Other Highlights
Office of the Mayor
City of Los Angeles
ANTONIO R. VILLARAIGOSA
FOR IMMEDIATE RELEASE
November 19, 2009
Contacts:
Sarah Hamilton
Casey Hernandez
213-978-0741
MAYOR VILLARAIGOSA AND PROFESSOR PAUL HARRINGTON ANNOUNCE ECONOMIC CONSEQUENCES OF DROPPING OUT OF SCHOOL IN LOS ANGELES
Mayor also names grantees of $4.75mil of stimulus funds for Reconnections Academy that will serve 1,160 out of school, out of work 21-24 yr olds.
Download the reports: Work, School, and Idleness and Dropouts Path to Poverty
LOS ANGELES - Mayor Antonio Villaraigosa and Professor Paul Harrington today announced the economic consequences of young people dropping out of school with the release of Harrington's two reports entitled “Dropouts: Path to Poverty - The Lifetime Employment Earnings and Poverty Consequences of Dropping Out of School in the Los Angeles Metro Area” and “Work, School, and Idleness: Disconnected Youth in Los Angeles.” According to the reports, high school dropouts had the lowest average hourly wage rate and were least likely to have worked at all during a given year.
“One out of five young adults is out of school and out of work in Los Angeles - this number is staggering and it is simply unacceptable,” Mayor Villaraigosa said. “The consequences of being under-educated and unemployed are dire for the individual and the community and we must continue to put forth efforts and resources to help disconnected youth move from the unemployment lines to the ranks of the workforce. With an educated, productive workforce, our city will thrive”
Harrington’s two reports break new ground by providing updated information on the education and employment of young people in the City of Los Angeles. The reports document the devastating impact of the recession on young adult employment rates, and the continued need to develop specific strategies to push disconnected young people back to school, especially young women.
The Mayor also announced the grant recipients of $4.75 million of stimulus funds for the Community Development Department's Reconnections Academy which aims to implement training and placement programs that will serve 1,160 out of school, out of work 21-24 year olds. The primary goal of the Reconnections Academy is to combine employment opportunities, training in sectors with a high-growth potential, and basic skills remediation.
The grant recipients are the Los Angeles Urban League, Community Career Development, Inc., Arbor Employment and Training, El Proyecto del Barrio, Youth Opportunity Movement, Managed Care Solutions, The Housing Authority of the City of Los Angeles, and the United Auto Workers.
Following the announcement in the Board of Public Works Room, community, education, and business leaders provided their reaction and feedback to the report.
Summary of Key Findings
The “Path to Poverty” report focuses on three such consequences for high school dropouts:
- Lower employment level rates
- Lower earnings
- Increased risk of falling into poverty for a prolonged period of time
High school dropouts are considerably less likely to be employed than are their better educated counterparts. When they do find employment, high school dropouts are more likely to work in low skilled jobs that pay low wages. Additionally, the report highlights their lifetime risk of poverty, particularly for women.
Work Rate: High school dropouts were least likely to have worked at all during a given year. In the Los Angeles metro area, 70 percent of all high school dropouts had worked at some time during the prior year, compared to 78 percent of high school graduates, and almost 90 percent of college graduates.
Hourly Rate of Pay: Residents with a high school diploma had average hourly rates of pay ($15.30) that were less than a third of those who held a master’s degree ($49.60) and less than half of those who held a bachelor’s degree ($34.15).
Annual Earnings: The mean annual earnings of high school dropouts in the Los Angeles metro area were about $15,500. This is only equal to about six tenths of those earned by high school graduates ($24,900), to just over a quarter of those with a Bachelor’s degree ($56,100), and less than a fifth of those with a Master’s degree ($86,400).
Expected Lifetime Earnings in 2005-07: The expected lifetime earnings of a high school graduate in Los Angeles were 65 percent higher than that of a high school dropout ($1,151,000 versus $697,000, respectively).
Trends in Expected Lifetime Earnings, 1979 to 2005-07: Between 1979 and 2007, the lifetime earnings of dropouts declined from $883,000 to $697,000, representing a loss of about $186,000 or 21 percent. In contrast, college graduates with either a Bachelor’s degree or a Master’s degree experienced an increase in their expected lifetime earnings over this period of time by 10 percent and 26 percent.
The average high school dropout will cost taxpayers over $292,000.
Mayor Villaraigosa's full remarks from this afternoon's announcement are below.
Good afternoon and thank you for being here today to participate in this important event. I’d like to start by thanking Charlie Woo, Chair of the Workforce Investment Board and David Crippens, Chair of the Workforce Investment Board Youth Council for their leadership, hard work and commitment to people of Los Angeles.
And a special thank you to Professor Paul Harrington for coming to Los Angeles to present his groundbreaking study to us in person. Paul Harrington who conducts his research from Northeastern University's Center for Labor Market Studies Is considered a leading expert in his field and we are lucky to have him here today.
For the last four years, the foundation of my work has been built on transforming our public schools and saving and creating jobs. With a quality education, our children will thrive. With good, well-paying jobs, our families will thrive. With an educated, productive workforce, our city will thrive.
This is why I’ve pushed the Los Angeles school district to address the dropout crisis. This is why I’ve pushed to bring choice and competition to our lowest-performing schools. This is why I’ve pushed to create thousands of summer youths jobs. This is why every day I won’t stop pushing until the nearly 100,000 young Angelenos who are out of school and out of work are given a chance to succeed.
Their success is tied to our success. Our children’s success is our city’s success.
Now, you just heard me use the number 100,000. That’s a staggering number and that is what Professor Harrington is here to talk about. He will go into detail about his two, groundbreaking studies. But what he will tell you is that nearly one out of five Angelenos between the ages of 16 and 24 are not in school and are not working. This is staggering. Think about the consequences of being under-educated and unemployed.
His study tells us that a high school dropout in LA will earn approximately $650,000 dollars over their lifetime compared to high school graduate who will earn $1.2 million dollars or a college graduate who will earn nearly $2.3 million dollars.
And think about the consequences to the City. He estimates that each high school dropout will cost city taxpayers approximately $292,000 dollars over their lifetime. These costs are paid through increases in social services, Increases in health care costs, and increases in incarceration rates.
One out of five young adults out of school and out of work is staggering and it is simply unacceptable!
It is a problem that we must face and we must face together. It is not just a public school problem. It is not a city workforce problem. And it is not just a county welfare and justice system problem. It is the responsibility of every level of government and every non-profit, neighborhood group and faith based community to pull together to solve.
That is why I am particularly proud to be standing here with Professor Harrington and leaders from our city, our Workforce Investment Board, our public schools and Community College District, our LA Chamber of Commerce, and many of our city's non-profit and faith based organizations to announce a beginning - a down payment of over $4 million dollars to start putting Angelenos back to work.
$750,000 dollars will be used to hire workers that will weatherize buildings and make our communities more energy efficient. And $4 million dollars will put people back to work through the Workforce Investment Act. These are your stimulus dollars at work in your city.
And today, we are also launching the Reconnections Academy - an Academy that will focus on putting more than 1,000 young adults back to school and back to work.
The Academy will start by helping them earn their high school degree. Then it will find them a good job that will place them on a pathway to a career. The Academy directly links our City’s Workforce System to our public education system. And it includes a combination of subsidized employment, with training in high-growth, private sector, businesses.
Congratulations to the Reconnections Academy grantees including:
The Los Angeles Urban League, Community Career Development, Inc., Arbor Employment and Training, El Proyecto del Barrio, Youth Opportunity Movement,
Managed Care Solutions, The Housing Authority of the City of Los Angeles, and the United Auto Workers.
The Reconnections Academy, with well-placed and well-spent stimulus dollars, will turn high school drop-outs into high school graduates, and it will move families from the unemployment lines to the ranks of the workforce.
It is a beginning that we are all very proud of.
Now, it is my distinct honor to introduce Professor Paul Harrington.