There should be no more hopeful time in a young person’s life than college graduation day. Despite all the blather at the pre-K, middle school, and high school graduation ceremonies about embarking on life’s journey, college graduation really does mark the beginning of adult life. With some 17 years of education, not to speak of fraternity parties and mom and dad’s credit card, in the rear view mirror, college graduation day is truly the first day of “real life.” It should be hopeful.
It is against that backdrop that the lead story in today’s USA Today is so depressing. In Hunt for jobs still tough on grads, the newspaper chronicles the treacherous employment waters that newly minted college graduates are navigating. Furthermore, as the article points out, college graduates have faced these same choppy seas for the entire duration of the Obama administration.
Let’s start with the numbers. While the government-reported unemployment rate has dropped to 6.3% recently, having spent most of the past 6 years at historically high post-recession levels of 7-9%, this figure has now become completely meaningless due to the manner in which it is calculated. The numerator in the unemployment rate is the number of Americans who are unemployed and seeking work.
unemployment rate = number of unemployed seeking work/working age population
So, mathematically, the unemployment rate can come down two ways. Either more people find jobs or more people give up looking. All of the “gains” in the government-reported unemployment rate in the last six years have come through people giving up the hunt. That is about as hopeless as it gets. A more meaningful metric is the percentage of Americans actually working. This number is particularly relevant in the age 25-34 bracket because virtually everyone that age should be working. While the reported unemployment rate dropped from 6.7% to 6.3% in April, the percentage of workers aged 25-34 dropped to a five-month low of 75.5% from 75.9% in March. In other words, as more college graduates hit the job market, fewer will find jobs. Again. Hopeless.
In case you didn’t stay in a Marriott last night and missed the USA Today, I want to share two particularly poignant passages. In the first, under the section heading “Never Been This Bad,” the paper reports the following, from Heidi Shierholz at the Economic Policy Institute:
High unemployment for young adults is not a new phenomenon. Bureau of Labor Statistics data compiled by EPI show that the unemployment rate for those under 25 is typically at least twice the national average, because they are so new to the job market, lack experience, and may be the first let go when a company has to downsize in hard economic times. Previous generations didn’t experience the fallout as harshly or for nearly as long as the current one. It’s never been this bad. How long we’ve had elevated unemployment is unprecedented.
The other paragraph I found particularly troubling was the one headed “Lifelong Consequences.” One of the great things about being young is that things can go really badly, but you still have plenty of time to fix it. Sadly, that may not be the case here. After reporting an anecdote of a Northwestern University graduate living at home unemployed, the article quotes studies showing that the consequences of a late career start can be lifelong.
Entering the labor market during a recession or period of extended weak employment can affect earnings for 10-15 years, depending on the industry and how long you are unemployed or underemployed.
Wow, there you have it. Six years of the Obama administration’s ill-conceived economic and job-killing policies have basically fucked a generation of young people. How’s that for Hope?