For the young, a dismal jobs picture
(Moneywatch) Unemployment rates for Americans under the age of 25 are the highest since the end of World War II. It's a situation that is unlikely to change anytime soon, according to a new report.
Since 2007, the average official unemployment rate for people under 25 has been 18 percent, 5.5 points higher than for the preceding 15 years, according to Bureau of Labor Statistics figures. This would seem to make the 16.2 percent rate for March look like an improvement.
But that rate, like the government's general unemployment rate, does not account for those who have dropped out of the labor force. Since 2007 the youth labor-force participation rate has dropped from 69 percent to 64.7 percent in 2012. Last month about 236,000 young people dropped out of the workforce. If you include them, the rate balloons to 22.9 percent and disturbingly close to the EU's 23.9 percent rate for the same age group.
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According to a new study by the public policy group Demos:
"Young people are facing a jobs deficit of over 4 million jobs. The economy needs to add 4.1 million new jobs for young adults in order to return to employment at the same levels as before the recession began. If we continue to add jobs at the current rate it will be 2022 before the country recovers to full employment. Even then, workers under 25 will face unemployment rates double the national average."
Just like in every other age group, education makes a big difference. For those between 18 and 24 who have a bachelor's degree the employment rate -- not adjusting for workforce participation -- is 7.7 percent. However, with a glut of college graduates looking for work, many of them are taking lower-paying, less-skilled jobs.
For recent college graduates, the rate of underemployment -- people who are either not working full-time or not making full use of their skills -- is 15.7 percent, twice the rate for those 25 and up. The displacement of the less-educated from these jobs can have a tremendous long-term impact. A report last year by the Annie E. Casey Foundation predicted that, "Those shut out of the labor market for considerable periods, especially in the early stages of their careers, have markedly reduced prospects for later connections to jobs."
