Search Jobs
Employer Directory
Career Articles
For NJTC Employers

Article: Recession 101: A Historical Perspective

Article Group List / Career Change / Recession 101: A Historical Perspective

Recession 101: A Historical Perspective

Cheryl Alkon knew the job market was tight in 1992 when she graduated from college at the tail-end of the last real recession in the United States. But that didn't make her six-month effort to find a job as a magazine writer any easier.

"If someone was going to get a media job, I thought, it was going to be me," Alkon recalls. "I was like super college paper girl. I had internships every summer, including Glamour [magazine.]"

After all, Alkon had a plan. After graduating from Brandeis University, she moved back in with her parents in Brookline, Massachusetts and temped as an office secretary a few days a week to free up time for interviews. She knew the Amtrak Boston to New York route by heart and trekked to the Boston Public Library every Monday to check New York newspaper classified ads. (This was a time before everything was on the Internet.)

Alkon literally sent out hundreds of paper resumes. When she wasn't trying to get a job, she was obsessing over why she couldn't get one.

"It was depressing," says Alkon, now 30 and gainfully employed as the "Deal With It" editor at gURL.com. "I wasn't watching TV all day. I was really trying."

Recession deja vu

For Alkon and other Gen Xers, nearly 10 years of unprecedented job growth had, until recently, dulled memories of economic hard times. But the flashbacks are surfacing with evidence of a slowing economy, as well as daily news of bankruptcies and layoffs. And younger workers, who have never known of a time when jobs were anything but bountiful, have become only too aware of the dreaded "R" word.

"God only knows what its going to be like in May," says Sara Ovadia, a senior majoring in English at the State University of New York at Albany.  Ovadia also interns at Marcel Dekker, a Manhattan-based publisher of science and math books.

Ovadia listens when thirtysomething workers talk about the bad old days. Already, she's seen the signs. Her older brother left was recently left Uproar.com after the gaming site laid off some staff. And fewer recruiters are coming to campus, she says.

"Last year at this time, I wasn't really worried," says Ovadia, 21. "It seemed the job market was so good. [The recruiters] were taking people from [non-business] majors. As an English major, I could have gotten a business job that paid in the forties. Now, I'll probably have to stay within my major."

~ The softer economy is hitting home. But that doesn't mean the demand for talented workers will end, says Bruce Tulgan, founder of RainmakerThinking, Inc., a research, training and consulting firm focused on the working lives of those born after 1963.

"There is a huge perception that, all of a sudden, the rug has been pulled out from under everybody's hopes," says Tulgan. "One of the most important things to tell people is that during the height of the boom, there was still plenty of career uncertainty. And right now, there's still plenty of opportunity."

Economics 101: What is a recession?

But first things first. A recession is defined as a period of two or more successive quarters of decreasing production, usually resulting from a combination of negative events, or shocks.  The U.S. economy has suffered through four recessions in the post-World War II years.

In 1990, the Iraqi invasion of Kuwait and the ensuing spike in oil prices shattered the confidence of American consumers, dampening their spending and pushing the economy into a recession. This shock was amplified by the large debts that American households and corporations had built up during the 1980s.

During the height of the bad times, unemployment was at 7.8 percent in June 1992. Economists consider the end of the first quarter of 1991 as the recession's end, but substantive recovery didn't really begin until the second half of 1993.

Today, nose-diving stocks, a tightening of availability of capital and higher energy prices are among factors taking their toll on the economy. But while President-elect Bush and his running mate, Dick Cheney, talk openly about recession, Tulgan and other forecasters aren't so pessimistic. The U.S. economy slowed to an annual growth rate of 2.2 percent in the summer, far below annual growth rates above 4 percent since 1997, but that's still healthy, Tulgan says. Job growth has slowed to about 150,000 new jobs a month vs. an average of 200,000 a month for the last few years, but unemployment still hovers around 4 percent.

Last week, the Fed cited its concern about softening demand when it cut its key federal funds interest rate a half percentage point. It was a surprise move between regularly scheduled meetings of its rate-setting Federal Open Market Committee.

~ Tulgan is willing to go as far as to say the situation has "softened" the economy.

"No doubt the never-ending good news is winding down and we're seeing a bit of a slowdown," he says.

Still, the intense competition for talent will not change in leaner times, he says. Even during the go-go days of the 1990s economic boom, with unemployment at record lows, he says, corporate downsizing reached record highs, he asserts in his new book, Winning the talent Wars

Ixnay job security

"It's a myth that even at the height of the economic boom there was job security," he says. "All the media hype was that everything was great, and it was great, and it is still great. But that doesn't mean there was job security per se. Just as companies were hiring like crazy, they were also downsizing like crazy."

Consider PricewaterhouseCoopers, which recently told Vault it would eliminate 400 management-consulting jobs. Still, a PwC spokesperson pointed out, 1,800 consultants have been added since last July and the company plans to hire 2,500 to 3,000 more employees by the end of this fiscal year, which ends in June.

Business is so fast paced these days that as soon as new market opportunities appear, companies staff up. They downsize just as quickly when the old opportunities sour, Tulgan says.

"The reality of the new economy is that there is tons of work to be done, but no real job security for anybody," he says.

While recession scare has no doubt sent shivers nationwide, not everyone is worried about his job prospects.

Fear and loathing on the college campus?

Tim Luzader, director of the Center for Career Opportunities at Purdue University, says while concern grows that the economy isn't as buoyant as it used to be, students who are completing degrees in hot fields like math, accounting and computers are still highly sought after by recruiters on campus.

"Their issue is it's too easy for them to lay back and let companies come to them," he says. "They're often putting themselves in the position of going to the highest bidder and not investing time to find out what's good for them."

~ Liberal arts majors face a bigger challenge, he says.

"The companies aren't aggressively pursuing them on campus visits any more, so there's some trepidation," he says. "We are essentially advising them to come to the campus center and talk about different kinds of opportunities."

Falling into the category of worried liberal arts major, Sara Ovadia is starting to regret her decision to study English. Since there's no turning back, her revised plan is to start aggressively looking for employment.

Although she had hoped to do something business-related, she now plans to target writing or editing positions. Dot-coms are blacklisted.

"That would be a last resort thing," she says. "Publishing may not be that high-paying, but at least it's stable."

What Gen X says

Alycia Eck was in a similar situation when she graduated from Rutgers University with an English degree in 1993. While friends with business degrees secured job offers even before graduating, she was still blitzing media and publishing firms with her resume months after graduation.

Still, her decision to suffer through "two years of pretty crappy jobs" led to new opportunities once the economy improved. Today, she's the manager of the Intranet at the Howard Hughes Medical Institute in Washington, D.C., making good money and loving her job.

"At the time, I was probably just happy to get money," she recalls of her decision to take a job answering phones at McGraw Hill in Hightstown, N.J. When that office closed, she got a similar job with the company in Washington, D.C. In time, she was promoted to McGraw Hill's production department, and found her calling in IT.

She advises Ovadia and others who may face tougher job competition not to dismiss jobs just because they're outside one's academic major. Gaining office skills and developing a specialty, she concludes, are more important.

"You never know where you're going to end up," she says. "I always thought I had to use my degree, but that's just crap.  You shouldn't ignore other possibilities. I never would have expected to be in the computer field when I graduated."

Tulgan, the author, has similar advice for new workers.

Don't just look for a traditional job," he says. "And if you get a traditional job, don't just be content to play a role. Look for opportunities to add value."

Alkon's path from her job as editorial assistant at the New England Journal of Medicine in the early 1990s to gURL.com included journalism graduate school as well as stints at newspapers and online companies.

She says she's at least more prepared to deal with economic uncertainties than she was as a naive new graduate. And she also knows she will never have to make weekly treks to the library, post office or stationery store - thanks to the Internet.

"If I find myself in a position to be looking for work again, I think that my industry contacts and experience built up over the past nine years of working should make finding another job easier than when I was fresh out of school back in 1992," she says.

Tips for surviving a recession

While very few workers will be invulnerable should a recession come, author Bruce Tulgan offers four tips for surviving.

1) Build marketable skills, which may mean continuing-education courses or just keeping current on trends in your field. Better yet, he says, develop expertise of some sort. "Just because you're clever and talented doesn't mean you have marketable skills," he says.

2) Build relationships with decision-makers that can help you. This goes way beyond networking, which he considers overrated. Only reach out to people when you have something to talk about. And approach them in terms of having something they could use, such as your newly acquired expertise.

3) Become good at managing yourself, your boss and other workers. That means getting organized, not needing too much direction to do your work and being the person in the group willing to lead when situations call for it.

4) Make the boss give you deadlines. "That's your proving ground and your opportunity to prove that you're valuable."