WorkSquare was invited to participate in a conference last week in Birmingham, Alabama on developing green job training programs for low-income workers. The conference was kindly put on by Wider Opportunities for Women and sponsored by the Ms. Foundation for Women.
I attended as a skeptic... with a not-so-small part of me wanting oh-so-much to believe in this... and then watched my skepticism grow. Reflections as follows. Dissent is welcome and encouraged.
1. Few if any of these training programs are demand-driven (e.g., designed in response to the direct hiring needs of real employers). Until employers state a need for a specific position and an inability to find that skill-set, training programs will continue to produce unemployable graduates. It is a waste of time and resources, not to mention a wild source of frustration, to train individuals for positions that do not exist. The millions of Recovery Act dollars that were wasted in misguided training programs is offensive, most of all to the low-income individuals who spent their time participating. If you don't believe me, I have several partipants I can gladly introduce you to.
2. In markets that DO show demand for green skills, this demand is still reliant on subsidies. Weatherization and solar panel installation are promising services given that consumers can finance large up-front expenditures and capture return on investment in the form of lower energy costs. That said, two significant risks still exists. Firstly, if subsidies disappear, jobs will go with them. Second, service providers noted that the need for consumer education was immense and well beyond expectations. This continued need to educate consumers on (1) the environmental importance of the product/service, (2) the projected financial benefit, and (3) how to apply for and receive a tax credit in a no doubt bureaucratic process, all create additional marketing and administrative costs that would be prohibitive in most business models.
3. All green training programs emphasized the importance of work-readiness skills as a precursor to industry-specific training. This strengthened my belief that education and training dollars should be spent on basic work readiness long before specific skill training. For every one employee who may be terminated for his or her lack of deft skill in solar panel installation, one hundred others are terminated for inability to get to work on time, find adequate childcare, or manage workplace conflict appropriately. Employers are willing to train good employees with industry-specific skills...but bad employees -- skilled or otherwise -- are useless.
4. Post-training placement remains a huge obstacle and bottleneck -- trainers struggle to connect with employers. Many of the organizations providing green job training (CBOs, social service orgs, worker rights orgs, etc.) reported much difficulty in reaching employers and convincing them to hire graduates. Given this challenge, it was particularly noteworthy that there was next to no private-sector representation in the entire conference (I saw one representative from a for-profit construction general contractor). If we're trying to sell to these people, wouldn't it make sense to get their opinion? Several organizations have employer councils, which is a step in the right direction, but the overall dialogue lacks the much-needed input of private-sector employers.
We are sadly still a long way off from making this an effective workforce development strategy, much less a tool in spurring current job creation.
5.02.2011
9.20.2010
Dear Obama...Why Small Businesses Aren't Hiring
Pundits and politicians alike (well, at least half of the politicians) have drilled down to a key word to explain the continued lag in our nation's unemployment.... UNCERTAINTY. Add my name to the long list of hundreds of thousands of small business-owners who have not wanted to hire in the past several months due to uncertainty.
Uncertainty... regarding payroll taxes attributable to a broken unemployment insurance system. Our payroll cost for SUTA (state unemployment tax) increased 300% in January of this year, raising our payroll costs by more than $20,000 relative to last year. With this additional $20k, we would have been thrilled to hire another employee, but not while we're busy subsidizing Florida's bankrupt UI system.
Uncertainty... regarding impending changes to the healthcare system and how this will affect payroll costs.
And... drum roll please for my favorite....
Uncertaintly... regarding the very programs that were designed to put people back to work. We have delayed hiring two full-time employees in order to take advantage of the Florida Back to Work program, which draws down federal stimulus funds to subsidize employment of individuals receiving unemployment insurance. This is a great plan.... in theory. After applying to the Florida Back to Work program three months ago, South Florida Workforce -- the agency charged with administering the program -- maintains that our application is 'in process' with no sign of approval prior to the initial expiration of fund availability on September 30th.
Had we -- and doubtless countless other employers -- had been given realistic expectations of how ill-equipped South Florida Workforce was to execute on this federal program, we would have hired *un-subsidized* employees three months ago and started stimulating our local economies. Instead, the poor execution of and uncertainty surrounding this program has delayed employer action -- leaving qualified unemployed individuals on the federal dole -- while employers sit on their hands watching their businesses stagnate rather than grow.
Uncertainty... regarding payroll taxes attributable to a broken unemployment insurance system. Our payroll cost for SUTA (state unemployment tax) increased 300% in January of this year, raising our payroll costs by more than $20,000 relative to last year. With this additional $20k, we would have been thrilled to hire another employee, but not while we're busy subsidizing Florida's bankrupt UI system.
Uncertainty... regarding impending changes to the healthcare system and how this will affect payroll costs.
And... drum roll please for my favorite....
Uncertaintly... regarding the very programs that were designed to put people back to work. We have delayed hiring two full-time employees in order to take advantage of the Florida Back to Work program, which draws down federal stimulus funds to subsidize employment of individuals receiving unemployment insurance. This is a great plan.... in theory. After applying to the Florida Back to Work program three months ago, South Florida Workforce -- the agency charged with administering the program -- maintains that our application is 'in process' with no sign of approval prior to the initial expiration of fund availability on September 30th.
Had we -- and doubtless countless other employers -- had been given realistic expectations of how ill-equipped South Florida Workforce was to execute on this federal program, we would have hired *un-subsidized* employees three months ago and started stimulating our local economies. Instead, the poor execution of and uncertainty surrounding this program has delayed employer action -- leaving qualified unemployed individuals on the federal dole -- while employers sit on their hands watching their businesses stagnate rather than grow.
7.16.2010
Thoughts on Yesterday's Interview Process
Remembering yet again yesterday how much I love what I do! Incredible to do twenty-five interviews back to back, access to the dreams and aspirations of really distinct individuals. A real time documentary in which I get to participate. Among the highlights -- a jobseeker who shared my passion for economic development, particularly in the international environment, and another jobseeker who -- after some probing -- confessed that the job he most wanted was in funeral services. Amazing! There is indeed a special job out there suited for everyone.
Some reminders to job seekers:
1. The return on a smile cannot be underestimated. This is the simplest and most important thing you can do in an interview.
2. Don't tell me you'll take *any* job, "whatever's available". The job I'm offering is SPECIAL. It's an OPPORTUNITY. And you should have taken the time to research the position and be able to explain why you value that and how you would excel in it.
3. Let me know how this job is part of your bigger plan and career development. Your applying for this job needs to make sense to me in the context of your longer-term plans. For instance, my new friend let me know that he was passionate about funeral services, taking classes toward that goal in the evening, and was excited for a daytime positon that leveraged his past experience while allowing him the schedule and income to continue to pursue a career in funeral services.
Some reminders to job seekers:
1. The return on a smile cannot be underestimated. This is the simplest and most important thing you can do in an interview.
2. Don't tell me you'll take *any* job, "whatever's available". The job I'm offering is SPECIAL. It's an OPPORTUNITY. And you should have taken the time to research the position and be able to explain why you value that and how you would excel in it.
3. Let me know how this job is part of your bigger plan and career development. Your applying for this job needs to make sense to me in the context of your longer-term plans. For instance, my new friend let me know that he was passionate about funeral services, taking classes toward that goal in the evening, and was excited for a daytime positon that leveraged his past experience while allowing him the schedule and income to continue to pursue a career in funeral services.
4.30.2010
MDRC Releases Opportunity NYC Results
After closely following the success of Vicente Fox's Oportunidades anti-poverty program in Mexico over the past decade, I was thrilled to see that Michael Bloomberg had pursued a similar approach for New York City. Opportunity NYC is a conditional cash transfer (CCT) program intended to alleviate poverty and change behaviors that propagate poverty while improving low-income residents' economic, health and education outcomes.
While I give Bloomberg, MDRC, Seedco and the rest of their team enormous props for actually daring to measure and report program outcomes, the results were lackluster. Particularly in light of the success CCT programs have had elsewhere. I'll continue to follow results but in the meantime some hypotheses about why an anti-poverty program could work so well in one context and not in another. If others have ideas, I would love to hear them.
1. Many participant children in Mexico - particularly in rural settings - who are not in school are frequently engaged in the family's productive activities (e.g., agriculture, domestic production) and helping to generate income. For these children to go to school --rather than work -- each day is likely an easier behavioral change than is going to school each day instead of passively staying at home.
2. Several of the health and education indicators were already remarkably high (e.g., how many participants have a primary care physician that they see annually) among the control population, leaving Opportunity NYC little room for impressive results.
3. The program is still young. We'll give them that....
4. ???
More to come....
While I give Bloomberg, MDRC, Seedco and the rest of their team enormous props for actually daring to measure and report program outcomes, the results were lackluster. Particularly in light of the success CCT programs have had elsewhere. I'll continue to follow results but in the meantime some hypotheses about why an anti-poverty program could work so well in one context and not in another. If others have ideas, I would love to hear them.
1. Many participant children in Mexico - particularly in rural settings - who are not in school are frequently engaged in the family's productive activities (e.g., agriculture, domestic production) and helping to generate income. For these children to go to school --rather than work -- each day is likely an easier behavioral change than is going to school each day instead of passively staying at home.
2. Several of the health and education indicators were already remarkably high (e.g., how many participants have a primary care physician that they see annually) among the control population, leaving Opportunity NYC little room for impressive results.
3. The program is still young. We'll give them that....
4. ???
More to come....
1.09.2010
Three Ingredients to Improving Returns to Low-Wage Labor
A big bravo to Fredrik Andersson, Harry Holzer, and Julia Lane, for their book Moving Up or Moving On: Who Advances in the Low-Wage Labor Market, published by the Russell Sage Foundation. This book is among the few data-driven and market-oriented approaches to understanding the dynamics of the low-wage labor market, how workers most frequently transition out of low wages, and what sorts of policies would best encourage this same trajectory for low-wage workers overall. The findings support a “work-first” approach (which they note is facilitated by temp agencies) and explicitly highlight the need for more efficient means of matching low-wage workers to better firms and jobs.
Three Ingredients to Improving the Returns to Low-Wage Labor: Early Work Accumulation, Job Switching, and Identifying ‘Good Jobs’
Early Work Accumulation: Despite the criticism of temp agencies as a dead- end for welfare-to-work participants following 1996 welfare reform, the authors found that low-wage earners working through temp agencies did experience increased earnings in subsequent positions, even if wages earned through the temp agencies were low. Specifically, initially working for a temp agency was found to increase subsequent earnings by 6 to 10 percent (1). The authors note the importance of labor market intermediaries – temp agencies, non-profit placement organizations, etc. – in improving the quality of ‘matches’ between employers and employees by overcoming informational, geographic and attitudinal barriers(2). Further, they argue that this improved matching does not merely place some workers in good jobs while displacing others (assuming a world with a finite number of ‘good jobs’), but actually helps increase the overall supply of ‘good jobs’ by reducing employers’ costs associated with hiring and managing employees.
Job Switching: As discussed in a prior blog, the authors reveal the importance of job switching for low-wage earners looking to improve wages, noting that low-wage workers have a much better chance of increasing wages by changing companies than they do by staying with the same company and waiting for wage growth via tenure. A first job, according to this theory, provides a signal to other employers that the employee is work-ready and has the basic skills required by a particular position. What then becomes critical is this employee’s ability to market herself to another employer who is willing to pay more for her services.
Identifying ‘Good Jobs’: The authors find that economic benefits to job-switching are possible because wages and compensation policies differ significantly among firms, even firms within the same industry. What is illogical on the macro level (why would a firm pay more for the same labor?) has played out on the firm level (think Wal-Mart versus Whole Foods) as employers take a more self-enlightened approach to the costs of turnover, training, sick days, poor morale, etc. For a low-wage worker, this means that she may be compensated significantly higher by a different employer for doing exactly the same job she is already doing, if only she could easily locate that employer. The authors find that obtaining one of these ‘good jobs’ (jobs that pay higher wages and frequently offer more on-the-job training and paths for advancement) is the single most important factor in a worker’s ability to transition out of low-wages (3).
The positive effects of providing improved market data as to how firms compensate their low-wage workers are many. If firms that pay wage premia relative to competitors were systematically recognized and rewarded with the best employees (and consequently with lower turnover and HR costs), it is reasonable to assume that more firms would pay higher wages. Additionally, those workers in low-wage positions would have a transparent and much-widened path for advancement as they move across firms, not just within a firm. Finally, workforce development practitioners could begin to distill which employee attributes make low-wage workers most successful in obtaining and retaining ‘good jobs’, thereby dramatically improving the costly (and frequently ineffective) education and training programs currently provided to the hard-to-employ.
(1) Andersson, Fredrik and Harry Holzer and Julia Lane, Moving Up or Moving On: Who Advances in the Low-Wage Labor Market? (New York: Russell Sage Foundation, 2005), p. 100.
(2) Ibid, p. 145.
(3) Ibid, p. 105.
Three Ingredients to Improving the Returns to Low-Wage Labor: Early Work Accumulation, Job Switching, and Identifying ‘Good Jobs’
Early Work Accumulation: Despite the criticism of temp agencies as a dead- end for welfare-to-work participants following 1996 welfare reform, the authors found that low-wage earners working through temp agencies did experience increased earnings in subsequent positions, even if wages earned through the temp agencies were low. Specifically, initially working for a temp agency was found to increase subsequent earnings by 6 to 10 percent (1). The authors note the importance of labor market intermediaries – temp agencies, non-profit placement organizations, etc. – in improving the quality of ‘matches’ between employers and employees by overcoming informational, geographic and attitudinal barriers(2). Further, they argue that this improved matching does not merely place some workers in good jobs while displacing others (assuming a world with a finite number of ‘good jobs’), but actually helps increase the overall supply of ‘good jobs’ by reducing employers’ costs associated with hiring and managing employees.
Job Switching: As discussed in a prior blog, the authors reveal the importance of job switching for low-wage earners looking to improve wages, noting that low-wage workers have a much better chance of increasing wages by changing companies than they do by staying with the same company and waiting for wage growth via tenure. A first job, according to this theory, provides a signal to other employers that the employee is work-ready and has the basic skills required by a particular position. What then becomes critical is this employee’s ability to market herself to another employer who is willing to pay more for her services.
Identifying ‘Good Jobs’: The authors find that economic benefits to job-switching are possible because wages and compensation policies differ significantly among firms, even firms within the same industry. What is illogical on the macro level (why would a firm pay more for the same labor?) has played out on the firm level (think Wal-Mart versus Whole Foods) as employers take a more self-enlightened approach to the costs of turnover, training, sick days, poor morale, etc. For a low-wage worker, this means that she may be compensated significantly higher by a different employer for doing exactly the same job she is already doing, if only she could easily locate that employer. The authors find that obtaining one of these ‘good jobs’ (jobs that pay higher wages and frequently offer more on-the-job training and paths for advancement) is the single most important factor in a worker’s ability to transition out of low-wages (3).
The positive effects of providing improved market data as to how firms compensate their low-wage workers are many. If firms that pay wage premia relative to competitors were systematically recognized and rewarded with the best employees (and consequently with lower turnover and HR costs), it is reasonable to assume that more firms would pay higher wages. Additionally, those workers in low-wage positions would have a transparent and much-widened path for advancement as they move across firms, not just within a firm. Finally, workforce development practitioners could begin to distill which employee attributes make low-wage workers most successful in obtaining and retaining ‘good jobs’, thereby dramatically improving the costly (and frequently ineffective) education and training programs currently provided to the hard-to-employ.
(1) Andersson, Fredrik and Harry Holzer and Julia Lane, Moving Up or Moving On: Who Advances in the Low-Wage Labor Market? (New York: Russell Sage Foundation, 2005), p. 100.
(2) Ibid, p. 145.
(3) Ibid, p. 105.
7.13.2009
Safety Nets - How to Incentivize Work When There Are No Jobs?
Barbara Ehrenreich, of Nickel and Dimed fame, raises the important point that 1996's welfare reform -- brought about to rightly incentivize work while discouraging dependence -- failed to imagine what our country's social safety net would look like in some distant future (at the time inconceivable) of high unemployment.
Suddenly, TANF and EITC benefits that are linked to work are available to only a tiny fraction of the population in need, as evidenced by relative stagnation in enrollment. Compare this with the rising ranks of those receiving Food Stamps, which are not tied to employment. Food Stamp enrollment has grown from a then record-high of 29.1million in July 2008 to 33.2 million in June 2009. This is ONE in every NINE Americans.
Ehrenreich also notes the changing perception of public benefits among individuals who were -- as recently as last year before losing their jobs -- middle-class. She describes their humiliation when going through a bureaucratic application process that requires finger printing in four states, and is more than likely to bring feelings of self-defeat in the remaining forty-six. Clearly we need to deter benefits fraud and incentivize work and independence, but it's worth exploring application and delivery channels that begin to help empower rather than merely running over the downtrodden once more.
A private sector solution perhaps??
http://www.nytimes.com/2009/07/12/opinion/12ehrenreich.html?_r=1&scp=4&sq=barbara%20ehrenreich&st=cse
Suddenly, TANF and EITC benefits that are linked to work are available to only a tiny fraction of the population in need, as evidenced by relative stagnation in enrollment. Compare this with the rising ranks of those receiving Food Stamps, which are not tied to employment. Food Stamp enrollment has grown from a then record-high of 29.1million in July 2008 to 33.2 million in June 2009. This is ONE in every NINE Americans.
Ehrenreich also notes the changing perception of public benefits among individuals who were -- as recently as last year before losing their jobs -- middle-class. She describes their humiliation when going through a bureaucratic application process that requires finger printing in four states, and is more than likely to bring feelings of self-defeat in the remaining forty-six. Clearly we need to deter benefits fraud and incentivize work and independence, but it's worth exploring application and delivery channels that begin to help empower rather than merely running over the downtrodden once more.
A private sector solution perhaps??
http://www.nytimes.com/2009/07/12/opinion/12ehrenreich.html?_r=1&scp=4&sq=barbara%20ehrenreich&st=cse
7.03.2009
"Less Educated Take the Worst Hit" - WSJ 6/7/09
The June 7 Wall Street Journal reported that the least educated are taking the biggest hit as unemployment numbers continue to rise, with the unemployment rate for workers over 25 who have not gone beyond high school rising to 10% in May, almost double the rate year-on-year. The picture is still bleaker for workers who haven't completed high school -- an unemployment rate of 15.5%, up from 8.4% last year.
The spread has stimulated demand for community colleges (remember when they used to accept new students??) and GEDs as employees try to fill gaps in resumes. Also notable was how acutely current job loss has hit less educated men over women -- construction and manufacturing jobs down with mild growth in education and health has meant that men have a jobless rate of 10.5% compared to women's 8.0%.
The spread has stimulated demand for community colleges (remember when they used to accept new students??) and GEDs as employees try to fill gaps in resumes. Also notable was how acutely current job loss has hit less educated men over women -- construction and manufacturing jobs down with mild growth in education and health has meant that men have a jobless rate of 10.5% compared to women's 8.0%.
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