Monday, May 26, 2008

Outlook for teenage jobs is not good

The article, Toughest Summer Job This Year is Finding One, argues that many American teenagers are suffering from the recent softening of the labor market. In April, the workforce lost 20,000 jobs, and in some parts of the nation, this trend in job loss is greatly affecting teenagers. The article downplays the loss in teenage jobs stemming from heightened competition with legal and/or illegal immigrants.

Highlighted in the article are three reasons for the recent loss of teenage jobs. First, adult workers are taking the jobs as the economy grows very slowly. Second, teenagers are increasingly spending their summers preparing for competitive college applications. Third, Mexican immigrants are competing for some of the same jobs.

The graph below illustrates the state of the labor force for workers aged 16-19. There are two visible trends. First, when the economy is in a recession, the share of teenage workers to the size of the population falls and unemployment rises, confirming the fist reason for teenage job loss. As the economy slumps, adult workers willing to work are preferred to teenage workers, and teenagers lose jobs. Second, the share rebounded and unemployment fell following the troughs of three recessions: two in 1980-‘82 and 199-‘91. As the economy rebounds, the adult workers move up in the work force, leaving jobs for teenagers, and teenagers gain jobs.

However, since the latest recession (2001), the share of teenage workers to the size of the population has fallen and not hit a bottom. There is a more structural element at work, rather than a simple economic slump explaining the loss of teenage jobs. Some of the explanation may lie in the fact that teenagers are increasingly preparing for college, and not seeking employment, but this reason is likely to explain only a small portion of the recent downturn. It is more likely that both legal and illegal immigrants are taking the jobs from the teenagers.

The 2007 Hispanic share of the population rose to 15.1% from 12.6% in 2000. The trend is obvious: a higher Hispanic population coincides with loss of teenage jobs since over the same period, the share of teenage workers to the total population has fallen steadily. Teenagers are loosing jobs to the rising Hispanic population. The question is: will the share hit a trough? According to the Census projections, that is unlikely, since the Hispanic population will grow to 24.4% by 2050.

This article should add a point on the “con” side of the immigration list. When immigrant workers are taking jobs from the teenage workforce, American citizens suffer.

Currently, both Hillary Clinton and Barack Obama call for immigration reform. Both focus on the loss in well-being when the U.S. immigration policies separate families. Senator Obama specifically highlights Mexico; he proposes aiding economic reform in Mexico in order to reduce the incentive for illegal immigration. Hillary Clinton advocates making the transition smoother for those families immigrating to the U.S. All three Presidential hopefuls (Obama, Clinton, and McCain) advocate to varying degrees tightened border control, but only McCain is making that his top priority.

It is wrong for politicians to push aside statistics like an increasingly unemployed teenage workforce to focus on the immigrant population.

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