New Report from JP Morgan Chase Highlights the Importance of Summer Youth Employment

By Kisha Bird

Unemployment is down and job growth is getting stronger as the economy recovers from the Great Recession.  However, entering the workforce remains challenging for U.S. teenagers and young adults, who have experienced steep drops in employment. Youth and young people of color have been disproportionately affected.

A new report from JPMorgan Chase & Co. details the persistent problem of youth unemployment and potential solutions. “Building Skills Through Summer Jobs: Lessons from the Field,” is part of JP Morgan Chase’s five-year, $250 million New Skills at Work initiative to address the mismatch between employer needs and the skills of job seekers. The report highlights how summer youth employment benefits local communities, economies, families, and youth. It also offers a set of effective program elements and promising practices from the field to strengthen summer youth employment programs and connect them to broader economic and workforce development agendas.

Key Facts:

  • The youth summer employment rate has declined 40 percent over the past 12 years.
  • In summer 2013, teens with a family income of less than $20,000 were nearly 20 percent less likely to be employed than teens with a family income of $60,000 or more.  
  • In 2013, White male teens in high-income families were five times more likely to be employed than their Black peers in low-income families.

Summer employment is a critical way for teens to gain early work experience, which is proven to increase their annual earnings through age 26. This is especially important for young people who are detached from school but seeking to reconnect.  Youth employment also boosts local economies because the dollars they earn are usually spent in the community. Yet federal investment in youth employment, in particular summer jobs, has dramatically declined over the past two decades.

The report features three key ways to strengthen summer youth employment programs:

  • Strengthen infrastructure and connections among programs;
  • Deepen private sector engagement and create pipelines to high demand and growth industries and sectors; and
  • Bring a skills focus to summer youth employment.

The Workforce Innovation and Opportunity Act (WIOA) also offers new opportunities to leverage federal funding. WIOA focuses on the most vulnerable workers—low-income adults and youth who have limited skills, lack work experience, and face other barriers to economic success. It also requires that at least 75 percent of available state-wide funds and 75 percent of funds available to local areas be spent on workforce investment services for out-of-school youth. This is an increase from 30 percent under the previous law. The redirected funding gives states and local communities dedicated resources to implement effective employment, education, and youth development strategies for the most vulnerable young people in highly distressed communities. WIOA also requires that at least 20 percent of Youth formula funds be spent on paid and unpaid work experiences that incorporate academic and occupational education for both out-of-school and in-school youth.

By 2025, 65 percent of U.S. jobs will require some postsecondary education, training, or credential. Leveraging opportunities through WIOA and increased public and private investments in youth employment and training will help to ensure all youth can be successful and economically secure.

 “What a summer job means to me is motivation. It motivates you to go out and explore. It helps you step outside your comfort zone. You’ll meet people and adapt to new environments. It’s a good step to the career you are looking into.”

– Alexis, a participant in the St. Louis Youth Jobs program, Summer 2014.