How Unemployed Millennials Affect Everyone’s Finances

Libby Kane
Posted

millennial unemploymentUnless you’re a member of Gen Y or you have a boomerang kid on your couch, you might not be overly concerned about the outsized 15% unemployment rate among young Americans.

Unfortunately, says a new report, their inability to get jobs is, in fact, your problem. The impact of that statistic stretches beyond individuals and even generations.

Researchers from young adult advocacy nonprofit Young Invincibles looked at the present impact of the bleak job market on the U.S. economy. To do so, reports the New York Times, the group estimated how much each unemployed worker would have paid in taxes had he been working, as well as how much he wouldn’t have collected from government programs like unemployment.

Ultimately, they found that unemployed adults ages 18-34 cost federal and local governments nearly $8.9 billion a year. And if you take into account the discouraged youth who aren’t technically considered unemployed because they aren’t actively looking for jobs, that number rises to $25 billion. About 93% of that is money lost to unpaid taxes; the rest is from government spending on social welfare programs.

Those numbers may feel abstract, but look at it this way: If taxpayers were directly billed for the $8.9 billion or the $25 billion in costs and lost revenue, we’d each pay about $60 and $171 extra in taxes, respectively—a burden that would weigh upon all generations.