America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth

Washington, D.C.–(ENEWSPF)–June 5, 2013. A new report released today by the Center for American Progress finds that the current youth-unemployment crisis will have substantial, lasting negative impacts on future economic growth. The report specifically explores the demographics of the 10.6 million American youth who are out of work or underemployed.

According to the report, titled “America’s 10 Million Unemployed Youth Spell Danger for Future Economic Growth,” young Americans—ages 16 to 24—are unemployed at about twice the rate of older workers. The negative impacts of these unemployment rates are clear: Young people are increasingly falling behind on student-loan payments, delaying saving for retirements, and moving home with their parents.

Furthermore, because youth unemployment is disproportionately high, American youths are also suffering from lost wages. According to CAP’s analysis, a young person who is unemployed for a six-month period can expect to lose at least $45,000 in wages—about $23,000 for the period of unemployment and an additional $22,000 in lagging wages over the next decade due to their time spent unemployed.

The consequences of high youth unemployment will create a rippling effect throughout the nation’s economy. As outlined in the report, if America’s youth-unemployment crisis is not adequately addressed, “businesses will consequently suffer from reduced consumer demand, and taxpayers will feel the impact in the form of lost revenues, greater demand for more government-provided services such as health care, increased crime, and more welfare payments.”

Read the full report.

2.5 million teens are out of work or underemployed

The report’s analysis of the 2.5 million Americans ages 16 to 19 who are either unemployed or underemployed—such as those who are employed part time but are seeking full-time work—highlights the alarming statistics surrounding high youth unemployment:

Teens ages 16 to 19 are unemployed at a rate of 22.5 percent.
Nearly 300,000 teenagers are employed but want a full-time job.
Another 728,000 teens are enrolled in school but are unemployed and actively seeking employment.
Finally, 1.4 million teens are “disconnected” youth—meaning they are neither enrolled in school nor working.

8.2 million workers ages 20 to 24 are out of work or underemployed

As with teens ages 16 to 19, young adults are also struggling to find full-time work:

Young Americans ages 20 to 24 are unemployed at a rate of 12.5 percent.
4.1 million young adults are disconnected from both work and school.
Another 3.6 million work part time when they want full-time jobs.

For those young adults who are college graduates, job prospects are nearly as bleak: Unemployment rates among college graduates under the age of 30 are high relative to older college graduates. Where a college degree was once the golden ticket to a good job and social mobility, today’s recent college graduates are finding that their investments in education are not paying off.

With the threat of severe, long-term economic costs looming due to high youth unemployment—$20 billion in lost wages alone—U.S. policymakers cannot afford to let an entire generation lose out on the earnings, wealth building, experience, and skills development that come from working.

Source: americanprogress.org