Young Folks These Days: Unemployed ‘Through No Fault of Their Own’
The slowly recovering economy and hurting job market are difficulties that all Americans face, and will likely continue to contend with for some time. But there is one group of Americans who have suffered particularly badly from the downturn, and are still suffering: young Americans and recent graduates. According to a new study from the Economic Policy Institute, there are more young people not working or in school, having a difficult time finding a job once out of school, and facing considerably lower wages once jobs are found. The study finds that since 2012, there has been a considerable drop in enrollment rates for colleges and that there are more and more “idle” high school and college graduates.
Part of high unemployment rates in graduates has nothing to do with the Great Recession specifically, but rather is a characteristic of all periods of economic difficulties. Young graduates have always faced more dire job markets than other demographics during times of economic weakness.
The study also states that unemployment and underemployment are both still considerably too high, despite seeing some improvement. Recent college graduates are seeing 8.5 percent unemployment, compared to 5.5 in 2007, and 16.8 percent underemployment compared to 9.6 percent in 2007. For high school graduates, the numbers are considerably worse, at 22.9 percent unemployment compared to 15.9 percent in 2007, and 41.5 percent underemployment compared to 26.8 percent in 2007.
What’s more, these numbers could actually be worse, based on a finding that unemployment rates may be recorded as lower than they should be. It finds that there are almost 1 million young workers who do not get counted as unemployed because they have stopped seeking work despite being unemployed after finding that there were no job opportunities. “If these missing workers were in the labor market looking for work, the unemployment rate of workers under age 25 would be 18.1 percent instead of 14.5 percent,” explains EPI.
For those who do find employment, pay is considerably worse. “Graduates who are entering the labor force right now will have reduced earnings for 10-15 years,” the study says, going on to explain that this reduction in earnings is a substantial one — 10.8 percent for high school graduates and 7.7 percent for college graduates — which will have a noticeable effect on workers. “The evidence suggests that because of their unlucky timing — in other words, through absolutely no fault of their own — this cohort is very likely to fare poorly for at least the next decade,” it states.
Highlighting this issue are the unemployment benefit applications, which rose by 14,000 this week, according to the Labor Department’s Thursday report. The four-week average also showed an increase, but by a less extreme amount, and Ian Shepherdson, chief economist at Pantheon Macroeconomics, told ABC that some of these numbers might have been affected by Easter, claiming that as a whole, “We think the underlying trend (in applications) is falling, but only slowly.”
More From Wall St. Cheat Sheet:
- High Unemployment and Economic Stagnation: The New U.S. Status Quo?
- 4 Ways Raising Fast-Food Workers’ Wages May Hurt the Economy
- Labor Market Steps Forward: Wages Grow and Jobless Claims Drop
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