Hidden by the August 2012 drop in the official U.S. unemployment rate, is the reality that millions of workers are still jobless—three years after the “great recession” was declared ended. Among the hardest hit by the capitalist crisis are younger workers.
“There were 453,000 fewer young adults with jobs in August than in July,” noted a September 7 CNNMoney article. “But despite that plunge, only 27,000 more young people were looking for new jobs….And those numbers take into account seasonal factors such as younger workers returning to school. As a result, the percentage of young people who are counted in the labor force fell to its lowest level since 1955.”
But if the statistics show fewer people working, how can the unemployment rate fall? Because “the labor department only counts those with a job or actively looking for work as in the labor force….The drop is because so many young adults, aged 16 to 24, are no longer looking for work.”
Of course, this is not to say that this mass of jobless young workers has suddenly become independently wealthy, or in some other way overcome the need to earn rent and food money. It just means that certain aspects of their scramble for survival have removed them from being counted in the workforce.
A September 23 Reuters article reinforced this statistical fiction when it reported that “Americans of all ages are leaving the workforce, but the problem is most acute in the 20-24 age group, where the participation rate has plunged by 4.4 percentage points since December 2007” (our emphasis—Ed.).
The article went on to say, “Economists, analyzing government data, estimate about 4 million fewer people are in the labor force than in December 2007, primarily due to a lack of jobs….The size of the shift underscores the severity of the jobs crisis. If all those so-called discouraged jobseekers had remained in the labor force, August’s jobless rate of 8.1 percent would have been 10.5 percent.”
8.7 million U.S. workers lost their jobs in the recession. Only half that number have regained employment since then.
On average, the U.S. working class grows by about 0.8% per year. This means that in order to restore the levels of employment that existed prior to the 2007–09 recession, millions more jobs must be created than were lost.
But progress in providing jobless workers with gainful employment is not just stagnating, but deteriorating. Reuters noted that “Economists say jobs growth of around 125,000 per month is normally needed just to hold the jobless rate steady….Last month, employers created just 96,000 jobs.”
What is even more striking is that the bulk of the new employment since the end of the recession pays significantly less than those jobs that were lost. HartfordBusiness.com reported on August 31 that “Some 58% of the jobs created during the recovery have been low-wage positions, according to a new report by the National Employment Law Project. Only 22% have been mid-wage jobs and 20% higher-wage positions. These low-wage jobs pay $13.83 an hour or less.”
In comparison, the article said, “Some 60% of the jobs lost during the downturn were mid-wage, as opposed to 21% of low-wage and 19% of higher-wage positions….‘The recovery continues to be skewed toward low-wage jobs, reinforcing the rise in inequality and America’s deficit of good jobs,’ said Annette Bernhardt, NELP’s policy co-director.”
Could a return to college, with an effort to gain new job skills, explain the massive statistical gap between employment rate and “workforce participation” by jobless youth? The Reuters report indicated the opposite.
“Separate surveys by the Economic Policy Institute (EPI) and Generation Opportunity found little evidence that young people were going back to school when unable to land a job.
“One deterrent is the rising cost of education and record levels of student debt. About two-thirds of 2012 college graduates left school in debt, owing on average $28,700 in student loans, according to Mark Kantrowitz, publisher of FinAid.org….
“A Generation Opportunity survey published in August showed a third of young people were putting off additional training and post-graduate studies because of the sour economy.
“‘This is significant. People are making the decision to put those off because the assurance of a return to investment is not there,’ said the non-profit’s Conway, a veteran observer of the labor market as a former Department of Labor chief of staff.”
As of July, according to the Consumer Financial Protection Bureau, student debt now totals over $1 trillion. With slim prospects for well-paying jobs, and no bankruptcy protection for these loans, a lifetime of debt slavery awaits most student youth.
Given a looming prospect of a double-dip recession, and the threat to the stability of world capitalist financial markets presented by the acute Euro crisis, U.S. youth face bleak prospects for their future under capitalism.