OpenIDEO is an open innovation platform. Join our global community to solve big challenges for social good. Sign Up / Login or Learn more

Five Policy Solutions to Job Creation for Youth

Five policies can spur job growth. It's that simple. * Limit Corporate Hoarding, Spur Hiring * Set an Earnings Ceiling * Raise Minimum Wage and Help (Not Hurt) Youth Employment * Open Borders: Visa-Free Work Abroad * Improve Public Transport to Connect Youth with Jobs

Photo of David
0 0

Written by

Five Policy Solutions to Job Creation for Youth

* Limit Corporate Hoarding, Spur Hiring 

American companies hold a record $1.6+ trillion — $1,600,000,000,000+ —in savings that they are hoarding.  

Meanwhile, there are almost 10 million people unemployed in the country — enough, if lined up shoulder to shoulder, to stretch across the continent.  

The result? Record corporate incomes are high, personal incomes are low and hiring is slow.  

What we are seeing is the reversal of the American dream. One solution may be to limit the amount of cash that companies are allowed to keep on hand — or disenctivize corporate hoarding of cash through higher taxes — in order to encourage firms to spend down their cash and invest in the economy: in research, development and jobs.  

Inaction combined with greater workplace efficiencies provided by technology may mean richer and richer companies hiring fewer and fewqer people — and a distopic future.  

Companies shouldn't be compelled to hire people simply for the sake of hiring people — indeed, hiring more people can lead to better service and better technoloical advancements — but companies today don't feel compelled to hire so a government push is in order. For years, the unemployed have been told that companies are having tough times and they cannot hire. But it's bogus: Thanks to deregulation that in turn allowed for industry consolidation and decreased competition, companies are making more money than ever before and have little incentive to improve service or pay higher wages. Companies can afford to hire, they are collectively choosing not to do so. It's time to fix that. 

* Set an Earnings Ceiling

When Ben and Jerry's was starting out, it capped earnings for its highest-paid employees at five times the amount paid to its lowest-paid employees. It raised the rate overtime, and Unilever eliminated the earnings cap after its takeover of the company, but the example survives nonetheless.  

Today, executives get paid millions ( with the average CEO getting paid about $750,000 annually, not counting stock options and other bonuses), while many of their employees, in more physically arduous jobs, work for minimum wage.  

Since the dawn of Reaganomics, the average executive has gone from being paid 20 times the salary of the average worker to more than 230 times the average worker.  

We need to restore a balance. If we cap the amount executives earn, then we can help reduce the earnings gap and help create a more equal society, as well as free up companies' payrolls to hire more workers and pay low-wage workers more. It's win-win-win. 

* Raise Minimum Wage and Help (Not Hurt) Youth Employmen

Most minimum wage jobs are local service jobs in places like restaurants, hotels and cleaning services -- and can neither be exported to lower-wage areas nor cut. And the current low minimum wage does not cause more employees to be hired that would orgeewise not be hired if wages were higher. 

For example, the current very cheap salaries of waiters, well below minimum wage since their real salaries come from customers' tips and not their employers, does not mean that restaurants have responded by overemploying waiters to ensure, say, that there is one waiter per customer. Rather, companies hire minimum-wage workers to their needs, no more, no less. Someone has to cook the food, bring it to the table and clean the floors and bathrooms. And that someone is, on average and in comparison to the age breakdown of the general population, disproportionately young. Raising the minimum wage, therfore, disproportionately provides a positive effect for youth and makes minimum-wage jobs more attractive for youth.  

U.S. states with a higher minimum wage provide provide the case studies. In Califfornia, for example, researchers at UC-Berkeley, in examining employment in border regions between states, found that a higher minimum wage does not lead to job loss. Further, UC-Berkeley researchers also found that a higher minimum wage led to employers being better able to attract and retain workers.  

If we want to increase youth employment in the country, one of the best things we can do is increase the minimum wage. 

* Open Borders: Visa-Free Work Abroad

Why is it that inanimate objects have more mobility rights than people? International free-trade laws have allowed for the free flow of material goods across international borders, but people are required to obtain visas to do the same.  

This is particularly an issue when it comes to people being able to move from a place without jobs to a place with plentiful job opportunities. Employers sometimes want international applicants to have the necessary visas before applying for a job, but their countries often require job placement before they will issue the work visa.  

It's a Catch 22. Free and open borders, however, would allow for young people to legally move to where they can get jobs. 

* Improve Public Transport to Connect Youth with Jobs

The typical metro-area job is inaccessible to 73 percent of an area's working-age adults within an hour-and-a-half of traveling on public transit.  

In some areas the cost of roundtrip public transportation to work can equal an hour's wages or more.  

People who live in places without public transport in the evening can't accept night jobs because they'll have no way of getting home.  

And others will spend just as much time getting to and from work as they will at work.  

If we're going to get more youth employed, we need better and cheaper public-transportation systems to get them from where they live to places of employment.  


Who does this idea benefit, who are the main players and what's in it for them?

This proposal benefits both those without jobs as well as those with low-paying jobs.

How is your idea specifically increasing access to employment opportunities and pathways for young people?

The combination of these five policy solutions will spur the creation of millions of jobs, particularly for youth.

What early, lightweight experiment can you try out in your own community to find out if the idea will meet your expectations?

These policies need to be implemented on a national scale in order to be effective.

What skills, input or guidance are you keen to receive from the OpenIDEO community to help you build out or refine your idea further?

Who wants to take these on?

The idea emerged from:

  • An individual

How do you envision your idea being implemented?

  • I'm more throwing the idea out there to inspire potential implementers
View more

Attachments (12)


Vanity Fair: Of the 1%, by the 1%, for the 1%


Economic Policy Institute: CEO pay and the top 1%


"Minimum Wage Shocks, Employment Flows and Labor Market Frictions"


"Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties"


"Job Search, Transport Costs and Youth Unemployment"


"Job Sprawl Revisited: The Changing Geography of Metropolitan Employment"


"Transit and Jobs in Metropolitan America"


"The Connection Between Public Transit and Employment"


"The Geography of Youth Unemployment: A Route Map for Change"


"Youth Unemployment in Rural Areas: What can be done?"


"Commuting in America 2013: The National Report on Commuting Patterns and Trends"


"High Cost or High Opportunity Cost? Transportation and Family Economic Success"


Join the conversation: