The UWIRE Forum

Policy solutions to fix 70 percent unemployment for recent grads
June 16, 2009, 7:43 pm
Filed under: Uncategorized
Chris Burks

Chris Burks

Ask any recent college graduate the most shocking statistic about our economic slump and you won’t get any percent GDP or loss of market capitalization number.

Instead, the cry of the college aged is summed up in this simple statistic: Nearly 70 percent of those graduating from college this year are estimated to not have a job.

While the seeming wizards of Wall Street cast blame on others as easily as a child waves a toy wand, the now defunct dark magic of collateralized debt obligations or credit default swaps looms large when nearly three-fourths of us don’t have a job. Fault should be apportioned, but we should also focus on the future. Yet, in the words of 2Pac, hip-hop’s first Icarus, “it’s on us to do what we gotta do, to survive… and still I see no changes.”

Change and survival are words this generation now knows all too well. They are also terms our nation of immigrants has embraced. We must continue to persevere through hard times by adopting those public policy solutions that work — wherever we may find them.

FDR, hero to a generation at home and captain of the arsenal of democracy to those abroad, did much to avoid a jobless recovery during his Administration and young Americans today are learning the right lessons from that time.

Two young progressives, Ethan Porter and Elon Plotkin, have proposed instituting a version of FDR’s National Youth Administration that would put young Americans to work and sow the seeds of a long term recovery. Porter and Plotkin’s proposal asks that we dig deeper and think about instituting a version of this successful New Deal effort that was a “part jobs program, part student aid program.”

Such a 21st-century version of the youth program could be financed at a fraction of the financial bailouts, and an investment in college tuition relief would reap many long term benefits.

Further, a coalition of youth policy and activist groups have come together to demand action for young Americans without jobs.  This ambitious coalition entitled 80 Million Strong — 80 million for the number of youth they hope to speak for and unite — is gearing up for a national summit and raising awareness of the critical issues surrounding not only the job market, but also related issues with health insurance coverage and access to higher education.

Such efforts may not ultimately sway serious legislation, but the cry is clear

Those intent on creating American jobs would do well to listen to our past when confronted with market capitalization statistic that hides the hard numbers of unemployment:

“The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.” – RFK


3 Comments so far
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Pingback by links for 2009-06-17 - Kevin Bondelli’s Youth Vote Blog

What exactly would this program consist of? Where are the jobs coming from? There’s nothing here that indicates anything concrete. And, philosophically speaking, what good is it for us to guarantee jobs to any group? It seems like that ignores the whole concept of a labor market. Productive jobs aren’t going to come for government, though I guess you could just read my last column! I do appreciate the Tupac reference, FWIW.

Comment by Michael Warren

Thanks for the response Michael. I’m not sure we will ultimately agree because it seems our disagreement is more about the role of government, but I think the economics behind deficit spending is pretty straightforward and investing in a jobs program and higher education tuition is good public policy.

As for the economics, a jobs program spurs consumption and demand. The philosophy, or economic theory, behind such a program isn’t so much about guaranteeing jobs to a certain group as it as a neo-Keynesian effort to efficiently prime the pump of the economy. Spending on jobs now gives income and drives consumption, especially to a group that doesn’t save. In fact, the effect of such a stimulus is weaker on other age and income groups because of the leakage caused by investment. This rationale is evidenced in the similar rationale to oppose upper income tax cuts. These cuts don’t spur short term growth because the money given to the upper income tax brackets is invested instead of being spent and it only marginally helps the already large investment pool of those at that spectrum of the bracket.

However, spending on college kids will drive demand and will also be a long term investment in education. Economics also tells us that educational attainment is highly correlated to income. Investing is education is the best long-term economic development strategy.

Also, as for your your column, I don’t think we’re shifting spending from the private sector to the public and I think we should broaden the notion of the market we are talking about. Simply put, the demand in the labor market is for public service jobs and increased government spending isn’t a bad thing.

I don’t know of any research that correlates increased government spending with decreased private sector spending, and, in my opinion, the choice isn’t between government spending vs. private spending, but between no spending or government spending. I’m a neo-Keynesian and I believe in investing in infrastructure and “priming the pump” of private sector spending.

Lastly, it’s not as if there is a “pie” that government is eating up. Such fiscal policy is not a zero sum game where there is a total amount of spending and we have to fight to see who gets to spend what. One of the small reasons such government investment works is because we can’t incentivize private investment to produce such large scale managed public goods, (i.e. roads/infrastructure, defense spending, etc) that benefit the common good. Halliburton can build a great toll road or pipeline, but only community development block grants or Federal Highway funds will invest and build the light rail our society needs because of the scale of such projects. Private entities can’t efficiently invest in education in a way that benefits the common good as well as many public vehicles for such investment.

The benefits to the common good and the scale of investing in education show that we should embark on a spending program like the National Youth Administration.

Comment by Chris Burks

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