Teen Unemployment Likely Close to 40%

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When the Bureau of Labor Statistics released its Employment Situation Summary for May, the headline was that national unemployment dropped to 13.3%, a decline of 1.4 percentage points from April. The number of people who were unemployed dropped by 2.1 million to 21 million. One group that remained badly crippled was teenagers, as among them unemployment was 29.9%. The summer, a time when many of the people in this age group get jobs, will be a time of deep job trouble. And the figure among teens is likely undercounted and actually much higher.

The jobless rate, while breathtakingly high among other groups, was still much lower than for people ages 16 to 19. Adult men had a jobless rate of 11.6%. The figure among adult women was 13.9%. Among white Americans, the number was 12.4%. Among Hispanics, it was 17.6%, among black Americans the number was 16.8% and among Asian Americans 15.0%.

In other words, the teenage unemployment rate was more than two and a half times the rate among adults. Because Bureau of Labor Statistics official unemployment does not include part-time workers looking for full-time work and those who have dropped out of the workforce, the teen number is likely closer to 35% to 40% when taking these factors into account.

The unemployment rates among people 16 to 19 years of age have always been higher than for other age groups. The national unemployment rate in February was 3.5%. Among teens, the number was 11.0%.

The high level of teen unemployment has at least two very negative effects. The first is that people in this age group often develop skills they can use later in their work lives. This, in turn, feeds a more well-trained labor force as these people age into their 20s. That effect will be lost to a large extent. That means that many people will be undertrained in the late 2020s and early 2030s. Some industries will find that young, skilled workers will not be available.

The other effect is that teenagers become important consumers as they reach their 20s. Those who do not have skills at that point are more likely to be paid more poorly. That, in turn, erodes the consumer economy, which is two-thirds of American gross domestic product.

A 40% unemployment rate not only hurts teenagers in the present. It will undercut their ability to have good jobs as time passes.

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