The Young And The JoblessAaron Bernstein
When Leydis de la Cruz applied for a federally funded summer job last spring, she had high hopes. The 16-year-old New York high school student's family--including her mother, sister, and four brothers--earn less than $12,700 a year, as required. And the Clinton Administration had said it planned to double the program's funding, to $2 billion.
But Congress authorized only $1.22 billion. By the time the Administration began distributing the funds in July, New York had told de la Cruz and 70,000 more of the city's 100,000 applicants that they were out of luck. The story is the same across the country, where cities have turned away tens of thousands. "It looks like I'll have no job this summer," laments de la Cruz.
If teenagers seem hungrier than usual for work, there's a reason: While the rest of the economy picks up steam, youth job prospects are trailing badly--more than in any other recent recovery. True, work isn't plentiful for anyone these days. And teens are always hit harder in bad times and take longer to feel the upturns. Still, while adult employment has surpassed its prerecession peak of 96.4 million jobs, employment of young people is 2 million lower than in 1989. Economists say two trends are at work: Productivity has jumped by more than 3% since mid-1991, obviating the need to hire lots of workers. And the level of skill required for many jobs is climbing rapidly, leaving unskilled young workers out in the cold.
CLOSING WINDOW. These trends are occurring at a particularly bad demographic moment for America's youth. Although the spread of low-wage and part-time jobs drove down their inflation-adjusted pay in the 1980s, such jobs at least were plentiful. Now, entry-level positions may remain scarce just as the 16-to-24-year-old age group begins growing again. After plummeting by 3.4 million, or 10%, since 1975, this group will swell by 3 million in the next decade, according to the Census Bureau. "The demographic window of opportunity for solving youth employment problems has closed," says Andrew Sum, a labor economist at Northeastern University.
The past recession was extraordinarily damaging to the young for several reasons. Heightened competition spurred many industries into efficiency drives that often eliminated entry-level jobs. One of the hardest-hit occupations has been retailing, where old-line chains such as Sears, Roebuck & Co. have cut out thousands of clerical and sales jobs. This has dampened job growth in an industry that employs half of all teenagers and a quarter of workers in their early 20s. Just two years ago, the Bureau of Labor Statistics predicted there would be 25 million retailing jobs by 2005 vs. 20 million today. Now, experts say, the increase may be much less.
Beyond that, the spread of new technology is lifting more entry-level work out of the reach of the unskilled, particularly the young. Many employers say the trend will continue for years. According to a recent survey by Price Waterhouse, 75% of 316 top New York executives say most new entry-level jobs will require specialized training beyond high school or a college degree in the next four years. Fewer than 50% of all jobs require such training now. "New technology creates jobs, but at higher skill levels, which hits kids the most," says Nelson Smith, who heads a summer-job program run by the New York Chamber of Commerce & Industry.
SILVER LINING. Indeed, the outlook for young workers is so poor that many have simply stopped seeking work. Those who have pulled out aren't counted in the jobless rate, which has jumped from 15% for teens in early 1990 to 21% today. And only 37.6% of teens are employed today, down two percentage points since the start of the recovery in early 1991, according to the BLS. By contrast, the share of teens with a job jumped by nearly three points, to 42%, after the 1981-82 slump, says Sum. The share of adults who work--61%--is nearly the same as it was two years ago.
There may be a thin silver lining in the grim numbers. With jobs so scarce, more young people are staying in school. The proportion of 18- to 24-year-olds enrolled in college, which hovered around 30% for a decade, rose in the late 1980s and jumped sharply when the recession began. It hit 41% in 1991, the last year for which Census Bureau figures are available. "In an odd way, there's a positive light to the bad job market if it scares young people into attending college," says Robert Kominski, head of the bureau's education branch. More education will leave young workers better off in the long run. But that's small comfort for those who need a job now.