A Public and Private Partnership

By Susan Tifft

Aided by a tax break, business works to create jobs for youths

It looked like a cleanup crew's nightmare: a noisy throng of students brandishing cans of bright-colored spray paint on San Francisco's Civic Center plaza. The youngsters were not vandals, however; they were job seekers. It was the city's third annual Paint-In, and the resulting graffiti, scrawled on large white placards destined for the municipal bus fleet, beseeched Bay Area businesses to participate in Mayor Dianne Feinstein's summer jobs program, aimed at the city's approximately 15,000 out-of-school and out-of-work young people. And for one young painter, the day produced more than urban art. Tai-Li Wang, 17, author of a design praised by a celebrity panel, won a summer graphics job at a local advertising firm. Her slogan: "We Are Your Hope. You Are Our Dream."

Like other cities, San Francisco, with a youth jobless rate hovering between 22% and 24%, is struggling to cope with this summer's teen-age unemployment problem. "Even with all the efforts we're making, that figure doesn't seem to get lower," says Steve Arcelona, an assistant to the mayor for employment and training. The city of Dallas estimates that less than 50% of some 10,000 teen-agers looking for work will find any this summer. Already a record number of teens have signed up with the city's summer-employment program. Says Barbara Blackburn, coordinator of the summer-jobs program in Portland, Ore.: "The need is great; it just breaks my heart."

It's summertime, and the job finding is definitely not easy for the estimated 2.3 million teen-agers who temporarily tumbled into the labor force between April and July of this year. The budding recovery has whittled the nation's civilian unemployment rate to 10%, an .8% drop from last December. For 16-to 19-year-olds, it dropped .9% from December, to 23.6% in June. Embedded in the teen-age jobless rate is a harsh 50.6% toll on black youths.

The stagnation has several causes. While federal funding for summer jobs has remained at virtually the same level since the last year of the Carter Administration, the total number of jobs created has fallen from 822,700 in fiscal 1979 to 683,000 in 1982. Two major culprits: high inflation during those years and a hike in the minimum wage from $2.90 in 1979 to $3.35 two years later. To help counter such factors, the Administration plans to spend $819.5 million for 813,000 jobs, 140,000 more positions than last year.

Most significantly, the Reagan Administration, which has lobbied unsuccessfully for a subminimum youth wage for years, has come up with a powerful way to make teen-agers attractive to business. Beginning this summer, firms hiring economically disadvantaged youths,* age 16 or 17, get a tax credit for 85% of the first $3,000 in wages paid out between May 1 and Sept. 15. "An employer can hire a young person for as little as $262 for the entire summer if he applies the tax credit," declared Albert Angrisani, Assistant Secretary for Employment and Training in the U.S. Department of Labor. In fact, at the minimum wage a business is in effect paying a youngster at the old-fashioned rate of 50-c- an hour.

The tax break has already had a discernible result in some localities. In Houston, most of the firms checking in with the city's summer youth-employment program specifically request a referral to a tax credit-qualified worker. "It's an incentive program that has done incredibly well," says Program Manager Julia Steinman. The credit is especially helpful to the small employer. "It means you don't have to take a bath if the kid doesn't work out," says Terrence Brown, whose Philadelphia-based architecture and planning firm hired four teen-age boys interested in the building trades. Says Fred Kleisner of the Greater Washington (D.C.) Board of Trade: "What it tells the private sector is that the Federal Government is willing to give them an incentive to put a youngster to work this summer for the price per hour of a cup of coffee."

Several states have added sweeteners of their own. Florida offers a 25% break on state corporate income taxes for businesses hiring low-income summer workers. Michigan, suffering from a 23.4% youth unemployment rate (38% in Detroit), passed a 15% tax credit that, when combined with the federal version, allows employers to write off up to 100% of a youth's wages.

Such tax credits have added to a growing momentum of corporate concern. A Conference Board survey of 176 large corporations found that fully 70% participated in some kind of summer-employment project last year. "Summer jobs are not charity," asserts George Weissman, chairman of Philip Morris Inc. and head of the Summer Jobs '83 program in New York City, where there are about 250,000 jobless teen-agers (40% of whom are blacks or Hispanics). "Unemployment is bad for business--more jobs mean greater consumer purchasing power." The New York program has already placed 11,000 low-income youngsters in large firms like the Metropolitan Life Insurance Co. Similar private programs are thriving in cities as economically diverse as St. Louis, Cleveland, Baltimore, Detroit and Los Angeles. In Tampa, Baseball Stars Johnny Bench, Pete Rose and Lou Piniella, as well as other celebrities, have pitched in, appearing in TV commercials to promote summer jobs for teenagers. The Boston summer-jobs program, a coalition of 187 businesses, in conjunction with local schools, teaches "job readiness" skills like how to dress for work and prepare for an interview.

Many businessmen feel that a private-sector summer job gives a teen-ager more meaningful training than its government equivalent does. Says Ted Bruinsma, president of the Los Angeles Chamber of Commerce, which has co-sponsored "First Break--Give a Kid a Job" for ten years: "This is a teen-ager's first glimpse of the business world. We want the experience to be a real one."

--By Susan Tifft. Reported by Ann Senuta/San Francisco and Janice C. Simpson/New York

* Defined as those whose families have an income at or below the poverty line.

With reporting by Ann Senuta/San Francisco, Janice C. Simpson/New York This file is automatically generated by a robot program, so viewer discretion is required.