How Investing in Youth Could Help the Economy Recover From COVID-19

Published on May 27, 2020

Recessions are tough on everyone, but they hit young people particularly hard. Young workers are the most likely to lose their jobs, and the least likely to be helped by public and private relief efforts. With minimal work experience or savings, an economic crisis can leave them floundering for years.

We saw this happen 10 years ago during the Great Recession. The 2009 bailout (the American Recovery and Reinvestment Act, ARRA) focused more on keeping big business afloat than keeping workers employed. By 2010, nine million jobs had been lost, with young people suffering the highest unemployment rates by far – over 25 percent for the 16-24 age bracket and over 10 percent for the 25-34 year olds.

There’s evidence they never recovered. Many millennials have saved little or nothing for retirement, and those who do save choose conservative investments unlikely to build wealth. Additionally, a significantly lower percentage of millennials own their own homes than previous generations.

Now we’re facing a new crisis, one which will surpass the Great Recession by several orders of magnitude. And now, as then, young people are disproportionately affected. Between March and April of this year, the unemployment rate for workers age 16-19 rose from an already high 14.3 percent to 31.9 percent, and for the 20-24 segment it went from 8.7 percent to 25.7 percent. Young people of color are even worse off. In the Latinx community, 53 percent of 18-29 year olds report they’ve had to take a pay cut or have lost their job due to Covid-19.

Many of the jobs young people held were in areas hardest hit by the Covid-19 restrictions — hospitality, retail and gig economy jobs – and we can’t be sure when or if they’re coming back. Like their peers 10 years ago, our youngest workers are in serious economic straits.

We can’t afford a lost generation. From both an economic and a moral perspective, we must ensure the nation’s young people are kept in the economic mainstream despite the unprecedented effects of Covid-19.

To do so will require major workforce development initiatives. We need to focus those initiatives in young people, and we need to go big.

There are some efforts pending. The House Education and Labor Committee introduced a bill on May 1 to inject $15 billion into the nation’s workforce investment programs (Relaunching America’s Workforce Act, or RAWA). Some of its provisions include substantial funding for programs that benefit young people, such as:

  • $2.5 billion for youth workforce investment activities (more than twice as much as ARRA)
  • $500 million to support Registered Apprenticeships (no money was allocated toward apprenticeship in ARRA)
  • $2 billion to reinvigorate the community college and industry partnership grants initially formed under ARRA
  • $250 million for the YouthBuild program
  • $1 billion for Career and Technical Education

That’s $6.2 billion of a $15 billion package going toward youth programs, which is a lot of money. But given the probable negative effects of this crisis on our youth, I think government should go much further.

One area proven to deliver returns over and above any investment is apprenticeship. The $500 million RAWA proposal is a start, but it’s not enough to generate the number of new apprenticeships needed to rescue young people. We need as many as 900,000 new apprenticeships annually to truly make a difference, an investment the Urban Institute estimates at $3.15 billion.

The federal government could be supporting apprentices and apprenticeships in other ways as well. In Australia, for example, the government launched a placement service to help apprentices find new positions if their workplace shuts down, and also committed to funding 50 percent of apprentice salaries through September 2020. In the UK, the government confirmed that funding would continue even if apprentices have a break in learning due to the pandemic.

A similar commitment to wage support in the U.S. would take pressure off employers and prevent apprentices from losing their positions, which they might never regain.

Another way to support young people in this crisis is to substantially increase funding for AmeriCorps, which funds and manages national youth service programs. The House proposal to add an extra $500 million to YouthBuild (one AmeriCorps program) is a start, but another $4 billion in public and private money could add enough service positions to really make a difference for youth. National service programs especially benefit young people of color, who have already been disproportionately affected by the Covid-19 crisis, and are most in danger of falling through the cracks.

Yes, this is ambitious and yes, it’s a lot money. But we know what happens if we let young people drift in an economic crisis. We doom them to lost years of unemployment and under-employment from which they might never recover.

We will come out of this crisis. The U.S. economy was strong before the pandemic hit, and those strengths will underpin the recovery. Before long, employers could be looking for skilled people to fill new jobs. We need to invest now and invest big to make sure the youngest, most optimistic, and most energetic segment of our population is ready to jump in.

Nicholas Wyman is a Grit Daily contributor. He is a workforce development and skills expert, author, speaker, and CEO of the Institute for Workplace Skills and Innovation (IWSI Consulting). Wyman is a leader in developing skills-building, mentorship and apprenticeship programs that close the gap between education and careers around the world. IWSI Consulting works with a range of companies, governments and philanthropic organizations all across the globe, including Siemens, Nissan, Ford, and Mercedes-Benz as well as the Commonwealth of Virginia, the United Kingdom and Australia. Wyman frequently lectures on workplace job innovations, and appears on national broadcast programs.  He is a regular contributor to Forbes and Quartz, and was named LinkedIn’s #1 Education Writer of the Year. His award-winning book, Job U, is a practical guide to finding wealth and success by developing the skills companies actually need. He is actively involved in school to work programs focusing on STEM education. A third-generation writer, Wyman began his own career by learning a trade. He was named Australian Apprentice of the Year in 1988 and went on to captain Australia’s gold medal-winning Culinary Youth Team. He has an MBA and has studied at Harvard Business School and the Kennedy School of Government and was awarded a Churchill Fellowship.

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