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Good News and Not Too Good News about Youth Unemployment

America’s unemployment rate continues to improve. It was 10% in the fall of 2009. It has been fluctuating 6.3% and 6.7% for the last couple months. While this is good news, there is a problem regarding youth unemployment. Young people face higher hurdles to and in the job market. They have fewer skills, and  less work experience.

  • Unemployment for 18 to 29 year olds is 15.85, more than double the general rate.
  • Unemployment for 18 to 29 year old African-Americans is 23..8% For Hispanics it is 16.6%.
  • Those with more education do better. Unemployment rates for recent college graduates increased from 3.1% to 8% in 2010. (Young people with no high school diploma had 33% unemployment in 2010).
  • High youth unemployment rates predate the recession. In 2000, the general unemployment rate was approximately 4%. For 15 to 24 year olds it was over 9%.
  • High youth unemployment is not confined to the United States. For the 33 “developed” countries in the Organization for Economic Co-operation and Development (OECD), combined 2013 youth unemployment was 16%. (It ranged from 7% in Japan to a whopping 58% in Greece.)

This problem has serious financial implications for all of us. According to a newly released report, In This Together: The Hidden Cost of Yung Adult Unemployment, the federal and state governments are deprived of $8.9 billion annually in lost taxes. If we count all those young people not in school and not in the labor force, the number jumps to $25 billion per year

Another recent report, The High Cost of Youth Unemployment, estimates that young workers facing long-term unemployment will lose more than $20 billion in earnings over the next decade. In addition, “youth unemployment….creates an additional cost burden for taxpayers in the form of…the need for government-provided health care, increased crime and additional welfare payments.”

But solutions do exist.

But more targeted solutions are also required. Here are three that are receiving attention here or in other parts of the world.

  • Create a “youth guarantee” similar to the one adopted by leaders of the European Union. It states that “all young people under the age of 25 years receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education.” This has had success in some countries.
  • Greatly expand national service jobs. This should include the possibility of mandatory service for all 18-year-olds in either the military or civilian branches working in health, education or other fields.
  • Require that middle and high school programs greatly strengthen their workplace ties through vocational education, apprenticeships, internships, and teaching of job skills.

 

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