NCPA - National Center for Policy Analysis

One in Three Young U.S. Workers Are Underemployed

May 14, 2012

It's not news that the economy is down and that unemployment is up.  American workers have been scavenging for jobs for years, accepting positions that underutilize their skills and swallowing salaries that are lower than they are accustomed to.  Regardless of occupation or place in life, it's impossible to say the recession hasn't affected every single American.

But a new Gallup study reinforces what people intuitively know: recessions do not hurt everyone equally.  Specifically, this economy has been particularly harmful to young people (ages 18-29), who have even bleaker job prospects than their more-experienced counterparts.

This can be seen first in their unemployment rates:

  • Unemployment among young adults, as measured by Gallup without seasonal adjustment, increased to 13.6 percent in April, up from 12.5 percent in March and the same as in April 2011.
  • Their 13.6 percent rate in April compares with 7.0 percent in the 30 to 49 age group, 6.2 percent among those aged 50 to 64, and 4.9 percent among those aged 65 or older.
  • Aggregately, young people face a 13.6 percent rate while the economy as a whole faces mere 8 percent unemployment.

Furthermore, young people are increasingly vulnerable to underemployment, where a worker is either unemployed or currently employed part-time but is actively seeking full-time work.

  • Thirty-two percent of 18- to 29-year-olds in the U.S. workforce were underemployed in April, as measured by Gallup without seasonal adjustment.
  • This is up from 30.1 percent in March and is slightly higher than the 30.7 percent of a year ago.
  • Underemployment among all Americans, on the other hand, has declined over the past year to 18.2 percent in April from 19.3 percent in April 2011.
  • Underemployment in April was 14.0 percent among those aged 30 to 49, 13.6 percent among those aged 50 to 64, and 12.7 percent among those age 65 or older.

One of the explanations for this disproportionate impact on young workers is their inability to self-employ -- a common response to being out of work.  Most young people lack the necessary experience and knowledge to employ themselves, and so this is not an option.

Source: Dennis Jacobe, "One in Three Young U.S. Workers Are Underemployed," Gallup, May 9, 2012.

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