Statistics and Trends Youth Employment Work Group May 26, 2016 1 - PowerPoint PPT Presentation

Youth in the Labor Force: Statistics and Trends Youth Employment Work Group May 26, 2016 1

May 2016 Update to the 2014 report, available online: Endangered: Youth in the Labor Force

Oregon’s labor market has improved substantially since the report was published.  Oregon has been adding jobs faster than the U.S. since 2013.  More jobs were added in the last 12 months than over any 12 month period since 1990 (at least).  Oregon’s unemployment rate is the lowest in 40 years, and is lower than the U.S.  Strong job growth is boosting the labor force participation rate, offsetting the long-term decline in participation.  The youth labor market has improved a lot, but it’s still not great, especially for teens.

Youth Unemployment  Unemployment rates for teens and young adults increased drastically during the recession.  Unemployment among young adults (20-24 years) has improved significantly since then.  Unemployment among teenagers (16-19 years) reached a record high during the recession. It has improved a lot since then, but the unemployment rate for teens is still very high.

The recession sent youth unemployment rates to record highs. It’s still troubling high for teens. Young people Unemployment Rates High for Oregon's Youth (Years with Recessions Shaded Gray) were just 12 35% percent of the 16-19 years 20-24 years Age 25 years and over labor force in 30% 2015, but they accounted for 27 25% percent of Unemployment Rate unemployed Oregonians. 20% Unemployment 15% rates: 16-19 years: 22.2% 10% 20-24 years: 8.8% 5% 25+ years: 4.7% 0% 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: Bureau of Labor Statistics, Current Population Survey

Oregon had the 17th highest unemployment rate for youth between 16 and 24 years old at 12.4 percent.

The share of unemployed teens with no previous work experience is much higher than it used to be, and the lack of experience makes it more difficult to find a job. Share of Half of Teen Job Seekers Lack Previous Work Experience Unemployed with No Previous Work Experience, United States unemployed 100% with no previous work experience: Age 16-19 Percent of Unemployed in Age Group Age 20-24 75% Age 25 and over 16-19 years 50% 20-24 years 50% 16% 25+ years 3% 25% 0% 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: Bureau of Labor Statistics, Current Population Survey

Youth Labor Force Participation  The labor force participation rate is the share of the civilian noninstitutional population that is employed or unemployed (no job, but actively looking for work).  Young adult participation increased slightly as economic conditions improved.  Teen participation has continued its long-term fall, which began in the year 2000.

After years of decline, the share of teens participating in the labor force reached the lowest point on record in 2015. It’s now far Oregon Teen Participation Rate at Historic Lows more common (Years With Recessions Shaded Gray) 100% for teens to be 16-19 years 20-24 years Age 25 years and over neither working 90% nor looking for 80% a job. Labor Force Participation Rate 70% Participation 60% rates: 50% 16-19 years 40% 34% 30% 20-24 years 20% 72% 10% 25+ years 0% 62% 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: Bureau of Labor Statistics, Current Population Survey

Oregon had the 34th highest labor force participation rate for youth between ages 16 and 24 years.

Fewer Jobs Held by Young People  Oregon has added back the number of jobs lost during the recession. However, relatively few of the new jobs went to younger workers.  By 2015, there were 43,000 more jobs in Oregon than before the recession.  But there were 29,300 fewer jobs held by workers ages 14 to 24 years, than in 2007.

Oregon’s youth held 29,3oo fewer jobs in 2015 than they did in 2007. Number of Jobs by Age Group Oregon 120,000 100,000 22 to 24 Years 80,000 Number of Jobs 19 to 21 Years 60,000 40,000 14 to 18 Years 20,000 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Source: U.S. Census Bureau, Quarterly Workforce Indicators

The share of youth in Oregon’s workforce has fallen dramatically, recovering slightly in the last few years. Share of Total Jobs by Age Group Oregon 8.0% 7.0% 6.0% Percent of Total Jobs 22 to 24 Years 5.4% 5.0% 19 to 21 Years 4.0% 3.8% 3.0% 14 to 18 Years 2.0% 1.5% 1.0% 0.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Source: U.S. Census Bureau, Quarterly Workforce Indicators

Today’s teenagers are less likely to find a summer job than previous generations. The number of Oregon Teen Hiring Halved in Recession teen summer Third Quarter New Hires Ages 14-18 “new hires” fell 70,000 during the recession and 60,000 hasn’t recovered. 50,000 Number of New Hires Summer 2006 40,000 45,300 30,000 Summer 2014 28,100 20,000 10,000 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: U.S. Census Bureau, Quarterly Workforce Indicators

The share of young workers has fallen in industries that have traditionally relied heavily on a younger workforce. The trend Share of Jobs Held by Youth towards fewer Oregon 50.0% young workers Food Services and Drinking Places has been taking 45.0% place since the Percent of Industry Workers Ages 14 to 24 40.0% 1990s, but the Food and Beverage Stores Great Recession 35.0% accelerated the 29.0% 30.0% trend for these key youth 25.0% 21.3% industries. 20.0% Total - All Industries 15.0% 10.7% 10.0% 5.0% 0.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Source: U.S. Census Bureau, Quarterly Workforce Indicators

What Are Young People Doing If They Are Not Working?

Enrollment in school makes a big difference in the labor force participation of today’s youth. Teens and young adults not enrolled in school are more likely to be working now than during the recession. Those enrolled in school are still less likely to be working.

Labor force participation among youth is expected to fall faster than that of the older population through 2022. The Expect Continued Decline in Youth Participation Rates participation Oregon 90% rate of teens dropped below 80% 50% in 2002. 72.2 70.1 Labor Force Participation Rate 70% Declines in teen participation 60% have been 62.0 60.8 sharp, and 50% show no sign of Ages 16-19 letting up. Projection 2015-2024 40% Ages 20-24 33.5 Projection 2015-2024 30% Ages 25 and over Projection 2015-2024 27.3 20% 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 Source: Bureau of Labor Statistics, Current Population Survey. Projections developed by Oregon Employment Department using Bureau of Labor Statistics, Labor Force Projections 2014-2024.

What About the Minimum Wage?

What Does the Minimum Wage Do?  2014 meta analysis of over 200 scholarly minimum wage studies.  Looked at U.S. studies since 2001 that focus on the effects of minimum wage on youth employment:  9 reported negative employment effects  9 reported mixed results  5 reported no significant impact  Singell and Terborg (2007). Oregon and Washington increases in the late 1990s. Found negative employment effect in eating and drinking places, and a positive employment effect in hotel and lodging.  Giuliano (2013). Increases in relative wages of teens led to increases in relative employment of teens, especially younger and more affluent teens.

Does the minimum wage impact youth unemployment? Minimum Wage and Youth Unemployment Rates by State, 2015 20.0 West Virginia 18.0 South Carolina Unemployment Rate of Youth 16-24 Years 16.0 New Mexico California 14.0 Nevada Oregon United States* 12.0 Washington 10.0 Vermont Idaho 8.0 6.0 Nebraska North Dakota 4.0 2.0 0.0 $7.25 $7.75 $8.25 $8.75 $9.25 $9.75 Minimum Wage *Weighted average based on minimum wage and labor force by state.

Does the minimum wage impact youth participation? Minimum Wage and Youth Labor Force Participation Rates by State, 2015 100.0 Labor Force Participation Rate of Youth 16-24Years 90.0 80.0 Iowa South Dakota 70.0 Idaho Washington 60.0 United States* Nevada Oregon 50.0 Connecticut California New Jersey 40.0 30.0 20.0 10.0 0.0 $7.25 $7.75 $8.25 $8.75 $9.25 $9.75 Minimum Wage *Weighted average based on minimum wage and labor force by state.

More About Teen Workers 16-19 Years

Oregon had the 4th highest unemployment rate for teens 16 to 19 years old at 22.2 percent.