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Young workers feeling squeeze of job market

WASHINGTON — Teens and young adults, short on experience and skills, have been giving up the job search at higher rates than other workers are during this Great Recession.

Frustrated by a lean job market, nearly 1.3 million workers ages 16 to 24 have left the labor force since the recession hit in December 2007. That's about 6 percent of them, and it's nearly 3½ times the exodus rate of workers ages 25 to 54.

With a jobless rate of 18.5 percent for 16- to 24-year-olds, some have gone back to school, some are volunteering, some are joining the military and some are chilling at home until the economy heats up.

Modesto resident Luis Ugalde, 20, and his friend Skyler Faber, also 20, browsed the information at the Modesto HIREvents job fair Wednesday afternoon at Modesto Centre Plaza. They've been looking for work with no luck.

"It's so hard to find a job nowadays," Ugalde said, leaving the event with some information but no solid job prospects. Instead, he is considering joining the Army.

"I've always had the Army in the back of my mind if I couldn't get a job," he said.

Meanwhile, his friend Faber is thinking about going back to school to get more skills. "I want to expand my options, so I can get a good-paying job," said the Manteca resident.

It's anybody's guess when that will happen.

In the Northern San Joaquin Valley, unemployment rates are approaching 20 percent after a downturn in the housing market in late 2005 that triggered job losses in construction, finance and related businesses.

As the recession deepened, job losses spread to retailers, manufacturers, service providers and other sectors.

February jobs figures are due out Friday, but labor analysts expect more bad news for the valley because last month traditionally sees higher unemployment — coming after holidays and well ahead of harvesting.

Don't expect much relief from the summer hiring season, either.

A survey of hiring managers by hourly job Web site SnagAJob.com found that seasonal hiring will be at roughly the same depressed levels as it was last year for teens and college students.

"Given the year that we've had, 'unchanged' on the summer job front is pretty good news," said Shawn Boyer, SnagAJob.com's chief executive officer.

Not for young people who are trying to kick-start their careers, move out or pay for school. They're being squeezed out of jobs in favor of older, more experienced workers, including those 55 and older.

The number of workers 55 and older has increased by 9 percent, or 2.5 million people, since the recession began.

"That's quite an astonishing rise," said economist Dean Baker, a co-director of the Center for Economic and Policy Research, a nonpartisan economic and social research center in Washington, D.C.

Some of these seasoned employees are returning to work because of job losses by spouses or the financial problems of other family members. Others are working longer to recoup retirement savings that were lost in the downturn.

Their increased presence and the scarcity of new jobs have made it hard for young people to find work. Twenty-nine percent of the hiring managers that SnagAJob surveyed said older workers would be their younger colleagues' biggest competition for summer jobs.

As a result, only 55 percent of 16- to 24-year-olds are working or even looking for work versus 59.1 percent when the recession started. Baker said Congress should fund a national youth jobs program that was even larger than the summer youth jobs programs funded by the stimulus.

Tom Mroz, an economics professor at Clemson University in South Carolina, said his research had found that six months of unemployment for young workers would depress their earnings by about 2 percent over the course of 10 years. They'll also be more likely to be unemployed again.

With youth jobless rates approaching 40 percent in some areas, the unemployment situation for teens and young adults is at a crisis level, Baker said.

"I think it's incredible that this hasn't been talked about more seriously," Baker said. "We've got people coming out of school, and there's nothing there for them. What are they going to do, sit around and hang out in the street for two or three years, however long it takes for the economy to recover?"

Last year, applications for the Job Corps, a federal job-training program for low- income teens and young adults, jumped 8 percent as the recession deepened.

Modesto resident Rachel Alejandro, 25, graduated from California State University, Stanislaus, with a degree in liberal studies in May 2008. Since then she hasn't been able to find full-time employment and instead works as a part-time substitute.

She was at Modesto HIREvents looking for more permanent work, but she plans to go back to CSU, Stanislaus, in the fall to get her master's degree.

"As soon as I graduated, there was nothing. I felt discouraged and that it was pointless looking," she said. "I couldn't find anything, and it didn't even seem worth it."

Ross Eisenbrey, vice president of the Economic Policy Institute, a liberal policy research group, said Congress should consider temporarily lowering the eligibility age for full Social Security retirement benefits by one year. Doing so for two years would entice more people to retire — particularly those in physically demanding jobs — and open more positions for young people, he reasoned.

"It's something we think ought to be explored," Eisenbrey said. "Freeing up jobs currently held by people that want to retire, but would be penalized if they did, would be of benefit to young people."

Baker's not so sure. He said most people didn't have enough savings to retire and those who did so prematurely could end up in financial hardship in a few years.

Bee staff writer Marijke Rowland contributed to this report.

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