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Youth Unemployment Crisis Has Longterm Implications For Teens, The Economy

Youth Unemployment

First Posted: 08/29/2011 5:39 pm Updated: 10/29/2011 6:12 am

As we look forward to this Friday's August unemployment snapshot from the Department of Labor, one part of the picture is already in focus: this was the worst summer on record for teens and young adults looking for work.

This July, the typical summertime peak of youth employment, the share of young people with a job was just 48.8 percent, according to fresh data from the Bureau of Labor Statistics. This represents the lowest July rate since the Bureau began collecting such data, in 1948. Perhaps this grim statistic explains in part why the labor force participation rate -- those working or looking for work -- for Americans aged 16 to 24 also fell a percentage point from the previous summer to a record low of 59.5, as more kids simply gave up looking.

"There are numbers of unpleasant consequences of this," said Carl E. Van Horn, a labor economist at Rutgers University and one of the authors of the recent report "Unfulfilled Expectations: Recent College Graduates Struggle in a Troubled Economy." "Increased poverty, increased reliance on social safety net programs, potential increases in illegal or off the books work, perhaps illegal actives like crime, idleness, lack of skills, atrophy of skills, inability to get a job later when the labor market gets better -- the list goes on and on."

With so many other indicators pointing to a struggling economy and a stagnant labor market -- weak GDP growth, overall unemployment above 9 percent, an uptick in corporate layoffs -- economists say it's no surprise that the young are unable to find work.

"The economy continues to be very weak. This point cannot be over-emphasized," said Algernon Austin, director of the Race, Ethnicity and the Economy Program at the Economic Policy Institute. "So we have, even in this group, at this young age, individuals who may have tried several summers, or for a year or more since completing high school or completing college, and have not been able to to find work."

A falling labor force participation rate can generally be attributed to two things: when the job market looks bleak, the longterm unemployed either go back to school or they give up looking. While part of the record-low labor force participation rate for youth can be attributed to higher education, economists say that the majority can not.

"When there's an absence of a supply of jobs, employers are able to bid up," Van Horn said. "When someone steps up with a Bachelor's degree to get a job that used to be held by a high school student, that [student] gets pushed out of the labor market."

The labor force participation rate is at a record low for American workers of all ages. But economists and sociologists say that a growing group of young Americans, so frustrated by their fruitless search for employment that they give up looking entirely, could have its own unique and troubling consequences -- not just in the immediate future but for decades to come, according to experts.

"People who are the economic victims of recessions bear a burden that goes on beyond the duration of the recession," Van Horn explained. Those hardest hit, he said, are young workers and older workers, laid off and unable to find new employment. "These two groups really are going to pay the heaviest price. The older workers can't get back into the labor market and the younger workers can't get in to begin with."

Within these groups, the pain is not evenly spread. According to Algernon Austin's research, compiled from the Bureau of Labor Statistics and additional sources of data, black teens are the least likely to find summer work, while rich white teens are most likely. Other economists have found similar trends.

"The substantial drop in teen employment prospects has had a devastating effect on the nation’s youngest teens (16-17), males, blacks, low income youth, and inner city, minority males," wrote Andrew Sum in a report on teen summer employment for the Center for Labor Market Studies at Northeastern University. "Those youth who need work experience the most get it the least, another example of the upside down world of labor markets in the past decade."

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