Could the US end up with a stuck, perpetually jobless generation slowing the economy? Those that came to adulthood since 2008 and are either unemployed or underemployed and saddled with student debt. Of course entrepreneurs need to and are emerging from this group as well and its one of the reasons we see more interest in entrepreneurship. FT.com has some interesting article looking at this jobless generation in America:
The share of American 18- to 24-year-olds who were employed fell to 54 per cent last year, the lowest since the labour department began tracking data in 1948, according to the Pew Research Center. The share who are in college has risen, but the researchers say this only partly explains the drop. The jobless rate for Americans age 16 to 24 is above 16 per cent, more than twice the national rate.
Youth unemployment has reached crisis levels around the world, with almost 13 per cent of the global youth labour force out of work this year, according to the International Labour Organisation.
But the problem has a unique flavour in the US, where the weak job market has collided with record levels of educational debt – about $25,000 for the average graduate. Together, they pose a threat to the future earning power of young Americans such as Mr Grzywacz – and could have long-lasting effects on US growth.
This no/low income + high debt lifestyle has slowed household formation as students live with their parents and also delayed other major spending (cars, rent, etc.).