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April 22 2016

High School Grads Involuntarily Join the Leisure Class

Patrice J. Lee

High school graduation season is nearly upon us. For seniors, they will don the most important outfit to date: a cap and gown. But what’s next for the high school graduating class of 2016? New research suggests that the answer for too many is nothing at all.

In the wake of the Great Recession, idleness is on the rise for those leaving high school and college. About one out of every six high-school graduates went on to do nothing after they earned their diploma.. We have 1.4 million young people ages 17 to 20 who are neither working or nor furthering their education.

According to the left-leaning Economic Policy Institute, which analyzed Labor Department data, the share of idled young people has not recovered with the recovery of the Obama economy. This is unusual, because the number of young people who are neither working nor in school typically tracks the health of the overall economy, but not after the recent Recession. After the 1990-91 and 2001 recessions, they elevated, but lowered  following economic recoveries. However, the level of idleness remains elevated today and is much higher than before the recession.

Common jobs after high school may be entry-level positions such as clerks, repairmen, retail associates, and customer service agents. However, the job market is difficult for high school grads. Some 17.9 percent of young high school grads is unemployed compared to 15.9 percent in 2007 and one in three (33.7 percent) are underemployed now compared to just over one in four (26.8 percent) in 2007. The picture is a little better for college graduates but they struggle too.

Young people of color are more “idle” as well with black high school grads facing 21 percent unemployment and Hispanic high school grads facing 17.2 percent unemployment compared with the 14.6 percent for white counterparts.

Young men are particularly affected. Their idleness rates have climbed to nearly 20 percent which is 5 percent points higher than previous recessions when their idleness hit about 14 percent. By contrast, young women have fared better.

Worst of all, real average wages for high school graduates has actually dropped from 2000 to $10.66 per hour.

So what are these idle young people up to? The Wall Street Journal reports:

The young and idle could be applying for jobs or for school and having a tough go of it; others could be falling back on parents or family.

“It’s not clear exactly what they’re doing,” said Elise Gould, an author of the report along with Teresa Kroeger and Tanyell Cooke.

What is clear is that high-school grads are doing much worse than college grads.

“Young workers are hit harder in bad times and that’s just persisting,” Ms. Gould said.

Overall, EPI finds that the class of 2016 has better prospects than those from 2009 to 2015. But for most of the 1.4 million high-school grads who aren’t building a resume, at school or on the job, those prospects must seem very remote.

While this data is eye-opening, EPI’s policy recommendations will do nothing to help grads (both high school and college). Minimum wage hikes make low-skilled, entry-level positions more expensive, leading many employers such as restaurants to shift to automated services. Employers will get around overtime rules by dismissing workers, but still holding them accountable to the same level of performance and firing them if they don’t meet expectation. Collective bargaining raises wages for some at the cost of other workers who are willing to be paid less or are not unionized.

We need to make younger workers, especially those who are unskilled and looking for skills and experience, attractive to employers. We also to see these workers have the flexibility to negotiate with their employers as needed. Inserting federal regulations only disrupts that employer-employee relationship and both parties suffer.

If the economy has recovered to the extent it is going to, we may be facing deeper, structural changes to the economy that don’t bode well for high school grads. Our secondary education system needs to adjust to the realities of a new economy that demand skills and knowledge that they may not be taught to students today, to prepare them better for more education or the jobs that are available.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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