Policy
The economic outlook is bleak for new workers and for millennials who entered the labor force after the 2008 economic crisis. The employment rate for 20-24 year olds is down 25% from March to April and down 16% for 20-29 year olds. For workers without degrees, and for minority workers, the outlook is more pronounced. A report released just prior to the onslaught of the virus showed that young college graduates had unemployment rates greater than those for the general population but less than that suffered by those without a degree. It further showed that 41% of recent college graduates worked in jobs not requiring a college degree. Data from the 2008 economic crisis suggest that job losses and bouts of unemployment have a lasting impact on career trajectories and lifelong income. There is evidence that job insecurity and competition make people “risk averse,” and less likely to change jobs which may provide a promotion or more opportunities in the future. People who have come of age, between the ages of 18-25, in periods of economic downturn are more likely to believe in luck rather than effort as a significant element of success. Loss of income and poor job security are linked to a disinclination to marry or to have children. Millennials have suffered two unusually severe periods of economic crisis and its full impact on their adulthood is yet to be seen though, as a group, they are less well off at the same age when compared to Gen Xers and baby boomers..
New job seekers, particularly those from affluent families and with college degrees, can choose to sit out the labor market for a “gap year.” Pursuing an interest or hobby is not likely to reflect poorly on their potential and the labor market may be more favorable in the next year. Workers without the luxury of sitting out in their parents’ home and/or doing something other than unpaid work face debt, unpaid bills, and poor prospects. Workers who lose jobs and/or take jobs that are not the desired type will face long term fallout.
Analysis
One obvious help would be for the government to ensure that workers are not laid off but for many that ship has sailed. Preserving employment would lead to bills being paid and debt being attended to. Even a pay cut, coupled with student loan deferments, would leave new and young workers in a better position. Other policies should focus on helping retail, leisure, and hospitality industries where young people are likely to be disproportionately employed. One fear is that older people, past retirement age, who own shuttered businesses, may decide not to reopen adversely affecting the prospects of young workers. Politically, for some young workers who formerly aligned with the Republican Party and other moderates, there is some evidence that they are swinging progressive. Young people are strong supporters of Bernie and also of Alexandria Ocasio-Cortez and are impacting the platform of the Democrats. If the trend continues, it can mean a new political landscape.
Learn More:
- https://www.nytimes.com/2020/05/19/business/economy/coronavirus-young-old.html
- https://www.theguardian.com/society/2020/may/19/young-workers-jobs-covid-19-crisis-resolution-foundation-economic-fallout
- https://www.insidehighered.com/quicktakes/2020/02/18/41-recent-grads-work-jobs-not-requiring-degree