Apr 25, 2013 - Issue 514

 BlackCommentator.com: Education Yes, but Young Workers Need Jobs Now - Left Margin - By Carl Bloice - BC Editorial Board

I was a wee lad when I first was told that figures can lie and liars can figure.  It was a caution to be careful when looking at numbers. What brought that to mind the other day was a commentary “Why the US is Looking to Germany for Answers,” by Financial Times U.S. Correspondent, Edward Luce. Not that Luce is in any way untruthful; he’s one of the most insightful and clear-headed major media observers of the political economy of the United States today. But it was the blown up quote on the piece that caught my attention: “Siemens recently had 2,000 applications for 50 vacancies in North Carolina. Only 10 per cent passed the aptitude test.” That means that 200 qualified workers showed up to try out for 50 jobs. Luce didn’t speculate on how many unqualified applicants would have turned out if the Siemens opening had been in Stuttgart but that 1,800 people without the stipulated qualifications thought they might land work at the plant is an illustration of how desperate workers are in North Carolina where over 400,000 people are out of work and the February jobless rate was 9.4 percent. The same figure goes for the Charlotte-Gastonia-Rock Hill metro area where Siemens has a plant and is looking for engineers. At the beginning of the year, the jobless rate for African American in the state stood at 17.3 percent.

“Not only did the state produce insufficient new jobs to bring down the overall unemployment rate, but the industries experiencing the best growth in an otherwise stagnant labor market are those industries that pay lower than average wages,” said Allan Freyer, public policy analyst with the Budget & Tax Center, a project of the North Carolina Justice Center.

In February, the North Carolina state legislature reduced the maximum weekly jobless relief check from $530 to $350 and set the duration of benefits from 73 weeks to between 12 to 20 weeks, depending on the unemployment rate. As a result of the action, an estimated 170,000 workers in the state will be denied Federal emergency unemployment compensation, which is intended to aid the jobless when their state benefits have been exhausted. “Hundreds of thousands of jobless workers thrown out of work through no fault of their own will face deepening poverty as a result of this decision,” said the Justice Center.

The situation in North Carolina is replicated in various parts of the country - particularly in the South - and Luce’s observation about it illustrates the seriously inadequate response to the unemployment crisis and confusion about what has caused it. 

Luce maintains that, “the US is underskilled” and “US employers insist the shortage of skilled labor is a growing problem” and “with the US participation rate continuing to plummet - last month another 496,000 Americans gave up looking for work - many US politicians are scouring Germany for answers.”

Luce noted that, “Germany channels roughly half of all high-school students into the vocational education stream from the age of 16. In the US that would be seen as too divisive, even un-American. More than 40 per cent of Germans become apprentices. Only 0.3 per cent of the US labor force does so.” What he doesn’t say is that apprenticeships are not unknown in the U.S. but their availability has greatly declined over the years. Apprenticeship job training has largely been replaced with limited on-the-job training, vocational classes, or community college courses based on paid tuition.

And, one has only to look at joblessness in the construction trades, where such programs do exist, to see that lacking skills is not the primary reason why so many men and women are out of work.

New York Times columnist, Thomas Friedman, weighed in on the issue last Sunday also citing the described dearth of skilled workers in North Carolina and noted that “Today states are slashing budgets for community colleges, just when every good job requires more skill.”

Luce reports that in North Carolina, Siemens is training six high school dropouts to be “robot supervisors” at a cost of $165,000 each. He is perhaps correct that the idea of channeling 40 percent of young people into apprenticeships wouldn’t go over that well here. I’m not so sure. But I can say with certainty that there are a lot of jobless kids in my neighborhood who would welcome the opportunity to learn “mechatronics,” a mixture of mechanical engineering and computer science. Especially if there are jobs waiting for them when they finish the course.

Of course nobody in a position to do so is proposing spending money on an apprenticeship program that would engage jobless youth in Cleveland, Detroit or Los Angeles; not the White House, not anyone in Congress.

But we are confronted with a much bigger problem than a lack of skills. Right now there just aren’t enough jobs to go around.

The Great Recession, and what has followed, “decimated job prospects and earnings for young workers,” a new Economic Policy Institute (EPI) briefing paper shows. In “The Class of 2013 young graduates still face dim job prospects,” found researchers Heidi Shierholz, Natalie Sabadish and Nicholas Finio. “For the fifth consecutive year, new graduates will enter a profoundly weak labor market and will face high unemployment and underemployment rates and depressed wages.”

“Because young workers always experience disproportionate increases in unemployment during downturns, young workers have confronted particularly high unemployment rates since the end of the Great Recession,” reads the paper released April 10. “For young high school graduates, the unemployment rate is 29.9 percent, compared with 17.5 percent in 2007, and the underemployment rate is 51.5 percent, compared with 29.4 percent in 2007. For college graduates, the unemployment rate is 8.8 percent, compared with 5.7 percent in 2007, and the underemployment rate is 18.3 percent, compared with 9.9 percent in 2007.”

“Young workers have also seen their wages decline,” says the EPI. “Between 2007 and 2012, the wages of young high school graduates dropped 11.7 percent, and the wages of young college graduates dropped 7.6 percent. However, the wages of young graduates fared poorly even before the Great Recession began, as most groups of young workers also saw wage declines between 2000 and 2007. In all, between 2000 and 2012, the wages of young high school graduates declined 12.7 percent, and the wages of young college graduates decreased 8.5 percent. For full-time, full-year workers, this represents a roughly $2,900 decline in annual earnings for young high school graduates and a roughly $3,200 decline for young college graduates.”

“While attaining additional educational is often identified as a possible option for young people during periods of high unemployment, there is no evidence of young workers ‘sheltering in school’,” the EPI report says. “Since the start of the Great Recession, college and university enrollment rates have not meaningfully departed from their long-term trend for either men or women. In fact, though some students have had the financial resources to take shelter in school, the lack of substantial increase in enrollment suggests this group has been offset by students who have been forced to drop out of school, or never enter, because a lack of work meant they could not afford to attend.”

“Through no fault of their own, these young graduates are likely to fare poorly for at least the next decade through reduced earnings, greater earnings instability and more spells of unemployment,” said Shierholz. “Instead of focusing on deficit reduction, policymakers should be passing policies that will generate demand for U.S. goods and services, and therefore demand for workers who provide them. This is the key to giving young graduates entering today’s labor market a fighting chance.”

A succinct and clarifying look at the relationship between unemployment was proven last week by Sherry Linkon, co-director of the Center for Working-Class Studies at Youngstown State University. In “Is Education the Answer to Economic Inequality?” she wrote:

“One of the most common solutions offered to reverse America’s growing economic inequality is increased access to education. President Obama may have started the trend with his call for universal, high-quality preschool, but others have joined the fray.  In March, Ronald Brownstein argued in National Journal that ‘Education remains critical to reversing the erosion in upward mobility that has made it harder for kids born near the bottom to reach the top in the United States than in many European nations’.”

Linkon went on to cite commentary on how “colleges and universities are failing to make those opportunities available, because higher education has become too expensive and doesn’t do enough to help lower-income students succeed.”

“On the basis of justice, we should be outraged,” wrote Linkon April 15, adding that, “We should join the thousands of college students who have organized protests against cuts to public education.  And those of us who are educators should heed Mike Rose’s prescription for addressing the needs of working-class students: ‘If we want more students to succeed in college, then colleges have to turn full attention to teaching’.”

“Still, the idea that more or better college education will ‘solve’ the problem of economic inequality is just silly,” wrote Linkon.  “While a college education still provides economic advantages, increasing lifetime income, achieving that benefit is harder than it used to be.  These days, getting a college degree doesn’t guarantee better middle-class job prospects, but it does often bring a lifetime of debt.  Unemployment rates for recent graduates remain high - 53 percent according to The Atlantic a year ago, and many have taken low-wage, hourly jobs that don’t require a college degree.  Meanwhile, student loan debt has increased to an average of $26,600.  For too many, higher education has become a trap door rather than an elevator.”

“I’m not suggesting that education isn’t worthwhile,” wrote Linkon. “Far from it.  A good education brings many advantages, only some of which have to do with employment or income. Martha Nussbaum is just one of many scholars arguing that education has value for society. But education simply won’t address the root causes of today’s economic inequality.

“First, while state legislatures and business organizations pressure public universities to focus on preparing students for jobs in specific fields, like health care or fracking, the widely-touted ‘skills gap’ turns out to be a myth.  The American economy is not being stymied by a lack of appropriately trained workers.  Wharton School management professor, Peter Cappelli, suggests that we should ‘Blame It on the Employer.’  He suggests that employers ask themselves a few key questions starting with this zinger: ‘Have you tried raising wages? If you could get what you want by paying more, the problem is just that you are cheap’.”

Linkon concludes that “even when we talk about increasing access or establishing ‘universal’ programs, education addresses the individual, not the system.”

“Even at its best, education helps some working-class young people prepare to move into the middle class, an outcome that might improve the economic opportunities of those individuals but doesn’t address the broader economic structure,” wrote Linkon. “A thousand well-trained nurses might earn a decent living, but they will work alongside aides, janitors, and clerical workers who don’t. Simply put, moving some people into better paying jobs doesn’t eliminate the low-wage jobs they left behind.”

“Moreover, we should expect to see more low-wage jobs over time, not fewer, and education won’t change that.”

“If we want to improve the lives of low-wage workers and their families, we need public policies that will create more jobs, increase wages … and protect people from the financial ravages that often accompany illness, natural disasters, and other devastating and expensive events,” continued Linkon. “But how likely do you think it is that our state or federal legislators will create such policies?”

In a new report for Demos, “Stuck: Young America’s Persistent Jobs Crisis,” authors Catherine Ruetschlin and Tamara Draut examine the state of the youth employment today and find that while the overall economy is showing signs of improvement, young workers are still in a state of crisis. In an article described and made available on AFL-CIO Now April 15, they warn that if policy isn’t changed to address the challenges young people face, “we risk a generation marked by the insecurities of the Great Recession for the rest of their working lives.”

“The only possibilities for change lie in activism and organizing,” wrote Linkon.  “And what does it take to foster resistance and build solidarity?  As our labor studies colleagues might remind us, learning about economic, political, and social processes as well as the history of activism, theories of class, and narratives of oppression and resistance can prepare people to articulate and advocate for their own interests and for the common good.”

BlackCommentator.com Editorial Board member and Columnist Carl Bloice is a writer in San Francisco, a member of the National Coordinating Committee of the Committees of Correspondence for Democracy and Socialism and formerly worked for a healthcare union. Other Carl Bloice writing can be found at leftmargin.wordpress.com. Click here to contact Mr. Bloice.