Youth Unemployment: A Growing Problem

data point tuesday_500

You probably know a good kid like this. Graduating from high school in June. From an OK high school. Not the best student. Probably not able to get in to college – even if they could afford it and were motivated to try. They had a part-time job a couple of years ago, but got laid off. Haven’t really looked for a job since then. No real skills that employers can use. No idea how to look for a job. Starting to think about the future. No idea where to start.

Guess what? Their prospects are not good. And they need help.

You know we have an unemployment problem. Did you know we have a youth unemployment problem?

Employers of every size in every sector lament the lack of skills available to them in the talent pool.  Whether you’re reading reports from McKinsey, the Georgetown University Center on Education and the Workforce, or countless other research organizations, the message is all too similar:  our post-secondary education system isn’t delivering enough degreed individuals to meet the demands of employers world-wide. And it’s only going to get worse. Something I’ve written about here, here and here.

But it isn’t just the post-secondary education system. The secondary system is doing even worse. The youth labor market has collapsed since 2000.  The rate of overall youth employment in the teen population has fallen from 45% in 2000 to 26% in 2012 – a 42% drop, to the lowest point in post-World War II history. In 1989 the youth employment rate was 48.5%.

Here are some sobering statistics from research completed in 20120 by The Center for Labor Market Studies at Northeastern University for Jobs for America’s Graduates:

  • In 2000, the share of employed, non-college-bound youth from the high school class of 2000 was just under 70%

  • In 2011, the share of employed, non-college-bound youth from the class of 2011 was 45%, the lowest since the survey started in 1965

  • In October 2011, the employment/population rates for these non-college-bound high school graduates ranged from a low of 32% among African Americans to a high of 48% among Caucasian youth.

  • Fewer than half of these employed, non-college-bound graduates were able to obtain a full-time job – yielding a full-time employment/population ratio of 21%

  • Among the non-college-bound population of high school graduates, only 25% of Caucasian, 24% of Hispanic, and 7% of African American youth were working full time.

And these are high school graduates.  In the U.S., the percentage of high school graduates by state ranges from 62% (Nevada) to 88% (Iowa), with an overall average of 78%. What about the 22% of young people who drop out of high school?  What are their prospects?

From an historical perspective, this chart shows the economic impact of dropping out of high school. But that lifetime earning amount of $1,198,447 will surely decline as fewer young people with – or without – high school degrees gain full-time employment.

Georgetown Projections of Jobs Education Requirements Figure V

And this is a problem. If unemployment in the teen population continues to rise, then a key argument to persist in high school to graduation begins to fade, further impacting college graduation rates. If unemployment in the teen population continues to rise, then key employment skills building experience will decline making employment less likely as they age in to their 20’s. If unemployment in the teen population continues to rise, then a whole host of societal challenges will grow – and none of them positive for people or the economy.

Involvement in organizations like JAG* (Jobs for America’s Graduates) can help. I’ve written about JAG here and here. It’s the longest-lived, most successful program in the U.S. that keeps the most at-risk kids in school through graduation and then stays with them through their first year of employment, college or military service. And it is making a difference in the graduation and employment rates of kids in 33 states.  Here are some current outcomes;

  • The employment/population ratio in spring 2012 was 72% for all young people in JAG versus only 42% for their national comparison group.

  • Nearly 60% of those JAG graduates not enrolled in college were employed full time in May 2012, compared to only 30% of their comparison group counterparts. Over three times the rate of teenagers in general who were working.

    • Nearly 48% of non-college enrolled African American JAG graduates were working full time versus only 17% of their comparison group peers.

    • 61% of Hispanic JAG non-college enrolled graduates were employed full time versus only 42% of their comparison group.

    • 68% of Caucasian JAG non-college enrolled graduates were employed full time versus only 31% of their comparison group.

It’s hard to argue with success. It’s even harder to argue with 32 years of consistent success. This video really captures the effectiveness of this approach:

Employers that hire skills that require high school graduation need to be concerned about the entire talent pipeline, not just the college degreed pipeline.

And by concerned, I mean involved in keeping young people in school until they graduate so that they are employable.

And by involved, I mean supporting programs like JAG that are focused on providing real, sustainable results.

And by support I mean financial support, political influence support and the promise to provide job interviews to every JAG student where they have a presence. (Archer Daniels Midland has done just that!)

You know we have an unemployment problem. Did you know we have a youth unemployment problem?

*I serve on JAG’s national board of directors.

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4 Comments

Filed under Archer Daniels Midland, China Gorman, Data Point Tuesday, High School Graduation Rates, JAG, Jobs for America's Graduates, Skills Shortage

4 responses to “Youth Unemployment: A Growing Problem

  1. Pingback: High Cost of ‘Mal-employment’ |

  2. Pingback: Long-Term Unemployment and job search: Troubling statistics | Are YOU the Right Candidate?

  3. Deandre Brady

    This is not simply the result of the financial crisis, though that is part of the explanation, having affected young people in the rich world particularly badly. Youth unemployment has increased by 30% across the OECD , and in Spain it has doubled to 20% as proportion of the youth population. In the developing world, meanwhile, a second contributory factor is that many countries with fast-growing populations also have inefficient labour markets. Almost half the world’s young people live in South Asia, the Middle East and Africa, the regions with the highest shares of youngsters out of work or working informally. (It is no coincidence that South Africa has some of the strictest rules on hiring and firing and one of the worst youth-unemployment problems in sub-Saharan Africa.) A third factor is the growing mismatch between the skills that youngsters have and the vacancies that employers want to fill. Germany, which has a relatively low level of youth unemployment, places a lot of emphasis on high-quality vocational courses, apprenticeships and links with industry. But it is an exception.

  4. Pingback: America Youth Unemployment: A Growing Problem | Job Market Monitor

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