Tough Times for Teens: Youth Employment Plunges in Recession

Young workers face fierce competition for jobs, with the highest youth unemployment rate ever recorded, and that could leave long-lasting scars on their careers and the effectiveness of the future workforce.
Young workers face fierce competition for jobs, with the highest youth unemployment rate ever recorded, and that could leave long-lasting scars on their careers and the effectiveness of the future workforce.

Teens and young adults entering the workforce have had it rough in the U.S. for nearly a decade, and the Great Recession has only made matters worse. The jobless rate for workers aged 16 to 24 years old, which the U.S. Department of Labor categorizes as "youth," has reached the highest level ever recorded since the government began tracking the data in 1947, according to a congressional committee report released Wednesday.

The report from the Joint Economic Committee, which includes members from both the House of Representatives and the Senate, found that these young workers make up just 13% of the total population, but comprise 26% of the unemployed population. The youngest workers, those 16 and 17 years old, have fared the worst with a 29% unemployment rate, the report says.

"This new JEC report makes clear that young workers have been hit hard and are still being hit hard by the Great Recession," Democratic Rep. Carolyn Maloney of New York, chairman of the committee, said in a written statement.

Will Recession Leave Lasting Scars?

Alarmed by such statistics, Congress is eagerly seeking solutions. But at a committee hearing Wednesday, labor experts warned that no quick and easy fixes exist. For one thing, many teens and young adults have trouble not only landing their first jobs, but also staying employed once they get those jobs. And all the instability could have long-lasting effects on the workforce, say experts such as Till von Wachter, an economics professor at Columbia University.

"Our best evidence shows that strong recessions, such as the current one, could lead to persistent scars for young labor market entrants," he told the committee, adding that entering the labor force during an economic downturn "lowers earnings, raises career instability [and] affects individuals' beliefs." Further, it's difficult to help affected workers after the fact, he said, so government policies that prevent recessions and layoffs could be the best bet.

But even in the best of times, disadvantaged young people struggle with low education levels, low employment rates and low earnings, leaving many to abandon the job market all together, says Harry Holzer, professor of public policy at Georgetown University. Compounding the problem are high dropout rates, averaging 25%, at the nation's high schools, while too few students strive for secondary education.

Long-Term Labor Trouble

Even attendance at two-year or four-year colleges doesn't guarantee jobs, however, Holzer says. Many students fail to get a certificate or diploma within six years after starting college, negating much of the economic benefits that higher education can provide.

The problem of high youth unemployment has been evident since 2006, says David Jones, president and CEO of the 160-year-old Community Service Society, based in New York, which advocates for the city's poor. A labor-market report the organization compiled that year showed that the booming economy "was helping everyone except young people who were working age," he says. Of course, the recent recession has exacerbated the problem.

Jones calls for the establishment of a pilot program that would employ youth teams to build city infrastructure, similar to the Works Project Administration of the Roosevelt years, and hopes to see such a provision added to a recently proposed transportation bill. "I have a crisis that is ballooning much faster than I think anyone recognized," he says.

Youth Programs vs. Lower Minimum Wage

Still, the idea has plenty of detractors. Although well-intentioned, youth-employment programs such as Job Corps and others have accomplished little so far, says James Sherk, senior policy analyst at the Heritage Foundation, a conservative think tank. "Youth who have used these programs are not statistically more likely to have a job or have higher earnings in life," Sherk told the committee.

He says a strong overall labor market is the best way to help young and low-skilled workers, pointing out that employment prospects for both groups improved substantially during the boom years of the late 1990s. Although Congress can't magically recreate the economic conditions that drove the Clinton-era job creation, one way to spur hiring would be to suspend the recent increase in the minimum wage for 16- to 24-year-old workers, Sherk says.

Rolling the federal rate back to $5.15 per hour, from the current rate of $7.25 per hour, "would create hundreds of thousands of youth jobs ... without costing taxpayers a dime," he says.