By: Jason deBruyn
North Carolina is among the hardest-hit states in terms of unemployed young people, something that is costing the state tens of millions of dollars, according to a new study.
The information was released about the same time that the N.C. Department of Commerce released local jobs data. The Raleigh-Cary area posted a 5.4 percent unemployment rate, and the Durham-Chapel Hill area posted a 5.1 percent rate for November of 2013. Figures for both areas were lower than both the previous month and the same month of the previous year.
In North Carolina, the combined losses per state taxpayer because of unemployed workers ages 18 to 34 come to $80.20, with only Alabama and Kentucky showing higher losses per taxpayer, according to the study released by Young Invincibles, a post-recession youth advocacy group.
In total, the cumulative cost to state government here is $115 million, second only to California. The federal cost coming from this state is $442 million, third behind New Jersey and California.
In the Young Invincibles report, titled “In This Together,” the group makes various calculations of lost tax revenue and additional social spending due to unemployed young people. It further argues that the generation called “millennials” are among the most under-employed, or have left the labor force, meaning they are either in school, or not actively looking for a job.
After combining all those factors, the group estimates a $25 billion annual net loss to state and federal governments because of unemployed young people, again, with North Carolina being hit harder than nearly any other state.
“This report reminds us that we are all in this together, and there is much to gain by investing in this generation,” said Rory O’Sullivan, Young Invincibles’ policy and research director and one of the report’s authors, in a statement accompanying the report. “When young adult unemployment rates are nearly twice the national average, there’s little doubt that it hurts individuals’ prospects. Now we have the economic evidence showing that everyone suffers through reduced economic output and lower tax revenues. Federal and state governments must make education and training of our generation a priority, or everyone will continue to lose out.”
Nationally, if the United States were to reduce its young adult unemployment rates to pre-recession levels (9.63 percent and 6.56 percent for 18- to 24-year-olds and 25- to 34-year-olds, respectively), it would need to create about 1 million jobs for 18- to 24-year-olds, and another nearly 500,000 jobs for 25- to 34-year-olds, according to the report.