Oregon Labor Market Information System
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Endangered: Youth in the Labor Force
by Nick Beleiciks
Published Jun-20-2014

 
Oregon added tens of thousands of new jobs while recovering from the Great Recession, but recent job growth completely overlooked younger workers. There were fewer workers in Oregon ages 14 to 21 in 2012 than in 2010. Young people are spending more time on education and face increased competition from older workers for jobs traditionally held by younger workers. Although higher levels of education improve a worker's job prospects and lifetime earnings, many of the essential "soft" skills that employers value are gained through early work experiences.

Our new report  Endangered: Youth in the Labor Force is an overview of the labor market situation faced by teens and young adults. This article is a summary of the report's findings. The full report is available online at www.QualityInfo.org .

Youth Face High Unemployment Rates
 
Unemployment rates for youth increased drastically during the recession and have not returned to previous levels. The unemployment rate of Oregon teens ages 16 to 19 years was 27.4 percent in 2013, while the rate was 12.5 percent among young adults ages 20 to 24. Young people are having a much tougher time finding jobs than the overall population with an unemployment rate of 7.8 percent.

Unemployment among young workers has historically been higher than among the older population. Regulations restricting hours and limiting the nature of permissible work, and the need to schedule work around school and extracurricular activities can make it more difficult for a teen to find a job (although these regulations predate the decline of the teen labor force since 2000). But young workers account for a disproportionate share of overall unemployment. Young people ages 16 to 24 made up 13 percent of the labor force, but accounted for 29 percent of Oregon unemployed in 2013.

Graph 1
Unemployment rates high for Oregon's youth
Not Working Now the Norm for Teens
 
Having a part-time or summer job used to be the normal situation for many teenagers. The labor force participation of teens averaged around 59 percent from 1978 to 2000. The rate started falling dramatically in 2001 - both in Oregon and the nation - but never rebounded as it had after past recessions.

The decline in youth labor force participation accounts for a quarter of the overall decline in labor force participation since 2000. In other words, the declining rate is partly structural and reflects a decade-long trend. It was already low when Oregon entered the Great Recession.

Graph 2
Oregon teen participation rate at historic lows
Teens Use Fewer Job Search Methods
 
Youth use fewer job search methods than adults, and they are less likely to use personal networks and public employment agencies in their job search. National data from 2013 show that the most common job search method used by teens is sending out resumes or filling out applications. Using more job search methods could help them find more employment opportunities. Older workers are more likely to contact friends or relatives for job leads, place or answer job advertisements, and use a public or private employment agency.

The Previous Work Experience Problem
 
The time young people spend unemployed has lengthened significantly. That is time not spent gaining on-the-job experience. Consequently, the share of unemployed young people with no previous work experience nearly doubled, making it harder for them to compete with experienced applicants.

Employers have reported that finding workers with previous work experience is a priority and that finding workers with the experience they need is a major reason for difficulty filling open positions. If the majority of young people looking for work lack experience, it could be driving up the average number of weeks it takes these workers to find a good job match.

Efforts to break what appears to be a vicious cycle for young workers could have a beneficial impact on labor market outcomes and lifetime earnings. Youth need opportunities to gain initial on-the-job experience and be successful in the workplace so they can illustrate those essential skills to later employers.

Today's Youth Are Not More Likely to Be Idle
 
Counter to popular belief, the Great Recession did not increase the share of "idle" youth - those neither in the labor force nor enrolled in school. In Oregon, roughly 6 percent of teens and 10 percent of young adults were considered idle in 2012. National data going back to 1985 show that youth are no more likely to be idle today than they were in the 1980s and early 1990s, although the share of idle youth did rise in 2013 (Oregon data for 2013 is not yet available). This could be because college enrollments have tapered off after rapid growth during and following the recession.

The use of the word "idle" here is not intended to be judgmental. Some young people face life situations more complex than simply choosing between work, education, or "nothing". Stay at home parents and others with family care responsibilities, and young people with disabilities come to mind. They may not be in the labor force or enrolled in school, but they are not necessarily purposely avoiding either.

Table 1
Share of Oregon Youth Not Enrolled in School or in the Labor Force
  2005 2006 2007 2008 2009 2010 2011 2012
Oregon teenagers ages 16-19 180,746 196,959 198,057 198,520 205,933 201,726 201,199 198,801
Share "Idle" 5% 5% 5% 6% 5% 5% 5% 6%
Oregon young adults ages 20-24 246,923 238,695 245,645 244,069 263,883 255,823 263,291 263,393
Share "Idle" 9% 10% 10% 11% 10% 10% 11% 10%
Source: U.S. Census Bureau, American Community Survey, data for young adults accessed through IPUMS
Youth Substitute Education for Labor Force Experience
 
Youth today face increased requirements related to high-school graduation and college preparations, and those enrolled in school are less likely to be in the labor force than in the past. Many are forgoing early work experience to gain formal education, which could pay off long-term given the college wage premium.

The importance of educational attainment has increased over time. Competition to get into colleges may encourage young people to pursue extracurricular activities that don't pay, but that will help them get into college. One example is the increasing number of advance placement exams. Passing such exams can help college bound students and their families save on tuition costs before they even show up to their chosen college campus. In 2013, Oregon high school students took a record 26,000 advanced placement exams - a staggering increase compared with the fewer than 10,000 such exams a decade earlier.

For teenagers not in school, the job situation went from bad to worse during and after the recession. The number of not enrolled Oregon teenagers remained relatively stable, but the share of those with jobs has fallen. Among teenagers not enrolled in school, the share not in the labor force is growing. Although "idle" youth have not grown as a share of the teenage population, they are growing as a share of teenagers who are not enrolled in school. For those without a college option, the youth labor market situation is even more threatening.

Next Steps
 
Fortunately, there are ways to help the youth labor force. Oregon's Local Workforce Investment Boards work to address youth workforce development issues. Examples are listed in the full report. They also identified potential next steps for actionable items that workforce development stakeholders can undertake to address youth unemployment.

Invest funding in summer jobs programs for youth. The Oregon Youth Employment Program, created to enable youth the opportunity to experience the value of work, develop work readiness skills, improve their financial literacy skills, and learn about career opportunities, remains unfunded.

Support career readiness and career exploration, targeted to the youth population, throughout the education and workforce system. Providing opportunities for youth to acquire work experience and skills through job shadowing, mock interviews, and career exploration is the key to building the workforce pipeline.

Provide flexible, evening, and weekend classes within postsecondary institutions to accommodate youth acquiring work-related skills while still focusing on education. Establishing connections with employers throughout the educational process, including piloting new programs, will help meet the unmet demand for career-related learning skills in school.

An investment in youth employment now means long-term benefits and a successful future for the state of Oregon.