The young and the jobless

The Baltimore Sun

At 29, Cynthia Schatoff has been laid off twice. After three years as a graphic artist at a local firm, she was let go in April. It wasn't easy finding a job as the economy worsened, but she did. In September, she lost that job.

After six months at an Internet startup, Loretta Goodridge, 27, lost her $65,000-a-year contract in January as seed money dried up.

A few years ago, employers wooed young workers with bonuses, perks and trips to ski resorts. Now, more people in their 20s are losing jobs and getting by on unemployment benefits and help from family.

With jobs scarce and the unemployment rate climbing, young workers are competing with older ones willing to take pay cuts. And some employers are keeping experienced workers who have more training and skills while avoiding large severance payments.

Dismal economic news continued yesterday. The Dow Jones industrial average lost nearly 300 points, to close at 6,763.29. It marked the first time since 1997 that the index had closed below 7,000. And more layoffs were announced, including 6,100 at HSBC Holdings, which is shutting down its U.S. consumer lending branch operations, with several offices in Maryland.

"I got my MBA to have something permanent and stable," said Goodridge, who graduated in May from the University of Maryland's Robert H. Smith School of Business. "I've spent more time looking for a job than I've been in one."

For workers 20 to 24 years old, the jobless rate skyrocketed to 13.5 percent in January, compared with 9.8 percent a year earlier, according to the Bureau of Labor Statistics. The unemployment rate for those ages 25 to 29 rose to 10.1 percent last month, from 6.4 percent a year ago. Nationally, the unemployment rate was 7.6 percent last month.

The rising unemployment among younger workers bucks a widely held belief that higher-paid and older workers are the first to go when employers look to cut labor costs.

Historically, younger workers are more likely than older ones to be unemployed during tough economic times. They are often seen as a bellwether for the economy because their labor trends are cyclical, said Heidi Shierholz, an economist at the Economic Policy Institute in Washington.

During previous recessions, including in 1990 and 2001, the unemployment rate among 20- to 29-year-olds rose faster than among older groups, according to the Labor Department. The last time joblessness was so high for that age group was in 1983 and 1984.

And competition for jobs is expected to get stiffer as a new batch of college graduates enters the market in the spring.

"We see always during a recession, younger people getting hit a lot harder," Shierholz said. "The new entrants are the first to be shed during a recession, the last to be hired during a recession."

Many employers use seniority as a factor in making cuts. Rather than spend to hire and train new workers, some companies prefer to keep skilled, older employees as they try to survive a business slump, economists say.

"As the labor force becomes more specialized and individual occupations become more specialized, getting new employees up to speed with equipment, software and culture is pretty costly and something that firms would rather not bear," said Kevin McIntyre, an economics professor at McDaniel College.

Severance is another factor: The less experience a worker has, the less an employer has to pay if the employee is laid off.

John Challenger, chief executive of Challenger, Gray & Christmas, said his Chicago outplacement firm is working with more workers in their 20s who have been laid off recently because of last-in, first-out policies. Employers are "betting less on the future and more on, 'Who could we get to get the work done?' " he said.

At the University of Maryland business school, career services started an alumni outreach in the fall in response to the economic crisis, said Kelly Brown, assistant dean for the Office of Development and Alumni Relations. The program provides networking opportunities, career counseling and workshops, including "Finding a Job in a Tough Economy." A session will be held tomorrow in Baltimore.

Malcolm Munro, assistant director of alumni career services, said he is working with many young alumni in their 20s and 30s to help them market themselves.

"A lot of them are realizing, sadly, that what they trained to do, the opportunities aren't there anymore," he said. "The challenge now is, what do I really want to do?"

Michael Mobley, 28, an architect who lives in Federal Hill, said he knew that his job could be vulnerable because development projects often stall during a recession. Still, he said he was surprised when he was laid off in November by a local company whose work had dried up. He is now living on unemployment benefits and savings.

"I do see a lot of younger people my age getting laid off because it is a recession," Mobley said. "A lot of employers feel like they can get older, more experienced workers for less."

Todd Steen, professor of economics at Hope College in Holland, Mich., said young workers, especially in their mid- to late-20s with some experience, are up against older, more skilled workers. "Employers are in a good spot," he said. "People are taking lower wages more than I've seen in a long time."

Schatoff, the graphic artist, has had no luck finding a new job. The Catonsville resident said that her field has always been competitive but if job openings were scarce the first time that she was laid off, it is worse now.

"I've had some leads and had people say, 'We would like to hire you, but we're not hiring right now,' " she said.

Neither is Goodridge getting any solid leads. Though she hopes to find work with startups or early-stage companies, she is considering government jobs, temporary work or other opportunities.

"If someone reaches out to me, I'm interested, just so that I could find something to get through the next year or two until the economy gets better," said Goodridge, who lives with a roommate in Arlington, Va.

Goodridge, who did not quality for unemployment benefits, is cutting expenses, clipping coupons, tapping into her savings, using a no-interest credit card, got a six-month unemployment deferment on her student loan and is getting help from her mother. But "at 27, you don't want to rely on her," she said.

Meanwhile, Goodridge is keeping busy, attending networking events and trying to meet at least two to three new people a week.

"I thought with my education it would be easy to get a job and all the opportunities," she said. "That has been different than what I thought going into the whole thing."


See video of Loretta Goodridge talking about the tight job market at

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