While some sectors of the economy begin to inch towards recovery, the 2008 financial crisis continues to negatively impact employment prospects for the Millennial generation. This lack of employment opportunity may negatively impact the ability of these citizens to pay for the crushing levels of debt caused by past and current administration.
July unemployment data released by the Bureau of Labor Statistics shows just how rough the current economic climate is for young adults entering the labor force. Only 48.8% of 16-24 year olds were employed in July, the lowest number recorded since the survey began in 1948. The proportion of young adults either working or looking for work has also bottomed out, with a lowest-ever 59.5% labor participation rate in what is traditionally the height of the summer employment season.
The total unemployment rate for the age group is 18.1%, a 1% improvement from last year’s numbers, but still over 4% higher than in 2008. The data is particularly rough for young minorities, with a fifth of Hispanic and a shocking 31% of African-American youth unemployed.
The 2010 census found that 16-19 year olds in North Carolina had an unemployment rate of 27%, while 18.4% 20-24 year olds were unemployed. The only other group to have over 10% unemployment was 25-34 year olds at 10.6%. (Neither the BLS nor the North Carolina Employment Security Commission releases monthly data for North Carolinian youth unemployment)
These numbers are devastating for an entire generation of Americans. Having a job teaches the values of punctuality, respect for authority, and encourages the self-esteem that comes with earning your own wages. Studies show that youth unemployment has a negative effect on future earnings. This level of unemployment also means that recent college graduates are having to move back home, putting further pressure on their parents’ already strained budgets, and that kids who are not college-bound are having trouble finding jobs that will allow them to develop marketable skills. This depletion in human capital will impact the economy for decades.
Artificially high minimum wage laws, the state’s requirement for worker permits, and a state income tax that punishes the young and employed all doubtlessly contribute to making an already tough economic climate even worse for this generation. Tax reform, an end to some licensing and permit requirements, and promotion of school-employer partnerships for at-risk youth would ease the burden on young North Carolinians.