Persistent high unemployment among young people is adding up to $25 billion a year in uncollected taxes and, to a much smaller degree, increased safety net expenditures, a new report says.
“The key takeaway here is that it’s not just the individuals who are suffering as members of our generation,” said Rory O’Sullivan, the policy and research director of the Young Invincibles, a postrecession youth advocacy group, which did the study. “When you have an entire generation of people that are out of work, it’s going to create tremendous costs for taxpayers both now and in the future.”
Fifteen percent of workers ages 16 to 24 are unemployed, compared with 7.3 percent of all workers. That does not include young people who are not working because they are in school, who are no longer looking for work or who were too discouraged to begin a job search. Much has been written about how much this will cost them in the long run, as they spend years trying to catch up.
The new report is an effort to quantify the financial effect now. Its authors determined how much young people would have paid in taxes had they been working, and how much less they would have collected in unemployment and other social welfare spending. Each jobless worker between 18 and 24 accounted for $4,100 a year, they concluded, and those between 25 and 34 accounted for $9,875, the study said.
