by Marshall Kirby, Public Policy Analyst
At this point, nearly every worker in America can see that in economic terms our country is no longer suffering from a recession. However, while our economy is no longer contracting, and is growing at very modest levels, the labor force has yet to see any meaningful reduction in jobless rates. This is a very frustrating development, as many people claim that there are two economies which are diverging very quickly. One has corporations which have weathered the crisis and are now back to making strong earnings, with an executive level management who have also weathered the storm. On the other end of the economy many workers are experiencing stagnant wages, very few job openings, and lack of economic mobility.
In subsectors of the labor force, the frustration is even more apparent from employment data. For young workers, aged 16-24, the unemployment is extremely high at 20%. When broken down by race, the numbers get very frightening. Latino youths have a 24% unemployment rate, and African American youth have an even higher rate at 32%. These numbers are not only frightening, but unacceptable as both economic and non-economic ramifications will be seen in both the near and long term.
Policymakers and community advocates have been very sharp laying the blame on the usual suspects. Failing schools, high crime, discrimination, the recession, and economically depressed regions have been offered up as the cause. The truth is that all are to blame, and there is certainly enough of it to go around. Our education system is becoming less competitive, and we currently are failing to educate 30% of our youths enough to even graduate from High School. In the end, this puts the youth at a disadvantage. Job growth both now and before the recession was mostly concentrated in sectors which require at least some college education.
With statistics like these, you would expect that federal, state, and local governments are devoting at least a portion of their time and resources to these problems. Unfortunately, this is not the case. In fact, for over a decade, the issue of youth unemployment has become even less of a priority. Resources for programs have dried up and the desire or capacity for governments to tackle the issue has also fallen. Government sponsored workforce development and training programs were once the main policy remedy for tackling underemployed sectors of the workforce. However, funding for those programs, which reached their peak in 1994 at $1.6 billion, was down to only around $900 million last year in 2010. With inflation, this represents a real drop of nearly 70%!
Since 1994, we have seen a decline in manufacturing and the resulting effects of deindustrialization. With the decline of these jobs, it’s hard to believe that government funding for programs which help to provide out of work and displaced workers basic training to meet the demands of new industries has fallen. The effects of this have resulted in a decline of standards of living for individuals, families, minorities, and cities and towns throughout the rust belt.
One explanation of why funding has fallen so drastically for job training and skill building programs is the belief that they do not work. Another explanation is that policymakers, especially focusing on youth employment numbers, have decided to revamp and focus on K-12 education. In this circumstance, their efforts have not fully materialized, which is proven by the high school drop out rate and jobless rate amongst youth aged 16-24. Additionally, a high school education may not adequately address the needs employers have for new hires.
Despite these perceptions, organizations are still operating workforce development and skill training programs for underserved youth desiring gainful employment. One organization, Year Up, has been widely recognized in training disadvantaged youth for successful careers. The organization’s founder saw the latent potential and strong aspirations for youth who lacked the resources and skills to allow their dreams to come true. What has made the program so recognized and award winning is not only due to the results, but the way it was crafted. The training brings in employers who wish to do outreach to underserved youth and allows them to assist in curriculum development to better meet their staffing needs. As a result, the program combines both hard and soft skills training, with hard skills ranging from math, computer and software skills, to writing. Soft skills focus around professional etiquette, speech, and attire; skills which many of the youth are unaware of and did not receive at home or school.
The results of the program have been astounding. All of the program’s participants were successfully placed in competitive and meaningful internships to help build their careers. Out of all those receiving internships, 95% have met or exceeded their employer’s expectations. Even more impressive, 84% of those graduating from the program are currently employed in full or part-time career level jobs. Those that are employed receive an average wage more than twice that of minimum wage.
Policymakers should be taking notice. One thing that Year Up and other organizations that have been successful in workforce development have done is to take the standard model of job training programs and be creative. They have worked out the perceived imperfections of the old model and have successfully built programs which meet both employers’ and workers’ needs. We should be encouraging our elected leaders to establish similar programs to meet the needs of our businesses and workers. We are facing a budget crisis at all levels of government, but cutting spending on workforce development programs which work is not the answer. The global economy has changed, and without partnerships between the public, private, and non-profit sectors we will continually have trouble filling needed positions and to keep being the economic innovators. When the labor force is balanced, results can be achieved in which businesses thrive and individuals can prosper.
Mr. Kirby joins The National Puerto Rican Chamber of Commerce with an experienced background in Public Policy Analysis. He has worked for Americans for Informed Democracy, the Center for US Global Engagement, and for local governments in Virginia on issues ranging from international finance, national security, and other areas of foreign and domestic policy. He holds a Master of International Development Degree from the University of Pittsburgh.
Marshall can be reached at 866-576-5222 x 8, or MarshallK@NPRChamber.org.