Lost Youth Employment in Illinois
by Stephen Lendman
June 6, 2010
What affects Illinois plagues the nation, the Bureau of Labor Statistics reporting in January that:
"The unemployment rate for young Americans has exploded to 52.2% - a post-World War II high, according to the Labor Dept - meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time."
"The number represents the flip-side to the Labor Dept's report that the employment rate of 16-to-24 year olds has eroded to 46.6 percent - the lowest ratio of working young Americans in that age group, including all but those in the military, since WWII."
The Illinois Policy Institute says the state is "in a fiscal meltdown that continues to spiral out of control," exacerbated by the economic crisis, falling tax revenues, and mismanagement in a state plagued by corruption.
As a result, it ranks in the bottom fifth of states by many key measures, including its economic outlook; Gross State Product growth; debt burden; cumulative per capita income growth; cumulative non-farm employment growth; net out-migration; and property, gasoline, and sales tax burdens.
Unsurprisingly, the state's wealth has been declining. At the same time, it's budget crisis has increased because of an expected $13 billion FY shortfall equal to about half the state's operating budget - the largest (on a per capita basis) of any state in America, including California.
To address it, huge cuts are proposed, including over $1.3 billion from education from primary through university levels. An estimated 17,000 teachers will be laid off, exacerbating an already dire situation, impacting students by school closures, larger class sizes, eliminated programs, and sharp tuition and fee increases at state colleges and universities, the University of Illinois considering a 20% hike besides large cuts in its operating budget.
As a result in January, it furloughed over 11,000 administrators, academic professionals and faculty at Champaign-Urbana, Springfield and Chicago campuses, requiring them to take 10 unpaid days of leave by June. More expected cuts will follow given the university's budget shortfall, one expected to grow, not diminish.
In Chicago and Illinois, planned destruction of public education is part of a national effort to privatize it to deny millions of working class youths a chance for a better life, a decent job, or perhaps any at a time half the nation's young people are unemployed.
The results show up in Northeastern University's Center for Labor Market Studies (CLMS) January 2010 report titled, "The Lost Decade for Teen and Young Adult Employment in Illinois: The Current Depression in the Labor Market for 16 - 24 Year Olds in the Nation and State."
It shows that youths failed to participate in the mid-2003 - 2007 labor market recovery, after which their employment rate fell sharply through 2009. Teens (aged 16 - 19) fared worst of all. In 2000, when employment peaked, their employment/population ratio stood at 45.2%. By 2003, it was 36.8%, then 36.4% in 2005. At the start of the late 2007 economic decline, it was 34.6%, the lowest figure since WW II, and by November 2009, it was 26.2%, overall the largest employment decline of an age group.
Young 20 - 24 year olds have also been severely impacted, especially men, Blacks, Hispanics, and non-college grads.
Since 2000, teen employment dropped by "20 percentage points" and for 20 - 24 year olds by 13 points, numbers reflecting depression, not recession.
While in 2000, Illinois teens were 1.4 times as likely to be working as adults 55 and older (48% v. 34%). Over the past decade, it shifted dramatically to 40% for older workers to 28% for teens, Blacks faring worst with only 12% in Illinois employed. A similar pattern occurred nationally, impacting the long-term employability of those affected, especially for the state and nation's poorest and most disadvantaged.
Chicago was especially hard hit given its large Black population. In the metropolitan area in 2009, suburban teens were 1.6 times more likely to be working than their city counterparts - 25% v. 16%, and teens from low income families fared worst.
Young adults also fared poorly. In 2000, 72% of 20 - 24 year olds in Illinois had a job. By November 2009, it was 60%, down 12 points. Blacks were especially impacted with only one in four finding work in 2009. In metropolitan Chicago, suburban employment dropped by 16 points. In the city, it was 19 points - "the equivalent of a Great Depression era, especially for young Black men."
The ability to stay actively engaged in school, training, and/or employment is key to future labor market and earning success. Underutilized youths run serious risks of long-term unemployment and poverty, a growing problem in Illinois and nationally.
The CLMS conclusion is that Illinois and Chicago teens and young adults "have been massively left behind in the labor market," given the state's historic low employment rate, especially for teens.
Facing likely high jobless rates through at least 2015 or longer, teens and young adults can expect "an unmitigated disaster" in their job market and future prospects.
Short of massive federal intervention, nothing envisioned offers hope, especially given the administration's penchant for budget restraint, except for Wall Street, militarism, homeland security, and debt service. As a result, a generation of youths is being trashed, discarded for other priorities.
Chicago's South Side Dilemma - America's Second Highest Unemployment Rate
On November 18, 2009, the Chicago Reporter covered the problem based on 2008 US Census Bureau American Community Survey data. It showed that the collective unemployment rate for the Auburn Gresham, Englewood, Washington Heights and West Englewood neighborhoods was 23.2%. Only Detroit's northeast corner was higher at 28.5%, and these figures exclude:
-- discouraged workers who want jobs but gave up looking;
-- "marginally attached workers" not actively looking after unsuccessfully seeking work in the past 12 months; and
-- part timers seeking full-time employment but can't find it.
Including these categories, South Side Chicago, Detroit and other community unemployment rates would be double or more the official figures. Exclude the bogus birth-death ratio, and the numbers are higher - at true depth of depression levels in communities throughout America, including Chicago's West and South Sides (with large Black and Latino populations in traditionally poor neighborhoods), facing grim prospects for many years to come, on their own and out of luck.
A New Worktrends Study
Rutgers University Edward J. Bloustein School of Planning and Public Policy's May 2010 report titled, "No End in Sight: The Agony of Prolonged Unemployment," is based on a March 2010 survey addressing the issue - systemic, growing and endangering the nation. Its findings include the following:
-- of those unemployed since August 2009, 21% found work by March 2010, 67% are still unemployed and looking, and the remaining 12% gave up for lack of success or pursued other directions including school;
-- younger respondents had better success than older ones;
-- women fared better than men;
-- Blacks, Hispanics and those least educated were especially impacted;
-- of the 21% who found work, only 13% got full-time jobs;
-- 65% of those finding employment looked for at least seven months; another 28% for over a year;
-- 61% settled for less than they wanted, saying it was "something to get you by while (looking) for something better;"
-- more than half of the newly reemployed took a pay cut; for about one-fourth of them, it was significant, and one-third lost benefits;
-- a clear trend was the pessimism among long-term job seekers, and their belief that they'll never again have employment as good as what they lost;
-- many of the unemployed have no safety net;
-- only 30% have unemployment insurance (UI) or health care coverage;
-- 33% have neither;
-- 21% have UI but no health coverage;
-- 16% have health coverage but no UI;
-- "The Great Recession has touched almost everyone;"
-- over three-fourths of the unemployed said the economic situation was having a major impact on them and their families; examples given were reduced spending, increased borrowing, missed debt payments, less medical care, and bankruptcy;
-- About 70% had to tap their retirement or other savings to get by, but it's not enough;
-- long-term unemployment caused physical and emotional stress, isolation, and for some, substance abuse;
-- nearly two-thirds believe the economy is undergoing fundamental, long-lasting change for the worst;
-- 61% rated the Obama administration's handling of the economy fair to poor; 68% said fair or poor on its handling of unemployment; and
-- half of respondents believe it's government's responsibility to help the unemployed, UI being the main support.
Despite reported economic improvement, more illusion than fact, "millions of unemployed Americans see no end to the Great Recession that wrecked their finances and threw their lives into turmoil." The unemployed understand things better than media pundits or political optimists, unable to fool all the people all the time or those unemployed any time.
As a result, they're angry, pessimistic, wonder what's next, and say what's needed are government efforts to create jobs, not cut taxes for business and the rich, the standard formula since Reagan under Republicans or Democrats, governing the same way or worse.
It's why poverty, hunger, homelessness and despair affect millions in the country. Food stamp usage is at record highs, and millions have no health coverage because the state of working America is dire and worsening for millions facing greater than ever challenges on their own with government indifferent to their plight. Is it any wonder they're disillusioned, pessimistic, fed up and angry!
Stephen Lendman lives in Chicago and can be reached email@example.com. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.