Job shortage for young people

American employers eliminated 51,000 jobs in July, the seventh consecutive contraction in the labour market, as the unemployment rate reached a four-year high, signs that the pressure on business owners and consumers was likely to continue.

Still, last Friday’s report from the U.S. Labor Department showed that the declines have softened since spring. The number of layoffs was less than the 75,000 that economists had expected, and the government said that businesses cut fewer jobs in June and May than first thought.

"The good news is there’s been no acceleration in the official data," Robert Barbera, the chief economist of ITG, an economic research company.

"The bad news is there’s nothing about the data that suggests improvement anytime soon."

The rough job market worsened in July, with the unemployment rate rising to 5.7 percent from 5.5 percent in June, its highest level since March 2004.

"It’s not that unemployment is rising because a lot of people are coming into the labour force," Mark Zandi, the chief economist at Moody’s Economy.com, said. "It’s rising because employment is falling."

Part of the problem is a paucity of jobs for young people, one out of five of whom are unemployed. The teenage unemployment rate rose to 19 percent, its highest level in 16 years.

Last month’s job losses came in a broad range of industries, with manufacturing, construction and administrative services suffering the steepest declines. About 30,000 support staff workers were laid off, along with 35,000 manufacturing employees.

Workers in the transportation industry were hit hard by high oil prices, which have weighed heavily on bottom lines. About 5,000 truck drivers were laid off, and airlines also trimmed their work forces.

Stocks on Wall Street were trading lower, with the Dow Jones industrials down about 50 points, as investors digested the jobs report and a $15.5-billion quarterly loss at General Motors.

Businesses have been cutting workers since the start of the year as they try to make ends meet amid a slowdown. While export sales have risen, many American customers have ratcheted back their spending to cope with expensive fuel and food and the ailing housing market.

Hofstra prof: Young people hit hard by unemployment

BY OLIVIA WINSLOW | olivia.winslow@newsday.com
7:33 PM EDT, July 22, 2008

Young people are suffering a "surprising decline" in their economic status, says a Hofstra University economics professor.

Hofstra professor Gregory DeFreitas edited and contributed two chapters to a book out this month: "Young Workers in the Global Economy: Job Challenges in North America, Europe and Japan." It gathers analysis by several economists, examining such issues as employment abuse among young workers, inequality of earnings among young workers, trends for health insurance and job fatalities.

"The main focus of the book is on the U.S., and in the U.S. we found that the employment rate among youth has fallen to its lowest on record," said DeFreitas, also director of the university's Center for the Study of Labor and Democracy, citing a figure of 32 percent.

Actually, the U.S. Department of Labor's Bureau of Labor Statistics reports the "seasonally adjusted" employment rate for 16- to 19-year-olds was 33.1 percent in June 2008, said Martin Kohli, regional economist in the department's New York office.

DeFreitas noted that in the 1950s, around 50 percent of teenagers were employed. Kohli, in a separate interview, said Labor Department statistics show that in the 1950s, the percentage of employed teenagers hovered in the high-40s, and that as recently as 1998, 45 percent of teenagers had jobs.

The national unemployment rate among 16- to 19-year-olds was 18.1 percent in June 2008, DeFreitas said, 2 percentage points higher than a year ago, citing current Labor Department statistics. (Young people not looking for work are not included in the unemployment rate). For all workers aged 16 to 24, the unemployment rate was 12.6 percent this past June, up from 10.6 percent from a year ago.

In New York State, the unemployment rate for teens was 17.6 percent in 2007, the most recent year available. That was a decrease from the 19.2 percent rate in 2006, the year that saw a sharp rise in the unemployment rate from 2005, when it was 13.9 percent, according to Bureau of Labor Statistics data. For 20- to 24-year-olds in New York, the unemployment rate was 9.6 percent in 2007, up from 9 percent in 2006.

Weak job growth for the past half-dozen years, DeFreitas said, "really hits youth quite a bit." While there is no age breakdown on the unemployment rate for Long Island workers, Kholi noted that job growth on Long Island has been "flat recently, so that people from a variety of age groups are going to be facing difficulty."

DeFreitas said the job plight among young workers has a ripple effect on households and families.

"More and more adults in the U.S. and elsewhere are under greater economic distress," DeFreitas said. "In that scenario, whatever young people can bring in matters more and more."