NathanNewman.org: Young People Giving Up on Economy

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March 15, 2004

Young People Giving Up on Economy

One meme out on the rightwing is that the media is unfairly hitting Dubya on the unemployment rate since today's unemployment rate is basically the same as in 1996. See Instapundit and others.

But the problem is that today's unemployment rate disguises large numbers of people leaving the workforce. Take this Business Week story (subscription required-- see full story in extended entry):

If young people's participation rate were equal to its level in March, 2001, the unemployment rate could be 6.6%.

That's the harshest story of this recession-- lots of young people are just losing hope of finding a job.

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Unemployment, at 5.6% in January, has fallen from 6.3% in June, 2003. But that's not because of robust job growth. Instead, many younger Americans have dropped out of the labor force.
Since March, 2001, a total of 408,000 Americans aged 16-24 have left the workforce -- meaning they are neither employed nor actively trying to find a job. The labor-force participation rate -- the share of those 16-to-24-year-olds with a job or looking for work -- hit a 32-year low of 60.5% in December, accounting for the entire fall in the overall participation rate (chart).

It appears that many headed back to school. The latest data, through 2002, from the U.S. Census Bureau show that the share of 18-to-24-year-olds in college declined from 1998 to 2000 but resumed an upward trend after the recession began.

What if the drop-off hadn't occurred? If young people's participation rate were equal to its level in March, 2001, the unemployment rate could be 6.6%.

Posted by Nathan at March 15, 2004 09:02 PM

Related posts:

57,000 Lousy New Jobs - Dec 05, 2003

Just Odd- Money Supply Falling - Nov 28, 2003

(More) GOP Lies on Jobs - Nov 16, 2003

Conservative Doubts on Job Growth - Nov 12, 2003

UI Claims Drop- But No Drop Last Week - Nov 06, 2003

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Is there any substantive economic figure that we can use to show people that these folks are "leaving the workforce"?

Posted by: Kenneth G. Cavness at March 16, 2004 11:36 AM

Actually Business Week article our employment rate would be 7.4% if our participation rate were the same as 2001.

This is interesting because "the sick man of Germany" as critics of heavily unionized European economies like to call that nation has an employment rate of 10.2% since it recently knocked off .2% by no longer counting people being retrained. Knock off another 2% by not counting the former East Germany; knock off another 1% for overly stringent German accounting (anybody working 14 hours a week or less is counted unemployed for instance): and you get 7.2% unemployment -- .2% less than maybe how much we should count our unemployment, for a 90% unionized-by-law country.

Posted by: Denis Drew at March 16, 2004 12:29 PM

the right wing likes to say Those tax and spend dems. but would not tax and spend put more power in the hands of the tax payer instead of tax the daylights out of the next generation because they can't vote?

Posted by: scott at March 16, 2004 04:15 PM

Ever wonder why the Republican-controlled Congress voted not to extend unemployment benefits? Well, if you extend the benefits for three months, a bunch of folks who lost their benefits would have benefits again, and thus be counted in the unemployment statistics. Then the unemployment number goes up again. Politics is much more important than food on the table for America's unemployed, after all, if you are a Republican. Somehow I don't think Lincoln would have agreed with the current Republican party.

Posted by: dean at March 17, 2004 01:10 PM

Can't remember where I heard it, but enrollment at MIT in electrical and computer engineering is of 33%. I know, here at GA Tech, they are having problems keeping their enrollment numbers up in both these programs. The only one here that is doing well is civil engineering. It's still a little hard to build a bridge, road or building in India and ship it here for use.

But, we're working on it.

Posted by: rick at March 19, 2004 08:17 PM

It is easy enough to blame one political party or the other, but the truth is it is systemic in both parties. They are just the Democrat-Republican plutocratic lackeys of the neo-robber barons.

Posted by: Tim at March 23, 2004 12:55 AM

It is easy enough to blame one political party or the other, but the truth is it is systemic in both parties. They are just the Democrat-Republican plutocratic lackeys of the neo-robber barons.

Posted by: Tim at March 23, 2004 12:55 AM

starting of Blank-Edelman's gui.

Posted by: asian rape at September 1, 2004 08:29 AM

March 15, 2004

Young People Giving Up on Economy

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