As the economy continues to struggle, America’s young people are feeling the most immediate effects. For those with and without college degrees between the age of 16 and 24, weak economic growth limits job prospects, wage security, and quality of life. The President’s policies have done little to put the country on a path to economic sustainability, particularly for young people. Unemployment remains high among those 24 and under and wage growth is barely sufficient to keep up with cost of living increases and inflation.
Facts You Need to Know:
- The President’s economic agenda has been ineffective in turning around the state of employment of the nation’s youth. According to the most recent jobs report, unemployment among those aged 16-19 was 22.7 percent, and 13 percent among those aged 20-24. These numbers have only slightly decreased from a year ago, when unemployment among those aged 16-19 was 24.5 percent, and 13.8 percent among those aged 20-24.
- Even more concerning is that young people make up a disproportionate share of the unemployed population relative to their overall share of the labor force. While youth aged 16-24 make up only 13.8 percent of the labor force, they represent 27.6 percent of the total unemployed population.
- Even among employed youth, economic well-being remains a concern. According to the Bureau of Labor Statistics, in 2012, workers under 25 represented 19.8 percent of hourly paid workers. However, they made up 50.6 percent of those paid Federal minimum wage or less.
- The number of unemployed youth decreased only slightly from a year ago, with 3.8 million unemployed in July 2013 compared with 4.0 million in July 2012. While the unemployment rate has decreased slightly in the last year among major demographic groups, the unemployment rate still remains high among White (13.9 percent), African American (28.2 percent), Asian American (15.0 percent), and Hispanic (18.1 percent) youth. The unemployment rate among youth remains significantly higher than the pre-recession average.
Why is this Issue Important?
- The economic impact of high unemployment for young people is far-reaching. According to a 2012 study from the Corporation for National and Community Service, the approximately 6.7 million unemployedyoung people could cost taxpayers $1.6 trillion in lost tax receipts, which amounts to $215,580 per person. This impact, when taking into account long-term economic and social effects, could result in $4.7 trillion in lost economic output over their lifetime. Among the approximately 3.3 million youth that are under-attached to the labor force, the social burden tops $2 trillion.
- Though the BLS’ summer report shows mild signs of improvement in youth employment, the share of young people employed is still low, with only 50.7 percent employed. Many young people are struggling with the prospect of a weak economy and job market incapable of providing them with a job that is consistent with their educational background. Many pursue advanced degrees as an alternative to unemployment, inevitably creating larger student loan debt and a glut of advanced degree holders relative to the supply of jobs. In March 2012, 39 percent of 18-24 year-olds were enrolled in college, up from 35 percent in March 2007.
- The decline in employment among the larger “millennial” generation (aged 18-31) has led to a steady increase in the number of young people who live at home. In 2012, 63 percent of 18-31 year-olds had jobs, down from 70 percent in 2007. 45 percent of unemployed millennials live at home, and 36 percent of the total population still lives at home. This large portion of the population is unlikely to make large purchases like homes and automobiles, which limits the overall growth potential of the economy.
 Statistic provided by WSJ report via data derived from BLS. See: http://online.wsj.com/article/SB10001424127887323893004579057063223739696.html