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Rex Nutting
Oct. 15, 2010, 12:01 a.m. EDT
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By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) "” Persistently high unemployment for teenagers is a tragedy that could haunt a whole generation for years. And the Great Recession has also been a disaster for older Americans that could ruin their finances for the rest of their lives.
The Great Recession destroyed the jobs of people from every walk of life and every segment of society, but it's hurt some much harder than others. For those just starting their careers, or just ending them, a long spell of unemployment can have devastating long-term effects.
The percentage of teens with a job is at the lowest level on record.
The official unemployment rate has risen from 5% at the beginning of the recession in December 2007 to 9.6% in September 2010. Unemployment has increased from 7.7 million to 14.8 million. But those figures hide some of the pain, because they don't include people who have given up looking for a job and have dropped out of the labor force.
For teenagers, it's much worse. The job market is as bad for young people as it's ever been. The official unemployment rate for teenagers now sits at 26%, not far from the record high of 27% a year ago.
What's worse, most teenagers aren't even looking for work, and so aren't counted as unemployed. As of September, just 25% of all teenagers had a job, the lowest rate on record. A generation ago, nearly 50% of teens were working, and as recently as 1999, the figure was more than 45%.
Since the turn of the century, there's been a steady erosion of teenage participation in the labor market, even during the economic expansion in the middle of the Oughts. In 1999, about half of all teens were working or looking for work, now it's just a third.
For African-American teens, the job market has virtually disappeared, with a record-low 11.7% working. The official unemployment rate for black teenagers hit a staggering 49% in September, even with three of four black teenagers not even looking for a job.
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The figures for those in their early 20s are slightly better, but the pattern is the same. Since the recession began, about 2.75 million people under 25 have either lost their jobs, or dropped out of the workforce entirely, about 1 million more than their fair share if the pain had been distributed equally across society.
Millions of young people aren't getting that first job, and so aren't developing the skills they'll need to get that second job. That lack of experience can saddle someone for years afterwards, reducing their earnings up to 10 years later, according to research by Thomas Mroz and Timothy Savage.
The International Labor Organization says higher levels of unemployment among young people is a global trend, suggesting that the causes aren't specific to the United States, such as the increase in the federal minimum wage in 2009 to $7.25 an hour.
Some of the jobs that young people usually take have certainly been lost for good, but in more cases, those entry-level jobs are being grabbed by older, more-experienced and better-educated workers who've lost their own job. Young people are at the bottom of the pecking order, and when there aren't enough crumbs to go around, they are the ones who suffer.
Older workers have been losing jobs at pretty much the same rate as everyone else. For those over 55, the unemployment rate has risen from 3.1% to 6.9% since the recession began, but what's more troubling is their long-term unemployment. More than half of those who are unemployed have been out of work longer than six months.
If you're older and you lose your job, you may never get another one.
The number of people taking early retirement or filing for disability has risen noticeably during the recession, according to the Social Security Administration. Those who can are working longer, as people over 65 are actually more likely to be working now than they were at the beginning of the recession.
Homeowners have lost $6.5 trillion since the bubble burst.
For those nearing the end of their careers, the biggest goal is to save enough to retire on. That's where the recession has really hurt. For most families, most of their wealth is tied up in their home. Since 2006, the equity that Americans have in their homes has plunged by $6.5 trillion, or 48%. How many minimum-wage workers would it take to save up $6.5 trillion?
It's no surprise that many people in their 50s and 60s fear that they'll never be able to afford to retire, and that forced retirement would sentence them to living out their lives totally dependent on Social Security.
The recession has been bad for everyone, but it's been downright brutal for both the young and the almost-old.
Rex Nutting is Washington columnist for MarketWatch.
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