Need to Know: Economy

The Glum and the Restless

Nearly one in five recent grads is out of work. Could that hurt Obama’s reelection bid?

NEW BRUNSWICK, NJ - MAY 28:  Recent graduate Divya Konuru (2nd-R) waits in line to speak to a recruiter at the New Jersey Collegiate Career Day hosted by Rutgers University on May 28, 2009 in New Brunswick, New Jersey. Over 150 employers attended the fair aimed at experienced and entry level candidates. Washington announced today that the number of people receiving unemployment benefits increased for the 17th straight week to 6.78 million the largest total since 1967.  (Photo by Chris McGrath/Getty Images)
National Journal
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Jim Tankersley
July 7, 2011, 12:25 p.m.

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Here’s a fact that should give eco­nom­ists — and maybe Pres­id­ent Obama’s polit­ic­al team — heart­burn: Two years after the Great Re­ces­sion of­fi­cially ended, job pro­spects for young Amer­ic­ans re­main his­tor­ic­ally grim. More than 17 per­cent of 16-to-24-year-olds who are look­ing for work can’t find a job, a rate that is close to a 30-year high. The em­ploy­ment-to-pop­u­la­tion ra­tio for that demo­graph­ic — the per­cent­age of young people who are work­ing — has plunged to 45 per­cent. That’s the low­est level since the Labor De­part­ment began track­ing the data in 1948. Taken to­geth­er, the num­bers sug­gest that the U.S. job mar­ket is strug­gling migh­tily to bring its next gen­er­a­tion of work­ers in­to the fold.

This is a dan­ger­ous pro­pos­i­tion, eco­nom­ic­ally (for the United States as a whole) and polit­ic­ally (for the pres­id­ent).

As The At­lantic‘s Don Peck wrote last year, cit­ing a lit­any of re­search from Yale Uni­versity’s Lisa Kahn, col­lege gradu­ates who enter the labor force dur­ing a re­ces­sion make sig­ni­fic­antly less money — in their first year and over the course of their ca­reers — than grads who walk in­to an eco­nom­ic boom. Work­ers stuck in the un­em­ploy­ment line for an ex­ten­ded peri­od risk watch­ing their skills at­rophy and face in­creas­ing dif­fi­culty find­ing new jobs. That’s par­tic­u­larly true, though, for people wait­ing and wait­ing and wait­ing to land their first job. The longer a whole batch of fledgling work­ers sits wait­ing to be hired, the more the eco­nomy risks los­ing young em­ploy­ees with valu­able, high-end skills at a time when glob­al com­pet­i­tion is in­creas­ingly fierce.

Snow­balling youth un­em­ploy­ment feeds so­cial un­rest. Ex­hib­it A is the Middle East. Ex­hib­it B is Europe’s peri­phery; in such coun­tries as Spain, Greece, and Croa­tia, more than one in three young people is un­em­ployed, a prob­lem that The Eco­nom­ist magazine warned this week is “as great a chal­lenge for these gov­ern­ments as pro­tect­ing their tot­ter­ing banks and slash­ing their budget de­fi­cits.”

Not sur­pris­ingly, polls sug­gest that Amer­ica’s young people have grown more pess­im­ist­ic about the eco­nomy and their own fu­ture for­tunes. Gen­er­a­tion Op­por­tun­ity, a non­par­tis­an, non­profit youth-out­reach group headed by former Bush ad­min­is­tra­tion of­fi­cial Paul Con­way, com­piled polling data this sum­mer show­ing de­cayed eco­nom­ic con­fid­ence among the so-called mil­len­ni­als: More than half say that the United States is ser­i­ously on the wrong track, and a sim­il­ar num­ber say they are not op­tim­ist­ic about the na­tion’s eco­nom­ic fu­ture. More than half also as­sert that they’re not con­fid­ent that the coun­try will be the glob­al eco­nom­ic lead­er in 10 years. More than three-quar­ters say that, giv­en the cur­rent state of the eco­nomy, they have delayed or will delay buy­ing a home, pay­ing down stu­dent debt, ob­tain­ing more edu­ca­tion, sav­ing for re­tire­ment, chan­ging jobs or cit­ies, get­ting mar­ried, or mak­ing some oth­er ma­jor life de­cision.

Young voters stam­peded to the polls for can­did­ate Obama in 2008, top­ping their 2004 turnout by more than 3 mil­lion and break­ing, 2-to-1, in his fa­vor. A drop in youth par­ti­cip­a­tion, or a shift to­ward a GOP can­did­ate, could com­plic­ate Obama’s reelec­tion dra­mat­ic­ally.

Gen­er­a­tion Op­por­tun­ity’s poll­ster, Kel­ly­anne Con­way, who has worked for sev­er­al na­tion­al GOP politi­cians in the past, says that young voters will be tough­er on Obama in 2012 than they were in 2008. “The big ques­tion for young people [in 2008] was, “˜How am I go­ing to help you make his­tory?’ “ says Con­way, who is not re­lated to the group’s pres­id­ent. “The big ques­tion from young people today is, “˜How are you go­ing to help me find a good-pay­ing job?’ “ This time, she adds, “they’re look­ing for tan­gibles.”

Con­way’s polling sug­gests that young voters could sym­path­ize with a Re­pub­lic­an mes­sage on cut­ting fed­er­al spend­ing and the budget de­fi­cit. Three-quar­ters of mil­len­ni­als want to see fed­er­al spend­ing re­duced, she says, and three in five want to re­duce the de­fi­cit through spend­ing cuts rather than tax in­creases. Two-thirds say that So­cial Se­cur­ity dol­lars are safer “un­der your pil­low” than with the gov­ern­ment. Paul Con­way, the group’s pres­id­ent, says that’s “fair warn­ing” to Obama about how young voters view his policies.

Oth­er polls sug­gest more-fa­vor­able at­ti­tudes to­ward the pres­id­ent. In a late-June Gal­lup sur­vey, 56 per­cent of Amer­ic­ans ages 18 to 29 ap­proved of Obama’s per­form­ance, the highest ap­prov­al rat­ing of any age brack­et. Team Obama sounds un­con­cerned about los­ing young voters. Cam­paign of­fi­cials note that thou­sands more of them ap­plied to be sum­mer cam­paign or­gan­izers this year than did in 2008. “In ad­di­tion to what he has already ac­com­plished on is­sues of im­port­ance to them — like es­tab­lish­ing a tax cred­it to provide tu­ition re­lief to stu­dents and ex­tend­ing health in­sur­ance cov­er­age to young adults up to the age of 26 — young Amer­ic­ans have seen the pres­id­ent bring the eco­nomy back from the brink of de­pres­sion and se­cure in­vest­ments in edu­ca­tion, re­search and de­vel­op­ment, and clean en­ergy that are cre­at­ing jobs today that will re­main glob­ally com­pet­it­ive in the fu­ture,” cam­paign spokes­man Ben LaBolt said in an e-mail.

Obama and Re­pub­lic­ans alike should pay par­tic­u­lar at­ten­tion to youth op­tim­ism about the dir­ec­tion of the eco­nomy. In 2008, exit polls showed that 54 per­cent of young voters be­lieved that the eco­nomy would im­prove over the next year, com­pared with 47 per­cent of the rest of the elect­or­ate. Obama prob­ably needs mil­len­ni­als to be sim­il­arly up­beat in 2012. In oth­er words, it’s all about con­fid­ence — like so much else in the eco­nomy these days.

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