New search Conducted by the Federal Reserve Institute for Economic Equality in St. Louis. Lewis (St. Louis Institute for Economic Justice of the Federal Reserve) focused on the issues faced by young people ages 18-24 in today's economy. It turns out More than one in three people have no income.
The researchers looked specifically at the group that did not work or go to school. In 2022, these people accounted for 13%. This age group. This ratio has been rising since 1998, according to calculations by the Federal Reserve Bank of Dallas.
Percentage of people aged 18 to 24 who are neither working nor continuing education
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Julianna Kaplan/Business Insider/Dallas Fed calculations for IPUMS-CPS
It is true that many young people do not receive any income because they are still studying and living on loans or family support. but For those who do not continue their education, a lack of income can hurt Generation Z's ability to save for retirement Or make larger purchases in the future. It can also affect their mental health, affecting them as they try to thrive in an unfavorable economy.
Younger Americans face stagnant incomes
Even after the pandemic subsided, the number of unemployed and out-of-school youth has increased since the late 1990s, according to data from the Federal Reserve Bank of Dallas.
At the same time, college enrollment rates are declining as younger Americans doubt the benefits of a college degree, especially in the face of a growing graduate debt crisis. For many members of Generation Z, continuing education is of little importance.
The lack of income has affected the ability of many young people to accumulate capital. For young people, the average saving in 2022 was only PLN 11,000. $200, which is much less than the typical adult household in the United States ($192,100).
Entering adulthood without a job or any source of income can have serious consequences for young people later in life. For example, as the study shows, financial instability means less saving. They will not be able to save for retirement and “invest in their future” by buying a home or starting a business.
The number of young people without income continues to grow. In 1990, about one in five young people did not receive a salary. According to a new study, in 2022 this will be more than one in three people.
The Reserve report said: “This is surprising because the labor market in 2022 was the strongest on record, yet real incomes, including young people on zero wages, remained essentially unchanged as this group made up a growing proportion of the population.” young adults.” Federalist of St. Louis.
The inflation-adjusted incomes of the younger generation, which includes people of all incomes, have increased slightly over the past five decades. However, even excluding non-workers, young people experienced greater income stagnation than all adults.
Youth income was adjusted for inflation
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Noah Shidelauer/Business Insider/Federal Reserve Bank of St. Louis
Difficulty maintaining stable employment can negatively impact mental health, and rising health care costs have made it more difficult for many younger Americans to get the care they need. Although young adults and older adults had similar rates of depression until 2017, after that time a gap emerged and by 2022, younger Americans were significantly more likely to report depression than older adults.
Prevalence of depression among young people and the elderly
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Noah Shidelauer/Business Insider/Federal Reserve Bank of St. Louis
The increase in the number of young people out of work and out of school deepens social inequality
The average wealth of white youth is about three times that of black and Latino youth, despite relative similarity in median income.which is caused by the racial wealth gap. Achieving more equitable wealth ratios could drive economic growth, as more people are able to buy housing or pay off debt.
Average income and wealth by race
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Noah Shidelauer/Business Insider/Federal Reserve Bank of St. Louis
“The report underscores that even under the most tightened labor market situation since World War II, there is a limit to the ability of economic growth to reduce the ‘structural’ unemployment experienced by many young blacks and Latinos, as well as growing numbers of young whites,” said William M. Rodgers III, director of the Institute for Economic Equity at the Federal Reserve Bank of St. Louis: “The face is the face.” Louis.
It's all because of this Young people were among the first to lose their jobs and income as a result of the pandemic. The unemployment rate among people ages 16 to 24 rose to 27.5% in April 2020. After a period of decline following reemployment, this rate has returned to pre-pandemic trends without reflecting people who are not actively looking for work.
Unemployment among people aged 16 to 24 years
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Juliana Kaplan/Business Insider/U.S. Bureau of Labor Statistics via FRED
These widening disparities show the need for interventions such as improving access to community college and vocational training, providing more vocational training, investing money and more attention in institutional barriers such as the justice system and mental health, the report said.
— Research confirms the importance of investing in the physical and mental health of young people. Otherwise, the economy will not be able to reach its highest potential, today or in the future, Rodgers said.
The text is a translation from the American edition of Business Insider magazine. Translator: Matthews Albin
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