The Recession May Have a Lasting Effect on Young People
August 21, 2009 | The Economist | Link to article
America's capital enrolled some 20,000 youth in a jobs programme this summer, part of a national effort to get young people to work. Some spent the summer in the offices of Adrian Fenty, Washington's mayor. Others joined a "conservation corps". Delonte Brown, 16 years old, spent nine weeks at Powell House, a non-profit organisation, learning about the arts industry and acquiring various job skills while earning an hourly wage. Now the summer is ending. Mr Brown is one of the lucky few in a jobs programme during the school year too. For most, work will vanish with the summer. In July the national employment-population (E/P) ratio was 59.4%. For teenagers it was 28.9%, the lowest on record.
Young people always have lower levels of employment. They may forsake work to focus on their studies, hardly a bad thing, or be willing to wait for the right job. But they are also less experienced job hunters, less mobile, less skilled and often the first to be fired. Since 2000 they have had an especially hard time, explains Andrew Sum of Northeastern University's Centre for Labour Market Studies (CLMS). One possible reason is that the old are elbowing out the young. The teenage E/P ratio dropped by 34% between 2000 and 2008. It rose by 7% for those aged 55-64 and by 29% for those aged 65 and older.
All types of young people have suffered. In the first quarter of 2009 only half of young college graduates had jobs that matched their education, according to CLMS. Figures are worse, however, for those who are teenagers, male, poor or black. Those with a combination of these traits have particularly glum statistics. The E/P ratio for poor black teenagers was only 12% in the first quarter of the year. Middle- and upper-class whites and Hispanics were three times as likely to be working.
The stimulus bill, passed in February, included $1.2 billion to help find jobs for those aged 14-24. The White House encouraged much of the money to be spent this summer, through programmes that subsidise jobs in the public and private sector. Hilda Solis, the labour secretary, is a firm believer in summer jobs programmes-not least because she took part in one as a teenager. The administration estimates that the stimulus will put 200,000 young people to work this summer. The push helps, but not enough.
The main federal effort to help the young, the Workforce Investment Act (WIA), has historically failed to reach many of the 3.5m-5m young people who are neither in school nor working. Washington, DC, offers an example of a local programme with good intentions, high costs and limited efficacy. This summer's $23m budget had to be almost doubled. Despite some heartening evidence, it is unclear that the programme reaches those most in need of help or provides the skills needed to get a job in future. But since the city has yet to spend its stimulus allocation, it could opt for a year-round effort to target the most isolated teenagers. Linda Harris of the Centre for Law and Social Policy, which lobbies for the poor, wants a broad overhaul of WIA-the law has been due for reauthorisation for years.
Meanwhile, the labour market remains dismal. Complicating the matter, the federal minimum wage rose last month, which may further depress the employment prospects of young, unskilled workers. And as the recession drags on, ever more youngsters are likely to find themselves left in economic limbo. Young people with jobs are more likely to graduate from high school and earn higher wages as adults. So lack of employment now may portend an even bleaker future.