Stepping up job help for inner-city teens
When President Carter last week announced a plan to spend $2 billion more to help unemployed youths prepare for and get jobs, it pleased David Ellwood, an economist, in at least one respect: The money will be concentrated in areas of high poverty and unemployment.
"It makes a certain amount of sense to target the funds this way," said Mr. Ellwood, the research analyst at the National bureau of Economic research.
It used to be that unemployment among family breadwinners was the nation's chief job-market concern. But this hasn't been to serious a problem in recent years, with a bit more than 4 percent of adult males without work. What has been troubling is teen-age unemployment, which has been running about 16 percent in general and, among blacks, more than 35 percent.
By now the academicians, including Mr. Ellwood, have turned their attention to the problem. Their findings do not entirely conform with the public image of teen-age unemployment. For instance, Mr. Ellwood and Martin Feldstein, president of the research bureau, have done a joint paper on the subject and conclude: "Unemployment is not a serious problem for the vast majority of teen-age boys."
However, their findings also show that joblessness is a serious problem for inner- city minorities and poor whites. Hence Mr. Ellwood's approval of directing government money to these areas. Indeed, the information turned up by studies such as those of Messrs. Ellwood and Feldstein was available to the White House Task Force on Youth Employment, headed by Vice-President Walter F. Mondale, and the panel has undoubtedly taken this knowledge into account in drafting the proposed program.
Here are some of the findings of the Feldstein-Ellwood paper:
1. More than 90 percent of all male teen- agers are in school, working, or both. Most unemployed teen-agers are in school or seeking only part-time work. Only 5 percent of teen-age boys are unemployed, out of school, and looking for full-time work.
Among out-of-school teen-age boys, the unemployment rate (in 1976) was 18.9 percent, about the same as the 18.3 percent overall figure. Obviously, the problem being without work is usually worse for those not in school than for those attending school.
2. Virtually all unemployed teens live at home. More than 87 percent of the out-of- school group live with parents or relatives, and only 7.5 percent live alone or with a family of their own.
3. Most spells of teen-age unemployment are quite short, and most teen-age job seekers have relatively little trouble in finding work. The bulk of unemployment is experienced by a relatively small group of teen-agers with long spells of unemployment.
In October 1976, 45.5 percent of unempployed youths were out of work for four weeks or less, and only 10.7 percent had been out of work for as long as 26 weeks.
4. Surprisingly, most teen-agers are able to find summer jobs with relative ease. The statistics show this. In March 1976, 3.8 million 16- to 19-year-olds were in the full-time labor force. This rose to 7 million in June, 8.3 million in July, and 7.5 million in August, before dropping back to about 4 million for the rest of the year. In the period between March and August, the teen-age unemployment rate fell from 22.6 percent to 15.3 percent. So a large number of teen-age boys and girls were able to find work.
5. Many of the teen-agers who are out of school and out of work are not officially classified as "unemployed." However, most of this group not included in the labor force show little interest in finding work. Their families look after them.
"For many of them," the two economists note, "there is relatively little pressure or incentive to find work." In fact, when a survey of this group was taken, 46 percent said they did not want work and 17 percent did not know whether they did or not. Some 21 percent wanted employment, but did not believe a search would find a job.
6. There remains a serious and persistent unemployment problem for a small group of boys with relatively little schooling, especially high school dropouts. The unemployment rate for teen-age high school dropouts was 28.2 percent. This rate improves as they move into their 20s. Nonetheless, it remains relatively high. Among 20- to 24-year-olds, those who did not complete high school have nearly twice the unemployment rate of those who did.
7. Nonwhites have considerably higher rates of unemployment and nonemployment than whites do (57 percent of out-of-school nonwhite teens vs. 26 percent of white out-of-school teens in 1976). However, since nonwhites are a relatively small fraction of the teen-age population, they account for only a small portion of unemployment and nonemployment.
Lowering the unemployment rate of the nonwhite group to the rate of the white group would take care of fewer than 60,000 of the 1.56 million unemployed teen-agers in 1956 in the whole country. It would have lowered the unemployment rate for all out- of-school male teen-agers only from 19 to 16 percent.
8. Among the very low-income house- holds, the unemployment rates of teen-age whites and nonwhites are similar. As family income rises from less than $10,000 towards $20,000, however, the whites suffer less than blacks or other minorities. Above $20,000, the disparity once more largely fades away.
The two economists note that the 250,000 boys with long periods of unemployment could in theory be hired by governments for a cost of $3 billion, even if they were paid more than twice the minimum wage. Mr. Ellwood, however, favors the effort of the President's program to attempt to prepare these youths for jobs in the private sector. It could help them more in the long run.