For Young Adults, A job famine

By Jane M. Von Bergen  & Alfred Lubrano
Inquirer Staff

With a degree in economics, Yevgeniy Levich, 23, may understand better than most why so many people his age are out of work.

He blames the lack of jobs on a myriad of reasons: the lack of regulation in banking that led to this economic crisis; a failed theory that lowering taxes leads to investment; a proposal for infrastructure jobs that doesn’t do much for someone who doesn’t work with his hands – that’s all the macro stuff.

Microeconomics is this: Levich, a Central High School graduate with degrees in economics and journalism from New York University, is still living with his parents in Northeast Philadelphia and hoping that he’ll land a job as a nightclub office assistant.
His interview was Friday.

On Thursday, the U.S. Census Bureau released figures showing that one in three young people, ages 20 to 29, were unemployed in 2010. In Philadelphia, the situation is worse, with barely more than one in two on a payroll.

“The jobs aren’t there,” Levich said. “Everyone wants experience that we don’t have, because no one is offering us the jobs to get the experience.”

With 14.1 percent unemployment nationally, the 20-somethings are worse off than any other age group, the census reports. The same trend holds locally, with Philadelphia reporting its highest unemployment rate – 19.4 percent – was for young adults.

Unemployment among young people has remained high throughout the recession, especially among high school dropouts, said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University.

But there has been a higher-than-normal unemployment rate even among 18-to-24-year-olds with college degrees, Van Horn said. “It’s a recession effect.”

In fact, during the recession, the United States has recorded the lowest rate of participation in the labor force among people younger than 24 “in quite a long time,” Van Horn said.

That effect has long-lasting consequences, he said.

People who enter the workforce during times of high unemployment tend to earn less over their lifetimes than others, as employers tend to pay less, Van Horn said. Even when good times return, those workers never catch up.

“These young people will pay a penalty for entering the workforce in 2007 vs. 1997,” he said.

A multitude of government surveys try to capture statistically what the jobless young people know from experience.
Some analysts look at weekly unemployment-claim reports, which track applications for benefits. But most young people don’t qualify, and thus aren’t counted.

“You have to have had a job for a certain amount of time and made a certain amount of money,” said Eileen Appelbaum of Philadelphia, a senior labor economist with the Center for Economic Policy Research in Washington.

Young people tend to have sporadic employment interrupted by longer periods of unemployment, which makes them ineligible for benefits.

Statistics aside, the current tough state budget scenarios have prompted many states, including Pennsylvania, to tighten eligibility, making it even more difficult for young people to qualify.
The U.S. Census Bureau collects data from many households, but there is a time lag.

The U.S. Labor Department’s Employment Situation report is probably the best source, because it relies on a statistically adjusted survey taken monthly, Appelbaum said.

In August, the Labor Department reported the national unemployment rate among people ages 20 to 24 was 14.8 percent, significantly better than the 17.1 percent reached in April 2010.

But April 2010 was the worst month since World War II, the earliest data available.

“The fact is that the unemployment problem is not getting better,” Appelbaum said.

“With the shortage of jobs, the jobs that young people might have gotten in the past are going to older women,” she said. “Adult women are viewed by employers as a more stable workforce than young people.”

Adding to the difficulty is the size of the youth cohort, said Peter Cappelli, an economist at the Wharton School of the University of Pennsylvania.

In 2009, the United States graduated the largest high school class in American history, Cappelli said.

Those young people are competing with one another for scarcer and scarcer jobs, Cappelli said.

Hardly the slacker generation that some observers call them, young people today are “falling all over themselves trying to figure out what employers want” in order to find work, he said.

Money matters.

Levich’s family couldn’t cover all his expenses, so he worked 30 hours a week while attending college in New York, making it impossible for him to do the kind of unpaid internships that provide valuable experience on a resumé.

“I couldn’t afford to work 25 to 30 hours unpaid,” he said.
Rosa Peiffer, 28, of West Philadelphia, faces a financial barrier to employment. She trained as a court stenographer but needs $5,000 to buy the software that will make her employable.

Over the summer, she worked as a lifeguard. Now she’s hoping to land work as a nanny.

Technically, Kyeem Witherspoon, 28, of West Philadelphia, doesn’t fit the definition of unemployed – not with three part-time jobs, all needed to make ends meet. He cleans at McDonald’s and cleans a client’s house one day a week (a job he inherited from his grandmother), all while trying to build up business as a barber.
“I have friends that have done four or six years in college and they don’t have jobs,” he said outside the Cuttin’ Up Barbershop in West Philadelphia Thursday, waiting for his girlfriend and their daughter, 5.

The way he sees it, barbering is a good bet. “Hair constantly grows.”

Things are so dire, economists fear some young people may never find jobs.

“They are facing an absolutely horrible labor market, damaging their prospects for work later on. They may withdraw from the labor force and give up on work, and be lost to gainful employment,” said Randall Olsen, economist and director of the Center for Human Resource Research at Ohio State University.

“These people face very little hope currently. Nobody knows what’s going to happen to this generation of people.”

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