Young Workers and Labor Market Withdrawal

Although August showed an improvement in unemployment, part of the reduction in joblessness arose from people simply giving up on seeking employment.  After one of the longest downturns in most of our lives, some job seekers simply chose to not look for employment actively any more.  This decision makes federal and state statistics look better, but affects our labor force negatively from a productivity, skill development, and capability standpoint.

One of the greatest concerns arising from this withdrawal from the market is the impact it is having on the future workforce.   According to the Department of Labor Department, 435,000 fewer young adults (16 to 24) are without jobs when comparing August to July 2012. However, a mere 27,000 sought work.  What does this mean? Young people continue to give up on the labor market due to a lack of opportunities.  Consequently, the percentage of young people in the workforce stands at the lowest level since 1955.  Unemployment among the young reached 16.8 percent in August.  For those that have jobs, a significant number are underemployed (

What is the impact of these changes?

A May 2012 study by Rutgers University, Chasing the American Dream: Recent College Graduates and the Great Recession ( examined a national sample of 444 recent graduates and found a few key considerations:

  • Work status varies considerably (51 percent are employed full time while 12 percent are part time)
  • Only 4 in 10 reported that their job required a four-year degree while only 20 percent saw the job being relevant to their career path.
  • Almost 25 percent of those with jobs took jobs not related at all to their degree with 42 percent claiming it was for purely survival reasons.
  • Median starting salary was roughly $3,000 less than before recession.
  • Almost25 percent make less than expected based on field of study.

What does this mean for us as human resource professional?

  • As the economy improves, younger workers will seek more compatible options and join those seeking to recoup lost spending power from the downturn;
  • A higher portion of employees will have a wider variety of experiences before joining your organization that may improve their flexibility, adaptability, and innovation;
  • Concerns with instability will impact engagement and culture more specifically than in previous generations; and
  • Demand for more specificity in career paths and development will grow as younger workers seeks to recoup lost time.
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