Overview of the Bay Area Economic Prosperity Strategy September 9, 2014 Egon Terplan, SPUR SPUR San Mateo County Union Community Alliance Center for Continuing Study of the California Economy (CCSCE) Working Partnerships USA Bay Area Council Economic Institute
Outline 1. Explaining the project 2. Key findings 3. Proposed strategies 4. Discussion
1. Project background
T his 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.
T oday, just over one third of all Bay Area workers are low and moderate wage--earning less than $18 per hour. Sh are of total 20 1 0 workforce $30 and above 1,196,090 38% $18 to $30 an hour 850,210 27% Under $18 an hour 1,126,860 36% T otal 3,173,160 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)
T he strategy aims to accomplish three inter-related goals G oal 1: Improve career pat h ways from low and moderate wage work to middle wage jobs. G oal 2 : G row t h e economy in t h e Bay Area, wit h a particular emp h asis on growing middle- wage jobs. G oal 3: Upgrade conditions, particularly for workers in existing low-wage and moderate- wage jobs. H ow did we come up with these three interconnected goals?
K ey findings
Finding #1: T here are more jobs at the top and bottom of the pay scale than in the middle. Bay Area Jobs (Thousands) 1600 1448 1324 1400 1200 977 1000 800 600 252 400 197 127 200 0 $30 and above $18 to $30 an hour Under $18 an hour 2020 2010-20
Finding #2: Lower-wage workers have lower average educational levels (nearly half with only high school). 60% 50% 40% Bachelor's degree or higher 30% H igh school or less 20% 10% 0% Above $18 Below $18
Finding #3: N A PA C O U N T Y S O N O M A C O U N T Y Lower wage workers live S O L A N O C O U N T Y and work M A R I N C O U N T Y everywhere. C O N T R A So increasing C O S T A C O U N T Y S A N economic F R A N C I S C O C O U N T Y opportunity is a region-wide A L A M E D A C O U N T Y priority. S A N T A C L A R A C O U N T Y S A N M A T E O = 100 Low- and Moderate- Wage C O U N T Y Workers Caltrain BA RT 0 5 10 Urbanized areas N MILES
WOR K N A PA C O U N T Y S O N O M A C O U N T Y Lower wage S O L A N O C O U N T Y jobs are located M A R I N C O U N T Y everywhere (and where C O N T R A C O S T A C O U N T Y higher-wage S A N F R A N C I S C O C O U N T Y jobs are). A L A M E D A C O U N T Y S A N T A C L A R A C O U N T Y = 100 Low- and Moderate- Wage S A N M A T E O C O U N T Y Workers Caltrain BA RT 0 5 10 Urbanized areas N MILES
Finding #4: T here is a paradox to our regional prosperity. • T he 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. • T hese 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: G oal 1: Improve career pat h ways from low and moderate wage work to middle wage jobs. G oal 2 : G row t h e economy in t h e Bay Area, wit h a particular emp h asis on growing middle- wage jobs. G oal 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?
G oal 1: Improve pathways to the middle Photo of an apprentice readiness program in proper use of harnesses.
T here are 30,000 annual middle wage openings (growth + replacement). Bay Area Total Job Openings 2010-20 (Thousands) 600 508 505 500 400 309 300 200 100 0 $30 and above $18 to $30 an hour Under $18 an hour …the majority of the opportunities come from replacement jobs, not job growth Source: Employment Development Department
H alf 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 S kills : math, basic literacy, and GED completion. • Englis h Language • S oft S kills: job readiness (attitude, reliability, promptness) • Tec h nology and digital Literacy • Hig h er order skills: Critical thinking and analysis
Y et training alone is not enough – need to also focus on job search, social networks and connection to employers • T he job search and hiring process is changing, often widening gaps between lower-wage workers and the rest of 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.
Goal 1: Improve pathways to the middle 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 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 I ndustry Number of Middle Wage Job Openings Prof, Sci, & Tech Services 2,635 Specialty Trade Contractors 2,366 Ambulatory H ealth Care Services 2,147 G overnment 1,708 Educational Services 1,665 Administrative & Support 1,304 H ospitals 998 Total 12,823
Y et there are no “middle wage” industries. (although the distribution of wages varies). Industries with the greatest number of middle wage jobs (3-digit NAICS) 400,000 350,000 300,000 250,000 200,000 Upper Low/Mod 150,000 Middle 100,000 50,000 -
F urther, 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 H ealth Care are located everywhere
Also true for Professional, Scientific and T echnical Services
INDU S TR Y OF OPPOR TUNITIE S IN 2020 N Industries of opportunity in Santa Clara County in 2020 A L A M E D A C O U N T Y SA N T A CLA R A COUN TY BA RT to Berryessa BA RT to Silicon Valley V T A Light R ail Source: US Census NAICS Caltrain = 200 Jobs in Industries of Opportunity Urbanized areas 0 2.5 5 MILES
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 100% 90% 80% 70% 60% low- and moderate wage 50% middle wage above middle wage 40% 30% 20% 10% 0% Alameda Contra Marin Napa San San Mateo Santa Clara Solano Sonoma Costa Francisco
And lower wage workers tend to have the shorter commutes (nearly 60% have commutes of less than 20 minutes). Bay Area commutes in minutes, by wage level 100% 90% 80% 70% 101- Mins. 61-100 Mins. 60% 41-60 Mins. 50% 31-40 Mins. 40% 21-30 Mins. 11-20 Mins. 30% 0-10 Mins. 20% 10% 0% > $18 < $18 < $11.25 But most low wage workers drive (73% for low) – just like all workers (80%)
But the region must also support more overall growth to ensure continued expansion of middle- wage jobs and the broader economy. • R egion 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. • T ransportation projects are not always planned in line with where growth will go (or whether or not they will carry the most people).
K ey takeaways: • 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
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