Utah lawmakers debate how to turn education into jobs

S.B. 169 Education Task Force was passed and signed, March of 2013. One of the task force’s duties is to make recommendations on the alignment of both public education and higher education with the state’s economic development goals and workforce needs, according to last meeting’s agenda. The Department of Workforce Services and the Georgetown University Center on Education and the Workforce described methods of forecasting the number and types of occupations and the educational demand corresponding to those occupations.

In a presentation from the Department of Workforce Services, John Krantz, a research economist for the department presented Occupational Projections and Education Requirements. Krantz explained both the Bureau of Labor Statistics and DWS’ approach to long-term occupational projection methodology and determination of education levels by occupation.

To see this presentation, click here.

For more meeting information, see the Utah State Legislature website.

Addressing Poverty Wages through the Organization of Labor

A recent topic of concern among labor economists across the country is the “hollowing out” of the labor market. Evidence indicates that middle-skilled, middle-wage jobs have been declining relative to both low-skilled, low-wage jobs and high-skilled, high-wage jobs. As a consequence of this trend, workers lacking a relatively developed skill set or without a relatively high level of educational attainment are finding that the only options available to them are low-wage jobs with hourly pay rates close to the federal minimum wage.

An article in the New York Times entitled “Unionizing the Bottom of the Pay Scale” characterizes some of the unsettling aspects of the hollowing trend in the labor market and discusses how labor union organizers are attempting to address the problem.

As the article indicates, national occupational projections show that many of the occupations producing the largest number of new jobs in the future pay low wages. According to the BLS 2010-2020 occupational projections, four of the top six fastest growing occupations ranked by largest number of new jobs pay a median wage of $10.10 an hour or less. These four occupations are, in order of their ranking, retail salespersons, home health aides, personal care aides, and food preparation and serving workers (which includes fast food workers). For a single parent with two kids, this would barely lift the family above the U.S. Census Bureau’s 2011 poverty threshold of $18,123, on the assumption that the employer hired the individual full time. Focusing on just fast food workers, the article cites research indicating that nearly three fourths of these workers live in poverty.

With such a large share of workers earning essentially poverty wages, labor unions have increased their efforts to organize workers in the lowest paying occupations. As the article’s author notes, successfully organizing some of these low-wage occupations will be difficult, partly because of high turnover in many of these occupations. However, it could perhaps become more common in the future to see striking workers where you would never expect them, such as in front of big-box retailers and fast food restaurants.

New Housing Construction Projected to Expand in 2013

As a leading economic indicator, residential investment can signal when the economy is about to slide into a recession and when the economy is returning to normal after a downturn. Beyond being merely an indicator, investment in residential construction has traditionally played a crucial role in stimulating growth after a recession. While the Great Recession was the result of a large number of interrelated factors, one explanation for its extended duration is that the devastated housing market has shown virtually no sign of improvement. From the beginning of 2006 through the end of 2008, new single-family home sales declined steadily reducing the volume of sales to one third of its former size. Over the three years from 2009 through 2011, new residential sales held constant, but showed no signs of growth. The absence of this important catalyst of economic growth offers at least a partial explanation for the very slow rate at which the nation has been recovering from the Great Recession.

In 2012, the new residential housing market started showing signs of growth. Fannie Mae has projected that by the end of 2013, new single-family home sales should approach an annual rate of nearly half a million. That’s good news for Utah. As the health of all state economies are tied to the health of the national economy, the recovery of the new residential housing market nationally bodes well for the future economic growth of the State of Utah.

What Are We Buying Now?

A new report from the Bureau of Labor Statistics examines how spending patterns have changed over the last 25 years. Based on inflation-adjusted expenditure data from 1986 and 2010, the report shows that the proportions of spending across expenditure categories have changed dramatically for U.S. consumers. While we often hear people complain about the cost of food or transportation, homeowners today actually spend 14 percent less on food and 22 percent less on transportation as compared to 25 years ago. However, when spending decreases in some categories, it must necessarily increase in others. Expenditures on health insurance grew the most with an increase of 145 percent, but, to keep the amount in perspective, it only amounted to 4 percent of total expenditures. The largest expenditure category was housing, which accounted for 33 percent of spending for homeowners and 38 percent of spending for renters. The share of expenditures going to housing grew by 11 percent for homeowners and 16 percent for renters over the last 25 years.

The full report can be found here.

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Training Works: the Impact of DWS Job Training Services – Utah Insights article

Federal job training programs have recently been the subject of both criticism and concern as a result of large federal budget deficits and widespread joblessness in our current economic situation. A report from the Government Accountability Office (GAO) criticized the apparently wasteful overlap in federal job training programs and claimed that “little is known about the effectiveness of the employment and training programs we identified because only 5 reported demonstrating whether outcomes can be attributed to the program through an impact study.”

To read more, click here.

To see all issues of Local and Utah Insights, click here.

Welfare, Work, and the Economy - Trendlines article

A background on welfare for mothers with dependent children and how numbers of new entrants coincide with economic times.

The social program known as welfare traces its origin back to the Great Depression, when it was created as part of the Social Security Act of 1935. The program was designed to provide support to mothers with dependent children whose fathers had left the family, become incapacitated, or died.

During the first 25 years of the Aid to Families with Dependent Children (AFDC), the program operated as intended, caseloads were relatively low, and the general public either accepted the program as satisfying a legitimate social need or was at least unconcerned with it. However, the broad social changes of the 1960s would drastically alter the public’s opinion toward welfare, providing an impetus toward reform. Perhaps the most influential social change was the steady increase in the percent of working mothers.

To read more, see the entire article here.

A New Approach to Poverty - Trendlines article

The Official Poverty Measure (OPM) was designed in the early 1960s and officially adopted in 1969. But it was never intended to be anything more than a temporary solution to the problem of measuring poverty. Not until the 1990s did work begin on developing a new method for measuring poverty and only this year did the Census Bureau publish its initial set of supplemental poverty estimates. The new supplemental poverty measure addresses problems inherent in the official poverty measure and provides a new perspective on the numbers of those in poverty based on age, race, and ethnicity.

To read more, click here.

A Look at Household Income Distribution in Utah - Trendlines story

A common approach for examining income inequality is to rank households by total income and separate them into quintiles. If household income were distributed with perfect equality throughout society, each quintile would receive 20 percent of the total household income. Regardless of whether it is measured at the level of the nation, state, county, city, or census tract, nowhere within the United States is household income distributed with perfect equality...

What causes household income inequality? read more>>

Industries of Life

Over the past nine years, life science industries employment has grown by more than 27 percent, 17 percentage points more than total employment growth for the State of Utah over the same period. Expanding by 47 percent during the last nine years, healthcare has exhibited the largest growth among the major industrial sectors and this is closely related to the growth in the life science industries. Many of the goods produced by the life science industries are used in association with the services provided by the healthcare industry. When the healthcare industry does well, we should expect it to pull life sciences along with it. TrendLines