The Lost Generation

The economic recession is hitting young people especially hard, with a potentially negative impact on both their future and the future of the U.S. economy. While unemployment is impacting just about every part of the global workforce, the most enduring harm is being done to young people, including recent college grads and MBAs, who can't grab onto the first rung of the career ladder. In the U.S., for example, the unemployment rate for 16- to 24-year-olds has climbed to more than 18 percent, from 13 percent a year ago. An extended period of youthful joblessness can significantly depress lifetime income as people get stuck in jobs that are beneath their capabilities, or come to be seen by employers as damaged goods. Equally important, employers are likely to suffer from a "lost generation," especially when the economy recovers and they no longer have access to a pipeline of young, highly-trained IT talent.

Given the imperative of adding young workers to the workforce, some economists argue that governments should act sooner rather than later. Options include everything from subsidizing education and training to reducing the minimum wage for young people and trainees. The disappointing outlook for youth employment extends beyond the traditional 16-to-24 demographic, to include people launching their careers in their mid-to-late 20s. College graduates in the 22-to-27 age bracket have fared worse than their older educated peers during the downturn. Two years ago, 84.4 percent of young grads had jobs, only somewhat lower than the 86.8 percent of college graduates aged 28 to 50. Since then, the employment gap between the two groups has almost doubled. The employment outlook is even more desperate for job seekers who lack college diplomas and thus have fewer options.

From Business Week