The Case for New, Year-Round Job Creation Strategies

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By Andrew Sum and Ishwar Khatiwada       During early September, the U.S. Bureau of Labor Statistics released its findings on the state of the nation’s labor markets in August. These findings, together with those for June and July, have allowed us to assess the state of the teen job market this past summer, both overall and for distinct demographic and socioeconomic subgroups.

The results were quite bleak. The summer teen employment rate (not seasonally adjusted) fell below 30 percent for the first time in post-World War II history. The estimated 29.6 percent teen employment rate represented the fourth year in a row in which a new historical low was reached. The teen summer employment rate was slightly below 40 percent in 2007, and reached nearly 52 percent in 2000 at the height of the labor market boom of that decade.

The summer of 2010 also was marked by extraordinarily high disparities in employment rates across gender, race-ethnic and family income groups of teens. Among blacks, Hispanics and whites, the share of teens with jobs rose steadily and often strongly along with family income, until reaching incomes of $100,000 and above. At the very bottom of the employment rate distribution were low-income black teens and low-income Hispanic women, with employment rates of only 10 to 14 percent. Slightly more than one-quarter of low-income white males and Hispanic males with family incomes between $40,000 and $75,000 were working, versus 36 percent of black female teens living in upper middle family incomes and nearly 43 percent of affluent, white female teens (with incomes of $150,000 or more). This latter group of teens was four times as likely to have a summer job as their low-income, Black and Hispanic peers.

The absence of a federally-funded summer teen job programs this year clearly played a role in diminishing teen job opportunities, especially among low-income minority teens. The greatest declines in teen summer employment between 2009 and 2010 were absorbed by low-income black teens (both men and women) and low-income Hispanic females and white males. Economically disadvantaged youth are the most dependent on these subsidized summer jobs to find work, given their more limited access to the informal job brokering services of parents, other relatives and neighbors.

The labor market problems of the nation’s teens go well beyond the absence of summer employment. Their year-round employment rates have hit historically low records over the past three years and are well on their way to a new record low this year. Younger teens (16 to 17), high school students and high school dropouts, males, and black and Hispanic youth have been the most severely affected.

The widespread lack of year-round employment experience for teens is particularly disturbing. Both past and current national and local research has shown that substantive paid work during the regular school year, rather than during just the summer months, is a more significant determinant of early post-high school employment and earnings outcomes. Recent research by the authors for Boston public school graduates has shown that consistent summer employment (three or four summers) can significantly improve the likelihood that a high school student will work during the senior year, but does not directly affect post-high school employment.

The summer job gap for the nation’s teens is conservatively estimated at around 3.8 million. This is the number of teen job opportunities that are needed to restore their summer 2000 employment rate. A resurrected summer jobs program at last year’s scale of operations could only meet about 8 percent of the current jobs gap. Clearly, we need more job creation on a massive scale from the private-for-profit and non-profit sectors.

The debate over a teen jobs creation program should begin now before the U.S. Congress closes up shop for the November election. We need immediate bipartisan support for a comprehensive array of year-round job creation strategies to put the nation’s youth, especially its low-income and low-middle-income youth, back to work. Our future workforce preparedness and the future livelihood of our low income youth is dependent on such actions.

Andrew Sum is director of the Center for Labor Market Studies at Northeastern University. Ishwar Khatiwada  is senior research analyst at the center.