News Article

PYN News Article

Working Poor and Young Hit Hard in Downturn

Category: PYN | Nov 1, 2008

PHILADELPHIA — Harvey Shaw’s plans to move out of his parents’ house, finally, have been derailed. With a high school degree obtained belatedly at 21, he had held a full-time job for 26 months as a detailer at a car dealership here, sprucing up new and used cars.

“They said they were cutting back and replacing me with part-time workers.”
Had a full-time job as a detailer at a car dealership

But in early October, Mr. Shaw, now 24, recalled, “I came back from vacation, and they said they were cutting back and replacing me with part-time workers.”

Labor experts say the hardships of the gathering recession are sweeping down to hurt the working poor and younger job seekers most of all.

From the fall of 2007 to this October, the share of 16- to 19-year-olds working fell by 8 percent, the largest decline of any age group, and the outlook for youths and low-skilled workers in coming months is bleak, economists say, with the industries most apt to employ them, like home-building and retail sales, taking steep dives.

On Friday, the Bureau of Labor Statistics reported that 240,000 jobs disappeared in October alone, bringing the unemployment rate to 6.5 percent. But construction, for example, had the highest unemployment rate of any industry: 10.8 percent, compared with 6.1 percent a year ago, leaving entry-level applicants in the cold.

“Low-income people are the big losers when the economy turns down,” said Andrew M. Sum, director of the Center for Labor Market Studies at Northeastern University.

With jobs scarce, many college graduates find themselves taking jobs that do not require a degree, and laid-off middle-income workers are taking lower-paying jobs in areas like retail sales. A kind of domino effect is beginning to squeeze out the least skilled or experienced workers — those already on the bottom of the ladder — who are settling for part-time employment and fewer hours if they can find work at all. Hardest hit of all are younger job-seekers, especially black males in their late teens or early 20s without more than a high school education.

Among those ages 16 to 19, access to part-time jobs, full-time jobs and summer jobs had already declined through this decade, and by last month only 31.4 percent had held some sort of employment. In the year ahead, Professor Sum predicted, “The teens will be thrown out of the labor market at record levels,” often causing hardship for poor families and causing youths to miss experience that, studies show, will gain them better jobs in the future.

Like Mr. Shaw, Kyuana Everett, 21, earned her high school degree at the YouthBuild charter school here, which helps dropouts complete high school and seeks to prepare them for a trade or higher education.

“I’ve tried for everything, retail sales, office work, but the employers all say they have too many staff and they’re not hiring now,” Ms. Everett said. “McDonald’s was the only place that would take me, but only part-time,” for $7.25 an hour.

Ms. Everett cannot afford to rent even a room, and stays secretly with her grandmother in a home for the elderly. She hopes to get a scholarship to a technical college for training as an electrician.

The one age group whose employment rate climbed over the last year was people over 65, who are starting to take the part-time and retail jobs once dominated by students and younger high school graduates, Professor Sum said.

A recession takes its largest tolls not only on the young but also in cyclical industries like construction, manufacturing of durable goods, retail trade, hotels and temp agencies — traditional avenues into the workplace for the less skilled.

The crash in construction jobs is most acute in housing, which tends to use a greater share of inexperienced labor than commercial construction does, said Ken Simonson, chief economist for the Associated General Contractors of America. Looking at economic projections, Mr. Simonson said, “I’d expect even more of those low-skilled jobs will be lost.”

Here in Philadelphia, Michael Stepnowski, who runs a small construction company mainly doing office renovations, has had to lay off four laborers in the last year, to a remaining staff of 17, because of declining contracts. “We’re worried about future business volume and jobs,” Mr. Stepnowski said. uth Transition Funders Group.
On Thursday, most of the country’s major retailers, another major source of jobs for people without college degrees, reported annual sales declines of more than 10 percent and in some cases more than 20 percent, translating into enormous job cutbacks. Last Monday, Circuit City announced it was closing 155 stores and eliminating more than 7,000 jobs.

YouthBuild, which runs school and training programs around the country, has tried to adapt to the changing job market, not simply giving young people a high-school degree but helping them prepare for fields with a future, meaning technical schools or community colleges for some, four-year college for others.

But transitional jobs, to sustain graduates as they train, are harder to find. Miguel DeJesus, 21 and a graduate of the charter school, has two small children and plans to marry their mother soon, and his goal is to work while he gets certified in building maintenance.

In recent months Mr. DeJesus has been applying to retail stores and fast-food outlets, poring over classifieds and Craigslist and walking into places cold to inquire. But everywhere, he said, he is told that, far from hiring, employers expect to lay off workers.

“I have to put school on hold while I find a way to support my family,” Mr. DeJesus said. “If I could get a job anywhere now I’d be grateful.”

Low-income women with children can face particular challenges. Kristin S. Seefeldt, a sociologist at the National Poverty Center at the University of Michigan, has closely followed 43 low-income women since 2005, and as expenses have climbed while work hours declined, many have survived by building up large debt on credit cards and to utilities, where they make minimum payments to keep the heat and electricity from being turned off, but are unable to chip away at balances of several thousands of dollars.

Several of the women have temporary nonunion jobs with the Detroit area’s remaining auto-parts manufacturers. The jobs provide no benefits or security but may pay $12 an hour, as opposed to $8 in fast food or sales. With the auto industry in crisis, Ms. Seefeldt said, “the women are really concerned that the companies will go under and they’ll lose these jobs.”

Fred Davie, president of Public/Private Ventures, a group in Philadelphia that develops and studies antipoverty programs, said that as the federal government considered new stimulus measures, it could help the poor as well as the economy by investing in construction and increasing cash benefits for the needy, who will spend the money immediately.

“The new administration will have to think several levels down the ladder,” Mr. Davie said, “so the government invests not only in the top but also in infrastructure jobs and training for low-income people to get some of those jobs.”

PYN, Inc.  
400 Market St.
Suite 200
Philadelphia, PA 19106