Wednesday, July 23, 2014
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Where are jobs for young people?

In a jobless recovery, entry-level positions have been especially hard hit — and the fallout’s taking a toll on a generation.

Ryan Fontana, 26, SEO consultant at SEER Interactive in Philadelphia. The technology company has its headquarters in a converted church in Northern Liberties. (Sharon Gekoski-Kimmel / Staff Photographer)
Ryan Fontana, 26, SEO consultant at SEER Interactive in Philadelphia. The technology company has its headquarters in a converted church in Northern Liberties. (Sharon Gekoski-Kimmel / Staff Photographer)
DayQuan Reid Video: DayQuan Reid

Ryan Fontana beat Stanley Joseph into this world by two weeks.

Both are 26, both live in Philadelphia, and both graduated from college in 2007, just as the economy slid into the worst recession since the Great Depression.

Both are also in the world of technology, but Fontana has an apartment in Society Hill and a job at a company so hip that it has its headquarters in a converted church in Northern Liberties.

Joseph, an unemployed network administrator and tech-support person, who lives with his parents in West Oak Lane, spends his time looking for work and building a server to keep his skills sharp.

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Fewer opportunities in their fields:
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  • Teaching (Video)
  • Human Resources
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    ABOUT THE SERIES

    Young people are bearing the brunt of the Great Recession and the changes in the American economy.

    In “Struggling for Work: Broken Dreams of a New Generation,” The Inquirer goes behind the unemployment rates and high college debt to describe the struggles young people are facing and detail what needs changing to help them.

    To create this series, reporters interviewed more than 280 people — including millennials and their parents — and analyzed government data. Among those interviewed were economists, sociologists, and historians. Groups that specialize in work issues were consulted, including: the Georgetown University Center on Education and the Workforce, the John J. Heldrich Center for Workforce Development at Rutgers University, the MacArthur Foundation’s Network on Transition to Adulthood, the Community College Research Center at Columbia University, and the Center for Labor Markets and Policy at Drexel University.

    Read more on how this series was reported.

    Follow us on Twitter at #PHLJOBS and on Facebook at www.facebook.com/PHLjobs where you can find more information about an April 25 special event.

    It would be nice to think that technology and the myriad categories of jobs that go with it would be enough to save people in their 20s from the huge toll unemployment is taking on their generation.

    But for Fontana's ability to straddle marketing and the digital world, he might be in Joseph's place.

    Young workers in the region lost their jobs at about three times the rate of all workers from the recession's start in 2007 until 2010, the most recent data available. Meanwhile, workers 55 and older gained jobs.

    "Across the board, kids have lost more than their share," said Paul Harrington, director of Drexel University's Center for Labor Markets and Policy.

    Mal-employed

    On Friday, the U.S. Labor Department released its monthly jobs report, and the news remained grim. In March, the unemployment rate for the nation's youngest workers, aged 16 to 24, was 16.4 percent, double the nation's rate of 8.2 percent, with 3.5 million unemployed. Of the 3.5 million, two million were aged 20 to 24 - an unemployment rate of 13.2 percent.

    While Philadelphia's tech sector is expanding - with jobs in cybersecurity, search-engine optimization, and product development, it is far from replacing the factory jobs that once allowed the Philadelphia Chamber of Commerce to proudly describe the city as "The World's Greatest Workshop."

     

    "Right now, in Philadelphia, there's real job growth in technology, absolutely," said Christopher Wink, 26, who follows technology as editor of the online news site Technically Philly.

    Since 2005, the number of people working regionally in tech jobs grew by 6,400, while production jobs fell by 25,000, although, even in its diminished state, manufacturing still has an employment edge of 52,000.

    "When I write about runaway successes, those are companies with 150 employees," Wink said. "But you need a lot of them to get to the 300,000 [manufacturing] jobs" that once employed so many in the city.

    "It's the big missing piece of the Philadelphia puzzle," he said. "We have a lot of small shops, but where are the runaway successes with 3,000 employees?"

    Recovery failure

    Indeed, where are the jobs for young people such as Stanley Joseph, graduate of Central High School and Pennsylvania State University, where he majored in communication and minored in information technology?

    Or for Kimberly Larned, 23, a Rowan University graduate with great grades and good internships in human resources, who is changing price tags at her local supermarket?

    Or for Joshua Berko, 23, who holds a GED and forklift operator's license and is bunking with family after being laid off from a factory job?

    In some ways, the problems affecting young people are the problems affecting all. The recession, while officially over, remains a nearly jobless recovery, leaving a deficit of more than 10 million jobs lost or not created since the recession began in 2007.

    Not only has the country failed to recover those jobs, but entry-level positions have especially taken a hit.

    Areas that typically welcome young workers - teaching, office work, manufacturing, and construction - have seen first-rung jobs evaporate.

    Here's a window into the trend: Job postings for entry-level positions fell 49 percent between the fourth quarter of 2007, when the recession began, and the fourth quarter of 2011, as employers filled the few openings they had with experienced workers, according to Beyond.com, a King of Prussia company that runs online job boards.

    Beginning jobs in many fields also tend to be the ones most readily shipped abroad or overtaken by automation. (Think online banking, factory robots, or self-service checkout at the supermarket.)

     

    "When a job is repetitious or rule-based, some smart engineer can devise some kind of algorithm to handle the work, sharply reducing the need for people with high school diplomas or less," said Drexel's Harrington.

    "This 10- to 15-year period is a wrenching transition to a new economy, and young people are caught in the middle," said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University.

    The situation has "gotten worse for people without a high school degree," Van Horn said.

    The youngest members of the workforce - including high school graduates and dropouts - aged 16 to 19, are in a particularly rough spot. One in four are jobless, the U.S. Labor Department reported Friday.

    Marketing jobs aplenty

    To be sure, many young people are getting hired. It's just that there aren't enough jobs for all of them.

    The growing use of social media for the Twitter-savvy means marketing jobs aplenty.

    But in this region, the largest employer for all ages is health care. Not surprising, it's also one of the top three employers of young people, especially in the city, where, in 2010, one in five workers in their 20s had jobs in health care.

    Regionally, hospitality and retailing each employed more than 10 percent of working young people, outnumbering the other top categories - professional, technical, and scientific services, as well as education-related jobs.

    On Friday, the monthly jobs report showed increased hiring, but job growth isn't keeping pace with previous losses.

    At the start of the recession in 2007, the nation's gross domestic product - the total output of the nation's 137.9 million-person workforce - was $13.3 trillion. By the end of 2011, the GDP topped prerecession levels, but employment declined to 130.9 million.

    In short, the nation has been producing more with way fewer workers. How could that be?

    Borrowing at low interest rates designed to spur the economy, companies invested in technological advancement - replacing labor with equipment.

    The result is a labor market so flush with potential candidates that employers can demand higher credentials for lower-skilled jobs. At the same time, just to be working, young people are taking lower-paying jobs below their education level and outside their field, a trend Harrington calls "mal-employment."

    Not surprising, those with more-technical degrees - in math, engineering, computer science, and health - landed jobs in their fields. Only one in six of these people are mal-employed, Harrington's analysis shows.

    By contrast, one in three holders of liberal-arts and social-science degrees took jobs waiting tables, answering phones, and working retail.

    Why should Ken Dubin, owner of the Dubin Group, a Bala Cynwyd recruiting company, hire a high school grad to be a receptionist when he is able to employ a young woman with a master's degree in organizational development who is educated, articulate, intelligent, personable?

    "I told her she might be our HR manager over time," Dubin said, "but I can't promise that." Meantime, she's handling administrative tasks.

    When someone with a master's degree works in admin, where does that leave the articulate, intelligent, personable high school graduate, who might also be capable of handling the job?

    A Rutgers survey of college graduates from 2006 to 2010 found that just over half of recent college graduates were working full time, and half of them work in jobs that don't require a college degree.

    Rival generations

    Most painful is the competition between this generation and its financially strapped parents and grandparents for the same jobs.

    When baby boomers can't afford to retire, they stay put, squelching the promotion hopes of the workers below them on the corporate ladder, and leaving the least-experienced and youngest workers, the "millennial generation," unable to grab even the first rung.

    Meanwhile, financial strain eventually compels pink-slipped older workers, who tend to remain jobless longer, to accept positions below their education and experience level. The result? Those lower-end jobs are no longer available for young workers trying to move up.

    Beyond.com's chief executive, Rich Milgram, can see the collision of the two downward trends, simply by scanning the jobs data his business amalgamates.

    "People are taking jobs that they otherwise would not have," Milgram said.

    "Because of the economy, and because there is a graduating class above the newly graduated class willing to work downwards, and because the classes that graduated a couple of years ago went to grad school" because they couldn't get jobs, he said, "they are now vying for the same entry-level jobs, paying $25,000 to $30,000 a year.

    "Then you've got the seasoned jobholder that was potentially thinking of retiring, but due to financials can't retire," Milgram said.

    Local government hiring, which expanded during the recession, is contracting now, jobs data show. In towns around the region, police, firefighters, teachers, and administrative assistants have lost their jobs.

    The federal government "will always be hiring, because there's always going to be attrition," but it won't be expanding, said Angela Bailey, deputy associate director of the U.S. Office of Personnel Management.

    There are opportunities, if young people plot their futures. "There is a shortage of machinists," she said. "Cybersecurity, information technology, that's a whole sector that continues to grow.

    "Veterinarians - students want to be pet vets," she said, "but we have a need for food-safety vets" who check for diseased animals, "getting your hands dirty being in slaughterhouses."

    Moving jobs abroad

    At least those jobs can't be moved abroad, even though the United States does hire around the world.

    The jobs that are moved abroad pose a particular problem for young people. Because some of those jobs tend to be the least-skilled, they are also the jobs that might have gone to young workers right out of school.

    "If it can be routinized, it can easily be outsourced," said Ed Koc, director of research for the National Association of Colleges and Employers, a research organization based in Bethlehem.

    The offshoring of manufacturing jobs is a decades-long story, and everyone knows about dialing into India with an 800 number. In the last decade, more and more American office and technology jobs have also moved abroad.

    "This is where globalization is threatening the entry-level job for college students," Koc said, "like it used to for blue-collar students."

    Companies also let employees go when imports meant fewer domestic sales of their U.S.-made goods and services.

    In Pennsylvania and New Jersey, more than 58,000 workers - 45,471 from 90 Pennsylvania companies and 12,948 from 24 New Jersey companies - qualified for federal job retraining dollars because their jobs were lost to foreign trade or offshoring from 2007 through 2011.

    Some of the companies are well-known:

    Advanta Bank Corp., the financial-services company in Horsham, transferred some customer-service jobs to India before it went belly-up.

    Production of Hershey's famous York Peppermint Patties moved from Reading to Mexico.

    Castleford Tailors Ltd., which fabricates Burberry products, shifted textile work from Williamstown, Gloucester County, to Italy, Turkey, and England, federal records show.

    The governing wisdom is that even though rote jobs would go overseas, innovation and advanced technology would remain U.S. strongholds.

    "You still want control over those skills," Koc said. "Right now, at the higher level, we still control research and development, but eventually you will be able to get those people in India and China."

    Case in point: In December, pharmaceutical giant Merck & Co. Inc., which operates a plant in West Point, Montgomery County, announced plans to invest $1.5 billion in research and development in China - enough to build a facility large enough to house 600 employees, who will work on discovering new drugs, testing them, and getting regulatory approval.

    "We had a presence there before," said Merck spokesman Ian McConnell, saying that scientists in Beijing had been only examining clinical data. The new larger facility, required by China if Merck wants entry into its market, will allow more lab research.

    Perennial lament

    Unfortunately for Stanley Joseph, the technology support jobs he knows the best are among those that continue to be sent overseas.

    In 2008, Delaware Valley Financial Services moved some of its IT work to India, according to federal documents. In 2009, Novartis Pharmaceuticals Corp. in Mount Laurel did the same.

    To explain his joblessness, Joseph voices the perennial lament of the young.

    "It's a lack of experience," said Joseph, who has worked side jobs fixing computers, along with stints as a help-desk staffer, door-to-door salesman, bank teller, and mail-room clerk, his last job. He left that job in September because he could not keep taking time off for IT interviews.

    "But even when I do have the necessary experience for the job," he said, "there's another applicant with more."

    Joel Capperella, vice president of Yoh Services L.L.C., a tech staffing firm, sees Joseph's point.

    "It's a lot easier for our clients to pay someone with experience" for most IT jobs, Capperella said. "The kids are up against it."

    However, as technology has become more pervasive, it has created work for non-geeks like Ryan Fontana, a marketing grad from the University of Delaware.

    The night before a job interview, he dug out lecture notes on search-engine optimization (the practice of getting a website highly ranked on Google) and talked his way into an online-marketing job.

    That led to his current job as a search-engine-optimization consultant at SEER Interactive, a good name for a business in a former church.

    "There are a lot of facets to search-engine optimization," Fontana said. "We have business majors, communications, mathematics majors."

    Capperella agrees. "You need someone who understands the business strategy vs. someone who just knows the bits and the bytes."

    Typically, Capperella said, someone like Joseph would spend a few years in the support trenches before specializing. But the recession cost Joseph those trench years, slowing his path.

    "I still think I can do better than my parents," Joseph said. His mother is a nurse's aide; his father works in a factory.

    "But the longer I'm out of work, the further behind my earning power will be, so the window is closing."


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    Contact Jane M. Von Bergen

    at 215-854-2769 or jvonbergen@phillynews.com,

    or follow on Twitter @JaneVonBergen. Read her "Jobbing" blog at www.phillynews.com/jobbing.

     

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