The Minnesota State Demographic Center in March put the state's growing worker shortage in graphic terms in a report that proclaimed the coming decade "will likely be the most severe in terms of labor supply in Minnesota."
Despite the dire forecast, Minnesota is at risk of leaving some 4,000 potential workers on the sidelines, with more to follow every year if changes aren't made.
These 4,000 are among Minnesota's disconnected youth, those in their late teens and early 20s who are experiencing homelessness. History has shown that if they aren't on a path to self-sustaining lives by age 25, they often face a lifetime of struggles. Minnesota employers lose them as employees and Minnesotans underwrite the lifetime costs of interactions with police, welfare and other taxpayer systems, a price tag that runs at least $250,000 per person.
It doesn't have to be this way. Take a 23-year-old man we'll call Delon as an example. Delon's path to the workforce hasn't been an easy one, and it likely wouldn't exist at all if it weren't for the partnership of the business community, Hennepin County, the city of Minneapolis and nonprofits.
When Delon was 16, he decided that it would be easier for his grandmother, who raised him, to care for his younger siblings if he left her home. In short order, though, Delon found himself living on the streets. He was identified as one of the "Downtown 100," an initiative of the Minneapolis city attorney's office to reduce crime in downtown Minneapolis by identifying the most chronic offenders.
Through the Downtown 100 Initiative's partnership with YouthLink, Delon was able to gain a safe place to live and access to employment services and other critical programs. Today, Delon is employed and enrolled at Minneapolis Community and Technical College with the goal of earning a degree in theater and business. He is on a path to reduce the labor shortage by at least one: him.
As board members of YouthLink, we see success stories like Delon's all the time. For 40 years, YouthLink has connected young people experiencing homelessness to resources and support, all with the goal of helping them make the transition to healthy, self-reliant adulthoods.
But as a businessperson and a researcher trained in social anthropology, we wanted more than anecdotal evidence. We want to build a business case based on solid economic data to support the partnerships we seek with employers, taxpayers and others.
A challenging question
Can business-world metrics be applied to programs that help steer youth experiencing homelessness to financial independence?
An important part of the answer was found in a rigorous examination of YouthLink's work. Foldes Consulting LLC studied a cohort of 1,451 clients YouthLink served in 2011. The task was to determine how many of the 1,451 need to become financially self-sufficient to cover a full year's cost of programs for the entire group.
The study focused on the "break-even" cost of helping homeless youth achieve self-sustaining lives. How many kids have to succeed to justify the investment in all 1,451 if the only criterion is a no-nonsense, dollars-and-cents evaluation?
The results are stunning. If just 89 of the 1,451 youth in the study cohort — about 6 percent — gain financial independence at age 20, Minnesota taxpayers break even. The anticipated long-term costs avoided in taxpayer-funded programs (for example, welfare, shelter, health care and interactions with the criminal justice system) from those 89 success stories are enough to cover the annual cost of supporting the other 1,362 young people. The 90th success story and every one that follows gives taxpayers a net gain.
The stakes are enormous. The estimated cost to taxpayers of the 1,451 youth in the study cohort from age 16 to 64 is $360 million for welfare, housing, health care and other support programs, and costs of the criminal justice system. The cost to society — including expenses such as lost wages and tax revenue not paid by those who aren't employed — is even larger. The study estimated that nearly $890 million will be lost over their lifetimes if the 1,451 young people continue on their present paths.
Proposals are in front of the Minnesota Legislature and Hennepin County to prevent and end youth homelessness and to support the transition of those who are experiencing homelessness to financially independent lives.
Delon is one great triumph-in-progress, and there are many others. In fact, there are 4,000 additional success stories waiting to be written. The break-even study makes clear that the work of YouthLink and other nonprofits and the public policy proposals are smart investments in job creation, not welfare for a few.
Will Roach is chair of the board of YouthLink and director of business development for Baker Tilly. Steven Foldes is a board member of YouthLink, principal of Foldes Consulting, LLC, and an adjunct associate professor of epidemiology and community health at the University of Minnesota.