"Unemployment To Cost Young Americans $20 Billion Over Next Decade"
Young Americans make up nearly half of America’s unemployed workforce, according to a study released Thursday, and the unemployment rate for Americans between the ages of 18 and 24 is a staggering 15.1 percent. But the bleak job prospects for young Americans isn’t just contributing to the nation’s persistently high unemployment rate. According to a study from the Center for American Progress, the long-term effects will hurt young Americans for years to come.
The negative effects of unemployment, in fact, will cost young Americans more than $20 billion over the next decade, CAP’s Sarah Ayres found:
Not only is unemployment bad for young people now, but the negative effects of being unemployed have also been shown to follow a person throughout his or her career. A young person who has been unemployed for six months can expect to earn about $22,000 less over the next 10 years than they could have expected to earn had they not experienced a lengthy period of unemployment. In April 2010 the number of people ages 20–24 who were unemployed for more than six months had reached an all-time high of 967,000 people. We estimate that these young Americans will lose a total of $21.4 billion in earnings over the next 10 years.
It isn’t just unemployment that is depressing wages for young workers, though. College graduates and young workers are increasingly being pushed in to low-wage jobs as better opportunities aren’t available to them because of a slacking job market. Low-wage jobs have made up a majority of the jobs added since the end of the recession, and there are now 13.4 million college graduates occupying them — a 19 percent increase since the start of the recession.
These losses also hurt the broader economy, as young Americans are less able to spend money. Reports have already shown that unemployment for young Americans is holding back the housing recovery and thus the overall economic recovery, and other reports paint an even worse picture. As Ayres noted, this unemployment will cost young Americans $1.6 trillion over their lifetimes, which will also reduce revenues for the federal government.
But even as youth unemployment remains in crisis, the government has cut more than $1 billion from youth job programs and continues to focus on reducing the deficit instead of policies that will create jobs and help young Americans — and the country as a whole — finally recover from the Great Recession.