ECONOMIC

For some youths unemployment is involuntary, and they have considerabledifficulty in finding and retaining jobs. This may be especially true forthose who come from disadvantaged families and those with little schooling.An appropriate role of public policy has been to expand job opportunities,particularly for the youths who, on their own, would not easily findand keep jobs in the private sector.Youths need to develop the skills, habits, and job-related experience inproductive activities that lead to successful employment in the private sector.About 85 percent of all civilian employment is in the privatesector; and as youths mature, this is where most will find jobs. The shelteredenvironment of prolonged public service employment appears to be an inappropriatemechanism for generating employment for youths. On a shorttermbasis, however, disadvantaged youths in particular may derive importanttraining or educational benefits from the experience provided by publicprograms.Substantial investments have been made in public programs to employ andtrain disadvantaged youths. In 1976, the Government financed at a cost of$563 million nearly 1 million job slots in local prime sponsor programs for theemployment of disadvantaged youths in the summer. The Job Corps programprovided training for 64,700 economically disadvantaged youths (the equivalentof 20,200 full-year positions) at a cost of $186 million in fiscal 1976.Under Title I of the Comprehensive Employment and Training Act, 2.1 millionpersons, the majority of whom were youths, received job training or workexperience at a cost of $1.7 billion in fiscal 1976. These programs are preparatoryto regular jobs in the private economy.For youths, job opportunities in the private sector should be expandedto permit these young people to take full advantage of the trainingthey have acquired in school or in special public training programs. Althoughaggregate job creation is largely the function of macroeconomic policy, thereare significant impediments to attaining high rates of employment foryouths even when the labor market for adults approaches full employment.The Federal minimum wage has been identified as one such impediment.A substantial body of research suggests that minimum wage legislationtends to diminish employment opportunities for teenagers, but does not havea significant net effect on adult employment. Though estimated impactsvary, some recent studies suggest that a 10 percent rise in the ratioof the minimum wage to the average wage would decrease teenage employmentby about 100,000 to 150,000. The reason is that many employers findit too costly to employ teenagers, particularly those with few skills, giventhe Federal minimum wage (currently $2.30 per hour in most jobs) andmandated payroll taxes and fringe benefits. Coverage under Federal minimumwage legislation has been extended substantially in recent years from65 percent of the private nonsupervisory workers in 1965 to 87 percent in1976. This extension of coverage, especially at a time when youths make141