Jobs Crisis Will Affect Young Workers for a Lifetime, More Recovery Aid Needed

by Seth Michaels, Oct 16, 2009

Speaking at the second and final day of the Demos conference, A Better Deal 2009, Algernon Austin, an analyst at the Economic Policy Institute (EPI), said the U.S. economy was failing young people long before the current recession was officially declared. He called the prospects for young workers “bleak” and said the nation needs additional investment in recovery.

Even before the recession, we had a very weak economy in terms of job growth, economic growth—it was one of the historically weakest periods for job growth—and now we’ve been hit with the hardest recession we’ve seen since the Great Depression. For young people, this impact has been particularly difficult.

It was a bad economy generally from 2000 to 2007, but it was a very, very bad economy for young people. For individuals from 25 to 34, household income declined 4.6 percent before the recession—and all the bad trends that occurred from 2000-2007 have multiplied in their impact.

Austin was among several experts discussing the current U.S. economy and its impact on young people at the panel, “On the Rebound? The Great Recession and Its Impact on Young People.” Other panels focused on issues like retirement security, family leave and the need to engage young people politically.

The recession is hitting young people in devastating and long-lasting ways (as we found in the AFL-CIO “Young Workers: A Lost Decade” report), and solving these problems will require an immediate focus on job creation, as well as long-term investments to build a strong economy through education, training and infrastructure, panelists at “On the Rebound” agreed. Although the American Recovery and Reinvestment Act prevented a more severe depression, the jobs crisis requires more direct action.

It’s even worse for young families with children, Austin noted. Child poverty is high and will have long-lasting negative consequences. Delays in starting on the career ladder damage the lifetime earning power. Indeed, a young person just entering the job market today, Austin says, will be earning about 8 percent less than if they had entered the job market in 2000.

Discussing the long-term damage caused by the recession, Paul Roales, a city council member from West Lafayette, Ind., said there is a “vicious cycle” at work. He noted that educational outcomes, which impact earnings over a lifetime, are affected by immediate financial strains. Students are going into debt to pay for higher education, working to pay for necessities and frequently living with parents to save on rent. If their parents’ jobs are tenuous, that provides additional strain.

Because of layoffs across generations, said Ditashiah Norris-Kohn, who works with the Brooklyn, N.Y.-based DREAMS Youthbuild training program, young people who typically would get entry-level positions are competing for jobs against unemployed, middle-aged workers. When competition for jobs is so fierce, it gets hard to take critical first steps on the career ladder, Norris-Kohn said, so we need to invest in mentorship and training programs to make sure youth can get a good start in their careers, especially those from marginalized and low-income communities.

Caitlin Howarth, policy director at the Roosevelt Institution, pointed to ways that a second stimulus program could work to build a stronger long-term economy. Investing in the nursing sector is a great opportunity to get young people into important, career-ladder jobs, Howarth said, but we need training and mentoring to get people to a position to become a nurse. She also pointed to important student loan reforms she hopes will pass in Congress this year, as a way to put young people on sounder financial footing.

Austin noted another key element that must be addressed: racial justice. We can’t build to a better future without acknowledging and working to fix racial disparities in poverty and educational attainment, he said. Those disparities are not sustainable because rising generations are more racially diverse. The history of race and economics in this country has been about pitting people against each other, Austin said, and we simply can’t do that anymore.

We can pull out of this recession and build a strong foundation for a fair economy, Austin said, but we need serious investments now in infrastructure and education—both for the short-term relief this investment provides and the long-term needs of our economy.

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