One of the bleakest spots in the tepid recovery of the U.S. jobs market is the difficulties young people are facing. The unemployment rate for 16- to 24-year-olds was 16.4 percent in April. Though this number is down from its highs in 2010, it’s still at levels last seen 30 years ago.
One impact of this deplorable jobs market for younger people is that household formation in the U.S. has been shrinking. A college education, once considered a sure way of financial independence, is no longer a guarantee of a job in your field or even any good job. Many young people are being forced to move back in with their parents, unable to afford a home of their own.
According to latest data from the Census Bureau, new household formations are growing at a historically slow pace. Young people do not find themselves financially secure enough to forge their own way.
Elizabeth Beck graduated in May from Miami University in Oxford, Ohio. She has a degree in early childhood education but can’t find full-time work. She is grateful her parents let her move back into their home. She has been substitute teaching but says that she cannot support herself and does not have enough money to move out.
“As soon as I get a full-time job I will leave,” she says. When that may be is unclear. Though she is optimistic that the new school year will bring new opportunities, she is up against an economy in which teachers have been facing massive layoffs.
President Obama has made young people a focus of his campaign. Today he travels to Washington-Lee High School in Arlington, Va., to speak with juniors and graduating seniors and their parents. The president will be talking about student loans, which have only complicated matters for new graduates.
Ballooning student loan debt– it recently topped $1 trillion — and a bleak job market mean the new college graduates today face a daunting start to their professional lives.
Many economists believe that young people who are not able to find jobs suffer long-term consequences. The initial setbacks may mean hundreds of thousands of dollars worth of lost wages and opportunities.
The economy is creating jobs — 115,000 in April–but not at a pace strong enough to battle some of the most ominous problems with the job market including creating enough high-quality entry-level jobs. It seems then that the new generation of American workers is in trouble, and that could mean many more economic problems in years to come, from tax revenue to housing to consumer spending.