How Are Youth Faring in Today’s Robust Economy?

The First in a Series on the State of Youth Employment

Recent reports by the Bureau of Labor Statistics (BLS) on unemployment and job growth show that the economy continues to expand. In September the U.S. economy created 250,000 new jobs, the 97th consecutive month of job growth. The overall unemployment rate remains below 4 percent. But are young people benefiting from this robust period of economic expansion?

In short, there’s good news and bad news. This piece, the first in a series, will take a look at basic data about youth employment.

On the positive side of the ledger, the unemployment rate for 16-24-year-olds over this past summer was lower than it has been in many years. In fact, the BLS found that the young adult unemployment rate had fallen to 9.2 percent, the lowest level in 50 years according to The Wall Street Journal. In all, the BLS estimates that almost 21 million young people were employed in July 2018, in industry sectors like leisure and hospitality (26 percent of all youth employment), retail trades (18 percent), and education and health service (11 percent).

On the other hand, while the summer unemployment rate for young adults was positive by historical norms, it was still two-and-one-half times that for the overall civilian labor. Furthermore, the unemployment rate only captures those who are not employed but are actively looking for work, as BLS defines it. Thus, the measure excludes discouraged workers (those who have not been employed recently and are not looking for work), and those (like many young people) who have never been in the labor force but are considering whether to enter it. The measure also undercounts those who work under the table or in the informal economy.

Another way of capturing who is participating in the labor force and who is on the sidelines is the employment-to-population ratio, which measures the percentage of the civilian non-institutional population holding a job. For young adults, the rate in summer 2018 was only 55 percent, with rates even lower for Hispanics (51.7 percent) and African Americans (47.2 percent).

Unemployment data for 16-19-year-olds are even more concerning. The BLS October jobs report estimated the teen unemployment rate to be (11.9 percent), more than three times that of the civilian labor force as a whole. Unemployment rates remain especially high for Hispanics (11.6 percent) and African Americans (22.6 percent), with employment-to-population ratios of 29.1 percent and 33.2 percent, respectively.

There are also troubling longer-term trends. The Pew Charitable Trusts analyzed BLS data and found that that while about 50 percent of teens were employed during the 1990s, these rates fell sharply after the 2001 recession and the 2007-09 Great Recession, when only 30 percent of teens were working. Teen employment had rebounded slightly by the 2017 summer to about 35 percent but remained far below what it was in the late the 20th century. Furthermore, Pew reports that, as of May 2018, 11 million 16-19-year-olds (66 percent of the civilian noninstitutionalized population for this age group) were entirely outside the labor force, compared to 7.8 million (49.1 percent) in May 2000.

Bottom line: despite eight years of economic expansion and a historically tight labor market, millions of young people remain unemployed or disconnected from the labor force. We need solutions that can bring these teens and young adults into the economic mainstream as active and productive citizens.