Every student graduating this year from the University of Michigan undoubtedly knows that jobs are hard to come by. Every student graduating this year has surely poured over applications in a desperate search for scarce jobs. And every student graduating this year certainly knows that the threat of a “double dip” recession looms from problems both domestic and abroad. Congress remains deadlocked over budget issues, and it is doubtful businesses will begin to make major financial decisions until after the election. In Europe, S&P’s credit rating downgrade of nine Eurozone countries last week demonstrates that the Eurozone crisis is far from over. This uncertain economic future is preventing businesses from expanding and hiring new workers, even as economic indicators trend positive in the U.S.

Although the unemployment rate will continue to decline, it will do so slowly, and expectations reveal that the unemployment rate will remain above 7.5% by the time we reach the end of 2012. For graduates just entering the job market, the unemployment figure is even higher. With this in mind, it seems a foregone conclusion that something drastic must be done. Yes, financial figures demonstrate that the economy is slowly improving, but this doesn’t help recent graduates with little work experience in search of their first real job. The scarcity of jobs means that there will be far more applicants per position, making it extremely difficult as graduates attempt to find stable economic footing.

The economic problems facing the entire nation are even more severe in Michigan. The job market for graduates around the country is still bruised from the recession, yet college graduates in the state of Michigan are still leaving in droves to search elsewhere for what scarce employment does exist. Go into any classroom at the University and ask students if they plan on remaining in the state after they graduate, and few would answer in the affirmative. The state’s unemployment rate is higher than the national level, and weak economic situation has caused 50% of college graduates in recent years to leave the state. This “brain drain” has been hampering the state’s recovery as Michigan attempts to restructure its economy. The problem with Michigan’s economy at the moment is a circular conundrum: graduates leave the state because they cannot find jobs, but there are no jobs in the state because the majority of graduates leave. It is irrelevant whether the economy has improved slightly or not: the most relevant measure of economic health is job availability.

Until most graduates are confident that they can go out into the ‘real world’ and find a job, the government must be more proactive with creative solutions to improve both the economy and Michigan’s graduate retention rate. We cannot continue on the same course and expect employment prospects for college graduates to improve as substantially as will be necessary to rebuild a healthy economy.

One proposed solution is a tax credit for graduates of Michigan’s public universities, which would allow them to write-off part of their loan payments. This plan would ease the burden on students and increase the amount of human capitol in the state. Students would pay less in taxes but they would contribute more to the economy overall. Businesses would return to the state as a result of the increase in the resource of valuable college graduates, improving Michigan’s employment rate and economic condition. The state government would also reap benefits from this plan. A similar plan was implemented in Maine in 2008 and will cost $50 million over 10 years, but then is projected to bring the state $30 million in revenues each year after. Clearly, such a plan would be beneficial to Michigan. In the long run, the state would have more people paying taxes, a better-educated work force, and more financial security for graduating students.

Empirically the economy has pulled out of the recession. Factors indicate that production is increasing and consumers are more willing to spend. However, realistic employment rates are lagging behind the positive economic news. Europe’s economy is still in shambles, the United States has barely recovered, and Michigan’s economy has yet to see many positive effects. Recent college graduates still face an uncertain job search and crushing debt unless the government acts with strong fiscal policy, i.e. spending. This fear has resulted in a majority of college graduates leaving in search of employment. This vicious cycle hurts both the state economy and recent graduates. A proposed plan to offer tax credits to relieve part of student debt would help to reverse this problem. Students would be more financially secure, contribute more to the economy, and be more inclined to stay in-state. Through this entire debate one thing is clear: the government must do something to help struggling college students, regardless of what certain statistics may say about the overall state of the economy.