From staff reports The labor force of individuals with a high school diploma or less, a group constituting about one-third of the total labor force, has recently surpassed pre-pandemic levels. The “high school or less” labor force reached its pre-pandemic level in mid-2023 and now stands more than 700,000 above this level.
Younger workers in particular appear to have driven the recovery, reported Emily Pollard, an associate economist at the Federal Reserve Bank of Kansas City.
Although the numbers of prime-age individuals (age 25 to 54) and older individuals (age 55 and older) have not yet recovered to their pre-pandemic levels, 1.5 million more youth (age 16 to 24) are now in the high school or less labor force relative to the pre-pandemic period, Pollard wrote.
“Young people do not usually drive a recovery in the labor force of individuals with a high school diploma or less, suggesting factors particular to the pandemic recovery may explain this rise,” she said. During the Great Recession, for example, the youth high school or less labor force suffered large declines that were never made up.
During the Great Recession and subsequent recovery, “young people were interested in working but were kept out of the labor force by a lack of job opportunities, as employers favored older, more experienced workers over teens,” Pollard reported. “This finding suggests the current surge in the young high school or less labor force may be due to recent labor shortages.”
Indeed, the recent growth in the labor force of young people has translated into large employment gains for this group, though much of this work is part-time or seasonal. Youth employment spikes every summer when many young people are on summer break, Pollard noted.
During recent school years, total youth employment has been lower than in the summer but still well above the March 2019 – February 2020 average. These employment gains are due to both more students working while still in school and more young people working and not in school.
Increases in each of these three youth employment groups have different implications for the economy, Pollard said. Young people who work only during summer break can fill only seasonal needs, while young people who work during the school year can generally work only part-time after school and on weekends.
Although only 21% of the high school or less group (all ages) worked part time during the 2022–23 school year, this figure is much higher for young workers enrolled in school (88%).
In fact, although the total high school or less labor force has seen strong employment gains overall, with more workers working part time, aggregate weekly hours of workers with a high school diploma or less are below their pre-pandemic level. Moreover, these numbers do not reflect potential productivity losses from shifting jobs to young employees who generally have less experience, or the struggles employers may face filling shifts during the school year or during school hours.
Perhaps more concerningly, Pollard wrote, “Young workers who report not being in school may be dropping out of high school or foregoing college to work, posing longterm risks to the economy.”
The high school dropout rate was higher in 2022 and 2023 than before the pandemic; the 2023 dropout rate of 6.4% was the highest in the 20-year sample. The college enrollment rate for recent high school graduates plummeted during the pandemic and has yet to recover, remaining about six percentage points below its pre-pandemic level.
Foregoing education could have negative longer-run effects on these young workers and on the overall economy, Pollard said. Individuals with a high school diploma or less “historically have had a higher unemployment rate and lower labor force participation rate than those with post-secondary education, suggesting they face tougher employment prospects.” On average, workers with a high school diploma or less make less over their lifetimes than workers with even some post-secondary education.
The U.S. Bureau of Labor Statistics forecasts that over the next 10 years, employment growth will be concentrated in jobs where the typical entry-level education is a post-secondary credential, while growth in jobs requiring no post-secondary credential is expected to stagnate.
The boom in high school or less youth employment may already be on the wane, research indicates. Vacancies in jobs requiring a high school diploma or less are well below their 2022 peaks.
In a related matter, on June 17 The Wall Street Journal published an editorial column by Cole Kelley entitled, “Why I Skipped College to be an HVAC Tech.”
“This month, after I picked up my high school diploma, I walked directly into a union apprenticeship that promises five years of tailored instruction,” Kelley wrote. “I’m earning nearly four times the federal minimum wage, and the union is even paying for me to earn professional licenses that demonstrate advanced skills.”
Today’s work differs from old blue-collar jobs, Kelley continued. “On job sites these days the laptop is the most important tool, as technology has transformed the trade disciplines. Artificial intelligence might be changing everything from electrical circuitry to electric-car repair, but a highly trained person still needs to crawl under the house or the hood to do the work.”
“As I start my career, I’m considering how I can become a homeowner before I’m 25,” wrote Kelley, a graduate of Shawsheen Valley Technical High School in Billerica, Massachusetts. “My college-bound friends will follow years behind as they spend large chunks of their paychecks on school debt.”