Direct from Washington, November 2008

Youth Employment

All the reports and recommendations about school-to-work and workforce development released early this fall seem largely irrelevant, considering the turmoil in the economy. What is ringing true is the prediction about a calamity in the youth job market. Labor market experts were warning Congress months before the financial collapse that it needed to act immediately to forestall the worst employment scenario for teens and young adults in decades. Youth employment has been declining since 2000 —“in a near state of free fall”—as one economist described it. In the summer of 2008, it reached a 60-year historical low, standing at 30 percent below that of 2000.

All income groups have been affected by the decline in teen jobs, but low-income youth and black males have been hurt the most, according to Andrew Sum and other researchers at the Northeastern University Center for Labor Market Studies. The decline of employment occurred during years when employers added millions of jobs and the number of 16–24-year-olds increased about 10 percent.

A number of factors are responsible for the poor youth employment statistics. New arrivals—legal and illegal—match almost one for one with the declines in youth employment, but youth also are experiencing competition from college graduates who cannot find jobs in their fields and adult workers in transition. The federal government cut out the summer jobs program, and, according to testimony Sum presented to Congress, the personnel policies of big-box retailers are tending more and more to bar any employees under the age of 18.

When Sum testified before the House Education and Labor Committee at the beginning of the summer, he warned against expanding the guest worker program until more teens and young adults willing to work had been trained and employed. Steps needed to be taken to start rebuilding youth labor markets, he said.

By October, Sum was calling for immediate action on a jobs stimulus bill aimed at putting teens and young adults back to work. With $3 billion for states and local Workforce Investment Boards, investments could be made to private for-profit, nonprofit, and government sectors to:

• Hire a staff to develop unsubsidized jobs for youth and provide on-site support and follow-up services.

• Pay partial wage subsidies to private for-profit firms to employ targeted youth through the summer of 2009 with the goal that the firms would make a good-faith effort to retain the youth after that time.

• Create subsidized jobs for teens and young adults in the nonprofit and public sectors with specific employment and skill attainment goals.

• Provide academic and vocational skills to youth employed in the summer and year-round program.

The goal would be to place between 400,000 and 500,000 teens into jobs between January and May and to employ no less than one million primarily low-income youth during the summer of 2009. Up to now, Sum argues, the federal government “has spend billions for financial bailouts, but not one cent for employing the nation’s youth.”

As events stood this fall, the proposal of what amounts to a public works program for youth may have to expand to one for workers in general, unless the economic picture turns around more quickly than anticipated.