Posts Tagged "unemployment"

Part-time College: a Slow Path to Success

The first thing that came to mind while listening to a recent webcast about part-time students was, Wow, people like me who attended four-year colleges are clueless about how hard it is to be a part-time student!

My second thought was better summed up by one of the webcast’s panelists. Solving part-time students’ immense financial and logistical challenges “is really about economic and social mobility for a large group of citizens in our communities,” said Karen Stout, president of Achieving the Dream, a non-profit network of community colleges that promotes students’ success.

Four in 10 U.S. college students are part-time and about four in 10 part-time students drop out very early in their education, according to the Center for American Progress, which hosted the discussion and produced the video above.

The panelists – and two former part-time students who shared their experiences – described the high obstacles part-time students overcome to receive a two-year degree, or to move on to further educational programs.   To succeed, these students need financial support and an understanding of their particular needs: …Learn More

Silhouette of white and black man

The U.S. Labor Participation Problem

The superlatives come fast and furious in the spate of reports coming out on the dwindling participation in the labor force by Americans still in their prime working years.

  • The fall in men’s participation in the United States has been going on for decades but has been steeper here than in all but two advanced economies (Israel and Italy) in recent years. “We have won the race to the bottom,” says Nicholas Eberstadt, an American Enterprise Institute scholar and author of “Men Without Work: America’s Invisible Crisis.”
  • A more recent drop in labor force participation for American women is “unique” – in the rest of the developed world, women’s participation continues to rise, according to a Brookings Institution report.
  • Men with no more than a high school degree make up 40 percent of workers but 60 percent of those who have dropped out of the U.S. labor force.
  • The decline in participation has been steepest among men without a high school education, particularly black men.

Economists count not only working people as being in the labor force but also people who are trying to find a job. Something is amiss when millions of Americans in their prime – between ages 25 and 54 – are doing neither, especially in a strong economy like the United States is experiencing now.

This issue is not new, but the election has brought it front and center. Also, the prolonged decline in men’s labor force participation had been partly masked by increasing women’s participation, which pulled up the aggregate figures. Now that women have begun withdrawing, the trend has become increasingly obvious – and ominous.

The Brookings and AEI scholars offer myriad, often overlapping, explanations for why this is happening: …Learn More

Dicey Retirement: The Long Ride Down

No one really needs confirmation of how tough the Great Recession was. But the Center for Retirement Research at Boston College has quantified the decline – and it’s brutal.

Investment losses and falling home prices placed 53 percent of U.S. households in danger of a decline in their standard of living after they quit working and retire, reports the Center, which funds this blog. That’s up sharply from 45 percent in 2004, prior to the financial boom, which created a strong – albeit fleeting – increase in Americans’ wealth.

The longer-term erosion in Americans’ retirement prospects is even more troubling and reflects deeper issues. The Great Recession just hammered the point home.

In 1989, just under one-third of Americans faced such dicey retirement prospects. The steady erosion since then coincides with the near-extinction of traditional employer pensions that guaranteed retirees a fixed level of income. It turns out that the DIY system that replaced them, a system reliant on Americans’ ability to save in their 401(k)s, is not working.

Older baby boomer households with 401(k)s have just $120,000 saved for retirement, according to the Center. That’s not even enough to pay estimated medical costs not covered by Medicare. Retirement savings for all older boomer households is a paltry $42,000 – that means a lot of people have no savings…Learn More

Progress Stalls for Young Adults

The promise of America is progress, but that progress stalled for the youngest generation: U.S. workers under age 45 earned dramatically less than workers who were that same age a decade ago, the Federal Reserve Board’s latest survey shows.

For Americans 35 through 44, the median household income – the income that falls in the middle of all earners – was $53,900 in 2010. That’s 14 percent less income than in 2001 when households in the 35-44 age bracket were earning $63,000, according to the Fed’s Survey of Consumer Finances released Monday. For young adults in the under-35 age bracket, median income fell to $35,100 in 2010, from $40,900 for that group in 2001.

The median income also declined, by nearly 9 percent, for Americans in their peak earning years, 45 through 54, to $61,000 in 2010 from $66,800 in 2001. [Incomes for all years are in current dollars.]

The sharp decline in real incomes, especially for young adults, occurred in a decade bracketed by the high-tech bubble of early 2000 and the jobless recovery of 2010 from the financial crisis. Without further analysis, it’s difficult to pinpoint precise explanations for the patterns. But the reasons vary depending on the age bracket being analyzed.

For the youngest workers, incomes may be lower if many are extending their college educations – high school and college graduates face the lowest level of employment ever recorded.
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Boomers May Stop Work Because They Can

Baby boomers who’ve left the labor force in their pre-retirement years are in better financial shape than they once were.

The wealth of non-working Americans between ages 55 and 61 increased from $83,000 in 1992 to $98,000 in 2008, according to new research from the Urban Institute in Washington.  (Comparisons are in constant dollars.)

Potential explanations for this trend range from greater U.S. inequality that launched more boomers into the top wealth tier to a rise in the numbers of married men who don’t work – but have wives who do.

Barbara Butrica, a senior research associate at the Urban Institute, said her study did not look into the “why” for the emerging group of voluntary non-workers who are approaching traditional retirement ages, married and single men in particular.  One possibility, she said, is that “they are leaving the labor force because they can afford to.” …Learn More

New Financial Tools Backed by Research

The Center for Retirement Research at Boston College has created a prototype personal finance website with tools and information on topics ranging from how to reduce spending or refinance a mortgage to the best way to draw down savings during retirement.

The website offers a comprehensive set of tools backed by impartial academic research – not sales pitches.  Individuals can use each calculator, “Learn More” lesson, or “How To” guide individually or as the building blocks for an overall financial plan, which they can construct in a step-by-step process that begins on the homepage.

The website, also called Squared Away, was created by the Financial Security Project (FSP), a financial education initiative of the Center.  It was funded (also like this blog) by the Social Security Administration.

The Center plans to distribute the site through various organizations, such as credit counselors, financial planners, employers, credit unions, and non-profits involved in helping low-income people build up their savings.

The website is still in the “beta” phase and will be improved over the coming months.  We invite readers to try out the tools and comment on them by clicking “Learn More” below.  All comments – good and bad – are welcome.Learn More

Graduating in Era of Low Opportunity

Philip Seymour Hoffman playing the washed-up salesman, Willy Loman, in “Death of a Salesman,” is all the rage on Broadway. But when I saw the play recently, it was Biff who got me thinking about young adults today.

In the Arthur Miller classic, Willy anguishes over son Biff’s failure to hold down a job in the city. But the irony is that Biff, played by Andrew Garfield, probably did very well for himself after leaving Brooklyn for Texas. I imagine he became an oil baron or wound up owning substantial real estate in downtown Houston.

Young people graduating from high school or college today don’t have the virtually unlimited opportunity that existed in the 1940s when Miller wrote the play: the personal drive to find a job and establish a career is not enough anymore. Young graduates who sign up for unpaid internships and double up on college degrees are well aware of this.

Last year, 54 percent of adults ages 18 to 24 were employed – that was the lowest level since the government started tracking the data, in 1948 – according to a February report by the Pew Research Center. Despite an improving job market, it was only 55 percent in March. Job creation – 115,000 were added in April – is below the pace that will open up meaningful opportunity for young people. …Learn More

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