The most recent version of this paper is The Class of 2012: Labor market for young graduates remains grim.
The Great Recession left a crater in the labor market that has been devastating for unemployed Americans of all ages. After more than two years of unemployment at well over 8%, we have a hole of more than 11 million jobs, with average spells of unemployment lasting nearly nine months. But the weak labor market has been particularly tough on young workers. In 2010, the unemployment rate for workers age 16-24 was 18.4%—the worst on record in the 60 years that this data has been tracked. Though the labor market has started to slowly recover, the prospects for young high school and college graduates remain grim. This briefing paper examines the dire labor market confronting young workers and concludes with ways that government policy could help. Specifically, our analyses found the following for calendar year 2010:
•The unemployment rate for 16- to 24-year-old workers averaged 18.4%, compared with 9.6% for U.S. workers overall.
•Young high school graduates have been hardest hit: The unemployment rate for high school graduates under age 25 who were not enrolled in school was 22.5%, compared with 9.3% for college graduates of the same age.
•Young high school graduates are not keeping pace with their older peers: Their 22.5% unemployment rate is more than double the 10.3% rate among high school graduates age 25 and older.
•While their degrees afford them more opportunities in the labor market than other young workers, young college graduates still lag far behind older college-educated workers: 9.3% of them are unemployed, more than double the 4.7% unemployment rate for college graduates age 25 and older.
•Since unemployment among young college graduates still shows no improvement, the class of 2011 will likely face the highest unemployment rate for young college graduates since the Great Recession began.
•Young blacks and Hispanics are suffering disproportionately. The unemployment rate for black high school graduates under age 25 and not enrolled in school was 31.8%, compared with 22.8% for Hispanic high school graduates and 20.3% for white high school graduates. The unemployment rate for young black college graduates was 19.0%, compared with 13.8% for young Hispanic graduates and 8.4% for young white graduates.
•Young workers as a group have not been “sheltering in school” during this downturn. School enrollment rates since the start of the Great Recession have not increased by noticeably more than the long-term trend.