Even as America emerges slowly out of the recession, too many of our young people are still not graduating high school or achieving a postsecondary education, which severely impacts their opportunity for growth in the labor market. Compared to other age groups, the unemployment rate for young people has always been on the higher end; however, the economic downturn has impacted young workers particularly hard. Since the start of the recession in December 2007, young adults (ages 16-24) have suffered the highest unemployment rate on record. By official estimates, unemployment among young workers reached 19.6 percent in April, the highest since the Bureau of Labor Statistics began tracking statistics in 1947. In reality, far more young people are out of work because many of them have given up on looking altogether, and are therefore not ‘counted’ in official unemployment tallies.
Can we afford to wait until the economy finally recovers to tackle the problem of youth unemployment?
Many scholars and economists say no. Expressing great concern about the current labor market and youth, Harry J. Holzer, a professor of public policy at Georgetown University and an institute fellow at the Urban Institute, testified this summer before the Joint Economic Committee of Congress on “Avoiding a Lost Generation: How to Minimize the Impact of the Great Recession on Young Workers”. Stephen M. Wing, the President of Corporate Voices for Working Families, also testified as the Director of Workforce Initiatives at CVS Caremark Corporation (view transcript of his testimony). Here are some of the statistics he shared to illustrate the severity of the problem:
- About 25 percent of all American youth drop out of high school and another 25 percent (or a third of high school graduates) do no move on to postsecondary education;
- Of those who do attend college, a majority fail to obtain any credential, even an occupational certificate, within six years;
- Teen unemployment rates average about 25 percent most months, with about 35 percent of the population in the labor force, and about 25 percent of the population employed;
- Among African American teens, the unemployment rate averages 40 percent, with only 15 percent of the population employed.
“And while these efforts would cost some federal funds over time, the social and economic costs of not investing in our most vulnerable young people will be far greater,” Holzer says.
During recessions, fewer than half of adult high school dropouts do not have jobs and the majority of them do not even take part in the active labor market. This is a problem in itself; but it has even more serious consequences in the long run. Young people today are trapped in this vicious cycle. There is an urgent need for businesses, policy-makers, communities and education institutions to make a sound investment to break the cycle.
Here at Corporate Voices, much of our work centers on programs that help launch young adults on a successful trajectory through high school, into postsecondary education, and on to their careers. Our efforts in connection with the Ready by 21 Partnership and the New Options Initiative are described below.
Another report, “The Recession Generation,” by the Coalition on Human Needs, says that when young people are unemployed early on, they are more likely to be trapped at the lower “margins of the economy” and to be unemployed or underemployed into their 20s. That, in turn, increases later odds of permanent un- and under-employment and poverty, which not only brings down the standard of living for young people themselves but lowers productivity for the U.S. labor market as a whole. Clearly, this is not just a concern for young people and their families; this is our problem as well. To combat poverty and unemployment, Corporate Voices has been working with low-income and under-employed working families. As demonstrated by our Family Economic Toolkit for employers and our research papers, “Struggling to Make Ends Meet 2004,” and “The Economic Security of Low Wage Workers 2003,” we provide practical tools to alleviate poverty for struggling working families.
In general—but especially in tough economic times–there needs to be a coordinated effort between schools, communities, policymakers and businesses to combat youth unemployment. Holzer concludes his testimony with this plea: “Sensible and cost-effective investments based on evidence of success, and with incentives for performance, should be made even in difficult fiscal environments.” Specifically, Holzer suggests investing in public policy and education. By broadening the use of existing programs, such as President Obama’s American Graduation Initiative and by fostering greater dialogues between students and their advisors about careers could improve youth unemployment issues.
We cannot afford to turn our heads away from youth unemployment. This is one of the key reasons why Corporate Voices is partnering with business leaders in target communities under the Ready by 21 Partnership and the Kellogg-Foundation funded New Options Initiative. Both programs share the goal of increasing the work readiness of young people ages 16 to 26. Ready by 21 and other priority initiatives are helping us increase the odds that when our nation’s economy fully recovers, young people across America are ready and eager to contribute to the competitiveness of American business and our future economic success.