The economic state of California plummets further into instability since Governor Gavin Newsom’s call for a shutdown of local businesses. California is leading the nation in total COVID-19 cases, according to the CDC. The California Department of Public health reports there are more than 71,000 confirmed cases, as of Sept. 1. The odds of most California residents returning to work become slimmer each day.
One group, in particular, suffers far more consequences by this downtown than any other. Youth workers (18-24 years old) barely entering the workforce face the same adversity as graduates of the 2008 Recession. Based on the National Center on Educational Statistics data, 18% of high school students ages 16-18 work. Half of these students work more than 15 hours a week. For those who are pursuing higher education, 11 million college students work. Of these 11 million, 4 million work 35 hours or more.
Locally, Merced County is no exception to the economic turmoil as the county’s unemployment rate reached a spike of 15.7% for June, nearly doubling the year’s unemployment rate. California’s unemployment rate reached 15.1% .
In contrast, the unemployment rate for the nation staggers at 11.2%. This rate accounts for the general population, while youth workers’ unemployment rate tends to be higher in times of a recession. During the Great Recession, youth unemployment was 70% higher than the general population. Today, the unemployment rate lies at 15%, which would elevate the unemployment for workers 18-24 years old, adjusted at around 30%.
In 2019, 156.92 million Americans were employed, with unemployment recently being 15%. Of that 15%, 7 million youth workers lost their job during this time. Merced county’s industry employment as of June was at 78,900. With over 7,600 confirmed cases, the number of workers in each industry is subject to change. Most jobs that youth workers typically fall under are Leisure & Hospitality. This industry employed 6,000 workers in June of last year. A year later, the number shifted down to 4,900 workers.
With over 40 stores inside the Merced Mall, only nine continue to function with only two containing outdoor entrances. The Merced Mall is known for employing younger individuals who can only work part-time or start on their first job. However, most youth workers were asked to leave due to businesses’ closure and the inability to pay for all employees.
A 20-year-old Merced woman was working part-time at JCPenny before being laid off due to businesses’ closure. She lives at home with her fiance and her 1-year-old daughter. She became the primary provider after her fiance had to leave his work due to personal reasons.
Youth workers who have been laid off find it tedious to find another job while competing with the general population. Older workers have had years of work experience, a disadvantage over youth workers, all while fighting for a limited number of positions. The older population is more likely to survive this economic chaos as they are more often to have money saved up for emergencies.
“We live paycheck by paycheck, whatever we get we use to pay our rent and bills,” she says. “Anything leftover goes to my daughter’s needs like diapers, new clothes, or shoes.”
Youth workers’ misfortune continues as those who seek unemployment benefits may not qualify due to being part-time or not having adequate work history. This barrier alone could be enough to prevent the younger generation from ever being financially stable. For youth workers of color, the obstacle of finding work is much higher.
To combat these tragedies, In March, the federal government passed the Coronavirus Aid, Relief and Economic Security (CARES) act. The CARES act provides unemployment benefits for those who do not usually qualify for Unemployment Insurance or workers affected by COVID-19. The CARES act benefits are up to the state government to distribute. Payments distribute $1,200 per adult, whose income was less than $99,000 and up to $3,400 for a family of four. Unfortunately, certain circumstances exclude students who’ve dormitory closed, yet their place of work remains open.
When asked if the government is doing enough to provide for those who were forced to leave due to COVID-19, she replies.
“For unemployment, we received $600. This was the only money coming in, but it wasn’t enough to get by.”
The shutdown’s lasting adverse effects would continue even if the quarantine were to be lifted and businesses reopened. As the job market would become flooded, college graduates are given false hope to join the gig economy. Large companies would have the power to dismiss giving eager new coming workers basic worker’s rights as they would be classified as “independent contractors.”
This is more relevant than ever, as Proposition 22 comes to vote in November. The proposition was created and funded by three app-based driver companies (Uber, Lyft, and Doordash) to create an exemption from California law. The law requires that app-based companies must provide minimum wage, paid sick leave, and safety protection. Roughly around $100 million was invested in this campaign with two more app-based companies joining the campaign.
With the uncertainty of finding a job after college, many high school seniors are deciding to take a “gap year” because they don’t believe they will be able to afford to attend college.
According to a survey conducted by a higher education consulting firm, The Art and Science Group carried out an evaluation of 487 prospective college students. Their findings revealed that due to the disturbance coronavirus has caused, 1 out of 6 high school seniors had to rethink their decision in enrolling into a four-year university. History repeats itself; it is unknown when the economy will recover. Still, it is regrettable to see the pioneers of tomorrow paying more than what they bargained for.