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Chapter Two: Literature Review

Many cities within the U.S. have summer jobs programs for young people. This has been made possible with the Summer Youth Employment Program (SYEP) paving the way. Several other cities that initially did not have such initiatives for their residents have implemented them. This trend appears to be moving fast and most of the youth in the cities look forward to getting a chance to showcase their skills, improve on their theoretical knowledge, start and gain strong foundations for their careers, gain useful professional experience, and have a taste of employment (Kao & Tienda, 1998). The creation of these programs has taken the cities by storm. The investment towards that direction is immense. Supporters of the programs might have seen the benefits of it a long time ago, but it is about time for these programs to be scrutinized, analyzed, and given more recommendations for improvement. Perhaps, as a society, we can do better. There are several parts of these programs that need to be modified. This will ensure that the program builds more on its current success, empowers the young generation of this country, and develops great professionals that will drive the country’s future in a positive direction, in the coming years.

While this is a positive thing for the country’s young generation, the purposes of these programs have to be clear, elaborate, and above all attainable. Good introduction and transition. The SYEP Program in New York is the largest in the US by population (Gelber, Isen, & Kessler, 2014). Every summer, a great number of youth are recruited into the program. These programs usually take from five to seven weeks of youth’s summer holiday. At the onset of the program several years ago, the marginalized groups of society, particularly minorities, were to be the greatest beneficiaries. However, focus has since shifted from the minorities to everyone. Attaining the “American Dream” in these times is not based on a person’s race or colors but determination, hard work, and having the ability to identify several competitive advantages over others (Hacker, 2008).

During these summer programs, the participants are usually given a variety of jobs from the public sector and some private institutions too. They spend their summer holidays working under different departments of different organizations, giving them the ability to earn an income during this time. This could be a major boost to the youth and it is especially of great importance to youth from poor backgrounds, poverty-stricken neighborhoods, and those who have significant barriers to obtaining gainful employment and quality education. To some people, this is a form of financial empowerment. In actual sense, the current SYEP program has not been well utilized for the development of the participant’s financial independence (Sum, 2014). The youth should be given adequate information that not only empowers them, but gives them financial literacy.

Financial literacy for the participants in the youth employment program is essential for several reasons. According to Gallery, Gerry, and Natalie (2005), a society that appreciates the necessity of equipping its young people with financial knowledge is able to achieve greater financial development and success. A research was done by Biddle, Hilary, & Verdi (2009) to establish the link between early exposure to financial management in people and the ability to invest. It was found that young people who have access to financial literacy information during their teenage years are able to become great investors. Financial literacy equips a young person with information concerning budgeting, dependency on parents, investment techniques, and retirement planning.

Savings and investments are fundamental terms that every youth should know. Ideally, the amount a person saves or invests today will help them in the future. People who are exposed to techniques of saving and investing make a good comprehension of the stock market and the money market (Pettigrew, Taylor, Simpson, Lancaster, & Madden, 2007). In addition, people who have financial literacy skills have an upper hand when determining the amount of funds they need to invest in a particular project (Pettigrew, Taylor, Simpson, Lancaster, & Madden, 2007). Additionally, knowing how to manage money can help a young person increase their investments and earn interests, manage their investment portfolio if they chose to have one, prevent the investment from suffering unnecessary losses, and finally improve the quality of their financial life (Wagner & Compton, 2015). On the other hand, a lack of financial knowledge in today’s world can set an individual into an unfortunate situation of financial losses, financial stagnation, and making wrong investment decisions (Wagner & Compton, 2015). It is time that the younger generations begin managing their financial destiny through empowerment programs that will equip them with adequate and appropriate knowledge like the Youth Workforce Financial Empowerment (YFiE). The SYEP Program has immense potential if other ideas are implemented within it. The effects of the Summer Youth Employment Program have been phenomenal especially in crime-related neighborhoods (Lusardi, Mitchell, & Curto, 2010). If other components are added, the communities in such areas are bound to gain more. Providing financial literacy to participants will be of great importance to those that come from hapless backgrounds. The Youth Workforce Financial Empowerment (YFiE) initiative has a potential of helping to build the gap between the rich and the poor. The current times are the toughest for young people in this country, especially those that come from homes that are less fortunate.

According to Biddle, Hilary, & Verdi (2009), the key to financial freedom and success is more inclined towards the person’s financial literacy rather the finances themselves. Great business people and investors started from humble financial backgrounds with minimal income. The ability to make life-changing investment decisions is the reason that successful investors managed to build their financial empires. It then follows to say that if youth have financial literacy, they are well placed to grow financially.

The country is experiencing situations where wealth accumulation has followed a predictable pattern in past generations, especially the last four decades. Keely notes that influential and rich people continue to amass significant assets through variables like college education, income, savings, length of home ownership and inheritance. This implies that the gap between them and the impoverished is still widening as generation comes and goes (2015). However, every generation since has faced tougher economic conditions to accumulating wealth, with millennials facing the toughest. Most of the current youth are millennials who were born in early 2000s. The financial gap is not only between generations but also age, race, and gender (Keeley, 2015). The solution to these financial gaps is empowering people with financial knowledge. This way, they are able to become the masters of their own financial freedom and destiny.

It is therefore essential for the Youth Workforce Financial Empowerment (YFiE) program to fully capitalize on the impact of the Summer Youth Employment Program (SYEP). Several people like mayors, police officials, and other city leaders believe from observation and personal experience that summer jobs increase skills, reduce youth violence, and otherwise benefit young people (Schensul, Berg, Schensul, & Sydlo, 2004). Until recently, however, most research on youth employment assessed its value for high school youth during the school year; little was known about the impact of summer jobs programming. In the same way, little was known about the impact of the program on the lives of the youth who are disadvantaged. Research on summer jobs programs serving public high school students in New York City found that these programs can reduce violence, make modest but non-trivial improvements in school attendance and academic performance, and reduce the probability of incarceration and mortality (Schensul, Berg, Schensul, & Sydlo, 2004).

In addition, a research was done to establish the impact of Summer Youth Employment Program (SYEP) on several outcomes in New York. These were the youth’ earnings, college admission, incarceration, and mortality (Schensul, Berg, Schensul, & Sydlo, 2004).The study found that participation in a summer jobs program reduced the probability of incarceration (Schensul, Berg, Schensul, & Sydlo, 2004). The effects were most pronounced among those who were 19 or older when they participated in the summer program (Schensul, Berg, Schensul, & Sydlo, 2004).

It also found reduced probability of mortality, most likely by reducing death by “external causes” such as homicides, suicides, and accidents (Schensul, Berg, Schensul, & Sydlo, 2004). However, the study found no positive effect on earnings or subsequent college enrollment (Schensul, Berg, Schensul, & Sydlo, 2004). The authors commented by saying that, “It is notable that even for this young group with typically little prior job experience, and even during the Great Recession period that we examine separately, an employment program did not provide a path to greater future earnings’’ (26 (2):5). It therefore justifies the notion that the financial empowerment is not all about the money available but the skills that are gained. The skills can be gained through financial literacy.

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