Saturday, October 15, 2016

Managing Income Risk

Even at a young age kids are asked what they want to be when they grow up. However, for many it only really becomes a source of stress in the teen years when we start to understand how the world operates from a basic economic perspective. We are then faced with the issue of choosing an occupation that could potentially follow and define us for the rest of our lives. Not only do many people worry about choosing a specific path, but many also worry about choosing between jobs that would make them happy and jobs that would make them the most money. While some are fortunate for these two priorities to align it's quite commonplace for people to give up on their dreams to pursue more financially stable and less risky occupations.

My brother graduated from the University of Iowa majoring in Human Physiology due to his natural love of taking care of people. His plan was to go to graduate school after his undergrad completion, however he figured his experience in healthcare and school performance weren't adequate enough to be accepted into many graduate programs so he decided he would go back home and work for some years before pursuing his advanced degree. Unfortunately, an undergraduate degree in Human Physiology paired with his lack of work experience and relatively weaker grade point average led him to an extremely difficult job search.

It took my brother eight months after his graduation date to find a steady job in his field. In addition, he only got his job after applying to an incredible number of other jobs and going through many interviews. Hearing bad news after bad news was extremely difficult for my brother and he began to wonder if he should've went into a less "risky" field that would've net him a more clear cut job with only an undergraduate degree such as engineering. In those jobless eight months my brother stayed at home with my parents and struggled emotionally as he felt like he was just taking up space and resources and wasn't able to grow himself financially. However, with encouragement and perseverance my brother was finally able to find a job and now feels as confident as ever. He bought his first car in September of 2016 which was his first ever large personal financial expenditure.

While I was already an Economics major before my brother graduated and struggled with the job market his experiences after graduating undergrad definitely effect the decisions I make now with regards to minimizing my own income-risk. I've come to the understanding that Economics is a very broad field and figuring out what I want to do and what I'm able to do with a degree in Economics is very crucial to me having a less difficult time in the job market when I graduate. My brother described how he always felt extremely inexperienced when applying for jobs so currently I am trying to build my resume with useful work experience. In addition, I'm trying to keep my grade point average as high as possible on the chance that it becomes a deciding factor as to whether I get a job or not in the future.

Paying off college debt is a very prominent topic in today's culture where a college degree seems to be a necessity to a high paying job. However, paying off loans can be extremely difficult if you can't find a job with the degree you've spent so much money on. By gaining work experience and connections, raising my grade point average, and developing social skills here at college I'm trying to decrease the risk of not being able to find a job once I graduate. Personally, I'm not an avid risk taker and therefore most of my actions in college are geared towards preparing me for the future financially. Aside from a few slip ups such as procrastination or activities relieving stress I don't make many choices that "seem good in the here and now" unless it both benefits me now and will benefit me later.  

In summary, I'm very frightened by risk and uncertainty. I'm currently trying to make use of every opportunity that is offered here at the University of Illinois at Urbana-Champaign such that when I graduate I will be faced with less uncertainty in the job market and have less income-risks. While other students may not live out their college life in the same way I personally find this to be the most beneficial use of this four year window in my life.

6 comments:

  1. One things to note here is that overall macroeconomic conditions matter in terms of finding a job. The labor market for U of I grads probably bottomed out for those who graduated in 2009 or 2010. The market improved after that. I believe things have continued to improve. In other words, while field of endeavor matters, when you graduate also matters. On that, it is more the luck of the draw than anything else, though back in 2009 some students would spend an extra year in school to delay having to face the market choice.

    You were pretty bland about work experience in this post after being pretty graphic in prior posts about being a student patrol officer. I wonder why that is. I also wonder whether that student patrol officer work has any derivative value for future employment, either in some economics related job or perhaps in law enforcement, which might be an alternative if an economics related job doesn't pan out. It is not always possible to make jobs in college matter for future income. (I washed pots at a sorority my last semester at Cornell. I did that in exchange for getting dinner. Otherwise that had no down the road value whatsoever.) So in spite of your comment that you don't make choices for the here and now, it would be good to support that with the evidence from choices that you have made recently.

    One other point. While your focus seems to be on that first job after graduation, the prompt really didn't ask you to be so near term in your focus. Therefore you might consider what, if anything, your current decisions are doing to impact your employability say ten years from now. On that one, I want to note that GPA has a much shorter shelf life. You typically don't list your GPA on resume once you are no longer looking for entry level positions.

    ReplyDelete
    Replies
    1. I don't understand what you mean by my post being bland about work experience. My only notable work experience on a payroll has been being employed as a student patrol officer so I didn't feel the need to elaborate on that subject because I had done so in multiple other blog posts.

      I do agree with you that it's not always possible to make jobs in college matter for future income. I did say in my post that I'm trying to build my resume with USEFUL work experience. In fact, I didn't take the student patrol officer job just for money. My current career aspiration, which I didn't make clear, is to work with criminal law whether that's as law enforcement or as an attorney. Being exposed to the police system, criminal activity, and the skills I gained through the student patrol program definitely feel useful to me as work experience towards receiving future jobs because of what I want to do.

      I've also applied to jobs on campus that deal more with Economics and statistics which is another career path I'm considering. However, I have yet to land a job or internship due to lack of experience and simply just not being the most suitable candidate. Even though I haven't gotten an internship, I still believe that being resilient and continuing to apply for useful work positions is a conscious CHOICE even if it hasn't yet yielded tangible reward.

      Even though the prompt didn't specifically ask for such a "near term" I focused on that first job after graduation because that is what is current and what is most within reach. I don't know where I'm going to be or what I'm going to be doing ten years from now. Not to say I know exactly where I'm going to be even right after graduation (as stated in the prompt). I found that my first job is what I can focus on and can control a bit better with regards to income-risk so I thought it would be best to direct my blog post on the near term.

      Yes I do understand that GPA isn't generally listed on your resume later in your work life, but monitoring my GPA is something tangible I'm able to work at. You can't get upper level positions without first receiving entry level positions which I believe having an impressive GPA would help with.

      I felt like my blog post wouldn't have as much substance if I focused on a time period so far in advance with regards to my work experience. I suppose, though, if I were to think on a wider spectrum of my future I would have to change my answer to my decisions are made because they seem good in the here and now. This is because "in the here and now" is relative and could be with regards to multiple years which is all I focus on currently.

      Delete
    2. Prof Arvan,

      Just my thoughts regarding GPA. It is true that most people after their initial job do not list GPA and most employers do not take GPA into account, however doesn’t GPA play an important role in determining your Graduate School applications, since that is one of the few quantitative measure of how a student has performed. And in the long term the place you received your education from (graduate and undergraduate) would impact the job you have and thus limit future income risk.

      Delete
  2. I agree with you in the fact that many people have passions that lie elsewhere, but do a different job due to the income stability it provides. For people who’s passions align with a job that is financially safer and well paying they are lucky. But many other have a hard decision to make in either following their passions or taking the less risky option and being financially stable. You mentioned that this job decision becomes most important in your late teen years when you have to select a discipline of study and also that you are a risk averse individual. Is your decision to study Economics thus based on passion and interest for the subject or because you think it is a field, which will be less risky in the future, and be easier to find a job?

    You also mentioned that Economics is an extremely broad field of study, and I absolutely agree with that. Have you figured out which part, or specific field within economics interests you? Also as a recent graduate who lacks experience, do you think it is more beneficial to limit yourself to a particular branch with economics, thereby limiting yourself or know the subject broadly so that through work experience you can become an expert in the particular field that suits you? For example taking a few Econometrics classes and a few international economic policy classes against just taking one of the other.

    ReplyDelete
    Replies
    1. I believe Economics, granted with my limited experience, is a mix of both an interest and a "less risky" field. I do find many parts of Economics interesting, but I wouldn't say any of the branches of Economics coincide with what I would consider a "dream job".

      Most likely I would try and find a job in economic statistics. While I enjoy microeconomics most of all, I don't know very many career paths that stem from it. Statistics seems tangible to me so I will most likely pursue it. With regards to your question related to spreading thin on the topic of Economics I don't think I will change my preferences of which parts of Economics I find interesting anytime soon. However, I'm a first semester junior and still have 3 more semesters in college which I find to be adequate enough time to explore the Economic electives here at UIUC.

      Delete