Starbucks-led coalition commits to hiring 100,000 disconnected youth

CHICAGO — A coalition of executives from some of the nation's largest companies, spearheaded by Starbucks CEO Howard Schultz, pledged to hire 100,000 young Americans who have been shut out of the job market.

The 100,000 Opportunities Initiative, which launches Monday, aims to give a leg up to some of the estimated 5.5 million Americans, ages 16 to 24, who aren't employed or in school. Demographers and economists refer to the group as "disconnected youth."

Schultz, who pledged this year to hire 10,000 such youth by the end of 2018, is being joined by top executives from 16 companies who will look to hire young people for apprenticeships, internships and part-time or full-time jobs.

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In addition to the Seattle-based Starbucks, Alaska Airlines, Cintas, CVS Health, Hilton Worldwide, HMSHost, JCPenney, JPMorgan Chase, Lyft, Macy's, Microsoft, Porch.com, Potbelly Sandwich Shop, Taco Bell, Target, Walgreens and Walmart have signed on. The coalition is looking to recruit more companies to join the push.

"What we've learned over these last many years is that rules of philanthropy, the rules of engagement have radically changed," Schultz told USA TODAY. "You really have to build a coalition of like-minded organizations and people who have the kind of experience and skill base and local knowledge to tackle a problem as complex as this."

New Starbucks Express Format opens on Wall Street on April 30, 2015 in New York City.
Getty Images
New Starbucks Express Format opens on Wall Street on April 30, 2015 in New York City.

The push by Schultz, who has been outspoken in his call to shareholders about the need for the coffee company to embrace social responsibility, comes after a pledge to hire 10,000 veterans and the expansion this year of a company program that pays employees' tuition toward an online degree at Arizona State University. Schultz also made a short-lived push this year for Starbucks baristas to engage customers in a dialogue about race relations.

Schultz has long been concerned about the dearth of opportunity in huge swaths of America. He grew up in a Brooklyn housing project but saw his fortunes change after earning a football scholarship to Northern Michigan University.

The plight of the young and poor — particularly people of color — was made more difficult by the Great Recession, when teenagers and young adults found themselves competing for jobs against adults and college graduates who were settling for positions below their skill level. At the national level, 22% of blacks, 20% of Native Americans, 16% of Latinos, 11% of whites and 8% of Asian Americans fall into the category of disconnected youth, according to a study published last month by the policy group Social Science Research Council.

Though the situation has shown modest improvement since 2010, the peak year for youth disconnection over the past decade, the job prospects for many young people remain grim. One in seven young people neither work nor go to school. This group of Americans is roughly the size of Minnesota's population.

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Martin Drell, who heads the infant, child and adolescent psychiatry division at LSU Health Sciences Center in New Orleans, said the post-recession malaise causes an enormous strain on the psyche of low-income Americans.

"There were always people who never made the American Dream, but what is happening now is the American Dream is getting more difficult to fathom for young people at the bottom layers of socioeconomic status," Drell said.

The coalition will host a jobs fair in Chicago on Aug. 13, the first of what Schultz expects to be many across the USA. Schultz recruited actor and rap artist Common, a Chicago-native, to lead a discussion with about 2,000 young people expected to attend the first fair. The companies have set a goal of making 1,000 hires — including 200 on-the-spot job hires — from young people who attend the Chicago fair.

"I believe in the talent that lies within our young people, and I know that when we give them a real chance, they will achieve and soar," Common said in a statement.

To launch its first hiring burst in the campaign, the coalition chose a city where the plight of disconnected youth has been on the forefront of policymakers' agendas.

Mayor Rahm Emanuel gave funding priority to youth jobs and training programs and an initiative to make community college free for any student who graduates from the city's public schools with at least a B average even as the city faces mounting budgetary challenges.

The mayor, who was re-elected in April, used much of his second inaugural address to call for a commitment to giving "an adolescent who was born without a prayer his first prayer at getting ahead."

Chicago faces daunting challenges in finding a path for disconnected youth. Only 11% of Chicago teens in some of the poorest households, those with less than $20,000 in annual income, were employed in 2013, according to a study published this year by Drexel University's Center for Labor Markets and Policy.

Chicago, like cities throughout the country, has felt the impact in recent years as states and the federal government slashed funding for summer jobs programs that helped communities reach out to disengaged youth.

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"Both Illinois and the federal government are AWOL when it comes to our adolescents, at least when it comes to (youth unemployment)," Emanuel said. "I believe those kids are not only getting a job and a paycheck, but they are also getting all the values that come with that paycheck — the respect of work, the respect of responsibility and structure."

Schultz said the need for private sector businesses and government to dig into the issue is hardly altruistic. Taxpayers spent roughly $26.8 billion in 2013 on incarceration, Medicaid, public assistance and Supplemental Security Income payments associated with disconnected youth, according Social Science Research Council.

"If we allow the cultural and economic divide to continue to widen, I think we're going to be facing significant social issues that are greater than the ones we have today," Schultz said. "That's why it's so vitally important that we recognize that this cannot be business as usual."