September 24, 2012 10:04 am
New reporting in Reuters sheds light on some trends not covered in typical employment statistics. The report focuses on those discouraged workers who are not considered in federal employment surveys, as they’ve ceased looking for work (presumably because they’ve given up). More specifically, the article focuses on a decrease in workforce participation among 19-24 year olds, members of a generation sometimes noted for its “failure to launch”.
Economists, analyzing government data, estimate about 4 million fewer people are in the labor force than in December 2007, primarily due to a lack of jobs rather than the normal aging of America’s population. The size of the shift underscores the severity of the jobs crisis. If all those so-called discouraged jobseekers had remained in the labor force, August’s jobless rate of 8.1 percent would have been 10.5 percent… The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one has fallen by an unprecedented 2.5 percentage points since December 2007, slumping to a 31-year low of 63.5 percent.
Labor force participation among 19-24 year olds is the lowest it’s been since 1972. For these young discouraged workers, there is not only an immediate psychological effect from this, but the failure to find gainful employment in the early stages of career development may be setting back the recessionary generation’s future competitiveness.
Rounding out the trinity of unique hardships facing the young and underemployed is the bleaker cost/benefit of advanced degrees. Spending a few years in school waiting for the economy to improve is beginning to look less and less like a reasonable panacea:
A Generation Opportunity survey published in August showed a third of young people were putting off additional training and post-graduate studies because of the sour economy. “This is significant. People are making the decision to put those off because the assurance of a return to investment is not there,” said the non-profit’s Conway, a veteran observer of the labor market as a former Department of Labor chief of staff. He said his organization found that young people were doing unpaid internships at nonprofit groups and businesses to prevent their skills from atrophying. Others were joining the military.
Some economists point to the workforce participation stat as illusory, due to some younger workers taking odd-jobs or being paid under the table. But piecemeal work can hardly be seen as a solid foundation on which to build a career — much less a family, a home, a future start-up or entrepreneurial endeavor, or any of the other components of the American dream. Without serious governmental efforts to spur job creation, young workers could be in for a bumpy ride.
Image from here