Who Will Share In DC’s Economic Recovery?

The greater Washington area seems to be on the road to economic recovery. The Brookings Institution reports that it’s one of three metro areas whose economic input returned to its pre-recession level in the second quarter of 2009. And the Washington Business Journal reports that IHS Global Insight–an economic forecasting firm–predicts that the area will get back to its pre-recession job level in 2011.

This is good news. But we must remember the area’s history of unevenly shared prosperity. We were recently reminded of this when the Washington Post reported that the District’s unemployment rate surged to 11.1% in August, while Virginia’s fell to 6.5% and Maryland’s stabilized at 7.2%.

The Post noted that “some employment experts attributed the disparity to the higher proportion in the District of undereducated employees.” We’ve got large disparities within the District–and for the same reason.

In 2007, the DC Fiscal Policy Institute reported that the District’s decade-long economic boom had not been widely shared. This could be seen in the low employment levels among African-Americans and residents without postsecondary training and in dramatically growing disparities between high-wage and low-wage workers.

Recently-released census data show that these trends continue. As DCFPI reports, the overall median income for D.C. households rose in 2008, but households led by someone without a high school degree saw their incomes drop by nearly 20%. And while the inflation-adjusted median income for white households grew by 20% from 2000 to 2008, black households’ median income rose by just 2%.

Clearly, improving all levels of education and training must be a central element of efforts to bridge this economic divide. As a joint report by DCFPI and DC Appleseed says, D.C. has a “high-skill, knowledge-based economy,” with strong credentials required for even low-skill jobs.

Nobody would say that the Fenty administration isn’t trying to improve primary and secondary education. But adult education and training need attention too.

According to Census Bureau estimates, in 2007, approximately 51% of D.C. residents 25 years or older had attained less than an associate’s degree. And a 2007 Brookings report estimated that between 51,000 and 61,000 low-income working-age residents were in need of workforce development services to compete in the District’s high-skill labor market.

The Great Recession has almost certainly increased the need for such services. Of course, it’s also reduced tax revenues, thus hampering the District government’s ability to fund them.

But there’s some heartening news. The District has received $10.7 million in workforce development funds from the economic stimulus package. It plans to use the money to train residents for jobs in growth industries, i.e., emerging “green” industries, health care and hospitality. In fact, many who receive “green” training may get work immediately on the $8.1 million weatherization initiative that ARRA has funded.

And despite budget challenges, D.C. policymakers have thus far kept $4.6 million of locally-funded adult job training in the Fiscal Year 2010 budget.

If you believe that adult job training should be a top priority, you have a chance to weigh in by testifying at the public oversight roundtable that the Committee on Housing and Workforce Development will hold on Thursday, October 1.

The roundtable will start at 11:00 a.m. in Room 412 of the John A. Wilson Building (1350 Pennsylvania Avenue, NW). You can also submit testimony for the record. For either option, you’ll need to contact Drew Hubbard at 202-727-8230 or dhubbard@dccouncil.us.

This recession has taught us that we’re all affected by one another’s economic fortunes. Let’s each do our part to ensure that we learn from past mistakes and climb out of this economic morass together.

UPDATE:  The Committee on Housing and Workforce Development roundtable has been postponed. No new date has as yet been announced.

5 Responses to Who Will Share In DC’s Economic Recovery?

  1. Martha Ross says:

    Right – a major challenge for the District, in boom times and in lean times, is to connect more of its residents to the city and the region’s relative prosperity. We’ve got a strong employment base and high median wages, accompanied by high poverty and unemployment rates. What’s wrong with this picture? Part of the problem is that many District residents don’t have the skills and supports to get and keep a job.

    But I wonder how the “skills gap” argument plays with community members. I think some residents may perceive it as a put-down, and could be especially frustrated if they don’t see opportunities to increase their skills and so feel stuck in unemployment or dead-end jobs. Additionally, they may feel like it ignores poor job quality and discrimination. Thoughts?

  2. kathrynbaer says:

    Your thoughtful comment raises two issues, I think. One is how community members at the low end of the income scale will react to the “skills gap” analysis. Obviously, if it’s not framed carefully, they may view it as a put-down—a version of blaming the victim.

    And surely they’ll feel frustrated if they don’t have opportunities to increase their skills. You know far better than I how adequately the District is handling workforce development. However, I suspect that its programs offer opportunities for some low-income workers and potential workers, but not others. After all, we aren’t dealing here with a single level or type of skills deficit.

    It’s one thing to provide specialized training for jobs in high-demand industries, as the District says it will do with the bulk of its ARRA work development funds. But doesn’t this training require basic literacy skills and also basic workplace skills that those at the margins of the labor force may not have? As you’ve written elsewhere, the District needs to invest more in multi-faceted year-round programs for disconnected youth and young adults. The same, I think, is true for programs for not-so-young adults who are functionally illiterate and/ or have little or no full-time job experience.

    The other issue is whether the “skills gap” analysis adequately explains the income gap. As I wrote earlier, national data offer pretty persuasive evidence that race discrimination is still a factor. The same is true for gender discrimination. And then there’s the matter of employers’ reluctance to hire ex-offenders.

    Finally, there are other factors involved in getting a job with advancement possibilities and moving up the career ladder—affordable child care, transportation, networks, etc. So the supports you refer to a very important.

    In short, it’s important not to reduce the income disparities issue to an over-simple “skills gap” explanation. You and your colleagues at Brookings certainly don’t. Nor does the DCFPI/DC Appleseed report Matt cites. But I’m not so certain our local policymakers have their minds around the problem or are ready to invest what’s needed in programs that will address the more complex aspects. Among other things, these won’t yield short-term, bang-for-the-bucks results comparable to narrowly-tailored specialized skills training.

  3. mattmckillop says:

    Thank you for your insightful comments, Martha. Both of you raise important points. It is certainly true that there are additional factors contributing to the District’s economic stratification beyond the “skills gap.” I did not intend to suggest otherwise in my post.

    Kathryn is right that how low-income residents react to this analysis will depend heavily on how it is framed. But my own anecdotal evidence suggests that those who seek job training resent those who failed to prepare them for the workforce in the first place, not at those who provide/fund training programs.

    I think it’s also important to consider how other community members will react to particular arguments such as those pointing toward discrimination, and how that will affect public support for policy responses.

    At the end of the day, we must all remember that the forces which contribute to social conditions such as poverty and unemployment are complex and interrelated. Reducing the income disparities issue to any simplified explanation reduces our understanding of the problem and undermines our ability to address it.

    At the same time, we have to do something. The demand for quality job training that enhances both hard- and soft-skills far outpaces the current supply. And those who are equipped with relevant skills are better positioned to overcome other barriers until they are adequately addressed than those who are unskilled.

    So let’s continue working hard to ensure that all District residents are afforded an equal opportunity to prosper.

  4. […] my partner Matt just wrote, these apparently are linked to levels of education. In 2008, 32.5% of D.C. residents below the […]

  5. Martha Ross says:

    I didn’t mean to imply that the original post was taking an overly-simplistic “skills gap” approach. It’s just that I’ve been thinking about my own language and ideas and wondering if that’s how I’ve been coming across! These are complicated issues and there are so many ways to approach the issue of income inequality it can be a challenge to figure out what things to foreground (skills, neighborhood effects, public education, family, etc.)

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