Tag Archives: Jobs

Rising Unemployment among Youth (Ages 16-24) in the OECD

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In last week’s post on the December 2011 unemployment numbers in the OECD, we showed how the total unemployment rate across the OECD has remained relatively stable in recent months, ending December 2010 at 8.2%; the same rate as in November 2010. While some countries—i.e., Germany and the United States—have seen a consistent decrease in unemployment since September 2011, the majority of states have not been so lucky: Spain, for example, ended 2010 with a shocking 22.8% unemployment rate, more than 8% higher than the country with the second highest unemployment rate (Ireland, with 14.5%).

What we did not discuss at the time, however, was the disproportionate impact the economic crisis has had on certain age groups. Today, we look at unemployment trends among the youth (ages 16-24); trends that are much more alarming than the overall unemployment trends.

The first chart, below, displays youth unemployment rates from January 2000 through December 2011 for the EA-17 (e.g., the 17 European Union member states that have adopted the Euro as their currency) and the EU-27 (e.g., all 27 European Union member states). From a low of around 15% unemployment at the start of the economic crisis in 2008, youth unemployment has grown to over 21% in 2011 with no sign of abating.

Source: Eurostat

The following chart uses the same Eurostat data, but looks at within-country trends over the past 4 years. We’ve also included the United States in this sample.

Note: The data labels represent the unemployment rates in Q3-2011.

 

Viewing the data in this way shows just how dire the situation is for younger job seekers in many countries. In Spain, the youth unemployment rate rose from an already high 24.6% in 2008 to 47.8% by the third quarter of 2011, more than twice as high as the total unemployment rate of 22.8%. A similar trend is seen in the other Southern European countries, including Italy (from 21.3% in 2008 to 28.2% in 2011), Greece (from 22.1% in 2008 to 45.8% in 2011), and Portugal (from 20.2% in 2008 to 29.9% in 2011).

As for the United States, the youth unemployment rate increased from 12.8% in 2008 to 17.5% in 2011; well below the EU-27 average of 21.6% in 2011, but close to double that of Germany (8.6%), Austria (7.3%), and the Netherlands (7.6%).

In short, it is important to keep different demographic age groups in mind as we evaluate economic trends. From this data, it is clear that the youth have been particularly affected by the Great Recession, and the recent economic gains (at least in the case of the United States) have done little to improve the situation of this group.

 

Job Openings Nearly Double Since the Peak of the Great Recession

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Current Events 2012

Earlier this week, the Bureau of Labor Statistics released their December job openings report covering the period through the last business day of December 2011. Generally speaking, the news was good but mixed. There were a total of 3.4 million job openings on the last business day of December 2011, up from 3.1 million in November 2011. Much of this increase came from nonfarm jobs, where the number of openings increased from 2.3 million in November 2011 to 2.5 million in December 2011.

As the graph below shows, the number of total openings (nonfarm) is still down significantly from the period before the Great Recession began in December 2007 (when there were 3.1 million nonfarm openings). However, the jobs opening rate has clearly been trending upwards, with the number of openings in December 2011 being almost double the 1.6 million openings in July 2009 (the month following the official end of the recession).

Employment in the US: January 2012 BLS Figures

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Current Events 2012

This morning, the Bureau of Labor Statistics released its report on the U.S. employment situation for January 2012, showing once again positive signs of improvement in the U.S. labor force. As the chart above shows, the unemployment rate has fallen for the fifth month in a row: dropping from 8.5% in December to 8.3% in January; the lowest it has been since President Obama’s first month in the presidency (February 2009). (The chart is color coded red for months that President Bush was in office, and blue for President Obama).

In January, total nonfarm payroll increased by 243,000 jobs. Job growth was widespread throughout the entire private sector, with large increases in professional and business services (+70,000 jobs), leisure and hospitality (+44,000 jobs), and manufacturing (+50,000 jobs). Government employment, however, continues to stagnate: in the past 12 months, the sector has lost 276,000 jobs.

On the less positive front, the number of long-term unemployed (e.g., those who are unemployed for 27 weeks or longer) remained high in January at 5.5 million, accounting for 42.9% of the unemployed.

In short, as with the recent numbers on GDP growth for the 4th quarter of 2010, the economy continues to trend in the right direction.

 

2012 State of the Union Address: Obama’s Specific Policy Proposals

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Last night, President Obama made his third State of the Union (SOTU) address, which focused in large part on the issue of economic fairness in the U.S. Like most SOTU addresses, much of his speech focused on broad goals for the coming year. However, perhaps more so than previous years, the President also called for a number of specific policies to be enacted. In this article, we provide a brief recap of these policies, dividing them by theme.

Tax Reform / Deficit Reduction

  • Remove tax deductions for companies that outsource jobs.
  • Introduce a “basic minimum tax” for every multinational company, so as to prevent them from evading taxes by moving jobs and profits overseas.
  • Double the tax deduction for high-tech American manufacturers that make their products in the U.S.
  • Make the tax code fairer, including the adoption of the Buffett Rule: if you make more than $1 million a year, you should not pay less than 30 percent in taxes.
  • End tax subsidies and deductions for individuals earning more than $250,000 a year.
  • Extend the payroll tax cut (set to expire in February 2012).

Trade

  • Create a Trade Enforcement Unit that will be charged with investigating unfair trade practices.

Jobs / Job Training

  • Tear down regulations that prevent aspiring entrepreneurs from getting financing.
  • Expand tax relief to small businesses.
  • Provide resources to community colleges to become community career centers.
  • Reduce the maze of confusing job-training programs and create one website where unemployed workers can go for information.

 Education

  • Grant schools more flexibility to keep good teachers on the job, reward the best ones, and replace ineffective ones.
  • Call on every state to require that all students stay in high school until they graduate or turn 18.
  • Extend the tuition tax credit for college loans.
  • Double the number of work-study jobs in the next five years.

 Immigration

  • If comprehensive immigration reform is unachievable this year, at least pass legislation that allows young people who “staff our labs, start new businesses, and defend this country” a path to citizenship.

Energy

  • Safely develop natural gas resources.
  • End subsidies for Big Oil.
  • Pass clean energy tax credits.
  • Allow the development of clean energy on enough public land to power three million homes.
  • Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings.

 Infrastructure

  • Clear away red tape that delays construction projects and increase infrastructure spending (using money previous spent on the wars in Iraq and Afghanistan).

Housing Market:

  • Give every responsible homeowner the chance to save about $3,000 a year on their mortgage by financing at historically low interest rates. Pay for this by introducing a small fee on the largest financial institutions.

 Consumer Protection

  • Establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments.
  • Create a special unit of federal prosecutors and leading state attorneys general to expand investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.

Government Reform

  • Ban insider trading by Members of Congress.
  • Prevent those who bundle campaign contributions for Congress from lobbying Congress.
  • Reform Senate rules to force an up or down vote on all judicial and public service nominations within 90 days.
  • Consolidate the federal bureaucracy to improve the responsiveness of the Executive branch.

Foreign Policy

  • Prevent Iran from getting a nuclear weapon using all options available.
  • Pass legislation that secures the country from the growing danger of cyber threats.
  • Create a Veteran Jobs Corps that will help communities hire veterans as cops and firefighters.