The Class of 2015: A Generation Stuck in 'Idle'

NEW YORK ( MainStreet) -- It appears that young people are increasingly stuck in idle.

According to a study released this week by the Employment Policy Institute, an increasing number of young people are simply falling out of the ranks of the working and educated altogether. More than 10% of young college graduates (between the ages of 21 and 24) are what economists call "idled," neither employed nor enrolled in school. More than 16% of young people with only high school degrees (ages 17 to 20) meet that same criteria.

Economists at the EPI based their analysis on Labor Department data following the recession. Young high school and college graduates tend to be unemployed at 2.2 times the national average, which, the EPI wrote, is "not because of something unique about the Great Recession" but because "young workers always experience disproportionate increases in unemployment during periods of labor market weakness."

What came as a surprise to researchers, however, was that this is a generation also beginning to avoid education as an alternative to a weak job market.

"Educational opportunity is often identified as a possible silver lining to the dark cloud of unemployment and underemployment that looms over today's young graduates," authors Alyssa Davis, Will Kimball and Elise Gould wrote. "The assumption is that a lack of job opportunities propels young workers to 'shelter' from the downturn by attaining additional schooling, which may improve their long-run career prospects."

"However," they added, "there is little evidence of an uptick in enrollment due to the Great Recession, and in fact, enrollment plummeted over 2012-2014 and still has not recovered."

The idea of students taking shelter from poor job opportunities in college or graduate programs has been oft-repeated. However the data shows that higher education enrollments between 2007 and 2012 didn't budge. They kept up the same 0.7% per year growth that schools averaged between 2000 and 2007.

Between 2012 and 20014 enrollment in higher education dropped a precipitous 4.5%.

"It's a myth that young people are riding out the recession by taking shelter in more schooling," Gould said in response to questions about the group's findings. Instead, the reality is that for young people, the economic recovery "still has a long way to go."

Economists are uncertain exactly why students haven't been seeking out education in response to a weak job market, as from a pure numbers standpoint it remains a better bet than lingering outside of the job market. Although employment and wage opportunities are still relatively dismal for baccalaureate graduates of the Class of 2015, they remain better than a high school diploma.

The answer may lie in one of the report's other findings: while unemployment is high for college graduates, under-employment appears to be through the roof. In 2014 the share of college graduates working in a job that did not require their degree reached 46%.

"Furthermore," the authors wrote, "the 'non-college' jobs that workers with a college degree are ending up in are of lower quality now than they used to be.... [Compared with year 2000] there has been an increase in the share of recent college grads who are in very low-wage jobs, such as bartender, food server, or cashier."

At the same time student debt continues its uncontrolled ascent.

In past years, young unemployed adults have returned to school off the theory that attending class is better than sitting in a coffee shop shuttling around an endless stream of resumes. They, and the economy at large, enjoyed the subsequent benefits of an increasingly educated populace.

Today it's entirely possible that the optics have changed. College educated baristas struggling to pay off loans with cutesy slogans on the tip jar have become common and getting their coffee from a former classmate may lead young people to decide that going back to school can actually do more harm than good. Idling in the economy may be bad, but at least it doesn't accumulate tens of thousands of dollars in debt for an uncertain future.

According to the study authors, this situation suggests concrete solutions. Specifically, they recommend that economists and policymakers abandon the idea of a "skills mismatch" in the economy. With wages stagnating, skilled workers languishing in retail and others refusing to pursue further credentials, there is no evidence of demand by employers.

"We like to say that when people say they can't find the workers they need, we ask for the wages they offer," Gould said. "So if there were a scarcity of workers relative to the skills that we need we would see wages going up."

"We don't see evidence of wage growth anywhere, which indicates that it's not a skills issue. It's an economy-wide slowdown."

And in the meantime, another class will linger in idle.

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