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Out of School, Out of Work, Out of Luck: The Youth Jobs Crisis

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"For disadvantaged youth lacking basic education, failure to find a first job or keep it for long can have negative long-term consequences on their career prospects that some experts refer to as 'scarring'. Beyond the negative effects on future wages and employability, long spells of unemployment while young often create permanent scars through the harmful effects on a number of other outcomes, including happiness, job satisfaction and health, many years later."

This language is from the 2010 report of the 33-member Organization for Economic Cooperation and Development, and while meant to be a coda for all the members, it seems to have special applicability today to the biggest OECD member of all, which of course is the United States of America, where fully 5 million out-of-school youth are now unemployed.

In all, there are now 30 million real unemployed Americans -- not just the 15 million "officially" being counted by the Bureau of Labor Statistics -- and they are all entitled to every reasonable public, private, 'public & private', and organized labor-based effort to find them employment. But we know that a jobless recovery can seem even more "jobless" to some out-of-work Americans than others, and right now it is our nation's African Americans, Latinos, blue collar males with high school diplomas and older workers who are facing much higher unemployment rates than other Americans.

Side by side with these unemployed workers for whom the challenge of reemployment is particularly high, however, are, as I said, five million youth who are desperately seeking initial employment. And this is not by any measure a static number, for each year, in recessions and in good times alike, another 6.4 million or so young people graduate from high school and college.

Five million is a huge, unprecedented number of unemployed youth -- in recent past recessions it never exceeded 1.5 to 2 million -- and the reason that this issue is so important is because a young person's prolonged delay into his first job has career-long impacts which show up as more limited job skills, fewer subsequent promotions and thus much lower lifetime income.

These unemployed young people are entitled to a new, broad-based, government-supported "Youth Employment Initiative" that draws from our previous experiences with Roosevelt's CCC, Kennedy's VISTA and Peace Corps programs, and Johnson's CETA program and from newer programs like Teach for America and CityBridge Foundation's Service Corps program. Unfortunately, because there are few extant agencies or initiatives which, even with immediate additional funding, could accommodate these five million youth, this new program will have to be instantly created. New Deal-like programs for workers whose earnings immediately cycle back into the economy were once our specialty -- they should be again.

The CCC under Roosevelt found hundreds of thousands of entry-level jobs for young people, and almost all of the costs of the CCC immediately flowed back into small businesses in local areas. VISTA placed young volunteers in deeply rural and poor urban communities working on uplifting poverty reduction efforts.

The Peace Corps is of course the nearly fifty-year old international version of VISTA, but with the energy that the Obama administration and friends in the Congress like Nita Lowey it is now a trajectory of growth and impact never seen before in its history. This year there will be 8,600 Peace Corps Volunteers, up from the 7,500 when President Obama took office, and the goal is to reach 10,000 volunteers in 2011, the actual 50th anniversary of the founding of the Corps. These are worthwhile goals that should be supported, especially because the Peace Corps is now doing an amazing job of supporting career placement of its volunteers when they return home to the U.S., which ties in perfectly with the unemployed youth programs we need to create nation-wide.

Of the two newer programs, Teach for America, on the Board of which I serve and was for several years its Chairman, each year takes 5,000 remarkable new college graduates -- out of an applicant pool ten times as large -- and finds them two-year teaching assignments in some of our nation's most challenged public elementary and middle schools. Founded in 1990, 60% of TFA's corps members have remarkably chosen to continue their careers in education after their initial two-year assignments. ServiceCorps' three signature programs connect workers with compelling community projects that create a lasting, positive impact on both employees and their community, with a noteworthy emphasis on entry level positions.

All of these programs have repeatedly proven their value over time, with many positive long-term benefits. The unemployed youth problem in this country today may be unprecedented in size, but solutions for it are not without models and past successes to emulate. Unemployed youth in 2010 are at once different and the same as the unemployed youth in the prior nine recessions since the end of WW II. Whatever differences do exist are mostly nuances that should not hold us back from acting.

As complements to the Youth Employment Initiative, Congress should undertake community-based federal government job creation in general, which would bring immediate benefit especially to those employment-challenged African Americans, Latinos, blue collar males with high school diplomas, and older workers to whom I earlier referred. These efforts should be directed at restoring our environment, policing communities, providing child care and tutoring, cleaning up abandoned houses and buildings, maintaining parks and public spaces, and preserving historic buildings. President Obama's recently announced transportation-based infrastructure initiatives for the next Congress to consider should also be expanded to recognize the special travails confronting the harder-to-place unemployed and to include energy conservation work in our schools and municipal buildings. These latter efforts would bring to the table an extraordinary combination of good energy policy, help to domestic manufacturers of green products, and initial and re-employment of deeply at risk workers.

The federal government should also take steps within existing programs, including the Workforce Investment Act, to provide additional incentives for job creation and training in much needed areas such as nursing, engineering and math & science instruction. And we should create a Teacher's Aid Corps to complement the Teacher's Corps, which should include allowing reasonable amounts of time for job searches and added training.

One of the greatest opportunities for the out-of-school unemployed youth and even many older unemployed workers, however, will always be found in apprentice programs. That same 2010 report from the OECD lauded such programs for allowing young workers to acquire much needed skills and work experience. It pointed out, as an example, that Germany, which has a long and proud history of high-quality apprentice programs, has an almost unbelievable low ratio of youth unemployment to adult unemployment of only 1.5 to 1, compared to 2.8 to 1 across the entirety of the OECD including the U.S.

International research suggests that there are few more viable ways of making a difference in the short-term, in the absence of an improved economy and more dynamic labor market, than from apprentice programs. For example, a pan-European study by the European Central Bank found that direct interventions such as preferential hiring policies and greater wage flexibility have relatively little impact on improving job prospects for young people when markets are generally slow. However, the higher rates of youth employment in countries with apprenticeship systems suggest that the development of education and training programs linked specifically to labor market needs are the most promising longer-term option.

More generally, we also know that policies intended to increase the academic attainment levels of all students in the United States clearly help to improve the job prospects of young people in the longer-term, and thus maximize the contribution of this group to economic growth.

So, let me add another initiative to consider.

Since 2006, long before the depths of this Great Recession of 2007 made many things suddenly seem automatic, I have proposed that all fixes to our nation's education travails should start with improving the economic plight of our K-12 teachers, which we know would also have great ripple effects on the employment future of the country's high school students and graduates. Specifically, it's time for these teachers to be given federal income-tax relief, and we will all be the beneficiaries when they get it.

Here's why this makes sense.

According to numerous surveys, both the public and teachers want an increase in teacher pay. Of course, there are other pressing issues, including better facilities, better curricula, better-trained administrators, and greater parent involvement. But responses to these needs, because they involve overcoming ingrained bureaucratic obstacles and instilling personal motivation, will take years to effect and move through the system.

So, let's start by giving refundable tax credits to K-12 teachers at all accredited schools based on their qualifications and teaching specialties, in order to increase the pool of teachers in critically important areas such as languages, math and sciences, and instructing students who are economically disadvantaged or have disabilities. Effective salaries would immediately rise to more livable levels, and improved quality would follow right behind.

Our country has a long successful record of using the tax code to reward what we as a society determine are desirable social actions. We agree, for example, that it's important to encourage homeownership, so we allow homeowners to deduct all sorts of related costs. And in the 1960s we gave income-tax relief to those VISTA and Peace Corps volunteers because their work was deemed so important -- and today we give substantial relief to our courageous and patriotic active-duty military personnel.

But teachers are just as patriotic and important, their contributions to our nation's vibrancy and economic well-being are exceptional, and vis-à-vis all other municipal professions (police, fire, general services) they are far and away the most difficult public servants to recruit and retain.

America has approximately three million K-12 teachers, which is a big number, yet their aggregate federal income taxes run only about $15 billion to $20 billion a year. This is only about six-tenths of one percent or so of the U.S. Treasury's expected total receipts in any year -- or a couple of months' worth of our ongoing expenditures in Afghanistan.

As with any material change to the tax code, we would need to "pay" for this benefit to teachers. But even in these budget-starved times there are many thoughtful ways to do this, starting with once and for all closing the entirety of the 'carried interest' tax loophole, which alone would just about cover the annual cost of the proposed teachers benefit. All informed citizens, starting with teachers themselves, want high teaching standards and accountability. Federal income tax relief for teachers of the sort I describe would be a powerful response to this demand, and a just as powerful step toward assuring the long-term vibrancy of our society, the health of our national economy, and our global competitiveness.

Let me close by briefly going back to those five million out-of-school unemployed youth, for in so many ways they seem to be ground-zero indicators of the nation's overall jobless plight and our solutions to that plight. Virtually all of the recommendations in this piece call for a greater role for the government, and I don't apologize for any of that, for when the mountain of woe is as high as it is now, you call for Edmund Hillary, which in this case is the government. But it can't be just the government, since, as our kids might say, we also need beaucoup amounts of enlightened private sector involvement in these efforts.

Responsible business leaders with a pervasive sense of concurrent and equal corporate responsibility to shareholders, employees, communities and the nation are the logical individuals to kick-start these additional job-creation efforts, for it is they who should have the foresight to see the obvious benefits. But these problems are so great and such an overhang on our economy that we need the inspiration and perspiration of the leaders at every level of our national community.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.

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