Parents mull best gifts for grads in a down economy
In the days following the U.S. Department of Labor's announcement that the unemployment rate had hit its highest point since September 1983, parents of graduating college students are probably wishing they could give their children the gift of a job.
But since that's not possible most of the time, family and friends are left with a common dilemma as commencement day approaches: What to give in times of recession and slim job prospects?
The picture isn't pretty. Graduates are entering a job market where 539,0000 jobs were cut in April alone, and the jobless rate is at 8.9 percent. Research shows employers expect to hire 22 percent fewer college graduates this year than they hired last year. But even so, accounting graduates aren't feeling as much pain as graduates in other majors.
At a job fair in Waco, Texas, for example, students milled around, stopping at booths of 40 employers looking for new hires. Chase McVicker, 21, from Brush Prairie, WA, an information systems and economics major, said Conoco/Phillips in Bartlesville, OK hired him up before he graduates from Baylor University. He told the Waco Tribune-Herald that he had been chatting with other students - it seems as if those majoring in information systems, finance and accounting are having less trouble finding jobs than those studying marketing and management.
His impression is backed up by figures released by Monster.com. More than 410,000 new U.S. job postings were placed on the Web site over the 90 days ending April 18. Most in demand were computer systems analysts, accountants, registered nurses, and sales managers, The Wall Street Journal reported.
Professor Stephen T. Limberg, faculty director of the University of Texas MPA program, is impressed by how flexible college graduates can be. They're savvy about the marketplace and adaptable. When it comes to giving gifts to new college graduates, Limberg said he gave his niece and nephew gifts that were tailored to their specific interests. For his sports management-oriented nephew, he bought stock in a company in that field. For his environmentally conscious niece, he bought carbon offsets. Another idea is to contribute in the graduate's name to a cause they are passionate about.
The Financial Planning Association suggested setting up college graduates for the future with a Roth IRA as a way for grandparents to "do something nice for their grandkids and something sensible for their estate." Grandparents can help them start a retirement fund, with parents or guardians opening the Roth account and grandparents making contributions to match the percentage of earnings kids put into it.
And to those worried parents, some words of hope from Harry Holzer, a professor at Georgetown University and former chief economist at the Labor Department. "There's always hiring going on," he told The Wall Street Journal. "The American labor market is characterized by a lot of churning. Beneath the net [job loss] numbers, there are always people quitting, so there's always replacement demand. There's less new demand, but there's still hiring, and that's true in a lot of sectors."