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The Collapse of the Nations Labor Market for Teens and Young Adults 2024: Designing A Set of Workfor

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Title: The Collapse of the Nations Labor Market for Teens and Young Adults 2024: Designing A Set of Workfor


1
The Collapse of the Nations Labor Market for
Teens and Young Adults (20-24) Designing A Set
of Workforce Development Strategies to Improve
the Immediate and Long-Term Employment Prospects
of the Nations Youth
  • Andrew Sum
  • Center for Labor Market Studies
  • Northeastern University
  • Boston, Massachusetts
  • May 2009

2
The Collapse of the Teen and Young Adult Job
Market in the U.S. The Case for A Comprehensive
Workforce Development System Response
  • An overview of the steep unprecedented declines
    in teen and young adult employment rates in the
    U.S. since 2000 and during the current recession
    we have achieved record low employment rates for
    the entire post-World-War II era, especially for
    men
  • These sharp drops in employment rates have taken
    place among all major groups of teens, including
    men and women, members of each major race-ethnic
    group, educational attainment, and family income
    group
  • There are very high underutilization rates for
    teens and young adults that go far beyond the
    official unemployment statistics
  • Why we should care about the severe loss in both
    the quantity and quality of teen and young adult
    employment prospects. The economic, educational,
    and social advantages of maintaining high
    employment rates for teens and young adults
  • The implications of these findings for the design
    and administration of future youth workforce
    development policies and programs

3
An Overview of Key Developments in the Nations
Teen and Young Adult Labor Markets from 2000 to
2008 and During the Current Economic Recession
  • The civilian labor force participation and
    employment rates of the nations teens (16-19)
    and young native born adults (20-24) fell sharply
    and steeply from 2001 through 2003 their E/P
    ratios fell more steeply than any other age group
    by far
  • Teen employment was only marginally affected by
    national job growth from 2003 to 2006 and then
    began to decline in the fall of 2006 well before
    the onset of the national recession. The teen E/P
    ratio fell considerably from the fall of 2007 to
    first quarter of 2009, by January-April period,
    under 30 of the nations teens were employed,
    lowest rate in post-World War II history
  • Between 2000 and 2008, teen employment rate
    declines were overwhelming their E/P rate fell
    by 15 percentage points from November-December
    2000 to November-December 2008

4
Continued
  • Teen employment declines were severe in every
    major demographic and socioeconomic group young
    college students affected the least, high school
    students and high school dropouts the most
  • Employment rates of teens in 2008 were lowest
    among the young (16-17), males, Blacks and
    Asians, and low income youth
  • Among 20-24 year olds, employment rates in 2008
    were nearly 5 percentage points below 2000 among
    all youth by January 2009, young males were
    employed at rates 10 to 12 percentage points
    below those of early 2001 record low employment
    rates for young 20-24 year old males high school
    dropouts and graduates with no college have fared
    the worst in the labor market

5
Continued
  • E/P ratios of young college graduates have
    remained quite high (the smallest declines) but a
    very high and growing fraction of them are
    mal-employed, working at jobs that do not require
    a college degree the mal-employment rates of the
    nations young college graduates (25 and under)
    have intensified during the past 18 months. Only
    50 of BA degree holders (25 and under) were
    working in a college labor market job in the
    first 3 months of this year.

6
Trends in the Employment/Population Ratios of the
Nations Teens (16-19) Between 2000 and 2009
(Annual Averages, Except 2009 Which is January
April)
(1) This employment rate for teens is the lowest
ever record in post-World War II history.
7
Trends in the Employment/Population Ratios of the
Nations Teens (16-19) During Selected Summers
Between 2000 and 2008 (June-August Averages, Not
Seasonally Adjusted)
8
Trends in the Employment-Population Ratios of
Male Teens in the U.S., 1979 to 2009 (Annual
Averages, Except 2009, in )
9
The Employment/Population Ratios of Male and
Female Teens in the U.S., Selected Years 1979 to
2009 (Annual Averages, Except 2009, in )
10
The Employment/Population Ratios of Teens (16-19)
by Their Family Income, January March 2009
(in )
11
Employment/Population Ratios of 16-19 Year Olds
in Selected Race/Ethnic/Family Income Groups in
the U.S., January-March 2009 (in )
  • Middle to upper middle income Whites and
    Hispanics are most likely to work 3 as likely
    as low income Black teens. Middle income Blacks
    are 2.3 as likely to work as low income Blacks.

12
Employment/Population Ratios of 16-19 Year Old
Teens in the First Quarter of 2009, Bottom Ten
and Top Ten States (in )
Top ten states have an E/P ratio for teens that
was twice as high as bottom ten states.
13
Changes in the Employment Levels of U.S. Adults
(16 and Older) All and by Selected Major Age
Groups, October-November 2007 to March April 2009
(Seasonally Adjusted, in Millions)
Note (1) Data for this age group are not
seasonally adjusted. Source U.S. Bureau of
Labor Statistics, CPS household survey, web site,
tabulations by authors.
14
Trends in the Employment/Population Ratios of
20-24 Year Old Men and Women in the U.S.,
Selected Years, 2000-2009 (in )
15
Trends in the Employment/Population Ratios of
20-24 Year Old Men in the U.S., Selected Years,
2000-2009 (Annual Averages, Except 2009, in )
Lowest ever recorded in U.S., history since 1948.
16
Labor Underutilization Problems Among the
Nations Teens (16-19) in the January-March
Period of 2009
17
Labor Underutilization Rates of the Nations
16-19 Year Olds by Gender and Major Race-Ethnic
Group, January-March 2009 (in )
18
Labor Underutilization Rates of the Nations
16-19 Year Olds by Household Income, January to
March 2009
19
Labor Force Underutilization Rates Among the
Nations Teens (16-19) by School
Enrollment/ Educational Level in the
January-March Period of 2009 (in )
20
The Potential Educational, Labor Market, and
Social Impacts of Expanded Employment for
the Nations Teens and Young Adults (20-24)
  • In-school employment for economically
    disadvantaged males, especially Blacks and
    Hispanics, helps increase their high school
    graduation rate
  • In-school employment with work-based learning
    opportunities increases students awareness of the
    links between high school curriculum and world of
    work requirements can increase commitment to
    school work and strengthen employability skills
  • Improves the transition from high school to the
    labor market upon graduation from high school,
    including higher employment rates, higher wages,
    and earnings

21
Continued
  • More intensive employment during teen years and
    early 20s increase likelihood of receiving
    apprenticeship training and formal training from
    employers in your early to mid 20s these
    training investments raise wages and earnings
  • Local areas characterized by higher employment
    rates for teenaged girls have lower teen
    pregnancy rates
  • Local labor markets with higher employment rates
    and wages for boys reduces their involvement with
    criminal justice system, particularly for
    assault/battery and property crimes, reduces
    attraction of drug sales among inner city youth

22
What Can Be Done to Bolster Teen and Young Adult
Employment Prospects in Short and Long Run
  • A need to expand both year-round and summer job
    opportunities for teens and young adults greater
    long-term effects on youth from year round
    employment
  • Use WIA monies including stimulus dollars to
    create both year-round and summer subsidized job
    opportunities for teens and young adults
  • Have the U.S. Congress allow the summer monies be
    used to fund job developers for jobs for all
    teens in the private sector and to experiments
    with wage subsidies for private, for profit
    sector employers
  • Mandate all ARRA funded projects list their new
    job openings with one stop career centers, have
    out-of-school teens and young adults be assigned
    a priority for referral to such openings
  • Use part of the ARRA stimulus monies for
    infrastructure/green technology investment for
    training of jobless youth and adults

23
Continued
  • Expand school-to-work (e.g., Jobs for Americas
    Graduates) and connective activities programs,
    and Career Academies programs for more high
    school youth to facilitate their transition to
    the labor market upon graduation from high school
  • Strengthen in-school and summer internships,
    cooperative education programs, and job
    development/placement programs for college
    students in 2 year and 4 year colleges and
    universities to increase their employment in
    college labor market jobs upon graduation. These
    job placements will substantially increase the
    private and social rates of return to college
    investments

24
Estimating the Impact of Summer WIA Job Creation
Programs for Teens and Young Adults on Their
Overall Employment/Population Ratio for the Year
  • ? E Ratio Number of youth Number of Net
    jobs Mean
  • P 14-24 assigned to 16-24 Year
    Old created per months in
  • jobs under the program Participants in
    program program
  • Eligible youth 100 Total 12
  • Participants
  • 14-24
  • Assumptions underlying our estimate of the
    employment impact of summer jobs programs under
    WIA in 2009
  • 400,000 youth 14-24 will be assigned to the
    program
  • 95 of every 100 jobs will go to 16-24 year olds
  • 90 of every 100 jobs created by the program will
    be net new jobs for youth
  • Average job will last 8-9 weeks, or two months

25
Continued
  • Solving for Change in
  • the E/P Ratio for all 400,000 .95 .90 2
  • 16-24 Years Olds in 38,000,000 12
  • the Nation

  • .15 percentage points
  • Annual average E/P ratio
  • would change from .48.5 to 48.6,
    a gain of .1 percentage points
  • The estimated employment impact could be
    increased by focusing programs only on 16-21
    years old, targetting services most heavily on
    at-risk youth to maximize net job creation
    effect, allocating monies to hire job specialists
    to development unsubsidized jobs for youth,
    subsidizing jobs for teens in the private for
    profit sector.


26
Continued
  • This is only a very modest impact of summer WIA
    jobs programs on the year-round employment rate
    of 16-24 year olds. Reasons for the modest impact
    are the following the
  • For economically disadvantaged youth, the impact
    will be up to 7 higher
  • Size of job creation program is small-only 1
    percent of the entire 16-24 youth population are
    served by the program
  • Summer program is only creating jobs for 2 of the
    12 months during the year a year-round jobs
    creation program is needed to substantially boost
    the E/P ratio of teens and young adults
  • There is always some substitution effect of jobs
    creation programs even among economically
    disadvantaged teens past research has shown the
    displacement effects of job creation programs to
    be lowest for teens.
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