The Anti-Economist — From the December 2013 issue
In late August, I traveled with colleagues from the Roosevelt Institute in New York to New Orleans, where we had invited a panel of community organizers to join us in discussing youth unemployment. The problem affects every major U.S. city — American teens and young adults have never, since record-keeping began, done worse in the job market than in the past decade — but it is worse in New Orleans than almost anywhere else. The organizers spoke to us of what they called Opportunity Youth, a group defined as those under the age of twenty-four who are neither in school nor working. Opportunity Youth are disproportionately minority men. Many have been incarcerated or suffer from poor health. Some have caregiving responsibilities that overwhelm them. In New Orleans, 23 percent of eighteen- to twenty-four-year-olds are out of school and unemployed; the national number — 17 percent — isn’t much better. Researchers estimate that there are 6.7 million young people nationwide who fit the bill.
“It’s criminal,” the economist Andrew Sum told me recently. “No one in Washington is defending them.” Sum is the director of Northeastern University’s Center for Labor Market Studies and is the nation’s leading expert on youth employment. Lately he’s been particularly interested in unemployment among teens. In the past decade, the percentage of teens working summer jobs has fallen nearly to post–World War II lows. The all-time peak, of 58 percent, was in 1978; that figure experienced only minor fluctuations throughout the Eighties and Nineties, and in 2000 it stood at a healthy 52 percent. It is now down to 30 percent. For young people of color the numbers are worse — about one in five for black teens and one in four for Hispanic teens. The farther down a teen’s parents are on the income ladder, the lower this employment rate.
Sum and I are about the same age, and we reminisced about how determined American policymakers once were to ensure that teens could find summer employment. A lot of this determination had to do with fears of social unrest stirred up by the racial violence of the Sixties and, several decades later, the Rodney King riots in Los Angeles. One of the federal government’s responses was to create hundreds of thousands of summer jobs for teenagers at parks, construction sites, and nonprofits. But these programs mostly ended in the early years of the George W. Bush Administration, after a decade of falling crime.
Although it is disheartening in itself that the threat of violence seems to be the sole effective political weapon the youth have, the major concern when they can’t get jobs is not street riots — it’s unproductive lives. Research shows clearly that your odds of staying in school and later getting a good job improve greatly if you have a job as a student. And youth joblessness has repercussions for the broader economy too, with effects rippling through the workforce as teens get older. The employment prospects for those between the ages of twenty and twenty-four have fallen more than for any other age group besides teens. In 2000, 72 percent of those young adults had steady employment; today, only 61 percent do. And when they are able to find work, their jobs don’t pay well: inflation-adjusted wages for men aged sixteen to twenty-four were about 30 percent lower in 2010 than in 1973. Among young women, wages dropped 11 percent in that time.
The economy is simply not producing enough jobs. Between 1992 and 2000, 18 million people joined the workforce. Between 2000 and 2010, only 2.2 million were able to join. With far fewer jobs available, those with more experience get picked first, while those entering the workforce for the first time get picked last. The recession has exacerbated this trend, as older workers delay retirement in hopes of rebuilding the savings lost in the downturn. Those aged fifty-five and older are the only group whose labor-force participation has actually increased in recent decades. They are taking the part-time jobs kids used to get as store clerks and cashiers. They require less training than their younger counterparts. Those who are working to supplement savings or Social Security payments are especially willing to accept low wages. Meanwhile, recent college graduates are left to take the jobs that once went to high school graduates and even dropouts. Two in five say their jobs do not require a degree.
More from Jeff Madrick: