A Lost Generation

The Junior Logician graduates this year and is not too thrilled about his job prospects at this time.  This study by Pew (reported by the Associated Press) shows that he has good reason not to be too thrilled.  And the report does not bode well for a President going into a re-election cycle.

The college class of 2012 is in for a rude welcome to the world of work.

A weak labor market already has left half of young college graduates either jobless or underemployed in positions that don't fully use their skills and knowledge.

Young adults with bachelor's degrees are increasingly scraping by in lower-wage jobs — waiter or waitress, bartender, retail clerk or receptionist, for example — and that's confounding their hopes a degree would pay off despite higher tuition and mounting student loans.

An analysis of government data conducted for The Associated Press lays bare the highly uneven prospects for holders of bachelor's degrees.

Opportunities for college graduates vary widely.

While there's strong demand in science, education and health fields, arts and humanities flounder. Median wages for those with bachelor's degrees are down from 2000, hit by technological changes that are eliminating midlevel jobs such as bank tellers. Most future job openings are projected to be in lower-skilled positions such as home health aides, who can provide personalized attention as the U.S. population ages.

The only way the timing for this study could have been worse for the President would have been for it to come out in July or August.  However, young adults facing a June graduation, are looking at it and wondering "Is this the change we really wanted?"

Among some of the key take-away points in the survey...

The recent indicators on the nation’s labor market show a decline in the unemployment rate. Nonetheless, since 2010, the share of young adults ages 18 to 24 currently employed (54%) has been its lowest since the government began collecting these data in 1948. And the gap in employment between the young and all working-age adults—roughly 15 percentage points—is the widest in recorded history.1 In addition, young adults employed full time have experienced a greater drop in weekly earnings (down 6%) than any other age group over the past five years....

Among all 18- to 34-year-olds, fully half (49%) say they have taken a job they didn’t want just to pay the bills, with 24% saying they have taken an unpaid job to gain work experience...

One-in-four (24%) say they have moved back in with their parents after living on their own...

In a 1998 survey, 65% of 18- to 34-year-olds working full time or part time said they were extremely or very confident that they could find another job if they lost or left their current job.3 The share highly confident fell dramatically to 25% in 2009. It has rebounded somewhat since then (to 43% in the current survey) but is still nowhere near the 1998 level...

And while those younger people surveyed were optimistic about their long term status, realize that this poll was taken back in December and since then gas prices have gone up, the economy has lost more jobs, housing values are still going down and just today the March Durable Goods Orders report came out and it is not good.

We’re just a couple of days away from the Commerce Department Q1 GDP report, and the indicators continue to turn sour.  Today’s bad news comes from the manufacturing sector, where durable-goods orders had their worst month in three years:

    New orders for manufactured durable goods in March decreased $8.8 billion or 4.2 percent to $202.6 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 1.9 percent February increase. Excluding transportation, new orders decreased 1.1 percent. Excluding defense, new orders decreased 4.6 percent. Transportation equipment, also down two of the last three months, had the largest decrease, $7.1 billion or 12.5 percent to $49.7 billion. This was due to nondefense aircraft and parts, which decreased $7.7 billion.

And in even worse news, inventories continued to rise even though demand fell significantly:

    Inventories of manufactured durable goods in March, up twenty-seven consecutive months, increased $1.7 billion or 0.4 percent to $375.1 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.3 percent February increase. Transportation equipment, also up twenty-seven consecutive months, had the largest increase, $0.8 billion or 0.7 percent to $118.0 billion. This was also at the highest level since the series was first published on a NAICS basis.

With yesterdays primary sweep in the North East, the race is now focused on two men...Mitt Romney, who has a track record of creating jobs and making unprofitable ventures (the Olympics) profitable and Barack Obama, who has a track record of making a bad situation worse and yet insists on sticking with policies that are not working.  Young people are less wed to ideology than older voters and they are already starting to defect away from the President.   If the economy continues to crawl along like it is, the Millenials could just decide to stay home if they can't vote for Romney. 

The economy is the number one issue for voters across the board.  That is an issue where the President's track record is at it's worst.  Which is why you see the distraction brigade from the left (contraception, Rush Limbaugh, Ted Nugent, dogs etc).  The fact that the Democratically controlled Senate has not proposed a budget in almost 1100 days is also going to play high in the minds of voters. 

The 18-34's are key this year.  Their support (or lack there-of) of a candidate will decide this election.  For as things stand, they are looking at a standard of living that will be worse than that of their parents for the first time in generations.  They are not happy with that and will react - either by voting for Romney or staying home.  Either one is devastating to the President's chances at re-election.

Written by LL.