Report Education still key to returning young adults to work

Listen to this article

While no demographic has been safe from unemployment in the past few years, young adults are having an even harder time finding jobs.

While no demographic has been safe from unemployment in the past few years, young adults are having an even harder time finding jobs.

According to a U.S. Department of Labor report, while the national unemployment rate hovers around 9 percent, adults aged 16 to 24 have faced unemployment rates of 16 to 17 percent over the course of the last two years.

Paul Conway, president of Generation Opportunity and former chief of staff for the U.S. Department of Labor and the Office of Personnel Management, said young adults are being pushed out of jobs by older workers with more experience taking jobs they are over qualified for.

Also, young employees are usually the most recent to be hired, which puts them as the first ones out during layoffs, Conway said, and especially in New Jersey, high barriers to expansion through government regulations are preventing elasticity in the hiring market.

“One of the things that we saw in our polling data is that 77 percent of that demographic — that’s college, non-college and young professionals — indicated that they will or already have delayed a major life change or purchase due to economic factors,” Conway said. “Almost one-third would delay going back to school or getting more education or training.

Conway said this delay will set the nation’s work force back, while other competitive nations will have an advantage in emerging technologies and other fields with their younger workers.

Wells Fargo Securities LLC had its economics group recently review if an investment in education still offers the return that it had in the past.

Tim Quinlan, author of the study and economist for Wells Fargo, said those without a high school diploma are facing unemployment rates roughly 14 percent as of August, but people with some college education, unemployment drops to 8.2 percent, and for people with college degrees, the rate is 4.3 percent.

“I think that number would surprise a lot of people who think we’re stuck and mired in this high unemployment with no real hope,” Quinlan said. “For people who have a college degree, the unemployment rate is much more manageable.”

Quinlan also said that despite quickly rising prices for college tuition, “It is still in our view a very worthwhile investment … in the very near term you would be better off (entering the labor force immediately), but if you consider this over the course of a lifetime, you’re probably forfeiting pretty substantial lifetime earnings by making the short-term gain for a slightly better return on your money. I think it’s a very short-sighted decision to forgo college to save money.”

According to the Wells Fargo report, a person with a high school diploma will have roughly $1.3 million of earning power over the course of their lifetime, while a person with a college degree increases their potential to $2.2 million.