Youth Unemployment Still an Issue

July 9, 2014  |  45 comments

By Samuel Frere-Holmes

On Thursday, July 3, the Bureau of Labor Statistics released the unemployment data for the month of June. Although the overall unemployment rate changed for the better, dropping to 6.1% on the back of 288,000 new jobs, youth unemployment revealed itself as a lasting problem.
In contrast to the general trend, the jobless rate of Americans aged 16-19 increased, from 19.2% to 21.0%.

Youth unemployment is a pressing issue and obstacle to economic stimulation. Especially at ages where jobs come at a premium, the longer one goes without being employed, the less time one has to acquire vital skills for the workplace, and for business relations in general. Without such aptitude, the likelihood down the road that said individual will become a participating member of the economy or find an appealing job gradually decreases.

As Will Stone points out, these trends could have “ripple effects for decades to come not only for young people's lifelong earning potential but also for their contributions to the tax base and the strength of the U.S. economy overall.”

As American youth are inevitably curtailed in their economic expansion down the line, so is the rest of America, and the negative effects on young people will translate to dimmed economic output across the board.

The potential negative effects are perfectly summarized by Christina Gagnier in a recent Huffington Post piece, as the points out that, “The inability to find work impacts the ability to meet financial obligations and save for the future, delaying purchases and investments that propel our economy forward.”

Although Gagnier is referring to negative effects on the 16-19 year olds, a general postponement of American economic progress will see a lag in investments and purchases on the whole.

At the Network for Teaching Entrepreneurship, we have spent the past 26 years investing in teaching workplace skills such as opportunity recognition and flexibility, teaching the youth vital skills to help them navigate their jobs and the American economy.

“Today’s high unemployment is a ticking economic and social time bomb,” said Amy Rosen, President and CEO of NFTE. “Without jobs, young people miss learning vital jobs skills and engaging the economy productively. With more than one in five American young people looking for work, it’s more essential than ever that we teach and empower them to be entrepreneurs so they can make their own jobs and even hire their friends.”

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High youth unemployment isn't new. Since 1948, youth unemployment rates have been, on average, 2.7 times higher than the prime-age unemployment rate, although this ratio tends to vary with the business cycle. Because youth unemployment tends to be concentrated among more disadvantaged populations, the “scarring” effects of early-career unemployment also have implications for social mobility. Young adults who don’t pursue post-secondary education suffer from higher levels of unemployment and are more vulnerable to economic downturns than their college-going counterparts.
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