The U.S. would earn $55 billion more in taxes if one particular generation worked.
If the 4.6 million members of Generation Z — those born in the mid-1990s to early 2000s — who aren’t working or in school joined the workforce, they’d each generate $11,900 per year in federal tax revenue, according to a study released Tuesday by Measure of America, a nonprofit initiative of the Social Science Research Council in Brooklyn, N.Y. The U.S. economy would see more in taxes, as well as spend less in public benefits, according to the report.
By the time they’re in their 30s, young adults who worked or were in school during their younger years come out ahead of their non-working or non-educated counterparts.
By the time they’re in their 30s, young adults who worked or were in school during their younger years come out ahead of their non-working or non-educated counterparts, the study found. The former group earns $31,000 more per year, are 45% more likely to own a home, 42% more likely to be employed and 52% more likely to be in good or excellent health, according to Measure of America’s findings.
Those who don’t work or go to school — referred to as “disconnected youth” in this report — don’t fare as well. And even those who do go back to school to get their General Educational Development (GED) degree don’t tend to do as well as those who stayed in school or started working during those critical adolescent years, said Rebecca Gluskin, chief statistician and deputy director of Measure of America.
Being a disconnected youth is not uncommon. More than 12% of young people between 16 and 24 years old are not working or in school, according to MDRC, a nonprofit economic research organization based in New York City and Oakland, Calif. and formerly known as Manpower Demonstration Research Corporation. “People think of disconnected youth as a cost to society, but a better way to think of them is as an untapped resource,” said Kristen Lewis, director of Measure of America. “These are young people who in time can be paying taxes and buying houses.”
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The employment rate for teenagers between 16 and 19 years old dropped to 29% in 2014 from 35% in 2008, according to Brookings Institution, a liberal think-tank in Washington, D.C. “While most teens do not need to work to support themselves or their families, the decline raises concern in some quarters that teens are missing out on opportunities to learn new skills and gain experience and contacts that will improve their job prospects later in life,” the Brookings report said.
Some teenagers simply don’t want to work — at least not in traditional jobs found in an office. A fifth of teens surveyed by Chicago-based market research company C+R want to be athletes, artists or entertainers. Health care came in second. Summer jobs, which teens usually flock to between school years, haven’t come easy this past year, but young adults also aren’t looking. The labor-force participation for teenagers was 35% in July, compared to 53% for the same age group in 2000.
Females are more likely to be disconnected than males, partially because women are more likely to leave school or work to care for children or the household.
Others don’t have the opportunity to work. Females are more likely to be disconnected than males, partially because women are more likely to leave school or work to care for children or the household. White youth are also almost half as likely to be disconnected as black youth, and the former sees that rate decline over time. A majority (65%) of disconnected youth grow up poor, and young women who are considered disconnected are four times more likely to have a child than their non-disconnected counterparts, Lewis said.
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Disconnected youth typically live in areas with above average unemployment rates, including Detroit, Philadelphia and Baltimore, and stop going to school after high school, which limits their career advancement prospects, according to Brookings.
If these young people did work, some cities would see greater gains than others. The Los Angeles metro area could take in more than $610 million a year from taxes generated by disconnected youths, and Atlanta could see an additional $155 million, the latest analysis found. Washington, D.C. could potentially earn more than $270 million.
Some cities have launched initiatives to encourage these young adults to work. New York City implemented the Young Adult Internship Program, now called “Intern & Earn,” for people 16 to 24 years old who are not enrolled in school, not employed and don’t hold an associate’s or bachelor’s degree. Between July 2013 and March 2014, nearly 2,700 young adults were assigned to the program, and 86% completed it during that time frame, according to a 2017 MDRC analysis.
The New York City teenagers were also more likely than others to work in the year after their assignment compared to a control group that did not receive these benefits, and were earning higher wages than the control group. Eventually, the employment rate for the group of participants and the control group converged, but former interns continued to see higher earnings than their counterparts, suggesting they had better-paying jobs, the analysis found.
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