The Still-Crummy Labor Market For Young Adults

The unemployment numbers for November and December were good enough to encourage predictions of a stagnant or even slowly growing economy for 2012. It's nice to get good news, even if the bar is set at eluding economic disaster.

However, young people in particular still see unemployment rates well above the national average. And for some minority populations, a ‘recovery’ ultimately could mean a return to the still-dismal pre-recession unemployment rate of about 8 and a half percent. 

If we look at the work force by age, race, and ethnicity, it's clear that the long term trends for vulnerable workers in this recession replicates those before it. Now, as in previous downturns, the first ones out of the labor pool are the last to be drawn back in. 

In fact, young adult workers hadn’t even recovered from the recession of 2001 when the latest financial crisis struck. While workers over 35 regained their employment levels within a few years, young workers were already at a disadvantage from slow assimilation back to the working world. 

With the culminating effects of two recessions and lagging employment growth, the employment-population ratio for 18-24 year-olds in 2011 was 13 percentage points below its 2000 level; and 7.7 points below for those ages 25-34.  This compares to a 5 percentage point drop among the older population and represents an even lower employment level than two years ago for every group.  

If the US is indeed 'recovering,' the labor market for African-American young adults may as well be part of an altogether different economy. 

Twenty-five to 34 year-old African-American workers saw their unemployment rates shoot up nearly 10 points since their pre-recession low of 8.6% in 2007.  With unemployment at 18.1% in 2011, young African- American workers actually saw an increase in the unemployment rate over the past year, even as their labor force participation rate declined. 

That means that for this group, fewer are looking for jobs than at any point in the last decade.  And among those who are looking, fewer than ever are finding them.  

The employment prospects of young workers will impact all generations as we move toward the full employment of resources that marks a true recovery.  Without experience and professional networks built in their early working lives, young adults will have more difficulty finding a job where they can reach their productive potential. So while it is fair to celebrate the December employment numbers as an encouraging blip in a year without a lot of positive labor market developments, past recessions tell us that recovery is a long slow road. And for some young adult workers it has not even begun.  

Catherine Ruetschlin is a Research Analyst in the Economic Opportunity Program at Demos. She worked on the recently published Demos report "The State of Young America: Economic Barriers To The American Dream."