As we approach graduation season, it’s important to note the uphill battle young job seekers continue to face in today’s labor market. This week’s Economic Snapshot explains that the unemployment rate for workers under age 25 has improved to 16.0 percent since its peak of 19.6 percent in spring 2010. However, excluding the Great Recession and its aftermath, youth unemployment remains higher than it has been since fall 1983. Furthermore, evidence from past recessions shows that entering the labor market during a downturn has severe and long-lasting effects on young workers.
EPI on The Colbert Report
Don’t miss EPI Vice President Ross Eisenbrey’s appearance on The Colbert Report. On Tuesday, Eisenbrey and Colbert discussed the negative impact the proliferation of unpaid internships has on the workforce. Click here to watch the entire clip.
Important research in danger of losing major funding
The National Longitudinal Surveys (NLS) program conducts an important set of surveys designed to gather information at multiple points in time on the labor market experiences (employment histories and job characteristics) of the U.S. population. The program currently faces major funding cuts from the Bureau of Labor Statistics (BLS). Despite avoiding a hit to its overall budget, the BLS decided to reduce previously committed funding to the NLS. For almost 50 years, economists, sociologists, and government analysts have used these surveys to study employment behavior and human capital investment and write thousands of academic papers and government and independent policy reports on poverty and income mobility. As such, the surveys are essential to our understanding of how labor market experiences evolve over workers’ lives
Stopping the proposed cuts, which would total $4.7 million this year (80 percent of the remaining budget for 2012) and an additional $6 million in 2013 (55 percent of next year’s annual budget), is particularly important at a time when there is a growing debate over whether the relationship between parents’ and children’s economic outcomes is strengthening or weakening within the United States. This debate can be best addressed with longitudinal data like the NLS. Without continued funding, these important questions cannot be adequately researched, and public policymakers would be hard-pressed to make evidence-based decisions.
EPI in the news
- Speaking with The Hill’s Peter Schroeder, EPI federal budget analyst Andrew Fieldhouse explained that the spending cuts and tax increases currently slated to take effect on Jan. 1, 2013, could reduce economic growth next year from 2.6 percent to 1 percent. “There is obviously a huge fiscal drag pending if Congress adheres to existing law,” said Fieldhouse.
- In Wednesday’s editorial, “Poverty line threshold is off,” the Minnesota Daily used EPI’s research to explain why the current definition of poverty is not broad enough. “According to experts from the National Center for Children in Poverty and the Economic Policy Institute, the poverty threshold should be at least twice” the current threshold, placing the “actual threshold of an annual income over $40,000 for a family of four.”
- With MarketWatch business reporter Ruth Mantell, EPI labor economist Heidi Shierholz discussed how high unemployment can erode wage growth. “Employers know workers don’t have outside options. If your employer knows you don’t have outside options, it reduces your bargaining power,” said Shierholz.