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One Major Missing Link to Solving Youth Unemployment: Corporations

With a pledge to hire 100,000 young people, Starbucks and a slew of other business giants are taking up an important torch.

A man carries a Starbucks logo sign after a corporate event. (REUTERS/Carlos Barria)

Starbucks has had its share of social-justice PR fails this year. But when it comes to hiring disenfranchised Americans, the coffee giant does put its money where its mouth is.

CEO Howard Schultz announced Monday that Starbucks would be leading the 100,000 Opportunities Initiative, a move by some of the nation’s largest corporations to hire 100,000 Americans, age 16-24, who are not currently employed or in school. USA Today reports:

Schultz, who pledged this year to hire 10,000 such youth by the end of 2018, is being joined by top executives from 16 companies who will look to hire young people for apprenticeships, internships and part-time or full-time jobs.

In addition to the Seattle-based Starbucks, Alaska Airlines, Cintas, CVS Health, Hilton Worldwide, HMSHost, JCPenney, JPMorgan Chase, Lyft, Macy's, Microsoft, Porch.com, Potbelly Sandwich Shop, Taco Bell, Target, Walgreens and Walmart have signed on. The coalition is looking to recruit more companies to join the push.

There are at least 5.5 million “disconnected youth” in the country—a number that grew dramatically during the recession. Many will have already faced homelessness, incarceration, or abuse in their short lives. Young men of color are significantly more likely than other groups to fall into this population, and to face scarring long-term effects. A young person who is out of school and unemployed for a long spell has greater odds of future unemployment, and can lose future income by large marginsup to $22,000 over the following decade, according to one estimate.

There’s been high-profile action around this issue by federal and local government. In 2014, President Obama passed the Workforce Innovation and Opportunities Act, a major reform to federal workforce programs that partly targeted at-risk youth. The White House Domestic Policy Council highlighted the need to engage that same population with “My Brother’s Keeper.” Meanwhile, a number of cities from Los Angeles to Chicago have relaunched their summer jobs programs for at-risk youth since the recession.

Starbucks, too, has been making moves. In 2013, it pledged to hire 10,000 disconnected youth into permanent positions with the company and their supply-chain partners. To do so, it established LeadersUp, an intermediary that works with nonprofits and local governments to identify candidates that match the profile. Last year, Starbucks also launched a program to help employees finish college, with totally free or heavily discounted online courses from Arizona State University.*

Corporate social responsibility campaigns can raise eyebrows, and rightfully so. Nobody wants a faceless, for-profit entity determining what disenfranchised people need. And too often, actual needs conflict with profit margins. Shouldn’t that work be left up to the public sector?

When it comes to providing meaningful work to disconnected youth, the answer is no, not entirely. Whether driven by nonprofits or local government, youth jobs programs have long faced a major problem: a low supply of the right kind of corporate contacts.

While public youth employment programs may excel at providing enrichment or training, Martha Ross, a fellow with the Metropolitan Policy Program at the Brookings Institution, tells CityLab via email:

They don't necessarily have strong ties to employers and their labor force/skill needs. Developing and maintaining relationships with employers and understanding industry dynamics require staff time and expertise, which can be hard to support in programs with tight budgets.

If you don’t know of enough companies that really want to employ your large pool of youth, you’re going to have a problem. By the same token, those partner companies need to be prepared to provide adequate supervision and meaningful work to incoming young people, who might not have a lot of prior experience.

Eshauna Smith is CEO of the Urban Alliance, a non-profit that connects at-risk youth with year-round internships, training, and support in Washington, D.C., Baltimore, Northern Virginia, and Chicago. She sympathizes with municipal jobs programs that struggle to match their youth to dedicated employers at a large scale.

“When you’re trying to identify productive opportunities for 20,000 young people with local funding and not enough external partners, you can get desperate,” says Smith. While those young people might get jobs, they might not get anything out of them: “They might be sitting there without anything to do, or maybe they’re filing or calculating something but don’t know why it’s important.”

Smith calls the 100,000 Opportunities the “ultimate prize” for the youth employment advocates: These corporations have made a large-scale, public commitment to fund learning-based job opportunities. They’ll fill those 100,000 slots by working with intermediaries like LeadersUp, which helps ensure meaningful experiences for their new employees.

USA Today reports:

To launch its first hiring burst in the campaign, the coalition chose a city where the plight of disconnected youth has been on the forefront of policymakers' agendas.

That city is Chicago, which has some of the highest rates of youth disconnection in the country: 24.5 percent and 13.9 percent of black and Latino youth, respectively. Mayor Rahm Emanuel has been fundraising hard to address the issue. And though Chicago has found itself in many a queasy tangle with corporations since Emanuel took office, 100,000 Opportunities should be a for-profit partner the city can feel good about.

*This piece has been updated to include information on Starbucks’ employee college program, which was the subject of The Atlantic magazine’s May 2015 cover story.

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