Graduation into the global economic crisis: Practice advice for students, hippies and revolutionaries

By Kate Jackson

Pic By: Desiree Schirlinger

Rhodes students live a sheltered life, tucked away in the Eastern Cape, far from the stress and responsibility of the ‘real world’. One could say that, for some of us, the closest we get to a disaster is the Union running out of creme soda on a cane train night, and that our most pressing responsibility is dragging ourselves out of bed for a dawnie the morning after. Watching the news readers report on stories about things such as swine flu and the global economic crisis is somewhat surreal, as if these are echoes from another world – a stressful world, and one far removed from the daily concerns of a Rhodent.

However, as we advance though our studies and graduation looms ever closer, it becomes increasingly apparent that the issues that infiltrate our consciousness and fuel our debates that are not merely academic. Someday (sooner for some than for others) there will be issues which will have a direct impact on our lives and our futures. This will happen soon after we leave the cozy protection of this little town and embark on our chosen career paths. The thought of leaving university, cutting down on old drinking habits, donning a suit and trying to make it in the corporate world is a scary one for students at the best of times. This transition is made all the more terrifying by the current state of the world economy due to the global financial crisis.

So what exactly is this global economic crisis? What does it mean for students and prospective graduates and, most importantly, what steps can be taken, not only to survive the crisis, but to come out on top?

The global economic crisis is a state of recession in the major world economies. I

t came about as a result of lax (or indeed nonexistent) credit controls in Europe and the USA. Banks make money off of loans. They work by holding customers’ money in the form of savings and then allocating money out to others in the form of loans. These people then (theoretically) pay the money back to the bank over a period of time with added interest. This is the ultimate source of income for the bank. Seeing that the banks make money off of loans, the bank CEOs are rewarded through a bonus scheme for finding more new people to lend money to.

A problem arises when the banks start giving out too many loans too quickly, without credit checks to ensure the money could and would be paid back. The economic crash we are now dealing with happened when it came time for the loans to be repaid and it was found that the average working man was so deep in debt that there was no way to repay it all. Individual savings could not be accessed, nor could those of companies who had saved their excess profits with the banks for later use. This factor, coupled with the fact that banks suddenly had no more money to invest in companies for the purposes of expansion and growth, caused the companies to curb their spending and to cut costs wherever possible. Ultimately, this lead to a grinding halt in hiring new employees as well as a wave of retrenchments, as existing staff were let go in the interests of saving the money.

This paints a bleak picture of the workplace for any first-time jobseeker. There are few positions available and those that are available are being filled by the older, more experienced workers that are being retrenched by other companies. The job market that has been competitive up until the crisis is currently so saturated with highly skilled applicants, that the chances of finding a position as a recent graduate are slim at best.

Here in South Africa, the economic crisis has not reached the almost disastrous proportions experienced by Europe and America, this due mainly to our stringent credit-control laws. However, any adverse effects experienced by the dominant economic powers will not necessarily filter down to affect every economy in the world (think international trade and finance 101). With the election results out and “Jay-Z” poised to take the reins of our country (and therefore our economy) there are certainly concerns regarding his economic competence and speculations surrounding the direction his policies will take. Broadly speaking, he could go one of two ways: left or right, left towards communism or right towards capitalism.

The ANC was supported during the struggle by communist superpowers and therefore has strong ties to communist policies. It is a distinct possibility that new economic policies could be introduced, favoring government regulation of the market. This might not be such a bad thing, given that the global economic crisis was caused by the capitalist system running rampage. However, too much government intervention begins to be oppressive and holds the potential for a dictatorship, as can be seen in the case of our northern neighbour, Zimbabwe.

Activate spoke to a number of third year and honours students to find out how they felt about leaving university and entering the employment market during this particular time in history. Trevor Kana, a third year economics student, said, “First of all, it’s scary. You might be sitting with a BCom degree and working as a bartender – I would prefer to stay in college.” Lauren Gmeiner, a psychology honours student, views the state of the world at the moment as “terrifying – capitalism isn’t going away anytime soon, and because we’re graduating now, we have no choice but to deal with this mess.” Alice Taylor, also a psychology honours student, has a much more optimistic, though somewhat revolutionary, take on the situation. “With the new age coming, our society won’t need money anymore, because we’ll be able to support ourselves in sustainable ways. The global economic crisis is hard proof that capitalism simply doesn’t work and the sooner we go back to the old ways, the better,” said Taylor.

So what are we, as prospective graduates and jobseekers, supposed to do in the face of such adversity? Curl up into a ball and cry? Become a hippy and live in a beach hut in Mozambique? Or simply stay at university indefinitely, completing masters and PhDs in things like ichthyology and metaphysics or post-constructionist pre-feminist lesbian Buddhist literature? As appealing as these options may seem, the fact remains that there are student loans to be repaid, fabulous boots to be purchased and a world economy to be stimulated.

Activate went to the Economics Department in search of some practical advice for prospective graduates, on how to deal proactively with the issue of graduating into the global economic crisis. Professor of economics, Gavin Fraser, suggested that students learn to apply the theories that they learn at varsity to “real-world situations”, in other words, don’t think of your studies simply as essays that you have to write or assignments that must get done. Be aware of the fact that the things you are learning now are the skills that you are going to take with you into the working world. Professor Fraser also mentioned that getting practical experience while studying “would be of assistance” as students should be doing anything they can to set themselves apart from the hundreds of other graduates applying for their dream job.

Finally, Activate would advise prospective graduates to be creative. Life is short and the world is big and there are so many things that you could do that do not involve sitting in a cubicle, fitted out in a in a too-tight polyester suit and tie, crunching numbers that mean nothing to you (apologies to the actuarial scientists among us). If all else fails, come to Mozambique and be a hippy, you’ll find me in the third hut from the left, under the crooked palm tree, writing the fourteenth draft of my dissertation on post-constructionist pre-feminist lesbian Buddhist literature.


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