1 Center for American Progress | America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth
America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth
Sarah Ayres June 5, 2013
Young Americans oday are conroned by an unemploymen crisis unlike any we have seen in recen imes. o say ha hese Americans are having a difficul ime enering oday’s labor marke is an undersaemen. As recen repors have documened, he unemploymen crisis acing young Americans akes many orms, including high school sudens who are having a harder ime finding aferschool jobs,
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weny-somehings who are increasingly suck in unpaid inernships insead o paying jobs,
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and college gradu-aes who are setling or low-wage, low-skill jobs such as waiing ables or serving coffee.
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While each o hese is evidence o he roubles acing young workers, none lays ou he ull scope o he naion’s youh unemploymen crisis. Te realiy is ha youh unem-ploymen is a much bigger problem han lawmakers have acknowledged. According o our analysis, here are more han 10 million Americans under he age o 25 who are cur-renly unable o find ull-ime worka number greaer han he populaion o New York Ciy, a ciy o abou 8 million people. As we have writen beore, America’s youh-unemploymen crisis will have serious, enduring coss or individuals, sociey, businesses, and all levels o governmen.
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A 16.2 percen, he unemploymen rae among Americans ages 16 o 24 is more han wice he unemploymen rae or people o all ages.
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Tese young people are acing significanly higher raes o unemploymen han any oher age group, as Figure 1 below shows.Some o he negaive impacs o high youh unemploymen are already clear: Young people are increasingly ailing o make paymens on heir suden loans, delaying saving or reiremen, and moving back home wih heir parens.
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Oher consequences will be el long ino he uure. According o our analysis, a young person who experiences a six-monh period o unemploymen can expec o miss ou on a leas $45,000 in wagesabou $23,000 or he period o unemploymen and an addiional $22,000 in lagging wages over he nex decade due o heir ime spen unemployed.
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2 Center for American Progress | America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth
Businesses will consequenly suffer rom reduced consumer demand, and axpayers will eel he impac in he orm o los revenues, greaer demand or more govern-men-provided services such as healh care, increased crime, and more welare paymens.
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Tere is no quesion ha lawmakers mus enac broad job-creaion measures o reduce overall unem-ploymen and ge our economy back on rack. Bu because youh unemploymen is disproporion-aely high and is consequences especially long lasing, any such measures should emphasize ge-ing young people back o work.In order or lawmakers o craf policies o do so, i is imporan o undersand he di-eren caegories o young people ha make up America’s unemployed youh. A high school suden in need o a par-ime job is in a very differen posiion han a college graduae suck in an unpaid inernship, and his variaion in circumsances will likely require differen policy approaches o ge boh young Americans back o work. In his brie we analyze daa rom he U.S. Bureau o Labor Saisics’ Curren Populaion Survey and find ha here are 10.6 million Americans under he age o 25 who are no ully employedmore people han live in he mos-populaed ciy in he counry. Specifically, his brie will explore he wo groups o people who make up America’s young unemployed demographic:• 2.5 million eens ages 16 o 19 who are eiher ou o work or underemployed• 8.2 million young aduls ages 20 o 24 who are eiher ou o work or underemployedFinally, his brie will explore he challenges acing young college graduaes, who are experiencing high unemploymen, low-qualiy jobs, and declining wages.
2.5 million teens are out of work or underemployed
Tere are 2.5 million Americans ages 16 o 19 who are ou o work or underemployed. Tis group includes eens who are employed par ime when hey would raher be work-
FIGURE 1
Young Americans are unemployed at about twice the rate of older workers
0%5%10%15%20%25%16–19 20–24 25–29 30–24 35–4 45–54 55–64 Total22.5%12.5%7.8%6.4%5.6%5.2% 5.1%7.5%Unemployment rate
U.S. Bureau of Labor Statistics, “Current Population Survey” (2013).
3 Center for American Progress | America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth
ing ull ime, eens who are enrolled in school while acively seeking employmen, and eens who are neiher working nor enrolled in school. (see Figure 2)O hese 2.5 million eenagers, nearly 300,000 are employed par ime bu are seeking ull-ime work. Tis means ha hey wan a ull-ime job, bu are no working ull ime because heir employer cu back heir hours or hey could only find par-ime work.
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Tis group is no included in he official unemploymen rae, bu because hey are no working o he ull exen ha hey desire, i is also an indicaor o jus how difficul he labor marke is or eens oday. Anoher 728,000 eenagers are enrolled in school bu are unemployed and acively seeking employmen. Members o his group could include a 16-year-old high school suden looking or an aferschool job a he mall, or a 19-year-old single moher who needs a ull-ime job during he day while atending communiy college a nigh. Unemploymen is clearly a problem or he later because she would need o provide or her amily while also bolsering her educaion credenials, bu i is also a problem or he ormer because aferschool jobs can play an imporan role in eens’ developmen. More han jus providing eens wih spending money, aferschool jobs can also help eens develop sof skills such as ineracing wih co-workers and ime managemen, along wih helping hem explore career opions.
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Finally, 1.4 million eens encompass a group ha social scieniss someimes reer o as “disconneced,” which means hey are neiher enrolled in school nor working. Tis group is paricularly worrisome because hese eens are no accumulaing human capial in he orm o eiher educaion or work experience, he loss o which will hinder heir employmen opporuniies, social mobiliy, and income in he uure.
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Wihou school or work, research has demonsraed ha eens are more likely o become involved in crime and o rely on pub-lic assisance and governmen healh care.
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Abou hal o disconneced eens have dropped ou o high school wihou making he ransiion o a job. Anoher hal have compleed high school bu have no been able o ranslae heir educaion ino work or urher schooling. Tese acs sugges ha addressing unem-ploymen among eens may require effors o keep eens in school, as well as measures o improve he ransiion rom high school o employmen and raining.
FIGURE 2
2.5 million teens are out of work or underemployed
In thousands
Source: U.S. Bureau of Labor Statistics, “Current Population Survey.”
Enrolled in school while actively seeking employmentNeither working nor enrolled in schoolEmployed part time but seeking full-time work
2.5 million
2947281,431
High school diplomaor equivalentNo high school diplomaSome college but no degree
1.4 million
122647652
Bachelor’s or associate degree
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FIGURE 3
Nearly half of all disconnected teens never graduated from high school
In thousands
Source: U.S. Bureau of Labor Statistics, “Current Population Survey.”
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