With unemployment soaring, Andy Sum, director of Northeastern University’s Center for Labor Market Studies, is in high demand by the media. The center analyzes trends in state and national labor markets, and workforce development. Professor Sum shares his thoughts about the job outlook and discusses a new, disturbing report that shows teens to be dropping out of high school at higher rates.
Many say that the class of 2009 is entering one of the worst job markets in the last 50 years. Is this true?
Yes, the current economic recession has generated a larger increase in the overall unemployment rate than in any of the preceding 10 recessions since the end of World War II. Since the beginning of the recession in December 2007, the unemployment rate has jumped by more than 4 percent, to 8.9 percent in April 2009, the highest unemployment rate in the past 26 years.
Which industries have been the hardest hit by this economic downturn?
Nearly all major private-sector industries, with the exception of utilities, health care, education, and social services, have experienced substantive payroll job losses. The industries with the largest relative job losses have been construction, manufacturing, transportation and warehousing, retail trade, and business services, especially temporary help and labor leasing.
Do you see things improving over the next year or two, or will this take more time to turn around?
National economic forecasters, including the Federal Reserve Bank and most private forecasting firms, have projected that the recession will come to an end in the late fall of this year. However, the average economic projection for 2010 is a very low growth rate in the nation’s output of only 1.4 percent, which is not large enough to generate any increase in employment next year.
There is another disturbing trend that you’ve been tracking. According to a new Center for Labor Market Studies report, an increasing high-school dropout rate in the United States is causing us to fall behind other developed nations in terms of education. How did this happen?
The United States was a world leader in its high-school graduation rate until the 1980s, when we began to lose ground to many nations in Western Europe, Canada, Japan, Australia and New Zealand. Lack of policy attention and poor national measures of graduation rates were partly responsible for our lack of progress.
What are the long-term costs of not having a high-school diploma?
For individuals, they include lower employment over their working lives, considerably lower annual earnings, less access to employee benefits, including health insurance and pension coverage, a much higher incidence of poverty and lower wealth. For society, losses include less real output, greater marital instability, lower federal, state, and local tax receipts, and higher rates of incarceration in jails and prisons.
Which states have been hardest hit by the dropout problem?
The dropout problem is fairly widespread in large cities and some rural areas. In our study of 12 large states in the United States, between 19 and 22 percent of 16- to 24-year-olds in Georgia, Florida, Texas and North Carolina did not have a regular high-school diploma.
What changes need to be made to curb this trend? How will we re-enroll and re-engage these former students?
We need to focus on expanding dropout prevention and re-enrollment strategies aimed at bringing existing dropouts into alternative high school settings to earn their diplomas and gain access to employment, job training and mentoring services. Some school districts, including Philadelphia, have opened “re-enrollment centers” that have employed specialized support staff to help dropouts transition back into traditional high schools, alternative high schools, and GED programs.
Even in Massachusetts, which has one of the highest concentrations of college graduates, 60 percent of all adults don’t have bachelor’s degrees. Is there room in our society for people without a college degree to succeed?
Male high-school graduates [without a college degree] have experienced earnings losses due to the continued decline of well-paid manufacturing jobs and blue-collar positions in other industries, and the steep drops in the number of unionized jobs. High-school graduates, however, do benefit from strong cumulative work experience, a solid base of literacy and math skills, and access to formal training and apprenticeship training at the workplace.