In 1964, at the height of the Great Society, the Johnson Administration decided that government should provide a job for every teenager who couldn’t find employment. The first summer jobs program, the Neighborhood Youth Corps, was established in 1965 to give poor urban youths “meaningful” work experience and to encourage them to stay in school.
The Neighborhood Youth Corps was the first of a long line of failures. According to several General Accounting Office (GAO) reports, the program had no effect on dropout rates and did not prevent a large increase in youth crime rates. In fact, the GAO concluded in 1969 that some workers “regressed in their conception of what should reasonably be required in return for wages paid.” (GAO, Review of Economic Opportunity Programs, 1969)
Ten years later, conditions were no better. GAO found that “almost three of every four [urban] enrollees were exposed to a worksite where good work habits were not learned or reinforced, or realistic ideas on expectations in the real world of work were not fostered.” (GAO, “More Effective Management is Needed to Improve the Quality of the Summer Youth Employment Program,” February 20, 1979)
When a Federal program fails, politicians can always change its name to create the appearance of reform. In 1972, after years of embarrassing failures, the name of the Neighborhood Youth Corps was changed to the Summer
Program for Economically Disadvantaged Youth. in 1977, after more exposés and boon-doggies, the name was changed to the Summer Youth Employment Program (SYEP). But the new names have not solved old problems.
To call SYEP a “jobs program” is a serious abuse of language. In Washington, D.C., kids last summer busied themselves building a model cardboard city or attending a “Basketball Reading Incentive Camp.” (Guide to the Mayor’s 1986 Summer Youth Programs) Some “workers” complained to the Washington Post that they spent all their time listening to lectures about South Africa, nuclear war, and birth control. One “enrichment exercise” consisted of tours around Washington, visiting Capitol Hill, the Washington Harbor, and elsewhere. In Phoenix, SYEPers painted pictures of cars on sides of buildings. In Baltimore, kids were paid for passing out toys and for chauffeuring cats and dogs to old folks’ homes. (Baltimore Blue Book of Summer Jobs, 1986)
With Federal funding on the line, local governments are becoming aggressive employers of first resort for young people. The New Hampshire Job Training Council used a rock band to drum up interest among teenagers. Phoenix tried to get Jesse Jackson to come and dignify their program with his presence. These gimmicks are understandable since many localities cannot find enough young people to fill Federally funded positions.
Programs like SYEP are a prime contributor to illusions and unrealism among young people about the world of work, and actually may have increased long-term unemployment. Columnist William Raspberry noted, “We are raising a generation of kids who don’t know the meaning of work.” (Washington Post, December 2, 1977) Raspberry cited summer jobs programs among the culprits.
A study by Harvard professors Jon Crane and David Ellwood concluded that “roughly 40% of SYEP jobs simply displace private employment” for minority youth. This is especially damaging to young people since, as the Task Force on Youth Unemployment reported in 1980, “private employment experience is deemed far more attractive to prospective employers than public work.”
Government jobs programs saturated black inner cities in the late 1970s. in 1978, up to half of all employed black teenagers had jobs with government programs. In the following years, the sharpest declines in employment and labor force participation were among the groups most heavily targeted by government jobs programs. A National Academy of Science study (Youth Employment and Training Programs, 1985) found that government employment and training programs isolate disadvantaged youth, thus making it harder for them to fit into the real job market. At the same time, these programs did not reduce criminal activity among participants.
The federal government also offers youth job training under the Job Training Partnership Act (JTPA). According to the Labor Department, less than 40 per cent of JTPA youths get jobs—even for a single day. JTPA inflates its apparent success rate by adding job placements to other “positive terminations”—including returning to school and development of “youth competencies.” “Youth competencies” usually refer to “employability skills”—such as “world of work awareness,” making change from a dollar (Pittsburgh-Allegheny Co. PIC Newsletter, November 14, 1984) and demonstrating “effective non-verbal communication with others.” (Department of Labor, An Introduction to Competency-Based Employment and Training Programming Under the JTPA, 1985) This allows administrators to measure their success by the number of certificates they hand out, rather than by the number of people who get jobs.
The fallacy underlying all government job training programs is that the private sector lacks incentives to train workers. Naturally, private employers prefer that job applicants be already trained; but where there is a shortage of skills and a demand for services, there always are incentives to train.
If Congress wants to help unemployed teenagers, it should abolish the minimum wage. This is the greatest impediment to the hiring and training of teenagers with no skills or experience. The higher the minimum wage, the less money employers can afford to devote for training and still hope to earn a profit. Were it not for the minimum wage, workers could exchange less pay for more training, and the process would be far more efficient and cheaper than any government intervention or subsidy.
The failure of Federal training programs is especially tragic since most teenage unemployment is caused, directly or indirectly, by government labor market interventions.
In 1947, the minimum wage was very low, and teenage unemployment was not significantly higher than the general unemployment rate. But, in the 1950s and 1960s, the minimum wage was repeatedly raised—and teen unemployment soared. By the 1970s, black teen unemployment was double that of whites—around 40 per cent.
The minimum wage, by trying to increase wage rates artificially, makes it no longer profitable to hire the least skilled workers. Without a minimum wage, even the least skilled worker can negotiate a price at which it is profitable for an employer to hire him. But, with a $3.35 an hour minimum wage, plus Social Security coverage and other state and Federally mandated costs, a worker’s productivity must at least cover these total costs, or he will not find work.
Teen unemployment is also boosted by government restrictions on the jobs and hours teens are permitted to work. For example, while government provides expensive, ineffective training programs to prepare teenagers to be construction workers, regulations in many states and localities prohibit 16- and 17-year-olds from working in the construction industry.
The answer to teen unemployment is less government, not more. If government would remove its minimum wage and other barriers to employment, there would be jobs for all teenagers who want to work.