The Small Business Solution to the Youth Employment Crisis
Despite the economic recovery, young Americans continue to face significant challenges to gaining a foothold in the labor market. As of early 2015, the unemployment rate for youth ages 16-24 was more than 12 percent. This is more than double the national average—and precedent suggests that, in the absence of strong intervention, the trend will continue. In the past 45 years, youth unemployment rates have dipped below 10 percent only once.
There’s growing recognition among decision-makers, academics, and practitioners of the role that the private sector can play to reverse this longstanding issue. And already the field is responding—last year, the federal government introduced employer engagement incentives in the new Workforce Investment Opportunities Act, and companies themselves announced commitments to youth in public forums like the Clinton Global Initiative and the World Economic Forum.
“In the past 45 years, youth unemployment rates have dipped below 10 percent only once.”
Moving forward, we’ll need innovation to address the complex challenge of youth employment and unlock new opportunities. Here’s where small businesses come in. The small business community has a long-standing and well-deserved reputation for innovation. Due to their size, these businesses tend to be nimble and well-positioned to experiment with new strategies and approaches. They are also powerful engines of growth and opportunity. With more than 23 million small businesses nationwide, this community provides upwards of 55 percent of all jobs and contributes significantly to new job creation in the U.S.
These factors put small businesses in a unique position to create, test, and adapt strategies that reduce the unemployment hardships faced by our nation’s youth. Over the course of the last year, the Economist Intelligence Unit (EIU), with support from The Rockefeller Foundation, searched the nation for small businesses doing just that. We found an impressive and expansive cohort of employer champions who are changing business practices to benefit youth and their company’s bottom line. With a board of expert advisors, convened by EIU, we identified distinct innovations with the greatest potential for replication and scale, and selected three small business leaders to honor for their efforts in the space. Their stories are featured in a series of case studies and short films designed to highlight best practices in youth hiring.
In the year ahead, The Rockefeller Foundation will support local business networks to share these findings for adoption or adaptation across the small business communities in New York, Chicago, and Portland, Oregon. Drawing on the community’s strengths and continued enthusiasm for taking action on this issue, the Foundation and its partners look forward to working with small businesses to address the youth employment challenge.