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Rangel Pushes Young Adult Jobs Bill

POSTED: October 02, 2008, 12:00 am

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Rep. Charles Rangel (D-NY), chairman of the House Committee on Ways & Means, has introduced legislation to provide tax incentives for employers to hire “disconnected youth,” young adults, age 16 to 24, who are out of school and out of work. H.R. 7066 would amend the current Work Opportunity Tax Credit (WOTC) to include low-skill young adults who have been out of work and school for the past six months.

Chairman Rangel reflected on his own life experience in announcing the introduction of the bill. “My own life story illustrates the power of the American dream and we need to rekindle that dream for the youth of today and tomorrow. Let us keep in mind that what we’re doing isn’t an act of generosity. Our parents’ and grandparents’ generation have already shown us the way: making investments in these youth now will save us money as they work hard and stay in the labor force, return to school and live productive lives,” reminded Rangel.

The plight of disconnected youth is a quiet crisis in our nation. These are generally young people who drop out of school and are unable to secure permanent employment. Although some do graduate or receive a GED, their employment prospects are severely limited. Faced with no skills and limited proficiency in any substantive subject area these young people become permanently “disconnected” from opportunity and become mired in various stages of estrangement from society. In many instances these young adults become entrapped in the criminal justice system, adding another degree of difficulty to their efforts to find suitable employment. Given their existence outside of formal systems – public education or labor market – these young people often live below the radar.

The young adult population that fits this description of disconnection is present in communities large and small. Across the country there has been estimated as many as 4 to 5 million disconnected youth. In one study conducted by a New York City social policy research group, the Community Service Society of New York (CSS), it was estimated in New York City alone there are upwards to 200,000 disconnected youth. CSS’ research prompted Rep. Rangel to introduce H.R. 7066. “Community organizations such as the Community Service Society of New York, led by David Jones, have long championed the cause of disadvantaged youth,” said Rangel. “Their outstanding work has given me and my congressional colleagues a better understanding of the costs that this nation will bear if we fail to simply give these young men and women a helping hand.”

In addition to CSS, the idea of a tax credit to encourage the hiring of disconnected youth has also received interest from business groups such as the Partnership for New York City and Corporate Voices for Working Families. Rep. Rangel initially sought out the Partnership when he was prompted by CSS’ research into disconnected youth to consider drafting legislation. CSS engaged Corporate Voices for Working Families on the issue after the business group released a study on workforce preparedness issues that revealed some direct links to barriers facing disconnected youth in the labor market.

The Workforce Opportunity Tax Credit (pronounced as Wot-See) targets categories of disadvantaged workers. Under the program an employer must employ a worker for at least 120 hours. For most eligible hires who are employed at least 400 hours, employers can claim a credit against their income tax of up to $2,400 (40% of the first $6,000 in wages paid during the workers’ first year of employment). For eligible hires who work at least 120 hours, but less than 400 hours, employers can claim a credit of $1,500 (25% of the first $6,000 in waged paid). H.R. 7066 includes youth aged 16 through 24 who are designated by a State employment security agency to have not been regularly employed or in school for the past six months and who lack basic skills for employment.

“In a time of rising economic distress, our disadvantaged youth have little-to-no chance of finding employment,” said Rep. Rangel. “The problem is so great that some of our minority youth face unemployment rates of nearly 30 percent. We need to send a message to all of our young people, regardless of where they live or who their parents are, that they are not out on their own. My bill would provide a Federal tax credit to businesses that step up and provide these young people with an opportunity to develop the skills that will help them move forward.”

Rep. Rangel is expected to convene a hearing on H.R. 7066 to bring corporate leaders, public policy research groups and community advocates together to lay out the case for expanding the WOTC to target disconnected youth.

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