Here’s one startling fact not often talked about: those aged 18-24 have seen double-digit unemployment rates for 70 consecutive months, or almost 6 years. And 25% of those job losses came after the Great Recession was officially declared to be over.
The end result? 5.8 million young adults were dropped from the bottom of the economy and are currently out-of-school and out-of-work.
Here are 5 ways high unemployment rates cost us more than you think.
1.) Federal Income Tax Losses
2.) State Income Tax Losses
3.) FICA losses
4.) Safety Net Program payments
5.) Welfare program payments
The costs of lost revenue from income tax payments is the single largest cost to taxpayers for our high young adult unemployment rate. It makes up 93% of the cost. Those safety-net programs, including food stamps, makes up just 7% of the total cost.
Cutting any amount of government aid for these Americans does little to correct the massive economic costs they have on our economy. The solution is to provide them with the jobs that aren’t there. We’re 1.5 million jobs short for this age group from where we were in pre-2007. That’s 1.5 million less jobs they have to apply for and to fill.
Among the gloom, the report does highlight some solutions for addressing this problem, including expanding the Department of Labor’s Registered Apprentice Program, and expanding the AmeriCorps program. Both provide young adults with employment opportunities that put them to work immediately with the skills they have while providing them with the opportunities to grow and develop the skills the need to be competitive. And both have huge returns. The Registered Apprenticeships return $50 for every $1 spent, while AmeriCorps return $2.50 for every dollar spent.
Creating jobs to make up for lost revenue should be the priority, not cutting assistance programs to save money on expenditures.