July 2009 Youth Unemployment Rate of 18.5% Was Highest on Record
The Bureau of Labor Statistics (BLS) is reporting that the youth unemployment rate in the United States was 18.5% for the month of July, which is the highest ever rate on record.
The youth unemployment rate includes people aged 16-24, and was first tracked in 1948.
Based on the numbers released by the Bureau of Labor Statistics, many young people will be returning to school this year with empty pockets. The number of young people employed in the month of July was just 51.4%, which is the lowest July rate on record. July is traditionally the peak month for youth employment, due to the fact that many youths are off from school and looking to earn money.
The July 2009 unemployment rate for young men was 19.7%, while the unemployment rate for young women was 17.3%.
The youth unemployment rate in the United States has spiked dramatically since 2007, due to the disintegration of the overall job market. The youth unemployment rate was 10.8% in July of 2007, meaning that we have witnessed a near 8% increase over just two years.
How does our current July youth unemployment rate compare to rates posted during previous recessions?
In 1982, when the United States was battling high unemployment rates and inflation, the July youth unemployment rate was 17.3%.
In 1992, when the United States was dealing with a major slowdown in the economy, the July youth unemployment rate was 14.5%.
The last time that the youth unemployment rate was below 10% was 2000, which was at the height of the dot-com boom.
The lowest youth unemployment rate on record for the month of July? 5.7%, which was posted in July of 1953. That number seems almost ridiculously low given our current economic troubles.
The industry that employed the highest number of youths in July of 2009 was Leisure & Hospitality, followed closely by Retail Trade. Leisure & Hospitality includes food services, which would include all of the people working at places like McDonald's, Starbucks and Burger King.
It's certainly not surprising that the youth unemployment rate is spiking. Many companies have had to cut back due to the "Great Recession", which means that many young people have been unable to find jobs. There are few industries that are thriving right now, and even fewer that can accommodate millions of unemployed youth workers.
High youth unemployment results in a greater need for student loans, an increased burden on the average American household and less youths being able to afford post-secondary education. All three of these issues have a dramatic impact on the overall health of the nation over the long-term.
Given the current state of the economy, the prospects for a major dip in the youth unemployment rate over the next couple of years seems pretty slim. I suspect that the overall unemployment rate will remain fairly high in the United States for the foreseeable future, which doesn't help the job prospects of those between the ages of 16-24 going forward.
Source: Bureau of Labor Statistics - Summer Youth Labor Force News Release
Filed under: The Economic Meltdown