According to the Bureau of Labor Statistics, less than 78% of
people aged 20 to 34 either have jobs or are looking for work. That’s down from
the highest point of 83% in 2000, and the lowest since the 1970s.
The frail economy is the leading thing keeping young people out of
work.
Recessions are mostly hard on the young, with last-in, first-out
policies at many organizations and a preference at firms to freeze hiring
before they start laying off employees, which mainly affects recent grads.
But there are other reasons in addition that could mean a
permanent shift in workplace demographics. These reasons are what economists
call “structural changes”.
Staying in school: Economists generally agree that, aside from the
economy, extended education is the biggest reason why today’s youth are
shunning the job market.
More people are going to college now and they’re taking longer to
finish. It is about 25% more compared to 2000.
There are a small number of motives why young people are paying
out more years at school.
Foremost, they’re getting more advanced degrees.
“We used to say that a high school degree wasn’t sufficient to
provide a middle class income,” said Bill Rodgers, a professor and chief
economist at Rutgers University’s Heldrich Center for Workforce Development.
“Now we’re saying no longer is a bachelor’s degree.”
Subsequently, college is getting more costly. Rodgers believes the
amplified financial problems of higher education is also making people to take
longer to finish, as they’ll take less classes for each semester or drop out
for phases of time previous to scraping up sufficient money to enroll again.
Staying home: Since 2000, married women between the ages of 25 and
34 have been leaving the labor force at a slightly higher rate than young people
at large, according to BLS.
There could be many reasons for that, but Rodgers thinks stagnant
wages over rising child care costs are two of them.
“The recession has caused a lot of people to do a gut check on
what they want in their lives,” said Rodgers. “They’ve decided they want to
spend time with their kids.”
Living longer: People are also living longer. Longer lives
frequently mean holding up several of life’s big mile stones such as graduating
from college, getting married, buying a house and having kids.
“They are going to live a lot longer than their parents and their
grandparents, and they know it,” said William Galston, a Brookings Institution
fellow who has studied issues of 20-somethings. “If you think you’re going to
live until 90, why rush into marriage at 23?”
Yet marriage, and the responsibilities that often come along with
it, is a big incentive for people to get and keep a job. “Committed
consumption” is what economists call it.
“You’re more answerable than you were before,” said Galston. “You can’t
just drift around.”
Giving up: Changing workplace tendencies have meant lesser
opportunities for those just starting out. A major one: the baby boomers
postponement retirement. They’re also living longer, and they’re realizing they
may not have stashed away enough money for retirement.
As a consequence, they tend to keep their jobs.
According to BLS, the percentage of the people aged 55 and over in
the workforce has gone from just over 30% in 2000 to over 40% currently.
The effect is smaller quantity on the lower end of the job
opportunities, which has kept a lot of millennials on the sidelines.
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