By Jaimeson Champion
This summer has seen record-breaking temperatures in many parts of the United States. It has been particularly hot for millions of young people who have spent the sweltering summer days hitting the pavement in search of a job, only to return home sweaty and still unemployed.
Youth unemployment has risen by an alarming 555,000 over the past three months, according to the latest report from the U.S. Department of Labor. Even Labor Department statistics—which deliberately understate U.S. job loss—can’t hide the miserable fact that youth in the U.S. are losing their jobs at an unprecedented rate.
The unemployment rate for workers under 25 years of age has increased by 2.4 percent over the past three months, according to the Labor Department. In comparison, the unemployment rate for workers 25 years of age and older has increased by 0.5 percent in the same time period.
These “official” rates are deliberately understated, as they count involuntary part-time jobs as full jobs and don’t count as unemployed the youth who no longer search for jobs because they know that no jobs exist for them. Real unemployment rates are much higher.
Many of the low-wage service sector jobs that have historically been filled by younger workers are increasingly being staffed by older workers who have lost better paying jobs in the deepening U.S. recession.
Young people of color have felt the spike in youth unemployment most acutely. According to a recent study published by Northeastern University’s Center for Labor Market Studies, Black and Latin@ youth are suffering real unemployment rates well over 80 percent. The CLMS research study concluded that “low income Black and Hispanic teens face the equivalent of a Great Depression.”
Overall, youth unemployment is the highest it has been in more than six decades, according to the CLMS. It found that only 37 percent of U.S. youth are actually employed.
According to the report, the highest youth unemployment rates are in the major U.S. cities. Washington, D.C., has the highest youth unemployment rate at 86 percent. New York City, Detroit and Chicago all have youth unemployment rates over 80 percent.
The spike in unemployment could not come at a worse time for working-class young people in the U.S., as it is occurring at the same time that relatively low-cost student loans are disappearing. The continuing crisis in the financial markets has sent interest rates skyrocketing on student loans. An increasing number of working-class youth, particularly those who go to community colleges, cannot get access to student loans at all.
Since March, nearly 100 lenders have suspended their participation in federally backed fixed-rate loan programs, according to the National Association for Student Financial Aid Administrators. Many more of the fixed-rate loans that low-income students are counting on to finance this coming term are likely to become unavailable in the coming months. Working-class students seeking loans for school are facing what amounts to a form of 21st-century redlining, that is, an automatic and prejudicial rejection.
On July 28 the Massachusetts Educational Financing Authority—which secures more than $500 million in student loans for more than 40,000 students—announced that it was shutting down lending operations for the 2008/2009 school year. MEFA cited deteriorating conditions in global capital markets as the reason for the shutdown. As many of the largest and most integral financial institutions in the U.S. continue to barrel toward insolvency, the subsequent credit contraction has spread to every debt market from mortgage loans to auto loans to student loans.
The utter absurdity of an economic system that makes access to education dependent on the profit margins of Wall Street is daily becoming more apparent. The need to intensify the struggle for free and universal education and more jobs for young people has never been greater. With no jobs and no money for the coming school year, this summer has been hot and miserable for millions of young people. It’s time to turn up the heat on the student lenders, bankers and bosses.
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