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.”

 

 

 

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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.


A Real Jobs Bill At Last!

March 17, 2010

Those of you who follow this blog know that I’ve been disappointed with what the White House and Congress have thus far done to address the jobs crisis. I’ve recently vented on the Poverty in America blog as well. And, of course, I’m hardly a voice crying in the wilderness.

The jobs problem hasn’t been altogether ignored. The Senate managed to pass a watered-down tax credit for new hires and a stop-gap extension of expanded unemployment benefits and COBRA subsidies.

It then approved extensions of both to the end of the year, along with an extension of the higher federal match for state Medicaid programs–these as part of a large package consisting mostly of tax cut extensions. The House leadership is now deciding what to do with this bill.

By now, it’s fairly common knowledge that public benefits like UI indirectly save or create jobs because recipients use them to purchase essential goods and services. Demand drives hiring–not only at the retail level, but up the supply chain and out to firms that provide contract services.

But the unemployment problem is far larger than the investments to date. In February, 14.9 million jobless people were actively looking for work–100,000 more than in January. But the number of underemployed workers, i.e., those who were working part-time though they wanted full-time jobs, increased by nearly half a million. An additional 1.2 million had given up looking.

Adding the number of payroll jobs eliminated since the beginning of the recession to the number that would be needed to keep pace with population growth, the Economic Policy Institute estimates that about 11.1 million new jobs would be needed to bring the unemployment rate down to its pre-recession level.

Meanwhile, as the Center on Budget and Policy Priorities reports, state governments are proceeding to slash spending. Education, health care and a wide range of other public programs and services have been targeted for cuts. More freezes and reductions in state-level workforces are in the offing.

Some of the cuts–K-12 education, for example–are actually cost-shifting to local governments, which have already laid off teachers, firefighters, public safety officers and other critical workers. They have also deferred or canceled capital projects, thus precipitating more private-sector job losses.

The National League of Cities projects job losses at 1.5 million or more by the end of 2011–unless the federal government steps in to stabilize city budgets.

And now, at last, it may. Congressman George Miller (D-CA) has introduced a bill–the Local Jobs for America Act (H.R. 4812)–that addresses job creation directly and aggressively, with a focus on restoring, retaining and perhaps expanding public services.

The bill would channel:

  • $75 billion to local communities–$52.5 billion directly to communities with at least 500,000 residents and the remainder to states to distribute to smaller communities
  • $23 billion to states, most of it for earmarked for distribution to local school districts and public higher education institutions
  • $1.68 billion for law enforcement and firefighter jobs
  • $500,000 to Workforce Investment Act programs for additional on-the-job training slots in private-sector businesses

Most of these provisions were part of the jobs bill the House passed in December, though the proposed WIA funding is somewhat lower. The local community aid would be new.

Funding under the new provisions would be allocated according to a formula that targets funds to communities with above-average poverty and unemployment rates.

Up to half the funds could be used to preserve local government public service positions that would otherwise be eliminated and up to half could go to nonprofits that provide services not customarily provided by local government employees. Any funds left over would go to creating new local government public service jobs.

Funds could be used only for compensation of employees in full-time, full-year positions. And priority for new hires is to be given to laid-off city workers, veterans and workers who are receiving unemployment benefits, have been unemployed so long as to have exhausted their benefits and/or aren’t eligible for benefits because their earnings were below the required minimum.

The price tag on the total package is about $100 billion over the next two years. Miller estimates it would save or create a million jobs. EPI says the actual number could be higher because people with these jobs would be spending money at local businesses.

EPI is very high on the bill. Needless to say, the National League of Cities is too. Also, needless to say, the bill has no Republican cosponsors.

A spokesperson for House Minority Leader John Boehner (R-OH) previews where the Republican delegation will be coming from: “The American people don’t want more wasteful Washington spending that expands government at the expense of small businesses. They want Congress to focus on long-term economic growth by helping small businesses create jobs.”

Last time I checked, Americans were a whole lot more concerned about jobs than the economic engine that would create them. But the Miller bill will face tough sledding anyway.


Big Job Creation Plans Fit the Crisis, But Not the Agenda

January 26, 2010

Everyone who’s in touch with the world knows we’ve got a jobs crisis and that it’s likely to continue for some considerable time.

Just about everyone thinks the federal government should do something about it. Needless to say, there are wide differences of opinion on what. The Republican leadership says that the answer is to cut back on taxes, spending and regulations.

Progressives say, on the contrary, that the government needs to plow more money into the economy–that if it doesn’t invest in job creation, the economy will leave lasting scars on the economic prospects for individuals and our economy as a whole.

They also recognize that the recession has exposed long-standing systemic problems that have depressed real income growth among a large sector of workers and left others on the sidelines, relegated to low-wage, no-benefit, often part-time jobs or out of the labor market altogether.

Some major organizations have come out with job creation plans that will put people back to work quickly and, at the same time, help the jobless keep the wolf from the door.

The Coalition on Human Needs has a set of job creation principles. The National Council of La Raza has recommendations reflecting Latino principles for job creation. The Economic Policy Institute has a detailed five-point plan. The AFL-CIO has one also.

These are all very similar in spirit and the last two in substance. They are reflected in yet another job creation plan issued by Jobs for America Now–a coalition the organizations helped launch.

The coalition, now more than 150 organizations strong, calls on the administration and Congress to:

  • Provide relief through continued and expanded unemployment benefits, COBRA and SNAP (the food stamps program).
  • Extend substantial fiscal relief to state and local governments.
  • Create jobs that put people to work helping communities meet pressing needs, including distressed communities that face severe unemployment.
  • Invest in infrastructure improvements in schools, transportation and energy efficiency, thus providing jobs in the short run and productivity enhancements in the longer run.
  • Spur private-sector job growth through innovative incentives and providing credit to small and medium-sized businesses.

There’s no price tag on all this. However, EPI estimated that its plan would entail roughly $400 billion in investments during the first year. About $160 billion of this would be recouped in higher tax revenues and lower safety net costs.

To pay for the rest, EPI recommends a financial transactions tax, i.e., a small tax that would be imposed whenever stocks and possibly other financial assets changed hands.  The tax would kick in two years from now, when presumably the economy will have fully recovered.

But first the deficit would grow. Does President Obama have the stomach for this?

Much appears to depend on how his strategists read the mood of the public–and more particularly, the upset in Massachusetts. Thus far, the prospects don’t look good.

We hear the President talking about doing a better job of explaining his agenda to the people. He mentions health care, energy, education, financial regulatory reform and the deficit.

Not a hint that “the anger and frustration that people are feeling” stems from our justified dismay about the jobs crisis–and the fact that it’s still nowhere on that must-do agenda.


New Report Warns of Growing Race Gap In Employment

January 22, 2010

The Economic Policy Institute has issued what it rightly calls “grim 2010 projections” for the employment prospects of our nation’s racial minorities.

Here are some lowlights from the “downcast” forecast, along with some calculations by yours truly.

The overall unemployment rate is expected to peak at 10.7% in the third quarter of 2010. But for blacks, the projected rate is 17.2%. This is in part because minorities “began the recession in a recession,” with the black unemployment rate more than double the white unemployment rate–higher, in fact, than the current white rate.

In the third quarter of 2009, the white unemployment rate was at or below 9% in all but nine states. In the 18 states for which there are reliable data black unemployment rates were all double digit. By the projected 2010 peak, the black unemployment rate will be over 17% in 11 of these states and over 20% in five.

The race gap is writ large in the District of Columbia.

  • In the third quarter of 2009, the black unemployment rate was 11.9% higher than the white unemployment rate. This is larger than any of the reported state race gaps except South Carolina’s, which is a mere 0.1% higher.
  • By the 2010 peak, the white unemployment rate will have increased by 0.4% and the black unemployment rate by 1.3%–more than three times as much as the white rate.
  • The difference between the white and black rates will have grown to 12.8%–again greater than the difference in any state except South Carolina.
  • Yet the increase in the black unemployment rate since the recession set in will be just about at the median–another indicator that black unemployment in the District is a long-standing problem.

The EPI report is a call to action for a job creation strategy that targets states and populations with the severest employment problems. And, indeed, the race gaps it documents clearly show that we can’t count on a rising tide to lift all boats.

The administration and Congress are going to be under pressure to put as many people as possible back to work as soon as possible. But if they focus only on raw numbers, low-income minorities and their communities will again be left behind.

In December, the unemployment rate for adults over 25 without a high school diploma was more than three times greater than the rate for those with a bachelor’s degree or higher. For teens, the rate was 23.6% and for black teens an appalling 48.4%.

So there’s an urgent need to build education and training into job creation programs, including meaningful work-learning opportunities for low-income youth. And we need, at long last, to commit to resolving other problems underlying the employment race gap.

And what if we don’t? Well, according to EPI, the black child poverty rate will increase to more than 50%–more than half of all black children beginning life with two strikes against them. A recipe for millions more trapped on the bad side of the economic divide.


We Need Action On the Job Crisis Now

December 14, 2009

For months, President Obama has been preoccupied with Afghanistan, the climate change summit and getting a health care reform bill passed. The rest of the country has been saying, Do something about JOBS!

And with good reason. We’re told that the November unemployment figures are good news. But 15.4 million American workers are unemployed–over 38% of them for more than six months. An additional 10 million have given up looking for work or are working part-time because that’s the best they can do.

The situation is even worse for black and Hispanic workers. Unemployment rates for them are 15.6% and 12.7% respectively. The Economic Policy Institute says it expects 40% of them to be unemployed or under-employed at some point over the next year. Worst off are black teenagers, with an unemployment rate close to 50%.

The economy continues to shed jobs, though at a much lower rate than earlier this year. Looking at the Bureau of Labor Statistics’ latest job openings and labor turnover survey, EPI figures there were 6.3 job seekers for every job opening in October.

The ratio of seekers to jobs will grow unless something dramatic happens. Because it won’t be enough for employers to stop eliminating jobs. EPI says the labor market would have to grow by an average of 581,000 jobs a month to bring the unemployment rate back down to its pre-recession level.

Now the President has outlined a plan to jump-start job creation, using funds appropriated for the bank-bailout. I’m still chewing it over. So, I suspect, are members of Congress–except, of course, the House Republican leadership, which is dead set against more spending.

What Congress can–and should–do is act on the most urgent elements now. Otherwise, the extended unemployment insurance provisions in the economic stimulus package will expire–notwithstanding the recent legislation to extend them.

A new brief by the Center for American Progress Action Fund and the National Employment Law Project says that 1 million workers will lose job benefits in January unless Congress acts. By March, the number will have increased to 3.2 million. NELP has a customizable e-mail we can send to support the needed legislation.

Congress should also immediately extend the COBRA health insurance subsidies. Beneficiaries have already started losing these. Millions more could face a tripling of their premiums in the months to come.

A third priority are the stimulus provisions that have helped states balance their over-stressed budgets. An estimated 900,000 jobs will be lost unless Congress extends these ASAP.

More about them in another posting.


Is Race Discrimination Just History?

August 3, 2009

The recent Supreme Court decision in the New Haven firefighters case has launched a spate of op-eds on affirmative action. Did the Court drive a stake in its heart? Does it really matter if it did?

Shelby Steele, a senior fellow at the right-leaning Hoover Institution, thinks no. The real problem today, he says, is “black underdevelopment,” not discrimination. True, some blacks still suffer from deprivations rooted in past discrimination, but “we also live in a society where race is no longer a significant barrier to advancement.”

Last month, the Center for American Progress co-hosted a panel discussion on black male unemployment. You’d think panelists were talking about a different world.

I was most struck by findings presented by Algernon Austin, Director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy. Happily, they’re summarized in an article that asks, “Why Is the Black Male Employment Rate So Low?”

The article presents research that contradicts common answers to this question. No:

  • It’s not that black men lack a work ethic because they wouldn’t be counted as unemployed unless they were actively seeking work.
  • It’s not that they reject jobs they think pay just “chump change” because, on average, the lowest wage they’ll accept is lower than the the average that’s acceptable to whites.
  • It’s not that they lack the skills employers are seeking because the greatest black-white employment gap is among high school dropouts, i.e., those competing for low-skill jobs.
  • It’s not that employers prefer the “soft skills” and cultural sophistication that people from well-off families tend to have because black teens from families earning $75,000 to $100,000 a year have a lower employment rate than poor white teens.
  • It’s not that black males don’t live where the jobs are because the difference in employment rates between black males in cities and suburbs is much greater than the difference for white males.

So, the argument goes, if it’s not any of these things, what’s left but race discrimination? It may, as Austin says, be subtle–even unconscious. But it’s no less a barrier to equal opportunity than the old in-your-face kind.

And if that’s so, then the “ultimate measure” of blacks equality with whites has to be something more than “parity in skills and individual competency,” Steele notwithstanding.