Employment

The Minimum Wage and Skills

/ The Old Crank / 1 Comment

Good article here on Chicago’s “Fight for $15” campaign, a push to boost Illinois’ minimum wage, which has been stuck at $8.25 since 2009. As noted in the piece, there has been a bit of a surge in these types of campaigns in recent months:

Wednesday’s action came just weeks after hundreds of fast-food workers walked off their jobs in New York City, also in a push for higher wages. Late last year, Wal-Mart workers in select cities staged protests, seeking higher wages and benefits as well as pushing back against the retailer’s decision to open on Thanksgiving.

The protests have been gaining steam in the fast-food and retail sectors — which have generated the most jobs since the recession, labor experts said, but are among the lowest paid.

A study last year by the National Employment Law Project, an advocacy group, found that most of the jobs gained since the early 2010 — 58 percent — paid $12 an hour or less. (my emphasis)

Many advocates point to education and training as the best way to move people out of low-wage jobs and into careers that command a living wage—and, ideally, a middle class income. But that argument doesn’t attempt to address the problem of stagnant wage growth in the low wage/low-skill jobs they hope to move people out of. And no matter how much we invest in adult education and training, we’re still going to be looking at considerable  growth in these kinds of jobs for the foreseeable future (not just retail and food preparation jobs, but other low-skill, low-wage jobs, like child care)—jobs that presumably we’re still going to want someone to perform (and most of which can’t be outsourced to other countries).

The argument for investing in education and skills also rests on the notion of a skills gap: that there’s a large mismatch between available jobs and the skills of the workforce. A couple of years ago, Jared Bernstein made what I still think is the best and most succinct argument as to why recent economic data doesn’t support this notion, at least in terms of educational attainment. (In a nutshell: if it were true, we’d be seeing an accelerating wage/salary premium for workers with higher levels of education.) At the same time, he argued:

I still think we’d have a better economy/society with higher levels of educational attainment…I’m quite certain, in fact. It’s wrong to think that the jobs of the future all will demand wicked high skill sets—we’re going to need lots of home health aides, cashiers, security guards, equipment technicians, child care workers, along with high-end engineers. But to have smarter, better educated people in all of those jobs makes all the sense in the world.

In other words, supporting education and training for all workers at all levels makes good economic sense, whether you accept the skills gap argument or not. But, again, that doesn’t address the problem that, currently, many low-skill jobs don’t pay enough for people to live on, and there’s little incentive (or opportunity) for someone to become a better trained or better educated cashier, for example, if wages for that line of work are stuck at a level that keeps them in poverty or close to it. At the same time, there doesn’t appear to be an incentive for employers to pay more for employees at this level, whatever their skills are.

Maybe there is a better way to address this problem that does not involve boosting the minimum wage (or even better, passing living wage laws), but if I were suddenly made the all-powerful Grand Poobah of economic policy in this country (this would be in an alternative universe where actual experience in—or knowledge of—economic policy was not a prerequisite), I think the first thing I’d push for is to just give everyone making less than $10/hour or less a raise to $15/hour—and then see what happens.

Here’s what I think might happen: obviously, minimum-wage workers and their families would be better off right away, but I assume that the boost in wages would also have a stimulative effect on the economy as a whole, too (thus leading to more job creation), because even with that raise, people making just $15/hour are going to be putting most of those dollars back into the economy.

I also suspect that demand for adult education and training would actually go up, despite the fact that minimum-wage workers would presumably be happier in their low-skill jobs. Even a large minimum-wage boost is not going to make people rich, so I don’t see how it would kill off the incentive to pursue education and training for a career in a field where the pay is even better. What it would do is provide more people with the time (fewer people working two jobs) and the economic security (fewer people worried about where the next rent check is going to come from) to successfully pursue those opportunities. I’ve had a pet theory for some time that the best way to boost adult education enrollment and retention rates in any community would be to pass a living wage law and provide universal child care.

(By the way, I’m not convinced that small business owners are standing in the way of raising the minimum wage. In a recent poll conducted by the Small Business Majority, more than two-thirds of small business owners said they supported it.)

Again, in education circles we tend to think of education as the primary policy lever for moving low-skill, low-wage workers into a position where they can command a higher wage, but stagnant wages and growing inequality is an issue that education alone is not going to solve.

Can a TFA-Style Program for Lawyers Succeed?

/ The Old Crank / 1 Comment

A lawyer version of something like Teach for America is an interesting idea, but it seems to me to be more about addressing the poor employment prospects for graduating law students than about coming up with a long-term solution to the lack of affordable legal services for low- and moderate income people. If the law profession bounces back somewhat (or if the supply of lawyers starts to decline, which is likely), I wonder if enough law school graduates will still find these programs attractive.

Putting aside whatever else you think of Teach for America, if you are a young person interested in a career in education policy, TFA is increasingly becoming a ticket to the cool kids table. Even if you are heading somewhere else in your career post-TFA, there’s a substantial job market value in having TFA experience on  your resume, and I don’t think it’s unfair to say that this is a prime motivator for many of the high achievers coming out college who apply. For something like Lawyers for America or similar programs to succeed long-term, I wonder if they’ll eventually have to build up a similar level of cachet among elites so that even those not considering careers in public interest law or legal services for the poor will see value in the experience. And for those who are considering public interest law or legal services, whether they will actually be able to make a career of it.

And Now Here’s the Republican WIA Bill – Plus a Hearing on the 26th

/ The Old Crank

Sure enough, hot on the heels of the reintroduction of the Democrat’s WIA reauthorization bill from last year (the Workforce Investment Act of 2013, or H.R. 798) last week, Education and the Workforce Committee Republicans announced today they plan to reintroduce their old WIA bill under a new name on February 25th. (At least that’s what it appears to be… I haven’t checked to see whether there might be any substantial differences worth noting.)

Here’s a copy of the bill, which will be known as “The Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act.” Higher Education and Workforce Training Subcommittee Chairwoman Virginia Foxx (R-NC) will chair a hearing on Tuesday, February 26th to discuss.

Educating and Training for Adults Largely Ignored in 2013 State of the Union Address

/ The Old Crank

Last night I was reviewing the President’s 2013 State of the Union address alongside my my notes on last year’s address. The thing I remember most strongly about last year’s speech was the President’s reference to a “maze of confusing training programs” which, at the time, (tweeting on behalf of D.C. LEARNs), I thought might be interpreted as a vague endorsement of the proposal then being floated by House Republicans to consolidate Workforce Investment Act (WIA) job training programs:

2012 SOTU Tweet

Sure enough, when House Republicans released their WIA reauthorization bill last spring, (H.R. 4297, the Workforce Investment Improvement Act of 2012), they used this quote in their fact sheet. In retrospect, I think the quote was taken entirely out of context (it seems clear when you read the President’s entire speech that he was talking about consolidating information about federal job training programs, not the programs themselves) but the House Committee on Education and the Workforce used the President’s words time and time again throughout the spring to support their arguments.

But hey, at least the President talked about job training and adult skills last year. Jobs were, in fact, explicitly linked to a proposal to support more job training. The President said that he had been hearing from business leaders “who want to hire in the United States but can’t find workers with the right skills.”  He then issued this call to action:

Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job. My administration has already lined up more companies that want to help.  Model partnerships between businesses like Siemens and community colleges in places like Charlotte, and Orlando, and Louisville are up and running.  Now you need to give more community colleges the resources they need to become community career centers -– places that teach people skills that businesses are looking for right now, from data management to high-tech manufacturing. (my emphasis)

And I want to cut through the maze of confusing training programs, so that from now on, people like Jackie have one program, one website, and one place to go for all the information and help that they need.  It is time to turn our unemployment system into a reemployment system that puts people to work.

But on Tuesday night the President barely mentioned adult skills. And when he did, it was to introduce other education proposals:

These initiatives in manufacturing, energy, infrastructure, and housing will help entrepreneurs and small business owners expand and create new jobs. But none of it will matter unless we also equip our citizens with the skills and training to fill those jobs. And that has to start at the earliest possible age.

Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than 3 in 10 four year-olds are enrolled in a high-quality preschool program. Most middle-class parents can’t afford a few hundred bucks a week for private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives.

Tonight, I propose working with states to make high-quality preschool available to every child in America. Every dollar we invest in high-quality early education can save more than seven dollars later on – by boosting graduation rates, reducing teen pregnancy, even reducing violent crime. In states that make it a priority to educate our youngest children, like Georgia or Oklahoma, studies show students grow up more likely to read and do math at grade level, graduate high school, hold a job, and form more stable families of their own. So let’s do what works, and make sure none of our children start the race of life already behind. Let’s give our kids that chance.

Let’s also make sure that a high school diploma puts our kids on a path to a good job. Right now, countries like Germany focus on graduating their high school students with the equivalent of a technical degree from one of our community colleges, so that they’re ready for a job. At schools like P-Tech in Brooklyn, a collaboration between New York Public Schools, the City University of New York, and IBM, students will graduate with a high school diploma and an associate degree in computers or engineering.

In 2012, preparing Americans for unfilled jobs required job training and community colleges and partnerships with businesses to retrain workers for new jobs. Last night, by contrast, when the President said that we must “equip our citizens with the skills and training to fill [new] jobs,” he immediately pivoted to his preschool proposal, and retraining adults is never mentioned. He then goes on to discuss the need to ensure that high school diplomas “puts our kids on a path to a good job.”

In other words, in 2012, preparing citizens for new jobs was linked to job training for adults; this year, it was linked to preschool and high school education. Adult training or re-training was never actually discussed at all. (It was only mentioned again as a segue into his discussion of immigration reform.)

No one I know in the field of adult education or job training is opposed to the idea of improving high school education or improving access to high-quality pre-school, (although, if we are serious about preparing kids for success in school, our strategy should include efforts to improve the skills of parents/caregivers), but I’ve never understood how improving preschool education is going to help us fill the jobs that are available now.

And it can’t help but make one wonder about the adminstrations’s engagement/commitment to WIA reauthorization. Perhaps after House Republicans appropriated his remarks on job training last year, he decided it was best not to get into the subject again last night. Or maybe it’s just a case of not having the time to hit on every priority, and/or wanting to keep the speech fresh. Hopefully it’s not a sign that adult education and training has slipped a further down the administration’s list of priorities.