Jobs for most vulnerable decline sharply in weakened labor market

NEARLY 5.5 MILLION YOUTH OUT OF SCHOOL & JOBLESS

CONTACT: Christine Phelan: 617-373-5455

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(2-3-03) BOSTON, Mass. – As Congress slashed more than $300 million in funding for youth employment and job training programs on January 23, 2003, joblessness surged to nearly 5.5 million for the nation’s 16 to 24 year-old out-of-school youth during 2002, according to a new research study from Northeastern University's Center for Labor Market Studies presented in a report titled Left Behind in the Labor Market.

Since 2000, there has been a 12 percent increase in the number of youth that are both jobless and out-of-school, which translates into a nearly 600,000 increase in this population. In 2000, on average there were 4.9 million 16 to 24 year-olds who were both jobless and out of school while in 2001, on average, there were 5.2 million 16 to 24 year-olds who were both jobless and out-of-school. This number has swollen to nearly 5.5 million in 2002, creating growing social and economic problems among America’s young people, especially those with limited schooling and those who reside in high poverty neighborhoods.

"As a consequence of the continued growth in the number of young people and substantially depressed labor market conditions, between five and six million out-of-school young adults have been left out of the ranks of the employed and are at substantial risk of being permanently left behind," said economist Andrew Sum, director of the Center and lead author of the study. " Joblessness problems are especially acute among high school dropouts, youth from low income families, central city minorities with no post-secondary schooling, and residents of high poverty neighborhoods."

Rising joblessness in the nation’s ten largest cities may lead to an increase in crime, dependency and poverty

> During 2001, in the central cities of the nation’s ten largest metro areas, there were 620,000 out-of-school, jobless young adults with New York City leading the pack at 202,000 followed by Chicago at 97,000 and Los Angeles at 88,000.

> A substantial majority – 71 percent – of the jobless and out-of-school young adults in these ten central cities was either African-American or Hispanic. African-American youth alone accounted for 39 percent of the disconnected youth.

> There were 3.139 million 20 to 24 year-olds during 2001 who were both jobless and out-of-school, representing more than 60 percent of the 16 to 24 year-olds who were neither at work nor in school. Given that these formative years are critical ones for educational, human capital, labor market, and social development, keeping young people actively involved in school and work activities are crucial to their long-term labor market success.

> The demographic analysis of the youth unemployment problem again highlights the importance of education. A substantial majority of the nation’s jobless and out-of-school population lacks post-secondary schooling and many do not even have a regular high school diploma or a GED certificate. The largest group consists of high school dropouts (3.28 million) followed by young adults with a high school diploma or a GED certificate but no completed years of post-secondary schooling (1.91 million).

“While Congress considers $600 billion in programs to jumpstart the economy, not one program proposed by either party was designed to address the youth crisis,” said Jack Wuest, executive director of the Alternative Schools Network, the organization which commissioned the report. “As revealed in this report, Congress’s recently proposed $307 million reductions in Youth Opportunity Grants and year-round WIA youth programs not only leaves children behind but it ensures their continued spiral into poverty. Cuts in these programs almost guarantee an increase in dropout rates and unemployment for youth from low income families, central city minorities with no post-secondary schooling, and residents of high poverty neighborhoods.”

The Northeastern study documents trends in how the nation has fared in keeping these young adults actively engaged in school and employed in recent years and documents the growing labor market plight of many of the nation’s out-of-school young adults over the past two years, especially those without any substantive post-secondary education. The report calls for a renewed national commitment to bolstering job, schooling, and training opportunities for young people and urges a national dialogue among legislators and civic leaders to remedy the increasing employment problems among those in this demographic cohort.

Additional key findings include:

>> Demographic surge: After declining for more than a decade, the number of 16 to 24 year-olds in the nation's population has steadily increased since 1992, a trend that will continue through most of this decade. Many of these additional youth will be foreign immigrants. The number of young people today is several million higher than it was in the mid 1990s. By 2010, the total population of 16 to 24 year olds will reach nearly 39 million, several million higher than the peak of the baby boom generation in 1981.

>> Race a factor: One out of every four African-American youth and one out of every five Latino youth between the ages of 16 to 24 are out-of-school, jobless, and on the streets.

>> In school but out of work: A higher share of the nation’s 16 to 24 year-olds, especially women, are enrolled in school today than at the end of the 1980s, but young people in school today are less likely to be employed than they were in the late 1980s.

>> Youth in central cities at highest risk: The likelihood of a young adult being jobless and out-of-school varied considerably depending on educational attainment, race-ethnic group, and geographic location. Only 11 percent of white bachelor degree-holders in suburban communities were jobless and out-of-school versus 34 percent of black high school graduates in the nation's 50 largest central cities. Some 63 percent of black high school dropouts were without work in these same large central cities.

>> Continued cycle of poverty: While many members of the out-of-school, young adult population live at home with parents or other relatives, nearly one-third of them have formed their own families. Given the extraordinarily high poverty rate among the nation's youngest families and their children, the nation's failure to address the labor market and schooling problems of these young people guarantees that the next generation of children will be certainly left behind, given what we know about poverty's strong relationships to the health, literacy, nutrition, and cognitive development of children.

>> Employment cyclically sensitive: Employment rates of out-of-school young adults are very cyclically sensitive, rising at above average rates during periods of strong job growth, such as 1994 to 2000, but declining at above average rates during periods of recession and jobless recoveries. But even at the peak of the labor market boom in 2000, only slightly more than half of all young adult dropouts held any type of job and fewer than 40 percent of black dropouts were employed.

>> Economic downturn hits youth hardest: Employment opportunities for the nation’s 16 to 24 year-old, out-of-school youth were far more adversely affected by the economic downturn of 2001 and the jobless recovery of 2002 than they were for adults 25 and older. The employment rate of the young adult population fell four percentage points versus a decline of only 1.4 percentage points among adults 25 and older.

>> Education level and race key factors in full-time employment: Full-time employment rates of out-of-school young adults vary considerably by educational attainment and race-ethnic group. Only one of four black high school dropouts and 42 of every 100 white high school dropouts were employed full-time in 2001 versus 63 of every 100 white high school graduates and 78 to 81 percent of black and white bachelor degree holders.

>> Invisible & disconnected: There is an urgent need to raise the visibility of these out-of-school youth. "The young men and women who drop out of high school are invisible to most policymakers and political leaders," said Neil Sullivan, director of the Boston Private Industry Council, an education reform and workforce development organization. "The plight of this invisible drop-out population and its impact on the quality of life in our cities is arguably the most consequential of all urban issues. Poverty, dependency and incarceration rates are only the tip of the iceberg."

Although some educational progress has been made, including an increase in college attendance among women, high school graduation rates have remained stagnant over the past decade and college-going rates have peaked and subsequently declined for young high school graduates. The problems of high dropout rates are particularly devastating in the nation’s largest urban school districts where between 35 to 50 percent of students often drop out before earning this most basic educational degree.

"What is needed today is clear recognition by national, state, and local economic policymakers and elected officials at all levels of the current and forthcoming youth demographic challenge and of the current high levels of youth joblessness and idleness," Sum said. "We are far removed from the attainment of truly full employment conditions and solid economic prospects for many of the nation's out-of-school young adults. Until there is a more complete understanding of both the magnitude and consequences of this problem, our nation’s young adults will be left behind in the labor market, increasingly idle and aimless."

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