Collapse of U.S. economy leads to higher youth unemployment, more part-time jobs

Next year may not bode well for those aged 16 to 24 as the collapse of the United States economy continues to contribute to the increase in youth unemployment and the 40-hour work week becoming a thing of the past. Both growing issues suggest that 2013 will be a troubling time for young Americans and full-time workers.

The Annie E. Casey Foundation issued a report Wednesday titled “Youth and Work: Restoring Teen and Young Adult Connections to Opportunity” that concludes youth employment is at its lowest in half a century.  The study found that 2.2 million teenagers and 4.3 million young adults were out of work or out of school and 1.4 million of these individuals were parents themselves.

Entry-level jobs at a lot of retail businesses, such as fast-food companies and clothing stores, which usually went to the younger members of the workforce, are now being given to older workers who have both the experience and the necessary credentials.

“The past decade has been the most challenging in 50 years for young people seeking to navigate the transition to adulthood, earn a degree, get a job and stand on their own financially,” the report stated.  “The employment rate for youth ages 16 to 19 dropped precipitously – down 42 percent since 2000.  More youth than ever – 2.2 million teenagers and 4.3 million young adults age 20 to 24 – are neither in school nor working.”

According to the study, some fast food outlets now require a high school diploma or a GED to flip hamburgers, clean the restaurant or serve customers. It also noted, though, that even those with college degrees are finding it difficult to obtain a job, which will lead to a generation without the proper work experience.

It provided a look at the employment rates across the country. The District of Columbia had the lowest employment rate for teens 16 to 19 as only 14 percent were working, while the state of Mississippi had the lowest employment numbers for individuals 20 to 24 with 51 percent having jobs.

For 16 to 19-year-olds, North Dakota (46 percent), South Dakota (43 percent) and Iowa (43 percent) had the highest employment rates. For 20 to 24-year-olds, North Dakota (75 percent), Minnesota (74 percent) and Nebraska (74 percent) were the top three states with employed youth in that age demographic.

“Studies show that youth who miss out on an early work experience are more likely to endure later unemployment and less likely to achieve higher levels of career attain merit,” the report added.  “Everyone needs opportunities in their teen years and young adulthood to experience work and attain job-readiness skills needed for long-term success.”

The United States isn’t the only nation experiencing high unemployment numbers for its youth. According to the International Labour Organization (ILO), the global youth unemployment rate in 2011 was 12.5 percent.

Part-time jobs

The U.S. Labor Department reported that an additional 582,000 Americans were working in part-time jobs in September, which is the most since Feb. 2009.  The reason why they chose part-time work was due to “slack business conditions” or it was the only job they could find.  This figure accounted for much of the 873,000 overall increase in employment for that same month.

At the time of this writing, there are approximately eight million Americans working in part-time jobs, but many financial experts and economists say that number will skyrocket in the coming years because of President Barack Obama’s Affordable Care Act (Obamacare).

Many businesses are already warning their employees that full-time hours will be cut due to many considerations and the policies being enacted by the federal and state governments, such as Obamacare, the increase in taxes, the paucity of economic growth and other factors.

According to one blogger, none of his company’s employees will work more than 28 hours per week because he has to get his company to under 50 employees otherwise he will face an Obamacare bill.

“I love my workers.  They make me a success.  But most of my competitors are small businesses that are exempt from the Obamacare hammer,” wrote the blogger on Coyote Blog.  “To compete, I must make sure my company is exempt as well.  This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt.  We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least, and I am pretty sure the cost of more training will be less than that.”

Papa John’s CEO John Schnatter was harshly criticized last month because of his intentions to move all of his full-time workers to a part-time schedule of less than 30 hours per week.  Schnatter expected that most franchise owners will do the same thing because many of these businesses cannot afford the costs of Obamacare.

Other companies, such as Applebee’s and Denny’s, have already confirmed that Obamacare will force them to cut worker hours, raise prices and stop building additional restaurants across the nation.

Democratic voters and President Obama’s supporters have suggested, like this letter here, that loopholes to Obamacare should be removed by the congressional legislators.

Akin to youth unemployment numbers, the increase in part-time work isn’t just prone to the U.S., but in other parts of the world.

In Canada, 11.8 percent of working-age Canadians had part-time jobs, while this Globe and Mail article suggested it will be the new norm and it will just increase.

Across the pond in Great Britain, three million Britons are working in part-time jobs when they would prefer to work full-time. In Australia, there has been an unprecedented growth in part-time jobs.

Perhaps the future of employment will look like what the Coyote Blog blogger projects:

“If given time, I would guess that just as the [Monday to Friday] workweek emerged as a standard, companies may adopt standard ways of dividing up the work weeks for part-timers, making it easier for schedules to mesh.”

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