Saturday, November 22, 2008

Teen Joblessness: the Director's Cut
Earlier this week, through a connection initially made on Back She Goes, I had an entry posted on the U.S. Chamber of Commerce blog, the (somewhat unfortunately titled) Chamberpost.

It's a strange venue for me, with my short brief for greater private sector engagement on the deeply troubling issue of historically low teen employment rates nestled in amongst a seemingly endless barrage of arguments against the union-supported "card check" legislation known as the Employee Free Choice Act. Here's the most recent broadside against it as of 3.29 Saturday afternoon. To listen to the Chamber's in-house bloggers, this measure, which is very likely to pass Congress early next year, not only will directly lead to downfall of American capitalism but will invoke a veritable army of great dead Americans, from Thomas Jefferson to Samuel Gompers, to rise from their graves and drown the world in corpse vomit.

While I don't feel sufficiently informed to make a strong argument for the EFCA, suffice it to say that I would be more inclined to feel sympathy toward the Chamber's views on this question if they made any acknowledgment whatsoever of how horribly out of whack labor relations have become over the last eight years--when we've seen record corporate profits but, for the first time in American economic history, flat median wages during a period of significant overall growth. Efforts to organize workers often lead to intimidation and outright dismissal. Maybe "card check" is too harsh a corrective for this and will do more harm than good, especially during a recession--but it's hard to argue that employers didn't bring this on themselves by so gleefully stomping on workers' throats when times were better.

Anyway, my blog entry was significantly shortened on the site, so I figured I would post the original version, which is about half again as long, here.

For Teen Workers, It’s Already a Depression

It’s no secret that we are only now starting to feel the effects of an economic slowdown, prompted by the pop of the housing bubble and exacerbated by the credit crisis, that could prove to be the worst in many decades. The federal Bureau of Labor Statistics just reported that the U.S. economy shed 240,000 jobs in October as the unemployment rate rose to 6.5 percent, its highest level in 15 years. Worse, economists are characterizing this recession as a structural, not cyclical, contraction—meaning that whenever we do emerge from it, our economy will look different than it did when we went in.

But as a recent New York Times article detailed, the groups already feeling the squeeze, and most likely to be disproportionately hit as conditions worsen, are working poor and younger job seekers—those who were already at the margins of the labor market. The piece neatly sums up the dilemma these would-be workers now face:

A kind of domino effect is beginning to squeeze out the least skilled or experienced workers — those already on the bottom of the ladder — who are settling for part-time employment and fewer hours if they can find work at all. Hardest hit of all are younger job-seekers, especially black males in their late teens or early 20s without more than a high school education.

The article cites the work of Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. In early October, I attended a forum in New York City at which Professor Sum presented on the silent crisis around teen employment in America. Sum illustrates a stunning trend in the nation’s summer employment rate for 16 to 19 year-olds over the last 20 years: it’s dropped by a third, from 48.4 percent in 1989 to 32.7 percent this year, the lowest percentage in the 60 years for which we have data. “If the employment rate had dropped that much for any other age group,” he said, “we’d be calling it a depression.” Sum also pointed out that both major party platforms in this election year were completely silent on the question. (Sum’s most recent research on teen employment trends is available online here.)

Why should teen employment matter to American businesses? Two reasons.

The first, which should concern everyone who aspires toward functional communities, is what social scientists call path dependency: once you start doing something, the odds are that you’ll continue to do it. If Ryan or Pedro works at age 16, he’s more likely to work when he’s 17, hopefully earning a bit more money and taking a job with more responsibility. As he gets older, he becomes acculturated into the world of work—and what might be items of concern for the teenager, from too-informal dress to difficulty communicating with colleagues or customers, are surfaced and solved by the time he’s grown up.

Primarily for this reason, early work experience is even more important for young people of modest academic attainment than for those who find success in post-secondary education. The problem is that the young people who statistically are most likely to work tend to be those whose long-term labor market prospects are better anyway: teens from families with larger incomes who are more likely to go to college. Sum reports that 26.5 percent of teens from families with annual incomes of less than $20,000 worked this past summer; by contrast, teens whose families earned between $75,000 and $150,000 worked at a rate over 47 percent. There’s a racial component to this as well: only 20.9 percent of Black teens and 26.8 percent of Hispanic teens worked this summer, compared to 35.9 percent of white teenagers.

The second reason has to do with the macro trends in the labor market and economy toward jobs that require more skill and more education, which both drive economic growth and offer sufficient compensation to support a family. Early work experience for young people lets them see what employers value. (Also, given the nature of the work that teenagers tend to do, they acquire the strong incentive of experience not to spend the bulk of their next five decades clearing tables, working a register, or sweeping up.) Ideally, this inspires them to buckle down in high school, and to think about college as something other than a place to party.

While teen employment is a concern everywhere, some communities have found success in creating work opportunities for their young people. Civic leaders in Philadelphia and Boston have forged effective partnerships with local business leaders to create thousands of meaningful private-sector summer placements for city youth. New York City’s Summer Youth Employment Program, the largest summer jobs program in the U.S., has expanded into more private-sector placements and begun to implement an effective education and life-skills curriculum for participants. Unfortunately, the provision in the ten year-old Workforce Investment Act (WIA) to eliminate dedicated funding for summer employment has made it harder for all localities to create summer work opportunities for teens. Given the squeeze now facing the youngest jobseekers, the 111th Congress and President-elect Obama would be well advised to revisit this question, either through WIA reauthorization or targeted legislation, in the near future. Strong encouragement from the business community in this effort would represent both civic-mindedness and long-term self-interest.

David Jason Fischer is Project Director for Workforce Development and Social Policy at the Center for an Urban Future in New York City (


Chris said...

Another major reason teen employment is important to the economy is that our economy is SOOO tied to consumer spending, and teens have the highest rate of spending on frivolous crap.

David said...

True, but anyone else in those (low-paying) jobs is also going to recirculate their earnings locally too, which is where you get any stimulus effect. The difference with the teens is just getting them into the habits of working.

The Navigator said...

As of Monday morning, no response -but that is probably in part because it seems to have moved off the front page pretty quickly - they put up a lot of new content on Friday the 21st. It's also not a comment-heavy blog: only one comment, total, on all front-page posts right now. AI&S gets way more than that! But that doesn't mean plenty of people didn't see it.

It would have been interesting to hear an actual response from someone connected to the Chamber. They seem pretty ideological, so my suspicion is that it would start and end with "this is exactly why we should abolish the minimum wage," although I think there's already a lower training wage for teenagers (for the first 3 months on the job, I believe).

In any event, kudos to Dave for spreading the good word. It would be pretty cool if this led to a regular engagement there.

David said...

Yeah, I've had that minimum wage issue come up before in writing/arguing around this issue. I need to look into whether you're right about the lower minimum; from my perspective, that's justified if the real point is to habituate younger people to working.

My sense of "the Chamber" is that it's probably inaccurate or at least a big oversimplification to characterize it as a singular, Borg-like entity with one political POV. While the big guys are surely of that stamp, I suspect a lot of the voices within the organization are more heterodox in terms of their politics and less rigidly ideological. Maybe the CIA in the '60s, with its "good wing" squaring off against its Bay-of-Pigs type hardasses and nutcases, is a good organizational comparison ;)

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