JPMorgan Chase is making a big bet — on younger Americans who don't have jobs.
Last month, the Wall Street mega-bank committed $75 million to tackle youth unemployment, which in parts of Europe, the Middle East and Africa is well above 20 percent, and is frequently mentioned as being responsible for a range of social ills in those regions. In the U.S., the youth unemployment rate runs at 10 percent, about double the national jobless rate and totaling more than 5 million.
For the U.S. economy, the stakes are high: A 2014 paper by the Brookings Institution estimated that unemployment among the 16-24 age group will account for $20 billion in lost earnings over the coming decade.
Longer term, the collective social burden of youth unemployment will cost the economy a mind-boggling $4.75 trillion, estimates from the Corporation for National and Community Service say. Put in context, that is nearly one-third of the nominal value of the U.S. economy as a whole.
Enter JPMorgan, which is plowing millions into its New Skills for Youth Initiative, an effort that will invest in a range of job education programs and skill training.
Yet looming in the background are scores of programs and pledges that have sought to bolster the fortunes of the young. In an interview with CNBC, one of the organizations working with JPMorgan to administer the funds explained how the initiative plans to make meaningful changes, and seeks to avoid the fate of other pledges that have been made in the past.
"This is a significant investment that will help states turn their bold visions into a reality," said Stephen Bowen, the director for innovation at the Council of Chief State School Officers and the National Association of State Directors of Career Technical Education Consortium. "It is a crisis that only 60 percent of students in high-poverty urban school districts graduate from high school and that more than five million young people are out of work and school."