As with young college graduates, young high school graduates are experiencing a much stronger labor market today than before the pandemic and at any point since 2000. The fast economic recovery from the pandemic shock is a direct result of the aggressive fiscal policy response that matched the scale of the problem—in stark contrast to policy responses following previous recessions.

In this blog post, we start by examining employment and enrollment outcomes for young high school graduates, defined as workers ages 18 to 21. We then analyze their short- and long-run trends in unemployment, underemployment, and wages, looking at those with only a high school degree and who are not enrolled in further schooling.1

To most accurately capture the choices that young high school graduates are making, we include all young people between the ages of 18 and 21 who have less than a bachelor’s degree (including those with some college) in our initial sample. We group this population into four categories: “employed only” and not enrolled in further schooling, “enrolled only” and not employed, employed and enrolled, or “idled” (not enrolled and not employed, which includes the unemployed). Among these young high school graduates, most are either “employed only” and not enrolled in further schooling (32.7%) or “enrolled only” and not employed (31.1%). Since 1989, the share of young high school graduates who are “employed only” has fallen 11.8 percentage points, while the share of those who are “enrolled only” has risen 10.1 percentage points. As of March 2024, the share of young high school graduates who are employed and enrolled (21.5%) and idled (14.7%) remains roughly similar from 1989 (21.0% and 13.5%, respectively).

Next, we narrow the sample of young high school graduates to those who are not currently enrolled in further schooling to assess the labor market for those making work their primary activity. The unemployment and underemployment rates for young high school graduates rose sharply during the Great Recession and the pandemic (Figure A). The unemployment rate reflects the share of the young high school graduate population who are jobless yet have reported that they are actively seeking work. Unemployment rates for high school graduates recovered nearly five times faster after the pandemic (two years, February 2020 to February 2022) compared with the Great Recession of 2008–09 (9.5 years, December 2007 to May 2017).

Figure A also shows that the underemployment rate for young high school graduates recovered in just under two years after the onset of the pandemic (February 2020 to December 2021) but took more than 10.5 years after the Great Recession (December 2007 to July 2018). This rate includes the unemployed plus “involuntary” part-timers (those who work part time but want full-time work) and “marginally attached” workers (those who want a job and have looked for work in the last year but have given up actively seeking work in the last four weeks and therefore are not captured in the official unemployment rate). Notably, the underemployment rate of young high school graduates has never returned to its low point in the tight labor market in 2000.

Despite the fast recovery in the pandemic recession, gaps still remain between Black, Hispanic, and Asian American and Pacific Islander (AAPI) high school graduates and their white counterparts, as shown in Figure B. If labor markets were well-functioning and free of discrimination, we would expect little disparity in the unemployment rates of young high school graduates given that they have the same basic level of education and are in the same labor market position. However, in the 36 months ending in March 2024, Black (18.8%), AAPI (12.8%) and Hispanic (12.0%) graduates have much higher unemployment rates than white graduates (9.5%). This suggests that other factors such as discrimination or unequal access to job networks and opportunities play a role. Young Black high school graduates’ underemployment rates are significantly higher than any other group, which demonstrates that a much larger share of Black graduates is either discouraged from the job search or is working part time when they would rather work full time.

Young high school graduates experienced real (inflation-adjusted) wage growth for the first time this early in a recovery compared with the prior three business cycles (Figure C). Even after accounting for unusually fast inflation, real wage growth between February 2020 and March 2024 was 9.4% for young high school graduates. By comparison, young high school graduates faced stark wage losses of 10.6% after the Great Recession, 4.3% between 2001–2005, and 5.5% between 1990–1994. This means that real wage growth in the pandemic business cycle was a tremendous 20.0 percentage points faster than in the aftermath of the Great Recession, 13.7 percentage points faster than between 2001–2005, and 14.9 percentage points faster than between 1990–1994. 

Despite this positive wage growth, Black-white and gender wage gaps remain significant even among young high school graduates who have equal levels of education and very little variation in work experience. Compared with young college graduates, young high school graduates experience smaller wage gaps across race and ethnicity and gender in part due to crucial policies such as the minimum wage. Figure D shows that Black workers are paid $1.15 less per hour, on average, than white workers and women are paid $2.22 less per hour than their male counterparts. This translates to Black workers being paid, on average, 93.2% of average white workers’ wages and women being paid, on average, 87.6% of their male counterpart’s wages.

These findings underscore the immense role that large fiscal relief and recovery packages, including expanded unemployment insurance coverage and aid to state and local governments, had in healing the labor market after the pandemic recession. For the first time in a recession over the past 35 years, young workers were not left behind by policy. However, policymakers must prioritize sustained full employment, increase the federal minimum wage, strengthen and enforce labor standards, and make it easier for workers to come together and form unions to ensure that these gains are fully realized and that racial and gender wage gaps are addressed.

Note

1. Notes about our data sample: Because we are examining such a small subset of the population, we pool 12 or 36 months of data to increase the sample size and mitigate some of the volatility in the series. Unless otherwise specified, when looking at “overall” trends in the data, we pool 12 months of data to create a pooled moving average, which also has the added advantage of removing any seasonal effects. We use 36-month pooled data to look at trends by gender and race/ethnicity, since breaking the population down by demographics reduces sample size and data reliability.