Like a young Kevin Bacon getting overrun by a mob of frightened townies and up-to-no-good college students, President Obama is doing his best to stem the growing anger over the lack of economic growth. In each of his recent speeches Obama begins with a litany of statistics designed to tout how many jobs have been created over the past 40 months, how fast the private sector is growing and how many foreign companies we’re attracting to our shores.
But as the famed author Mark Twain wrote, “facts are stubborn, but statistics are more pliable.” And the fact is that the job market remains no better than it did in the midst of the recession. For proof look no further than last week’s official jobs report which revealed that if the labor force participation rate (the share of Americans with a job or looking for once) was the same as it was when President Obama took office the unemployment rate would be 11.2 percent.
While that is scary in and of itself, the underlying, rarely-reported story is even more terrifying. The labor market isn’t shrinking because discouraged workers are throwing up their hands and resigning themselves to early retirement or eking out an existence on the government dole, it’s shrinking because young adults aren’t even trying to get in.
In a new paper for the Urban Institute, Austin Nichols and Stephen Linder challenge the conventional nation that the “discouraged worker effect” is to blame for the shrinking labor force. They found that rate of labor force exit is actually lower than it was following the 2001 recession, which was much milder than the more-recent financial crash. Instead, they found that a decline in entry, particularly among young women, is the real culprit.
“The dramatic drop in labor force participation during and after the Great Recession has been driven by a decline in labor force entry rates rather than substantial increases in the share of workers becoming discouraged and leaving the workforce,” write the study’s authors.
That could have profound effects on an entire generation.
One of the ongoing themes of this recession has been the disastrous plight of the long-term unemployed. As time elapses these workers become essentially unemployable as businesses look at the gap in employment as shorthand for someone whose skills have eroded beyond repair. And once a worker is locked into this downward spiral, there is little hope of escape. As Matthew O’Brien writes for the Atlantic:
“Long-term unemployment is a terrifying trap. Once you’ve been out of work for six months, there’s little you can do to find work. Employers put you at the back of the jobs line, regardless of how strong the rest of your resume is. After all, they usually don’t even look at it.”
If the economy is so bad that many graduates are choosing to sit on the sidelines rather than even attempt to enter the labor force then we’re at risk of having an entire generation that is unemployable. Young adults are being squeezed on one end by employers who refuse to accept gaps in a resume and by a steady stream of new graduating classes on the other. The economic door has already been slammed shut by the recession, and now the window of opportunity is becoming impossibly narrow.
Young adults deserve better. We deserve better than the fact that 36 percent of young adults aged 18 to 31 were living with their parents in 2012, the highest share in at least four decades. We deserve better than the 15.6 percent unemployment rate for 18- to 24-year-olds, which is more than double the total 7.6 rate. And we deserve better than an economy that pumps out part-time, low-wage jobs rather than fulfilling careers.
All is not well in America. Since he’s shown no inclination to fix that reality, at the very least President Obama could give it to us straight.