Life in the Obama Economy: The Youngest Generation is Hit the Hardest
The month of May is synonymous with graduations; thousands of college students leaving school and heading out into the work force. This May, due to President Obama’s failed economic policies, the job market is extremely tight for graduates. But yet, the national unemployment rate of 8.1% doesn’t tell the full story. Simply, the younger generation is hit the hardest.
In a previous blog post, Americans for Prosperity highlighted how the drop in the unemployment rate is being fueled by a mass exodus of workers from the labor force; not due to real job growth. Over 342,000 workers left the labor force in the month of April alone.
Job statistics for younger workers are even more dramatic. The unemployment rate for workers 16-24 is 16.4%. One in two recent college graduates is unemployed or underemployed. As a result, the number of 16-24 year olds in the labor force is falling as they give up hope of finding a job. There are 400,000 less 16-24 year olds in the workforce than when President Obama took office even though the demographic grew.
This has greater effects than not being able to find a job. Workers graduating in a recession tend to make lower initial wages than those graduating in better economic times. A recent study found these workers tend to make 6-7% less for every 1% increase in the unemployment rate. The damage can take up to 20 years for workers to undo. Further “workers who graduate in bad economies are unable to fully shift into better jobs after the economy picks up.” Workers are penalized for years for the bad luck of graduating in a bad economy. The author concludes that the effect of graduating in a bad recession are “significant and persistent” for younger workers.
Additionally, these workers have to delay major life events due to their poor work conditions such as getting married, buying a first house and having children. Delaying these events has economic consequences as well. Creating a new household can add up to $145,000 to the economy as its spending on everything from groceries to furniture spreads through the marketplace.
Unfortunately instead of May being a symbol of happy beginning and fresh starts, it now represents struggling twenty-somethings living with parents, delaying life events and the inability to find a job. The President gives lip-service about caring for young adults in large rallies at college campuses, but his actions speak otherwise. Creating jobs and the best environment for economic growth, instead of government handouts, is the real way to help young adults get ahead.