Overview of the Bay Area Economic Prosperity Strategy September 9, - - PowerPoint PPT Presentation

SPUR San Mateo County Union Community Alliance Center for Continuing Study of the California Economy (CCSCE) Working Partnerships USA Bay Area Council Economic Institute

Overview of the Bay Area Economic Prosperity Strategy

September 9, 2014 Egon Terplan, SPUR

Outline

• 1. Explaining the project
• 2. Key findings
• 3. Proposed strategies
• 4. Discussion

• 1. Project background

This work is a collaboration between regional agencies, Federal government, and consortium of organizations.

Project timeline and approach

• Included significant technical analysis

– E.g. profile of lower wage workers and analysis of industries and occupations of opportunity.

• Combined with an outreach process to

diverse stakeholders during 2013

– 7 subregions; 30-45 folks per mtg; wide range of stakeholders (CBO, gov’t, workforce, business, labor)

• Agreement on the need for comprehensive

action to strengthen opportunities for lower wage workers.

Today, just over one third of all Bay Area workers are low and moderate wage--earning less than $18 per hour.

Source: 5-year 2011 American Community Survey (PUMS data)

Project focus is economic mobility: how to move low and moderate wage workers into middle income jobs (earning at least $18 to $30 per hour)

2010 Share of total workforce $30 and above 1,196,090 38% $18 to $30 an hour 850,210 27% Under $18 an hour 1,126,860 36% Total 3,173,160

The strategy aims to accomplish three inter-related goals

Goal 1: Improve career pathways from low and moderate wage work to middle wage jobs. Goal 2: Grow the economy in the Bay Area, with a particular emphasis on growing middle- wage jobs. Goal 3: Upgrade conditions, particularly for workers in existing low-wage and moderate- wage jobs.

How did we come up with these three interconnected goals?

Key findings

Finding #1: There are more jobs at the top and bottom of the pay scale than in the middle.

1448 977 1324 252 127 197 200 400 600 800 1000 1200 1400 1600 $30 and above $18 to $30 an hour Under $18 an hour 2020 2010-20

Bay Area Jobs (Thousands)

Finding #2: Lower-wage workers have lower average educational levels (nearly half with

• nly high school).

0% 10% 20% 30% 40% 50% 60% Above $18 Below $18 Bachelor's degree or higher High school or less

Finding #3: Lower wage workers live and work everywhere. So increasing economic

• pportunity is a

region-wide priority.

N A PA C O U N T Y S O N O M A C O U N T Y C O N T R A C O S T A C O U N T Y A L A M E D A C O U N T Y S A N F R A N C I S C O C O U N T Y M A R I N C O U N T Y S O L A N O C O U N T Y S A N M AT E O C O U N T Y S A N T A C L A R A C O U N T Y

5 10 MILES

= 100 Low- and Moderate- Wage Workers

Caltrain BART Urbanized areas N

Lower wage jobs are located everywhere (and where higher-wage jobs are).

N A PA C O U N T Y S O N O M A C O U N T Y C O N T R A C O S T A C O U N T Y A L A M E D A C O U N T Y S A N F R A N C I S C O C O U N T Y M A R I N C O U N T Y S O L A N O C O U N T Y S A N M AT E O C O U N T Y S A N T A C L A R A C O U N T Y

WOR K

5 10 MILES

= 100 Low- and Moderate- Wage Workers

Caltrain BART Urbanized areas N

Finding #4: There is a paradox to our regional prosperity.

• The Bay Area’s economic success cannot be taken for

granted.

• But the rising tide has not lifted all boats; many still

struggle in the region.

• These struggling workers (and their children) are the

future middle-wage and higher-wage workers.

• We need to improve economic opportunity to support

long-term economy competiveness.

• But more economic growth alone does not necessarily

mean enough middle wage jobs.

Finding #5: Solutions require working across silos – and jurisdictions

• Much of the decision-making in the Bay Area takes

places in silos

– By topic (land use separate from workforce development) or – geography (individual jurisdictions in isolation).

• But success on the issues explored in this projects

requires more effective action across these silos.

In conclusion, the strategy must focus on the following three interrelated goals:

Goal 1: Improve career pathways from low and moderate wage work to middle wage jobs. Goal 2: Grow the economy in the Bay Area, with a particular emphasis on growing middle- wage jobs. Goal 3: Upgrade conditions, particularly for workers in existing low-wage and moderate- wage jobs.

Strategies: What can the Bay Area do to improve economic opportunity?

Goal 1: Improve pathways to the middle

Photo of an apprentice readiness program in proper use of harnesses.

There are 30,000 annual middle wage openings (growth + replacement).

508 309 505 100 200 300 400 500 600 $30 and above $18 to $30 an hour Under $18 an hour Bay Area Total Job Openings 2010-20 (Thousands)

Source: Employment Development Department

…the majority of the opportunities come from replacement jobs, not job growth

Half of middle wage jobs do not require a college degree – and are found in many industries.

At the same time, lower-wage workers face critical skills gaps necessary to attain higher wage jobs.

• Basic Skills: math, basic literacy, and GED completion.
• English Language
• Soft Skills: job readiness (attitude, reliability,

promptness)

• Technology and digital Literacy
• Higher order skills: Critical thinking and analysis

Yet training alone is not enough – need to also focus on job search, social networks and connection to employers

• The job search and hiring process is changing, often

widening gaps between lower-wage workers and the rest

• f the workforce.
• Social networks and on-the-job experience are also

critical for upward mobility and lower-wage workers face barriers in attaining them.

• Employer needs and structures are rapidly changing,

which makes it crucial for the workforce development systems to be closely connected to employers.

• 1. Expand job-focused basic-skills training for

working adults with contextualized learning.

• 2. Establish industry-driven, evidence-based sector

partnerships between employers and education/training providers.

• 3. Improve career navigation systems and support

career pathways from K-12 and beyond (LinkedLearning, paid internships).

Goal 1: Improve pathways to the middle

Goal 2: Grow the economy, with an emphasis on middle-wage jobs

43% of middle-wage job openings are in seven of the region’s leading industries.

Annual job openings 2010-2020, by industry

Industry Number of Middle Wage Job Openings Prof, Sci, & Tech Services 2,635 Specialty Trade Contractors 2,366 Ambulatory Health Care Services 2,147 Government 1,708 Educational Services 1,665 Administrative & Support 1,304 Hospitals 998 Total 12,823

Yet there are no “middle wage” industries. (although the distribution of wages varies).

• 50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000 Upper Low/Mod Middle

Industries with the greatest number of middle wage jobs (3-digit NAICS)

Further, many of the industries with the most middle-wage jobs grow as the entire economy grows.

This means it is necessary to maintain policies that support overall competitiveness… while being cognizant of the fact that some projections show the share of jobs paying middle wages will decline.

Key growth industries like Health Care are located everywhere

Also true for Professional, Scientific and Technical Services

A L A M E D A C O U N T Y SA N TA CLA RA COUN TY

Source: US Census NAICS

VTA Light Rail Caltrain

= 200 Jobs in Industries of Opportunity

Urbanized areas

2.5 5 MILES

INDUS TR Y OF OPPOR TUNITIE S IN 2020

N BART to Berryessa BART to Silicon Valley

Industries of opportunity in Santa Clara County in 2020

Mobility matters: workers who commute to another county are more likely to have higher wages

Percent of a county’s residents whose job is in the county they live in, by income

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Alameda Contra Costa Marin Napa San Francisco San Mateo Santa Clara Solano Sonoma low- and moderate wage middle wage above middle wage

And lower wage workers tend to have the shorter commutes (nearly 60% have commutes of less than 20 minutes).

But most low wage workers drive (73% for low) – just like all workers (80%)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

> $18 < $18 < $11.25

101- Mins. 61-100 Mins. 41-60 Mins. 31-40 Mins. 21-30 Mins. 11-20 Mins. 0-10 Mins.

Bay Area commutes in minutes, by wage level

But the region must also support more overall growth to ensure continued expansion of middle- wage jobs and the broader economy.

• Region does not approve enough housing in places with

strong demand.

• Industrial land becomes a prime place for rezoning, in

part because we lack the tools to reinvest in that land.

• Transportation projects are not always planned in line

with where growth will go (or whether or not they will carry the most people).

• We need to build more to accommodate regional grow

and as a way to create more middle-wage jobs.

• But we also need better regional mobility – particularly

with alternatives to driving given the negative impacts congestion

Key takeaways:

Goal 2: Grow the economy, with emphasis on middle-wage jobs

• 4. Develop regional strategies to promote and support

competitive industry clusters, retain existing middle wage jobs, and expand entrepreneurship opportunities.

• Focus on business retention and entrepreneurship
• Coordinate economic development policies among cities

Goal 2: Grow the economy, with emphasis on middle-wage jobs

• 5. Effectively plan for a range of diverse needs and

land uses to accommodate the region’s growth, including:

• Accessible job centers near transit,
• Housing at all income levels,
• Preservation of industrial land,
• More of a job focus in Plan Bay Area and PDAs

• 6. Invest in and expand key infrastructure

(transportation, broadband, water, energy) in a way that supports job growth.

• Local: Long-range capital plans, Bonds, Vehicle License Fees
• County/Regional: Sales taxes, pilot road pricing and tolls
• Public private partnerships (PPPs)
• 7. Manage transportation as an integrated regional

system that is easy to navigate and provides a range of

• ptions for workers.
• Regional transit fares allow for broader regional mobility.
• More last/first mile shuttles and ridesharing.

Goal 2: Grow the economy, with emphasis on middle-wage jobs

Goal 3: Upgrade conditions in existing low-wage and moderate-wage jobs with an emphasis on increasing workers’ economic security.

Occupations with median wages below $17.83 an hour in the East Bay

• $15 to $18

Office clerks, medical assistants, nursing aides, delivery truck drivers, receptionists, shipping clerks

• $12 to $15

Pre-school teachers, janitors, security guards, laborers, groundskeepers, cooks

• $9 to $12

Stock clerks, retail salespersons, home health aides, cashiers, maids, child care workers, bartenders, food prep workers, dishwashers, counter attendants, fast food cooks, and waiters/waitresses

The jobs that pay less than $18 per hour are not going away…and will likely grow…

And many workers earn low wages throughout their entire working lives.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All >$18/hr <$18/hr <$11/hr $11-$18/hr 65+ 55-64 35-54 19-34 16-18

Percent of Bay Area workers at different wage levels, by age cohort, 2010

So it is important to improve the quality of work at the bottom of the wage scale because the jobs will remain and many workers will stay in these jobs.

Goal 3: Upgrade conditions, particularly for low- and moderate-wage workers

• 8. Raise the floor by increasing minimum standards

all workers (e.g. minimum wage, earned sick leave,

workplace schedule flexibility)

• 9. Organize and professionalize industries to improve

wages, benefits and career ladders.

• E.g. campaigns to professionalize industries
• 10. Establish higher standards for public investment to

ensure that investment of public dollars is aligned with the goal of economic opportunity (e.g. broad agreements

• n community benefits)

Finally, we cannot solve many of these challenges at the scale of the Bay Area…

Role for the Federal and State government

• Income support and safety net policies

– Medicaid/MediCal, unemployment insurance, CalWORKs, subsidized child care, earned-income tax credit, food stamps, housing, Social Security

• Investment

– education, workforce, transportation, infrastructure, housing, clean energy, child care

• Benefits

– portable benefits, maintaining a strong health care exchange

• Immigration reform
• Trade policy
• Wage policy (minimum wage)
• Environmental review process - CEQA

Discussion and questions