Despite the $1.2 billion in stimulus money the Congress set aside for summer jobs for youth, the summer youth employment rate hit a record low of 29.1 percent - the lowest since World War II, according to a new study that concluded still more federal spending is needed.
The author of the study, Northeastern University labor economist Andy Sum, had predicted shortly after the Recovery Act was passed that employment for 16- to 19-year-olds for June and July would be 32.1 percen
Now, Sum says, without further federal action, things are not expected to get better anytime soon.
"Given the likely absence of any near term resurgence in [overall] employment growth, teens will face declining employment rates through 2010 in the absence of new and expanded job creation strategies targeted upon teens and young adults (20-24)," states the study, titled Nation's Teen Summer Employment Rate Hits New Post-World War II Low: Effects of Federal Jobs Stimulus Overwhelmed by Private Sector Job Decline.
The study determined that the length and severity of the 2007-2009 recession were to blame for the record low youth employment this summer, and the fact that more adults were willing to compete with teens for a wide array of entry level positions. It also found that rising federal and state minimum wages "appear to have influenced employers to scale back the hiring of teens, especially those with limited work experience, and rely instead on more experienced workers."
Jonathan Larsen, policy associate at the Washington, D.C.- based National Youth Employment Coalition, said there will be a need for federal action even when the economy turns around.
"The only alternative at this point, because we don't expect any recovery in employment rates for teens and young adults, is to have some kind of federally funded employment program," Larsen said. "If we want young people to have work experience, we need to invest federal money."
Sum's study found that young black males fared the worst over the summer with an employment rate of 17 percent versus 22 percent for black females and a high of 39 percent for white females and 36.9 percent for white males. Black males also incurred a near 50 percent drop in their employment rate - from 34 to 17 percent - while other groups experienced smaller declines, the study found.
The forecast for next year doesn't look good, according to the report.
To get the youth employment rate back up to 45 percent, where it was in 2000, 2.7 million more teens would have had to be employed this summer, the study found. Through the Recovery Act, only about 107,000 youths had been employed through June, U.S. Department of Labor officials have said.
To improve the youth employment situation, Sum recommends the creation of a national task force on youth employment and several other measures, including:
• An immediate increase of up to $5 billion in federal spending to create both year-round and summer jobs for teens and young adults under the Workforce Investment Act.
• The use of federal funds to hire year-round Career Specialists in each local WIA service delivery area to help develop year-round and summer paid internships for youth in the private sector.
• The creation of tax credits for employers who expand the number of workers on their payrolls and the testing of wage subsidies for private sector employers hiring youth from high poverty neighborhoods. Both the tax credits and wage subsidies should resemble similar initiatives from the 1970s, namely, the New Jobs Tax Credit and Youth Entitlement demonstrations, respectively, the study stated.
"In the absence of any comprehensive new set of strategies to dramatically boost teen employment, the labor market for teens will continue to deteriorate over the next few years with adverse consequences for their future employability and earnings," the study stated.