In 2008, young adults in America experienced a collective political awakening when, inspired by the Gospel of Hope and Change, they turned out in record numbers to “Rock the Vote” for Barack Obama.
Two years later, little has improved for these young people, who remain among the hardest hit by the economic downturn. According to November 2010 data from the Bureau of Labor Statistics, the unemployment rate for Americans between the ages of 20 and 24 is now 15.9 percent, a figure that is well above the overall national unemployment rate of 9.8 percent.
If we consider, too, the youngest American workers seeking jobs, the numbers are even worse. Since the recession began, the unemployment rate for young adults between the ages of 16 and 24 has nudged toward 20 percent. According to an April 2010 study, although young adults account for only 13.5 percent of the workforce, they account for 26.4 percent of unemployed workers.
Other economic indicators provide few reasons for confidence. The national deficit has now mounted to all-time scary proportions, ringing in at $1.4 trillion, and the national debt looms at nearly $14 trillion. To put that in perspective, that is a debt level of $180,000 per every family of four. The dismal future this disastrous economy ensures for America’s youth is just one of the many reasons Pass the Balanced Budget Amendment, a recently formed organization chaired by Ken Blackwell, believes it is imperative we pass a federal balanced budget amendment by October 1, 2011, the first day of the new fiscal year.
The gravity of the current economic state for America’s young adults may not be fully grasped because, at the moment, young people don’t have as much to lose as their older counterparts — the story of the middle-aged employee whose house has been foreclosed upon, who has lost his life savings and is now unable to provide for his children, proves a far better news-clip than that of the aimless liberal arts degree-holder who’s nesting in his mother’s basement. Yet in the long-term, the outlook for this demographic of younger Americans, a group recently dubbed “Generation Recession,” will be forever impacted by the current period of economic downturn. It is for this reason that young adults must do as they did in 2008 and rouse themselves, this time to rally for a return to fiscal sanity by demanding their leaders balance the federal budget.
Forget about the prospect of insufficient Social Security payments down the road — that’s the least of the concerns for young adults entering the labor force during this period of economic unrest. Studies show that not only do young adults entering the labor force during a recession suffer short-term earning losses, these losses may become permanent, as this group is never able to catch up to the position they may have achieved had they entered the job market in a good economy. And with less financial security due to a lack of previous job experience, young members of the workforce have less ability to wait out an economic downturn and are therefore more likely to take any job available.
Even in an economy that has recovered, those who enter the labor market during a down period are less likely to have confidence in the stock-market. One study found, for instance, that corporate managers who came of age during a recession are more likely to pursue conservative capital structures.
“This is a serious drain on labor market potential,” writes the Economic Policy Institute, “lower earnings, lower output, lower productivity, and the displacement of less-educated workers.”
The circumstances arising from the country’s mammoth deficit will reinforce these proclivities of Generation Recession. As the United States’ debt grows and its ability to compete in world markets dwindles due to a weakened dollar, the country will no longer be able to dominate the global market, reducing America’s ability to be a competitive world player.
The US is on the brink of fiscal collapse. In an effort to alleviate this future economic malaise, it’s imperative that American young adults in particular demand accountability from their elected officials to rein in out-of-control spending and restore fiscal responsibility. If we do not balance the federal budget, we will become beholden to foreign debt-holders. In short, our national sovereignty is at stake.
America’s youth came together in 2008 in support of Barack Obama’s candidacy. Now they have an opportunity to rally behind Pass the Balanced Budget Amendment, a movement that will unite the country in acknowledgment of the need for fiscal accountability among our leaders. This is the fight that will define their future.
Lucy Morrow Caldwell is Executive Director of Pass the Balanced Budget Amendment (www.passthebba.org).