A Depressing Discovery

By equating salaries for new hires to the unemployment rate, a Yale professor calculates that students who graduate during a downturn earn 6-8% less in their first year for each percentage-point increase in the unemployment rate.

That means a 1982 graduate entering the job market when unemployment stood at 10.8% earned, on average, 23% less than a 1981 grad who entered the job market when the jobless rate was 7.5%, according to the blog Daily Finance.

The research, conducted by Lisa Kahn, assistant professor of economics at the Yale School of Management, suggests that the disadvantage may take years to overcome. For example, new hires during a recession may be more reluctant to look for another job, which could bring a salary bump.

“Over 17 years after college those groups have a $100,000 difference in earnings,” Kahn said.

What about the Class of 2009?

The National Association of Colleges and Employers (NACE) just released a list of the top jobs (with salaries) for the Class of 2009. The big news was the emergence of teaching in the top spot.

The top five positions and starting salaries are: teaching ($35,496), management trainee ($41,353), financial/treasury analysis ($52,043), consulting ($56,472), sales ($41,577).

2009 marked the first time in several years that the public sector landed the top spot. And public sector jobs generally pay less than those in the private sector, as NACE’s executive director Marilyn Mackes said.

No surprise: the NACE press release also noted that the average starting salary for new college graduates fell this year. The average starting salary offer for a 2009 bachelor’s degree recipient is $48,633. That comes in at 1.2% less than the $49,224 average offer extended to members of the Class of 2008.

A Broader Perspective

Does this mean new grads are financially screwed for the next decade compared to their peers who are a year older?  Maybe — if you consider Kahn’s research in a vacuum.  But plenty of other factors play into the mix of anyone’s career and salary trajectories.

The Yale salary-comparison research offers a valuable piece of data, but — like the national unemployment rate — it’s not an absolute for every worker.

Kahn herself offers a great piece of advice in the Daily Finance interview: “Don’t accept the status quo.”

For more helpful resources on this salary issue, see these articles:

• Will the Recession Deflate Your Income Forever?
• 4 Types of Pay Cuts, and What You Can Do About Them
• Do You Dare Ask for a Raise in This Economy?

Brianna Karp was hired this week by Elle to blog about being homeless and her future, reportedly making $150 a month for 24 hours of work. The amount is less than California’s minimum wage, which made some people accuse Elle of getting good publicity on the cheap. (Karp lives in Orange County.)

But, in email comments to columnist Tommy Christopher, Karp said she doesn’t feel exploited.

“This is an internship. Most internships, as I’m sure you know, are unpaid,” she said. “The whole point of an internship is that it is unpaid and opens doors for the intern which would not have previously been a possibility, and I accepted the internship offer assuming that it would be unpaid, before any sort of money was even mentioned, because I know how much this could help me down the line.”

Internships certainly do open doors. I expect Karp has a promising future, provided that she maximizes the benefit of this assignment. Some key tips for interns for getting the most benefits out of their gigs:

Ask for a recommendation. Get your boss or other leaders to agree to be a reference for you. Perhaps one would write you a recommendation on your LinkedIn profile.

Keep in touch with coworkers. Send cards periodically or have lunch every few months. These people could be great sources for career advice and job leads.

Keep good notes on all you learned and achieved. Use these to update and tailor your resumes sooner rather than later, when you might have forgotten some of what you accomplished.

For more, watch this clip from “ABC News Now,” featuring my discussion with Tory Johnson about internships.

The graph from the article (shown here) shows just how prevalent these measure have become in recent months.

A recent poll (June 2009) on Yahoo! HotJobs had similar results: Almost half of the respondents (48%) said that they have their pay cut or hours reduced by their employers in the last year.

It’s not like employees have many options today but to accept these sorts of cuts. But how you handle the situation can still make a big difference. For some ideas, see “Four Types of Pay Cuts, and What You Can Do About Them.”

Not surprisingly, medical jobs were among the highest-paid. Surgeons topped the list ($206,770), followed by anesthesiologists ($197,570) and orthodontists ($194,930).

Bottom three: Combined food-prep and service workers ($17,400), fast-food cooks ($17,620), and dishwashers ($17,750). The rewards for being a barista or “sandwich artist” are definitely more than monetary.

But now a new contest offers one VERY lucrative food-service job: Scooping ice cream. You could make $100,000 in one day — courtesy of Edy’s Grand Ice Cream.

Who wouldn’t want to make $100K in a single day of work? Whether you’re a foodie or not, employed or not, this sounds as irresistible as a triple-scoop waffle cone on a hot summer day. The promotion coincides with the 80th birthday of Edy’s Rocky Road, a flavor that gave people something to smile about during the Great Depression.

The contest involves writing about how you would use the $100K salary to fulfill your American dream. For more details, check out www.icecream.com and follow the “Taste of Recovery” links.

“Real pay cuts for people are something companies are very cautious about doing. We’re seeing some, and it is a sign of the times,” said John Challenger, CEO of outplacement firm Challenger, Gray & Christmas. He was quoted in the article “4 Types of Pay Cuts, and What You Can Do About Them.”

For complete poll results, see the table below.

Q	Would you be willing to take a 10% pay cut in order to keep your current job?
Yes	38%
No	30%
I don’t have a job	32%
10717 Votes to date

In the coverage there was some confusion about how much someone like Joe the Plumber actually makes in a year. I’m certainly curious about it. Fortunately some writers at PayScale.com looked into it.

According to the article “‘Joe the Plumber’ and Middle-Class Paychecks,” plumbers in Ohio (where Joe lives) make an average salary of $47,500 per year. Top-earners in that category make $81K.

The article also discusses the nebulous problem of defining “middle class.” In some parts of the country you can make a six-figure salary and still consider yourself middle class, whereas others would call you rich.

But it does seem fair to say that people who make $250K or more per year are among the top earners in this country. And cutting their taxes is not on Obama’s agenda (nor should it be).

Michael Graham, who had played Santa there for 18 years, reached an agreement with the mall to get his job back, according to the Associated Press. The surprise in the article, however, is that Graham makes $175 per hour as Santa!

That hourly wage is 10 times the going rate, AP reports. Where is the Professional Santa Claus Impersonators Association to comment on this?

Of course, being Santa can be hard work: The outfit is hot, the kids can be bratty and demanding, and their parents even more so. But if you’re good — and all accounts suggest that Michael Graham excels in the job — it could be the best seasonal job around that doesn’t require much training.

Even year-round full-time contractors (with degrees) don’t make close to that kind of hourly wage. Contract recruiters in California make between $80 and $100 per hour, depending on years of experience, according to Bob Hancock, senior recruiter at Electronic Arts.

“I don’t know anyone in my profession who makes $175 an hour, but then again,” adds Hancock, “we do not require candidates to sit on anyone’s lap during an interview!”

If you’re on a quest for a high-paying seasonal job, get busy! For some helpful hints, read this outlook on holiday hiring.

The talented Mr. Graham may still be a bargain for the mall, as they have averted a PR nightmare and a possible boycott that would have scrooged holiday earnings.

That’s according to a vote set up as a way to promote a survey that is part of National Payroll Week (Sept. 1-5). Great attention-getter. I hope it’s working!

Speaking of attention-getters and salary, here’s another one: “Job Hunters: Price Yourself Like a House.” This interesting article by Liz Ryan looks at real-estate tricks and applies them to the job-seekers’ task of figuring out what salary to request.

She makes a good point: If you do the research and know your “market value,” you should have confidence in asking for it — even if you have to bring up the subject after your second interview (or some other appropriate point).

A 2006 survey from the Reason Foundation looks at why drinkers make more money than nondrinkers. The researchers found that self-reported drinkers earn 10-14% more than abstainers. In addition, white males who visit bars at least once a month earn 7% more on top of the drinkers’ 10% premium.

The news makes me want to do more happy hours after work! For more interesting studies about salary, check out “9 Reasons Why Your Salary Isn’t Higher.”

NOTE: I will be on vacation tomorrow through Aug. 11, and I will not be posting during that time. But I will be drinking. (If you haven’t taken a vacation yet this year, don’t let it get away!)