August 2013

The State of Working Connecticut 2013: Young People in the Workforce

Edie Joseph and Orlando Rodriguez, M.A.

This annual report, focused on young Connecticut workers, finds that the growth in youth unemployment over the last decade, along with racial and ethnic wage gaps, are warning signs of long-term economic trouble for the state. Demographic trends indicate that Connecticut’s aging population will increasingly rely on the coming generation of young workers to fuel its economy, including a fast-growing Hispanic population.

Among the key findings of this analysis, which examined wage, unemployment, and job sector trends over the course of the recession and recovery:

Youth unemployment has dramatically increased in Connecticut over the last decade and is more than twice the rate for older workers. In 2012, the unemployment rate for Connecticut’s young workers (age 16 to 24), at 17.1 percent, was more than double the rate for 25 to 54 year olds (7.4 percent) and almost triple the rate for workers 55 and older (6.4 percent). Connecticut’s youth unemployment rate is higher than the United States average (16.2 percent).  It has been on the rise over the last dozen years, increasing dramatically during the recent recession.

A smaller share of the working age population is working or looking for work, particularly among young people. Though the state’s unemployment rate shows signs of improvement, it does not take into account the number of young people who have stopped looking for work because of a lack of jobs. The labor force participation rate is the share of the working age population that is working or looking for work.  The rate for all Connecticut workers fell from 68.8 percent in 2007 to 66.2 percent in 2012. The largest decline in participation is among the state’s youngest workers: the rate among 16 to 24 year olds in Connecticut declined over this period from 62.0 percent to 54.5 percent.

Long-term unemployment for young people in Connecticut is higher than the national rate,    though it is worst for older workers.  Long-term unemployment -- the share of the unemployed who have been out of work for more than 26 weeks -- was second highest in Connecticut among all states. Among Connecticut’s unemployed youth, one-third (33.6 percent) have been out of work for more than 26 weeks, above the national rate of 27.7 percent.

Connecticut’s Black and Hispanic workers face high unemployment and low wages.  In 2012, Black unemployment (13.4 percent) and Hispanic unemployment (15.7 percent) were about double the White unemployment rate (7.0 percent).  On average, Hispanics earned 55 cents and Blacks earned 72 cents for every dollar earned by Whites.

Closing Connecticut’s opportunity gaps for young and minority workers will be necessary for the future economic health and quality of life in the state. Demographic trends show a growing number of retirees and an increase in lower-paid minority populations. This means that Connecticut is losing higher-income workers (older, more educated whites) while adding lower-income workers (younger, less educated minorities).  This convergence of demographic trends and income gaps will hamper the state’s economic growth and its ability to pay for the growing costs of an aging population.

Issue Area:
Family Economic Security