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HIRING CRUNCH Young adults are hit hardest



Published: Mon, February 18, 2002 @ 12:00 a.m.



Teens are at a big disadvantage in a down job market.

RALEIGH NEWS & amp; OBSERVER

T.J. Jones looks like the kind of teen-ager business owners love. He wears a neatly ironed shirt with his khakis, volunteers for the United Way, tutors elementary children with reading problems, maintains a B average and is president of his high school class.

But Jones can't get employers to take a second look at his r & eacute;sum & eacute;.

"It must be my age," says Jones, who lives in Raleigh, N.C., and dreams ultimately of becoming a film producer. "They see I'm 17, and they just toss my [r & eacute;sum & eacute;] in the wastebasket."

If teen-agers feel unfairly singled out during this recession, there is good reason. Companies are scaling back payrolls, and often the first to go are the low-skilled workers with short tenures and very little job experience.

The technology and retail industries, which traditionally hire younger workers, have been hit especially hard by the downturn. And because more adults are clinging to their jobs, the number of available positions for young people is dwindling.

The numbers: All of this is culminating in some hard numbers. The unemployment rate among 16- to 19-year-olds actively looking for work hit 16.1 percent in January, up 27 percent from two years ago. Among 20- to 24-year-olds, the unemployment rate is 9.7 percent, according to the Bureau of Labor Statistics. Both are well above the overall unemployment rate of 5.6 percent.

And teens and young adults are getting pink slips at a much faster rate than their older colleagues. Of the 2.32 million layoffs that have occurred nationwide since January 2001, half (1.15 million) of those jobs were held by 16- to 24-year-olds, according to BLS data. That's more than any other single age category. By comparison, employment among 45- to 64-year-olds has actually increased by 1.02 million jobs.

"In an economic downturn, age matters," said Michael Wald, a regional economist with the Bureau of Labor Statistics in Atlanta. "Companies want to keep older people who have been around awhile and know how things work. A 16-year-old with three months' experience doesn't stand much chance."

Positive signs: The good news is that an economic recovery appears imminent. The nation's gross domestic product, the broadest gauge of the economy's health, increased 0.2 percent in the final three months of last year, well above the 1 percent decline expected by most economists. The University of Michigan's benchmark Index of Consumer Confidence improved for the fourth consecutive month in January.

But just because productivity is up and consumers are buying doesn't mean companies will start hiring young people, warned Richard Toikka, chief economist with the Employment Policies Institute in Washington, which studies public policy issues surrounding entry-level employment.

Lag time: Recent history suggests there are substantial time lags between the end of a recession and improvements in the employment of young adults. During the last recession, the unemployment rate for 16- to 20-year-olds didn't peak until it reached 19.9 percent in 1993 -- nearly two years after the recession was declared over.

This time around, the lag could be even worse because the population of young adults is on the rise, Toikka warned. The so-called "echo boom" -- the surge of children born from baby boomers -- has caused the nation's population of 16- to 24-year-olds to increase 3 percent between 1990 and 2000.

"Companies are going to delay hiring young people until they are absolutely certain that they need them," Toikka said.

To be sure, teens can adapt to job losses easier than most. They are less likely to have families, mortgages and hefty credit-card debt than people in their 30s and 40s. And if they still live at home, they can often rely on parents to help pay for everyday items such as food and gas.

Long-term impact: Still, even a small employment setback at an early age can have a lasting impact. A high school senior who can't find a part-time job might not be able to sock away enough money to attend college. And if they can't attend college, then they have to postpone their dreams of becoming doctors or teachers.

A recent study by economist Thomas Mroz of the University of North Carolina-Chapel Hill tracked the behavior of 3,700 male teens ages 14 to 19 between 1979 and 1994. Teens who were unemployed for 13 weeks or more during that period experienced a 1 percent drop in their real wages and were more likely to face future unemployment spells, he found.




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