The unemployment rate for Americans aged 18-29 stood at 13.1 percent during the month of January, while the overall unemployment rate was 7.9 percent, according to the Bureau of Labor Statistics.
The situation for younger workers has improved little since the 2007 financial crisis and recession sent unemployment rates spiraling upward.
“They have disproportionately high rates of both long-term and short-term unemployment,” writes the Federal Reserve Bank of San Francisco in a new letter examining the short and long-term effects of unemployment.
The percentage of short-term unemployment for workers 16-19 is well over double that of the next closest group, which happens to be workers aged 20-24.
“Short-term unemployment is most frequent among younger workers, the less educated, nonwhite workers other than Asians, and people who previously worked in construction,” reports the SF Federal Reserve.
The news of increased unemployment came after reports that the economy actually shrank in the fourth quarter of 2012.
The concern about the long-term unemployed, as pointed out by the SF Federal Reserve, is ”that they may face unusually weak job prospects that will keep the unemployment rate elevated even after the economy has regained the ground lost in the recession.”
Younger workers who struggle to find employment now will face a significant disadvantage finding work in the future.
This reality is coupled with the fact that more students than ever are graduating college piled with student debt. According to credit bureau TransUnion, the average student graduate is carrying $23,829 in debt — a 30 percent increase in just five years. On top of that, more than half of those student loans are in deferral status, meaning students are delaying payment until they can otherwise afford to pay.
“I think a few more years and it’s going to be a general crisis,” said Barry Bosworth, an economist at the Brookings Institution, to Time.
A recent study by the Center for College Affordability and Productivity found that 37 percent of college graduates are doing work that did not require their expensive degree.