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Labor "Participation rate" for younger people plummets

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softwareNerd

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Recessions never hit all segments of the population equally. In the current recession, folks who have held on to their jobs have not really felt much pain. Prices have remained fairly steady, some portion of their 401-K stock market losses have been recouped and they've got over the rest of loss and spent the last two years saving a bit more to make up. They're actually going back to restaurants and not shopping at Walmart as much.

Meanwhile, those who have lost jobs, and were in industries like construction have had it bad: the people who have been unemployed for 27 weeks of more is at record highs. Retired folk who have a good chunk of their income coming from stock investments have been hit because they don't have a way to earning back and saving what they lost. Retired folk who had a good chunk of their income coming from safe CDs have been hit as 5-year rates have dropped from about 5% to 2.5% (they're seeing that component of their income halved). In a sense, these folk are subsidizing the ones who're having it good: granny gets less money and does not realize that the low rates are helping keep sonny's marginal job from being cut!

One of the badly hit segments is younger folk looking for jobs. Here's the so-called "labor participation rate" by age-group. This rate shows how many people in each group say they want jobs. Look at how the participation rate among younger folk has been plunging. Of course, in theory, it could be that a huge segment of younger folk have decided that they prefer to do something other than work: e.g. continue with education. Actually, it is almost certain that the majority of the drop off is because they're unable to find jobs they want.

post-1227-0-72348500-1311591059.jpg

The irony is that a good portion of these young kids probably support the various statist policies that put them in this position. A majority of the ones who cared enough to vote probably voted for Obama who is a symbol of such policies (regardless of whether Bush and his ilk are equally responsible for all this). So, for many -- not just youth, but many people across the economy -- they're getting what they voted for. Neverthless, among all these there are many that are being sacrificed unjustly and needlessly for their neighbor.

(Graphic from one of my favorite blogs for objective economic data-analysis: Calculated Risk)

post-1227-0-72348500-1311591059_thumb.jp

Edited by softwareNerd
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