Orders to stay at home and the closure of all “non-essential businesses” have halted the U.S. economy, concerning some graduating seniors about to enter the workforce.
Since Westminster College canceled all on-campus activity March 15, three weeks ago, a lot has changed. COVID-19 cases have increased into the hundreds of thousands and stay-at-home orders have been issued for all but eight states.
The stay-at-home orders are shown to be slowing the spread of the virus, but have had a crippling impact on economies worldwide. Unemployment claims are close to 17 million in the U.S., according to Politico.
With that, the demand for new employees has vanished for the time being — creating a complicated situation for soon-to-be college graduates.
Johnny Carr, a senior at Westminster and the director of budget and accounting at ASW, said his biggest fear after graduation is finding a job. He hopes to be able to stay in a location that sets him up for the future, but the economic situation could hinder that.
Others fear the uncertainty of not knowing where they will be two months from now, after finishing college and unsure of job prospects.
“I am now likely entering the workforce during a recession – risking the possibility of having to move back in with my parents for an indefinite amount of time,” writes senior Maggie Regier in an op-ed to The Forum March 24.
Many students have already been forced to go back home for safety and financial reasons because of COVID-19.
What a potential economic downturn would mean
The Dow Jones Industrial Average is an index averaging the values of 30 large companies in the U.S. stock market. The Dow Jones’ value dropping indicates investors are taking money out of the stock market.
Often this signals to other investors it’s time to take money out, causing the index value to drop even further. The valuation of the Dow Jones went from $29,551 in February down to $18,591 by the end of March.
The Dow Jones has seen a rise back to $23,719 April 9 due to hope around the approved $2 trillion stimulus package passed to aid Americans. The stimulus package will aid individual American households, hospitals, insurance companies and provide help in loan programs for businesses. Despite this, many employees still can’t return to work.
At the moment, it is difficult to predict how long-lasting the impacts of the current poor economy will be.
“How long and deep the economic downturn will be is dependent on how long the government lockdown lasts,” said Hal Snarr, professor of economics and business analytics at Westminster. “And that depends on the development, approval and large-scale production of treatments, antibody tests and the new five-minute reusable COVID-19 detection test manufactured by Abbott Labs.”
Snarr said the likelihood of getting the country back in business depends on the development of those tests.
The aftermath of the lockdown
“The key to shortening the length of the COVID-19 lockdown and economic collapse, to me, is the mass production of an antibody test so that everyone who has yet to be tested can know if they have immunity or not,” Snarr said.
Dr. Deborah Birx, a member of the White House’s Coronavirus Task Force, said an antibody test could be available within this month, according to Daily Mail. A test made available that quickly could mean people go back to work much sooner.
The hope is that once people can go back to work, the U.S. economy and job markets will bounce back to where they were prior to the pandemic. The key will be people engaging with the market quickly after lockdowns are raised.
“Just go basically into January and February: The markets were at all-time highs, unemployment record lows. In Utah unemployment was less than 4%,” said Cid Seidelman, professor of economics at Westminster. “This is simply just a result of everybody’s fear and basically everyone stopped engaging with the economy.”
Even though the economy was at an all-time high before the pandemic, the size of the crash may extend the amount of time it takes to rebuild.
“This is looking like the worst contraction we have had since the Great Depression,” Seidelman said.
Compared to the Great Recession that spanned from 2008-2010 with lasting impacts, this crash has the potential to be much worse, according to Seidelman.
“It was pretty bad in 2008, 2009 and 2010 and I was really distraught about the fact that time we had lots of students who were graduating,” said Seidelman. “People with good degrees in good fields that were certainly very employable ended up taking positions at Starbucks and places like that.”
There is hope for graduating seniors, some experts say
Despite the uncertainty entering the workforce, Seidelman said there are things graduating seniors can do to minimize losses.
When it comes to managing stress, Westminster graduates shouldn’t have to worry about getting support from the school, according to Seidelman.
“I think it’d be nice to reassure [graduates] that the Westminster community is going to do everything possible to try to help them succeed,” said Seidelman. “When they’re out there looking for jobs, any recommendations, any kind of letters of support, references — I’m confident that, in addition to myself, my colleagues will go every extra mile to help students land on their feet.”
For the time being, there are steps soon-to-be graduates can take to situate themselves in the best place possible.
Seidelman mentioned this may be a good time for students to look at more education opportunities like graduate school. However, he acknowledges this could present issues like accumulating more student debt.
“I’m hopeful that one of the things that comes out of all of this is another significant progressive agenda like we saw with the New Deal in the 1930s,” Seidelman said. “Hopefully people are going to wake up to how important it is to reconsider the fact that healthcare is accessible to everyone in this country.”
Seidelman said it would be detrimental to defund and deregulate healthcare and other aid to Americans.
Along with hopes of relief for student debt, Seidelman also urges students to save every bit of money that they can.
“Unfortunately, that’s just exactly the opposite in terms of what helps the macroeconomy,” Seidelman said.
However, Seidelman said he believes there will be a larger fiscal response than what he saw in the Great Recession that should help the economy rebuild faster.
In the coming months, students will surely be affected by the current global pandemic — but it’s clear they will have support from Westminster.