The Great Depression threw those views into question. Millions found themselves unable to find jobs, even when they wanted to. The Bureau of Labor Statistics began to create an unemployment rate in the 1930s, and with it a definition of what qualified as “the workforce” and of what it meant to be unemployed. A key aspect of the definition was not that you were “out of work” but rather that you were actively looking for a job, yet unable to find one. It pointed to a flaw — either temporary and cyclical, or longer-lasting and structural — with the labor market and, by extension, with the economy as a whole.
Today, the high levels of youth unemployment are viewed primarily as a breakdown in the labor market and a sign of a failing system. That’s why so many call it a “crisis.” But if you start to look at the patterns of youth unemployment, a different set of conclusions is possible.
It’s best to start with the unemployment rate among recent college graduates, which attracts the lion’s share of attention. According to a recent Georgetown University study, about 8 percent of recent college graduates are unemployed, and the number is about 10 percent for students majoring in the arts, law, public policy, and most social sciences. The BLS actually says the situation is worse, with the unemployment rate for those under the age of 29 with only a bachelor’s degree above 15 percent for men and around 11 percent for women.
And the true unemployment numbers might actually be higher. For instance, in assessing unemployment among younger people the Bureau of Labor Statistics faces greater challenges in obtaining responses from cell phone users who don’t have land lines. Moreover, many of these recent grads are working in a succession of short-term jobs, which is difficult to classify in employment surveys.
Take a 25-year-old woman I met recently, who left her job to develop an app, work on a live-stream talk show, and write a book. If by some chance the Bureau of Labor Statistics contacted her, she would say that she doesn’t have a job, and hasn’t been looking. She would simply evaporate from the labor force and not be considered unemployed. But are her decisions a symbol of systemic crisis and failure? No.
Most economists believe that not having a job in your twenties has systemic repercussions for years to come. A study from the Center for American Progress claimed that, “the nearly 1 million young Americans who experienced long-term unemployment during the worst of the recession will lose more than $20 billion in earnings over the next 10 years. This equates to about $22,000 per person.”
Yet we should be wary of these statistics. The BLS has only been collecting data on age, unemployment and subsequent incomes for a few decades. That is not enough time to make conclusions. Even if accurate, the $22,000 figure doesn’t factor in how much was recouped in unemployment and other benefits, which likely would lower that figure considerably.