"Outrageous behavior, also known as the lunatic fringe, is the seed bed of innovation and creativity."The other day I had the rare opportunity to speak to my councilor. Needless to say I wasn’t heartened. Instead of hearing me out, I was placated and plastered with all the JLP party had been doing, and not much listening to us about what needs to be done. He also went on to elaborate about youth and employment, which he had a rosy and glowing portrayal of the situation. However that is when dissonance crept in… what I have been seeing is not a massive employment sweep for youth but a growing trend sweeping the youth and the most vulnerable to the edge of society and to the brink of existence, a place close to poverty and a life as vagabond or vagrant. Young adults today earn half of what they would have made 20 years ago. The labor market problems of young workers are disproportionately severe; they include higher than average unemployment and relatively low earnings when employed and this does not bode well for our future.
~Joel Salatin
Since the late 1970s, social science researchers, the media, private foundations, and policymakers have directed considerable attention to the labor market problems of young adults and their families. It is noted that there has been sustained drop in earnings which has especially dramatic for young adults with no postsecondary school education. Most proposed remedies have emphasized the quality of the labor supply. But improving education and training, while often worthwhile and necessary, is not by itself sufficient to raise earnings. If this downward trend, which has persisted through recession and recovery alike, is to be reversed, then policymakers and educators must address the demand side as well as the supply side. Raising young adult wages will require not only better academic performance, training, apprenticeships, and school-to-work programs, but also full-employment policies, changes in the configuration of jobs and careers, and larger young adult union membership.
ECONOMIC ADOLESCENCE
The steep downward trend in the earnings position of youngsters has lengthened the period of "economic adolescence," during which young adults are working but not earning enough to be economically self-sufficient or capable of supporting a young family. This development has, in turn, had a number of damaging consequences for young men and for society at large. Among the effects of this protracted adolescence are:
- a sharp increase in the age of first marriages;
- lengthier stays in the homes of parents;
- a rise in young single-parent families;
- reduced economic support of children;
- the increased economic attractiveness of drug sales and other illegal activities;
- the sustained rise in the numbers of young men incarcerated in jail and prison.
For wages to grow on a sustained basis, workers’ productivity must rise, meaning they must steadily produce more per hour, often with the help of new technology or capital. Further, workers must receive a consistent share of those productivity gains, rather than seeing their share decline. Finally, for the typical worker to see a raise, it is important that workers’ gains are spread across the income distribution. If wages are rising but the increases are all going to the best-paid workers, the typical worker doesn’t see a gain. Two of these conditions have not been met, which explains the fact that productivity has risen while the median wage has barely changed.
Assigning relative responsibility to the policies and economic forces that underlie rising inequality or declining labor share is a challenge. International trade and technological progress have played significant roles, putting downward pressure on the wages of low-skilled workers. For example, as imports from low-wage countries made inroads into the manufacturing sector, job losses in Jamaican manufacturing were substantial in some areas. At the same time, local manufacturing has learned to produce more with fewer workers. Both developments generated widely shared benefits in the form of new products and lower prices, but also led to dislocation of some workers and downward pressure on less-skilled workers’ wages.
We also know that educated workers have fared better; the wages received by those who finished their education with a four-year college degree grew. While increasing educational attainment has helped to raise wages for many workers, it remains the case that the majority of Americans have not completed a four-year degree. Hence, domestic policy choices have mattered, too, especially because they have affected workers’ bargaining power and the allocation of wages across different workers, examining the bargaining power of a Freezone worker, little to none.
It took many factors — some the result of deliberate policy choices, some the outcome of broad economic processes — to produce decades of wage stagnation for the typical worker. Similarly, it will take many incremental reforms and new policies to reestablish the conditions that support robust, broadly shared wage growth. There is no single wage growth panacea, but many policies would help, including: raising the minimum wage; increasing worker bargaining power; ensuring adequate labor demand through looser fiscal or monetary policy; increasing dynamism through pro-mobility or entrepreneurship policies; and making broad improvements to education or productivity policies. Given the longstanding trends and limited improvements in living standards for many workers, taking action to increase wage growth is one of the most important policy imperatives we face. If we don’t create solutions soon we will soon see many in our social circle continue to be pushed to the edge...
About the author: Yannick Nesta Pessoa B.A. is Jamaica’s first blogger, a Community Activist and Law Student . Follow Yannick on Twitter at @yahnyk | yannickpessoa@yahoo.com
