Understanding the Economy

Economic news supplements and videos to accompany 'Economics:The Basics' by Michael Mandel

Posts Tagged ‘Unemployment’

Number of the Week: Unemployment Rate for Young College Graduates

Posted by Mike Mandel on August 14, 2009

If you are a young college grad looking for a job, it’s tough out there. But how bad is it, really?

Bad—but not as bad as it could be. That may be cold comfort if you have been hunting through want ads and redoing your resume for the 20th time. The numbers, though, don’t lie.

In June 2009, the unemployment rate for young college graduates was 7.3%. By comparison, the unemployment rate for young high school graduates with no college was 16.3%, more than twice as high.*  Education pays—not just in better wages, but in a lower likelihood of unemployment, even in these tough times.

What do these numbers mean? By ‘young college graduates’, we mean all U.S. residents who are 20-29 and have finished a bachelor’s degree.  ‘Young high school graduates with no college” includes all U.S. residents who are 20-29, have finished high school, but have not started college.

The government’s monthly survey puts these people into three categories: Working; actively looking for a job; and not looking for work (no, “laying on the beach until the sun goes down” is not an acceptable answer).  You are “in the labor force” if you fall into one of the first two categories—either already employed, or actively searching for one.

The unemployment rate is the percentage of the labor force who don’t have jobs, but are actively searching.  So in June 2009, 7.3% of the young college-educated labor force was unemployed. 

One way to think of this number:  If you draw a card randomly out of a deck of cards, the chances of you pulling an ace is slightly bigger than  7.3% (actually it’s 1 out of 13, which is 7.7%).  Take a deck of cards and pick a card—if you get an ace, you are unemployed. Otherwise you have a job.

Now,  don’t get me wrong. The labor market for young college graduates is a lot worse than previous years. For example, in June 2007, before the recession started, the unemployment rate for young college graduates was only 4.1%. That’s a big difference from today.

Still, when it comes to finding a job, it’s still better to have a college degree.

 

*Not seasonally adjusted.  These results come from the author’s tabulations of the June 2009 Current Population Survey. They are consistent with published data.

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Unemployment: The Actor and the Student

Posted by Damian on February 13, 2009

[This item will soon be moved to McGraw-Hill's Connect online homework management system, where it will be available along with a customized problem set]

In January 2009, the number of unemployed Americans hit 11.6 million, an increase of 4 million over a year earlier. These are all people who don’t have jobs, but are actively looking for work.

Take for example, Johnathan Tchaikovsky, a 25-year-old actor living in Queens, New York. Being a young actor isn’t easy even in the best of times–but in today’s recession, it can be downright painful. Over the past few years, Johnathan has guest-starred on television shows such as CSI New York, Law and Order, and Cold Case. But he is now considering other jobs as a backup, since opportunities for actors seem to be few and far between. “There’s just very little work available right now,” he says.

Johnathan scans publications like Backstage for smaller theater work to “cultivate the craft,” but relies on his agency and manager for higher paid television and film roles. He also networks with directors, writers and producers whenever the opportunity presents itself, typically when filming for a pilot. Last year Johnathan booked about three to four auditions a week between January and April — the time when television pilots are shot in New York. One big problem? When he goes to auditions, he often faces competition from “celebrities that have been doing it since they were kids.”

By contrast, Lesette Latimer, a 21-year-old undergraduate student in her last semester at Pace University in New York City is not counted as part of the unemployed because as a full-time student she has not begun looking for work. And like many students, she has serious reservations about joining a labor force with such dismal prospects. “I don’t know if I’ll be able to find work in the next year,” says Ms. Latimer, a forensic science major living in Brooklyn. “My hope is to continue onto one of the masters program here.”

Reported and written by Damian Ghigliotty

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