Cut taxes for young professionals
Kai Ryssdal: The July unemployment report comes out Friday morning. But, as it happens, statistics have a way of never missing an opportunity to kick an economy when it’s down. The Labor Department gave us this this morning: A report on metro-area unemployment. In a survey of more than 350 cities, the department says the unemployment rate rose in more than 90 percent of them.
Commentator Reihan Salam says that’s especially troubling for one specific group.
Reihan Salam: Our jobless recovery has been bad news for all Americans. But it has been particularly harmful for the economic prospects of under-25s, who face an unemployment rate over 17 percent. And unless we do something drastic to help young workers now, we’re looking at decades of economic stagnation.
The reason is that the starting point of our careers has a big impact on our lifetime wages. A person who graduates in a boom is more likely to land a paying job rather than slug through an unpaid internship.
But those who graduate in leaner times aren’t quite so lucky. Finding that first job is a lot tougher in a recession than it is in a boom. Climbing to the next rung — the job that pays a little better or offers a bit more responsibility — takes much longer. Instead, people cling to jobs that don’t fully realize their potential. The simple accident of when you happened to have been born can determine your entire economic future.
And this impacts the rest of us in a big way. Jobless young people can’t afford strike to out on their own. They delay marriage and child-rearing. They’re more likely to live with mom and dad rather than rent an apartment or buy a new home. They’re less able to invest in their future. This depresses the economy even further.
To break out of this miserable cycle, we need to consider a permanent tax break for the young. We could, for example, exempt workers under 25 from paying their share of the Social Security payroll tax. Yes, this might strike you as fiscally irresponsible. But giving young workers an early boost can help guarantee that they will earn higher wages later in life. That first paying gig will lead to more, each of which will, as a general rule, pay a higher salary than the last. And that will put our entitlement programs on a much sounder footing. A tax break for the young is a win-win.
Ryssdal: Reihan Salam is a policy adviser at e21 — that’s an economics think-tank. We’d love to hear what you think — send us a comment.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
