Your First Job Won't Be Your Dream Job. And That's OK.

(Bloomberg Opinion) -- The job market seems to be improving for college seniors, but those who graduated last year may still be struggling to find work. Their younger peers are landing jobs thanks to a better job market, along with internships and in-person professor interactions that they missed out on during the height of the pandemic.

Only 67% of graduates who received bachelor’s degrees in 2020 were employed, compared with 76% of their cohorts who graduated a year earlier, according to the most recent data from the Bureau of Labor Statistics. Another survey from employment website Monster shows that almost half of 2020 graduates were still looking for work a year after they had graduated.

Those in certain graduate schools may not be faring much better; there was a 34% drop in job postings for MBAs from May 2019 to May 2020. Even at the university where I teach, the hiring process for Ph.Ds has slowed considerably. One of my best students got a temporary job at the Central Bank of the Republic of Turkey instead of a full-time teaching gig.

Despite the depressing news, there are some things 2020 graduates can do to mitigate the labor scarring and long-term negative effects on their wealth from graduating into a recession.

First, don't hold out for the dream job. Those who start working during a recession will earn about 10% less over their entire careers due to lower starting wages and fewer working hours than those who graduated into a better economic environment, according to research from University of California at Berkeley economist Jesse Rothstein and University of Rochester economist Lisa Kahn. To prevent those losses from becoming even steeper, start working sooner rather than later.

Be open to industries where demand is highest, even if they weren't where you initially saw yourself. Sectors such as home health and personal care, food service, software development, and market research are among those with the highest projected number of new jobs over the next 10 years, according to the Labor Department.

The other benefit of working in a job — any job — is that you can start putting some money away and take advantage of compound interest. While I know that sounds near impossible while facing student loans or other debt, and feeling strapped for cash, consider this: A 25-year-old making about $80,000 could save just 12% of her income and get to $1 million in 40 years (assuming a 4% interest rate on her savings). A 40-year-old would have to save 28% of her income under the same scenario, and a 50-year-old would have to save almost her entire salary to get to $1 million by 65.

Even writer Jack London was a fan of saving early, remarking in his book “What Life Means to Me”: “It is not particularly easy for one to climb up out of the working-class — I early inquired the rate of interest on invested money, and worried my child's brain into an understanding of the virtues and excellencies of that remarkable invention of man, compound interest.”

Finally, don't discount the mental and physical toll having graduated during less-than-stellar times can take. Research from Stanford University economist Hannes Schwandt shows that graduating into a recession can have long-term negative effects not just on earnings, but also on marriage stability and longevity because of increased rates of heart and liver disease, cancer and drug overdose. So, remember: You're not to blame for entering a labor market with high unemployment rates. It can be helpful to tap into networks for those facing similar situations to share frustrations, or to talk to a mental-health professional.

Pandemic graduates may be having a hard time right now relative to their peers, but at least they have time on their side. Being old and struggling to find a job is a far worse predicament.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Teresa Ghilarducci is the Schwartz Professor of Economics at the New School for Social Research. She's the co-author of "Rescuing Retirement" and a member of the board of directors of the Economic Policy Institute.

©2021 Bloomberg L.P.