endangered: youth in the labor force state of oregon research academy april 28, 2015 nick beleiciks...
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Endangered: Youth in the Labor Force
State of Oregon Research AcademyApril 28, 2015
Nick BeleiciksState Employment Economist
503 447
15,293
20,723
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5,000
10,000
15,000
20,000
25,000
1993 2013
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Jobs in Nursing and Residential Care Facilities by Age GroupKing County, Washington
19 Years and Older
14 to 18 Years
Source: U.S. Census Bureau, Local Employment Dynamics
Oregon added tens of thousands of new jobs while recovering from the Great Recession, but recent job growth completely overlooked younger workers. There were actually fewer workers ages 14 to 21 in 2013 than in 2010.
Executive Summary #1
Unemployment rates for youth increased drastically during the recession and have not returned to previous levels. The unemployment rate of Oregon teens ages 16 to 19 years was 28.0 percent in 2014, while the rate was 12.7 percent among young adults ages 20 to 24 years.
Executive Summary #2
The recession sent youth unemployment rates to record highs and rates remain at troubling high levels.
Young people were just 13 percent of the labor force in 2014, but they accounted for 31 percent of unemployed Oregonians.
Unemployment rates:16-19 years: 28.0%
20-24 years: 12.7%
25+ years: 5.6%
0%
5%
10%
15%
20%
25%
30%
35%
1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
Un
emp
loym
ent
Rat
e
Unemployment Rates High for Oregon's Youth(Years with Recessions Shaded Gray)
16-19 years 20-24 years Age 25 years and over
Source: Bureau of Labor Statistics, Current Population Survey
Young workers account for a disproportionate share of falling labor force participation. Young people ages 16 to 24 accounted for more than one-quarter of the decline in the state’s overall labor force participation rate since 2000.
Executive Summary #3
After years of decline, the share of youth participating in the labor force reached the lowest point on record in 2013.
It’s now far more common for teens to be neither working nor looking for a job.
Participation rates:
16-19 years36%
20-24 years72%
25+ years62%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
Lab
or
Fo
rce
Par
tici
pat
ion
Rat
eOregon Teen Participation Rate at Historic Lows
(Years With Recessions Shaded Gray)
16-19 years 20-24 years Age 25 years and over
Source: Bureau of Labor Statistics, Current Population Survey
Youth use fewer job search methods than adults, and they are less likely to use personal networks and public employment agencies in their job search. Increasing the job search methods used by young workers could help them find more employment opportunities.
Executive Summary #4
Job search methods of youth differ from search methods of all workers.
Sending out resumes and filling out applications is the most broadly used job search method for all workers. Youth rely on this method more than the average – with 62%
citing this search method (compared with 57% for all workers).
Youth are far less likely to search for jobs using their friends or relatives
Youth seldom visit public employment agencies – this search method was cited by just 9 percent of job seekers ages 16 to 19, compared with 19 percent of all workers. Just 4 percent of teens use private employment agencies.
Source: Bureau of Labor Statistics, Current Population Survey
Snapshot look at job openings currently available for teenagers.
The time young people spend unemployed has lengthened significantly. That is time not spent gaining on-the-job experience. Consequently, the share of unemployed young people with no previous work experience nearly doubled, making it harder for them to compete with experienced applicants.
Executive Summary #5
The share of unemployed teens with no previous work experience is on the rise, and the lack of experience makes it more difficult to find a job.
Share of unemployed with no previous work experience:
16-19 years54%
20-24 years16%
25+ years3%
0%
25%
50%
75%
100%
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Per
cen
t o
f U
nem
plo
yed
in
Ag
e G
rou
pHalf of Teen Job Seekers Lack Previous Work Experience
Unemployed with No Previous Work Experience, United States
Age 16-19
Age 20-24
Age 25 and over
Source: Bureau of Labor Statistics, Current Population Survey
Postponing work experience harms young workers’ ability to compete for jobs. Breaking this detrimental cycle could be a focus of public policy efforts. Helping teens find and be successful in their first work experiences could improve their long-term labor market outcomes.
Executive Summary #6
Invest funding in summer job programs for youth. Support career readiness and career exploration,
targeted to the youth population, throughout the education and workforce system.
Provide flexible, evening, and weekend classes within postsecondary institutions to accommodate youth acquiring work-related skills while still focusing on education.
Oregon’s Local Workforce Investment Boards have developed actionable items to address youth unemployment.
Counter to popular belief, the Great Recession did not increase the share of “idle” youth – those neither in the labor force nor enrolled in school. Roughly 10 percent of youth ages 16 to 24 are considered idle, in Oregon and the U.S.
Executive Summary #7
The number of idle youth has increased over the years, but they remain a relatively small share of the total youth population.
The use of the word “idle” here is not intended to be judgmental. Some young people face situations more complex than choosing between work, education, or “nothing”. Stay at home parents Other family care responsibilities Young people with disabilities
2005 2006 2007 2008 2009 2010 2011 2012 2013Oregon teenagers ages 16-19 180,746 196,959 198,057 198,520 205,933 201,726 201,199 198,801 202,020
Share "Idle" 5% 5% 5% 6% 5% 5% 5% 6% 5%Oregon young adults ages 20-24 246,923 238,695 245,645 244,069 263,883 255,823 263,291 263,393 264,951
Share "Idle" 9% 10% 10% 11% 10% 10% 11% 10% 11%
Source: U.S. Census Bureau, American Community Survey, data for young adults accessed through IPUMS.
Share of Oregon Youth Not Enrolled in School or in the Labor Force
About 1 out of 20 teens could be considered idle.
Source: U.S. Census Bureau, 2013 American Community Survey
Identifying the Idle Youth: Oregon
All People 16 to 19200,800100%
In labor force56,90028%
Not in labor force108,700
54%
In labor force25,50013%
Not in labor force9,7005%
Enrolled in school165,600
82%
Not enrolled in school35,20018%
About 1 out of 9 young adults could be considered idle.
Source: U.S. Census Bureau, 2013 American Community Survey, accessed through IPUMS.
Identifying the Idle Youth: Oregon
All People 20 to 24265,000100%
In labor force65,10025%
Not in labor force40,00015%
In labor force129,900
49%
Not in labor force29,90011%
Enrolled in school105,200
40%
Not enrolled in school159,800
60%
The money earned by working teens, especially those from lower income families, helps improve their families’ finances and stimulates the local economy.
Executive Summary #8
A 2009 summer youth employment program for low income youth in rural Oregon “generated an additional 47 cents in economic impact for every dollar the program spent.”
The youth dedicated the largest share (26%) of their paychecks to family members or guardians.
An additional 20 percent of the youth said they saved their earnings for cars or trucks, housing, college, or future bills.
The remaining spending, most of which occurs locally, was on groceries, gas, clothing, electronics, eating out, and sports.
Money Earned by Teens BenefitsFamilies and the Local Economy
Youth today face increased requirements related to high-school graduation and college preparation, and those enrolled in school are less likely to be in the labor force than in the past. Many are forgoing early work experience to gain formal education, which could pay off long-term given the college wage premium.
Executive Summary #9
See note about the college wage premium.
Research shows that teens are substituting education for labor market experience. They are spending more time on academic activities.
Students are spending more time to graduate from high school.
The new requirements include more stringent math and additional science and English / Language arts.
Required credits* to graduate Pre-20082008 9th graders and
beyondTotal 22 (back to 1970s) 24English/Language Arts 3 4Math 2 3 (Algebra I and above)Social Science 3 3Science 2 3Physical Education 1 1Health 1 1Arts/Career/Tech Ed./Second Language 1 3Electives 9 6
* One credit equals 130 hours seat time; excludes homeworkSource: Oregon Department of Education
Oregon High School Graduation Requirements Increased for 2008 9th Graders
Although youth labor market woes are sometimes blamed on stricter regulations, current state and federal regulations for hiring youth have been in place for decades and predate the start of the downward trend in teen labor force participation.
Key Point about Regulations
When school is in session Not allowed during school hours Only between 7:00 am and 7:00 pm 18 hours per week maximum
3 hours on school days 8 hours on non-school days
When school is not in session From June 1 through Labor Day: 7:00 am to 9:00 pm 40 hours per week maximum
8 hours per day
16 and 17 year olds can work any hours, up to 44 hours per week
Working hours limited for 14 and 15 year olds in nonagricultural jobs.
Source: Bureau of Labor and Industries, Employment of Minors
Ages 9 to 11 years old may work with parental consent on a small farm which is operated under state regulations Picking berries and beans for intrastate commerce
Ages 12 and 13 years old may work with parental consent in agricultural jobs not declared hazardous by the U.S. Secretary of Labor.
Ages 14 and 15 do not need parental consent Work by those under the age of 16 must be outside
school hours Ages 16 and 17 may work at any time in jobs not
declared hazardous.
Agricultural work is still allowed for minors
Source: Bureau of Labor and Industries, The Employment of Minors in Agriculture
Employing minors requires extra paperwork from employers.
Oregon employers must obtain an annual employment certificate to employ minors under 18 years old.
The requirements are simpler now than in 1995 and prior. Individual permits were required by both the minor and
the employer for each minor hired.
Federal law requires employers of minors in agriculture to maintain records of name, address, date of birth, and written parental consent if required.
Source: Bureau of Labor and Industries, Employment of Minors: Questions & Answers
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Nick BeleiciksState Employment
503-947-1267