The Anti-Economist — From the December 2013 issue

The Real Lost Generation

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What happens when a nation fails its youth? That question is now being asked around the world. This summer, Pope Francis called youth unemployment one of the two gravest global problems (the other being the loneliness of the elderly). Youth unemployment averages 23 percent throughout Europe, which is currently in the throes of a serious recession.

At least European nations are openly discussing the issue and suggesting ways to address it. The European Union plans to expand its youth-employment initiatives, setting aside roughly $8 billion over the next seven years to finance work programs in regions where youth unemployment is high. Even German chancellor Angela Merkel, the continent’s staunchest champion of fiscal austerity, supports the effort. Under the Youth Guarantee, EU member states have committed to making sure that anyone under twenty-five who leaves school or becomes unemployed will “receive a high-quality offer of a job, an apprenticeship or a traineeship” within four months. No one is putting forward equivalent plans in the United States, where the employment programs that do exist are being cut back.

Since austerity hawks in Washington seem determined to hamper our recovery before it starts to generate real employment gains, we need to find other ways to improve the lot of young workers. A high proportion of these Americans, more than in any other demographic, are not sufficiently prepared to work. After World War II, the United States graduated a higher proportion of teenagers from high school than any other nation in the world. As of 2011, it ranked eighteenth out of twenty-four wealthy nations. More than a million students drop out every year, at a time when educational credentials have become more important than ever in the job market. “Even to work in the fast-food industry, you often need a GED,” Jerome Jupiter of the Youth Empowerment Project told us in New Orleans.

There are now many programs in New Orleans aimed at Opportunity Youth, but the needs of these young people are complex. Local organizers are trying to keep kids in high school while enabling them to work as well. Education matters most, but the school system alone cannot overcome the profound effects of poverty, parental unemployment, drug abuse, and racism. The organizers in New Orleans devote a lot of attention to their kids, which makes these programs extremely labor-intensive.

“The scope and depth of it is paralyzing,” says Cherie LaCour-Duckworth, of the Urban League of New Orleans. “We need to address the root causes as to why youth and young adults are having a difficult time finding employment, not just the sociological results.”

One promising factor is the attitude of these young people. According to a 2011 survey by Civic Enterprises, 85 percent of Opportunity Youth recognize the importance of education and a good job to living the life they want, and more than three quarters say that achieving these goals is their personal responsibility. “What makes me hopeful is the kids themselves; they really want to get an education, get a job, and contribute to society,” says Amy Barad, who directs the Reconnecting Opportunity Youth Initiative at Tulane University. The Civic Enterprises survey finds that most believe they will eventually achieve their goals.

And there are programs across the country that work. Through Project U-Turn, the city of Philadelphia has raised its high school graduation rate from 52 percent in 2006 to 64 percent last year. In Cincinnati, a nonprofit called Strive has obtained striking results in preparing children for kindergarten, improving high school graduation rates, and raising fourth graders’ reading and math scores. Results in Boston and Chicago have been less dramatic but still encouraging.

An expansion of these programs could bring vast improvements. If the employment-to-population ratio were the same today as it was in 2000, there would be nearly 3.6 million more teens with summer jobs and 2.4 million more young adults with full-time work. Yet the federal government has essentially turned its back on the young. In 1993, Bill Clinton signed a bill creating AmeriCorps, a domestic program modeled on the Peace Corps, which enrolls eighteen- to twenty-four-year-olds in intensive community-service work in exchange for stipends, health-care coverage, and job training. Since 2005, efforts to expand the program have gone nowhere. Another notable federal program, YouthBuild, provides young people jobs constructing affordable housing while they complete a GED or earn a high school diploma, but its $80 million of federal funding is now being cut back under congressional sequestration.

Any wide-ranging solutions will require the broad collaboration of government at all levels with nonprofit organizations, universities, and businesses. The programs that exist require more support. Initiatives like AmeriCorps could be expanded, and perhaps linked to college-debt forgiveness. The best bet for funding in these times of public and private budgetary cutbacks may be tax credits for companies who hire teens and first-year college graduates.

But no one in Washington says a word about the youth-employment crisis, Sum told me. Our failure to address the problem, he explained, will lead to long-term difficulties for the economy. Without good work prospects, young people will pay less in taxes over the years and depend more on Medicaid, food stamps, and other social assistance; the prison population will continue to grow. Academic researchers have put hard numbers on what each Opportunity Youth is costing America. A report published in 2012 put the lifetime figure at more than a million dollars in lost tax revenues and increased social costs. With an estimated 6.7 million Opportunity Youth in America right now, the total lost wealth will be well into the trillions of dollars. And this, of course, does not account for less quantifiable impacts. The disconnection of youth from jobs and school has led to declines in the marriage rate, household formation, and home ownership — to unhappy and unstructured lives. This is an American tragedy, and its dimensions are growing.

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