August 27, 2014

Young, Bummed, and in Debt

Veronique de Rugy

George Gibbs Chair in Political Economy
Summary

If the economy doesn't improve, reality will catch up with this generation. When that happens, let's hope they demand the same freedom in their economic lives that they have grown to expect in their social lives.

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This article appears in the October edition of Reason Magazine

Until recently, a bad job market was nearly always bad news for political incumbents. Unemployed and anxious voters have a habit of throwing the bums out. But headed into the 2016 election season, one large demographic group is still likely to vote Democratic: millennials.

Which is weird, because when it comes to the labor market, it sucks to be young. To be sure, it has always been hard to enter the workforce during a recession. But this recession has not only been particularly severe; it has been made longer and deeper than necessary by the Obama administration's policies. Washington's burdensome regulations, "stimulus" spending, and health insurance mandates have given us a slow recovery, high uncertainty, and a pathetic job market.

According to the Bureau of Labor Statistics (BLS), some 1.2 million unemployed millennials with little or no job experience are trying to find jobs for the first time right now. Their unemployment rate is 12.2 percent, more than twice the rate for 25- to 54-year-olds. And if those first-time job seekers don't find employment soon, some of them may actually never work. "It is even more depressing," says my Mercatus Center colleague Keith Hall, a former BLS commissioner, "when you know that some 400,000 young long-term unemployed have never worked before." That's much higher than anything we have seen in the last 45 years.

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