Probably because it came out on the same day as the monthly Employment Situation Report — not to mention that it was also published on the Friday before a holiday weekend — an “Editor’s Desk” item at Uncle Sam’s Bureau of Labor Statistics entitled “Youth employment and unemployment in July 2010” got very little attention. It deserved plenty.
The report led with this paragraph:
In July, the employment-population ratio for youth — the proportion of the 16- to 24-year-old civilian noninstitutional population that was employed — was 48.9 percent. This was the lowest July rate on record for the series, which began in 1948. (The month of July typically is the summertime peak in youth employment.)
It’s the first time this ratio has come in below 50%. In the late 1980s, it was almost 70%. This column will concentrate on the lower portion (ages 16-19) of the 16-24 age bracket.
One would expect the employment-population ratio for those in the age 16-19 cohort to be lower, and it is; but you might be surprised by how much. The July 2010 ratio for this subgroup (not seasonally adjusted) was 31.3%. That is also a low since records have been kept, and represents the fourth consecutive year with a record-breaking low. In July 2006, the analogous percentage was 44.9%. From 1948 until 2002, it was only rarely below 50%. The ratio (rounded) reached 60% for a couple of years in the late 1970s and late 1980s.
What in the world is going on here?
One obvious current factor is that those teens who are looking for work aren’t finding it thanks to the economy. Not only have millions of jobs disappeared during the POR (Pelosi-Obama-Reid) economy, but adults (legal citizens and, in many states, illegal immigrants) are also competing for and taking many of the entry-level and even summer jobs that still exist. The July 2010 unemployment rate for teens (again, not seasonally adjusted) was 26.5%, setting a since-1948 July record for the second year in a row, crushing the 24.8% rate in July 2009 (this economy is breaking records all over the place, isn’t it?). Before 2009, no July ever had a teen unemployment rate higher than 22.1%.
Perhaps surprisingly, though, it’s not as much a matter of unemployment as it is of disengagement, as this graphic comparing July 1989, the last near-peak July for the teen employment-population ratio, to July 2010, shows:
The graphic demonstrates that even if the teen unemployment rate were the same as it was in 1989, the employment-population ratio would get back only 5.2 of the 28.3 points by which it has declined in the past two-plus decades. The obvious comparatives that stick out are the increases of over 5.3 million in the number of teens not in the labor force (9.680 million compared to 4.321 million), and the near doubling of their percentage of the teen population (57.4% versus 30.4%). Fairly close to six out of every ten teens weren’t even trying to find work in July.
Perhaps it’s a matter of discouragement, as in wanting to work but not actively looking for it because one “knows” there are no jobs out there. To a degree, yes, but not as much as you might think. I looked at July 2006, when the overall unemployment rate in a strong economy was 5%. With roughly the same population as 2010, there were still almost 7.8 million teens not in the labor force. On a population-adjusted basis, that’s well over 2.5 million higher than 1989.
This means, good economy or bad, millions of teens have consciously chosen not to try to enter the workforce. Why?
Though it’s hard to pin down their relative importance, I believe that at least the following factors are at play:
• More demanding high school activities, including sports and music — These have increasingly encroached on summertime to the point where many teens could only work for a few weeks at most even if they wanted to.
• Overprotective parents who don’t want to expose their little darlings to the harsh, cruel world of work — With many teens, if you don’t push, it won’t happen. In many cases, no one’s pushing.
• Illegal immigration — Why would an employer hire a high school kid with an unproven work ethic when cheap, reliable help is otherwise available? Besides making it harder for teens who are looking for work, other teens don’t bother because they know they won’t get anywhere.
• Minimum-wage laws — These have caused employers to think twice about taking on summertime and inexperienced help. University professors William Even and David McPherson recently contended that federal minimum wage hikes of the past few years have been responsible for 114,000 fewer teen jobs. I think that’s an underestimate, because minimum-wage hikes also influence decisions to even to try to find work. If you think it’s highly unlikely that any employer out there will pay you $7.25 an hour, or if your friends testing the job market aren’t having success, you probably won’t start looking.
• Substantial penalties against working teens in college aid calculations — The higher a college-bound or college-attending teen’s earnings (and assets in their name), the higher a family’s Expected Family Contribution will be. This means, all other things being equal, that less financial aid will be available.
• A plethora of distractions which make it much easier to waste vast amounts of time accomplishing absolutely nothing while still not getting really bored — Video games, fantasy sports leagues, and the like would certainly fit into this category.
• Unpreparedness for work — This has to do with basic literacy, the ability to follow simple instructions, decorum, and attitude, all of which I have recently been told by several different employers continue to deteriorate, even among those who attend supposedly “good” schools.
Whatever the reasons, on balance I don’t see how increased teen disengagement can be viewed as a favorable development.
At the risk of boring readers with a “when I was young” riff, I’ll note that I got my first summer job at age 16 washing dishes for 48 hours a week at the minimum wage of $1.60 an hour. It was rough, to say the least, but I took two very important things away from the experience: a) a healthy respect for those who do such jobs all year long (while not necessarily wanting to engage in such work for the rest of my life), and b) an appreciation of how difficult it is to keep a business operation working.
How, or even when, will disengaged teens, especially those who eventually move directly into so-called “professional” careers out of school, ever learn or appreciate these lessons?