7/12/2009 - The US should raise significantly federal funding on jobs programmes for young people in order to limit the impact of the economic downturn on the current generation of school leavers, according to a new OECD report. Given the pressure on public finances, this may require some reallocation of federal funding towards youth programmes.
Jobs for Youth: United States says that despite signs of economic recovery, the outlook for young people in the jobs market will remain difficult in the coming years. In the year to November 2009, the youth unemployment rate rose by 8 percentage points to 19%, equivalent to 1.6 million more young people out of work.
Teenagers have been hit especially hard: just over one in four 16 to 19 year-old Americans were unemployed in November 2009 compared to one in ten for all workers. This is the highest rate of teenage unemployment in the US since World War II.
“The short-term priority must be to help the young people most at risk to avoid the long-term scarring of a generation of young Americans,” said OECD Secretary-General Angel Gurría.
“Business must play its part in creating jobs but the government has to act quickly to extend financial support to more young people and increase funding for re-employment programmes. Longer-term, investing more in education to give young people the skills they need to succeed is essential.”
The crisis has highlighted the urgent need to tackle structural issues affecting the labour market, according to the report. Programmes targeting school leavers with the bleakest job prospects, notably African-American youth, those with poor qualifications and teenage mothers, are heavily underfunded, reaching just 5% of those people. Without financial support and help to find work or retrain, many end up in long-term unemployment or inactivity, entirely disconnected from the labour market.
The federal government should focus its efforts on three areas, says the OECD. First, extend financial support to unemployed youths to prevent them withdrawing from the labour market. Second, spend much more on the currently underfunded job programmes for at-risk young people. Third, ensure young people leave school with the skills needed in the labour market.
The OECD recommends the US introduce measures, including:
• Temporarily relax unemployment benefit eligibility criteria for youths with some work experience, but apply strict job-search requirements;
• Expand existing early-childhood education programmes and provide more support for parents and children when they go to primary school;
• Extend vocational training by rolling out nationwide Career Academies, small learning establishments within high schools combining academic and technical education;
• Broaden the role of the Office of Apprenticeships to include funding responsibilities and introduce subsidies and sub minimum wages for apprentices in order to promote the use of apprenticeships in SMEs and for teenagers and at risk youths;
• Favour summer jobs programmes for at risk youths who are still at school;
• Expand the Job Corps programme for young adults and encourage teenagers to stay on the programme longer and do more vocational training.
Jobs for Youth: United States is the latest in a series of OECD reports on youth employment policies that now covers 14 countries.
For comment on the report, journalists are invited to contact Stefano Scarpetta, Head of the OECD’s Employment Analysis and Policy Division on +33 1 4524 1988 or firstname.lastname@example.org or Glenda Quintini economist in the same division on +33 1 4524 9194 or email@example.com.
>> For more details about the project visit www.oecd.org/employment/youth
>> Visit the OECD country site for the US www.oecd.org/us
Table A. Scoreboard for youth aged 16-24, United States, Europe and OECD, 1998, 2008 and Q3-2009
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ISCED 3: International Standard Classification of Education referring to upper secondary education; LTU: long term unemployment; NEET: neither in employment nor in education or training; UR: unemployment rate.
a) Youth aged 16-24 for Iceland, Norway (for 1998 only), Spain, Sweden, the United Kingdom, and the United States; and 15-24 for all other countries.
b) Seasonally adjusted data; employment rate data for European countries refer to the second quarter 2009 instead of the third.
c) Unweighted averages for the 19 OECD and EU countries and for the 30 OECD countries.
d) 1997 and 2007.
e) Share of youth not in education and without an upper secondary qualification (youth holding qualifications at ISCED levels 0, 1, 2 or 3C).
Source: National labour force surveys; and OECD Education database.
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