While Friday’s better-than-expected July jobs report provided a welcome sigh of relief to investors, the U.S. labor markets remain entrenched with long-term structural problems.
High unemployment among young people remains an intractable issue, and appears to be creating a generation wracked by apathy and cynicism over their economic prospects.
The Labor Department reported that while the overall jobless rate in the country edged down to 9.1 percent in July, 16.6 percent of Americans between the ages of 18 to 24 are unemployed. This is believed to be among the highest level recorded in recent decades.
Stephen Bronars, senior economist at Welch Consulting, explained that high joblessness among youth is typical in a recession.
“In all recessions -- in the past 40 years -- the youth unemployment rate has increased relative to the rate for adults,” he told International Business Times.
“In a recession young workers with less experience are competing with more experienced workers who were laid off from their previous jobs. This works to the disadvantage of the younger less experienced worker.”
Bronars added that this recession has been especially difficult for teenage workers because of the 40 percent increase in the minimum wage that was phased in between 2007 and 2009.
“In addition, a number of states increased their state minimum wage above the national minimum of $7.25 per hour,” he said. “These laws make inexperienced workers more expensive without making them any more productive to employers. The result is fewer jobs held by inexperienced workers.”
There is also much anger at the federal government for failing to create enough jobs.
“It’s not as though Caterpillar or Goldman Sachs is suddenly going to create hundreds of thousands of jobs to put our citizens back to work,” said Matthew Segal, President and co-founder of OUR TIME, a non-profit organization working on behalf of youth.
“So, what is our government’s role in this mess? To sit on the beach, attend fundraising dinners, and spew talking points on cable TV. The political leadership in this country is devastating millions of young Americans. When will our politicians wake up and realize that unemployment is the worst American tax of all?”
Also, according to a poll Generation Opportunity, a Washington-based non-profit organization, the vast majority of Americans between the ages of 18 and 29 believe they are facing a very bleak future.
The poll reveals that among this group: 77 percent either have or will delay a major life change or purchase due to economic factors; 44 percent will delay buying a home; 28 percent will delay saving for retirement; 27 percent will delay paying off student loans or other debt; 27 percent will delay going back to school/getting more education or training; 26 percent will delay changing jobs/cities; 23 percent will delay starting a family; and 18 percent will delay getting married.
“The immediate reaction to this report should be empathy and compassion for the everyday people and families behind these numbers, and frustration toward Washington and the unending stream of policies that suppress job creation,” said Paul T. Conway, President of Generation Opportunity and a former Chief of Staff for the US Department of Labor. “The impact of the poor economy, in human terms, has been devastating. This is especially true for young Americans, whose lives have been interrupted and dreams put on hold due to the lack of economic opportunity. Young adults are confident in their own abilities, and those who are unemployed and underemployed expect Washington to step aside and make way for folks who truly have the expertise to create real jobs.”
Bruce Yandle, an economist at the Mercatus Center at George Mason University explained that weak GDP growth will continue to dampen employment, especially for the young.
“There can be no meaningful growth in employment so long as consumer spending is weak or falling, there is a serious mismatch as between worker skills and skills desired for jobs that are opening, and the construction sector is dormant,” he said. “We are in a period now where we are experiencing all three of these problems.”