Tag Archives: Center for Labor Market Studies

What Obama Should Have Said

4 Feb

Andrew Sum, Center for Labor Market Studies, Northeastern University and Paul Harrington, Director, Center for Labor Markets and Policy, Drexel University, writing for the Huffington Post, offered their own version of a progressive State of the Union address that President Obama should have offered last week:

A State of the Union Address for Today’s Labor Market Realities

“Our nation’s teenagers and many young adults ages 20-29 are working at a considerably lower rate today than at any time since the end of World War Two. Absence of work experience in the teen years and early 20s prevents our youth from acquiring marketable occupational skills, solid work habits, the soft skills demanded by employers, and opportunities to interact with adults and observe the skills and behaviors needed to succeed at work. Absence of early work experience will reduce their employment, wages, and training opportunities in their mid 20s. These problems are not confined to young adults lacking college degrees. Too many of our new college graduates are left either jobless or holding jobs that do not utilize the skills and knowledge that they acquired in college, reducing the return on their human capital investments and those of society.

A variety of actions are needed to improve the employment prospects of these young workers. We will work with states and local workforce development boards to expand internship opportunities and paid employment of high school students both year round and during the summer, increase the hiring of career specialists to prepare them to make the transition from high school to the world of work, and work with the nation’s employers to expand new youth apprenticeship opportunities, and provide subsidized employment in the summer for the nation’s jobless at-risk youth. We also will experiment with employer wage subsidies to promote the full-time employment of out-of-school youth, and we shall work with colleges and universities to provide additional internships and cooperative education positions for our college students to facilitate their transition to the labor market upon graduation.”

American Dream Elusive for Young Workers Before Recession

8 Jul

Yesterday the New York Times ran a front page article, A New Generation, an Elusive American Dream, on how the recession has made the American Dream unattainable for many young folks.  It’s a must-read article, however, it missed the long-term trends that have been exacerbated by the recession: youth unemployment and decline in quality of jobs.

Taking the story of Scott Nicholson, a Colgate University graduate, who is living off his parents while he optimistically searches for a job, the Times’ story generalizes:

Starved for jobs at adequate pay, the millennials tend to seek refuge in college and in the military and to put off marriage and child-bearing.  Those who are working often stay with the jobs they have rather than jump to better paying but less secure ones, as young people seeking advancement normally do.  And they are increasingly willing to forgo raises, or to settle for small ones.

All true, but these trends were already occurring in response to a difficult labor market for young workers.  Businesses have been retaining older workers and not hiring young workers since the recession of 2001.  According to a working paper, Out With the Young and In With the Old: U.S. Labor Markets 2000-2008 and the Case for An Immediate Jobs Creation Program for Teens and Young Adults, by the Center for Labor Market Studies at Northeastern University, from 2000 to 2008, the employment rates of each age group below 35 declined sharply with the most significant decline in teenage employment.  Over the same time, older workers employment rate increased 4.6 points for 55-64 year olds and 4 points for 65+.

But its not just employment figures that matter, its also the quality of the jobs.  Pay and employer-provided benefits for young workers has stagnated.  Wages for 18 to 29 year olds was 10 percent lower in 2007 than in 1979.  According to a report by the Center for Economic and Policy Research, Unions and Upward Mobility for Young Workers, the decline in union density has had a significant effect in diminishing the quality of jobs available to young workers.  Unions boost wages for young workers by $1.75/hour on average and significantly increase the prospects of health insurance coverage (by 17%) and retirement security (by 24%).

However, the trend has been away from unions – not towards them.  Meaning there has been a real decline in the quality of jobs young workers have available to them.

Scott Nicholson has the bad luck to graduate into a recession, yes, but the opportunities available to his grandfather (a retired stockbroker) and his father (a tool manufacturer) might never have been available to him at least not in the ways this relatives fell into them.  Young workers have been hardest hit by this recession (as they have been in every post-WWII recession), but its these long-term structural problems that need to be addressed.  The standard, slow job growth won’t dig young workers out.

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