What Cities Need: Jobs for Teenagers
YOUNG people played the leading role in fomenting the mindless violence that ripped Los Angeles. The mob actions were inexcusable. The mob anger was understandable. The 27 percent increase in the minimum wage in 1989 and 1990, coupled with the recession in 1990-91, dealt a brutal blow to teenage employment. Total teenage jobs dropped almost 23 percent from their high point in 1989. The number of employed teens fell by 1.6 million.
Moreover, beneath the temporary ups and downs of the business cycle, the economy is moving slowly, compounding chronic difficulties in the cities. Unemployment in urban ghettos is sky high. Misdirected social engineering undermined family structure and fostered social disintegration. Federal and state governments have spent roughly $2.3 trillion on Great Society programs in the past quarter century, yet the problems appear worse.
Over the past two decades, the employment rate for white teenagers (jobs as a share of population) averaged 48.9 percent. The employment rate for African-American teens was less than half that. This means that on average over a 20-year span, fewer than 1 out of 4 young black persons had a job at any point in time.
This is a shocking statistic. By contrast, the employment rate for adult whites (20 and older) averaged 61.3 percent and 57.2 percent for adult blacks - a 6-point spread. In March 1992, the employment rate for adult whites was 63.7 percent, 59.5 percent for Hispanics of all ages, and 57.1 percent for blacks.
Parents know that work can be as important as school during the teenage transition from dependence to responsibility - often more so. The United States must remove the structural barriers that today deprive a majority of young people - and an overwhelming majority of young blacks - of this vital experience. Washington must rethink its policies on education and apprenticeship. Young people typically take it on the chin during a business downturn. They have few skills, no seniority, and weak attachment to the labor force. When business slows, they are always among the first to be laid off. Thus, shifts in teen employment are often a leading indicator.
Withal, teenage jobs were unusually weak in the 1990-91 downturn. Changes in teenage jobs ordinarily account for about one-third of the variance in total employment. In the 1990-91 downturn, the drop in teen employment accounted for 66 percent of the drop in total jobs. Yet teenage unemployment showed relatively little change. The increase in the minimum wage simply priced low-skill workers out of the market. These workers dropped out of the labor force and stopped looking for jobs.
In the first quarter, 64.6 million people were neither working nor seeking work. Of this total, 90 percent were out of the labor force by choice - keeping house, retired, going to school, or ill or disabled. Some 6.1 million persons who said they would like a job did not look for work, including 1.1 million "discouraged workers" - individuals who believed they could not find work.
It is hard to separate the impact of the recession on teenage jobs from other factors. However, the increase in the minimum wage from $3.35 an hour to $4.25 helped to reduce jobs for low-skill, inexperienced, and poorly motivated workers. Moreover, the minimum wage is an inefficient and inequitable way to subsidize workers. It benefits people who don't need help (teenagers from upper-income families), and it reduces job opportunities.
Dealing with the economic, social, and moral decay in urban America is a daunting task. Congress must resist calls for programs that let state and local politicians spend but insulate them from the responsibility to tax. Ultimately, cities will prosper when paternalistic government allows residents to take charge of their own lives and their children's future.
Indeed, one solution may be close at hand. Korean-Americans were targets of the rampaging mobs in Los Angeles because many are recent immigrants who have prospered - barriers of language, poverty, and race notwithstanding. Koreans have succeeded because of an extensive network of self-help agencies, hard work, and most of all, strong family ties.