KY Policy Blog

The State of Working Kentucky 2012: Youth

By Sean Litteral
December 13, 2012

In times of recession and high unemployment, it’s particularly hard for young people to find jobs. Competition for the jobs that do exist becomes more intense, making it harder for less-experienced workers to obtain employment.

That can be seen in the unemployment rate for Kentucky youth under age 24, which stood at 19.9 percent in 2011 compared to 9.5 percent for the entire Kentucky workforce. Young adults have experienced the brunt of the economic downturn and their climb from the trough of the recession has been slow.

The youth unemployment rate rose substantially after the recession began in 2007. It increased from 12.7 percent that year to a peak of 20.6 percent, or one in every five, in 2010. In comparison, during the recession and its aftermath the annual unemployment rate rose as high as 9.7 percent for Kentuckians ages 25 to 54 and 7.5 percent for those ages 55 and older.

youth table

Source: Economic Policy Institute analysis of Current Population Survey Data

Even more telling of the struggle experienced by young adults is the underemployment rate—which in addition to the unemployed includes those who have taken part-time jobs to make ends meet but would prefer full-time work and marginally attached workers who would like work but are currently discouraged or are unable to work because of barriers like transportation. The overall underemployment rate for youth in Kentucky jumped from 19.6 percent in 2007 to 31.3 percent in 2011. So, nearly one in every three young adults in the Kentucky workforce would like full-time work but cannot find it.

The disproportionate effect of the economy on young people is also demonstrated by the share of young part-time workers whose part-time status is involuntary and due to economic reasons. That share rose from 13 percent in 2007 to over one in every four by 2011.

The economic situation facing young Kentuckians is made worse by the rising cost of higher education. Tuition increases result primarily from state budget cuts to postsecondary institutions—a decline, adjusted with inflation, of nearly 23 percent since 2008 in state-per-student spending. The combination of rising education costs and scarce employment make it more likely that young adults will suffer long-term consequences as a result of current economic conditions.

As indicated in one report, those consequences include a loss of human capital and work experience that results in lower future wages. Unable to find work that matches their education, young people who find jobs during bad economies often do so in fields requiring less training, leading to a degradation of skills and a lower-wage career trajectory. Graduating during an economic downturn has a large, negative effect on wages compared to those entering the labor market in good times.

The need for faster job growth spurred by short-term federal investment is critical for young adults in Kentucky both to help them make ends meet now and to improve their long-term economic well-being.

The State of Working Kentucky 2012 is a series of blog posts highlighting how Kentucky workers and families are faring in key indicators of economic well-being including employment, income and wages.

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