12/07/2012 03:36 pm ET Updated Feb 06, 2013

Millennial Unemployment: The Cognitive Cliff

When President Obama's Council on Jobs and Competitiveness was tasked with handling the shortage of engineers in the U.S., they turned to interns. Using a tradition with its roots in the master-apprentice relationship, the Council is relying on industry to start earlier in training its next generation of workers. In August 2011, the White House announced commitments from top companies to create 6,000 new engineering internships in 2012.

In the big picture, 6,000 internships are a drop in the bucket as there are 4 million U.S. 16-24 unemployed, bringing the unemployment rate to 17.1 percent as of July, 2012. The U.S. is now facing a professional cognitive cliff, as current graduates are being deprived of crucial career building for the fourth year in a row since the 2008 recession. It is unclear how much this cognitive cliff will cost our country in the long run -- but it will be magnified the longer we fail to create quality early employment opportunities.

Several Pew Research Center studies found that a college degree doubles the lifetime earnings over a 40-year career ($1.42 million vs. $770,000 for those who did not finish college). This data shows how early career education has significant long-term impact, similar to the way compound interest works on a retirement account. What will this cognitive cliff cost our country in the long run? Could it be as costly as not sending people to college at all?

The internship
The way that a company runs an internship program can affect its ability to attract top talent, and can shape its brand and even its industry. Too many companies think of internships solely as an audition for the intern, often forgetting that they are simultaneously serving as a professional classroom. Moreover, that insignificant intern may be an undiscovered industry prodigy. In the late 1960s, both Universal Studios and Hewlett-Packard gave two such interns an opportunity.

Hewlett-Packard CEO Bill Hewlett received an interesting call from a 12-year-old in 1967 asking about computer parts for a project he was working on. Twenty minutes later, Hewlett offered Steve Jobs his first internship putting screws into frequency counters on an assembly line. "I remember my first day, expressing complete enthusiasm and bliss at being at Hewlett-Packard to my supervisor, a guy named Chris, telling him that my favorite thing in the whole world was electronics."

Like Jobs, at age 17 Steven Spielberg kicked off his career with an unpaid internship at Universal Studios after a family friend made the life-altering introduction. As an intern Spielberg wasn't officially allowed on set -- but, that didn't stop him from sneaking on regularly and networking his way into any meeting he could find. He made his first short film, Amblin (1969), and hustled to get Universal executives to watch it. Once the vice president of the television division saw the film, he offered Spielberg a seven-year contract. Six years later, Spielberg delivered the epic movie Jaws (1975) to Universal Studios and cemented the beginnings of his cinematic legacy... and made us all think twice before sticking our toe in the ocean.

Jobs and Spielberg had a lot in common -- an extraordinary work ethic, initiative, a sense of imagination, etc. Most importantly, though, both young men were given opportunities at great companies early in life that helped launch them into their future careers.

Internships as an education
The U.S. News and World Report, known for its annual rankings of universities and colleges, also releases a short list ranking schools based on the percent of undergraduates who have an internship during their time in college. The only Ivy in the top 10 for the 2011 report was Dartmouth College (72 percent), which came in third behind American University (85 percent) and Colorado School of Mines (81 percent).

In an interview with Monica Wilson, the acting co-director of the Dartmouth Undergraduate Career Services Department, Ms. Wilson noted that one thing that helped Dartmouth to have a successful intern program is the way they use the quarter system. Dartmouth encourages its students to take a quarter off to intern with an organization and gain real-world experience to supplement their education.

The undergraduate career services department is a member of the National Internship Consortium, which collectively houses several thousand opportunities. Ms. Wilson explained that students are encouraged to begin their search six months out.

Integrating internships into the educational process as much as Dartmouth has can be difficult in a down economy. "We definitely noticed a dip in available internships for students in 2008 due to the economy," Ms. Wilson noted. "Fortunately, 2011 really picked up with more internships because a lot of companies have realized it is a great way to identify talented entry-level hires early on, well in advance of graduation." Dartmouth College continues to grow its pool of available internships through a variety of means, including optimizing relationships with parents and alumni/ae.

Avoiding the cognitive cliff
Unfortunately the 17.1 percent unemployment rate doesn't tell the whole story for millennials. "The underemployment rate for young high school graduates is still extremely high, at 54.0 percent, as is the underemployment rate for young college graduates, at 19.1 percent. Thus, the Class of 2012 will be the fourth consecutive graduating class to face the severe short-term and long-term consequences of entering the labor market during a period of profound weakness." (Economic Policy Institute 2012).

On top of this four-year slide, the value of college degrees has also dropped as the market gets flooded while the cost of attaining a degree has risen each year. This has led to the average student leaving college with $26,500 in debt.

This election, my generation showed up in record numbers to re-elect Barack Obama. It's my hope that new job plans extend beyond manufacturing and service jobs and focus on increasing quality jobs for college graduates. However, to overcome this cognitive cliff it will also take the private and nonprofit sector to increase their internships and junior positions.

Imagine a world where HP and Universal Studios had no room for interns or young hires? We could potentially have been deprived of watching Jaws on our iPads. Right now, while you're reading this, the next Steve Jobs is hanging out with his buddy Spielberg playing "Call of Duty" instead of showing up at your company.

The nation's politicians are now focusing their attention on our impending fiscal cliff, but I believe there is a much more dangerous cliff -- one that is threatening to cripple an entire generation. So, my holiday wish this season: cut the company bonus and spend it on doubling your internship budget.