A Research Focus of the Urban Institute
The Urban Institute has examined jobs programs and policies since the late 1960s, through many economic cycles.
About the Issue
Although the economy is growing at a solid rate, workers' wages have stagnated. After five years of tax cuts, one million more people are officially unemployed. Consumer spending is up, despite scant disposable incomes, pushing the savings rate to the lowest level since the Depression. Behind these confusing economic signs are the nonpartisan analyses provided for decades by Urban Institute researchers.
The Urban Institute evaluated four major government departments, including Labor, nearly 35 years ago, pioneering a model that researchers here still follow. Urban Institute experts provided facts on how early welfare reform put single mothers into the workforce, heralding some success with the new policies. More broadly, we tracked how unskilled workers fared in the 1990s boom.
Then, as employment losses mounted early in this new century, long-term unemployment insurance was re-examined in UI briefs. Welfare leavers and their outcomes were recounted, and ways to measure job growth, or decline, were developed.
What's New
Two new books from the Urban Institute Press tackle the thorny question of why so many disadvantaged young men don't get the boost they need in school, in the workforce, and in life.
Peter Edelman, Harry J. Holzer, and the late Paul Offner, in Reconnecting Disadvantaged Young Men, present policies to improve the educational and employment prospects of 2–3 million youth ages 16–24 who have been out of school and the labor market for over a year. Black Males Left Behind showcases the research of 17 leading scholars and gives policymakers a starting point for addressing the problems of young black men with limited education.
As part of a larger Urban Institute collection on After Katrina, Harry J. Holzer and Robert Lerman examine "Employment Issues and Challenges in Post-Katrina New Orleans." Several hundred thousand former residents of New Orleans and the Gulf Coast lost their jobs—many will need help transitioning back into the workforce. Holzer and Lerman recommend that the city's rebuilding be undergirded by sound labor market policies.
Many low-income working families today live on health crisis or job setback away from catastrophe. Over 9 million working families with children lead this precarious existence. The Urban Institute's new project on low-income working families has released a series of papers on the risks working families face, how the workplace raises or minimizes those risks, how public programs can address them, and whether state tax and spending choices match families' needs.
First Tuesday: Reconnecting Disadvantaged Young Men
Panelists:
- Peter Edelman, professor, Georgetown University Law Center
- Harry J. Holzer, visiting fellow, The Urban Institute; professor and associate dean, Georgetown Public Policy Institute
- Clarence Page, columnist, Chicago Tribune (moderator)
- Karen J. Pittman, executive director, The Forum for Youth Investment
- David A Reingold, associate professor, Indiana University; former member, White House Task Force for Disadvantaged Youth
On March 7, this panel discussed the millions of young people disconnected from society. While young women have made progress in recent years, young men haven’t. Ten percent of young African-American men and 9 percent of young Hispanic men are disconnected from school and work for a year or longer. Add in the incarcerated, and the rates rise to 17 and 12 percent, respectively. What types of education and training programs might help this group? And, could financial incentives help get these young men into jobs?
Transcript
Recent Findings
Though some low-wage workers manage to advance, many do not.
Evidence exists that employer attitudes toward unskilled workers changed over the 1990s. Employers became more willing to hire disadvantaged workers during the boom, including former welfare recipients and minorities.
However, about 12 percent of U.S. workers earn roughly $12,000 annually—and, they earn as little for at least three years. Nearly half eventually earn more, though many still make an annual salary of less than $15,000. White males enjoy the highest rates of "escape" from this low-wage status. Some women achieve higher wages in such areas as financial services, health care, and education, while men improve in more traditional industries, such as construction, manufacturing, transportation, and wholesale trade.
More men behind bars and stronger child support policies have also contributed to the decline in employment among unskilled youth in the past two decades.
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New welfare policies encourage work and work activity, though not ways to keep the job or advance.
Despite the weakened economy, about 6 out of 10 welfare recipients worked or prepared for work in 2002. Yet, similar gains haven't occurred in job performance, retention, and advancement—the factors that determine wages and benefits and ability to support families and reach financial independence. A survey of about 3,000 employers in four large metropolitan areas found that most welfare recipients who are hired perform at least adequately, though most earn relatively low wages and have limited prospects for advancement. The same survey showed that the employment options for welfare recipients, especially minorities, are limited by lack of demand for their skills.
Because employment is one measure of welfare reform's success, researchers compared two groups—those who left welfare shortly after reform and those who left more recently—and found that employment among welfare leavers fell from 50 percent in 1999 to 42 percent in 2002. Of course, the unemployment rate was 5.8 percent in 2002, compared with 4.2 percent in 1999.
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Several large states are having difficulty financing unemployment benefits.
The rapid recovery from the 2001 economic downturn has meant increased productivity, but little change in employment. As a consequence, the unemployment rate has hovered around 5.4 percent for nearly three years, forcing nine states so far to secure loans to pay unemployment benefits.
The Temporary Extended Unemployment Compensation program pays up to 13 weeks of benefits to individuals who have exhausted regular unemployment benefits. In long spells of unemployment, such benefits help maintain family income and reduce poverty. This program is temporary, so it requires congressional action to continue. One such extension is currently pending in the Senate.
As an alternative, the Bush administration has proposed Personal Reemployment Accounts (PRAs) to pay for retraining and other activities to speed reemployment. Urban Institute research shows that the PRA proposal isn't on the same scale as unemployment benefits, so many long without work wouldn't be covered.
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Publications
