May 21st, 2012
Townhall Finance:
While we have rescued our economy from catastrophe, we have also begun to build a new foundation for growth."
...............Barack Obama from the White House, August 7, 2009
In 2008, Obama inspired legions of young Americans who bought into his "Change you can believe in" campaign message. According to the Pew Research Center, voters under the age of 30 supported Obama over John McCain 66:31 – by far the largest disparity between young voters and other age groups in any presidential election since exit polling began in 1972. In addition to the critical vote totals, Obama attracted thousands of high energy campaign volunteers that brought unbridled enthusiasm to his campaign of Hope-and-Change.
Sadly, three years later, it is more like Hopeless Change that millions of young Americans face. In exchange for that 2:1 vote of confidence they gave Obama in 2008, the 18-29 year-olds are feeling the brunt of the economic stagnation – often by twice the degree of all other age groups. According to the Wall Street Journal, "The U.S. labor market is in a malaise, but young adults are in crisis."
Maybe you hadn't noticed, but the recession supposedly ended almost three years ago. According to the National Bureau of Economic Research, NBER, the economic downturn that began in December 2007, lasted 18 months and officially ended in June, 2009. NBER defines a recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Economists declare the end of a recession when the declining trend is reversed.
The point at which the economy begins to create more new jobs than it sheds each month is crucial in making a determination of when a recovery begins. The following graph analyzes job loss through the eleven U.S. recessions since the end of World War II. Clearly this has been the deepest recession in terms of job loss and it has also been by far the slowest to recover to pre-recession employment levels. Note the rapid recovery to normal employment in all the previous recessions. It will take nearly 6 million more new jobs before the current labor force resembles employment numbers in late 2007 when this recession began.
When economists declared the recession over and the beginning of a period of recovery, the President was quick to react. Not being one to miss a chance to spike-the-football, Barack Obama took full credit with a speech outside the Oval Office in the summer of 2009. Notice the "we have rescued" reference in the above statement from the President. But, the pain of the economic "catastrophe" he claimed to have ended drags on with no real end in sight. And, whatever " new foundation for growth" he was talking about must have been built out of Jell-O.
So, for 35 of the 40 months that he's been in office, Barack Obama has been the beneficiary of an economy technically in expansive, recovery mode – on the way up. That deep into an economic recovery usually means good things are happening like significant GDP growth, new job creation, wages and salaries on the rise – except none of that has happened with this recovery, even though that was the promise of The One as he campaigned for the job and during the honeymoon period of his first term. Now, he says he just needs more time. The American people just need to practice patience. And, of course, it is still George W. Bush's fault.
In his "American Promise" speech in Denver on August 27, 2008, Obama promised an America beyond the "broken politics in Washington and the failed policies of George W. Bush." He used the word "promise" 32 times, so this time he must have really meant it – or, maybe he just thought we didn't hear it the other 31 times.
Unfortunately, what has happened is persistent unemployment, particularly long-term unemployment, depressed wages and purchasing power, massive depreciation of home values, doubling of gas prices, rapid increase in food and health care costs, and nearly stagnant economic growth. Virtually everyone and every sector have been negatively impacted, but young Americans just entering the workforce are suffering the most.
A new economic report by Gallup says 32% of 18-29 year-olds in the U.S. workforce were underemployed in April. That number is greater than the previous month of March (30.1%) and also higher than a year ago (30.7%), so nearly three years after the recovery supposedly began the trend is still worsening. Unemployment among this age group (13.6%) is nearly twice as high as any other age group, according to Gallup. Another 18.4% are working part-time, "but wanting to work full time." This trend is also worse than in March as well as April, 2011.
"Today's slow economic growth is a disaster for those unemployed and underemployed as they look for jobs when so few new jobs are being created. For younger Americans as a group, this is a particularly acute issue," summarized Gallup.
According to newly released research by the John J. Heldrich Center for Workforce Development at Rutgers University, only 49% of college graduates from the classes of 2009-2010-and 2011 had found a full-time job within a year of graduation, compared with 73% for students who graduated in the prior three years. Meanwhile, the cost of that college degree for the job they can't find continues to increase. Average student loan debt for the class of 2010 (the latest available data) was $25,250; a 5% increase over 2009.
Among young people entering the workforce with lower education levels, the prospects are even worse. For young workers with only a high school degree, unemployment is "astonishingly high" according to the Economic Policy Institute. EPI reports that the unemployment rate for young high school graduates jumped from 17.5 percent in 2007 to 32.7 percent in 2010, "dwarfing the increases in prior recessions," and remains above 31% still today. A staggering one-out-of-two black high school graduates (49.1%) are unemployed. For Hispanics, it is 33.8%.
If fortunate enough to find a job, new graduates likely have to settle for less than their predecessors, too. According to EPI, the starting hourly wages had declined for both young men (7.6%) and women (6%) as compared to 2000, and wages are barely above 1989 levels when adjusted to 2011 dollars.
Obama ravaged the economic record of his predecessor pointing out that during Bill Clinton's two terms in office, "the average American family saw its income go up $7,500 instead of down $2,000 like it has under George Bush." But, under Obama first 39 months, median household income has declined $4.300 - $2,900 since June 2009 when the recovery supposedly began.
Nearly four years into Obama's "American Promise" young people are finding they have to compete with more than 20 million other unemployed or underemployed Americans. Degree in hand and ready to claim their place in America's great "middle class" they discover that 95% of the net job losses during the recession were in the middle-skill occupations like office workers, sales associates, bank tellers, and machine operators. And, thus far, those mid-level jobs haven't started coming back.
According to the Pew Research Center, since 2010 the share of young adults 18-24 years old currently employed (54%) has been the lowest since the government began collecting data in 1948. Additionally, the gap in employment between the young and all working-age adults is the widest in recorded history – about 15%.
For all of the soaring rhetoric in that laced Obama's 2008 American Promise speech, young Americans are hard pressed to see much fulfillment of his litany of promises. According to Pew, by huge margins, Americans of all ages believe reaching some basic financial goals is harder for today's young adults than it was for their parents. Whether the objective is finding a job (82%), saving for the future (75%), paying for college (71%), or buying a home (69%), Americans believe that today's younger generation has a tougher row-to-hoe. The prolonged bad economy has affected the personal lives of young Americans, too, and the nation's culture and future as a result; 31% say they have postponed getting married or having a baby. Nationally, the birthrate has fallen every year since 2007. Pew also found that 24% of young adults moved back in with their parents for economic reasons after living on their own.
As with all other age groups, the economy is the number one issue on the minds of young adult voters, too, and they are not happy. A newly released survey showed just 34% of 18-to-24 year olds are "satisfied" with Obama, while 51% said they were "disappointed," "worried" or "angry." The survey by the Public Religion Research Institute and Georgetown University's Berkeley Center sampled 2000 young adults and found Obama held a narrow 48:41 lead over a "generic" Republican candidate – a dramatic shift from the 66:31 advantage he enjoyed over McCain with young voters in 2008.
A day can change a lot in politics. A week is like forever, and the election is still 25 weeks away. The landscape could change, but "Things are very, very bleak and very different than four or five years ago," according to Cliff Zukin, a political science professor at Rutgers University's Heldrich Center for Workforce Development, of the economic situation facing young adults. "These guys are in trouble and they know it," says Zukin.
In 2008, young people voted for the candidate most like them; he liked to have a good time, didn't have much in the way of experience, but talked a really good game. He seemed more like a cool older brother than their grandfather.
But, this time it is more like, "Fool me once, shame on you. Fool me twice, shame on me." It is clear that Obama was all talk, or "big hat, no cows." Instead of some new American Promise when they get out of school ready to take on the world, today's young Americans face the lowest employment-to-population ratio since 1948. "Their employment prospects are dim, their debt is high, their lives are on hold and a stunning number are living with their parents, even into their 30s," even the blindly liberal MSNBC admitted.
Mitt Romney may resemble a wise, successful, experienced, and staid older uncle rather than the try-anything, live-for-today big brother with his hair on fire, but a little more composure, dignity, and a strait-laced sense of propriety might be the "Change" that voters are looking for in 2012.
Rather than just somebody that might be fun to hang out with, Romney gives voters an option of a President with vastly more experience, a steady hand who has successfully steered large, complex, troubled enterprises – public as well as private – through very difficult circumstances. In the end, Romney may not entirely erase the 2:1 edge Obama held with young voters in 2008, but I'll bet he gets pretty close, and in the critical swing states like my Colorado, that "change" for 2008 might make all the difference.
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