The Uneven Recovery of Youth Employment

Only half of 16- to 24-year-olds had a job last year, and youth employment has rebounded in just a handful of states. Is the recession all to blame?
by | April 5, 2017
(AP/Charlie Neibergall)

Job growth has picked up in recent years, but there’s one segment of the workforce that particularly isn't recovering as well as others: those just starting their careers.

Just 49 percent of Americans between the ages of 16 and 24 were employed last year, and the latest federal data depicts an especially uneven recovery for youth employment across states.

Governing compared each state’s 2016 youth employment-to-population ratio with averages for 2005 through 2007, the last three years preceding the recession. In all but four states, youth employment hasn’t fully recovered. The decline has been particularly severe in states like Florida and Nevada, where the youth employment rate still remains roughly 10 percentage points below pre-recession levels.

Young people were least employed last year in Mississippi (40.1 percent), West Virginia (41.9 percent) and New York (42 percent) and most employed in Iowa and Utah, where about two-thirds held jobs.

SOURCE: Governing calculations of Bureau of Labor Statistics 2016 annual estimates

In general, states where young adults are least likely to be working tend to have low employment across all age groups. This is the case in Mississippi, New Mexico and West Virginia.

But there are some exceptions.

Consider Connecticut and New Jersey. Both states maintain among the poorest rates of employment for young adults, yet their numbers for those in their prime working years (ages 25 to 54) exceed national averages.

Nationally, the youth employment rate has recovered only about halfway from recession-era job losses. By comparison, employment for the prime working-age population has rebounded better, recovering roughly two-thirds from the bottom of the recession.

Similar discrepancies exist for unemployment rates, which don’t account for most full-time college students and others not actively looking for work. Compared to the unemployment rate of all workers, the youth unemployment rate (10.4 percent) was more than double last year.

Another state where younger workers drastically trail the rest of the workforce is Oregon. Its youth unemployment rate of 12.4 percent last year was more than three times higher than that of its prime working-age population, the largest disparity nationwide. In some cases, employers hired experienced workers for jobs traditionally filled by teenagers, says Nick Beleiciks, a state employment economist with the Oregon Department of Administrative Services.

In the past, some have attributed Oregon’s above-average youth unemployment to the fact that the state maintains a relatively high minimum wage. Beleiciks, however, doesn’t believe it’s the reason why young people aren't finding jobs.

“I don’t think it’s a straightforward connection,” he says. “Some states with high youth unemployment have low minimum wages.”

Other states where youth unemployment rates most exceed those of older workers include Georgia, Indiana and North Carolina.

A number of factors have contributed to the uneven recovery among states. The strength of states’ economies explains a lot of the variation as does the performance of industries that typically employ young people. In addition, areas where younger workers are more educated report higher rates of youth employment. Those enrolled in school, however, are less likely to be working than others.

More broadly speaking, why young people lag behind other segments of the workforce can be explained by several reasons.

The most obvious is the Great Recession. Historically, young workers suffer disproportionally during economic downturns. But Martha Ross, a Brookings Institution fellow who researches the subject, says there’s more to it than that.

“We have a blend of longer-term trends and a reaction to the recession,” she says.

To better understand why younger workers have fallen behind, it’s worth taking a closer look at trends for narrower age groups.

 

Teenagers between the ages of 16 and 19 have sustained the single largest drop in employment. But the decline started around 2000, long before the arrival of the recession.

One possible explanation, says Ross, is that teenagers have gradually become more focused on academics and extracurricular activities than earning a paycheck. Additionally, reforms led to high schools offering fewer career and technical education courses in favor of a greater emphasis on college prep.

Employment for those in their early twenties has rebounded somewhat better than it has for teenagers, but it too hasn’t fully recovered.

 

Part of this is a result of young adults spending more time in the classroom. More than 41 percent of all 20- to 24-year-olds were enrolled in school in 2015, up from 37 percent a decade prior, according to Census American Community Survey estimates.

Ross says those who complete bachelor’s degrees have about as good a shot at finding a job as they did prior to the recession. But the same can’t be said of those without degrees.

“Young people will do better where the economies are stronger and where they have higher levels of education,” she says.

A recent study sponsored by The Rockefeller Foundation suggests employers too often overlook young adults who’ve finished high school but didn’t attend college.

Demographics further explain disparities in employment across states. Younger Americans most likely to hold jobs are those whom one would expect: Mostly non-Hispanic whites from wealthier households. (See a Brookings report detailing youth employment for different groups.)

If there’s one demographic that's working more often now, it’s older workers. Americans 65 and over are employed at greater rates now than a decade ago. It’s difficult to gauge, however, the extent to which or even if those working later into their careers is hindering job prospects for the youngest jobseekers.

 

State Employment Data by Age Group