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Not Out of the Woods Yet

More Immediate Action Needed to Create Jobs for Low-Income Workers

SOURCE: AP/Mark Lennihan

People wait to talk with potential employers at a job fair sponsored by National Career Fairs in New York, Monday, December 12, 2011.

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The December jobs numbers released earlier this month showed slow but steady progress in the nation’s recovery from the Great Recession. In December the labor market added a net 200,000 jobs and the national unemployment rate tracked down to 8.5 percent. Job gains occurred in critical industries such as transportation, retail trade, manufacturing, and health care. Coupled with the better-than-expected sales figures during the holiday shopping season, consumers and policymakers are hoping this is a turn in the economy that will lead to faster economic growth in 2012.

Amid these positive signs in the economy, however, more aggressive action is still needed to create jobs for low-income workers. Accompanying the positive signs of economic recovery is a number of serious challenges. First, at the current three-month average pace of job creation, it will take three years just to recover the jobs lost in the Great Recession of 2007-2009. Second, while the private sector continues to create jobs—although at a slower-than-needed pace—the public sector continues to shed jobs. In December the private sector created 212,000 jobs while the government shed 12,000, yielding a net of 200,000 jobs.

Another area of concern is the continued high level of unemployment among African Americans, Hispanics, and young workers. From October to December the jobless rate tracked down for white workers, but it remained stubbornly flat for Hispanic workers and crept up among African Americans. In December the unemployment rate for African American workers was 15.8 percent, more than twice that of white workers (7.5 percent). At 11 percent, Hispanic workers also had a significantly higher unemployment rate than the national average.

The unemployment rate among youth also remains extremely high, with 23 percent of teens ages 16 to 19 unemployed. The already-high rate for African American youth ages 16 to 19 ticked up from 39.6 percent in November to 42.1 percent in December. At the same time, 14 percent of workers ages 20 to 24 were unemployed. Additionally, the unemployment rate continues to be unacceptably high for less-educated workers. Those with just a high school diploma had an unemployment rate of 8.7 percent, twice that of workers with college degrees (4 percent).

Two recent studies highlight some of the challenges that continue to confront groups with high levels of unemployment. A study from the Center for Labor Research and Education at the University of California makes the connection between the high African American unemployment rate and the level of job cuts in state and local governments. The report offers several key findings:

  • From 2008 to 2010 more than 21 percent of African American workers were public employees, compared with 16.3 percent of non-black workers.
  • The public sector is also a critical source of decent-paying jobs for African Americans. For both men and women, the median wage earned by African American employees is significantly higher in the public sector than in other industries.
  • Since January 2009 state and local governments have laid off more than 400,000 workers. The dramatic and ongoing reduction in these jobs has contributed to the high unemployment among African Americans and the 39 percent poverty rate among African American children.

The Half in Ten campaign also recently released a report that illustrates the important connection between work and economic security for families. The report shows that the poverty rate among single-mother-headed households fell to 14 percent from 40.7 percent when mothers were able to find full-time, year-round work. With millions of families struggling to find employment and regain their foothold on the middle class, and poverty increasing dramatically among children—currently one in five live in poverty—far too much is at stake for us not to focus more on jobs and ways to get more Americans employed and earning once again. Without targeted investment in jobs, millions more Hispanic and African American children whose parents are disproportionately unemployed and underemployed will come of age in families that are trapped by poverty.

To address the many employment challenges facing low-income families, policymakers must take immediate and aggressive steps to put more families on the path to good jobs. For those currently unemployed, Congress can create more subsidized-employment opportunities for low-income adults, expand employment opportunities for young workers, and increase targeted training programs for in-demand jobs in local communities.

One proposal in Congress, the Pathways Back to Work Act, would provide $5 billion to fund targeted employment and training programs for those workers hardest hit by the Great Recession. It includes resources for subsidized-employment programs for low-income, unemployed adults; summer and year-round employment for low-income youth; and funds for local partnerships to create work-based training initiatives to prepare workers for specific in-demand jobs in the local areas.

These types of targeted employment and training programs are critically needed to keep vulnerable Americans from falling deeper into poverty. Previous programs that utilized these specific strategies have proven effective, among them:

  • A similarly structured subsidized jobs program created more than 260,000 jobs in 2009 and 2010.
  • Investments in the summer youth-employment program in 2009 created more than 300,000 jobs for young workers, with more than 82 percent of the youth who participated in the summer jobs program completing their work experience and nearly 75 percent achieving measurable increases in work readiness.

In addition to these new investments, Congress must take additional steps to help local governments prevent more layoffs and keep teachers, police officers, firefighters, and other municipal workers on the job. Congress should also improve the Workforce Investment Act, or WIA, system to ensure better access to training for all workers. WIA was enacted to serve as a hub for both employers and job seekers. WIA-related services include coordinated training and employment services for youth who face barriers to employment and other workers looking to develop new skills or find employment opportunities.

During this period of record unemployment, policymakers must ensure the American workforce system is strengthened and fully funded. WIA-related programs served more than 9 million job seekers in 2010. Clearly there is a need for continued investments in a strong workforce system.

Desmond Brown is a consultant to the Center for American Progress Action Fund’s Half in Ten antipoverty project.

To speak with our experts on this topic, please contact:

Print: Allison Preiss (economy, education, poverty)
202.478.6331 or apreiss@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org