-term to get a lower-paying job with higher security than a high-paying expendable position.

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Fortunately, the University has resources to help students navigate these issues. In an interview, Career Services' Executive Director Eva Kubu explained how the office has "one-on-one meetings with students" to help them research industries.

She said, "Instead of just preparing students for just the first job, we try to prepare them for beyond that." Kubu added, "If you are faced with a layoff, you're going to reach out to people in your network to find a job," explaining that one of Career Services’ goals is teaching students how to use their networks.

No one can precisely predict when the next recession will occur, but today's college students will experience the effects. They should prepare for the worst and hope for the best as they search for jobs. Princetonians should use every resource available to prepare for the next recession now before it's too late.

Liam O’Connor is a sophomore from Wyoming, Del. He can be reached at lpo@princeton.edu.