Demos

Crossposted from the EMILY's List Blog.

The State of Young America tells us that the issues plaguing young Americans aren't just bad. They're abysmal. The research project released by DEMOS, details a frightening glimpse into the lives of 18-34 year olds trying to start a life and start a family, particularly young women.

One discouraging fact from the data (page 53): just 11% of all workers had access to paid family leave. When it comes to young women and young families having their first child, a lack of paid family leave can be devastating, and leave new parents no choice but to get back to work right away. Not surprisingly, access to paid family leave depends on job level. If you’ve got the swanky Wall Street job you probably have a greater chance of having paid family leave (17%), where lower wage earners, like those at entry level jobs had a heck of a lot less possibility of paid family leave (5%).

When it comes to child care, you're looking at one of the largest expenses a family often has. Moms already know this, but according to the data, "center-based child care fees for two children (an infant and a 4-year-old) exceeded annual median rent payments in every state" (page 55). And this isn’t just in places like New York City – child care costs for 2 children is more than average rent in all 50 states.

One young mom said, "the lack of affordable child care in California is the main reason my husband had to quit his well-paying full time job. The monthly rate of $900 a month per child for each of our 4 kids exceeded his take home pay. We decided that it didn't make sense for us both to work." More and more children are being cared for by ad-hoc child care arrangements, grandparents or other relatives, or stay at home dads.

We've seen the President take an important step to help many young working Americans, and we must focus on helping young women and families. High child care costs, low wages, and no paid family leave, are all issues women have had for generations. And in a tough economy they don't get better; they get worse.

This blog is part of the Demos/Young Invincibles blog carnival to bring awareness to the economic impact on young Americans.

DEMOS released an important study today "The State of Young America," that tells us that half of young Americans between the ages of 18 and 34 believe that a fundamental tenet of the American Dream is broken. We're seeing this frustration manifest itself across the country with the Occupy Wall Street protests.

A recent article in Business Week remarks that Occupy Wall Street protests are filled with signs about a crushing student debt load. In a widely repeated USA Today report, the total amount of outstanding student loans will reach $1 trillion this year. It isn’t hard to see why so many in our generation might believe the American Dream is no longer attainable.

The Bureau of Labor Statistics shows a clear correlation between high unemployment and education. Those who don’t graduate from high school have a greater likelihood of being unemployed than those who graduate from college. The assumption is that, if you want to get a job, you must go to college. But to go to college, all but the wealthiest students have to take out loans. To make matters worse there’s a widening gap in the hours worked vs. hours paid.

So what do our lives look like? We’ve got to go to school to get a good job but the cost is so high we have to take out loans to pay for it, and the wages are too low to survive and pay back the loans even though we have to work twice as hard.

President Obama recently announced a kind of "student bailout" that will provide forgiveness for loans, provided students work in some form of public service job following graduation. This solution is an important step in acknowledging that education is necessary in today's world of job seeking, but that the costs are out of whack with affordability.

Unfortunately, this is merely a band-aid on the gash that is our economic problems. Our problems persist while our government continues to give tax cuts to the wealthy. Something is broken with the priorities of our policy makers and our business community. How can we succeed as a country when the wealthiest Americans control a policy agenda hellbent on benefiting their bottom lines and not ours?

This is what the death of the American Dream looks like, and those of us who are occupying cities across the country are the idealists who refuse to let it die. As we look forward we must consider that we're a different country than we were 50 years ago, and the solutions that worked then won't necessarily work now. A student bailout is a great quick fix, but we must look for long term solutions to fix the system that is now working against those who just want a shot at making a decent life.

After Craig's piece on youth unemployment this piece in the NYTimes struck me as interesting.

With unemployment on the rise the one thing that is also on the rise is internships for young people seeking experience but not getting paid for it. There is a fine line between unpaid internship and free labor. I'll admit I did unpaid internships while in college full time and working part time and many of the innovative online experiments I run in campaigns I am only able to do with the support of a staff of unpaid internships because campaigns don't want to pay their staff to try new things. So I rely very heavily on interns both for support staff and for new and sometimes crazy ideas.

The difference is that when I was an intern it eventually lead to a full time paid position, and when it comes time to hire staff on campaigns - all of the campaigns I work with offer positions to existing interns before we look outside the campaign. Plus, we ensure that our interns are getting some kind of credit for classes or at the very least it can go on their resume.

According to the piece in the NYTimes

"Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.

Many regulators say that violations are widespread, but that it is unusually hard to mount a major enforcement effort because interns are often afraid to file complaints. Many fear they will become known as troublemakers in their chosen field, endangering their chances with a potential future employer."

Campus Progress, Demos, and the Economic Policy Institute had a panel at the end of March to address the problem with unpaid internships. Their email announcing it read:

"Internships, once a rare bonus for students, have become a standard component of a college graduate's resume. Despite their near universality and their necessity for students entering the job market, the majority of internships at non-profits and in government are unpaid, putting many low- and middle-income students at a considerable disadvantage."

The groups have crafted a new legislative proposal to allow for some source of funding for low-income students who are seeking high quality public service internships that are often times unpaid. The proposal Paving the Way through Paid Internships: A Proposal to Expand Educational Opportunities for Low-Income College Students, says, among other things

"Considering the importance of internships when it comes to finding a full-time job after graduation, it is startling to see the large number of internships that go unpaid, tilting the scale in favor of students higher on the economic ladder," said researchers Kathryn Edwards and Alexander Hertel-Fernandez, who developed the proposal..."

In an email to supporters, Demos says that internships are a requirement now more than ever with 84% of college students in four-year schools doing at least one of them before they graduate.

"Internships also provide an important foot in the door; 76.3% of employers report internships as the primary factor when deciding whether to hire recent graduates."

This makes it even more troubling for students who have a hard time going to school to begin with. So, basically, we make it hard for students to afford college, but now college isn't enough because.. hell... everyone has a BA now. Everyone was the president of some club or makes decent grades so internships are used to get that extra edge. But if you have to work full or part time and go to school when the hell do you have time for an internship? Its impossible, particularly internships that are a public service internships that aren't available at a distance and most times must be between 9-5.

Demos goes on to say low income students find it even harder to take internships away from home because they have to pay higher cost of housing or would have to leave their part-time jobs for a summer. So internships in the city where they would like to live after graduation are simply beyond their reach.

"With college costs drastically increasing and financial supports decreasing over the past 25 years, it has become more and more difficult for our nation's low-income young adults to access and complete college, perpetuating economic and racial inequalities and threatening our ability to compete with other highly educated nations in the 21st century global economy," said Nancy K. Cauthen, Director of the Economic Opportunity Program at Demos. "Internships are key to securing meaningful employment, and making them inaccessible to low-income students only further preserves existing inequalities by impeding the ability of these students to obtain a decent job and enter the middle-class. Policymakers need to take action to ensure that all students can access internship experiences. . .

"The cost of completing an unpaid internship is often too high for students without ample family financial resources, but the cost of not completing one can reduce students' future employment opportunities," said Edwards and Hertel-Fernandez. "This inequality ultimately reduces diversity in government hiring, making our democracy less vibrant."

This is a good first start - the Demos proposal and the crackdown on employers exploiting young people. In the end I think this is part of a larger problem with youth unemployment. As Craig said in his piece "One way to assist these young people is by passing legislation with comprehensive youth programs and public works projects included."

Another is to think more about long-term. As I said in a piece that covered the stimulus impacts on youth "this is kind of like putting a tourniquet on to stop the bleeding. You take it off and you're still going to bleed to death. We need an operation that will stop it long-term."

Tonight Demos is hosting a much needed discussion on higher education and the needs of youth who are increasingly faced with high costs, unstable job markets, and an uncertain future.

"As today's young adults struggle to balance the rising costs of a postsecondary education with countless other financial obligations, many public universities are burdened with budget cuts, intensified admissions competition, and debt. These factors collectively drive up the cost of tuition and make a previously accessible college degree virtually unaffordable to many. The stakes of these new economic challenges are high; they make it more difficult for low- to moderate-income students to graduate, undermine the quality of education that students receive, and in the process, hamper the best path to upward mobility for the next generation of young adults."

Watch a live stream of the event below or the event page here

Live TV by Ustream

This afternoon at lunch Campus Progress is hosting a great panel discussion in Washington DC where they will discuss the state of our system of higher education and the burdening costs that young people are shouldered with when they graduate.

According to the release

"On the heels of student protests in California against 32% tuition hikes, college affordability is making headlines again, and the timing could not be more critical as landmark college affordability reform legislation awaits action in the Senate. This Wednesday, Campus Progress, the United States Student Association and USPIRG will host a panel discussion examining the implications of the controversy in California, and looking ahead at efforts to make college more affordable and accessible on the institutional, state, and federal levels. The panel will feature: Congressman Tim Bishop, Bruce Cain from the UC System, Victor Sanchez from the UC Student Assoc, Angus Johnston of studentactivism.net, Pedro de la Torre III from Campus Progress, and moderated by Erica Williams from CP."

Tuesday, Demos and the United States Student Association released findings about students and private loans

"Yet with tuition skyrocketing and entry-level jobs flat-lining, students are borrowing more and more against their futures to pay for school. A startling 67 percent of the U.S. bachelor’s degree graduates last year had student debt, averaging about $23,200 per indebted student. While most of that debt is in safe, lower-interest federal loans, a significant amount is in private loans that can carry interest rates of over 18 percent.

"In fact, due to aggressive marketing, nearly 3 million American students took out private loans last year, up from less than 1 million just four years before. Since federal loans are lower interest and have more borrower protections, taking out unnecessary private loans for college is like putting tuition on a high-interest credit card that students can’t pay off for years. And like credit cards, private loans carry costly penalties and fees and are marketed heavily to students regardless of need, resulting in unnecessary and damaging levels of expensive debt. Unfortunately, unlike with credit cards, there has been no “Credit Card Holder’s Bill of Rights” for student loans to reign in the worst abuses in the private loan market."

The briefing paper recommends the Consumer Federal Protection Agency actually regulate private loan companies and ensure protections for youth who have to navigate paperwork etc.. They also call for a close to the loophole in the House CFPA bill that could allow some colleges (the ones that are more focused on profit) to "make private loans to students without abiding by the CFPA’s consumer protections."

I reported a few weeks ago about the extent to which students who attend these schools often graduate with the most harmful of loans and graduate without the necessary skills to take part in their career path of choice.

The briefing paper references some main abuses in the private loan market and the connection they have to the "for profit" school industry.

• "Unnecessary Loans: Any student with access to the full information should only buy a more expensive private loan after reaching the maximum federal loan amount first. However, full information is increasingly the exception, and not the rule. Last year, almost 2 out of every 3 private loan borrowers did not reach the Stafford limit before taking out a costlier private loan; 26 percent took out no Stafford loans at all.
• Outrageous Rates: Unlike federal loans, most private loans have no upper limit on their interest rates. As a result, private student lenders charge annual percentage rates (APR) as high as 18 percent—nearly three times the average federal loan APR and twice as high as the federal cap on student loans.
• Rate Floors, Not Ceilings: During the recession, the federal government has lowered interest rates to make money cheaper for lenders—but the savings have not flowed through to millions of private loan borrowers. That’s because instead of ceilings, many private loans have rate “floors” guaranteeing that the borrower’s interest rate stays high. The resulting spread that lenders are pocketing is as high as 12.5 percent.
• High Fees: There are no legal limits on the fees private lenders can charge students. Eighty-five percent of lenders charge origination fees just to make the loan, averaging 4.5 percent of the loan amount—but with some as high as 9.9 percent.
• In-School Interest: With federally-subsidized loans, the government pays the interest while the student is in school and not making payments. Private lenders start running the clock from the moment of origination. The difference is significance; a college freshmen who takes out a private loan for $1,500 at the start of the year will owe $2,945 on that loan alone the day he or she graduates.
• Aggressive Marketing at For-Profit Schools: While only 9 percent of undergraduates attend for-profit schools, these students make up 27 percent of private loan borrowers."

The most interesting turn of events is that the progressive community isn't the only one that has noticed this. The Family Research Council (The Christian organization promoting the traditional family unit and the Judeo-Christian value system upon which it is built) has announced that they are having a lecture with Tony Perkins where he will discuss the "Crushing Burden Of Student Loans On Family Formation For Generation X+." Apparently because young people (both Gen X and Gen Y) are so overburdened with student loans and financial responsibilities they are having a rough time starting families to make more little Family Research Council people, the Family Research Council has decided to discuss the importance of taking action now.

Its nice that solving the student loan crisis is an issue that every part of the political spectrum can get behind.

A VERY quick upload of the opening remarks at the Better Deal Conference.

I'm at A Better Deal, for young people who are trying to navigate the economy in such troubling times. We've told you these stats before: youth have twice the unemployment than the rest of the country despite having twice the education, 1/3 of Millennials don't have health insurance at all, and many more are under insured...

These are all things we're talking about in the next two days at a Better Deal 2009. Follow on Twitter #abd09 or here is the live stream online. Or watch below. I'm about to also upload the welcome remarks.

Broadcasting Live with Ustream.TV

From the Statement from Demos:

"Washington DC -- Young adults across America are reeling from the effects of the recession, with rising unemployment, higher education increasingly out of reach, and diminishing prospects of an economically secure future. To reverse this trend, the national public policy and advocacy center Demos, along with partner organizations from around the nation, is building a movement of young adults to support policy reforms that will lead to a new social contract—and an economic recovery comprised of good jobs, widespread opportunity and a path to financial stability that will last well into the future.

On October 15 and 16, Demos is holding their annual conference for this movement, entitled “A Better Deal: Reclaiming our Economic Security Now!” This convening brings young leaders from around the country together to discuss the most pressing economic concerns facing their generation and the policy reforms that can address them. Participants include politically-engaged young adults, community organizers, young elected officials, policy advocates, get-out-the-vote volunteers from 2008, community and four-year college students, and others engaged in a collective effort to elevate this generation's economic crisis onto the national agenda, to offer policy substance to sustain the rise in youth voting, and to forge partnerships for future reform efforts. Attendees will examine ways to connect politics to the personal financial struggles of young voters, and forge connections with others to build a movement for a better deal in their communities.

"This generation of young people is the first in years to start their adult lives not only worse off than their parents, but also with fewer prospects for long-term financial security," said Tamara Draut, Vice-President of Policy and Programs at Demos and author of "Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead."

"Young adults have been hit hard by the recession, and unless we shift policy to deal with pressing issues—good jobs, affordable education, housing costs, rising debt—then their future economic potential will be severely hamstrung. Fortunately, young people are engaging in politics in a way we haven't seen for a long time. They are going to drive this agenda and make Congress take note."

See further details on speakers and key points on the jump.

Bumped. Ian Storrar, COO of Mobilize.org, invites you to apply for a grant summit in Chicago. - Karlo

On Friday I attended a reception with Majority Leader Hoyer’s staff at the Capitol, along with many of my friends and colleagues in the youth empowerment movement. In July, Majority Leaders Hoyer keynoted at the 80 Million Strong For Young American Jobs summit where over 100 Millennials engaged with him on some of the most pressing issues of our day. On Thursday, I attended a hearing of the House Education and Labor Committee (see Karlo Marcelo’s coverage on FM). My fellow Co-Chair of 80 Million Strong, Matthew Segal, testified about the huge disparity in unemployment across generations that leaves the Millennial Generation ill-equipped to tackle the economic and personal financial barriers of the near and long-term future.

Let’s turn to Chicago, not to dissect the 2016 Olympics but because this November 18th to 20th Mobilize.org will be holding another summit for young leaders in our generation to tackle economic problems. Democracy 2.0: Exploring the Millennial Generation’s Return on Investment (ROI) will bring together 150 people, many of whom were in DC this July, to discuss the barriers to our collective financial health and then compete for Democracy 2.0 Awards ($25,000 is available) to implement their ideas at the grassroots and netroots levels. The issues we will address range from healthcare and medicare/-aid to personal financial education and taxes.

The Peter G. Peterson Foundation sponsors Exploring Millennial ROI so, for selected summit participants who need it, travel expenses will be paid. We’re also excited to have an intergenerational partner in AARPs Lifetuner. The application form for the Summit is open until October 17th and anyone interested in competing for an Award should fill out a separate form with their proposal outline. I’m always happy to talk with anyone who’s interested and/or has questions (202 736 5703) or email ian@mobilize.org.

This is the year for dealing with these issues and pushing bold, innovative ideas. Demos is holding A Better Deal in Washington, DC I two weeks. You should go, I am. From there, let’s go to Chicago and cement our commitment to making change happen through collaborative approaches to our tough fiscal times.

Bouncing into my inbox the other day was some information on Demos' second annual conference on economic opportunity for young adults. I thought I'd pass it on to everyone.

On October 15 and 16, Demos, in partnership with more than twenty leading national youth, labor, policy, media and civil rights organizations, will be hosting "A Better Deal 2009: Securing Our Economic Future NOW," our second national conference on young adults and economic opportunity at the Omni Shoreham Hotel in Washington, DC. The event will bring together more than 200 young activists, advocates, and other key voices to address the pocketbook concerns of the Millennial Generation as well as decades of declining economic opportunity and social mobility.

Registration is open and FREE. Travel scholarships are also available. Click on the invitation below or go to www.ABetterDealConference.org for more info and to register.

The more conferences on young adults and the impact they suffer from our economy, the better. Hopefully this storyline gets some more traction in the media.

Last year, Demos sponsored an excellent conference - A Better Deal - on revitalizing the American economy to meet the needs of young people. I was a panelist at the conference, and you can read my coverage of it here.

The need for a better deal for young Americans is more necessary than ever, and Demos is getting ready to hold the second annual Better Deal conference in October. Details are below, you can register here (for free). There are some travel scholarships available for those outside the DC area.