Why Do Banks Care About Youth Career Readiness in New York?

Five months ago, JP Morgan Chase announced its biggest philanthropic undertaking ever: a $250 million initiative to bolster the skills of workers, with a big focus on young people. Then, just three months later, the Citi Foundation announced its biggest initiative ever: a $50 million, three-year effort to improve career readiness for 100,000 youth.

Looks like a pattern to us. But why this focus? 

Well, for starters, youth unemployment and alienation from the labor market is a huge problem. These days, even if you went to a good college, finding a job can be tough. So imagine if you are low-income and lacking in the career skills necessary to compete for the shrinking number of entry-level jobs. Labor experts estimate that young Americans aged 16-24 make up 15 percent of the nation’s unemployed.

Young people of color are especially likely to be detached from the labor market, with any number of negative consequences. And addressing that social disaster has been a growing focus of foundations lately, most notably with major funders lining up to support the My Brother's Keeper initiative, which brings together public, private, and nonprofit resources to empower young men of color. 

But banks like Chase and Citi have a particular stake in this issue, since they hire huge numbers of young people, often of color, to staff their giant operations, from working the teller windows to handling back office responsibilities. 

This is particularly true in New York, where Chase and Citi are among the two biggest employers. But banks also loom large in the labor markets of a number of other cities. So when young people don't make it out of high school, or emerge with poor work skills and habits, these banks pay a direct price.

That's the context for understanding what the Citi Foundation is doing with its $50 million Pathways to Progress initiative, which will focus not only on New York, but nine other of the largest U.S.  cities: Boston, Chicago, Dallas, Los Angeles, Miami, Newark, St. Louis, San Francisco and Washington, DC. The initiative will help young people set and meet educational and career goals as well as map out their professional futures. And the mayors of all ten cities have signed up in partnership with the foundation to make sure the three-year initiative is a success.

“If we want a strong labor force for generations to come, we need to make sure our country’s youth are prepared to meet the evolving needs of employers,” said Citi CEO Michael Corbat. “Through Pathways to Progress, we will connect young people with opportunities to fuel their own career ambitions and develop the skills that are needed in a 21st century economy. The professional success and civic engagement of our young men and women are critical to our economic competitiveness, and we are proud to support them.”

Job training and career development initiatives are famous sinkholes for both government and philanthropic dollars, so the Pathways effort has a steep hill to climb. But the game plan here looks solid.

The initiative takes a 360-degree approach to bolstering low-income urban youth. From helping young people obtain meaningful summer jobs and financial literacy education, to establishing youth-focused entrepreneurship camps in the 10 cities, the program is invested in helping make young leaders masters of their own fate. And it’s not all about the money: The program will also leverage volunteerism as a strategy to help the youth and young adults develop leadership and workplace skills needed for success in college and in their careers.

Sarah Rosen Wartell, President of the Urban Institute, thinks Citi is on the right track: “With this initiative, the Citi Foundation and mayors around the country recognize that strengthening the career-readiness of young workers in a community may not only contribute to their own improved outcomes, but can help drive a region's economic growth through productivity gains, rising incomes and business attraction and retention."