Tuesday, November 8, 2011

Generation Jobless: Young Men Suffer Worst as Economy Staggers

The Wall Street Journal looks at the impact of the current financial crisis on young, the demographic group hardest hit by the job cuts and hiring freezes most companies are enacting, despite rising profits.

Generation Jobless: Young Men Suffer Worst as Economy Staggers


 25-year-old Cody Preston has no college degree and had to move back in with his parents after going from job to job and landing in a low-paying and unsteady machinist job. WSJ's Conor Dougherty reports.

PORTLAND, Ore.—Few groups were hit harder by the recession than young men, like Cody Preston and Justin Randol, 25-year-old high-school buddies who didn't go to college.

The unemployment rate for males between 25 and 34 years old with high-school diplomas is 14.4%—up from 6.1% before the downturn four years ago and far above today's 9% national rate. The picture is even more bleak for slightly younger men: 22.4% for high-school graduates 20 to 24 years old. That's up from 10.4% four years ago.

In contrast to those men, Messrs. Preston and Randol are old enough to have had some time in the job market. They worked together installing granite counters before the housing bust.

Mr. Preston married his girlfriend and settled into what he assumed would be a secure pattern of long hours on job sites and enough cash to travel and enjoy restaurants and bars. Mr. Randol at one point felt flush enough to buy a 63-inch television set and a 50-gallon fish tank for his apartment.

Then the recession hit. Neither man has found steady work since that pays as much as he earned before. Mr. Preston's marriage broke up and he moved back in with his parents, an increasingly common pattern for jobless young men. Mr. Randol has made do with help from girlfriends and by living in houses packed with roommates to keep the rent low.

For such men, high unemployment is eroding their sense of economic independence. Their predicament reflects that of a generation of Americans facing one of the weakest job markets in modern history.

"We're at risk of having a generation of young males who aren't well-connected to the labor market and who don't feel strong ownership of community or society because they haven't benefited from it," says Ralph Catalano, a professor of public health at the University of California, Berkeley.

Mr. Preston has a steady job, making parts for recreational vehicles for $11 an hour. And living with his parents rent-free allows him to start paying off debt he built up during the slump, he says. But he keeps looking for work that will pay the $14 an hour he made installing granite. What made construction especially attractive was the potential for lots of overtime, which allowed him to beef up his paychecks.

On a recent afternoon, he sat in his parents' kitchen, combing online classified ads. But construction work remains scarce and other positions available for which he's qualified don't pay more than he makes at the factory.

Sue Preston, his mother, says several of her friends are helping out their grown sons, providing either money or shelter or both. She works in payroll at a telecommunications company, and neither she nor her husband, a truck driver who worked his way up into operations, has a college degree. That wasn't an issue when they were starting out, she says: Trade and production jobs were not only available, in many cases they paid enough that many blue-collar wives didn't have to work.

Now she worries that lower wages—and, more pressingly, the dearth of jobs—has left young men like her son disaffected and depressed. "They're working minimum-wage jobs and a lot of times, they don't have benefits, they don't have a full 40 hours a week. It's such a struggle they're kind of like, 'What for? All I'm doing is surviving,' " she says. "They have to move back home or they have to have multiple roommates. How are you going to take on a wife and a family in that situation?"

The share of men age 25-34 living with their parents jumped to 18.6% this year, up from 14.2% four years ago and the highest level since at least 1960, according to the Census Bureau.

Mr. Randol, an ex-convict who is in irregular contact with his parents, says he doesn't have access to the live-at-home reset button. So the Portland native is stretching his $187-a-week unemployment checks by living in a two-story $1,000-a-month house, 40 minutes away in St. Helens, Ore., that he splits with a couple and a friend whose claim to a small bedroom fluctuates based on whether he has a girlfriend.

Mr. Randol admits that over the past three years he's indulged in too much beer and "Call of Duty," the popular war-simulation videogame. Empty liquor bottles line the top of his kitchen cabinets as decoration. "I just hope stuff gets better," he says as he battles online rivals one evening.

Mr. Randol says he's looking for work but grumbles that the remodeling jobs advertised pay between $10 and $12 an hour, with no assurance of full-time work.

Mr. Randol was a poor student who got in trouble in high school and earned a high-school equivalency certificate in lieu of a diploma. He is the first to admit that a checkered past has hampered his job prospects. In 2004 he served a year for burglary and not long after added an assault charge that resulted from a fist fight during a night of hard partying.

But when the housing boom came, he says, his past wasn't such a big issue. After working fast-food counters and other minimum-wage jobs, in 2007 he landed a position installing granite for Fineline Pacific. He started at $10 an hour and within six months was making $15, with plentiful overtime. Mr. Randol told Mr. Preston to apply. He did and was hired.

"They were looking for anybody who would show up to work," says Ted Sherritt, chief executive of Floform Countertops, the Winnipeg, Manitoba, company that acquired Fineline.

Mr. Preston lived well with his construction money. He took out his girlfriend frequently and paid for a snowboarding trip, during which he proposed to her at the summit of Mount Hood, Ore. Married, they settled in Canby, Ore., about 40 minutes from Portland. "I was in a hurry to grow up," he says.

Both Mr. Preston and Mr. Randol say the first sign of trouble appeared on a white dry-erase board at company headquarters. The list of jobs became short, and then empty.

Mr. Sherritt says sales at the company dropped 40% through 2008 and 2009. When it reduced head count, Mr. Randol was among those let go. Floform acquired Fineline late in 2008.

Mr. Preston was kept on a bit longer than his friend but eventually lost his job, too. Mr. Preston was able to find work at a bike store, a skate shop and other retailers, but at lower wages than at his construction job and often with sporadic hours.

To save on rent, he and his wife moved to her parents' house in Salem, Ore., a 45-minute drive from Portland. Later, when the couple separated, he went to live with friends in Bend, Ore., 3½ hours from Portland. He found occasional jobs—one was at a gas station—but after a few months gave up and moved home.

"I wasn't living, I was surviving," he says.

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