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December 9, 2011


Jobs for Youth: Hype or Hope?

Russell Sykes

A new $62 million plan to promote employment for unemployed inner-city youth was part of this week’s tax increase deal between Governor Cuomo and the Legislature.

Like the rest of Wednesday’s legislative package, the youth employment provisions were rushed through the Legislature with no deliberation, consideration of alternatives or weighing of evidence from similar existing programs. Under the circumstances, skepticism is in order.

At 17.9% in 2009, unemployment among youth age 16-24 in New York, is a serious problem. Can the state make a dent in this problem by offering a hodgepodge array of tax credits to business, stipends for youth to entice them to participate and a host of work readiness training, credentialing, job placement, literacy, basic education and other interventions?

One of the two biggest pots in the package is $25 million to support and expand Summer Youth Employment statewide through the NYS Department of Labor (DOL). Fine — the program is well targeted to low-income youth. However, the jury is out on whether it imparts real, durable skills.  This is not a new initiative and is only a two- month seasonal program. Young people need full and part-time year round jobs.

DOL will get another $8.26 million for operating training programs and to pay stipends to participating youth (up to three monthly stipends of $300 to help them “transition to the workplace.”) However, unlike most of the current DOL clientele, many disconnected youth are members of or heads of a welfare household. They often have children out of wedlock and must navigate numerous issues such as child support and childcare. Some have aged out of foster care. Some have juvenile or adult criminal records and have been previously incarcerated. Substance abuse issues are also a problem.  Given this profile, DOL may not be the best fit for the mission.

Is a new program really necessary to address employment for inner city youth?  A successful existing program, Career Pathways (CP), is now administered by the state Office for Temporary and Disability Assistance  (OTDA), with DOL as a consulting partner (Disclosure: I was until recently an OTDA deputy commissioner with oversight of this program, among many others.)

The Governor’s proposal provides a pittance of $2.5 million for CP – which is perplexing, because the program already targets a good portion of its funds to this same youth population and has a solid and transparent track record. CP focuses on business sectors locally that are actually hiring (health care, hospitality, conservation, clean energy, etc.), the very areas the Governor mentions in his plan.  CP grantees are concentrated in urban areas and are encouraged to operate according to the realities of the local labor market and the needs of employers – both essential elements for success.

Sixty percent of CP funds are performance based, earned only when certain employment related benchmarks are met. For a Governor who has pledged to streamline government, make agencies work together and avoid duplication, it seems peculiar not to use an existing program as the core foundation for his inner city youth jobs program.

Tax credits worth $25 million for businesses are another element of the jobs program approved this week. In targeted urban areas, the Governor’s plan will provide participating businesses with a $3,000 tax credit during the 6-month “training period” and another $1,000 credit for retaining that full-time employee for an additional six months. However, tax credits to business to promote hiring have a mixed record. Some research suggests such incentives are too complicated and do not add enough value monetarily to tilt the hiring decision (more on that here).

Focusing on jobs for inner city youth is laudable. The Governor deserves credit for taking on the issue. But the operational plan on the ground will be far more important than the political gain realized for proposing it. Employer buy-in will require more than tax credits of the size proposed and likely a different approach.

A better and cost neutral approach than tax credits would have been to use the same dollars for wage subsidies to employers combined with the existing CP program. This model fully underwrites the employer’s hiring risk, by paying the wage of the youth for a trial period of time (usually 3-6 months). The expected trade off is that the employer will retain the hire on an unsubsidized basis, if the employee functions well in the work environment during the trial period.

Experienced intermediary organizations in targeted urban areas — for example America Works and SEEDCO –could actually hire and pay the youth for the trial period, further unburdening the employer. When the person being hired is part of a welfare household, one method to partially pay the wage, is to divert the welfare grant to the employer (i.e. grant diversion).

Even if all the right steps are taken, the success of the program will likely be modest. Unfortunately, as in so many other government programs, this latest youth employment program lacks performance standards to help determine whether it delivers the goods.

3 Comments »

  1. Points well taken, but, I suggest, this issue is dwarfed by the second of the Governor’s one-two punches this week - that being the announcement of the $785M cornucopia of gifts of taxpayer funds generously given out to seemingly every entity in the State (other than those picking up the tab) by his Economic Development Councils, in a glitzy Clinton-laced event hosted by none other than CNBC’s Maria Bartiromo. This is pork, not only on steroids, but, in the midst of universal fiscal shortages, taken to a new whole new level. And since no project or expenditure has the apparent fingerprints of any particular legislator, no elected politician risks being outed for the decisions.

    Amid all of the chants that “everybody won” and the portrayal that everything here is wonderful, nowhere is the mention of the details of how there is any accountability for measurable returns on these hundreds of taxpayer ‘investments’, a point the Controller should weigh in on. ‘Responsibility’ is spread across virtually every State and county agency, which really means there’s no accountability at all!

    The detailed list of ‘awards’ can be found here: http://www.governor.ny.gov/assets/documents/CFAAWARDSBooklet.pdf. Like revelations of some public salaries, in the recognition that this money is coming out of your pocket, be prepared to become ill.

    Comment by Throw-Em-Out — December 9, 2011 @ 9:09 pm

  2. Unfortunately it sounds, again, as if the right hand doesn’t know what the left hand is doing! Duplicative efforts are a waste of precious funds. As Mr. Sykes recommends, why not look at existing , successful programs and boost those efforts? We read so often of various programs targetting the same issue. And each of those programs have administrative costs that could more productively be used for direct program needs.It is also unnerving to read that the Legislature had no debate or deliberation on spending $62 million dollars in these hard economic times! This is especially egregious when a program of the Governor’s own administration has proven successful on the issue of inner city youth employment. Maybe the Governor , in addition to having no clothes, also lacks a brain.

    Comment by Barbara Temple — December 11, 2011 @ 10:45 am

  3. While this post raises some questions worthy of further exploration, the answer to the question of the value of the Summer Youth Employment Program (SYEP) is decidedly less ambiguous. SYEP, while not a substitute for the full and part-time jobs Mr. Sykes correctly identifies as a need of youth, does impart several real, and tangible benefits.

    Literature on the topic and the experience of settlement houses within our network (United Neighborhood Houses) that administer summer youth employment programs tells us the following:

    -SYEP often provides the critical first job for youth that allows them to develop valuable professional and life skills, including responsibility, punctuality, money management, workplace expectations and teamwork.

    -Through SYEP, youth are able to explore career options as they transition to adulthood, and often help support their families. In fact, their highly liquid earnings help stimulate the economy through purchases of school supplies, food, clothing and other goods and services from local businesses.

    -Youth that work during their high school years demonstrate increased school persistence and graduation rates. In addition, young adults who work during high school obtain higher weekly wages and earn more per year 10-15 years after leaving high school.

    -The jobs SYEP participants perform are essential to their communities. Thousands of youth across NYC work as counselors and aides in day camps. Without them, many camps would have to greatly reduce the number of children they serve, raise their fees, or shut down all together- jeopardizing the ability of working families to secure safe, structured summer care for their children.

    Engagement with the world of work and the beginning of soft skills development, cash spent in local economies on necessities and family support in the midst of deeply troubling economic times, and the bonus effect of subsidizing the cost of day camps desperately needed by working families- all of this is had for roughly $1,500 per participant in New York City’s Summer Youth Employment Program- quite a bargain by any standard.

    So while yes, we can and always should challenge the State to maximize the effectiveness of its investments, the very real benefits of SYEP and the State’s investment are abundantly clear to participants and their families, and perhaps even more so to the 100,000-plus youth turned away from the program annually for want of funding.

    Kevin Douglas
    United Neighborhood Houses, Campaign for Summer Jobs

    Comment by Kevin Douglas — December 14, 2011 @ 5:53 pm

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