Philadelphia Tops List Of Best Cities For New Grads

As summer rapidly approaches, millions of college students are preparing to graduate and find their first "real world" jobs. (Few of them will likely be actually working for "The Real World.")

Philadelphia topped a recent list of the top 10 most affordable cities for grads. The list was compiled based on research from Apartments.com and CBCampus.com, which is part of CareerBuilder.

"Joey Hyde, a 25-year old physics grad student at the University of Pennsylvania, likes living in downtown Philadelphia because he can get around without a car, make spontaneous plans with friends or his fiancée for a night on the town, and enjoy a great meal at his favorite upscale Cuban restaurant for half of what it would cost in Manhattan," according to MSNBC.

"Frontrunner Philadelphia, along with other cities on the list, has been working to enhance its reputation among younger workers and prevent the 'brain drain' that happens when young adults graduate and leave," according to MSNBC.

For more on this phenomenon, see our article on the Top 5 Declining U.S. Markets.

Research criteria for each city included "the population of people age 20 to 24, the number of entry-level job openings suitable for new grads, and the average cost to rent a one-bedroom apartment," according to MSNBC.

The rest of the list included, in order from second through tenth: Boston, New York, Phoenix, Chicago, Dallas-Fort Worth, Los Angeles, Houston, Detroit and Atlanta.

New York was the most expensive city on the list in terms of the average rent for a one-bedroom apartment, which is $1,520 per month. Detroit featured the cheapest rental rate for a one-bedroom apartment at $699 monthly.

Recession Forces Teens To Curb Spending

In a previous post, I talked about how the tightening job market would bode poorly for teens--there will be more competition for fewer summer jobs.

A recent Associated Press article documented another way in which the slowing economy is affecting life for teenagers: the recession has made frugality cool.

"Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period," according to the article.

Because of the recession, "jobs for teens are less plentiful, and parents who supply the allowances are feeling the economic pinch themselves," according to the article. "The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold."

Teenagers always want to be trendy, but now they have less money to spend on trends. So, "Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch," according to the article.

For those who aren't crafty (such as myself), thrift shops, consignment stores and second-hand stores are all great options for saving money on close. An added bonus is that buying used clothes allows people to reduce their carbon footprints.

"Kerstin Block, president and co-founder of Buffalo Exchange, a Tucson, Ariz.-based chain that sells second-hand clothing, said Gap jeans there run $9 to $20. A new pair runs $50 to $60. Block noted that buying second-hand is also appealing to a growing eco-friendly sentiment among teenagers," according to the article.

"Economists say this teen spending slump could be the worst in 17 years, when teen frugality led to the demise of once-hot Merry-Go-Round Enterprises Inc. and ushered in an era of flannel shirts and torn jeans," according to the article.

I grew up in Seattle, and had no idea that flannel and ripped jeans were popular because they were cheap. I just thought everyone was into grunge. And while we're on the subject, the 14th anniversary of Kurt Cobain's tragic death was this month. May the voice of his generation rest in peace.

Slowing Economy Could Impact Summer Jobs

When I was a student, I spent four summers working at a small Greek restaurant in my hometown (Kafe Neo in Edmonds, for those of you in the Seattle area. Try the Grecian Special gyro--pronounced "YEAR-oh"--and definitely get a side of skordalia and pita!). The money wasn't great, but it was something; I got delicious free Greek food while I worked, and whenever I went in while I wasn't working; I liked my coworkers; it wasn't too stressful. In short, it was a typical summer job.

Unfortunately for today's high school and college students--prime candidates for seasonal work--summer jobs are likely to be hard to come by this year.

"Oil prices skyrocketing. Home sales plummeting. Retail sales falling. Because of all these factors, there is likely to be a dearth of 'help wanted' signs up this summer. And many teens may be extra motivated to want work as parents, seeing discretionary dollars dwindle, start asking kids to pick up more of the tab," according to a recent MSNBC article.

Two recent studies show that the summer job market is going to be a competitive one.

"Nearly half of hiring managers say they have no plans to hire any seasonal workers this year, according to a study of 1,100 companies released today by SnagAJob.com, a job site for hourly positions. When asked why they wouldn’t be hiring, 31 percent of those polled said they didn’t have the budget," according to the article.

Further, "a report put out this month by the Center for Labor Market Studies at Northeastern University states that 'the summer 2008 job outlook for teens looks particularly bleak,'" according to the article.

Part of the squeeze will come from "the growing number of older workers going after traditional teen jobs in retail and food services, and also the increase in illegal and legal immigrants vying for those jobs," according to the article.

With the economy in a slowdown or a recession--depending on your point of view--more people are looking for work and there are fewer jobs to go around. I know one woman, well established in her job, who recently got a second job working weekends at Starbucks to help cover her rising gas and food costs.

Teenagers and adults alike who are looking for part-time, seasonal work should start looking soon. According to the SnagAJob.com study, 76 percent of companies that will be hiring summer and seasonal workers expect to fill those positions by May.

Few Young Workers Contribute To Retirement Plans

Americans love instant gratification. That's why so many are in credit card debt (more on that in a future post) and that's why so many save so little (see our previous article on Americans' Negative Savings Rate).

This preference for devoting resources to the present rather than the future apparently starts young.

According to a study released by the Government Accountability Office (GAO) in December 2007, 36.8 percent of workers who are 17 years old now will have absolutely no money in a 401(k) or similar retirement plan when the time comes for them to retire.

According to a CNN article on the study, "Only 36 percent of workers in 2004 participated in 401(k)s and similar accounts when offered."

With Social Security up in the air and pensions becoming increasingly rare, workers are basically left to plan their retirement on their own by contributing to a 401(k), IRA or both. There are even self-directed IRAs and self-directed 401(k)s for those who want to really take the reins of planning for their retirement.

Unfortunately, it seems that many workers are paralyzed by the idea of planning for their retirement. So, rather than face the stress of the decision-making process, so they do nothing about it. And hope for the best, I guess.

"GAO found that automatically enrolling workers in 401(k)s and similar plans would cut the number of those without money in those plans to 17.7 percent," according to CNN. "Automatic enrollment would halve the number of low income workers with zero retirement dollars from 63 percent to 30 percent."

The GAO is not the only one reporting on the trend. The Employee Benefit Research Institute (EBRI) released a report last November that found that participation in employment-based retirement plans decreased from 40.9 percent of all workers in 2005 to 39.7 percent of all workers in 2006.

"The EBRI report found certain characteristics were associated with a lower level of participation in a retirement plan, such as being non-white, younger, female, never married, having a lower educational attainment, lower earnings, poorer health status, no health insurance through an employer, not working full time, not working full year, and working in service occupations or in farming, fisheries and forestry occupations," according to The Wenatchee World.

The bottom line, though, is that everyone needs to plan ahead and save for retirement. Not only do they need to save, they need to invest in such a way as to outpace inflation. Otherwise, they won't have any money when they want to retire. Hoping to win the lottery at age 64, for example, is just bad "strategery."