Jobs outlook: Can young people overcome the gloom?

Times are tough when it comes to getting a job – and they're especially tough for young people ages 16 to 24.

Their unemployment rate is more than double that of the 25-and-over. Nearly half are not even looking for a job – a low not seen since the mid-1950s. Those fortunate to find employment are starting at pay levels that are likely to restrain their earnings for a decade or more.

"There's real evidence that kids who graduate in bad times start behind and stay behind" in terms of pay and career advancement, says Keith Hall, a senior research fellow at George Mason University's Mercatus Center and a former Bureau of Labor Statistics commissioner. "They're really bearing a big brunt of the costs of the slow recovery." 

Today's jobs report did little to relieve that gloomy outlook. Their unemployment rate stands at 16.2 percent in March, the Department of Labor reports. Though that's a slight improvement from February's 16.3 percent, the dip was caused by more young people leaving the workforce than finding a new job. As of March, 18.3 million young people don't have a job and are not looking for work, the second-highest figure recorded since the Labor Department began tracking the number in 1994.

Starting out in recession can set young workers' earnings back compared with their colleagues who begin their careers in more normal economic times, Mr. Hall says, adding that studies show the effect of diminished wages and career advancement can linger for 10 or 15 years. "All that data is based on old recessions. It may well be much much worse" in the aftermath of the Great Recession.

Can Washington ease the situation for young people? Congress and the White House could certainly resolve uncertainties around the budget, the effect of the sequester, and health-care reform, which would bolster confidence in the private sector, says Jim John, chief operating officer of Beyond.com, an online career network based in King of Prussia, Pa.

One hopeful sign Beyond.com noticed in the first quarter of 2013 was that companies were beginning to hire recruiters.

Employers "have trained the team, they're suited up and ready to go, ready to go on the field and hire," says Mr. John. "They're looking for a signal that some of these unknowns are going to be turned into knowns. And that signal will have to come from Washington."

Others want government to cut spending so that, among other things, a smaller debt burden will fall on young people.

"I think Washington needs to get out of the way and let the most innovative generation perhaps in history solve the problem," says Evan Feinberg, a former aide to Sen. Rand Paul (R) of Kentucky and now president of Generation Opportunity, a Washington-based advocacy group for 18-29 year olds. "My generation is paying for all this big government."

With employment constrained, young people have had to be creative. Some have returned to school. Others have taken part-time jobs even though they wanted full-time positions or are working as unpaid interns. Some are living off unemployment benefits. One in four Americans age 18 to 34 have moved back in with their parents, according to a study last year by the Pew Research Center.

"We hear from thousands and thousands of young people across the country about how a lack of opportunity is crushing them," Mr. Feinberg says. "There's nothing less cool than living with your parents and being dependent on government for your livelihood."

Still, young people retain certain advantages when vying for jobs, says John of Beyond.com. Despite the difficulties of finding a job, their optimism about finding a job is the highest of any generation working today. A Beyond.com survey earlier this year found that 88 percent of job-seekers age 18 to 29 were positive to very positive about their prospects for getting hired. 

"What youth brings to the job search and the jobs, once they find one, is this wonderful positive attitude," John says. "They haven't been tainted by multiple layoffs. They don't have the negative overhang" of other generations. Only 72 percent of baby boomers were positive to very positive about their job prospects.

Another advantage is young workers' use of social media and technology to search for jobs. Two weeks ago, Beyond.com began offering job-seekers a service where they can post online, graphics-centric versions of their résumés, which can be indexed by search engines. Young people were the first to begin tweeting the news to their friends and adding links to Youtube videos they had made of themselves.

"It doesn't surprise us that they're the early adopters," John says. To be successful at a job search, young people will have to make up for their lack of experience by playing up their positive outlook, their ability to learn quickly, and their flexibility. Eventually, companies will step up and hire them, he adds, even if Washington doesn't come up with answers.