Today, college graduation lacks some of the promise it normally holds but some grads are taking the initiative and making it work. Photo: inorman88 (flickr)

You've probably heard something along the lines of "get an education and you'll make more money," at least once in your life.

And for the most part, it's true. Higher education and university degrees are linked to higher salaries, greater lifetime earnings, and lower unemployment rates. This correlation is corroborated by data from the Bureau of Labor Statistics, which shows that individuals who possess a doctoral degree faced an unemployment rate of a mere 2.5 percent in 2009, compared with an unemployment rate of 14.6 percent for those who did not finish high school.

Yet, the current job market is still tough for college graduates, and as a recent USA Today article reports, "the jobless rate for Americans with at least a bachelor's degree rose to 5.1 percent, the highest since 1970 when records were first kept." (This number has since declined. As of January 2011, the unemployment rate for those with a bachelor's degree or more is down to 4.2 percent according to the Bureau of Labor Statistics).

Still, employment prospects for many new college graduates are bleak. A press release from the National Association of Colleges and Employers describes the job situation for the class of 2010.

...[only] one-quarter (24.4 percent) of 2010 graduates who applied for a job actually have one waiting for them after graduation. In comparison, just 19.7 percent of 2009 graduates who applied for a job had one at this time last year.

This may be a consequence of older workers holding onto their jobs a little longer, postponing retirement in order to ensure they will have enough to live on after they leave the labor force, a recent The New York Times article asserts.

So what are young workers to do, when there just aren’t jobs opening up for them and the national unemployment rate hovers between 9 and 10 percent?

According to a different The New York Times article, some recent grads are making their own jobs, building businesses from scratch and employing themselves.

These young college graduates are trying something new, making up for their lack of experience with pluck and drive. The New York Times article mentions Scott Gerber, a young entrepreneur who opted to start his own company to "...encourage young people to start their own companies — instead of trying to land a job." His nonprofit is called the Young Entrepreneur Council (YEC), and provides funding and mentorship to young entrepeneurs.

These desperate times call for creative measures. And who knows, maybe this new generation of entrepreneurs is just what we need to give our economy a push in the right direction.

Find more graphs and charts depicting the consequences of the "Great Recession" on the United States' economy by clicking on the following link. Photo: Center on Budget and Policy Priorities.

Data recently released by the Bureau of Labor Statistics bears discouraging news for the unemployed. In short, the Bureau's findings reveal that the longer an individual remains unemployed, the less employable they become.

The New York Times explains how the likelihood of landing a job diminishes after a lengthy period of unemployment:

… [P]eople out of work fewer than five weeks are more than three times as likely to find a job in the coming month than people who have been out of work for over a year, with a re-employment rate of 30.7 percent versus 8.7 percent, respectively.

Neal Conan from National Public Radio's "Talk of the Nation," expands on the issue, reporting that high rates of long-term unemployment are a product of the high level of overall unemployment, which gives employers the luxury of being selective in their hiring process.

For every job open in America, there are five unemployed workers anxious to apply. That means employers can afford to be picky. Some would-be bosses don't want to hire people who have been out of the workplace for too long, perhaps because their skills have gotten rusty or maybe because they assume someone out of work that long is flat-out unemployable.

Historically, the percentage of long-term unemployed (defined as unemployed for 27 weeks or longer) fluctuates, but has remained well under 25 percent of the total unemployed population. By today's estimates, the long-term unemployed make up about 44 percent of unemployed workers, according to the Bureau of Labor Statistics' December 2010 Employment Situation Summary.

So what's the consequence of these record levels of long-term employment? The United States' government is rethinking how long someone can be considered unemployed and changing the parameters that define long-term unemployment, claims an article in USA Today. The article reports that the new policy has been introduced to address the rising numbers of long-term unemployed but does not revise or extend unemployment pensions to these individuals.

Citing what it calls "an unprecedented rise" in long-term unemployment, the federal Bureau of Labor Statistics (BLS), beginning Saturday [January 1, 2011], will raise from two years to five years the upper limit on how long someone can be listed as having been jobless... The change will not affect how the unemployed are counted or the unemployment rate is computed nor how long those eligible for unemployment benefits receive them. Analysts call the move a sign of the times."

A sign of the times indeed. These days long-term unemployment presents new challenges and added pressures on our government and welfare system. However, this policy change does not mean we are addressing the needs of the long-term unemployed, rather we are simply taking an interest in observing the phenomenon.

Eventually the job market will recover. Unemployment is often one of the last symptoms to recover following any recession. But thankfully, slow recovery is not no recovery.

Entrepreneurs like this New York City business owner drive job creation. Photo: Franklin Abreu (flickr)

Would easing visa requirements for immigrant entrepreneurs give the U.S. economy a much-needed boost?

A recent Wall Street Journal opinion piece suggests it might. Immigrants are almost 30 percent more likely to start a business than non-immigrants, explains the article, and new businesses account for the most jobs added to the economy every year.

“For years, academics have noted the connection between immigration, entrepreneurship, and job creation,” explains a recent Slate article. The article cites a recent report by the National Foundation for American Policy that estimates 10,000 entrepreneur visas could create 100,000 jobs.

Right now the requirements for getting an investor visa make it nearly impossible for most immigrants who want to start a business, argues the Wall Street Journal article.

The U.S. created an immigrant investor visa category (EB-5) in 1990, but steep minimum capital requirements put it out of reach for most potential recipients. The average start-up company in the U.S. begins with about $31,000. Yet to become eligible for an EB-5 visa, an individual must invest at least $500,000. It's no wonder that fewer than 3,700 people received EB-5 visas last year—including spouses and children—and most of them went to immigrant investors looking to expand existing U.S. ventures, not create new businesses.

Senators John Kerry and Richard Lugar have introduced legislation that proposes issuing a conditional green card for anyone who receives at least $250,000 from a U.S. venture capitalist, and extending permanent residence if the business does well. But The Wall Street Journal article suggests that these changes would still falls short, given that the average start-up cost to businesses are much lower than this plan outlines.

"The U.S. would do better to discard capital requirements and welcome any foreign national who can present a business plan that passes muster with the Small Business Administration," said Stuart Anderson of the National Foundation for American Policy, tells the Wall Street Journal article. "As with the EB-5 visa, the individual would receive a green card only if the business created a certain number of jobs for U.S. workers within a set period of time."

Let's hope politicians heed this advice — the economy could certainly use the jobs.

An estimated 8.4 million payroll jobs were lost during the recession. Photo: wools (flickr)

What's most effective in helping people climb out of poverty? Jobs and education, according to New York Times columnist Nick Kristof, who cites several recent studies by economists.

Quality youth education programs targeting youth pay off immediately and in the long run — especially those that focus on ninth-grade students, considered a critical juncture for at-risk youth. And jobs are important because they boost entire families.

But as Kristof points out, both employment and school funding have been severely affected by the economic crisis, "harming the two most effective stairways out of poverty." In response, Kristof is calling for a greater commitment.

This wave of research suggests that there’s no magic bullet, that helping people is hard, and that even when pilot programs succeed they can be difficult to scale up. But evidence also suggests that we increasingly have the tools to chip away at poverty. We know what to do if we just can summon the political will.

A call center in India. New U.S. policies against outsourcing jobs overseas will hurt India's IT sector the most. Photo: David Robinson (flickr)

In spite of the global recession's painful effects on most of the world's economies, India has managed to stay stable. The country even expects its economy to grow by 5 percent this year. However, this prediction came before President Obama announced that his administration would be cutting tax breaks and refusing bailout money for companies outsourcing jobs overseas.

Rising unemployment in the U.S. has renewed the political and economic debate over shipping jobs abroad. More than 1,000 U.S. firms that have outsourced jobs abroad are being criticized for taking jobs away from Americans. Countries like India — which gets more than 60 percent of its outsourcing work from U.S. businesses — will likely be hit the hardest by the Obama administration’s protectionist approach to reviving the U.S. economy.

President Obama also announced a hiring ban on foreign workers for companies receiving federal bailout money. Of the 65,000 H1-B work visas that the U.S. issues annually, 21,667 have been for Indian citizens who mostly join the information technology industry. These non-immigrant visas are granted to educated and skilled foreign workers.

But the U.S. is not alone in adopting policies against outsourcing jobs and limiting foreign workers. In Persian Gulf countries like the United Arab Emirates, millions of Indians who are employed in the construction and banking industries have been laid off and forced to return home. In the United Kingdom — where Indians are one of the most prevalent immigrant groups — the government has announced plans to potentially limit foreign workers to sectors of the economy that have documented labor shortages.

New policies against hiring foreign workers in the U.S. may have a long-term impact that policymakers are not anticipating, according to a study by Duke and Harvard researchers. With increased job opportunities in places like India and China, more than 100,000 foreign workers could leave the U.S. for jobs in their home countries. The study found that many Indian professionals in Silicon Valley have already left, and predicts many more will leave to start businesses in India.

This is bad news for the long-term economic recovery of the U.S. because nearly half of Silicon Valley start-ups, including Google, were started by immigrants, the lead Harvard researcher tells BusinessWeek. This long-term “brain drain” will mean that “when we start recovering ... the people we need are going to be in India and China,” according to the researcher, Vivek Wadhwa.

The U.S. has historically welcomed immigrants and their innovative ideas. A reversal of policy could prove to be very harmful — hurting economic growth and limiting the expansion of key industries.

Despite rising unemployment, average hourly wages went up 4 percent in the past year. Photo: James Yu (flickr)

It's tough finding a job in this economy. There have already been 3.6 million job losses since the start of the recession. So would you believe that hourly wages have risen almost 4 percent in the past year?

How can this be? According to an economic theory called "adverse selection," employers are better off increasing wages rather than cutting them. Cutting pay often prompts the most productive workers to look for employment elsewhere, leaving the company with the laziest, most unproductive workers. Higher wages are also good for employee morale. This same wage phenomenon occurred during the Great Depression.

Not all companies are subscribing to "adverse selection" theory — Hewlett-Packard and FedEx are planning to cut worker pay. But as the saying goes, a happy worker is a productive worker, and as the New Yorker notes, productivity is key to a healthy economy.