Young U.S. workers still reeling from recession, could be impacted for another decade: study

Despite officially ending in June 2009, the worst global economic downturn in decades could continue to impact young American graduates for the next 10 to 15 years, revealed a study released Wednesday by a non-profit think tank.

The slow pace of the recovery means that seven classes of students have now graduated into a very weak labor market and have had to compete with more experienced workers for a limited amount of job opportunities, found the study by the Washington-based Economic Policy Institute.

For the next 10 to 15 years, those in the class of 2015 will likely earn less than if they had graduated when job opportunities were plentiful, the study found.

While the recently improving economy has finally brought more job prospects to recent grads, there is a long way to go, the study said.

Indeed, unemployment of young graduates is extremely high today, as young workers always experience disproportionate increases in unemployment during periods of labor market weakness -- and the Great Recession and its aftermath is the longest, most severe period of economic weakness in more than seven decades, the report said.

Unemployment and underemployment rates among young graduates are improving but remain substantially higher than before the recession began. For young college graduates, the unemployment rate is currently 7.2 percent, compared with 5.5 percent in 2007 -- just before the economy took a nose dive.

The underemployment rate -- the number of part time workers seeking full time work -- is a whopping 14.9 percent compared with 9.6 percent in 2007, the study said.

The numbers are even worse for young high school graduates: The jobless rate is 19.5 percent compared with 15.9 percent in 2007, and the underemployment rate is 37 percent, compared with 26.8 percent in 2007, according to the study.

Demand in the economy still remains weak, making it unnecessary for employers to ramp up hiring, and there is a high share of college grads working in jobs that do not require a college degree, the study found.

The share of young graduates who are "idled" by the economy -- neither enrolled in further schooling nor employed -- remains elevated in the wake of the Great Recession. This indicates that many graduates are unable to take the two main paths -- receiving further education or getting more work experience -- that enable future career success, the study found.

Wages of young college and high school graduates are performing poorly and are substantially lower today than in 2000. The real ( inflation-adjusted) wages of young high school graduates today are 7.4 percent lower than in 2000 and the wages of young college graduates are 3.9 percent lower, the study said.

Women in particular have seen large declines in hourly wages, among both high school and college graduates. The unemployment rates of blacks and Hispanics are substantially higher than the unemployment rates of white non-Hispanics, for both young high school graduates and young college graduates.

The share of young black and Hispanic graduates who remain unemployed and not enrolled in further schooling is substantially higher than that of white graduates, the study said. Endite