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Young Money: Midway Through 2017, Youth Economic Opportunity Still Depends On Race And Ethnicity

Midway through 2017, the youth unemployment rate is falling below 2016 levels, though labor force participation remains low.

CREDIT: Flickr user auddess.

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June’s youth jobs day numbers show us not just how youth fared this month, but a reflection point for the first half of 2017. As will be discussed, the numbers show that while youth unemployment and labor force participation have stayed steady in 2017, there remains room for improved economic opportunity for youth through targeted policies, especially when it comes to addressing the disparities that youth of color—particularly black and Latino youth—continue to face. In contrast, President Trump has worked to slash programs proven to put economic stability within reach for youth. His budget, for instance, would cut funding for workplace development and eliminate student loan repayment programs that help borrowers stay on their feet while paying back their loans. The economic stability of young people is by no means guaranteed, and we should be doing more, not less, to ensure young people have the tools they need to get good jobs and participate in the economy.

In June, the youth unemployment rate (which is seasonally adjusted, and therefore accounts for potential differences in unemployment rates season-to-season), increased by 0.3 percentage points, from 8.8 percent in May to 9.1 percent. Still, the youth unemployment rate for the first half of 2017—9.4 percent—is a full percentage point below the 2016 average of 10.4 percent. This decrease is part of a years-long decline in the youth unemployment rate since the height of the Great Recession, when youth unemployment peaked at 18.4 percent in 2010. Since then, the youth unemployment rate has consistently fallen one to two percentage points every year. Overall, the national unemployment rate (which tracks people 16 and older, versus the youth unemployment rate, which tracks just those 16 to 24), increased slightly, from 4.3 percent in May to 4.4 percent in June. The economy added 220,000 jobs.

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In June, youth unemployment rates increased across the board for white, black, Asian, and Latino youth. However, these numbers are not seasonally adjusted, meaning they do not account for other potential factors leading to increases in the unemployment rate, such as a large increase in the number of young people looking for jobs as school lets out for the summer. As such, though the increases in unemployment in June are large, they might not be out of the ordinary for changes in the unemployment rates from May to June.

The white youth unemployment rate increased by nearly two percentage points in June, from 7.4 percent to 9.3 percent. The black youth unemployment rate increased by 1.1 percentage points, from 14.6 percent to 15.7 percent. The Asian youth rate, which tends to have volatile changes because of its small sample size, jumped by 4.5 percentage points, from 7.2 percent to 11.7 percent. Finally, the Latino youth unemployment rate also increased by two percentage points, from 8.2 percent to 10.2 percent. Though these numbers are noisy because they’re seasonally unadjusted, it remains clear that black and Latino youth continue to generally face poorer economic outlooks than their white and Asian peers.

Looking at the first six months of 2017, youth unemployment numbers by race and ethnicity show similar patterns. The mid-year 2017 average white youth unemployment rate was 8.4 percent, while the black youth rate was 14.9 percent—not quite double, but nearly. Latino youth also see consistently higher unemployment rates than white youth: their 2017 mid-year average unemployment rate was 9.7 percent. For Asian youth, who experience very different economic outlooks by ethnicity, the 2017 average unemployment rate was 9.4 percent. Both June and 2017 mid-year numbers paint a similar picture: economic opportunity for youth isn’t equal, and many face much worse prospects simply because of their race or ethnicity.

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In June, the youth labor force participation rate (LFPR), which tracks how many people are participating in the economy out of the entire population, not just the number of people participating out of the number of people looking (which is what the unemployment rate does), increased slightly, from 55.1 percent in May to 55.4 percent. While youth unemployment has fully recovered to pre-Recession levels, youth labor force participation has not, indicating that low youth unemployment numbers may  be a result of fewer young people looking for work instead of more young people working. However, the 2017 mid-year youth LFPR is 55.6, the highest it’s been since 2009 (though still significantly lower than pre-Recession levels, which hovered near 60 percent). The overall LFPR for all adults 16 and older was 62.8 percent in June, and 62.9 percent for the mid-year average.

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