We’ve lost count, a few years ago, of the number of times President Obama has “pivoted to the economy.” It’s a three or four times a year ritual for him. Along with a speech about the millions of jobs he’s created. Or saved. Or something.
This summer we get to watch the next generation of workers fend for a job and eventually lose hope and go play video games. It doesn’t take long for 16 and 17 year olds to lose hope and this summer will be a crusher.
Using U.S. Census Bureau data from May 2013 to April 2014, the analysis reveals that in Riverside-San Bernardino area of Southern California, the unemployment rate for teens ages 16 to 19 years old who don’t have a high school diploma is 54.2 percent.
In the Portland-Vancouver-Beaverton, Ore., metropolitan area, the unemployment rate from that population is 53.8 percent.
Three other California metropolitan areas round out the Top 5 cities with the highest unemployment for the least skilled young people – Los Angeles-Long Beach-Santa Ana (39 percent), San Diego-Carlsbad-San Marcos (37.5 percent) and San Francisco-Oakland-Freemont (35.2 percent).
The cities rounding out the Top 15 are Philadelphia-Camden-Fremont (33.2 percent), Chicago-Naperville-Joliet (33 percent), Pittsburgh, Pa. (32.9 percent), Sacramento-Arden-Arcade Roseville (32.1 percent), Baltimore-Towson (31.4 percent), Tampa-St. Petersburg-Clearwater (31.2 percent), St. Louis (28 percent), Miami-Fort Lauderdale-Miami Beach (27.3 percent) and Dallas-Fort Worth-Arlington (26.5).
Unskilled young people are unemployed at a rate of 25% to 50% in major cities. This is not a problem, it’s a crisis. Young people build their working skills not in school but by working in “entry level jobs.” Jobs that require little to no skill and little to no experience. They fill those kinds of jobs because they have neither of those qualities. The part of the equation that politicians in general, and Democratic politicians in particular, refuse to face is that because they have neither skills nor experience they aren’t worth much to an employer. Their marginal contribution to any business is pretty much nil.
Because their contribution is very minimal, their jobs are subject to the hard reality of economics more than any other positions. In other words, when the marginal cost of employees who don’t contribute goes up, those employees go away. Positions get consolidated and employers find ways to do more with less.
Chicago just raised the minimum wage in the city to $15 per hour, it will step up over the next few years. You can expect to see Chicago’s youth unemployment rate going up dramatically over the next few years and you can also expect to be ordering your burger and fries from a touch screen.
As weak as the O’recovery has been nationwide (unless you’re a government employee or a lobbyist) it’s been utterly non-existent for kids. It hasn’t been much better for those in their prime working years – 25-54. The following chart demonstrates the problem, and the red line is the important one. The blue line is the labor force participation rate for that age group. It’s dropping, but it doesn’t begin to highlight the extent of the problem because it doesn’t count millions of younger people, namely college graduates who’ve decided to stay in school – and run up significantly more student loan debt – because they can’t find a job with the bill of good they were sold about their bachelor’s degree in whatever. The other group it doesn’t count are those people who’ve just dropped out of the workforce and stopped looking for a job.
The red line accounts for both of those groups because it measures employed vs. total population. Note the huge drop-off during the recession in 2008-2009. You can look back historically and see the huge drops in other recessions, particularly in 1981-1983 when Ronald Reagan came into office. You’ll also want to note the very sharp uptick in people working after each of the earlier recessions and the flat line since the end of the last recession. That flat line is what passes, in Progressives world, for a recovery.
Not only do we have millions of able bodied workers collecting some sort of government dole, we’ve got millions of young people who are not learning how to work and are blunting their ability to build a career because they aren’t working. We can tell you from personal experience as both a hiring manager and a business owner, given the choice between a high school grad (or especially a veteran) with real work experience and a graduate from any grad school with a freshly minted master’s degree and no experience, we’ll take experience every time, unless the job requires skills learned in college, like engineering or science.
What the O’recovery is bequeathing to the next generation is a workforce that is, at the bottom end where everybody starts, a workfarce. They have no skills, they have no experience showing they understand work at any level, they have a sense of entitlement, and the state is mandating a minimum wage that immediately prices them out of being able to get the skills and experience to move beyond “entry level.” Add to that the drive by all of the Washington Establishment to pass an amnesty bill that will flood the low end of the job market with an additional 40 million unskilled but newly documented aliens and you’ve got a perfect storm.
This is one of those times we’re glad we’re old.