No Country for Young Men (and Women)

Screen Shot 2014-07-16 at 10.06.40 PMThe youth of America are finding it difficult to get jobs. Unemployment for those ages 18-29 reached 13.2 percent in May — about double the general unemployment figure. The lack of jobs for the young has many causes: fewer job opportunities overall; more older people taking jobs that would have been filled by younger workers; and a mismatch between available jobs and people available to fill them.

Fewer Full-Time Jobs

America the land of opportunity is not what it was. Though unemployment has continued to drop, we’re trading full-time jobs for part-time work. According to the U.S. Bureau of Labor Statistics, in June, part-time jobs increased by 800,000 while full-time jobs decreased by 523,000. Part-time workers now number 28 million, of which about 7.5 million are considered involuntary. They take part-time jobs because they cannot find full-time work.

Many of these jobs are ones that teens would have filled and many are jobs taken by people in their prime working years — ages 25-54. In the fast food industry almost 40 percent of workers are 25 or older and more than 30 percent have at least some college experience. But the majority of people in part-time work lack a high-school education and consequently, having limited opportunities for advancement, are unlikely to vacate them since they also have no vocational training or are unqualified or unwilling to work in manufacturing.

Land of the Old

The workforce is aging: the median age of the American worker is about 42, up from 39 at the start of the century. Older people increasingly continue to work after age 65 — about 30 percent of those ages 65 – 69 are employed. Substantial numbers have no choice since their savings and investments were decimated in the recession, or they never had enough to retire comfortably. Consequently, by 2020 the proportion of the U.S. labor force that is composed of older adults will be 25.2 percent, up from 13.1 percent in 2000. And many of these workers are taking part-time jobs that would have been filled by younger workers in the past.

The Jobs Mismatch

A decade ago Richard Florida’s book The Rise of the Creative Class made the case that places and cities that were “cool” would be the powerhouses of economic growth, because they would attract the most talented people. Many of California’s cities were cited as the best examples.

Fast forward to today and the so-called cool places have not produced the jobs they were supposed to. Virtually all the growth in employment has happened in decidedly uncool places like Dallas, Houston, Lehi, Utah, and Williston, North Dakota. Seven of the fastest growing cities in America are in Texas. Not a single one is in California. Houston has added more than 600,000 jobs since 2000, and 263,000 since 2008. The much larger New York City area has only added 103,000 jobs since 2008, and Los Angeles, Chicago, Phoenix, Atlanta, and Philadelphia have fewer jobs today than they did at the start of the century.

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Outside of Silicon Valley the Golden State is losing much of its allure as companies decamp to other states or expand elsewhere and take their jobs with them. But this creates even more problems for younger workers who are disproportionately concentrated in places like San Francisco and New York and unwilling to relocate.

Younger workers are attracted to industries that are not likely to produce many jobs — such as “green” industries or the government. The largest increase in jobs in America is likely to be in the energy industry, but not in renewable energy. The International Energy Agency says North America will invest $2.5 trillion (with a “t”) in oil in the next 20 years. That will generate a huge demand for employees by companies in energy and related industries; more than healthcare and IT.

Since 2001, according to the Wall Street Journal, “the energy industry has been directly responsible for an increase of 67,000 jobs in Houston, and it now employs more than 240,000 people in the area.” $25 billion to $40 billion in new petrochemical facilities are in development, the Journal says, “one reason the region now boasts the highest concentration of engineers outside Silicon Valley.” Even Williston in North Dakota has 25,000 open jobs and is adding 2,000 per month, but lacking even a single coffee shop it’s not likely to attract many young workers from places like California. But it is there, and places like Oklahoma and Utah, where you may be want to tell your children to go when they get out of college and start working.

Raghav Singh, director of analytics at Korn Ferry Futurestep, has developed and launched multiple software products and held leadership positions at several major recruiting technology vendors. His career has included work as a consultant on enterprise HR systems and as a recruiting and HRIT leader at several Fortune 500 companies. Opinions expressed here are his own.

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12 Comments on “No Country for Young Men (and Women)

  1. Until I see kids actually going to the thousands of farms to pick fruit, and farmers no longer complaining about the lack of immigrant labor for seasonal harvests because no one here in our own country will condescend to do the work, I won’t feel a whole lot of empathy for the youth who feel that working as a barista or at the mall is the only way to make extra money in the summertime.

    Skilled labor industries are in more need of new workers than anyone else, but everyone wants to be a software engineer or sustainability coordinator.

    We need to stop writing stories about there being “no” jobs out there for teens and college graduates simply because the jobs they want don’t fit into the business world.

  2. I see nothing wrong in having career ambitions and working
    hard to succeed in the chosen field. Yes, I agree not everyone is made to be a
    doctor or a lawyer, but I think it’s worth trying. Anyway, we live in the country
    where you are bound to make a try, otherwise you’re considered a loser. If our
    mentality changes – the attitude to such jobs as barista or farm worker will
    change. Until then we have to comply with high rates of underemployment.

  3. I have nothing but sympathy and empathy for younger workers of today. They were sold a bill of goods and are now getting hammered. They are living in one of the biggest recessions in economic history. Debate about how and why it came about, and what policies and practices caused it can be left aside for this argument, but it is undoubtedly the result of those who came before them; it’s not their fault. They didn’t manage the economy into a hole, their parents did. They didn’t develop the system that insists on college degrees for working at McDonald’s, nor that requires they sell themselves into debt amounting to lifetime servitude to get that degree, their parents did. They didn’t sell the idea that working a trade is ‘unworthy’ or a bad move, their parents did. And it was their parents that lead, or stood by, as vocational learning and apprenticeships took a nose dive into relative obscurity.

    Today’s generation has been royally screwed by the ones who came before, who did nothing but mount up debt and destroy their own currency and productive capacity over time, and then decided to turn around and call the current generation ‘entitled’ when they actually started question why the dream they were sold wasn’t anywhere near the reality.

  4. This article suffers from a lack of what even Fox News would call “fair and balanced” use of statistics. The data used is ancient and not at all reflective of the reality since the economy really started growing again a few years ago. To cite data going back to 2001 to make the case for where young adults should live in 2014 is silly.

    The reality is that states like Texas and North Dakota did produce far more jobs than non-oil rich states in the 2000’s but most of those jobs were low wage and low skilled and therefore not well suited to a university graduate. If you want to see where young adults are moving then look no further than metros like San Francisco, Portland, Austin, Chicago, Minneapolis, DC, and New York. Those will be the metros which will propaer over the coming decades as they will have an increasingly large share of the knowledge workers in this increasingly lknowledge-based economy.

  5. Granted this is an anecdotal comment, but the companies we work with sure seem to have aggressively ramped up their college recruiting over the past couple of years. And not just for the engineers, software developers, and IT folks that we help them find. I see them hiring more college grads across the board, including more liberal arts degreed grads for career tracks in areas like sales, marketing, finance, project management, etc. One thing that isn’t discussed much online is the role of GPA in determining employability. I know that our clients always want to take a close look at GPA and also things like specific course selection and how the grad did in subjects most relevant to the open position. College reputation also seems to play a big role but it isn’t as big a factor as GPA (in my limited experience). If a student graduates with a horrible GPA, barely getting by, then probably no company that takes GPA into account will hire them. After a couple years experience, many companies stop looking at GPA. But at that point it may be too late if a grad can’t find a job in their field of study and get off on the right track. This seems like a huge factor that is only discussed in passing. In other words, good grades still count!

    Doug Friedman
    EngineeringReferral.com
    LinkedIn Profile

    1. We’re seeing the same things, Doug. Highly selective employers — typically Fortune 1,000 — care about GPA. But the vast majority of students and grads work for smaller organizations which are more concerned about major and personality.

  6. Thanks Raghav and Everyone.
    These are the facts (as I understand them):
    The US has a slightly more jobs now than during the beginning of the Great Recession. However, we have lost millions of FT, decently paid and benefitted jobs and replaced them with temp, and lower-paid, lesser-benefitted FT jobs.

    The Tech Industry has created a relatively small number of highly paid jobs, and Healthcare has created a large number of low-paid jobs.

    There is claimed to be an increasing shortage of skilled trades people, but with the disappearance of unions, there aren’t many places where people can learn these trades, and furthermore, these jobs always seem to be considered great for “other peoples’ kids, but not my own”.

    Now my opinion:
    Americans needs 15-20 million FT, decently benefitted jobs that pay 80-120% of the median U.S. wage. Also, America needs to spend well over $1T fixing up our highways, roads, streets, harbors, airports, railroads, water treatment plants, schools, parks, power grid, telecommunication systems, etc.. We need to retrofit our houses, offices, etc to make them as energy efficient as is feasible, and work to deal with climate change. We probably have tens of millions of people willing and able to work on these if they were given the chance to do so and make a decent ($80-$120% of the median)wage (with benefits). Under the current and likely next “do-nothing, stop-everything” Congress, I don’t see a snowball’s chance in hell of something like this happening anytime soon.
    So I ask you, Folks:
    What would YOU do to create the large numbers of decent jobs that Americans need?
    No Cheers,
    Keith

    1. “What would YOU do to create the large numbers of decent jobs that Americans need?”

      It’s the constant Doing Something! that causes most of the problems. Make-work programs are not the answer, for every job ‘created’ it’s by force, not necessarily what people want and so a marginal loss, and always at the expense of something else. People need to stop meddling and deciding a priori where the economy ‘should’ go. In any event there is no way to avoid another crash; politicians keep coking up the economy to get one more thousandth of a percent of GDP ‘growth’, the crash is inevitable as with any other unrepetant coke addict with no self control. Just try and enjoy the ride and hope you don’t get burned.

      1. Thanks, Medieval Recruiter. A thoughtful response. At the same time, I do not believe it is correct. Here are two reasons why:
        1) A large number of well-paid, well-benefited infrastructure-creating public works jobs are not “make work” or if they are, then Adam Smith encouraged the government to do that in The Wealth of Nations:
        Chapter I: On the Expenses of the Sovereign or Commonwealth
        Part IV: On the Expense of Supporting the Dignity of the Sovereign-
        “When the institutions or public works which are beneficial to the whole society either cannot be maintained altogether, or are not maintained altogether by the contribution of such particular members of the society as are most immediately benefited by them, the deficiency must in most cases be made up by the general contribution of the whole society. The general revenue of the society, over and above defraying the expense of defending the society, and of supporting the dignity of the chief magistrate, must make up for the deficiency of many particular branches of revenue.”
        EVERYBODY benefits from these types of things, not just a few.

        2) If the Feds hadn’t “meddled” in the economy in 2008 and bailed out the “too big to fail, too big to jail” bankers, then we’d almost certainly have been in the Great Depression II, and not just the Great Recession. IMHO, it is not the “meddling” which has created major economic downturns, but the failure to properly oversee and regulate those industries which were responsible for creating them.

        It also seems rather callous to say to the millions of people who lost their jobs, homes, and savings (through no fault of their own): “Just try and enjoy the ride and hope you don’t get burned.”

        3) Societies typically don’t benefit from having large numbers of un(der)employed young people (particularly young men) around for a long time without many future prospects. They’re particularly receptive to charismatic figures who can effectively channel their anger and frustration for their own ends- think Fascism, Naziism, and Jihadism…We started to have that here during the last Depression with figures like Huey Long and Father Coughlin- and THEY didn’t have Social Media.

        1. Indeed, if you build a bridge, even one to no where, some people will use it. But, the fact remains that if payment for it has to be forced rather than voluntary then there were other options people had to forego that they valued more. What’s more, in the study of past instances of Spend Yourself To Wealth attempts like The New Deal, most such expenditures did not go where they were arguably objectively ‘needed,’ but to where they would buy the most votes. William Shughart, Jim Couch, and Gavin Wright are three people specifically who have studied the issue. Such programs would benefit a few people, those who were politically connected enough to get the contracts, and everyone else would end up paying for it. Despite his reputation, Adam Smith didn’t get much right, and was more of a mercantilist than a free market type.

          “If the Feds hadn’t “meddled” in the economy in 2008 and bailed out the “too big to fail, too big to jail” bankers, then we’d almost certainly have been in the Great Depression II, and not just the Great Recession.”

          I disagree. The bail out, and the fact that banks knew it would come, created this recession by manufacturing a bubble – which people like Paul Krugman called for them to do – in order to ‘recover’ from the dotcom bust. They created the misallocation of funds, the eventual liquidity crisis, and their actions since have done nothing to help, and have likely set the table for a bigger crash to come. I know you’re a Keynesian, so there’s not much point in arguing about this. If spending yourself into wealth is a viable option, it’s just a wonder it’s never worked to date; I think this is like the fourtieth time the US government has bailed ou the banks after a supposedly necessary credit expansion fueled boom. I also know while Keynesians were claiming real estate couldn’t go down, and were calling for more ‘stimulus,’ others were warning of the bubble. I think I’ll listen to the ones who called it over the ones who missed it, and who just rushed to find excuses for their policy prescriptions being a total failure after the fact.

          “IMHO, it is not the “meddling” which has created major economic downturns, but the failure to properly oversee and regulate those industries which were responsible for creating them.”

          I assume you’re refering to the so called ‘repeal’ of Glass Steagle. It did indeed create some conditions which lead to the bust. But that’s a one sided, incomplete analysis. You can pass legislation to make it seem as ‘profitable’ to make square wheels as the ‘repeal’ made it seem profitable to manufacture tons of bad debt. The question still remains: who bought it and why? If the Fed hadn’t been flooding the market with cheap money, turning investment into gambling, crushing interest rates and making people desperate for returns and accepting of higher risk, and winking about the implicit bail out that awaited them all should the economy pop like a balloon and do fart circles around the country, which it did, then I seriously doubt this would have happened, and certainly not on such a grand scale.

          Instead of arguing over the ‘proper’ type of meddling, perhaps the meddling should just stop?

          “It also seems rather callous to say to the millions of people who lost their jobs, homes, and savings (through no fault of their own): ‘Just try and enjoy the ride and hope you don’t get burned.'”

          All due respect, that’s really the only choice. In any case, inventing work which is ultimately destructive of resources by misallocating them is not the answer. Wealth isn’t produced by taking money from people and giving it to a senator’s brother-in-law to build a road, nor can such corruption be stopped or controlled. And calls for repair of the infrastructure are popular but sidestep the question of how that infrastructure got there, and is it worth keeping? For example, many of the bridges which are so desperately in need of repair, and which counties/states would be beneficiaries of such a program, are one lane bridges in sparsely populated states. If the progam you want gets going those states get money for tons of improvements! Tons of work! Jobs! Then at the end of the day a bunch of two person towns have nice shiny bridges, a few conncected contractors get rich, and the rest of the population is poorer for it.

          But, if you’ve got a way to get that kind of corruption out of such programs, I’m all ears. Such has been attempted in the US government in particular for the last 200+ years, just let me know how much more time you need to make it happen.

  7. The same scenario is being replicated in Australia. Its simple maths really. When you give away jobs to overseas countries with cheap labour unless you create the exact same number of jobs to replace them then unemployment will rise. OZ and the US have not even come close to that. I wonder also if Aimee has ever picked fruit either- easy to throw stones from inside a nice office.

  8. Jobs numbers may have increased in Texas but I can tell you that the jobs are low level ones —- so don’t be fooled.

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