Don’t ignore America’s youth unemployment crisis

By Rory O'Sullivan
December 13, 2013

Recently, Reuters columnist Zachary Karabell proclaimed that “The Youth Unemployment Crisis Might Not Be a Crisis.” Having spent much of the past several years writing about record levels of youth unemployment and speaking with hundreds of struggling young adults across the country, I was intrigued to say the least.

In reality, the article itself does an excellent job demonstrating why youth unemployment is a crisis in America. Unemployment for 15- to 24-year-olds is nearly 16 percent, twice the national average. College graduates are doing slightly better, but young people with just a high school diploma face unemployment rates of nearly 30 percent. High schools dropouts fair even worse. Young people of color face truly shocking labor market conditions: for African American teenagers, the jobless rate is 40 percent. Economists predict this could have serious long-term consequences for the economy. One study claims that nearly 1 million unemployed young Americans will lose $22,000 each in earnings over the next ten years. Youth unemployment is an unmitigated disaster for young people and the economy as a whole.

Decades of economic data on youth joblessness shows that: 1) lack of work early in an individual’s career leads to lower future wages; and 2) entering the job market during a recession scales up individual challenges to entire generations. The data is as solid as it is disturbing.

In a report my organization, Young Invincibles, will release next month, we found that the research on wages fails to count social safety net benefits paid out to the unemployed, or that decades of research aren’t enough to draw conclusive opinions. Unfortunately, safety net programs do not help young people much; you can’t qualify for unemployment insurance if you’re looking for your first job.

Perhaps the droves of “college-educated” young people moving home with Mom and Dad are simply avoiding low-paying service jobs and holding out for something better? Unfortunately, this isn’t true either. College graduates have higher employment rates and higher labor force participation rates compared to less-educated young people. English BAs may get a bad rap, but they are not driving youth unemployment.

Few realize the extent of the problem. That lack of understanding is something I can identify with. As a college-educated man with a peer group of similarly educated people, I was shocked to learn that only 1 in 3 young people ages 25 to 34 have a 4-year degree. Eventually about four in ten Americans manage some kind of postsecondary credential, but that’s it. Most people don’t have one. Simply put, the majority of young people face staggering labor market challenges.

The problem has brewed for decades as increasing demands for skill have left less-educated young people with fewer jobs, lower wages, and worse prospects. Again, by “less-educated,” we mean “most young people.” Our education system simply hasn’t caught up with the new economy. Added to that, the worst economic nosedive since the Great Depression disproportionately impacted our generation. Put those ingredients together and you have a crisis.

PHOTO: Job seekers wait to meet with employers at a career fair in New York City, October 24, 2012. REUTERS/Mike Segar 

268 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

The mantra, repeated by the public relations/lobbying firms, over and over:

THE PITCH FOR FRIDAYS:
America doesn’t have enough UNSKILLED workers to harvest our tomatoes, tend to our dairies, and man our beef and poultry packing houses. Therefore we (America) must import LOW-SKILLED workers from Mexico, Latin America, etc., as immigrants.

THE PITCH FOR MONDAYS:
America doesn’t have enough HIGH-SKILLED workers to satisfy our need for engineers, scientists and technology workers. Therefor we (America) must import HIGH-SKILLED H1B VISA workers from India, China, Philippines, Brazil and Indonesia.

The truth, of course, is that America has great unemployment, and there are many millions of unemployed unskilled workers and unemployed STEM (science, technology, engineering and mathematics) workers.

If there were indeed a shortage of either unskilled Americans or skilled Americans, you would see wages rising substantially and naturally in those industries where the workers are needed.

In fact, wage rates in America for both unskilled agricultural workers and highly skilled engineers have been going down, down, down. Why?

Because of the unprecedented campaign by big business to flood the labor markets, for both skilled and unskilled workers, with a gigantic tidal wave of foreign immigrants.

Immigration is quickly destroying the American middle class while the wealthy class grows ever richer by reducing its cost of labor. This destruction of the American middle class by immigration in the age of cell phones and the internet is the most significant economic catastrophe to occur in the last two hundred years, and we are witnessing it.

Posted by AdamSmith | Report as abusive

Immigration into the US has never in history approached the massive levels of immigration occurring at this time.

Todays internet-assisted and cellphone-assisted immigration is truly unprecedented in both percentage and absolute numbers, dwarfing the famous Irish immigrations into America during the 1850′s when America was building factories by the thousands and much of the country was unpopulated.

Posted by AdamSmith | Report as abusive

Let’s see…we need to raise the minimum wage so a family can be supported, but we need to work on lowering unemployment in the teen ranks. Man, these liberals can’t get their heads straight. If you raise the minimum wage, who do you think is going to suffer the most? Teens…duh

Posted by mddickens | Report as abusive

What is driving youth unemployment is only a symptom of the big problem.

So here’s a question; if Minimum Wage rises to $10 (which it should) as most among low and mid-class alike live on a 2013 Cost of Living with petrol and milk at $3.5 + and working at a 90s wage with no annual pay-raise, will employers also incrementally raise all salaries to an actual Cost of Living reality or will they do as status quo by further reducing/compressing the salary range until all workers (in all positions) are paid the same $10 hourly wage?

I see the mentality displayed in today’s job listings requiring the work of three people in a one person $8 hr job with the hook “Only Go-Getters Need Apply.” (a norm across the country).

So; if I’m not a slacker, why I’m I unemployed and can’t find a job? (Just get a job!!! – you say) For one thing, over qualified comes to mind (that’s the excuse I’m given by employers).

With the out of whack CEO pay at nearly 500% that of the workers being the new business strategy, no wonder the country is in dire straits. This New Business Strategy begins with the out of touch HR dept. failing to calculate diminishing return as it relates to someone with a learning-curve and the talent of a seasoned skill-set. Second – they just restrict candidates to those that fall within this new business strategy of minimum skill, minimum pay with minimum benefits to roll-over the skilled and talented for the sake of the immediate bottom-line which pads the executive salaries and is why the middle-class is now earning a 90s salary. These are not just my thoughts. I’ve had the wonderful opportunity to assist Dr. Deming when he was lecturing and had explained all of this in the corporate spotlight. I would also add that I think the HR field has focused too much on just scanning for ‘hit’ words within resume’s and has lost touch with what really is the skill-set for this new technologies era (which is my current dilemma and a thorn in the side as news comments declare; “just get off the ass and work.” – don’t they know you just hear ‘over qualified’ or HR just has no idea, no vision).

Posted by bikeamtn | Report as abusive

Here a real story for you, real jobless hardship. How does one get to a job interview, pay for calls to want-ad’s, keep a warm home, etc & make required Internet state login’s when sequestration reduces benefits by 12.8%.

To representatives: Michael D. Rogers; Spencer Bachus; Martha Roby; Mo Brooks; Terri Sewel; Robert Aderholt – Ref; see AT. Case No-13951AT13

Rightfully many American’s understand this country founded itself on liberty and justice for all and under its judicial system; one is innocent until proven guilty. But what’s been hidden from view is, that’s not all the truth. The dirty secret is, at times innocence is stamped guilty and not allowed to show their innocent. This isn’t just some cliché or movie drama but happening to to real people, real lives crushed by the cracks in the system and sometimes it’s intentional by officials as pomposity prevails to saying; “see we’re doing our job”.

Case in point: I’ve been asking why has the state of Alabama stamp me as disqualified for unemployment benefits and when exonerated by the state, the state then refuses to return the $1200 in benefits by misapplying statute and disallowing an appeal. The dirty secret; innocence stamped guilty and not allowed to show their innocent.

One assumes Fair Justice but the game is rigged – It’s been said that Human Rights are those rights that no government body, group or person can deprive such rights to an individual, the rights that veterans fight for and lay down for. This injustice by Alabama sully’s the ideology that those had fought for.

Posted by bikeamtn | Report as abusive

it’s more than just unemployment, colleges are not being straight with students. They continue to provide programs of study that lead to poor employment opportunities while getting these kid deeper and deeper in debt. Sure it’s great to study what you want, but warn them of little or no employment awaiting them at graduation in their fields. America’s political system is now more then ever only representing the rich peoples special interests and votes to the highest bidder. Men of no shame.

It may well take a lost generation to dig out of this hole Washington has put this great country in. Both parties have been catering to rich special interests for many decades now and it is now really becoming evident in the standards of living for the middle guy. Add too it that no one wants to get their hands dirty anymore working, because they “went to college”. You now have America’s youth laying on the couch.

If I was a young lad again, I would start my own business and not put my future hard work in a Wal mart of wawa. That is where the politicians ” job creation” remarks indicate job growth. At this point until things change drastically and someone has the horns to stop America’s workers competing with low paid foreign workers, poor economies will drag along.

Posted by cheeze | Report as abusive

I think most recognize the problem besides the odd writer paid to say differently. But where is the solution? I believe that part of the solution lies in a reengineering of the powers of state and city leaders. They should have the power to force local businesses to employ people until unemployment is back to structural levels. It may seem communist but it is not, the wages paid go back into the local economy and thus benefit the local businesses and the city/state.

Posted by BidnisMan | Report as abusive

@BidnisMan, but States and cities are doing the exact opposite. They bid against each other with our money to eliminate taxes, provide construction money, and train their foreign students in our colleges. No, there is no level of government that has not been thoroughly taken over by corporate interests.

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