Tag Archives: unemployment

Off to Philadelphia

I’m taking off the week to go to Philadelphia and hang out with 22-year-olds for my next book on how the recession is affecting this generation. So no blogs this week (I can hear the disappointment).

To be honest, I’m worried about this generation. I know that we’ve had recessions before, but there’s rumblings out there that this recession is different–it’s not just a cyclical recession, one that will bounce back and reabsorb all those laid-off workers. Some are saying we’re experiencing a “structural” shift–which leaves much deeper scars and a more lasting change. While our interviews with young people to date have uncovered their optimistic side (“I don’t think it’s true that we won’t do better than our parents,” they say adamantly; “If we just work hard, we’ll succeed.”), I’m not so sure their optimism will hold. I leave you with these thoughts for the week.

The first is from the responses to Matthew Klein’s op-ed in the New York Times last week on the plight of the young and jobless. A mother writes in response:

After spending hundreds of thousands of dollars on our children’s educations, we have little to brag about. Many of our children are feeling desperate about their futures, and we are feeling as though we have failed them. As a social worker, I often work with clients who have seemingly insurmountable obstacles to employment. They are people without hope. I often find myself wondering, is this the future for my own children and their friends?

Or this one:

Many of my friends and I are unemployed. There is no pattern to indicate who will find a job. World-class education, enviable résumés, internships, volunteer work and excellent people skills offer no guarantees. Nor do teaching English abroad and seeking even higher education. I know because I have tried both.

The op-ed, our own interviews, and these responses to the op-ed make it clear:  there is a deep underlying anxiety about the future.

Bob Herbert captures this anxiety in his final column for the Times:

Young people today are staring at a future in which they will be less well off than their elders, a reversal of fortune that should send a shudder through everyone….Instead of a land of opportunity, the U.S. is increasingly becoming a place of limited expectations. A college professor in Washington told me this week that graduates from his program were finding jobs, but they were not making very much money, certainly not enough to think about raising a family.

That future is what we will be exploring in this next book. So for now, it’s off to Philadelphia to spend some time with recent college grads and hear what they think, dream about, and hope for.

If you have your own worries or stories, add them to our book’s website at http://www.generation-r.org

The power of youth

Amid all the dire news today, from Japan to North Africa and the Middle East, it’s easy to sink into a funk. It’s the old(er) person in me I suspect. The more years you’ve spent on this earth, the more life seems to be an unrelenting punch to the kidneys.

I remember my boxing days–yes, I was a boxer of the Golden Gloves sort– when I’d train with this much younger boxer. We’d climb into the ring to spar for two minutes of action between the bells, both of us fit, both of us well-trained . The bell would ring and  I’d dodge and weave, use my experience to outgame him. That would work for round #1. And maybe into round #2. But by round #3, as in life, it was the dogged persistence of youth that would defeat me every time. I would simply get worn down by his stamina, his unfettered belief in his abilities. He had no doubts, no sense of decline. He just put his head down and kept punching.

I think of that unending barrage of punches as I watch the news. Pummeled by the enormity of the disaster in Japan, weighed down by the task ahead in the Middle East, I think, “where is the bell?!” And on more pessimistic days I think, “All this pain will come to naught. The powers that be will win out. The ways of the world are too much to overcome.”

But what I fail to see is the flipside of that coin: the power of idealism. The power of youth.

Watch this video to see the future. Theirs are not the naive voices of untested youth. They are the certain, hopeful voices of dogged idealism. It gives me hope.

Our own youth here in the U.S. are less tested than those in the Middle East or even in Europe. Ours is a comfortable–some would say “fat”– existence, one rarely tested, and certainly not on the streets, with bullets fired by our government. We can thank our lucky stars for that. Yet I fear that this generation will be tested in more subtle ways.

See this op-ed in today’s Times by Matthew Klein (a topic I raised here). While the Arab world burns, he says, we might also take care to look closer at home for the tinder that makes for a fire.

High unemployment? Check. Out-of-touch elites? Check. Frustrated young people? As a 24-year-old American, I can testify that this rich democracy has plenty of those too.

About one-fourth of Egyptian workers under 25 are unemployed, a statistic that is often cited as a reason for the revolution there. In the United States, the Bureau of Labor Statistics reported in January an official unemployment rate of 21 percent for workers ages 16 to 24.

And then he says this: “My generation was taught that all we needed to succeed was an education and hard work.” That, dear reader, is the crux, the beginnings of a disillusionment that can lead a turning point. This young man, after all, is one of the elite. He works for the Council on Foreign Relations. He no doubt went to a “good” school. Yet even he feels the tentacles of unemployment and economic malaise.

I’m starting to sort through the 50+ interviews of young adults in the Philadelphia area, whose upbringings span the economic spectrum. I have heard those very words, often. “I played by the rules.” “We were told we could be anything if we worked hard and went to college.” “What gives?” There is a strain of disillusionment, coupled with a grain of optimism–the optimism of untrammeled youth.

This generation stands at a turning point, after which nothing will likely ever be the same. The world is rising up, led by young people. Whether dictators crush the uprisings or not, the fire has been lit. Our own young people are suddenly facing a hardship they could never imagine. And that hardship is not going away any time soon. The global, interconnected world they inhabit is tied together in inextricable ways. The earthquake in Japan will only lengthen our own economic recovery. The crisis in the Middle East will only add to our daily expenses in higher gas prices (just to start with). They, their older siblings, their uncles and aunts, grew up amid growing affluence. Certain things were taken for granted. A middle-class life was assumed. And now? It’s not. In the blink of an eye, those assumptions crumbled. The rules of the game changed, and for many, they are awakening to the fact that the rules of the game have been rigged.

It is their moment. Like their parents and grandparents before them, it is their time to take a stand. And I don’t mean a stand by “buycotting” or buying only Tom’s Shoes because they give 10% of their profits to a good cause. I mean a loud, demanding raid on the powers that be.

Perhaps the dogged persistence of youth will win out. Perhaps our own young adults will be inspired by those risking their lives for an ideal, for the future. As Muhammad al-Zawam, 25, of Libya said, wiping tears from his eyes, “This revolution is not for me. I am 25 years old. We started this revolution for the sake of the coming generation.”

I do hold out hope that the sheer idealism of youth will carry us to some place better. We need that energy. I’m tired of Tea Party anger and thinly veiled class warfare in the name of politicking. We need that dogged persistence of youth if we are to break out of that tired, self-interested, pandering that counts for political “discourse” today. We need that unflagging belief.

But I do think we’re in for a long round before that bell rings.

Outrage. Enough is enough

Forgive the rant, but I am outraged. The Right has bamboozled the very people who will get screwed by their policies. They’re not looking out for Joe Sixpack. Yet there stands Joe, waving his Republican flag. Brilliant.

The Republicans are undermining the already-shrinking middle class with their pandering attacks on public sector unions, teachers, and others who still have the makings of middle-class security. They claim to want to balance the budget and “tighten government’s belt.” Really? Why? The ratio of GDP to debt was 110 (much higher than today) in the 1940s, and it dropped in the subsequent years even while the government spent money on things like education (GI Bill anyone?), pensions (Social Security), and infrastructure (interstate highways come to mind). Yet today we have to go into austerity mode (on the backs of the least secure citizens, mind you), why?  

We used to expand the pie for everyone. In the boom years following WWII, we were spending money, but we were also creating a solid middle class and investing in American workers. But that stopped in the 1980s, with Reagan, and it’s gone downhill ever since. We’ve lined the pockets of the wealthy and set up the system so the rewards flow up and concentrate at the very top. The game, my friends, is rigged. We’ve coddled the wealthy and kicked the little guy to the curb. Under Eisenhower–hardly a lefty–the income tax on top earners was 91%. Today, a top-25 hedge fund manager pays a tax rate of just 17% on his income. (loop holes). Hedge fund managers’ income–$1 billion each on average–compares to about $30,000 for a teacher’s salary. The teacher more than likely pays more in taxes than the hedge fund manager. And yet we rag on teachers. Incredible.

I for one am sick of this blatantly lopsided game the Republicans are playing. We need “good” jobs that pay decent wages. We need better roads and internet connections across the country. We need to invest, not divest, in education (and charter schools are not the answer). And all that takes some money. We can’t keep cutting and cutting and expect our middle class to do anything but whither up and blow away.

I feel helpless in this onslaught of slick messaging to an uninformed (shame on them) audience. I find myself back in familiar territory when I pick up the morning newspaper. What next, I think. What galling thing can the Republicans do now? This morning was eliminating the recyclable “green” forks in congressional dining halls because they weren’t “cost-effective.” If that isn’t blatantly political, I don’t know what is. After all, if cost-effectiveness were really the deciding factor, then let’s revisit the $35 billion defense contract to Boeing for a gas station in the sky for planes that no longer have a pressing strategic mission requiring such refueling.

Nearly 14 million Americans are still out of work–6 million of them have been unemployed for more than 27 weeks. With every week they’re not working, they’re inching farther away from the beating heart of “normalcy.” For every week they’re unemployed, their resume moves farther down the pile. Before long, the routines that guide and shape our lives dissipate. Afternoon tv with its infomercials for DeVry and bankruptcy protection becomes the filler.  They slide into the forgotten fifth–those who, no longer working, lack an identity and become invisible to the rest of us.

Where is the outrage? Are we all just fatalistic? Do we really believe Republicans truly speaking for the little guy? Is anyone?

Make room for young workers, or else.

A few months back I wrote a couple of posts wondering whether we were witnessing a youth revolution, in Europe. I should have included the Middle East. Tunisia, Egypt, and now Yemen are all in open revolt against staid, corrupt governments that cling to the status quo, blocking opportunities for young people to get started in life. In Tunisia, young men, even those with college degrees, spend their days in cafes instead of at jobs, because the jobs are nowhere to be found. Their forced idleness becomes a tinderbox–the results of which are clear.

Young people are taking their pent-up frustrations to the streets, in the optimistic, naive, heartfelt belief that they–the 20-somethings of this world–can change their future. More power to them. It is just this optimism coupled with youthful naiveté that we need. It is why the world changes only at the hands of the young. They still believe it can. Without that belief, we’re done. Witness Japan.

Japan’s economy continues to struggle through a lost decade (or two), largely the result of a failure to respond nimbly to changing times. They became mired in the past, unable to pivot as the world shifted. Their economy ossified. According to today’s New York Times article by Martin Fackler, the failure lies with the old folks. Japan has clung to policies that protect older workers while creating a new system of “irregular” jobs that make it harder, if not impossible, for younger workers to get a foot in the door. In this case, irregular jobs are akin to contract jobs, where young people are paid less, they work for a set short-term time period, with no benefits, or as they call themselves in Japan: “freeters”–a job-hopping part-timer.  Last year, according to the Times, 45% of young people 15-24 were working in irregular jobs, up from 17% in 1988. The Economist finds that about 28% of young people aged 25-34 were freeters.

“Japan has lost its vitality because older workers refuse to step aside,” said one person interviewed.

Young people are feeling shoved aside in favor of older workers, and are facing the prospects of never fully getting that foot on the escalator of a career. Sound familiar? Baby Boomers are forced to cling to their jobs here in the US as their retirements disappeared. According to the Labor Department,  28.2 million people over 55 years of age had jobs, an increase of 7.6 percent from three years earlier, when the recession was beginning. Thirty years ago, one in seven jobs was held by a person who was 55 or older. Today the proportion is one in five.

We also tilt our safety net to older Americans, from Social Security to Medicare, to pensions.  Unlike in the Middle East or in Europe, however, young people in Japan (or in the US) do not flood the streets in protest. Instead, according to the article, they turn inward, blame themselves, or “try to find contentment with horizons that are far more limited than their parents.’”

We certainly join them in the blame-game. How many times have you heard the word “moocher” attached to 20-somethings living at home with mom and dad?

It seems the time is now to have a serious conversation about how we help this younger generation get started on the path to adulthood. Older people I talk with often pooh-pooh this generation’s struggles: “Boo-hoo. So “the world has changed.” Big deal. It’s always changing. Grow up.” Perhaps. But to that I say, this one is different because we’re different.

We’re no longer the Big Dog in the world. We’re playing the game on a globalized field. We suddenly have billions more people to compete with, most of them young. We are also not poised to rebound as quickly as we once were. Our education ranking has declined. Our economy is preoccupied with old-school industries. We have not invested in R&D. The list goes on. Like Japan, we’ll be feeling this sting for a long time because we have failed to adapt. Tunisia is feeling the heat because it sat on its laurels and refused to see the powder keg they were creating by ignoring the frustration of its youth.  In Portugal, young people are tossing in the towel and emigrating. The list goes on.

Here in the US, we have the makings for a lost generation for another reason as well. Andrew Leonard, writing at Salon, warns that countries with the weakest safety nets risk losing the most in this globalized economy. Reading Dani Rodrik’s “The Globalization Paradox: Democracy and the Future of the World Economy” it struck Leonard that the U.S. is overlooking one important fact of competing in a globalized world: “People demand compensation against risk when their economies are more exposed to international economies.” Those economies most exposed to globalization also are those with the biggest governments, providing strong safety nets to its workers–with the exception of the US.

I was struck by the fact that the United States (which, despite all the hoo-ha we hear about Obama’s “socialism” today, boasts a smaller government as measured against the size of the economy than most other rich nations) has opened itself up very widely to globalization and international trade without expanding its safety net to compensate for the risks involved. We’ve thrown ourselves into cutthroat waters without a life preserver in sight, exposing our workers to the harsh mercy of global competition without showing them any mercy of our own.

It’s time we take this issue seriously, and start having a conversation about how we can make this path into jobs, careers, and adulthood easier and more hopeful for young people–the world over.

Young adults and their fractured futures

I’m not keeping up on my blog as well as I should be, mainly because the book events and media have me hopping. It’s both fun and draining to pimp a book. Fun in that people are talking about the book, which means (hopefully) they’re reading it, which means the hard slog in writing it was worth it. But it’s also draining because I’m not one for being center of attention. I deliberately eloped so I could avoid a wedding.

There’s more to come, including another tv appearance this week on Chicago’s WTTW. Check it out Wed in the 7-7:30 slot on “Chicago Tonight.”

Last week saw a great review in the Economist. We had a little snafu early on about the unemployment rate–a typo put it at 36%, when it’s 16%. But they quickly corrected it. I was amazed, however, at how fast the information (and in this case misinformation) spreads. I follow twitter comments about the book, and was mildly horrified when the 36% figure was quickly spread around, reaching as far as Brazil. Let’s hope people went back to the site to read the corrected review.

And speaking of unemployment, TIME Magazine ran a rather optimistic look at the economic recovery. While I think they may have on rose-colored glasses, what struck me, however, was in a side article, “Where the Jobs Aren’t.” It is there they raise this scary issue of what economists call “structural” unemployment–that is, unemployment that is the result of major restructuring and not just a cyclical response to a crisis (like most of our recessions have been).

This is worrying because that structural unemployment could well hit young adults the hardest. Structural unemployment is far more enduring, and harder to rebound from, than regular old unemployment. It follows from massive changes in the economy–changes that require a reboot. But reboots take time, and we happen to be ill-equipped at this moment to manage that reboot. We should have been investing in education far more and for far longer than we have.  The shift away from jobs that required little skill to those that require greater skills (and thus more training and education) is leaving far too many far behind. It has created a glaring skills mismatch–and has (and will continue to) ultimately led to diverging destinies. As TIME puts it,

“America is facing a bifurcated employment future. At the top end is a highly educated, technically competent workforce attuned to the demands of the global marketplace. At the other end is a willing but underskilled group that is seeing its prospects undermined by workers in countries like China in low-end manufacturing and by a skills mismatch in emerging industries.”

We saw this bifurcated future in not just the economy in Not Quite Adults. We saw it in the futures of young adults themselves, a future divided into those who swim and those who tread water and barely stay afloat.

And as the Economist review so aptly put it:

The [swimmers} often have supportive parents, wider social networks, university degrees and a greater sense of civic engagement. Many “swimmers” even choose to move back home to help pay off student loans and save for the future….Most twenty-somethings, however, are “treaders”, who simply replicate the lessons of their poorer, less stable, non-voting and hands-off parents, but to worse effect.

“To worse effect,” is key in that last sentence. Because of the massive changes, and because of our underinvestment in education, a generation is now faced with too few options and many more potential pitfalls. It is simply easier today to dig yourself into a deep whole and much harder to get out.

We have no experience with chronic high unemployment like you see among young adults in Europe–where unemployment tops 30% in some countries. We just don’t know how to react, and that means several lost years just trying to figure out what needs to be done. Will it truly be a “lost generation” before we figure out how to retool an economy that has room for everyone?

Let’s hope not–for all our sakes.

Young adults take it to the streets

Are we on the brink of a worldwide youth revolt? Young adults in London have taken to the streets to protest cuts in education spending and tuition hikes. Students in Bologna, Italy, did likewise.  Unemployment among young adults in Europe is staggering, creating a potential tinderbox for political unrest. And today’s New York Times reports on a growing class of Chinese students, who flocked to college on the promise of white-collar prosperity, only to find themselves woefully underemployed, living in crammed, filthy rabbit warrens in Beijing with fellow 20-somethings, and told that their degree means nothing without the “guanxi”–the personal connections that grease the way to a good job. (hmm, sounds familiar.)

The dashed dreams, the slow awakening that too many were sold a bill of goods, coupled with their vast numbers worldwide (including in the US) makes me wonder if we’re not on the precipice of a global youth uprising. In China alone, the number of 20-25 year-olds is 123 million, about 17 million more than four years ago, according to the Times article. They may be optimistic and ready to take on the world at age 22, but a few years of just scraping by working six days a week, and doubts and questions begin to take shape. Give a voice to that doubt, and who knows.

The world’s developed economies have seen the highest annual increase in youth unemployment since record-keeping began in 1991, according to a recent ILO report, Global Employment Trends for Youth, August 2010. In 2009, 13% of worldwide youth were unemployed. The rate was even higher (17.7%) in developed countries. This instability, the bleak prospects are in part a reason for the rise of Islamic fundamentalism as well as the enduring Palestinian uprising. Youth in these nations, locked out of good jobs owing to high unemployment, favoritism, and a ruling class of elites, find a home in radical arms.

Reading the article on China, I couldn’t help but think of the parallels here and elsewhere among 20-somethings, given the current recession, the high cost of college, and the prospect of underemployment as the value of a BA sinks with a glut of college grads.

In the US, according to a recent report by the government, “College graduates who received a bachelor’s degree in 2008 borrowed 50% more (in inflation-adjusted dollars) than their counterparts who graduated in 1996, while graduates who earned an associate’s degree or undergraduate certificate in 2008 borrowed more than twice what their counterparts in 1996 had borrowed.” The quote is from a new analysis of National Center for Education Statistics data by the Pew Research Center’s Social & Demographic Trends project.

So far, on average, that debt is still manageable. The average debt for college grad from a four-year school is $22,000. That’s the price of new car. Not bad, considering the long-term payoff to a BA today. But –the value of that BA is sinking as more flock to college, creating a glut of college grads just when the economy grinds to a halt. There’s a lot of underemployed, or unemployed, young people out there.

While $22,000 might be manageable and a good investment in the long, run, it sure feels like a burden right now. (And don’t even get me started on how many drop out of college before getting the degree. Not that’s an expensive “lesson”). That sense of burden, of an unrelenting drag on their futures is enough for many to begin asking, where’s my piece of the pie? Disillusionment coupled with debt coupled with the ability to rally millions with a tweet is enough to make one wonder just how long it will be before we hear the rumblings of another youth movement.

If you think it couldn’t happen here, here’s a statistic that might change your mind. Three in ten young men in the US with just a high school degree have dropped out of the labor force altogether. They are not simply unemployed momentarily. They have given up on the workforce altogether. That’s a lot of idle young men.

In China, officials are beginning to tell kids to dial down their aspirations. Be more practical. If all your only option is a third-rate university, shift from a finance or computer programming degree to nursing or teaching. The officials, according to the Times, are indeed worried about the potential for unrest when millions of disillusioned 20-somethings begin to vent.

We should be worried, too. We should take this potential flash-mob seriously by developing some policies and programs that support young adults just starting out. We need clearer paths to middle-skill jobs. We need tuition reform–perhaps tied to graduation rates. We need employers to step up and offer on-the-job training and career ladders. We need rent control for young people. We need college debt payback to begin only when graduates start earning $30,000 or more (or some formula tied to their field and the cost of their degree). We need more loan forgiveness for going into lower-paid but valuable service jobs. These are just some of the options we should consider.

When back in the 1960s we discovered that too many elderly were living out their lives in dire poverty, we did something about it. We created Medicare and revamped Social Security to ensure just that, security in old age. Those programs have kept countless elderly in their homes with food on the table. They are good programs, worthy programs, despite their costs. Yet we ignore the other end of the age spectrum–conceivably the most important decade of a young person’s future life: the decade when they get their first real job, when they finish their education, when they marry and start families.  We don’t want to coddle them by giving them too many breaks, apparently. (At least that’s the message I hear constantly whenever I blather on about this topic). Instead, we want 20-somethings to venture out, learn some hard lessons, and eventually “make it.”–mainly because that’s what we had to do.  Yet few of us came of age with 10% unemployment (that’s the rate for young workers), with a college debt to pay back, or a highly competitive,  much less predictable, much more unstable job force, even before the recession.

I think it’s time we had this conversation, before we wake up in the near future to a revolt in the streets.

Status update on young adults and recession

Spoiler alert: Pop some prozac. This post will be a downer.

Unemployment is hanging tough at 14.8% for those age 20-24. It’s 10% for those 25-34. No wonder nearly half of young adults aged 18-24 were living with their parents in 2009. (Unemployment, of course, is not the only reason. In fact, there’s been a 50% increase since 1970 in living at home even for the older group, age 25-34. In a word: changing “norms.”) But I digress.

The real news today is the job market and its lingering effect on the ability of this generation to grab the horns of adulthood, and ultimately, achieve that quintessential goal of us all, to live the American Dream: a house in the burbs, kids in good schools, a good job that pays enough to take a vacation every year, splurge now and then, and bank enough for a secure retirement.  In other words, a standard of living equal to –and preferably better than–their parents’.

But is the American Dream at risk for a generation? Seven in ten adults surveyed recently said that young people starting in their career today will not have as much success as they did. Six in ten think they won’t  see better standard of living.  Ask Millennials themselves, and half believe they will not recover in their careers.

They’re probably right. Young adults (particularly men and women with just a HS degree) have been living through about four decades of stagnant or declining wages. In 1970, male high school graduates earned about 64 cents for every dollar earned by the male college graduates. By 2008, this had fallen to 42 cents. (and we talk about the gender gap!)

While the decline in wages is disturbing, even more alarming is the fact that large numbers of these young men are throwing in the towel and dropping out of the workforce entirely. In 2008, even before the recession sunk in, only 70% of young men age 25-34 with just a high school degree or less were working when the survey team visited. That’s a lot of idle young men in their prime working years. And lest you think this group with just a high school degree is a small one, it’s not. Fully 60% of the US workforce has a high school degree or less. Shocking, huh? As I’ve said before, a lot of young people aspire to college, even enroll. But far too many drop out and never get a degree of any kind.

University of Michigan economist Sheldon Danziger calls the number of men who have thrown in the towel and aren’t working,  “the most troubling trend of the last 40 years.” Harry Holzer, a Georgetown labor economist, testified before Congress in May, also about the alarming figures. It’s not only that they’re not working, but should they keep trying to return to the workforce, they’re going to find it hard to do.  As Holzer told Congress, long-term unemployment erodes workers’ skills, especially if their jobs had been permanently eliminated and they need to shift to new sectors.

Check this chart out, put together for me by Sheldon Danziger and his grad students in economics at University of Michigan.

These less-educated workers are scarred by a recession, but the pain has been coming on strong for a while. The recession was the final nail in the coffin for many.

As a nation, we’re feeling adrift, paddling alone today as the twin effects of a staggering recession and a long-term shift toward a “do-it-yourself” workforce join together like strands of DNA. Our  youngest workers, just getting started in their careers, are suffering as they work more for less. They’re fighting a tight labor market with older workers staying put longer, which makes it even harder to get a foot in the door. It’s very easy to get discouraged when everyone says you need experience to land the job, and the experience you’re up against is a worker with 15 or 20 years under their belt. Many young people are turning reluctantly to part-time work, which pays even less and offers few, if any, benefits. During the recession, young adults were the most likely to be working part-time involuntarily among all age groups.

Whatever burst of optimism we might have felt last spring is dashed, according to the latest Heartland Monitor Poll. We know now just how long this slog will be. Consumer confidence is where it was in the winter of 1975, when oil prices were shocking us for the first time. Jobs are going to be scarce for a while. Cash and loans are going to be hard to come by. Credit cards are being cut off. How are young people going to get started in life? There’s going to be a big group of people who will remain on the sidelines for a long time to come. In the end, all this is a recipe for sustained political volatility (“volatility” is probably the understatement of the year given the hi-jinks going on out there on the political front).

So in the immortal words of Bette Davis, fasten your seat belts. It’s going to be a bumpy ride.

Community colleges are strapped just when we need them the most

Today’s workers are facing some hard realities. Many will need to retrain for different jobs, and young adults just coming into the workforce will need to be very strategic about their own plans. Community colleges are a logical choice for many, to either get the retraining, or to use as an alternative to pricier four-year schools. And yet just when we need them the most, community colleges are forced to pare back class offerings, layoff teachers, and trim their offerings.

High unemployment rates are nothing new these days–after nearly three years of hardship. But a more telling number is just how long many have been out of work. The portion of the unemployed who have been out of work for more than six months topped 46%!  It’s rarely ever topped 25% in past recessions.

In recessions as deep as this one, it makes sense for many is to head back to school to retrain or, if you’re just starting out, to sit out the slump in school. At least you’ll be well qualified when the jobs return.

On the bright side–if there is one–more than half the future jobs will require more than a high school degree but less than a four-year degree. Most people can get that training in  community colleges. Yet, here’s the clincher:  just as demand is rising, community college budgets have been slashed.

Most community colleges get their funding from state budgets, tuition, and property taxes. We all know how flush state budgets are these days. And with the tanking housing market, property taxes are hardly a panacea. That leaves raising tuition, or cutting back on offerings. Most community colleges are doing the latter.  To add salt to the wound, the original promise of $12 billion to community colleges by the current administration was scaled back by Congress to a mere $2 billion and change over four years (and schools have to compete for the funds).

Cutting back on services and classes leaves students out in the cold. In California, according to Ali Eaves, reporting in Stateline, community colleges had to turn away 140,000 students. Others have to figure out how to rejigger their prerequisites when classes aren’t offered, which inevitably delays graduation. In Michigan, every community college has a nursing program (health care is one of the few growing industries), yet every program has a three-year waiting list. Three years.

Deficit hawks are all up in arms that the government is spending too much money on recovery programs, jeopardizing our grandchildren’s futures, they say. But it seems to me that not spending money on rebooting our economy with a newly trained workforce is a wee bit short-sighted. Cutting off noses and all that.

Community colleges have their problems– their abysmal graduation rates for one. But they are by far the workhorses of the higher education system. They do a lot with very little.  And they change lives. As a recent Demos report, “Graduated Success,” finds, two-year technical degrees pay off. Eight years after graduating from high school, 43% of technical certificate holders earn a median annual salary that is higher than that earned by someone holding an associate’s degree. (This is where being strategic comes in.) Moreover, 27% earned more than those with a BA!

Granted, if you go to community college and wander through some English courses and a philosophy class, with little direction, as many of the young adults we interviewed for Not Quite Adults did, then the payoff to community college is won’t be great. But if, like the young men we interviewed in a landscaping program and phlebotomy program, they choose a course that aligns with growing job demand (health care, green technologies to name two), then the payoff is solid. And worth it. The Demos report finds that a one or two-year credential in engineering or health care can deliver higher salaries than BAs in other fields. Those holding an engineering certificate earned on average $47k a year. That’s a lot higher than a BA with an English degree or a social work degree (or even teaching) earns.

Students need to graduate, however, to get these returns. And sometimes the for-profit schools are luring young people into their programs but not giving them the supports or the tools to graduate and earn those salaries.

For-profit colleges get the bulk of their revenues from federal aid, and their students are  more likely to default on their loans than those at nonprofit or public colleges. The New York Times reports today that Congress has delayed a decision on a proposal to demand more results for those federal dollars.

In the original draft of proposal, the Department of Education suggested cutting off federal aid to programs in for-profit schools whose graduates could not repay their student loans in 10 years with 8% of their income. However, that debt:income threshold is now under debate.

Congress will publish the new regulations in the Federal Register on Friday. The regulations require for-profit schools to disclose the job-placement rates and graduation rates in specific programs, and provide information that would let the DOE calculate debt load of graduates.  After a 45-day comment period, the department expects to publish final rules by Nov. 1, to take effect beginning July 2011.

I say fund community colleges better, demand accountability, and help them ensure that students complete those certificate programs. If we do that, our workforce will be ready for the future. And we can begin to restore the sagging middle class.

National Journal Magazine – Children Of The Great Recession

National Journal Magazine – Children Of The Great Recession.

A great article by Ronald Brownstein and crew on what young people today are facing as they head into a workforce struggling to recover from the Great Recession.

Here’s some tidbits:

  • Their great expectations are colliding with diminished circumstances.
  • For many others the working world has become an inscrutable maze of part-time jobs, temporary gigs, and full-time positions that abruptly dissolve into layoffs.
  • Many young people are stuck at the bottom of the jobs escalator as boomers at the top can’t retire because their 401ks tanked. Those who have managed to get on the escalator are often not rising smoothly. They might gain a job, lose it, and fall back several steps–or off altogether.

But they’re an optimistic bunch.

  • Many are flocking to public service, like AmeriCorps, the Peace Corps, and Teach for America
  • Others are thinking like entrepreneurs as “the gig” economy forces them to be nimble on their feet. At Steadfast Associates, a group of Millennials has created a business that works as a hub for freelancers in the arts.

But in the end it’s a tough road ahead. As Robert Reich says of this predicament: “It’s a social problem if young people, fresh out of school…can’t get into the labor force and have to sit around for a year or two or more.”