Diploma Depression

Posted By on April 21, 2009

It’s almost graduation time, and you can feel the anxiety in the air. Very soon, 1.5 million college graduates will be flooding into the worst job market in 25 years, with unemployment at 8.5 percent and rising. According to Nouriel Roubini (also known as “Dr. Doom”), the New York University economist who accurately predicted the current economic meltdown, we can expect the unemployment rate to go into the double digits before we begin to feel the effects of a recovery. To make matters worse, the class of 2009 is competing with 1.8 million degree holders who are already on the street looking for the same jobs. The supply and demand curve is simply not in their favor. Understandably, the fear among this year’s graduates is palpable—but it’s nothing compared to that of their parents.

One worried parent said to me recently, “You mean I’ve paid $50,000 a year for my kid to go to Princeton, and now he’s going to become one of those boomerang kids?” While the news is dire, I say there is another way to look at this situation. After a couple of deep breaths, a few Hail Marys, or maybe a stiff drink, you might come to see this as a great life lesson for today’s youth, who have grown up in an unprecedented period of affluence. Life is full of peaks and valleys, and they may as well learn that while they’re young and have so little to lose. In my new book, The Richest Man in Town, I find a lot of hope in the wise counsel of 100 self-made wealthy men and women, many of whom started out under just these circumstances.

The greatest advantage we are all given is youth. It’s the ultimate equal-opportunity gift. What do Bill Gates, Steve Jobs, Sergey Brin, and Mark Zuckerberg have in common? They all started what became billion-dollar businesses before their twenty-fifth birthdays. Risk only increases with age, so if the jobs offers aren’t streaming in, why not start a business now, when there’s less to lose? No future recruiter or employer will fault a 20-something for taking a stab at launching a new enterprise right out of school. To the contrary, they will admire the drive and determination that starting a business during a recession requires. At worst, it’ll keep your kid from spending the summer on your sofa. And who knows? He or she may never have to work for anyone but him- or herself ever again. And as my survey found, owning your own business is the surest way to become the richest person in town. The majority of RMITs also had a college degree—interestingly, however, an advanced degree such as an MBA does not seem to offer much of an advantage, if any, in starting and building a business. It takes a few more years, and it costs more money—and are you ready to write more tuition checks? To gain more insight into how the RMITs succeeded in hard times, see chapters 5 and 6 of The Richest Man in Town—which also makes a great graduation present.

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About The Author

W. Randall Jones is the author of The Richest Man in Town. Visit the About W. Randall Jones and About The Richest Man in Town pages to learn more.