college seniors from Cal, Stanford, Ivies fight over $27,000 per year jobs

The impact of the worsening recession can be felt by graduating students attending some of the most elite universities in the U.S. such as UC Berkeley, Stanford, and Ivy League colleges. Because of a contracting economy, companies are unwilling to hire but are increasingly ready to fire employees every day. As a result, many college students from the class of 2009 and beyond are competing for jobs to teach in low-achieving schools in programs such as Teach For America for as little as $27,000 a year!

Facing the tightest job market in a generation, thousands of elite members of the class of 2009 are competing for a chance to head off to the nation's most troubled schools to work exhausting hours for as little as $27,000 a year.

Instead of becoming doctors, economists or attorneys, they're hoping to join Teach For America, a Peace Corps-like program that aims to eliminate educational inequity. Applications have surged an astounding 42 percent for the coming school year.

...

With the economy quashing job hopes for college graduates, President Barack Obama calling for community service and students anxious to enhance their résumés, 35,000 college seniors applied this year for Teach For America. They included about 6 percent of the graduating classes of Stanford University and University of California-Berkeley, according to the program, and 11 percent of Ivy League school seniors.

"There are no jobs guaranteed for undergraduates coming out of college," said Anna Nguyen, a UC-Berkeley senior who was inspired by observing TFA alumni at an Oakland school where she volunteers. She hopes to go into school administration. Stanford senior Stany Leblanc wants to work with Haitian-American children in his native New York.

Competition for the demanding assignments, at beginning teacher salaries that ranges from $27,000 to $47,000, is fierce: Less than 20 percent will be accepted.

EDUCATION PAYS MUCH LESS IN A RECESSION

While what the students are willing to do is definitely admirable, the amount of students with Bachelor degrees that are willing to work exhausting hours for income as low as 50% below of the national median earnings for individuals with Bachelor's Degrees is absolutely mind-staggering.

In a previous article from December 2008, I've learned from the U.S. Bureau of Labor Statistics that median weekly earnings for individuals with Bachelor's Degrees is $987, which means $3,948 per month ($987 x 4), or $51,234 per year ($987 x 52).

Let's do some simple math to put the figures into perspective...

Assuming the reported $27,000 to $47,000 income is pre-tax and falls within the 15% Federal Income Tax Bracket, the graduates really make $22,950 to $39,950 per year or about $2,000 to $3,000 per month. I'm not sure about others living near college towns, but when I was a student at UC Berkeley, my rent including utilities was almost $2,000 a month!

But assuming that the students are independent from mom and dad and live with housemates or roomates so that they can cut the rent down to one-third or half, the amount left over would still barely cover all the other non-discretionary expenses required for survival such as food, groceries, gas, public transportation, car insurance, health insurance, cell phone bills, utilities, and payment for credit card debt and school loans.

TODAY'S GRIM REALITY

The following are percentages of what will become of 100 college graduates in the U.S. when they turn 65, the legal "retirement age," as reported by surveys by the U.S. Federal Government.

• Wealthy: 1% (at least $2 million net-worth)
• Financially independent: 4% (> $100,000/year income)
• Still working: 5%
• Dead: 36%
• Dead broke: 54%

Clearly, an overwhelming majority of the populace that are still alive are trapped in either a money prison (i.e. dead broke) or work prison (i.e. still working) by the time they turn 65. Unfortunately, a sour or worsening economy only increases this number.

MY 2 CENTS FOR COLLEGE GRADUATES

Many current college students or recent graduates are probably faced with one or more of the following challenges:

• How can I protect myself and my family during these tough times?
• Will I be able to find a job when I graduate?
• Should I attend graduate school after I complete my undergrad degree because its too hard to find a decent job or because I am not sure what else I can do?
• What should I do?

Please carefully consider the following...

While education is undoubtedly a valuable asset one may own, it clearly pays much less during a bear market when high unemployment forces everyone to fight for the same, small piece of the pie. For instance, in less than a year into the current recession (the worst recession since the Great Depression), the income of individuals with Bachelor's Degrees have already plummeted to as low as 50% of the national median income for individuals with Bachelor's Degrees prior to the recession. And the economy is only going to get worse even with Obama's stimulus plan.

When individuals get paid less, they often encounter more money problems.

Financial guru Robert Kiyosaki often says that many people attempt to outsmart their money problems with more education (i.e. graduate or professional school) so that they can get paid more instead of attempting to face their money problems and seriously attempt to find solutions to such problems.

For those who wish to achieve financial independence and freedom by the time they retire, hedging all your bets on education as one's Plan A and sole asset is similar to putting all your eggs in one basket and praying nothing outside the basket will crack the eggs.

In these volatile economic times, there is no longer guarantee for financial or job security even when one has a 6-figure income. 401(k)'s may be at the mercy of the stock markets and may be wiped out in less days as many had experienced in 2008. On the other hand, inflation continues to increase and one's hard-earned cash becomes increasingly worthless every minute. Taxes may also increase in the near future to help offset the high national debt. Did you know a person on average works 4 to 6 months just so they can pay their taxes?

In short, many forces entirely out of the individual's control are at work that may devastate one's financial future. The key is to educate oneself about such forces and become financially intelligent to minimize such devastation while moving toward obtaining your goals in life and not the other way around (e.g. ignoring money problems until later in life and increase the chances of having a mid-life financial crisis).

This may mean educating oneself about how to get taxed less or finding ways to make more money while sleeping without much or any money to begin with.

This may also mean educating yourself on what other types of assets exists how you may start acquiring some to generate additional streams of income, especially residual income, so that you may still thrive and pay your mortgage or rent when you are unexpectedly fired from your job in the future.

While I am no financial guru or expert, it is my sincere hope that some people may find this article somewhat useful or at least an eye-opener. At the same time, I dare to ponder the futures of the children that are currently struggling in America's most troubled schools as even their teachers from elite universities are struggling to make ends meet.

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