February 15, 2012
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For years, Year Up has understood that the return on its investment in young adults was not purely measured by the incremental income that our graduates are able to earn and the taxes they will pay. Surely, the avoidance of negative costs (social welfare, prisons, lost productivity, etc.) is also something we should include in answering the question, “What is the value of Year Up?” However, much as we tried, we were not able to obtain accurate and convincing data to quantify the savings to society by enabling a “disconnected” young adult to gain access to a livable wage job and a post-secondary education. We did not want to cite “soft” data that could be questioned, ultimately weakening the proof of our model. We were content to rest purely on the external causality study conducted by Economic Mobility Corporation, which concluded that Year Up raises the wages of those who go through the program by 30% compared to control group.
Imagine the smiles across our faces at Year Up when we read the article in the Atlantic about the cost of jobless youth to taxpayers. I almost ripped the cover page of the magazine trying to find the article in question. The numbers are eye-popping! Each jobless youth costs taxpayers $14,000 per year, costing us more than $437 billion over the next five years and $1.2 trillion over their lifetime. Have a read through the article and the data – the claims are justifiable and coherent, and the implications are massive. In a time when we have to get our economy back on track and reduce the debt burden that exists in our nation, we can save ourselves half a trillion dollars, AND do something to reduce economic inequality. Sound too good to be true? It isn’t.
The fact is that we will pay for rising numbers of disconnected young adults in our nation whether we like it or not. The only question is how you want to invest your money. You can do it on the front end by providing people with access, opportunity and support to realize their potential and enable them to become taxpayers and productive citizens; or on the back end in lost taxes and productivity, higher social welfare costs and higher costs for the criminal justice system. The choice is ours to make, and it is a real choice.
David Brooks talks about this choice in his recent article about Charles Murray’s new book, Coming Apart, and ends by correctly encouraging the top 20% to spend some more time with the bottom 30%. Brooks is encouraging us to look ahead and to recognize that the current path down which we are going hurts our long-term economy, increases our level of inequality and reduces mobility. Ultimately, it poses a threat to our civil society, and tears at the very fabric of our democracy.
The good news is that we can do better – putting our youth to work is better for our democracy and better for our economy. One and one can equal three, and in this case it might just equal a trillion!