New Report Shows Staggering Youth Unemployment Rates

NEW YORK, NY–(ENEWSPF)–April 4, 2013.  In advance of the release of this month’s job figures, national public policy center Demos today issued a new report analyzing the lasting economic effects of youth unemployment. Surveying a full year of Bureau of Labor Statistics data from 2012, Stuck: Young America’s Persistent Jobs Crisis shows that 18 to 34 year-olds make up 45% of the total share of the unemployed population and continue to face a serious jobs gap—with 4.1 million new jobs needed to return to pre-recession levels of employment. If job growth continues at 2012 levels, it will be another ten years before the country recovers to full employment. Even then, workers under 25 will face unemployment rates twice the national average.

In addition to examining the stark contrast between the unemployment rates of young people of color and white workers in the same age group, the report analyzes the continued high unemployment rates facing non-college educated workers, now further squeezed out of the labor force as they compete with college graduates for lower-wage and part-time jobs.

“What’s most concerning about these trends is the prolonged double-digit rates of unemployment for African American, Latino and less-educated workers,” said Tamara Draut, Vice President of Policy and Research at Demos and author of Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead. “While much attention has been paid to the challenges facing indebted college graduates who are now much more likely to be working in jobs that don’t require a college degree, the deep and persistent high levels of joblessness and under-employment among young people without four-year degrees (the majority of the generation) is a silent crisis facing our nation. And it demands a robust and national response.”

Other key findings from the study include:

  • Over 5.6 million 18 to 34 year olds are actively seeking employment, and an additional 4.7 million were underemployed, working part time or marginalized from the labor market altogether.
  • The unemployment rate for 18 to 24 year olds with a Bachelor’s degree was 7.7% compared to 19.7% for those with a high school diploma.
  • The unemployment rate for 18 to 24 year old African Americans is 25.4%, and 14.8% for 25 to 34 year olds, almost double the rates of unemployment for whites in the same age group, 13.1% and 7.3% respectively.  Young Hispanic workers have an unemployment rate that is 25% higher than white workers.
  • Women are much more likely to work in part-time, low-wage jobs than men — 21% of women aged 18 to 24, compared to 10% for men.
  • In 2012, the labor force participation rate of 18 to 24 year olds declined to its lowest point in more than four decades. At the same time, 25 to 34 year olds stopped leaving the job market for the first time since the recession began, but the gains were negligible.

“Looking at the data over the course of the entire year allows us to see the full impact of joblessness for the demographic groups most effected in this slump,” said Catherine Ruetschlin, Demos Policy Analyst. “Monthly figures obscure the trends for these smaller populations, who are subject to many variables that skew data, such as seasonal shifts in hiring or the exodus of job seekers who have given up hope. When we compile the numbers and break them down for 2012, we find the disparities between communities. This is where we discover the problems that need to be addressed.”

The report includes policy recommendations that would address the jobs crisis and provide young people with renewed opportunities to work or educate their way into the middle class.  Given the scale and stubbornness of the youth jobs gap, the report provides solutions ranging from the creation of youth job corps to policies that would improve wages to revitalized vocational and post-secondary education.

Stuck: Young America’s Persistent Jobs Crisis is part of Demos’ on-going work creating pathways to ensure a strong and diverse middle class. Demos is a public policy organization working for an America where we all have an equal say in our democracy and an equal chance in our economy.

Tamara Draut is the Vice President of Policy and Research at Demos and author of Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead. A member of the Demos team since 2001, Tamara developed the organization’s groundbreaking work on household indebtedness, middle class insecurity and the economic challenges facing young people.

Catherine Ruetschlin is a policy analyst at Demos. In addition to Stuck: Young America’s Persistent Jobs Crisis, she is also the author of the November 2012 study Retail’s Hidden Potential: How Raising Wages Would Benefit Workers, the Industry, and the Overall Economy and writes a monthly analysis of Millennial employment data for the Demos blog PolicyShop.