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Note: Beginning with today’s analysis, Generation Progress will begin publishing and analyzing unemployment and labor force participation rates for 25- to 34-year-olds, in addition to the analysis we have traditionally provided for 16- to 24-year-olds. We hope this will offer a fuller picture of the economic conditions facing all of today’s young people. You can view aggregate numbers—for both 16- to 24-year-olds and 25- to 34-year-olds—for 2017 here.
January marked the end of the first full year of the Trump presidency—a presidency defined by conservative rollbacks of President Obama’s progressive economic vision and a tax overhaul that will drastically benefit America’s wealthiest. Meanwhile, President Trump has ridden on the economic coattails of the Obama administration, which helped set into motion declining unemployment rates and increasing wages. At the first State of the Union address of Trump’s presidency earlier this week, he touted high job growth and rising wages, noting that 2.4 million jobs have been created since the election, including 200,000 jobs in manufacturing, and claiming that “after years of wage stagnation, we are finally seeing rising wages.” However, these claims lack context and therefore perpetuate a false narrative about Trump’s economic success. In fact, while wages did increase this year, real average hourly earnings grew by only 0.4 percent—less than the 1.8 percent growth seen in 2015 and the 0.8 percent growth in 2017. This means that not only was wage growth under Trump the lowest it’s been in three years, but also that this growth began under President Obama and because of his policies. When it comes to jobs growth, even though there has been an increase in the number of jobs in 2017, the increase was the smallest it’s been since 2010, meaning 2017 was the weakest year for job growth in years.
Unemployment Outlook for Young People
In January, youth unemployment (tracking those 16 to 24) jumped slightly, from 8.9 percent in December to 9.2 percent. However, the overall youth unemployment rate for 2017 was 9.2 percent, meaning January falls in line with 2017 averages. For 25- to 34-year-olds, the unemployment rate in January was 4.3 percent, a fall of 0.2 percentage points from December’s rate of 4.5 percent. This rate also falls beneath the 2017 annual unemployment rate for 25- to 34-year-olds, which was 4.6 percent. Though the unemployment rates for 16- to 24-year-olds closely mirror 2017 averages, they still hover above the overall unemployment rate, which was 4.1 percent in January (and measures all those 16 and older).
Unemployment by Race and Ethnicity
In January, the white unemployment rate for 16- to 24-year-olds was 8.4 percent, the black unemployment rate for 16- to 24-year-olds was 17.8 percent, the Latino unemployment rate for 16- to 24-year-olds was 10.5 percent, and the Asian unemployment rate for 16- to 24-year-olds was 6.5 percent. Among 25- to 34-year-olds, the white unemployment rate in January was 3.9 percent, the black unemployment rate was 8.9 percent, the Latino unemployment rate was 5.7 percent, and the Asian unemployment rate was 3.1 percent. Across both age groups studied, the black and Latino unemployment rates were both disproportionately high, signifying that black and Latino 16- to 34-year-olds face tougher economic landscapes than white and Asian young people. It’s worth noting that while the Asian unemployment rate for young people generally falls below the overall average, this statistic often fails to provide much helpful information because economic prospects vary widely within the Asian community when the data is disaggregated by ethnicity and because the sample size is relatively small.
Labor Force Participation Among Young People
The Labor Force Participation Rate (LFPR), unlike the unemployment rate, measures all those working out of the entire population, not just those actively seeking work. This offers additional context into the unemployment rate, as the unemployment rate can go down for a number of reasons: if more people looking for work have found it, or if more people have simply stopped looking for work, either because they’ve given up, or entered school, or any number of other reasons. The LFPR helps answer that question. In January, the LFPR for 16- to 24-year-olds hit 55.8 percent, slightly above the 2017 annual average of 55.5 percent, but still falling short of pre-Recession numbers, which hovered around 60 percent. This implies that, even though unemployment numbers for 16- to 24-year-olds have returned to pre-recession levels, the overall economy for young people hasn’t: fewer young people are participating in the economy today than before the Great Recession. For 25- to 34-year-olds, labor force participation took less of a hit during the recession: in January, the LFPR was 81.9 percent, which falls below pre-recession averages (which usually ranged between 82.5 and 83.5 percent), but to a much smaller degree. The LFPR for all workers 16 and older in January was 62.7, also falling behind (though again, to a lesser degree compared to the drop for 16- to 24-year-olds) pre-recession levels of approximately 66 percent.
Labor Force Participation by Race and Ethnicity
Like unemployment, labor force participation varies by race and ethnicity. For 16- to 24-year-olds in January, the white LFPR was 56 percent, compared to 51.6 percent for black youths, 52.3 percent for Latino youth, and 37.3 percent for Asian youth. Among 25- to 34-year-olds, the white LFPR was 82.6 percent, the black LFPR was 81.4 percent, the Latino LFPR was 78.5 percent, and the Asian LFPR was 74.9 percent.