Investing January 28, 2002

Joblessness Hits Youths Hard

January 28, 2002 (PLANSPONSOR.com) - Younger workers are often hardest hit by a tight job market, according to USAToday.
Reported by

The trend is alarming because youth unemployment can hamper income and advancement later.

The jobless rate for people ages 20 to 24 hit 9.6% last month, while the unemployment rate for 16- to 19-year-olds is topping 16%, according to the Department of Labor (DoL). That’s far above the national jobless rate of 5.8%.

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Here’s why youth unemployment is up:

  • employers want skills and proven performance,
  • high school and college-age students were disproportionately represented in the
    high-tech industry that was hit hard by the downturn, and
  • rising unemployment has prompted some older workers with more experience to take more entry-level jobs typically held by younger hires

Early unemployment delays the gains in experience and training that typically lead to higher salaries, according to an Employment Policies Institute study.

Thirteen weeks of unemployment experienced as long as four years ago reduces average hourly earnings by more than 1%, according to the study.

More than 44% of the unemployed are under 30, according to an analysis by the Employment Policy Foundation. Only a third are heads of families. 

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