Millions of high school and college graduates will enter the workforce for the first time in the coming months. However, the excitement over graduation may evaporate quickly in the summer. The economy showed little change in April, adding an estimated 115,000 found jobs as the unemployment rate fell slightly to 8.1%. The jobless rate for young Americans remained a stagnant 16.4%. Unless things pick up soon, millions of young graduates will face months of searching ahead.
The steady unemployment rate for young people actually hid the fact that 16 to 24 year olds lost an estimated 55,000 jobs. The unemployment rate only counts the proportion of people who are looking for work compared to everyone in the labor force. Discouraged workers who stop looking aren’t counted. In some cases, like last month, the unemployment rate stays the same, because the number of young people in the labor force shrinks along with the number of youth jobs. Neither are encouraging signs.
On the other hand, older young adults – those ages 25 to 34 – have some reason for optimism. Their unemployment rate fell from 8.5% to 8.1% while nearly a 150,000 thousand found jobs in April. This age group’s unemployment rate has tracked just above the national average over the last several years. Adults older than 35 generally have much lower unemployment rates than young workers, who that have felt the worst of the recent economic pain.
It is widely recognized at that graduating into a recession can lower a generation’s wages for years to come. It will take a concerted effort to minimize the loss of experience and training of the class of 2012.