Creating Social Value Blog / Social Innovation

Notes from the Case Files: The Opportunity Gap

By Jesseca P. Timmons, a case writer in Entrepreneurial Studies and Social Entrepreneurship for the Lewis Institute at Babson College.

Meeting social entrepreneur Gerald Chertavian, founder of Year Up, opened my eyes to an issue I had been only vaguely aware of: the nationwide “skills gap,” which he also describes as the “opportunity gap.” Gerald, who grew up in Lowell, MA and attended Bowdoin College, later went to work on Wall Street. While living in New York, he became a “Big Brother” to David Heredia, a young man growing up on Manhattan’s then drug-ravaged Lower East Side. Getting to know David and his family would change Gerald’s life. He recalls the exact moment when he realized that it was a complete lack of opportunity that was devastating an entire sector of society:

I can tell you the day, when I had (David’s) brother, Willie, up against the wall in their housing project talking to me, and I said to myself: This man has out-argued me so well, he has out-thought me so well–he would be a great lawyer! Then I realized—he had no idea how to get into the mainstream of this country. None. Nor did David, nor did any of his family, or any of his friends.

When he launched Year Up in 2009, Gerald began to research the systemic issues that contributed to the “opportunity gap”: the circumstances that conspire to keep talented, intelligent and motivated young people unable to break the cycle of poverty, particularly in urban areas. When Ed Marram and I interviewed Gerald for the case study, he summarized the issue this way:

There are 4.5 million disconnected young people in this country—“disconnected” meaning they are out of school, out of work, and do not possess more than a high school degree. That is as much as 18% of all the 18-24 year-olds in America today. We have structural imbalances in our labor market that have, without question, threatened our competitiveness as a country. We have 44% of people in areas of New York City who have only a high school degree, or less, but there are only 22% of jobs that you can get with that little education. That means there is a 20% imbalance between the jobs available, and the labor pool—and it’s only getting worse. It’s going in the wrong direction. I tell people—if you want to pass on a lower standard of living to your children—create a structural imbalance in your labor market like the one we have today.

Having worked on Wall Street and created a hugely successful software company, Gerald also knew there was a need for reliable and highly accountable entry-level workers. (One CEO complained: “Just try hiring a Millennial college grad for $30,000—they’ll be gone in three months.”) In launching Year Up, Gerald sought to create a way to match at-risk, disconnected youth with the desperate need for a reliable workforce. He proposed to CEO’s:

If we can show you a cost effective-source of human capital, would you be interested? If the answer is no, it took ten seconds and that is the end of it, and I won’t waste your time, or my time. If the answer is yes, I ask you to give us a one-year pilot program, and we’re going to prove to you we can provide a cost-effective source of human capital.

We were struck by how Year Up had developed a revenue stream, making Year Up a sustainable nonprofit; addressed a significant social issue, and solved a problem for white-collar employers. Next month, I’ll write about Year Up’s incredible program and how it takes disconnected youth from the streets to college and viable employment.