Teen Jobs
Last summer, how many times did you hear the same sad story from your teens—usually as they hit you up for cash? Yes, they said, they’d tried to get jobs. They’d pounded the pavement, submitted the resume, and filled out the application. There just weren’t any positions to be had. Sound familiar?
To be honest, it was bad. In fact, teen unemployment rates last summer were about as high as they’ve ever been. These tough times came on the heels of some great years not so long ago, when there were decent jobs that went unfilled for lack of warm bodies to take them.
The reason so many teens were unable to find summer employment was that there were a lot of other people—older, more experienced people—also looking for work. As the economy slows, the hardest hit are those with the fewest credentials. Positions typically filled by younger kids went to more established members of the workforce. And, of course, the sluggish economy meant there were fewer jobs available in the first place.
Long-term demographics are also making things more difficult, thanks to what has been called the “baby boom echo” or the “baby boomlet.” The baby boom is officially defined as those born between 1946 and 1964; many of this super large generation are now raising teens. Thus, the baby boom echo. The generation will peak in 2009, with the largest high school graduating class in US history. Competition is already fierce for positions in top colleges; prepare for it to get worse. This summer, however, things are looking a little brighter on the teen job front. The general recovery in the economy is helping lead to the creation of positions across a wide range of skill levels. Travel is expected to be up, both thanks to the ongoing recovery and to shrinking fears related to terrorism, so there are more jobs at resorts, theme parks, and other perennial hot spots for summer work.
The Internet is a great resource for identifying positions, with websites sponsored by government agencies and a spectrum of public and private entities. (One word of warning is in order, however; there are, as always, websites offering dubious benefits at sometimes high prices. Proceed with caution any time money is solicited.)
Potential employers should know there are laws prohibiting teens of certain ages from working at jobs such as those using certain types of power equipment which could be dangerous, involving roofing or excavating, and some other types of work. There are also state and federal tax considerations if payments surpass specified minimum levels. Even so, hiring a kid for the summer can be a terrific business decision.
Potential teen employees should consider the benefits of working as reaching beyond the dollars earned this summer. Job experience can be invaluable in choosing a future career path. It can also help with college admissions and scholarships. As such, even unpaid internships can pay off in the end. In fact, it can be a good strategic move to accept such an internship even if it means foregoing short-term income.
Many teens are looking for jobs because they want to pay for a car, trip, or other items. Some are putting away money for college, and many say they need a job to help support their family. They expect to work in retail stores, restaurants, offices, and lawn services firms. A growing number are finding success through their own entrepreneurial activities.
Like virtually everyone looking for work, teens are facing a more difficult struggle than several years ago. But the worst is over, and this year should be noticeably better than last. When possible, teens should be encouraged to look for work that is meaningful, can enhance their long-term earnings stream, and (most importantly) helps them find their path to future happiness as a permanent member of the workforce. (One of my sons is selling popcorn at the movie theatre; he wants to be filmmaker.)
A Favorite American Pastime
If asked to name America’s most popular pastimes, most people would probably put baseball near the top of the list, especially since the current season is just getting underway. It’s definitely one of my favorites. I love just about anything associated with the game.
One pastime that might be overlooked, however, and one that is certainly popular, is watching movies. While a large number of people enjoy this form of leisure activity on their television sets or computer screens, sometimes referred to by experts as “cocooning,” about a third of American adults view at least one movie on the big screens monthly. Over eight million see up to four movies a month. Movie going is also very popular in India, Sweden, and Mexico, where more than a quarter of the population over 18 average at least one movie every four to five weeks.
Box office receipts in the US last year totaled some $9.5 billion with 1.57 billion tickets sold. About 8.6 billion tickets were purchased worldwide. Average price in the US was $6.03. This cost, though reflecting a 45.7% increase over the past decade, is still considered a bargain when compared to the price of tickets for professional athletic events, Broadway shows, or special musical concerts.
Although the number of people going to movies in the US last year was 4% less than 2002, it was still the second highest admissions year since 1957. The mega-screen complexes, which present a wide variety of choices, were keys to patrons’ high interest. The 6,060 movie sites across the country as of the end of 2003 provided audiences with choices on 35,774 different screens.
Since the birth of the Texas Film Commission in 1971, Texas has been intricately involved in the making of movies. In some circles, the Lone Star State is called the “third coast” behind only the California and New York filmmaking locations. A couple of other states—Illinois and Florida—sometimes challenge that idea, but credibility was given to the Texas claim a few years ago when films made wholly or partially in the state won seven of the top eight Oscars.
Movie makers have been coming to Texas since 1910 when French film producer Gaston Mélies moved from Brooklyn to set up the Star Film Ranch near San Antonio. Today, there are 16 permanent sets located across the state, and scores of production companies, soundstages, and studio complexes. (Austin has nearly 80 of these entities.)
In addition to the permanent sites, which principally feature western themes, locations in Texas have substituted for sites identified as various US states along with countries such as neighboring Mexico and faraway places like Morocco and Afghanistan.
Last year, 43 feature films and television shows were made in Texas, providing $229.1 million to the state economy. With commercial, corporate, and sports productions added, the economic benefit of the film industry to the state in 2003 was nearly $330 million. During the past decade, over 500 of these kinds of entertainment and educational shows were produced in Texas, adding some $2.83 billion to the state economy.
In addition to the funds contributed by the movie companies each year, millions of additional dollars are spent by the thousands of individuals who participate in the more than two dozen local and international film and television festivals held annually across Texas. These events are located in the state’s major population centers of Austin, Dallas, El Paso, Fort Worth, Houston, and San Antonio, as well as Beaumont, College Station, Galveston, and Texarkana.
Texas does not finance the making of movies, but production companies are exempt from state and local sales taxes on much of what they rent or purchase. Those units that remain in the state for more than a month can also receive various tax refunds.
Such benefits are certainly of value and keep filmmakers returning to the Lone Star State. Equally important, however, are the experienced film crews, equipment vendors, and support services available within the state. About three-fourths of the personnel used by major film productions are employed locally, an incentive that very few states can match.
The popularity of movies and corresponding box office revenues are projected to continue their record-breaking pace. Over the past three decades, the US population has increased approximately 43% while theater admissions have climbed 71%. Watching movies is definitely high on the list of American pastimes.
Delayed Reaction
The economic news has been positive for long enough now to convince even most of the naysayers that a recovery is indeed underway. Jobs are being added at an impressive clip, spending is up, the stock market is improving, and things are generally looking brighter for the future. There are always contradictions in the economy and the occasional bad news item will continue to surface, but for the most part things are looking good.
In the midst of all of this positive news about America’s economic engine revving up, there’s been a sour, but not unexpected, note. Bankruptcies are reaching new highs. According to the American Bankruptcy Institute, some 1,625,208 Americans declared personal bankruptcy in 2003; 88,687 of them were Texans. Compared to 2002, the pace of bankruptcies in the US was up significantly (over 5%). In Texas, however, the total for 2003 was more than 15% higher than 2002. The economy is far better now, so the surge in bankruptcy filings is surprising—and alarming—to many. The answer lies in the calendar.
For thousands of American families, the recovery was too late. Debt came home to roost with a vengeance for some people, and the result was bankruptcies. Consumer spending and debt built up over a decade added to the crisis situations felt in thousands of households as the economy struggled during the past few years. A lost job, unexpected expense, or divorce could tip the scale.
The upward swing in bankruptcy filings is clearly a bad thing for those involved. For a number of years to come, they will be essentially unable to get credit. They will find it more difficult to buy cars and make other major purchases. They may face higher insurance rates. Without a doubt, they will lose flexibility in the way they deal with household budgeting issues. Declaring bankruptcy is a last resort, necessary at times, but certainly disruptive to a household’s economy.
Nonetheless, I am not alarmed by the recent upswing in bankruptcies. For one thing, it has nothing to do with what’s going on now. People don’t decide to file on the spur of the moment. Instead, the usual process involves months of struggling before a lawyer is called in. The data itself is for the full year of 2003, thus making it stale by several months at least. It’s what economists call a “lagging indicator.” In other words, it indicates how bad things were in the past rather than reflecting current or future conditions. I don’t know a single well-run company that doesn’t have something built in for bad debt. It’s unavoidable. It was also good news to see that business filings were actually down.
As a state, we continue to account for about 5% of all filings in the US, a statistic which has been remarkably stable over the past several years. Given that Texas comprises a slightly larger proportion of the US population (over 7%), we’re not doing so bad on a per-capita basis. The fact that the Southern District of Texas topped a list of federal court districts with the highest increases in filings was not good news, but it’s not necessarily a sign of poor conditions today.
I spend a good bit of my time analyzing numbers to arrive at forecasts. I worry over certain bits of information and put less emphasis on others. The most important, naturally, are the leading indicators, or those trends and events in the economy that tend to precede a full-blown swing. There are other facts and figures that are not relevant to my perception about today or tomorrow. Filing for bankruptcy can be devastating for a household, but it’s really not a huge issue for the economy. In fact, it’s nothing more than a delayed reaction. It tells us what was happening in 2002, not what will be happening in 2004.
The Right Thing To Do
During the last legislative session, the Texas Enterprise Fund was created. The purpose of the Fund was to give the state the flexibility and “deal closing” capability in economic development that had long been lacking. It was the cornerstone of a broad package, part of a series of measures to make Texas more competitive in the intense global race for long-term prosperity. Although the session was certainly contentious on many fronts, this measure passed with broad bipartisan support. It was not about politics—it was about economic opportunity for generations to come.
At the moment, the Enterprise Fund seems to be facing the ultimate irony: it is both incredibly successful and subject to extensive criticism. In fact, it seems as if the more “wins” the Fund chalks up, the more vociferous the outcries become in editorial pages across the state. Let me offer a bit of perspective.
For most of the early 1990s, Texas consistently ranked first or second in the country in new manufacturing locations. Our totals fell precipitously thereafter, as we dropped to an embarrassing 37th by 2000. In the early 1990s, Texas also landed a dozen new locations with investments in excess of $500 million. Between 1996 and the Toyota plant in early 2003, we didn’t land any. The reason was quite simple. Other states had become very aggressive in economic development efforts and incentives; Texas had not.
As growth began to slow and our inability to compete became obvious, the Legislature in 2001 passed a bill requiring the state to conduct a comprehensive economic development study, but appropriated no money for the task. At the request of state officials, my firm performed a very extensive analysis on a pro bono basis. One of the key elements of that study was a benchmarking relative to other states; we discovered that the major difference (among many) between Texas and the “winner” in many location decisions was a deal closing fund. The Governor’s Task Force on Economic Growth reached exactly the same conclusion.
Armed with this information, the Governor and the Legislature created the Texas Enterprise Fund. In its short life of less than eight months, the Fund has already (1) secured a multi-billion dollar investment in a state-of-the-art microelectronics facility (Texas Instruments) with a corresponding commitment to a world-class nanotechnology program at the University of Texas at Dallas, (2) brought thousands of new aerospace jobs from Voight in a consolidation that, without these resources, could well have resulted in the loss of several thousand jobs, and (3) ensured that Sematech would do the prototyping for the next generation of technology products in Austin, rather than New York. There have been several others as well, and there will be more.
These “wins” are important not only for the high paying jobs they bring to Texas, but also for assuring that we will be at the forefront of the next generation of products. If we are going to achieve sustainable prosperity, we have to be a player in emerging industries. There is no other way.
Critics say that we shouldn’t be giving incentives at a time of pressing needs in other areas. If this were a debating society or a scientific laboratory, I would be in total agreement. In the “real world,” however, such incentives are critical. Our seven-year drought while others prospered is compelling evidence on that score. To abandon this effort would be to eat our seed corn. A stagnating economy would certainly compound problems such as unemployment, underinsurance, and inadequate funds for schools.
They also say that maybe we should dribble the money out over time in small doses (which is not competitive) or conduct all of the negotiations in public (which is impossible in the site selection process). We should certainly spend scarce public resources wisely, and the Fund is doing just that. Every outlay has to be approved by the top three statewide officials (not exactly a bunch of spendthrifts), and they have established an extensive set of parameters. In fact, those in the economic development community will tell you that the Fund needs more flexibility, not less.
In short, the Texas Enterprise Fund is working and needs to be maintained, expanded, and renewed. It is the primary catalyst in moving Texas once again to the head of the pack in economic development and job creation. Most important of all, “it ain’t broke—so don’t fix it.”
Outsourcing I’ve touched on these issues before, but let me say it again. The current flow of certain services jobs to other countries is a necessary process crucial to the ongoing vitality of the US economy. It’s nothing more than the continuing evolution of our business base. It’s been going on for centuries. The issue has become so politicized, however, that it can be difficult for many people to deal with it rationally. Here are some basic facts.
The number of jobs in traditionally “white collar” industries that have been sent abroad remains a very small fraction of the job market, even in industries such as computer programming which have received an inordinate amount of media attention recently. In fact, the Infotech sectors’ losses to outsourcing (or offshoring as it’s often called) are dwarfed by the employment reductions caused by the bursting of the Internet bubble several years ago and the subsequent economic slowdown, although many people tend to ignore this fact.
The companies sending jobs abroad save substantial sums on wages. These funds are then available for investment in innovative work, which as I have said many times, will be the lifeblood of future economic growth. The firms are also better able to control costs, helping keep a lid on inflation.
As these companies innovate, spend money on research and development, control costs, and otherwise become more efficient, they contribute to job gains across a spectrum of industries. A recent study sponsored by the Information Technology Association of America puts these gains at 90,264 in 2003, with expected growth to 317,367 by 2008. Texas, they estimate, has already gained some 7,236 jobs. Net new jobs. In other words, more jobs were gained due to lower inflation and higher productivity than were lost to companies in India, China, and other countries due to offshoring.
Without a doubt, the trend has caused huge problems for thousands of Americans. I do not mean to minimize the misery to those individuals who have lost jobs to people in foreign lands. However, it is far better that we help those affected find other jobs through quality training programs and other services than to try to stop the evolution of our economy.
Outsourcing is a term used decades ago to refer to the practice of companies contracting with specialized firms for particular tasks rather than performing them with existing staff. For example, a decade ago my employees folded, labeled, mail metered, sorted, and posted our monthly publications. Now, we hire a company to do it—they’re faster, better, and cheaper. They have the right equipment; they know all of the shortcuts. My staff’s time is better spent doing the things that we do well—economic research and analysis, for one thing.
Similarly, the technology industry (as well as others affected by the current outsourcing trend) should focus on what US firms do well—namely innovative, cutting-edge advances. Sending work to other countries is a part of the process.
posted @ 08:08 AM CST [link]