The basic concept of Reaganomics was that reducing the tax burden on the wealthiest Americans would begin a “trickle down” effect on wage earners at all levels and result in a strengthening economy. Today, young Americans are experiencing a trickle down recession, evidenced by the following statistics:
1. Only 26% of American teenagers aged 16-19 are employed.
2. 28% of all Americans are not working or in school.
Neither of these numbers should inspire confidence in young people beating the streets to find work both to make ends meet and develop job skills for the future. With laid off blue and white collar workers now competing for the sorts of jobs normally left for teenagers and young Americans, the trickle down recession is in full effect. Obviously, owners are more likely to hire maturity, experience, and availability to work, especially if desperation has driven them to accept lesser wages.
Not to mention that the actual jobs available pool continues to shrink as the recession grinds on. Owners are closing down or trying to make it with fewer employees.
This leaves young people on the outside looking in. It also tends to have an effect on future earning potential. A 2001 study by found that “a six month unemployment spell can reduce future wages by 2.3 percent.” Teens who can’t find work tend have a good chance of turning into adults who can’t find work.
Miracle solution? Sorry, we don’t have one of those yet but a real world financial education is a good start. Stay tuned.
The Young Wealth Team