Honest question: Have we, as a society, looked into possibly supplying people with short-term loans, with a guaranteed open position for someone at a place in more rural parts of America?
Originally, I was born in Fresno, CA. We didn't have the most healthy job rate when times were good, let alone once the recession hit. I spent five years looking for a job- and didn't find one until I got the help of a friend online in Claremore, Oklahoma, who let me move in. In a month I was working at an auto parts store, even though I knew jack shit about cars. I was making enough that I could've survived with that job. I'd be poor, I couldn't go to college, but I could survive.
I was lucky enough that I had a nice computer I'd gotten from when there was a windfall in the family, and I'd taught myself to program enough Python and Django to get a webdev job remotely. But even if I hadn't, I could've survived on this. Getting me out there cost a grand total of perhaps ~$1500, at most, and that'd get me my first month's rent. Tack on another $1000 and I'd have 3 months rent total and enough leftover to get a cheap bed.
Is this economically feasible? Would it even provide good economic value? People are needed in these rural areas, but I just don't know if it'd provide enough economic reward to actually be worth it to the country.
I wonder what fraction of the (let's call it) hopelessly unemployed would take up such an option if it's offered to everyone who wants it. As a whole our society has become much more entitled than back in those days, and the way in which we've been brought up, I wonder if some would see it as patronizing and reject the offer, even if it really would have meant a better future for them.
Then again I have been incredible throughout my life, winning the birth lottery pretty big and probably can't hope to truly understand the psychology and desires of much of my own very diverse country. Maybe I am wrong. Hopefully I am wrong. After all I can only really see this world through my own biased bullshit perspective.
I suspect it would not do much to help the people who are homeless because they are struggling with mental illness or addiction (which I understand account for the majority of homeless people). Those are problems that need a more targeted program.
I don't see it getting used by a majority- but 10, 20% maybe? Sure. There's a lot of shame that comes with being jobless, and as much as you think we're more entitled as a culture, people who go years without work, while living in poverty or just above it, don't feel entitled for much.
However, many of them are incredibly close to their family or friends- after all, what's the point of life if you don't have anything you love in yours? I was a bit fortunate that my family had effectively written me off as a failure, which left me little guilt to feel when I left.
Then, my entire life turned around. In the span of 14 months, I go from unemployed, to auto parts delivery, to paid-for-shit web developer, to absolutely amazing webdev/product development job. All without college, and thusly, with no debt.
I got stupendously lucky, once the bad luck ran out. But I don't imagine as many had the pure hopelessness that I had before, where you have no moral support from friends/family, and no hope for work, which gives you no reason to not leave.
There's no shame in being jobless - Not for these people, it's a societal norm. There's no shame in asking for government handouts, blowing it on booze and drugs and gold chains and other luxuries, then complaining that you can't make rent and can't buy food. There is no shame whatsoever - just a continuing resentment that they are owed something by society that is not being provided, like everything else they have ever had.
I'm sorry, but this rings of such blatant ignorance that I couldn't help but respond.
Have you ever even been to a poor neighborhood, in your life? I've lived there. Everyone I knew growing up lived there. Poverty doesn't work that way. Blowing your money on booze and drugs and gold chains and other luxuries? Christ, you barely have enough money for food, let alone all of that. I don't mean "barely enough money to buy food after all of the other things", I mean that tonight you're having a can of chicken noodle soup, just like the last three nights in a row, so that on Friday you can go to McDonalds for two or three items off the dollar menu as a treat. The people you're talking about are dozens of steps above the people I'm talking about.
I'm talking about the people for whom if they made even $10k a year they'd be some of the happiest people on earth. There are millions of them, in America. And Christ, no shame in asking for government handouts? WHAT government handouts? Are you at all, even one iota, familiar with the welfare system of the United States? It's incredibly hard to get much of anything beyond for a few months unless you have some kind of job. A few years if you're a pregnant woman. And when you're jobless for this many years, well, too bad.
I'm sorry, but you couldn't possibly know less about what you're talking about. Your statement smacks of overt racism, and if you seriously claim "Well hey white people get gold chains too", I just hope you realize that you're not fooling a soul.
Setting aside the blatant and overt racism inherent in your statement, the studies on this topic are quite clear and directly contradict what you're saying.
I wish I could point you to full text articles, but they're all behind paywalls. Try googling 'joblessness black youth depression' to read some relevant abstracts.
I've seen my fair share of white people that have the same attitude described above. It isn't necessarily a racial divide, and not everyone is motivated to do/be better.
>As a whole our society has become much more entitled than back in those days
You should recall that less than a century ago people felt they were entitled to own other people, perhaps you mean that as a whole our society has grown averse to letting people starve in ghettos.
Certainly could. But God, talk about risky investment. I don't see how you'd reliably make your money back. Not to mention, what business is going to say, "Yeah I want the dregs of somewhere really far away." without extra monetary incentive?
Not all of us are born knowing people who can get us jobs. Fresno had one of the densest populations of poverty in America, and as someone with no college, finding minimum-wage work was near impossible- 4,000 people show up for jobs at grocery stores. And no, that isn't an exaggeration.
Combine that with not knowing where to look or who to ask when it comes to getting remote programming work, you don't really have a lot in the way of recourse.
This seems like another argument for Basic Income. A lot of young, jobless people (males especially) isn't only a moral problem, but it's a sociological problem. The young jobless commit more crimes, are more likely to join gangs and are generally more of a drain on society. Giving them an income would remove the social pressure to constantly look for jobs that aren't actually there. People could focus on internships and other productive activities without having to resort to selling drugs to make a living.
Short of full on Basic Income, we could at least continue a much larger version of the government teen jobs program mentioned in the article. Money given to low income youth tends to find it's way back into the economy quickly. Much of the money from a government jobs program would be spent at the mall or walmart, some of which would end up in the hands of vendors and suppliers, which could get spent on apps and web services run by hn users. In short, poor people don't save a lot. Some percentage of our tax money will come back to us.
Capitalism is a great system, but it isn't perfect. The best predictor of future income is parental income. Direct action is the best way to break the cycle.
> This seems like another argument for Basic Income.
Or another argument against minimum wage. Minimum wage gets increased as cost-of-living goes up (albeit with a large lag). That's good if you're the household bread-winner trying to live off a minimum wage job. It's bad if you're a kid looking for some spending money. Damned if you do, damned if you don't.
Given that human wants are infinite, why would someone with no job but a basic income not commit crimes to increase their income? They have plenty of time on their hands, and their social status would be a function of how much wealth they had beyond their basic income.
If I get a $270 check from the government every week (14K/year), what incentive do I have robbing a gas station, which will probably have less than half my weekly pay in the till (unless of course I carefully time my robbery).
It would be like a developer who makes ~$85K/year breaking into someones bank account online and transferring just $800 out. And consider the punishment of that crime versus armed robbery.
What you would likely see is people collecting wages off the books. People working odd jobs part time for maybe $250 a week and collecting their minimum income. Way less risk than crime; much better pay. This is bad, but nowhere near as bad as robbery or working the black market.
I doubt people who rob gas stations post often on the HN. But consider this: it takes money to vandalize as the spray paint does not grow on trees and even when you stole it you are missing an opportunity to steal something you could pawn/sell (like washing detergent or booze). Yet the vandalism does not stop.
Spray paint graffiti generally isn't used by independent criminals. It's usually gang related. Or used by an artist (But they'd spring for the good stuff, and aren't really doing any harm).
You can get spray paint for $1 at the dollar store. It's crap, but it's not like you're using to rust-proof your patio furniture. You can even get "used" cans at some places (like pawn shops). Considering the age restriction on purchasing it, I'm guessing either A) people turn a blind eye to that rule B) it gets shoplifted, or C) Old gang member member buys and distributes it.
Gangs use graffiti to mark territory and presence. They don't necessarily steal it. The person writing it is designated to write it. Overall, they don't use much paint and probably don't care about paint quality.
Artistic tagging and graffiti are a different thing. Due to the amount of paint used, they do tend to steal it if they lack money. "Racking" or stealing it is also considered a part of that outlaw culture. A large mural can cost hundreds of dollars to execute. Even a small picture can take a few cans of paint.
To get an idea of the amount of paint, search for images of "gang graffiti", and then for "graffiti murals".
My point is this: people are, essentially, paid not to vandalize. Don't buy paint and pocket that money for being a good citizen. Yet they go and do it anyways.
The idea that they will suddenly change their lifestyle after being given some unconditional stipend seems to be in a direct contradiction with the observable behavior of vandals.
The marginal value of money decreases as income goes up. So a crime that has an expected positive return when you have no money becomes less and less worth it as you become richer.
I would think people with basic income would be much less likely to commit crimes because a) essential needs can be met and b) they would have something to lose (freedom, time, money).
Beyond that, there's something inherently silly about your question - perhaps its the way it assumes the worst of people. You might as well ask why don't teachers get tenure and leave as much teaching as they can to subs without being fired, or why don't programmers pass all their work on to elance or odesk and get some additional outside work to make more money. These things may happen on occasion, but I'm inclined to believe that most are not so mercenary/sociopathic.
Your approach is simplistic. In France there is a kind of Basic Income. Yet crimes are still committed. The reasons why you go into a life of crime is not just a matter of getting food because you're hungry. Otherwise all poor people would commit crimes.
Being part of a gang is a way for young people to exist. It's not just a question of money. It's also an occupation, because there's nothing else to do. And there is the remote possibility that you might become very rich. Which will never happen with living wages.
These young people don't need money. They need a job.
"This seems like another argument for Basic Income."
I stopped reading there.
The reason black youths have high unemployment rates is their (typically unwed) mothers already live off a combination of section 8 housing, food stamps, medicaid, other govt. programs and whatever they can get under the table to keep their reportable income low.
This produces an environment where one can not thrive - black children do not learn the value of work nor understand how society and the rest of the world works. More of this would make it worse. Social programing is problem. Why create more of it?
> The reason black youths have high unemployment rates is their (typically unwed) mothers already live off a combination of section 8 housing, food stamps, medicaid, other govt. programs and whatever they can get under the table to keep their reportable income low.
Got a source, there, David Duke? FYI low-income/poor black youth ≠ all black youth.
Having lived in Georgia, I want to say acouple things. First you need to know that your beliefs and the beliefs of your wife are the reason that jobs that actually pay well will never come to Georgia. You can't educate what amounts to 30% of your population give or take if you think they are morally bankrupt. There is a reason corps move jobs to georgia when they want to pay less.
Having gone to school in the south I will tell you that it is a really strange place. There was an expectation that as black person you would be stupid. Most of the black people I knew played along. I don't really get it.
"First you need to know that your beliefs and the beliefs of your wife are the reason that jobs that actually pay well will never come to Georgia."
How do you claim know what we believe??? Our experience does not mean we believe, or endorse the current status quo of the situation on the ground. But it really is the situation here. A lot of black youth in single parent welfare section 8 households with little hope for the future. From seeing it first hand, I don't believe basic income via the government is the answer.
So you have no source for your claim about the mothers of black youth being "typically unwed." What you are doing, then, is what we refer to in the common vernacular as "talking out of your ass."
White people smell like hotdogs and never take baths. Source: I live in Vermont and my husband works at a car dealership.
I imagine a huge number of people on Basic Income would just blow all the money on the first day of each month on drugs and frivolous consumer goods. That said, I do think society has an obligation to provide a basic guarantee of life's needs: education, food and income, and health care. There is only so much society or any individual can do for someone if they, given the tools and opportunity, choose to waste it.
What do you mean by "a huge number"? Do you mean "a huge number" or do you mean "a huge fraction"? The difference is important for policy decisions.
25% of Americans are food insecure each year. If you gave them enough money to not be (we sort of try to do this: about 15% of the US population received food stamps at some point last year, but 15% is less than 25%, and the monetary amount is sometimes too small to prevent food insecurity), some amount of it would probably be misspent. Let's suppose 1% of recipients misspent it. 750,000 people blowing government money on heroin and hookers is a huge number of people. But a program with 99% efficiency -- where only 1% is misspent -- is also objectively really fucking efficient; a charity only has to spent 80% of its funds well for most people to consider it efficient.
So do you care about a huge number or a huge fraction of people abusing the system? Personally, I'm OK with the idea of hundreds of thousands of people abusing the public trust if it means that tens of millions are bootstrapped out of poverty.
"Personally, I'm OK with the idea of hundreds of thousands of people abusing the public trust if it means that tens of millions are bootstrapped out of poverty."
Hear, hear! We have to stop governing our society by what a small percentage may do. We need to start using some business logic and leverage the best ideas for the most people. Is spending food stamps on heroine an abuse of the system? Yes.
But so was selling loans to people they knew couldn't afford it, and then taking out an insurance policy on them defaulting.
Food security is a working poor problem. Totally different scenario. The 95% of unemployed youth mentioned here are going to be in jail in the next year or so. Fraud rates are way higher than 1%, but its still money well spent.
The issue here is that family lives of these kids are train wrecks. No stability, no father, probably a mother who was a pregnant 14-15 year old. The 5% kids who have a job probably had a strong grandparent or religious presence.
To help these kids, you need to intervene around ages 1-3 with daycare/headstart. Give them some hope and structure, and get them away from or improve the skills of their clueless parents (who are often kids themselves).
Apparently I am the only one who wouldn't be okay totally okay with tens of thousands of cheaters.
Anyway you could reduce that number drastically by offering basic income in the form of goods: a bed to sleep in, clothing to wear and food to eat. Nobody is going to cheat themself to the ability to sleep in two beds, and you can only eat so much food.
This might be more expensive, but I feel like a program with tens of thousands of cheaters would be a non-starter (and will die as soon as fox gets the story).
It's OK to be outraged by huge numbers even if they're small fractions. Personally (unrelated to the current topic), I'm outraged by the idea of executing even a single innocent person; it doesn't matter if 99.9% of convicted, executed murderers are in truth murdering unrepentant, if one person is executed wrongly, that's a big fucking deal.
But I gotta disagree with you on goods versus money. Trying to provide goods to everyone is inefficient and wasteful. It's central planning, and the central planners don't know what the situation is on the ground, and can't customize the plan to every situation. Free beds, great. What if the guy already has a bed? What if he's got a friend whose couch he can crash on and can do without a bed for a year or three? What's he supposed to do with it? So it goes with everything. If you gave him the money instead, he could do something else with it. Buy booze and heroin, maybe, but he could also spend it on welding classes or a netbook, get a job, advance himself.
Just giving people money is the essence of American socialism. Planned economies have vouchers for bread, vouchers for beds, vouchers for cars. And it works like shit, because the planners can't plan for everything, can't adapt to the situation on the ground. America has Social Security. We send you a check, and you spend it on whatever your greatest need is. It's worlds better, because the people with the most information are making the decisions on how to allocate resources. It's capitalism-tastic.
You don't to convince me capitalism is the best thing ever - I already agree with you.
But I am not interested in getting the most out of every dollar in aid - I am interested in getting people of the aid ASAP, and I don't think the best why to do that is to make their lives as good as possible right now. A place to sleep, clothing and food are the necessities of life (technically you could run around naked. In practice you would freeze to death in most of the places you could go) and this form of basic income would allow people to survive, but force them to work (or somehow produce) for anything above survival. In addition any little thing they did would bring immediate rewards to them.
In the case your person who already has a bed, he would certainly be welcome to just eat the meal and with his basic needs taken care of a mimimum wage job would enable him to save for the text-books or whatever.
I am assuming for the sake of this that people are lazy and will do no work that does not benefit them, that if free money is available people will take them, and that most would not use that money to do long term life improvement (certainly some would, but if you look at the number of people in the US who are overweight you will note that most aren't will to take pain for for pleasure later). If they have earned the money at a job it is theirs to do with as they please, if they get it from the government it comes out of their neighbors pockets. It seems only fair then that their neighbors should decide how it is used.
I wasn't suggesting that people abusing the system would be a reason to not implement it. I was just expressing disappointment that it wouldn't be able to help them.
As I've mentioned on HN before, I dropped out of high school and found my into a job in technology by way of a GED, public libraries and work as a landscaper, in the DC area coincidentally.
Everything mentioned in this article rings to true me. The transition traditional low-end jobs to middle-aged people and closed-circle of internships and job programs in particular.
That said, the first step towards mitigating this would seem obvious - stay in school. Unfortunately, anecdotal experience says the particularly bad situation for young black teens starts with a general de-valuing of education and victim mentality at home.
We shouldn't engage in wishful thinking either. Even if they graduate high school, the unemployment rate that awaits them is still pretty dismal. I believe the employment/population ratio for young black males "increased" to 33% for high school graduates...
Only the Bureau of Labor Statistics doesn't count incarcerated people in that ratio. So if you throw in that 1 in 9 young black males who are incarcerated, (I know it's higher, but 1 in 9 is the rate for high school graduates), you can see pretty clearly that even with a high school diploma they barely crack a 20% employment/population ratio. And that's actually being pretty generous with the numbers.
Of course, 20% - 25% is a better chance than 5%, so it's TECHNICALLY better to have a high school diploma...
But since the unemployment rate for whites with no high school diploma hoovers around 12%... it's actually MUCH better just to be white, than it is to graduate high school.
For blacks, especially males, I think the only way education really helps them in a material fashion, is if they can manage to graduate college.
Of course not. That's why I refer to staying in school as a "first step" as opposed to a solution.
>But since the unemployment rate for whites with no high school diploma hoovers around 12%... it's actually MUCH better just to be white, than it is to graduate high school.
I'd expect it's even better to be born rich and well-connected. Equality and the distribution of wealth and influence are important topics, but they're the last thing anyone who's actively struggling should be concerned with.
>For blacks, especially males, I think the only way education really helps them in a material fashion, is if they can manage to graduate college.
Both the statistics you provided and my experience disagree with this notion.
It happens a lot in lower income white and hispanic communities as well... I don't think this is so much a racial issue as it is one of multi-generation poverty.
What jobs are you going to give them? Cashiers these days have Bachelors degrees in Communications. It's the inflation in the system. America is not producing as many factories as it used to, manual labor jobs in construction are hard enough to get. If you drop out, it's going to be tough to get a job.
not really. A black high school drop out is probably looking for a job in a city (and a large city at that). a white high school dropout is much more likely to be looking for a job in a rural area or a smaller city, where there are much more opportunities for people with less education.
Exactly. Shouldn't this be used as incentive for parents and families within those communities to promote school attendance and encourage academic performance?
Or shouldn't it be used to promote alternative methods of education that are accepted by many employers?
STEM fields by and large are the most friendly towards alternative (or complete lack of) education. A well-manicured GitHub, a decent resume, and not looking like an idiot in an interview trumps most college degrees for mid-level developer jobs that aren't Facebook/Google/etc.
I work for a 600 people company. We are at least one level below Facebook/Google. I once interviewed a guy from Microsoft for a senior position. Everybody liked him. But we couldn't make him an offer because he doesn't have a degree. Blame this on the stupid US immigration policy. If we hire him, we'll have to let go all the H-1B holders, me included, on his team because the logic of US immigration service goes like this: "If you can hire an American without degree for this position, what are these foreigners with degree doing here?".
Interesting, but did the INS really say that? Steve (Jobs') and Bill's lack of university degree never stopped Apple and Microsoft from hiring H-1B holders.
Steve and Bill are the founder of the company, aren't they? Also, for companies as big as Apple and Microsoft, they'll be able to find a position for the guy without a degree. The restriction only applies to comparable positions. Steve Jobs not having a degree has nothing to do with me being hired on H-1B as a software engineer.
By "STEM fields" you mean "programming". Or do you know of many scientists, mathematicians, or engineers (real engineers, not programmers) who succeed without a formal education?
In bioscience jobs there are definitely pipette monkey -> manager stories, and you don't particularly need much in the way of qualifications for the former.
I suspect he's pretending all STEM is programming though.
>I suspect he's pretending all STEM is programming though.
I am not. I would have said programming if I had meant it.
ETA: Ironically enough, I am a non-degree holder (dropout) working in a non-programming STEM field. My bio is a bit out of date since I have indeed gotten out of the data science community.
If you have a good resume but no degree, that almost certainly means you have job experience. Of course actual experience trumps a college degree, that's why its so hard for new graduates to get a job. I know things are going well on the west coast, but around the DC/MD/VA area most companies are asking for 3-5 years of 40 hour/week experience, a TS clearance with a polygraph, and a B.S. in Computer Science for entry level jobs. They are called entry-level positions simply because they plan on paying you 40-50k even with the ridiculous requirements.
That employment environment around DC is insane. The time-tables that the government operates on would prevent almost any jobless applicant from chasing a job. When I got out of the Marine Corps year before last, I of course applied for many government contracting jobs within my field. Of the 30-40 jobs I applied for that specifically required my unique skill set, I received request for interviews from 25. I applied for these jobs in September, and received the first follow up contact from the employers in July of the following year. Keeping in mind that I have 10 years experience in a very specialized field with a TS/POLY, and extremely high demand for my skill set. Not sure what I am trying to point out except that government job creation would takes years to actually affect change on unemployment numbers.
On a side note, I did find a job with a startup, but that was because of a chance encounter while trolling the right bars every night for 3 weeks looking for that chance. Smiles and handshakes always trump resumes.
I can't speak for the US, but here in Canada everyone is already trying pretty much their hardest to make youth stay in school. Doesn't always work, and we need to have alternative solutions (/jobs) for those who do drop out.
Maybe. If the article is to be believed, they obviously aren't being promoted enough. One thing we do have here in Canada is a lot of education propaganda (which is basically the only kind that I like). I suppose in the US that kind of thing varies from state to state.
> The sad thing is that since the nation began to add jobs in 2009, we've created about 5.2 million additional jobs for America's workers. Teenagers in the aggregate received none of them. Not one.
This is the kind of Washington, DC b.s. that gets regurgitated in the news. If you look at the U6 unemployment rate, the net impact has been a huge upturn in total unemployment:
Where are the young black kids in tech? Blacks of any age are sorely under-represented in tech. So are Latinos, although not quite as bad. It's a very white (and Asian/Indian) world we live in.
I'm so glad to see things like Black Girls Code. These kids need mentors that aren't sports stars, or music stars. Oddly enough, music is one industry I always remember running into a lot of black people in - Macs and ProTools used in music production.
> Oddly enough, music is one industry I always remember running into a lot of black people in - Macs and ProTools used in music production.
That's not odd at all. Blacks are hugely overrepresented in the music industry (as well as the pro sports industry).
You gotta love how American society is always collectively wringing its hands about how there aren't enough black people in STEM, but nobody mentions how underrepresented Asians are in the entertainment and pro sports industries.
They matter because they represent a big win for a select few and people feeling they do not have many choices will discount the "few" and invest all their eggs into those two baskets and most often than not fail.
Blacks are something like 12% of the US population, so around 35 million people.
Pro football has around 80 men on the roster (more than any other sport), and 32 teams (again, on the high side), so you're looking at less than 3000 athletes employed by that one sport. Even if all the athletes were black, which they're not, that number is less than one in a thousand of the total population.
'There are jobs for blacks in pro sports' is a complete canard that needs to be abandoned.
"High school students working today work at less than a 50 percent rate to what they did back in 2000. Like in our state here in Massachusetts, 45 percent of our high school students worked in 2000. Last year it was 15 percent: 45 to 15 percent."
I had a couple jobs - as a high schooler in Massachusetts in 2000. I learned a lot of job/life skills from those jobs...
So all those factors, when you combine them and take a young black high school dropout, low-income male, you're talking 5 percent employment.
Paul Solman: 5 percent?
Andrew Sum: Yes.
Paul Solman: 95 percent unemployment rate?
Andrew Sum: Jobless. Not all of them would be classified as [unemployed], but they're not working. In other words, you could just say, "I gave up looking for work," which a lot of them do, but only 5 percent are working. Yes, 5 percent.
Another factor is geography. Last year, in the summer in [Washington,] D.C., only 15 percent of the kids worked; California, only 20 percent; Arizona and large parts of the south, 20 percent. Yet in Montana, North Dakota, South Dakota, Iowa, Nebraska, you had 50 percent to 55 percent of those kids working.
This part is unclear to me. Is the "those kids" in the last section (about the geographic factor) still referring to the "young black highschool dropouts", or to a more general group again?
There is an oil and natural gas boom in most of those states- the jobs pay quite well and don't really require any education. So theoretically either- but I suspect he actually means 'high school age persons in the aforementioned states'.
There are fewer young black people in Montana, North Dakota, South Dakota, Iowa, Nebraska which happen to have higher youth employment rates. So that partially accounts for it.
Yeah, black youth unemployment rates in those states won't have much influence since the black population in those states is much smaller.
However if black youth unemployment rates in those states is better than the national rates (it is unclear if the article is claiming this or not), then it is probably worth looking into what these states are doing that makes this the case.
Competition is much higher in urban areas. There are more black families in urban areas and thus there are more black dropouts while simultaneously urban areas have become hip destinations for college graduates. I know 20-somethings in NYC with liberal arts and art degrees that still work in retail or food services. And even many of my friends who no longer perform jobs like that did for several months to over a year while they sought out other work. I don't think this is as much of a phenomenon in Montana, the Dakotas and Iowa because they don't have a high rate of 20-somethings entering the workforce from other parts of the country.
Hardly. Lowering the minimum wage isn't going to make an unskilled and lazy teenager useful.
We have programs for this:
* http://www.jobcorps.gov/home.aspx -- This provides room, board, a stipend suitable for a teenager with no expenses, and vocational training for those under 25 years old (i.e, teens)
* http://www.fafsa.ed.gov/ -- There's really no disputing this one. Any one of them can hoof it over to the nearest community college and get some skills and a paid work-study job.
* http://www.army.mil/ -- Many of you probably don't like this, but it's probably the most successful organization at turning lazy teens into productive citizens, however, it carries the risk of death or dismemberment. My point, is there are many options.
To split hairs over the minimum wage because 95% of 1% of kids (the approximate dropout rate) don't have jobs is nonsense. So, because these kids who did not do their civic duty are unemployed means we should lower labor standards for everyone else, including those who have to feed families, such as the parents of these very children? It can only worsen the situation.
Min wage is already so low that it is not the driver to whether someone is getting hired or not. The big corporations that run most of the "small" businesses now, can pay. They just need to know they're indeed getting a valuable worker.
The other thing is, a lot of that 95% can be accounted for by kids who don't want a job. They'd rather play x-box, or work as a foot soldier in the local gang.
We have programs for this. Job corps, seriously. There's nothing stopping young people from working here. The jobs exist. The skills do not.
I think that there is value in dropping the minimum wage for teenagers dramatically, regardless of these issues. Giving teenagers another place to get yelled at for not working hard enough (besides just school and home) is clearly beneficial (as you note about the military) but the options that you list are not sufficient. They require too much of a lifestyle change which makes those programs seem inaccessible. Letting the sandwich shop down the road yell at teenagers for $4/hr is better than having teenagers go halfway across the state with Job Corps.
Teenagers in rural areas already have plenty of opportunities to be employed below minimum wage, but these opportunities largely do not exist right now in urban areas. I suspect this partially accounts for the employment discrepancies in rural and urban areas.
(Dropping the minimum wage for this should only be done for teenagers who have more social safety-nets than adults.)
> They require too much of a lifestyle change which makes those programs seem inaccessible. Letting the sandwich shop down the road yell at teenagers for $4/hr is better than having teenagers go halfway across the state with Job Corps.
A lot of these kids need exactly that - a change of environment. I have a second cousin whose mother is always getting fired from minimum wage jobs, is constantly getting kicked out of apartments, and couldn't provide him with a stable home life. His dad is long gone.
Job Corps provided him with a place to stay, training, and a job. But the best part of it was that he had to move an hour and a half away, close enough to visit but far enough where he wouldn't be distracted by all the trouble in our crime-ridden and poverty stricken city. They also teach personal skills and things like money management.
If you don't get the kid out of the ghetto, you'll have trouble getting the ghetto out of the kid.
Oh sure, a lot of those kids definitely need the Job Corps. I wouldn't support discontinuing that program.
I'm just saying that the Job Corps isn't a great fit for all teenagers, and that all teenagers would benefit from working at any sort of job (and that a lower minimum wage for teenagers would facilitate this. I think that work for the sake of work is good for teenagers, but that minimum wage gets in the way of this).
I agree, the sandwich shop up the road did yell at me when I worked there for lower than minimum wage under the table at more than one shop.
What jgreco suggests is good, as long as it's just for teens and doesn't go lower than it currently is (i.e., lets raise it for adults, since they often have to feed children)
I can agree to this, except, lets do it this way: lets leave the minimum wage where it is for teens, and raise it for everyone else. That'd also solve the problem of adults working jobs that are meant for teens.
It wouldn't be such a big deal to prevent adults from taking these jobs, it just needs to be more attractive for companies to give them to students. So, the lower wage alone would be a good enough incentive for them.
Once the minimum wage was lower for "school jobs" the market would efficiently define which jobs can be given to school kids and which can't.
1) Increased unemployment in the adult segment, due to teenagers stealing their jobs.
2) Need for government agency to enforce the age requirements. Modeled after immigration authority, such agency would need to be able to raid the businesses in order to do age verification, to ensure that teenager-compatible jobs are not given to adults. Also, such agency needs to ensure that people are fired on the day they reach 20th birthday, and thus lose the "teen" status.
If they have not received raises after spending many years with the business, then it's unlikely that their years of experience matter.
And if their years of experience do not matter, they would be replaced with lower-cost younger labor well in advance of them reaching particular age group considered "older".
I found myself wondering about this as well. Some of this is quite likely legitimate unemployment, but I'm wondering what percent is laziness.
That said, it's pretty easy as a middle-income white guy to cast judgement on people living in a situation I can't even dream of understanding. This is a pretty complex subject.
Dropping out is not the opposite of not graduating; you can continue trying to graduate for several years. The actual dropout rate is 7.4%: nces.ed.gov/fastfacts/display.asp?id=16
Thanks for the correction. The Atlantic article should have specified that they meant the four year graduation rate. I did think that 25% seemed too high, but I knew that 1% was much too low.
I directly disagree. Lowering minimum wage reduces the risk of hiring an unskilled and lazy teenager to train them in a job.
When you look at one hour of one person's work, the difference between $9, $7, $5 and $3 an hour seems trivial. Surely the employer has a five dollar bill sitting around, right? But when you look at full work weeks of time, plus the costs of training the job, multiplied by all of the employees the company will hire, the difference in hourly wages emerges. And, equally importantly, the employer perceives this difference and given time will react rationally to a lower minimum wage. For every dollar of "labor standards" achieved, the minimum wage imposes a skill and manners floor with no ladder beneath it for people who need to get a leg up into the employment system with experience. Lowering this floor lets an employer take a chance on someone or even take a chance on two people where only one could be hired previously.
Job Corps, FAFSA grants, and the military all essentially pay below minimum wage for job training without economic benefit, i.e., productivity (ignoring the various effects caused by foreign wars.) Additionally, while the training provided is supposed to bridge over neatly to employment, it never does perfectly and sometimes does not match real-world needs at all. It would be better to just let companies directly pay lower wages and also provide the training by having the employee learn the actual job instead of a simulated job.
> But when you look at full work weeks of time, plus the costs of training the job, multiplied by all of the employees the company will hire, the difference in hourly wages emerges.
Not really. You won't train them with a $3 / hour worker. Their timesheet won't be done by a $3 / hour worker. Their workspace and equipment will cost more than $3 / hour. If they piss off a customer, or steal from the till, or break stuff, or bully other employees, or get you sued, the cost will be the same.
People in non-tech fields have to practically beg to get an internship which pays nothing. OK, internships should be about training, not work (it's the law), but we all know that's often a load of crap. That's because all staff have overhead, so even a free worker costs quite a bit.
I was hoping that was all understood in my post since it's all obvious to anyone who has been in business. If a business cannot tolerate unskilled workers or has limited hiring spots due to a limited number of machines, etc., then they need to hire skilled workers immediately and so are not part of what we are considering.
As someone who has managed a variety of budgets, I assure you that the wage portion of an employee's total cost is still meaningful.
Except the military and Job Corps provide room and board. I suppose if a student was really good he could get room & board from a college and scrape by during the summers, but it's not the same deal.
If minimum wage law was such a determining factor why is it countries with a higher minimum wages than the USA have lower (including youth) unemployment rates.
I'll give you my take on this.
What creates employment is consumption and people earning next to nothing don’t consume.
So if you cut the minimum wage all you'll end up doing is reduce the overall consumption, which in turn will drive up unemployment.
The truth might in fact be the reason the USA economy is so stuffed is because the minimum wage has not gone up in decades leading to greatly reduced levels of consumption.
The countries with the highest minimum wages are the democratic socialist states of Europe which all have much higher youth unemployment rates than here. One of the lowest youth unemployment rates in Europe is Germany, which has no minimum wage law.
Whether northern Europe has a minimum wage or not is a bit complex. Neither Germany nor the Nordic countries have statutory minimum wages, but they have very corporatist labor sectors, with strong labor-union participation organized along the lines of broad confederations (giant labor confederations negotiate ground agreements with giant employer confederations). Some of that is entrenched in law, e.g. in most of Scandinavia the workers are guaranteed representatives on certain bodies that can veto things like changes to employment contracts.
So a negotiated minimum wage still covers a large proportion of jobs. In Denmark somewhere around 80% of jobs are covered by the negotiated minimum wage agreements, which are typically set at $20/hr. The main exceptions making up the 20% are small mom-and-pop stores (kebab shops and such) who don't join the employer confederation and therefore aren't subject to the agreements. But all jobs at large companies, like supermarket clerks and janitors, are covered by the minimum wage.
In Denmark this was basically the social-democratic outcome of the late-19th-century labor strife: the moderate wing of the labor movement reached an agreement in September 1899 with moderates within the business community to adopt a consensus-based approach to workplace conditions and pay. That held, so both the laissez-faire capitalist advocates and the militantly socialist portion of the labor movement were sidelined for a century or so.
Actually, I'd argue it doesn't matter what the minimum wage is. Today we see that the minimum wage just means a lot of people aren't working, and if you dropped minimum wage and gave them something to do hourly for pennies they still would have nothing.
If you raised minimum wage, you would just drive McDonalds to automate away more of its menial jobs and make Walmart replace all the cashiers with self checkouts, which I think is good (eliminate the useless wastes of peoples time) but it doesn't mean more people are employed for labor.
The real issue is that the distribution of economic resources has been direly concentrated in very few for 30 years, and they are now the predominant drivers of economic activity because nobody else has any prosperity anymore. It is a compound effect that the people with the money to hire and employ others have nothing to hire or employ them for, and thus they don't, instead they push their money into avenues that make profit off of regulatory exploitation rather than productivity (big banks & the fed, fortune 500 investments, lobbying for monopolies to get artificial markets).
The problem with increasing minimum wage is that the more you increase it, the more incentive you give a company for further ramping up mechanization even though the initial costs are generally high upfront.
I see a lot of peripheral discussion - But what do you think about the article? As an investor, I see the proposed solution as very interesting. I feel as though there is no reason that the funding effort cannot be entirely crowdsourced for a company trying to raise funds.
As an investor, how many of these dropouts would you like to hire at one of your startups tomorrow morning?
I don't really understand which solution you're pointing out as a candidate for crowdsourcing. Microloans are as much of a solution as pawn shops, to be brutally honest.
There is no market demand for unskilled labor at $7.25 an hour. Even if you removed minimum wage laws, you would still need to pay people enough to eat and stay functional in the workplace, which nowadays I imagine isn't much lower than $7.25, especially considering the only practical unskilled labor roles today are physical toiling, since almost everything else can be very easily automated away, so you need to fix their broken bones.
So I'd argue the open market in the US don't have enough demand for physical human labor at the bare minimum cost to keep people alive. The consequence is a lot of people are just not working. We have nothing for them to do at the given price that anyone is willing to pay.
So if the market has no unmet demands for toil, then guaranteeing a minimum wage job means you are wasting that persons time on some task that nobody needs done, at least not for the price he is paid, and you are not only biasing away the labor market you are wasting that persons time on some task that isn't valuable to be done.
Even if you have some market demand, the given rate is dropping annually due to the cheaper and more efficient automation of physical duties. I guarantee you once automated vehicles are entering the market and are legally allowed, there will be an absurd displacement of menial labor driving delivery trucks.
Other industries rife for that kind of displacement are farming (considering most farming tasks are procedural, automated farming machinery is practical, even if it needs high precision to harvest using computer vision), retail (with automated vehicles, you might as well buy all your goods online, shipped directly to your home, with no need for an intermediary store except in rare conditions like furniture and cars where you want to "sample" in person the goods), and construction (if you plant factory made homes, might as well build a foundation machine to excavate and lay a foundation without human intervention).
And then you have no use for human meat sacks moving their arms. We are already approaching that - it is why this problem even exists today. What happens when we get there?
Humans are not ready for the post-work era, and probably won't be for a few generations. When there truly is no more need for actual labor to make the world run, humans will have to reform their notion of "unemployed". As of now, we define people based what they give to the world, and so far the easiest way to measure that is through work. That's why it's such a huge deal that our unemployment rate is high, we have these immense conceptual blocks that we'll need to shed for the post work era.
In the mean time, we have to accommodate the current generations of people by subsidizing work. It's the only way to sustain our current paradigm and give people livelihoods, instead of leaving them desolate in the transition phase with callous explanations of technological progress.
You're describing a situation where most of the economic work of producing the necessities of human life can be done by robots (food/clothing/shelter/electricity/transportation of those goods to the humans that need them).
When that happens, the human race will be able to retire -- communism / Basic Income will actually work in that world, everyone will be able to get the necessities of life, and the small proportion of people who are willing to work for fun, or unnecessary luxuries that aren't necessary for survival, will be very small compared to today's pool of human labor, but still enough to maintain the robots and do the remaining jobs that robots can't do.
Offering money to drop out of high school would cause the drop out rate to increase further. Besides, I get the feeling that most high school drop outs aren't really looking for work. This is a hard problem to solve.
The money would be unconditional, not in exchange for dropping out of high school. You may as well say that soup kitchens are offering soup to drop out of high school and are causing the drop out rate to increase further.
It has some advantages over more traditional welfare systems. For instance it could be implemented with far less bureaucracy and would help improve labor mobility in the middle class by decreasing the friction of changing jobs and moving to different areas with better jobs (improving labor mobility would benefit the economy at large).
18 is probably too old. We want the child support handout to be separated from the parent as early as possible. Giving 12 year olds their own income is probably better than either welfare queens or fertility police.
If you are an economist (a field is already more an ideology / spin machine than science -- the science part in it is basically math), and you are more into entertainment (e.g making the NYT best selling list of shallow books) than science, then you can "prove" a lot of things, without actually proving anything.
Start with a few unexamined wrong assumptions, select the data that fit your conclusion, dress them up with anecdotes and prose, and there you go!
Originally, I was born in Fresno, CA. We didn't have the most healthy job rate when times were good, let alone once the recession hit. I spent five years looking for a job- and didn't find one until I got the help of a friend online in Claremore, Oklahoma, who let me move in. In a month I was working at an auto parts store, even though I knew jack shit about cars. I was making enough that I could've survived with that job. I'd be poor, I couldn't go to college, but I could survive.
I was lucky enough that I had a nice computer I'd gotten from when there was a windfall in the family, and I'd taught myself to program enough Python and Django to get a webdev job remotely. But even if I hadn't, I could've survived on this. Getting me out there cost a grand total of perhaps ~$1500, at most, and that'd get me my first month's rent. Tack on another $1000 and I'd have 3 months rent total and enough leftover to get a cheap bed.
Is this economically feasible? Would it even provide good economic value? People are needed in these rural areas, but I just don't know if it'd provide enough economic reward to actually be worth it to the country.