Objective:To determine why the American youths suffered the most fromjoblessness during and in the aftermath of the 2008 crisis.
Thesis:The American youths suffered the most from the loss of jobs and thedifficulty of finding new employment opportunities following the 2008crisis due to their lack of work experience and skills compared toother age groups.
It is estimated that the U.S. has about six million youths within the age group of 16 and 24 years who are not in school (Blivin, 2016).
The challenge of unemployment affects youths aged between 16 and 24 years more than other groups (Blivin, 2016).
Preview of the main points
Impact of the 2008 financial crisis on the youth unemployment
Studies have shown that young people aged16-19 years make up only 3.8% of the labor force in the country while those between 20 – 24 years have a 10% share in the labor force (Casselman, Ben, and Walker, 2013).
The unemployment rate for the citizens aged between 19 and 24 years is 30 %, which is quite higher than their percentage of the national population (Casselman, Ben, and Walker, 2013).
Significant decline in wages
The drop in the weekly earnings of the workers aged between 16 and 19 years were -4.6 % and -6.9 % for citizens in the 20-24 age groups (Casselman, Ben, and Walker, 2013).
The age groups 35-44, 45-54, and 55-64 years enjoyed a 0.8 %, 0.4 % and 0.9 % increase in weekly wages in the aftermath of the depression, respectively (Casselman, Ben, and Walker (2013).
The nature of the jobs available for the youths
Many youths became hopeless and a large number of them chose to take longer in schools (Casselman, Ben, and Walker, 2013).
Some of the youths choose to pursue education with the objective of avoiding the harsh experiences brought about by the nature of the labor market (Casey, 2012).
Reasons for the disproportionate effect of the crisis on youth unemployment
The rate of unemployment among the youths includes those who are not in school and they are available for employment (Fashoyin & Tiraboschi, 2012).
The concept of the great squeeze is used to describe a situation in which people are willing to take jobs that do not match their respective levels of skills due to the harsh economic conditions (Tseng, 2013).
The financial crisis that took place in the year 2008 affected all sectors of the economy and employees in all age groups, but the youths were disadvantaged the most.
The lack of skills and work experience resulted in the squeezing out of the youths from the jobs that were reserved for them before the crisis.
The2008 crisis affected people in all age groups, but the young peoplewere impacted disproportionately. Apart from the high risk of losingjobs during and the aftermath of the crisis, young people sufferedthe most in terms of the decline in the wage rates. Employers reactto the crisis by reducing the number of employees or cutting thewages. Both of these reactions affect the young people aged between16 and 24 years more than other groups. The lack of adequate skillsis among the leading cause of a scenario in which the young peopleare affected disproportionately by the crises. This limits theirability to compete with workers from the older generations, who havethe skills and the experience needed by employers. The young peopleare also squeezed out of the labor market by experienced workers. Thesituation can be rectified by developing the educational and trainingprograms that will empower the young people by equipping them withthe skills required in the contemporary labor market.
Keywords: Joblessness, labor market, skills, age group, financialcrisis.
Thisresearch paper will be focusing on the employment rate among theyouth in America during the period after the financial crisis. Theage group considered as the youth in this paper are those agedbetween 16 – 24 years. The importance of conducting this researchis significant since it will assist in analyzing the aftermath of therecession and its effects on the labor market. This will, in turn,assist all involved stakeholders like the government to understandthe youth employment rate and their contribution to the economy.Consequently, it will help the stakeholders to make clear,well-informed decisions based on the findings. There is adisproportion in the share of the labor market among the differentage-groups. The unemployment rate among the youth is higher after theeconomic recession and this paper addresses this problem. This paperpresents a data commentary about the findings and statistics behindyouth employment in America relative to the labor force and thepopulation as presented by Casselman, Ben, and Walker in "TheYoung and the Jobless" (2013).
Unemploymentis one of the key economic challenges that the governments in alljurisdictions face in the contemporary world. However, the challengeof unemployment affects youths aged between 16 and 24 years more thanother groups. It is estimated that the U.S. has about six millionyouths within the age group of 16 and 24 years who are not in school(Blivin, 2016). These youths have an unemployment rate of about 12 %,which is the highest compared to other age groups. Youths face uniquechallenges that limit their ability to secure reliable employment andbetter-paying jobs that can help them lead a fulfilling life. Blivin(2016) stated, “Millions more youth are unable to find full-timeopportunities that match their skills, or draws on their formal jobtraining or education” (p. 1).
Casselman,Ben, and Walker (2013) note that most Americans under the age of 25make up the biggest portion of the unemployed relative to the shareof the population. According to The Young and the Jobless journaldata, 16 – 19-year-olds make up only 3.8% of the labor force in thecountry while those between 20 – 24 years have a 10% share in thelabor force. This is a disproportional share comparative to the totalpopulation of those between 16 – 24 years. The share of theunemployed is 11.2% and 16.4% for 16 – 19 years and 20 – 24 yearsrespectively. This brings the total share to almost 30%. It is acomparatively high proportion. Another claim in the article is thatthe change in the average weekly earnings from 2007 to 2012 among thedifferent age-groups is unfavorable to the youth. It shows that theyare progressively losing ground when it comes to weekly earnings. Inthe data, it shows that those between 16 – 19 years experienced a-4.6% change in average weekly earnings while those between 20 – 24years had a -6.9% change. The data demonstrates a high rate ofdecline in weekly earnings among the youth. In comparison, thischange was distributed among the other age groups as follows
Age %change in weekly earnings
25– 34 -0.7%,
35– 44 +0.8%,
45– 54 +0.4%
55– 64 +0.9%.
Apartfrom those between 25 – 34 years who experienced a slight drop, therest of the age groups increased their weekly earnings after therecession at the expense of the youth. This data is calculated andadjusted for inflation. According to Casselman, Ben, and Walker(2013), in The Young and the Jobless, many of the youths are stayingin school in a bid to escape the harsh reality in the job market.This is a claim that is further supported by Casey (2012) who claimsthat the rate of those who are enrolled in school is increasing whilethe same cannot be said for those who are out of school and working.Statistics also show that the rate of those who are neither in schoolnor working is also on an upward trend. Those who are in employmenttoo are not having it easy. Most are working part-time and thepercentage of those in full-time jobs is on a downward trend. It isalso claimed that those working are doing so for fewer hourssubsequently earning less money than the period before the economicrecession.
TheNature of the Jobs Available For the Youths
Thefinancial crisis was characterized by the decline in the number ofjob vacancies available in each industry. This made it difficult forthe jobless youths and those who lost their employment opportunitiesfollowing the crisis to access the labor market once more. Manyyouths became hopeless and a large number of them chose to takelonger in schools (Casselman, Ben, and Walker, 2013). The decision ofmany youths to take longer in schools than they did prior to thecrisis is attributed to different factors. Some of them choose topursue education with the objective of avoiding the harsh experiencesbrought about by the nature of the labor market (Casey, 2012).Another group of the youths has developed a perception that it needmore academic certificates in order to get jobs, which has motivatedthem to spend more years in school. This trend is confirmed bystudies showing that the number of youths who are enrolling inschools has been increasing exponentially. On the contrary, thenumber of the youths in the formal employment has been declining(Casey, 2012).
Afew of the youths who are lucky find unstable and poorly paidemployment opportunities than what they would expect. Casey (2012)reported that the number of the youths in the full-time employmenthas declined significantly. The number of the youths working in thepart-time employment, on the other hand, had been increasing withtime. This suggests that employers are not willing to give long-termemployment to the youths. Similar trends indicate that the youths whosecure employment work for a few hours per day due to the decline indemand for the services or the products offered by their employers inthe market (Casey, 2012). The number of hours that one spends,especially for the part-time jobs, is directly proportional to amountthat one earns. Therefore, youths who are forced to work for a fewnumbers of hours earn less than the amount of money that they need inorder to lead a fulfilling life. Consequently, the quality of life ofthe youths was affected disproportionately by the crisis.
Reasonsfor the Disproportionate Effect of the Crisis on Youth Unemployment
Supportersof the idea that youth unemployment is not an issue of concern holdthat they do not lack job due to poor economic conditions. They arguethat most of the youths are in colleges, which reduce their desire tolook for jobs or deny them time to identify the availableopportunities. However, the rate of unemployment among the youthsincludes those who are not in school and they are available foremployment (Fashoyin & Tiraboschi, 2012). There are many factorsthat have been suggested as the leading causes of unemployment amongthe young people. The lack of skills and experience is among the keyfactors that have put the young people in a disadvantaged position.According to Joerres (2011) the level of experience and skillspossessed by the young people cannot be compared to potentialemployees who are aged 25 years and above. Consequently, the newemployment opportunities created during the economic recovery periodwere taken by the adults who had also been rendered jobless by thecrisis. These adults are more experienced and they are willing totake lower wages, which gives them some preference over inexperiencedyouths.
Thesecond factor that has rendered many youths jobless is what scholarscall “the great squeeze”. The concept of the great squeeze isused to describe a situation in which people are willing to take jobsthat do not match their respective levels of skills due to the harsheconomic conditions (Tseng, 2013). The economic crisis created asituation in which more experienced workers were willing to take jobs(such as retail, restaurant, and bars attendants) that werepreviously being done by youths. This implies that the young peoplewere squeezed out of the job that was previously reserved for them.
Thethird factor that has increased joblessness among the American youthsis the lack of growth in the number of vacancies that do not a lot ofexperience. Unfortunately, these are the jobs that give the youngpeople an opportunity to gain an easy entry into the formal labormarket, given that most of them lack the skills needed in differentprofessions. One study indicated that the limited growth in thenumber of jobs available for youths, coupled with the fact that theyoung people are continually being squeezed out of the workforce bytheir experienced counterparts have made the situation worse(Soergel, 2015). The research indicated that the percentage of youngpeople working as counter attendants was 45 %, 45 % hosts, 27 %costume attendants, 23 % food serving, 24 % dishwashers, and 23 usheror lobby attendants in 2001, but all these proportions had reduced to31 %, 32 %, 15 %, 14 %, 14 %, and 12 %, respectively by the year 2014(Soergel, 2015). This data confirms that the decline in the number ofjobs that do not require a lot of skills and the fact that moretrained and experienced people are willing to take the fewopportunities that are available have placed the young people in adisadvantaged position.
PolicyImplications of the Findings
Theresults of the studies analyzed in this paper indicate the lack ofadequate skills is the leading cause of joblessness among the youngpeople aged between 16 and 24 years (Soergel, 2015). The young peopletake jobs that are more sensitive to shocks, which imply that theyare the first group to be made redundant. From this perspective, thegovernment can protect the young people from the high level ofvulnerability by developing the educational system as well as thetraining programs that will equip them with skills that are requiredin the contemporary business environment (Rankin & Roberts,2012). These skills will protect the young people from being squeezedout of the labor market when crisis occurs.
Thisdata implies that the youth have been hardest hit by the economicrecession which only favored the older, more experienced andwealthier workforce. The financial crisis that took place in the year2008 affected all sectors of the economy and employees in all agegroups, but the youths were disadvantaged the most. They suffered themost from the loss of jobs and the decline in the quality of life.The impact of the crisis on the lives of the young Americans extendedto the recovery period where they still found it difficult to getemployment compared to the general population. In addition, a fewyouths who managed to secure jobs in the post-crisis period earnedless wages compared to what they got prior to the occurrence of theeconomic depression. The lack of skills and work experience resultedin the squeezing out of the youths from the jobs that were reservedfor them before the crisis. This implies that policies should bedeveloped in order to help them increase the level of skills that arerequired by employers.
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