Friday, September 2, 2011

The rise of Generation Recession

As we prepare for the Labor Day weekend, it's worth remembering that many young people have little labor to celebrate this year.   

The Washington Post recently noted that "recession is the new normal" for millions Americans.  The average length of unemployment now tops 40 weeks -- the longest period ever recorded -- and more than a million job seekers have given up on looking for work entirely.  A record number of people exist on the fringes of the workforce: part-timers looking for more hours and the self-employed eager for more work.

The figures above include workers of all ages.  Unfortunately, the pain has been felt the most by young people.  Consider the following statistics:

  • Since the start of the downturn in 2007,  "Generation Recession" -- those born in the late 80s and 90s who came of age as the economy tanked -- has absorbed more than one-third of all job losses, making them the hardest hit age group.  
  • One-in-six young people who are actively seeking work cannot find any.  Many who do have jobs either work fewer hours than desired, or are in positions for which they are overqualified. 
  • More troubling, many have either given up (or never started) looking for work.  Over the past three years, the percentage of 16-24 year olds actually involved in the labor market has fallen to all-time record lows.  Less than half of young people currently hold a job, compared to over 60% of workers over 25.  
  • The numbers are especially grim for African-American (33%) and Latino (43%) youth.       

While those with little education have been hit the hardest, even young people with college degrees are finding the job market a tough nut to crack.  What's more, starting a career in the midst of a recession can have lifelong repercussions.  Studies have shown that workers who joined the labor force in poor economic times will be more risk-adverse in their approach to investment and business creation, and suffer, on average, a decrease in lifetime earnings of over $100,000 and higher risks for depression.

Let's hope that President Obama captures the urgency of this crisis in his upcoming address to Congress, and proposes ambitious solutions that can get American workers -- especially young people -- (back) to work again, so that we can have more to celebrate next Labor Day.

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