They say that a mind is a terrible thing to waste. Nowadays, though, 6.7 million young adults in this country are out of school and at best marginally employed. And although the rhetoric on the campaign trail would make us think otherwise, our squandering of our most vital national resource is a far graver threat to our economy than outsourcing. The diminished standing of our workforce is undoubtedly more pernicious to this country than cheap labor abroad.
Businesses are no longer receiving the cost savings from outsourcing that they once did. Indeed, fewer than 300,000 jobs per year are projected to be lost to foreign competition in the years to come. What we do observe from employers leaving our shores, though, is a belief that foreign workers are more motivated and better prepared for the work, especially for entry level roles. An errant point of view has taken hold in the public and corporate spheres: that America's young people, especially those who grew up on the wrong side of the Opportunity Divide, are not assets to our economy but liabilities, ill-suited for the work demanded of them and not worthy of investment.
Nothing could be further from the truth. At Year Up, our students -- low income 18-24 year olds -- come to us having already faced substantial obstacles in life. They are not in search of a handout; what they want most of all is the ability to take ownership of their own futures. All they 're looking for is an opportunity: a chance to learn the skills America's employers are demanding and then prove just how smart and motivated they are.
Ky Smith was one of those students. When he enrolled at Year Up in Baltimore, he was out of school and working two restaurant jobs. Nowadays, he's a full time IT Network Technician at Radio One. Last month, he stood on stage with President Clinton at the opening of the Clinton Global Initiative America meeting, and told an audience of policy makers, CEO's, and thought leaders that he was now writing his own story, one not constrained by the zip code he was born in.
At Year Up, we have helped thousands of students rise from poverty into a professional career in a single year. It's not a fluke -- since 2000, we have scaled from 22 students in one city into a national organization with 1,500 students and 250 corporate partners. Our graduates earn an average of $15 per hour, or about $30,000 per year for those in salaried positions. Last year, a third party randomized control trial found that Year Up participants out-earned those in a control group by 30%.
Ky and the rest of Year Up's 3,500 alumni are proving every day what our young adults are capable of when given the chance, and are living proof that the American Dream is still alive when we equip our young people with relevant training and connections to the professional world.
What's more, these young adults are filling a real business need. Leading tech firms like LinkedIn, Salesforce and Microsoft, and leading financial institutions like State Street, JPMorgan Chase and Wells Fargo have come to rely on our interns as a pipeline of entry level talent that is smart, flexible, and motivated. Companies like these use our interns to fill positions that are in high demand, and that's why they invest so heavily in their partnerships with us -- in fact, corporate contributions cover more than half of our operating cost. When it comes to expanding opportunity, businesses and young adults are not the sources of the problem -- they are a substantial part of the solution.
We as a country need to embrace that perspective, and fast. Over the next five years, those 6.7 million young adults will cost taxpayers $437 billion in public expenses and lost tax revenue, and over the course of their lifetime will have a negative $4.7 trillion impact on the economy. Meanwhile, by conservative estimates, American businesses are sitting on $1 trillion in cash and are unable to fill well over 3 million jobs. By the end of this decade, we will face a structural shortage of millions more skilled workers. Reversing these numbers can unleash a wave of prosperity that will power us through the next several decades and raise millions of people out of poverty.
Our goal should be to build the most highly skilled populace in the world, the kind that will fill jobs that cannot be outsourced and will keep America's companies at the forefront of the global economy.
Investing in our youth is not just a matter of economic justice. It's good business sense.
Gerald Chertavian is founder and CEO of Year Up and author of A Year Up.
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