Labor Day Jobs Report Has Good and Bad News

MAUREEN CAVANAUGH: Our top story on Midday Edition is a new report on the job market in California. The non-profit California Budget Project has studied employment and earnings throughout the state. It has found that although California has regained jobs in lost during the great recession, many of those jobs do not pay middle-class wages. Alison St. John spoke about the jobs report with Luke Reidenbach, policy analyst with the California Budget Project, and Peter Callstrom, president of the San Diego Workforce Partnership. Here's that interview: [AUDIO FILE PLAYING] ALISON ST. JOHN: Look, thank you so much for being with us. Let's start with you. Based on your report, California has have something to celebrate this Labor Day, as we have regained all of the jobs that we have lost before the downturn. But they are not the same kind of jobs, how are they different? LUKE REIDENBACH: One of the things that we looked at in this report showed a longer-term trend of the times of jobs the California's economy has been adding, and one of the things we've been seeing is that low-wage work is becoming a larger share of jobs in California. ALISON ST. JOHN: This a very slow recovery, it took fifty months to regain all of the jobs lost in just thirty months before we hit the bottom. Why is the recovery so slow? LUKE REIDENBACH: If not because we are not adding jobs as fast as we have in the past, it's just that we lost so many jobs in the great recession. We lost over 1.3 million jobs in thirty months. The pace of job growth is similar to what we've seen in prior recoveries, but we are recovering from a much deeper hole. ALISON ST. JOHN: Going back to the point that you made, low income job seem to be the ones that are increasing, rather than the high-paying jobs. Why is it that good paying middle and low income jobs are not increasing as fast as those in the top echelons? LUKE REIDENBACH: Just to clarify, there is a large outgrowth of the high-end. We are seeing very low growth in the middle. It seems that a lot of the job growth is hard out between low and high paying jobs. Part of that has to do with the type of industries that are growing in this economy, but another aspect is that jobs are paying less now. Low-wage workers have experienced of the last three decades and erosion of wages. The low-wage worker in 2013 was earning over 12% less than a similar low-wage worker would in 1979. ALISON ST. JOHN: Why do we have more low-wage jobs and our wages are not increasing as much as they are in higher wage jobs? LUKE REIDENBACH: Part of that is policy, for one, minimum wage is not end up with the rising cost of living, especially in high-cost areas such as San Diego. And then, there are a multitude of other factors that have to do with how the national economy is changing from international trade to technology, to the decline of the union. There is no single answer to explain it. I think all of those factors combine, it makes it very tough for low-wage workers today. ALISON ST. JOHN: Peter, you are focusing on employment here in San Diego, what does the job market look like in San Diego, what is our employment rate compared to the rest of the state? PETER CALLSTROM: It has come down, as Luke has pointed out. It has been a steady increase since the recession. We may still be in it in many areas. But it has improved locally, the local unemployment level has gone down to the mid-six range. One important part of that number that is missing is long-term employment, which is a significant concern in our area and across the country, because when folks have been out of work beyond six months, they fall off the ranks, and they are not receiving benefits, and they are not even accounted for for the most part as part of the employment number. The true number that are unemployed is beyond what is reported to the Department of Labor figure that we all receive. They also account for it and other data, but there are a lot of folks who are not back in the labor force. ALISON ST. JOHN: Is it true to say there are more long-term unemployed then after previous recessions? PETER CALLSTROM: I think so, it seems much more difficult to get back into the workforce for many, because the jobs, as Luke pointed out, are there, but there's a matching of skills and needs that folks have. It's also very competitive to get any job. There are dozens, if not many dozens of applicants for any single job. When you have a longer gap in your resume, that can work against you. ALISON ST. JOHN: Is that true in San Diego as it is in San Francisco, for example they have a much lower unemployment rate, and other areas like El Centro have a much higher unemployment rate. Is this aspect similar across the state? PETER CALLSTROM: It is, and it cuts across all industries. There were so many jobs lost, as Luke pointed out, during the freefall that we had. To get those jobs back is a slow, steady process. Long-term employment is a significant problem throughout the country. Local we're talking about 100,000 people were fallen that rank. ALISON ST. JOHN: And that's actually something the Workforce Partnership is actually working quite hard with those individuals. What can you do with someone who has been unemployed for more than six months, to help them get a foothold again? PETER CALLSTROM: I encourage anybody to come to the career centers. We have twelve locations in the county, it is free, because these are public dollars to the department of labor that make these services available. And for anyone to learn more, go to our website workforce.org. There is a listing of all the locations around the county. Come sign up. There are classes to refine your resume, interviewing skills, and all that takes to get prepared for going into the work that you're looking for. ALISON ST. JOHN: In San Diego, it's a similar pattern to the rest of the state, the lower income jobs seem to be increasing and we've got a job market coming back, but wages are not what they used to be. PETER CALLSTROM: The issue with minimum-wage and living wage, however we put it, is an issue. Both sides of the arguments have excellent points. In the end, it comes down to a local decision of what we need for our region. That minimum-wage those less far and it would in other parts the state, with lower costs. We are high-cost region. With a be the for business if minimum wages elevated to the levels being proposed? ALISON ST. JOHN: This is what makes your report particularly relevant this year, because we about to embark on a debate about whether or not to raise the minimum wage here in San Diego. The city council has voted for it, and there's initiative to put it on the ballot. From the perspective of your report and your research, how have listed to raise the minimum waste to close the gap between high and low paying jobs? LUKE REIDENBACH: It is very important for low-wage earners. Minimum wage is less important for your median earners. For low-wage workers, minimum-wage increases are very helpful for them. With modest increase, the impact on business is minimal as long as the increase is within reason. I think given the erosion low-wage workers have faced in the last three decades, I think it is reasonable to see a higher increase that we have seen so far. ALISON ST. JOHN: There is a graph in your report, it's kind of interesting because it does show a better paid jobs taking off, and the lower wage jobs decreasing wages, and the lower paid jobs are going down, and the middle jobs are going down as well, but in the last couple of years on your graph, the low wages don't seem to be going down as fast, why is that? LUKE REIDENBACH: Part of that might be the variability in data, it is hard to know any kind of annual trend. You have to look at the big picture. One of the interesting things I think we see in that chart, I wish I could explain it to your audience, is that in the late 1990s, wages grew for everybody. This isn't a mystical reality we are thinking up here. In the 1990s, wages grew for all workers, because it was a tight labor market. Workers were in demand, and employers had to keep workers. I hope we reach a point where workers are in demand, and that would be the best outcome for low-wage workers and middle wage workers. ALISON ST. JOHN: What do you think is driving the fact that high wage workers wages keep going up? PETER CALLSTROM: That is a great question, having an hourglass economy, a lot of jobs in the higher income levels and many of the low level and not enough in the middle is a concern. That is something that look points out well in the study. We have in interesting economy here, it is so big and so vast with 3.5 million people in the county. We have three really significant drivers of the economy, being the military, tourism, and the innovation sector, which is so unique to other regions, we have a lot of high paying jobs there, and lower end in tourism. But middle-class jobs are harder to come by, because of the nature of the economy that we have. ALISON ST. JOHN: Do you think the same thing applies to the state as a whole? That we are seeing higher level wages going up? I remember seeing a cartoon with someone carrying a protest sign, saying why are there maximum wages the same as minimum wages? They just aren't. They keep going up. Do you have any explanation for that? LUKE REIDENBACH: It has to do with the type of jobs and demands that those workers have. They have more bargaining power, they can demand higher wages. I think what you're seeing for the low and middle wage sector, there are fewer middle skill middle wage jobs those you are having more workers competing for the lower end. That's what you don't see the wage recovery, because, employers don't have incentive to offer higher wages. They don't have problems hiring people. I think that is part of the anemic that you are seeing. PETER CALLSTROM: That's part of where we come in with the workforce partnership. We are offering training to people who come to the career centers, so we can raise folks up from low skilled or unskilled places to have skilled professions. By going to the career centers and the support we offer, we are raising people up to middle class positions, it's not just getting a job, it's getting a great career and moving up. ALISON ST. JOHN: That is something your report also mentions in terms of ways to level the playing field a bit in terms of jobs and wages, is education. LUKE REIDENBACH: That is something California lost its way on. There used to be huge investments in higher education, and I think the recent trend has been declining investments, increasing tuition, and making higher education less affordable for disadvantaged students. That is something from our statewide budget perspective that the city can do to increase mobility for low-wage workers. ALISON ST. JOHN: You've got quite a lot of federal money to provide training, and you can train people and train people, but if the jobs are not there, will that help? PETER CALLSTROM: The jobs are here, there's a great demand, it's a matter of matching up skills with jobs. In our region, we have a lot of high skilled positions, in IT for example, with countries like QUALCOMM and others the high-tech arena. It's a specialized area to have skill and experience. We may not be of the train you to place you in levels like that, but there's a lot of other work around IT and so forth, and higher paid work in these sectors that we can get folks into. With the right training and certification, a lot of those positions are very attainable. Even back to some of the middle class jobs, there are partnership programs and a lot of work and organized labor to get folks into well-paid middle-class jobs with the right training. If you don't have the skills, you won't suddenly move up the next level. But if you retrain and work on continuous learning, those positions are available. It's really about being exposed to what is out there, that is with the career centers can help with, because we can put out before the job seeker, here are the positions in our region that are in demand, who put a report about in demand jobs on our site as well that looks across the entire region and what it takes to get those jobs. Educational background, skills, and what the jobs pay. ALISON ST. JOHN: Are the construction jobs coming back? PETER CALLSTROM: As our economy is coming back, yes. They are there and our region has a lot of infrastructure work being done, as you know, and other building and redevelopment going on. ALISON ST. JOHN: I know your report mentioned that one of the reasons those middle-class family jobs are shrinking is partly because public sector construction has been eroded, is that right? LUKE REIDENBACH: Unlike previous recoveries in California, the public sector job market has been very weak and it has actually been a drag on overall job growth. The reason we think that is noteworthy is because in the public sector, partly because of the role of public sector unions, that was one of the last areas that people were getting middle-class wages and benefits. It is not that we have preferences to the public sector, this huge industry. It's just the reality on the ground. The public sector is not recovering, and that has had an impact on middle-class families. ALISON ST. JOHN: We have come to the end of our time. Thank you very much for nipping at the bud at the labor picture in California. Thank you both very much. PETER CALLSTROM: Happy Labor Day, everybody. LUKE REIDENBACH: Thank you for having me. [ END SEGMENT ]