Some College Education Not Enough in DC’s Economy

February 5, 2015

As you may have noticed, this recovery that’s suppose to be more than five years old now hasn’t been one of those rising tides that lifts all boats. We’ve had scads of reports, media features and the like showing how more and more income is flowing to the already-rich, leaving the rest with a shrinking share.

A new report from the DC Fiscal Policy Institute zeroes in on one angle of this nationwide story — employment and wages in the District of Columbia. It does so mainly by comparing Census data for 2007, just before the recession set in, to comparable data for 2013.

The report’s subtitle tells that “DC’s Economic Recovery Is Not Reaching All Residents.” That’s an understatement. For example:

  • Low-wage workers, i.e., those with earnings in the bottom fifth, actually got paid a bit less per hour in 2013 than in 2007.
  • The unemployment rate for black workers was 6% higher late last summer than in 2007, though the overall unemployment rate in the District was just 2.1% higher.
  • About two and a half times as many black workers were jobless for at least six months in 2013 as in 2007.
  • Higher percents of black and Hispanic workers, especially the former, were working part time, though they wanted full-time jobs.

The big message underlying many of the figures and related graphs is that residents without at least a four-year college degree are no better off than they were before the recession. In some respects, they’re worse off.

We’re used to seeing dismal wage figures and relatively high unemployment rates for workers without a high school diploma or the equivalent. And we’ve surely got them in DCFPI’s report.

But the figures for District residents with some college education, including those with an associate’s degree are an eye-opener. We learn, for example, that:

  • The median hourly wage for the some-college group fell more, in dollars, than the median for workers with no more than a high school diploma.
  • At the same time, the median for residents with at least a four-year college degree increased by $2.00 an hour — roughly the same as what the some-college workers lost.
  • The unemployment rate for the some-college group was close to 15% in 2013. This is nearly three times the rate in 2007 — and only about 4% higher lower than the rate for residents without a high school diploma.
  • About 22% of the some-college workers were involuntary part-timers, i.e., wanted full-time work, but couldn’t get it.

Yet when DCFPI turns to what needs to be done, it focuses largely on the District’s lowest-wage workers — and those who either can’t get jobs or could, but can’t afford the collateral costs.

Our some-college workers may benefit from most of the recommendations, but only to the extent they’re as disadvantaged in our labor market as workers and potential workers without their formal education credentials.

For example, DCFPI puts in another plug for career pathways that integrate basic literacy and job training programs — not, one hopes, an approach our some-college residents need.

It also recommends that the District take better advantage of federal funds available for job training and related supports, e.g., transportation subsidies, through SNAP  (the food stamp program). This, I take it, means invest more local dollars because the U.S. Department of Agriculture will reimburse half of what’s spent on an approved plan.

Two other recommendations would help ease conflicts between work and family obligations. One would enable a worker to take paid leave in order to care for a new baby or ill family member. Obviously preferable to quitting, getting fired or, in the best of cases, losing wages you and other family members need.

Another recommendation — oft made and still not fully funded — would increase the reimbursement rates the District pays providers that care for children with publicly-funded subsidies.

We know that some providers won’t accept such children and that others limit the number they’ll accept because, in at least some cases, the reimbursements don’t even cover the costs of care.

Some parents who don’t work could. Others could work more. Wouldn’t do a thing for their wage rates or job prospects. But there’d be more income to spend on other needs.

Still another oft-made recommendation could boost earnings for thousands of workers in the District’s growing “hospitality” sector, as well as some others, e.g., hairdressers, the folks who deliver our pizzas. These are workers whom employers can pay as little as $2.77 an hour because they regularly receive tips.

DCFPI suggests a 70% increase in the tip credit wage — borrowing, it seems, from the long-stalled minimum wage bill in Congress. But it also notes that seven states have no tip credit wage at all — a model the District could follow, if policymakers would stand up to the restaurant and hotel industry lobbyists.

Don’t look to me — or, I would guess, other progressives — to argue against any of these recommendations. But, so far as I can see, none of them gets to the heart of the problem DCFPI illuminates.

If you live in the District, you’ll have a tough time getting — and keeping — a job that will pay enough to support a reasonably secure, comfortable lifestyle unless you’ve got at least a four-year college degree.

What our local policymakers can do about this I’m hard put to say. And I’m certainly not faulting DCFPI for teeing up a handful of quite modest recommendations they could adopt right now — or as part of the budget the mayor’s people are already working on.

But I don’t think we should just shrug our shoulders either. An economy that works for only about half the adults in the city isn’t, to borrow from DCFPI, “enabling all residents to succeed.”

 

 

 


House Spending Cuts Would Mean Massive Job Losses

March 2, 2011

I suppose this is self-evident, but I think it’s worth saying. Spending cuts as deep and wide as the House Republicans want would throw many thousands of people out of work.

Based on the total non-security cuts that went to the House floor, the Economic Policy Institute estimated somewhat over 800,000. Mark Zandi, Chief Economist at Moody’s Analytics, projects job losses at 700,000 by the end of 2012 — this apparently based on the bill the House passed.

Add to the jobless an uncounted number of workers who would be subject to reduced work hours or furloughs.

In the latter camp would be employees in the Social Security Administration. So much for getting timely action on benefits claims — let alone hearings on the large percentage of disability claims the agency initially rejects.

But it’s not only federal employees that would be affected. Think of all the state and local public service workers who’d find themselves on the unemployment rolls — Head Start and K-12 teachers, staff in one-stop centers for job seekers, etc.

A fact sheet from the Senate Democratic Policy and Communications Center says that the Head Start and Title I (Education for the Disadvantaged) cuts alone could cause an estimated 65,000 layoffs. Not a disinterested source, but not necessarily out of the ballpark either.

And then there are all the private-sector workers indirectly paid by federal grants to the states, e.g., the professionals and other staff in the community health centers that would close or shrink. The centers’ national association estimates job losses totaling 7,434.

Add to these the jobs that would be lost in the maternal and child health centers the Republicans would totally defund. And the 80,000 public service jobs funded by AmeriCorps — also targeted for extinction.

And what about the construction workers who won’t be rehabbing public housing or building new affordable housing because of cuts in the Department of Housing and Urban Development’s budget?

And the workers that we devoutly hope will be maintaining the Washington metro area’s rapid transit system, but probably won’t be if the proposed $150 million WMATA cut is approved?

I could go on generating examples, but I think you’ve got the picture.

Confronted with the loss the federal jobs, House Majority Leader John Boehner replied, “So be it. We’re broke.” Which is stuff and nonsense. But then so is the notion that the proposed spending cuts will reduce the deficit that’s got our policymakers — Republicans and Democrats alike — so agitated.

When people don’t work, they don’t owe as much — or anything — in income taxes. They also don’t buy as much. Business profits go down and, with them, corporate tax payments.

So federal revenues decline, as they did when the recession set in. Meanwhile, mandatory safety net spending, e.g., for food stamps and Medicaid goes up, because more jobless people means more people poor enough to qualify.

So how is the deficit shrinking?

I think just about everyone agrees that federal spending is on an unsustainable upward curve. But the programs the House Republicans would slash have virtually nothing to do with that. The pie chart and analysis on Dustin’s Our Dime blog show why.

Maybe the House Republican leadership has put itself in a box. It pledged to immediately cut at least $1 billion in federal spending while holding the military and programs for veterans and seniors harmless.

This helped get a bunch of Tea Partiers elected. And now they’re insisting that the House make good on the pledge, though the very conservative chairmen of the Budget and Appropriations Committees apparently didn’t want to go there — at least not during the shrinking remainder of this fiscal year.

Whatever the case, I think EPI is right when it warns that the House proposal would magnify the ongoing labor market crisis.

Also right when it says the proposal “suggests that Americans take on unnecessary pain with no long-term gain.” I’d just add that some Americans are going to have lots more pain foisted off on them than others.


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