Keeping Tabs: Locals To Watch In 2014—Carter Malcolm
Brought manufacturing back to the United States from overseas. Provided dozens of jobs for area teen workers.
IT’S 2013, AND there are 2.5 million Americans ages 16 to 19 who are out of work or underemployed. This group includes teens who are employed part-time when they would rather be working full-time, teens who are enrolled in school while actively seeking employment, and teens who are neither working nor enrolled in school. Of these 2.5 million teenagers, nearly 300,000 are employed part time but are seeking full-time work. This means that they want a full-time job, but are not working full time because their employer cut back their hours or they could only find part-time work. This group is not included in the official unemployment rate, but because they are not working to the full extent that they desire, it is also an indicator of just how difficult the labor market is for teens today.
In the summer of 2010, at the height of the recession, teen unemployment in Michigan stood at a staggering 35 percent. State economic analyst Bruce Weaver predicts this summer teen unemployment should be closer to 25 percent. This means that 84,000 teenagers who want to work will be unable to find jobs. Teen unemployment may not seem an important issue. However, by not working, teens miss out on acquiring new life skills which can help them move on to better-paying jobs as adults. Unemployed teens are also more likely to become unemployed adults.
The U.S. Bureau of Labor Statistics attributes the current high numbers to the lingering effects of the recession, to increased automation like cashier-free check-outs in grocery stores, and to the unintended consequence of the hike in the federal minimum wage, which rose from $5.15 an hour in 2007, to $7.25 in 2009. (Sixteen states have a minimum wage that is higher than the federal rate, like California, where it’s $8.00 an hour.)
High teen unemployment even means that fewer teens are learning to drive. In 2009 there were some 460,000 drivers on the roads in Michigan who were 19 years of age or younger. But over the next three years that figure dropped by 7 percent to about 427,000. Nationwide the trend was nearly identical. The number of teen drivers fell by 12 percent between 2006 and 2012.
The Center for American Progress published a piece in June 2013 in which the consequences of high unemployment for young workers is presented starkly:
Some of the negative impacts of high youth unemployment are already clear: Young people are increasingly failing to make payments on their student loans, delaying saving for retirement, and moving back home with their parents. Other consequences will be felt long into the future. According to our analysis, a young person who experiences a six-month period of unemployment can expect to miss out on at least $45,000 in wages—about $23,000 for the period of unemployment and an additional $22,000 in lagging wages over the next decade due to their time spent unemployed.
Businesses will consequently suffer from reduced consumer demand, and taxpayers will feel the impact in the form of lost revenues, greater demand for more government-provided services such as health care, increased crime, and more welfare payments. There is no question that lawmakers must enact broad job-creation measures to reduce overall unemployment and get our economy back on track. But because youth unemployment is disproportionately high and its consequences especially long lasting, any such measures should emphasize getting young people back to work.
Enter Ann Arborites Carter and Jackie Malcolm. In 2005 they founded Constructive Eating, Inc. The company makes tableware for kids. If forks and spoons shaped like construction vehicles, plates and place mats for the young eater sound like inventive objects that make meal-time fun, well, they are. Constructive Eating, Inc. is a growing business that, in 2013, was recognized as one of 50 businesses to watch in the state—one of only two business on that list located in Ann Arbor. Constructive Eating sells its products through kitchen stores, toy stores and hardware stores—at about 2,000 or so retailers—across the United States.
Initially, the Malcolm’s products were made outside of the United States. However, The Malcolms eventually decided that it made more sense to move manufacturing to the United States and even to Michigan, where several of the products the company makes are produced. If this bucked the trend of offshore manufacturing, Malcolm and Jackie bucked another trend, as well. They have 36 part-time employees, the equivalent, Carter Malcolm says, of 7 FTE employees. All of those employees are local teens. In an interview, Malcom explained that his workforce is mostly high school juniors. “The kids work from 6-15 hours per week depending on what their school and sports schedules allow,” said Malcolm. “We have a nice training program that supports it all,” he added.
With teen unemployment so high in Michigan, and the importance of having a job so crucial to a teen’s future, the Malcolm’s business model is an outstanding example of entrepreneurial creativity. The Malcolms not only provide much-needed employment, they provide a road map for other employers to follow. The model shows that not only can teen employment help a small business succeed in a marketplace, but just how many lives a small business can impact while helping teens succeed in the same marketplace.