Exclusive Commentary

Get Teens Back to Work: Why the Federal Government Must Invest Now in Teen Jobs

Algernon Austin, Economic Policy Institute - Posted July 25, 2011


Let’s hope that American teens have a lot of good, clean fun this summer because the vast majority of them certainly won’t be working. While that may be enjoyable for teens, it’s not good for America.

 

In a country where growing numbers of young adults are neither working nor looking for work, we need to do more to create teen jobs and establish the habit of working.

 

The teen labor market is collapsing and taking the benefits of work with it. In 2000, 45 percent of America’s teens were employed during the summer. This summer only about 25 percent of teens will have a job. This precipitous drop in employment will lead to the worst teen summer employment rate since World War II.

 

The crisis in the teen labor market is partly a reflection of the massive jobs deficit that the country faces. We are still 6.9 million jobs below the level of employment we had at the start of the recession in December 2007. Since then, the working-age population has grown by 4.1 million. Altogether, that means we are actually short 11 million jobs.

 

For teens, the Great Recession has hit hard. Since 2007, teen summer employment has declined nine percentage points while summer employment for all workers has only declined four percentage points.

 

The decline of the teen labor market pre-dates the recession, however, as Andrew Sum and his colleagues at the Center for Labor Market Studies have shown. In the summer of 2007, before the recession, the teen summer employment rate had already dropped 11 percentage points from its 2000 level to 34 percent.

 

This decline in teen employment has had a disproportionate impact on low-income and minority teens. Poor teens are less likely than middle class teens to find summer jobs, and poor African American teens are much less likely to find work than poor white teens. Poor Hispanics are better off than poor African Americans, but worse off than poor whites.

 

The situation for poor African Americans is compounded by the fact that they tend to live in neighborhoods with other low-income families and the deprivations in community resources that result. In contrast, many poor whites live in middle-class neighborhoods, and they can benefit from the resources available in these neighborhoods.

 

All of these factors lead to a situation where teens who would likely benefit most from summer jobs – poor, African American teens - are the least likely to find them.

 

It’s important to appreciate the depth of these benefits. Summer jobs allow youth to be productive during the summer. Adolescents earn money for themselves and save money for educational expenses during the school year. Over the long term, teens who work tend to do better in school and continue working into their twenties.

 

Although it is difficult to address the needs of teen workers during a recession, we can’t ignore this growing problem. With the private-sector barely increasing employment, it is necessary for the federal government to step in with bold job creation initiatives.

 

Without federal intervention, we can expect years more of high unemployment across the board and very low summer employment rates for teens. If our leaders decide to enact large cuts to the federal budget the outcome will be even worse. Reduced federal spending would lead to significant job losses and the continued collapse of the teen labor market. Even once the economy recovers, we will still need additional job creation resources for teens.

 

The good news is that there have been several effective youth summer employment programs that can serve as models. In the 1970s, the Youth Incentive Entitlement Pilot Program not only increased youth employment in the targeted cities, it achieved the impressive result of virtually eliminating the black-white employment rate disparity for youth in those cities. Given the persistent severity of this disparity, we should learn from any model that has eliminated it.

 

There are also other, more recent examples of effective programs. In 2009, the Youth Workforce System received additional funding from the American Recovery and Reinvestment Act and created over 300,000 summer jobs for youth. Even more jobs may have been created through additional funding.

 

Finally, we need to reinstate the federal Summer Youth Employment Program. The Summer Youth Employment Program put over a half a million youth to work during the summer from the 1960s to the 1990s. Reinstating this program would serve as a countervailing force against the rising numbers of disconnected youth who are neither in school nor working.

 

The teen employment crisis is genuine, but it can be solved. Once youth get into the habit of working, they become less likely to stop. Making an investment in teens now will ensure they have a better chance of continuing to work throughout their lifetimes.

 

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Algernon Austin is the director of the Race, Ethnicity, and Economy Program at the Economic Policy Institute.