by Rory O’Sullivan and Brian Burrell
A lot can change in 10 years. Twitter, Facebook, and Netflix didn’t exist a decade ago. Nor did Angry Birds or Ruzzle. Young workers also held 1.5 million more jobs than they do today.
With the release of the monthly unemployment numbers this morning, we thought we’d take a look at what the next decade might hold for young workers.
Millennial unemployment jumped 1.5 percentage points in January to 13.1%. It can be tough to predict the future, but we do know that high unemployment rates now will have a long-lasting impact on our generation.
Where we are
Overall the economy added 157,000 jobs in January while unemployment ticked up slightly to 7.9%. Unfortunately, young workers missed out on the job growth. The unemployment rate for millennials ages 18 to 29 rose from 11.5% in December to 13.1% January. These numbers are not seasonally adjusted, meaning they can shift a lot from month to month, but the overall trend is bleak for youth jobs.
Younger workers had a particularly tough time last month. Those ages 16 to 24 saw their unemployment rate rise half a percentage points to 16.8% – well over twice the national average. Younger African-Americans jobless rate held steady at a shocking 28% well over three times the national rate. In short, millenials started 2013 on the wrong foot.
The Next 10 Years
The latest jobs numbers offer fresh evidence that young workers have slipped into a pretty deep hole with a long way to go before they can get back out. In fact, Young Invincibles’ analysis shows that our economy would have an additional 2.7 million jobs had the recession never occurred. Even under the most optimistic scenarios, with the labor market growing like it did during the 1990s, it could take until 2021 for the youth labor market to fully recover.
And that’s just baseline question about whether young people can find jobs. Then there’s the question of earnings.
The best evidence tells us that graduating into a recession can “scar” a generation with lower earnings for over a decade. One study predicts that college graduates today will have 10% lower wages a decade from now than they would be in a strong economy. That’s the difference between making $45,000/year and $50,000/year in the middle of your career: quite a hit to the wallet.
These predictions do not even account for high school graduates, whose employment rates and earnings are far below those with a post-secondary credential. A typical young man with a high school diploma makes 75 cents on the dollar his father made in 1980. Increasing returns to education promise to widen disparities between those with and without education.
Is it hopeless?
There are some things our generation can do to avoid the bleak trends. First, there’s no question that education is more important than ever to economic success. Things may be tougher for college graduates during a recession, but they’re far worse for those with only a high school diploma.
Also, work experience matters. Whether it’s an internship at a local company or a summer gig as a barista, studies show that early jobs lead to better career prospects. Make the effort to work a few hours a week in school to build experience and connections to the workforce.
In the meantime, join us at Young Invincibles, where we’re working to get our generation back on track by fighting for policies that help us get a degree, get experience, and access expanded job opportunities.