We Should Be Very Worried About the Drop in Millennial Unemployment
Co-authored with Tom Allison.
The economy added 162,000 jobs in July as the unemployment rate fell from 7.6% in June to 7.4%. The unemployment rate for 18- to 29 year-olds also declined in July to 11.4% from 12% in June. For younger workers, ages 16 to 24, the unemployment rate fell to 15.6% from 16.3% last month.
The numbers look promising, but are actually disappointing. It turns out that the millennial unemployment rate fell, in part, because many young people left the labor force last month discouraged from persistent lack of opportunities. There are still over 4 million unemployed millennials ages 18 to 29.
A tricky thing about the unemployment rate is how you define it. The Bureau of Labor Statistics publishes six different unemployment metrics each month. Most economists accept that the “U-3” rate is a fair way to quantify the jobs situation in America, because it captures the proportion of people in the labor force looking for work without any job.
However, that number can underestimate the true challenge facing our generation. For example, Gallup released a report last week showing fewer 18- to 29 year-olds held full-time jobs this past June than they did in 2012, 2011, and 2010. After a slight improvement in 2011, young adults are actually working full-time at a lower rate today than they were in 2010, one year after the recession officially ended.
Gallup calls the chronic lack of full-time work for young adults a “growing crisis” because full-time employment provides the financial stability to start a family or buy a home. Part time work also pays less, offers fewer experiences and skills, and provides fewer opportunities for advancement. The prevalence of part time work could have long-term career consequences for our generation.
The youth unemployment rate released today is a good metric to measure youth unemployment, but it counts part-time workers even if they were looking for more work. Advocates for youth jobs need to keep in mind that even if the youth unemployment rate declines, the trend in full-time employment for young people needs to be addressed as well.