Every month, Young Invincibles studies new unemployment data for Millennial workforce trends. We routinely look at racial disparities in Millennial joblessness as well as analyze trends by sector. For further information about Millennials and the workforce, please see these Young Invincibles reports: Where Millennials Work, the Future of Millennial Jobs, In This Together, and the Best Millennial Jobs.
Please see below for our latest monthly analysis.
The young adult unemployment rate increased slightly to 6.5 percent, in January (seasonally adjusted), up from 6.3 percent in December. About 51,000 new young adults entered the workforce, which can cause the unemployment rate to increase. The number of unemployed also increased and by a larger margin than new young adults in the workforce. The young adult unemployment rate continues to persist at higher rates that the national unemployment rate, which also increased slightly from 4.7 percent up to 4.8 percent.
The unemployment rate grew for young Latinos, African Americans, and Asian or Pacific Islanders over the month (though these are not seasonally adjusted). Notably, the rate for Asian or Pacific Islander young adults doubled, from 2.7 percent to 5.5 percent.
The workforce has largely recovered since the Great Recession, as reflected by stronger employment rates, but new research published by Young Invincibles last month demonstrated longer-term structural problems for today’s young adults. Millennials today earn lower incomes, own houses at lower rates, and have amassed fewer assets and wealth than Boomers had when they were the same age in 1989.,This highlights that increased employment is just one piece of the puzzle needed to get this generation of young people back on track.
The unemployment rate for young adults fell to 6.3 percent in December 2016, its lowest point in nearly a decade. Last week’s report is the final jobs report of the Obama administration, which oversaw a volatile workforce that significantly impacted young adults. A few notable points:
- Young adults suffered from 54 straight months of double-digit unemployment rates between January 2009, when President Obama first took office, to June 2013.
- Young adult unemployment reached its height at 13.3 percent in April 2010.
- Last month’s rate of 6.3 percent is the lowest the rate has been since May 2007.
This graph below tracks the unemployment rate among young adults and the workforce generally over the last decade. It also highlights the weak jobs market President Obama inherited from the Great Recession and the slow recovery through his administration. the Recession (yellow area) officially began in December 2007, over a year before Obama took office and continued for at least six months into his presidency. The green indicates an overlap of both the recession and the Obama administration (remember how yellow and blue make green?). Starting with the recovery in June 2009, the unemployment rate for young adults steadily declined to last month’s historic low.
Taking a closer look at the most recent unemployment rates for December of last year, we see that despite overall gains, that young African Americans still suffer from the highest unemployment rates, double the rate overall, at ten percent. Young Latino adults also have higher rates at 7.3 percent. Young Asian or Pacific Islander adults had the lowest unemployment rates at 2.7 percent.
While the jobs market has generally recovered from the Great Recession in the short-term, last week Young Invincibles released new research analyzing long-term declines in financial security, which show that today’s Millennials earn lower incomes, own homes at lower rates, and have amassed fewer assets and wealth than Baby Boomers when they were the same age.
Overall, unemployment for millennial-age workers is 35% higher than for the population at large, and pay, while finally beginning to rise, is still lower than it was before the recession, Young Invincibles data show. But the numbers are at least moving in the right direction: The unemployment rate ticked down to 6.6% for workers age 18-34 in October from 6.7% in September, and 55,000 jobs (outside of agriculture) were added. Even better, the reason the unemployment rate fell is because more young workers found jobs rather than giving up and leaving the labor force, Allison says. “The big picture is pretty encouraging,” he says.
Excerpt from Barron’s Next: Looking for a Job? Here’s Where to Find One (11/4/2016)
Earlier this month, the Bureau of Labor Statistics released the monthly jobs report for September. The unemployment rate for young adults aged 18-to-34 stayed flat at 6.7 percent (seasonably adjusted). The rate remains above the national average of 5.0 percent.
Below are the race and ethnicity breakouts for young adults (not seasonably adjusted):
- African American: 11.1 percent
- Latino: 7.4 percent
- Asian or Pacific Islander: 5.0 percent
We’ve covered the slow but steady recovery for young adults in the job market in previous posts. Don’t forget that in June 2013, young adult unemployment was at 10.4 percent, with 2.9 million fewer young adults working today. Looking even further back to the depths of the recession in September 2009, young adult unemployment was at 13.0 percent.
But for these young adults who are working now, how much are they earning from those new jobs? New Census data released last month showed real (adjusted for inflation) median income rising for the first time since 2007. We crunched the numbers for young adults and saw similar trends. Real median earnings for workers aged 18-to-34 rose $1,000 to $14,000, while 25-to-34 year-olds’ earnings rose $2,000 to $35,000.
So young adults got a raise last year. That’s good. Only problem is, after adjusting for inflation, young adults are still earning less than they did before the recession in 2007. And these declines are steeper for them than for older workers. As the table shows below, our youngest workers make 6 percent >lessthan they did in 2007. This compares to only a 1 percent decline for workers 35 and older. Fortunately 25-to-34 year olds median income rose 2 percent during this time.
|Median Earnings Since Recession (2007 to 2015)|
|18-24||$ 14,820||$ 14,000||-6%|
|25-34||$ 34,200||$ 35,000||2%|
|35+||$ 43,320||$ 43,000||-1%|
|Young Invincibles Current Population Survey, adjusted to 2015 dollars|
Young Invincibles will release new research exploring the implications of these income declines, with a close look at education attainment, student debt, and demographic equity. Beyond income, we’ll also look at wider indicators of financial security, like home ownership, saving for retirement, and asset accumulation. Stay tuned.
Echoing the national employment picture, young adults unemployment rate fell again last month, from 6.9 percent in July to 6.7 percent in August (seasonably adjusted). Young African Americans, a group with persistently high unemployment rates, also dropped nearly two points to 10.5 percent, although that estimate can not be adjusted for the seasonable employment changes, such as summer jobs.
While the national unemployment rate remained at 4.9 percent in July, the rate for young adults ages 18-to-34 rose slightly to 6.9 percent (seasonably adjusted) from 6.8 percent in June. Notably, sectors with high prevalence of apprenticeships saw significant job growth. Those sectors include:
- The construction industry added 14,000 new jobs in July, including 9,400 specialty trade contracting jobs.
- Nearly 50,000 new jobs were created in health care and social assistance, including 17,000 new hospital jobs and over 5,000 in social assistance.
- There were also 11,000 new jobs in durable good manufacturing (all estimates seasonably adjusted).
Among the other unadjusted unemployment estimates, we see that young people of color continue to struggle to find a job despite the fact that our national unemployment rate has fallen by more than half since the depths of the recession:
- Young Latinos: 7.5 percent
- Young Asian or Pacific Islanders: 6.0 percent
- Young African Americans 12.2 percent
Last week’s jobs report coincides with Young Invincibles’ release of a new reporton apprenticeships, debunking myths about the program and making suggestions for improving the system. The job growth in sectors key for apprenticeships reinforces our recommendations to improve our apprenticeship system. Conducted in the Chicagoland area where young people face some of the highest unemployment rates in the nation, the study highlights three key misconceptions that Millennials hold about apprenticeships: that apprenticeship programs don’t currently exist in their communities, that apprenticeships don’t pay, and that participating in an apprenticeship means never receiving a college degree.
Based on these misconceptions about apprenticeships, as well as stated job preferences among Millennials, we advance six recommendations for building and branding youth-friendly apprenticeship programs.
When it comes to program structure, we recommend expanding pre-apprenticeship and job shadowing opportunities, creating more apprenticeships that provide the option to receive college credentials, and starting apprentices in cohorts. On the marketing side, we suggest being more explicit about wages, building innovative social media marketing strategies, and using near-peers as ambassadors. Doing so will both build a broader base of Millennial support for these programs and ensure that those opportunities fit the needs of today’s young people.
June marked my third anniversary of working at Young Invincibles, and the 36th straight month of digging through the monthly jobs report to highlight young adults and underrepresented minorities’ trends in the workforce. Along the way we’ve explored entrenched inequities, particularly between African American and white young adults, put a price tag on the cost of youth unemployment, ranked the best jobs and industries for Millennial workers, and laid out a workforce development gameplan to improve young workers’ employment prospects. So we’ve learned a lot about young adults in the workforce, but I was curious about how their situation has changed in these last three years.
Generally, young adults, just like the workforce as a whole, have seen some significant improvements in the job market. In fact, there are 2.9 million more young adults working in 2016 than in 2013. Their unemployment rate has dropped 3.5 points to 6.8 percent from 10.4 percent.
The percent of young adults participating in the workforce (young adults with jobs or actively looking for one) has remained nearly the same. This isn’t necessarily a bad thing though, as students not actively looking for work don’t count as part of the workforce.
The percentage of young people with jobs, also known as the employment-population ratio, has improved: nearly 70 percent of all young adults have some sort of employment, compared to 60 percent for the workforce at large. While young people are finding jobs, it’s just as important to understand the quality of jobs for young adults, and have that understanding drive our workforce policies.
We know that all jobs aren’t created equal, and there’s plenty of evidence that young adults aren’t recovering fast enough to remain financially secure, and of course significant racial gaps persist and must be addressed. We also know that 99 percent of all jobs created since the Recession have gone to workers with a college education, so making college more accessible and affordable, and improving student success rates, is more important than ever.
So we’ve come a long way in the last three years, but have a lot more work to do.
Looking at some of the headlines for the May jobs report, you’d think America’s employment situation is in rough shape. After all, the economy added only 38,000 jobs, the slowest growth since 2010. Some speculated that Fed Chair Janet Yellen might delay interest rate hikes due to the sluggish job growth.
The monthly jobs report can be sliced and diced different ways though, and May’s report shows some interesting trends for young adults. But further analysis points to persistent inequities for marginalized communities and it underscore a need for innovation and targeted reform in our employment system. With that in mind, it’s worth it to take a step back, and look at these trends. This month, we compare the unemployment rates for young adults, broken out by demographic between May 2015 and May 2016.
By this comparison, the employment picture for young adults improved overall since last year. The unemployment rate facing young African Americans declined 2.6 points, and young Latinos’ rate declined 1.9 points. However, rates of unemployment for young people of color are almost double their white counterparts. This is clear evidence that structural disparities remain and more work needs to be done on workforce policy and college affordability to improve our economy overall.
There are still nearly 1 million young African American men actively looking for a job
March jobs numbers are out today and they largely show good news, with the addition of 215,000 new jobs and the unemployment basically holding steady at 5 percent. Measuring employment is a complicated endeavor as there are thousands of ways to slice and compare the data: historically, by demographics, by education attainment among many others.
At Young Invincibles, we monitor the monthly report and break it down by age, race and ethnicity as well as by groups that are particularly vulnerable to economic downturns and don’t always benefit from recoveries. Because the sample size for these groups is smaller, the Bureau of Labor Statistics doesn’t adjust for changes in the season, one accurate way to look for changes in the workforce is looking back a year to date. The idea is that the month of March has basically the same seasonable characteristics as any other March in a different year. Below are the unemployment rates for March 2015 and March 2016, broken out by age and race and ethnicity:
The good news is that the unemployment rate has gone down for most groups. Young Asian adults is the only exception, although they do have the lowest unemployment rate, 4.8 percent, of any group in this analysis. Young Latinos in particular have seen their job prospects improve, dropping two points in the last year, and achieving parity with young adults in general. However, while African American young adults have also seen improvement, it is troubling to see their unemployment rate hover stubbornly above the rest and stuck in double digits.
According to today’s report, there are still nearly a million black young adults looking for a job (939,000). To be counted as unemployed in this rate, people have to be actively looking for jobs in the last four weeks. That should inspire action from our policymakers to make postsecondary education and training more affordable and available, and remind us how much more work there is to do to address structural inequalities in our economy.