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Editorial: Youth unemployment troubling

BY DI EDITORIAL BOARD | FEBRUARY 18, 2014 5:00 AM

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The trends concerning youth unemployment in the United States paint a disturbing picture about the future of the American economy.

Though youth unemployment has fallen over the past year, the current unemployment rate for people aged 16 to 24 who are working or actively looking for work is 14.2 percent, more than twice the national unemployment rate of 6.6 percent.

Given the corrosive social and economic of long-term youth unemployment, it is clear that the current course is unsustainable and that a continuation of current trends will lead to major long-term disadvantages for our generation.

A 2013 report from the Center for American Progress found that youth unemployment tends to have a long-term negative effect on young workers. The study found that “workers who are unemployed as young adults earn lower wages for many years following their period of unemployment due to forgone work experience and missed opportunities to develop skills.”

Based on the research, the study’s author projected that the total economic cost of recent long-term youth unemployment during the next 10 years will come to approximately $20 billion.

This phenomenon is not particular to the most-recent period of economic stagnation, either. An earlier study from the Employment Policies Institute looked at youth-employment data from 1979 to 1993 and found similar effects. Youth unemployment tended to lead to adult unemployment and that unemployment primarily affected the young people most vulnerable to slipping into poverty.

Essentially, by depriving young people of work experience early, the sluggish economy is holding up progress as these young people enter adulthood and keeping some mired in poverty into adulthood.
The high youth unemployment rate is often chalked up by older generations to laziness, a lack of work ethic, a coarsening of the old Protestant work ethic. The truth is that it’s the jobs — not good young people — that are harder to come by.

Since the Great Recession, the job market has been characterized by a so-called “hollowing out” of decent mid-wage jobs. During the economic recovery, demand has risen for high-skill, high-wage workers and for low-skill, low-wage workers, but middle-wage jobs lost in the recession have disappeared altogether.

According to an economic analysis from the St. Louis Federal Reserve Bank, this phenomenon was not specific to the manufacturing sector, to which this trend is often attributed, it was seen across the broader economy.

The massive loss of medium-skill jobs has forced many former employees to look for work in the low-skill industries typically dominated by young workers. This expanded pool of potential low-skill laborers has created fewer opportunities for young people who lack the skills and experience to get better jobs and, as a result, youth unemployment is high.

This trend is exacerbated by the fact that many low-skill jobs outside the service industry have been lost to automation and outsourcing.

Something has to change. The long-term outlook for youth unemployment seems to be tied directly to the fate of the middle-wage workers whose jobs have not come back since the end of the Great Recession. Without robust middle-class job growth, the glut of Americans looking for low-skill jobs will continue to edge young people out of the job market.


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