By Robert Romano — Since Jan. 2009, the labor force participation rate of college graduates has dropped significantly — from 77.6 percent to 75.5 percent today. That may not seem like much, but it represents more than 1.34 million graduates who should have entered the labor force upon graduation, but did not.
Add to that another 1.96 million youths with some college or an associate’s degree who should have entered the labor force but have not, and suddenly in just three-and-a-half years, 3.3 million Americans have left college and already given up on looking for work it’s so bad out there.
That is a rate of 75,340 a month joining America’s lost generation, or 904,000 a year.
How bad is it?
Let’s just examine college graduates for a moment. Since Obama took office, the population of college graduates who are 25 years of age and older has grown by 5.9 million to 64.1 million.
But, recall 1.3 million of them did not join the labor force. That means that even if one graduated today with a degree, there is a 22.5 percent chance — roughly one in five — of joining the lost generation.
Those are devastating numbers.
A recent study by Rutgers found that as many as half of recent college graduates cannot find work in this economy. The above data confirms that result at least in part.
“This represents younger Americans who are simply not entering the work force — a lost generation,” said Americans for Limited Government President Bill Wilson.
“If this trend continues, we are going to look like Spain or Greece in a matter of a few short years, where the youth cannot find work because there are no jobs in the economy,” Wilson added.
In those countries, youth unemployment tops 50 percent, and has resulted in an idle existence, civil unrest, and societal upheaval. If allowed to persist, the long-term economic and social damage wrought will be immense.
As if the human toll and lost dignity of a generation was not bad enough, losing some 904,000 of the most high-potential employees from the workforce every year could have another even more serious impact.
In the U.S., because members of the lost generation are not working, they are also not paying taxes, particularly payroll taxes that fund entitlement programs like Social Security and Medicare.
To the extent that the trustees of those programs have actuarially calculated a lower level of unemployment and higher rates of labor participation in the coming years, the trust funds, now set to be exhausted in 2033 and 2024, respectively, may run out even sooner than thought.
Ironically, many of the members of the lost generation voted for Barack Obama for president in 2008, who has done nothing to improve the situation. His economy has not produced jobs at a rate that even keeps up with the growth of the population, let alone helping the long-term unemployed find work. He has expanded entitlements, increasing the future potential tax burden on the youth.
And the current $16 trillion debt is set to rise to $26 trillion if Obama’s budget proposal is adopted. This debt being passed off to the next generation will include interest payments topping $1 trillion a year by 2022 — much of which will go to banks and foreign countries that hold our debt.
Whoever is elected president this year has to truly make creating the proper conditions for job creation his first priority rather than just an empty campaign slogan. And young people must decide who it is they trust to create those jobs. That choice may well determine if the temporarily lost generation becomes permanent.
Robert Romano is the Senior Editor of Americans for Limited Government. He is 32 years old, and graduated from Stony Brook University in 2008 with a degree in political science.
