Will President Obama’s Jobs Bill Get Young People Working?
What do young voters want from President Obama? What problem must he address to ensure that he secures their votes in the next Presidential election? BE Next asked these questions on the Black Enterprise Facebook page and Twitter and your answer was simple: jobs.
Overwhelmingly, readers like you responded and said that unemployment was the number one issue. That shouldn’t be surprising. While the general unemployment rate is 9.1%, youth unemployment, those aged 16-24, was nearly double at 18.1% in July. Older peers aren’t faring much better. The next highest unemployment rate (9.6%) is held by those aged 25-34.
In an effort to deal with the unemployment problem head on President Obama recently unveiled the American Jobs Act and went on tour to promote it but are the measures he’s proposing enough to turn the tide for students and young professionals? Well, yes and no.
First, the Good:
Returning Heroes Tax Credit
This is a $5600 to $9600 tax incentive for employers to hire unemployed veterans. This is potentially very helpful. The armed forces are disproportionately younger and more diverse than society at large. Those under age 30 comprise roughly 55-60% of the armed forces. And blacks account for nearly 18% of the military while they only represent 12% of the general population.
Preventing Layoffs of Teachers, Policemen, and Firemen
The federal government would invest $35 billion, of which all but $5 billion would be for educators, in states and localities for the purpose of stopping and reversing layoffs. Nearly 78% of new teachers are under the age of 35. This large investment would nearly ensure that the pipeline for new teachers is in great shape until the economy can turn around. It’s especially critical since many school districts still use the “last hired, first fired” principle that is far too skewed in the favor of seniority, protecting the most experienced – and research has shown much less effective – teachers from layoffs. (Ironically, such layoffs actually raise the average salary at schools since teachers with more seniority typically earn more.)
Modernizing over 35,000 Schools
The government would make a $25 billion investment in infrastructure that could be used for “a range of emergency repair and renovation projects, greening and energy efficiency upgrades, asbestos abatement and removal, and modernization efforts to build new science and computer labs and to upgrade technology in our schools.”
There is little doubt such an initiative would not spur more hiring in general but especially youth hiring. Renovating and upgrading classrooms will add more capacity for overcrowded schools that are in dire need of space. And additional funds noted above can expand budgets so that schools are able to hire more teachers.
Pathways Back To Work Fund
Though there’s no specific dollar amount attached to this idea it would focus on creating summer and year-round jobs for youths. The program builds on the successful Temporary Assistance for Needy Families (TANF) Emergency Wage Subsidy program which was responsible for 260,000 jobs in 2009 and 2010.
The program would clearly assist young people with acquiring new skills, earning additional money, and spending their time productively. The National Urban League supported all of these initiatives except the first one, lobbying Pres. Obama personally about the need to revitalize urban areas and get young people working again.
And now, the Bad:
The chances of the American Jobs Act passing aren’t very high.
For one, Pres. Obama is negotiating from a position of weakness. He caved during the Bush tax cut negotiations; he caved during the debt ceiling/deficit reduction fight; and there’s little reason to believe that results here will be any more palatable. However if the Obama administration could urge Congress to pass this bill, and it was effective at lowering the youth unemployment rate even a little bit, it could spark a turnaround in the youth support.
Here are three suggestions for how the Obama administration could actually lower youth unemployment and by extension shore up the youth vote.
1. Forget the American Jobs Act
Take the initiatives noted above out of the American Jobs Act and bundle them into a smaller, easier to swallow $65-75 billion bill. That cost is less than one-fifth of the American Jobs Act and would have a much better chance of passing. And a small stimulus provided by legislation passed, is better than the stimulus of legislation that’s killed.
2. Invest in urban cities
Provide not money but 5-7 year tax credits that would allow companies to develop, renovate, and invest in areas that have been hit the hardest and remain mired in an economic malaise. New Jersey Gov. Chris Christie (R) recently signed the Urban Transit Hub tax credit into law which will allow projects worth $50 million or more to qualify for such tax breaks. But Pres. Obama will need to go a step further. Along with the tax breaks there should be additional responsibility asked of private developers. For every dollar in tax savings require a dime go to funding job training and summer internship programs for young people. That’s a win-win. Developers receive their savings and a cost-effective investment; and cities are revitalized not just for the short-term but also into the future with a far better trained and educated work force.
3. Defer student loan payments for 1 year.
Currently a six month deferral is standard, and hardship deferrals can be requested. But by extending it graduates would have a twice as long to land a job and make payments on time. Nearly two-thirds of borrowers are making payments late. And recently the student loan delinquency rate was second only to credit cards. (Better marketing of the Income-based Repayment plan needs to also happen. It caps payments at 15% of discretionary income for 25 years, and if there is no discretionary income there’s no payment required.)
After all voters aren’t expecting miracles, just opportunities. A sincere interest on behalf of the administration would go a long way to alleviating the fears that youth voters feel.