Will the Class of 2023 Be Happy?

Last year, I wrote about how the college graduates from the class of 2022 were lucky. Although they suffered through COVID, when it was time to start their careers, the economy was firing on all cylinders, the job market was hot, and starting salaries were rising.

A year later, circumstances have shifted. The economy is slowing and there is a lot of talk about a recession.

The Conference Board predicts that one will occur within the next 12 months, as “economic weakness will intensify and spread more widely throughout the U.S. economy.”

Additionally, the once-scorching labor market is slowing down. Through April, the three-month average payroll gain now stands at 222,000, its weakest 90-days since January 2021. Additionally, the March Job Openings and Labor Turnover Survey showed that layoffs rose to the highest level since December 2020 and job openings fell to their lowest level since April 2021.

The good news for new grads is that slowing down is not retrenchment.

According to its Job Outlook 2023 Spring Update, the National Association of Colleges and Employers (NACE) found that “employers are planning to hire 3.9 percent more graduates from the Class of 2023 than they did from the Class of 2022.”

That said, some industries have shifted their plans dramatically. “Respondents in the information industry planned to hire almost 87% more new graduates at this time last year. Currently, they are projecting a decrease in hiring of almost 17%.”

So much for the parents who forced their kids to learn coding, in an effort to make them marketable in the labor force! Of course, many of those coders will still find work, but they may land jobs in other sectors where there is growth, like health care, transportation, and chemical manufacturing. And maybe they will be happier in those industries.

Even if a recession is just around the corner, the news may not be all bad.

According to research from Emily C. Bianchi of Emory University, there is an upside of entering the workforce in a recession. Wait, what about the research that says that graduating into a recession can hurt earnings for a decade (or more)?

A famous paper from the National Bureau of Economic Research found that “graduating in a recession leads to large initial earnings losses. These losses, which amount to about 9% of annual earnings in the initial stage, eventually recede, but slowly, halving within five years but not disappearing until about ten years after graduation.”

But earning power is not the only measure of professional success.

Bianchi found that “people who entered the work force when the economy was faltering are more satisfied with their jobs in later years…People who graduate in tough economic times are subsequently less likely to ruminate about how they might have done better and are more likely to feel grateful for the jobs they have.” Higher satisfaction occurred throughout their careers, even when they earned less money.

Happiness in a money column?

Indeed, job satisfaction may be more important than dollars and cents. Just ask people who proactively chose careers as teachers, government employees and social workers.

I’m not suggesting that every one of them is thrilled all of the time, but from the tiny sample that I hear from on my podcast, it is amazing to consider how many are satisfied and proud of the choices they made.

As new grads enter the workforce, they would be wise to consider that choosing a career that makes them happy may also allow them to have longevity, a concept that is ever more important as life expectancies increase.