As the U.S. labor market continues to show modest improvement, new high school and college graduates may confront the worst year for job hunting since the Great Recession began. That's in part because of the backlog of graduates from 2009 and 2010 who either have not yet found jobs or found something to hold them over as they seek a position more in keeping with their education and career desires. It's also because jobless levels among 16-to-24 year olds are being repaired even more slowly than they are for the population as a whole. But the most distressing aspect is the racial divide.
As we are reminded in a new briefing paper written by Heidi Shierholz and Kathryn Anne Edwards at the Economic Policy Institute, young Americans have taken heavy hist during the Great Recession. Their jobless rate is always higher than the overall population. No surprise since they have fewer skills and are less connected to the job market in general. They "churn," that is move from one job to another as they make decisions about what direction they will or won't take in their lives, including enrolling in school full time or, if they have the resources, interspersing jobs with traveling or just plain bumming around. All part of maturing.
But for young people actively seeking work, the past three years have been exceedingly tough. Easier for those with more education, but tough nonetheless. In 2010, the official jobless rate for those aged 16-to-24 averaged 18.6 percent, compared with 9.6 percent for the overall population. In March, with the overall rate down to 8.8 percent, the figure for young people was still 17.6 percent. And for those in that age group with only a high school diploma, the figure was 22.5 percent. The jobless rate for college graduates under 25 averaged 9.7 percent for 2010 through March 2011.
For most of these job-seekers, the safety net provides little sustenance, which is one reason so many young people who used to be moving out of their parents' home or already gone by this age have either not done so or moved back in. Having no savings and usually being ineligible for unemployment insurance, the Earned Income Tax Credit and payments from the Temporary Assistance for Needy Families program, about the only benefit they can claim is food stamps.
Shierholz and Edwards point out that the solution to this serious problem for young people is the same as for the rest of the population, a robust, job-creating economy. They recommend more government spending to make this happen, not exactly a message that gets much traction in Washington these days.
The most troubling aspect of their report, however, is the difference between unemployment rates of young blacks and Latinos when compared with that of whites. And not just when it comes to the overall numbers:
For graduates of color, the 2007 recession and its aftermath has been marked by regrettable milestones. Hispanic [college] graduates saw an unemployment-rate increase that was twice as large as that for white graduates. Young black graduates three years after the recession started—have a nearly one-in-five chance of being unemployed.
While it is true that even in the broader labor market, unemployment rates for blacks and Hispanics are higher, there arguably should be little disparity in the unemployment rates of young college graduates. Not only do they have the same basic degree, but they also are in the same labor market position (i.e., college graduates under age 25 who are not enrolled in school and are actively looking for a job). This begs the question: If higher education and a virtual blank slate of prior work experience do not create parity in unemployment among races, then what will?
Indeed, what will? If it's not the labor market per se, and it's not education level, and it's not previous job experience, the reasons for this disparity seem to be have been narrowed down to one. A very disturbing one.