Unemployment has been a major issue ever since the real estate bubble burst, sending shockwaves across the global economy. The group that has been affected most by the global recession is young adults. Unemployment among young adults comes with it’s own set of issues, including difficulty getting into entry level jobs that help them pay down record student debt. One thing to keep in mind is that despite how connected the global economy is, unemployment varies by country and even by city.
U.S. Unemployment
In just the past couple years, the unemployment numbers have improved in the United States. Sitting at approximately 7.5%, unemployment has improved by more than 1.5% since July of 2011. Lower unemployment figures are a trend that policymakers in the U.S. are hoping continues.
Young adults are affected more so than other demographics, as Christopher Ryan explains:
Unemployment remains at 22.8% for 18 and 19 year olds, 12.4% for 20 to 24 year olds, and 8.1% for 25 to 34 year olds. These latest figures are a slight improvement for 20 to 34 year olds, and a minor setback for 18 and 19 year olds. Regardless, over 5.5 million of us are currently unemployed.
This could have long-term effects, which I will address in a bit. Now let’s look across the pond at how London is doing economically, particularly on the unemployment front.
London & U.K. Unemployment
The unemployment rate in London has recently dipped to 8.5%; the lowest for around four years. There are approximately 365,000 out of work in London, which is no small number but still much better than it could be. One reason the London unemployment rate is lower than other parts of the UK is due to the 2012 Olympic Games. This required a massive effort that likely drove employment that otherwise would not have existed. The question of the long-term stability of such government spending is still yet to be seen.
Nevertheless, things look better for London at the moment. However, the overall economic picture is mixed according to a spokesperson for cityindex.co.uk. He said:
“This is good news on the surface, but these figures should be taken with a pinch of salt, as employment numbers have largely been bolstered by the low skill jobs created around the summer Olympics.
“The data does not reflect the situation in the rest of the UK, where unemployment continues to rise, hitting 2.52m in March’s job figures.
“London has long been economically isolated from the rest of the country, where disappointing economic performance continues contributing to overall rising unemployment, with Wolseley, the world’s biggest distributor of plumbing and heating products to the building trade listed on the FTSE100, this week announcing the decision to lay off 1,000 of its workers”, he added.
“There is, however, room for optimism as positive figures from the services sector has helped clear at least some of the gloom that has plagued economic rhetoric since The Chancellor of the Exchequer announced his budget, which was widely perceived as disappointing.
“The Office for National Statistics announced that service output increased 0.3% in January this year, which may indicate the UK could avoid a triple dip recession in the first quarter of 2013”, he concluded.
Elsewhere, unemployment in the Eurozone recently hit a record high of 11.9% in 2013. While things are starting to look up for both the US and the UK, problems elsewhere no doubt will impact the economic recovery.
Take Unemployment Figures with a grain of salt
A couple things to keep in mind when it comes to unemployment figures:
- Unemployment does not take underemployment into consideration – An increasing number of young adults are taking jobs that they are overqualified for. They would like to have a higher-paying and more challenging job, but competition for these jobs are fierce.
- People who have given up looking for a job are not counted – Unemployment figures do not take into consideration people who have given up looking for work. This could include the chronically unemployed or people who would like to work but have decided to stop and live off of their spouse or partner’s income. There certainly are people who have retired earlier than they would have liked, but simply have had too much trouble finding a job so they gave up. This group is also excluded from the unemployment figures.
One of the long-term effects of unemployment for young adults is increased competition for entry-level jobs. The key to making a higher income is first getting your foot in the door. New graduates are now competing with others who graduated the past few years for these limited number of spots (and this is without mentioning decrease in hiring that has become more of a norm recently). With this failure to “get started” at their career, possibly for years, will delay gaining experience which will delay raises, etc.
An additional issue is that graduate school has become more competitive. Lots of time and energy is spent on graduate school applications, with many applicants being turned away (think 5% or less acceptance rates to phd programs).
No matter what, unemployment figures are something to watch in London, the United States, and elsewhere. Paying attention to this economic data (while also keeping in consideration the limitations) will help us know whether the economy is truly turning around.
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Photo by Victor1558
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