Wall St. and Business Wednesdays: Bring Back Summer Employment Program by Marc Morial

With the end of the school year a few months away, the prospects of putting America's youth to work to keep them off the streets this summer are pretty meager. Given the lack of federal support and competition for these jobs from other sectors of society, that is especially true for those living in urban areas.
In 1974, President Richard M. Nixon injected nearly $400 million into Uncle Sam's so-called Summer Jobs Program, which has been around in some form or other since the 1960s. In 1999, the program was funded at $871 million and served 500,000 at-risk youth. Since then, the federal government has pretty much taken itself out of the summer youth employment business.

In 1998, Congress took steps to replace the Job Training Partnership Act, which had funded the Summer Jobs Program, with the Workforce Investment Act. The Workforce Investment Act went into full effect in 2000. It brought systematic change to work force development in our nation and essentially ended the Summer Jobs Program as it was known for decades.

It went from a stand-alone program - with its own budget - to one of 10 youth services required under the Workforce Investment Act. In order to participate during the summer, disadvantaged youth now must be involved throughout the year, a requirement that has increased the cost considerably and severely limited the number of participants. Also, the act made the program optional, giving cities and municipalities the power to spend the Workforce Investment Act money allocated for them where they want to spend it.

That was in 2000, when the U.S. economy was still going strong, the housing market hadn't collapsed and crime was at an all-time low. Since then, the nation has gone to war, the economy has lost steam and unemployment among youth - especially black youth - is higher than that of whites. According to the National Urban League's 2007 Equality Index, which will be released on April 17, unemployment is 29 percent among blacks age 16 to 19, compared to 13.2 percent for whites.

What happens when too many youths have nothing to do all summer long? They get into trouble. They join gangs, they take drugs and they get pregnant. Even if they manage to stay out of trouble, they miss opportunities to gain desperately needed skills to lift themselves out of the projects through college and into a promising future.

Why does the federal government need to play a role in putting low-income, disadvantaged youth into summer jobs? Because there is little likelihood of them securing employment without outside help. In 2006, only 17 percent of young blacks from families with household incomes under $20,000 managed to find summer jobs, according to a 2006 study the Northeastern University Center for Labor Market Studies.

The higher the income the better their prospects among their own race: 38 percent of blacks from families with incomes over $75,000 a year were employed during the summer. But even blacks from the most affluent households were less likely to get jobs than whites from the least affluent households: 45 percent of whites from families with incomes under $20,000 landed summer jobs for 2006. Affluent whites outperformed their black counterparts by 17 percentage points. So, it's not only economic standing but also race that dictates to some extent the success of black summer job seekers.

That said, it has still been difficult for teenagers of all races and income backgrounds to find summer employment. From 2000 to 2006, the seasonally-adjusted employment rate of youths 16 to 19 fell from 45 percent to 37.1 percent, despite strong national wage and salary job growth, which usually boosts teen worker demand, according to the Northeastern study.

This overall reduction, the report surmises, is a result of increased competition from newer immigrants, older workers, older college students home for the summer and young college graduates unable to obtain jobs in their chosen field of study. It doesn't help that the federal government's commitment to helping keep youth employed in the summer is a mere shadow of its former self.

This trend is likely to limit opportunities available for youths, especially those from disadvantaged economic backgrounds, which will in turn hurt their income-earning ability in adulthood.

"For teens, work experience begets more work experience, and cumulative work experience has a high payoff in determining the wages and annual earnings of young adults in their early to mid-20s," said the Northeastern study report.

In 2000, the U.S. Conference of Mayors, which I led in the early part of the decade, urged U.S. lawmakers to no avail to reconsider phasing out the old Summer Jobs Program, predicting it would have detrimental effects down the line.

"Now is the time to marshal our resources and focus on our at-risk youth, not abandon them. Investing in these populations returns many times over in reduced welfare dependence, fewer crimes, less incarceration expenses, and greater work force productivity," the letter, of which I was a signatory, stated.

That is why I'm calling on the Congress to reinstate the Summer Jobs Program. If our nation hopes to close the gap between minorities and mainstream America, it must start with our youth. If we don't invest in them now, the disparities they face will only be reinforced in the years to come.

Marc H. Morial is president and chief executive officer of the National Urban League.

Copley News Service

Marc H. Morial

Wednesday, April 18, 2007