Overcoming Barriers for the Underemployed
Overcoming Barriers for the Underemployed:Opportunities for Michigan to Grow, Leverage its Labor Force
Eric Lupher, President
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Citizens Research Council • Founded in 1916• Statewide• Non-partisan• Private not-for-profit• Promotes sound policy for state and local governments through
factual research – accurate, independent and objective• Relies on charitable contributions from Michigan foundations,
businesses, and individuals
• www.crcmich.org
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Thank You Report Funders
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Connecting the working poor to low-and medium-skill job opportunities
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Connecting Workers to Jobs
• Employers continue to report a talent shortage• Focus on skills gap is not satisfactory
• The majority of job openings tend to be concentrated in low- and middle-skilled jobs• Lack of occupational skill not the sole barrier to connecting job seekers to employers
• Michigan is home to a growing population of workers struggling to make ends meet
• Not able to find full-time jobs• Employed in a job that does not fully utilize their skills• Working in gray market
• State programs off target in addressing needs of today’s economy
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Demand for Workers
• Statewide demand for workers continues to grow• Number of jobs posted and available on the state’s website has nearly
doubled since 2012
• Bulk of job openings are for low- and middle-skilled positions
• Given the level of skill required, many of these positions are also low-wage
• Low-skilled, low-wage workers are less likely to have the personal resources needed to help overcome barriers to employment
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Categorization of Job Types by Educational Requirements and Time to Proficiency
Skill Level Minimum Education RequiredTime to Achieve
Occupational ProficiencyLow-Skill A high school education or equivalent On average, 2 weeks on the
jobMiddle-Skill Some post-secondary education or
trainingOn average, 1 year on the job
High-Skill A terminal post-secondary credential, bachelor’s degree or more
More than 1 year on the job
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The Demand for Workers
Projected Percentage Annual Average Job Opening Growth by Educational Requirement, 2016-2026
Projected Annual Average New Job Openings by Educational Requirement, 2016-2026
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0%2%4%6%8%
10%12%14%16%
0
50,000
100,000
150,000
200,000
250,000
Supply of Available, Job Seekers
• Even with ~386,000 job openings with minimal requirements…
• Michigan has >400,000 unemployed and underemployed individuals
• ~200,000 unemployed• ~200,000 underemployed
• Discouraged workers• Marginally attached to the workforce• Working part-time for economic reasons
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Michigan Unemployed and Underemployed Populations, Average Annual Rates 2003 to 2018
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0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Long-term Unemployed (15+ Weeks) Job Losers Discouraged Workers All Marginally Attached Involuntary Part-Time Employed
Can Michigan be at Full Employment with People Sitting on the Sidelines?• Two of easiest measures of strength of economy:
• Unemployment rate• Poverty rate
• These measures tell only part of the story:• Unemployment rate
• Measure of individuals who are both unemployed and actively seeking employment• Many people not actively seeking employment
• Poverty rate • $12,180 for individual, $25,100 for family of four• Not necessarily a livable wage
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Unemployment Rate
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Do not focus solely on the unemployment rate
Unemployment Rates in Michigan, Midwest States, and U.S. – 2007-2017
Labor Force Participation and Unemployment Rates in Michigan – 2007-2017
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0%
2%
4%
6%
8%
10%
12%
14%
16%
Une
mpl
oym
ent R
ate
Michigan
Midwest States
U.S. Average
64.2%
60.0%
61.4%
7.0%
13.7%
4.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
57%
58%
59%
60%
61%
62%
63%
64%
65%
Une
mpl
oym
ent R
ate
Labo
r For
ce P
artic
ipat
ion
Rat
e
Unemployment Rate
Labor Force Participation Rate
Michigan Labor Force Participation Rates, 2007-2017
Gender, Ethnicity, Disability Educational Attainment, Age, Poverty
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30%
40%
50%
60%
70%
80%
90%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Male Female White Black Disability
30%
40%
50%
60%
70%
80%
90%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
No High School Bachelor's DegreeAge 19-25 Below Poverty Line
Labor Force Participation RatesFor Michigan, Midwest States, and U.S., 2007-2017
54
56
58
60
62
64
66
68
70
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Labo
r For
ce P
artic
ipat
ion
(%) Midwest States
U.S. Average
Michigan
By county
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Michigan Labor Force Participation by Select Age Cohorts, 2007-2017
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0%
10%
20%
30%
40%
50%
60%
70%
80%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
20-24 55-64 Total
Health and Substance Abuse
Individuals Receiving Social Security Disability Income, Michigan, Midwest States, and U.S., 2007-2017
Overdose Deaths in Michigan, Midwest States, and U.S., 2007-2017
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2%
3%
4%
5%
6%
7%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
SSD
IBen
efic
iarie
s as
% o
f Tot
al P
op
Michigan
Midwest States
U.S. Average
0
50
100
150
200
250
300
Ove
rdos
e D
eath
s pe
r 1,0
00 P
op
U.S. AverageMichigan
Midwest Average
Poverty Rate
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Generally the ALICE Population
•ALICE• Asset • Limited• Income • Constrained• Employee
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Michigan Unemployment Rate and ALICE Households, 2009-2017
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0%
5%
10%
15%
20%
25%
30%
2010 2012 2014 2017
ALICE Households
Unemployment Rate
Headwinds to Greater Labor Force Participation
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Number of Licensed Child Care Providers, 2010 and 2017
Category 2010 2017 ChangePercent Change
Child Care Centers 4,163 4,363 200 4.8%Family Child Care Centers 5,888 3,585 -2,303 -39.1%Group Child Care Centers 2,811 1,849 -962 -34.2%All Providers 12,862 9,797 -3,065 -23.8%
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Number of Child Care Slots, 2010 and 2017
Category 2010 2017 ChangePercent Change
Child Care Centers 297,834 313,692 15,858 5.3%Family Child Care Centers 34,949 21,397 -13,552 -38.8Group Child Care Centers 33,579 22,121 -11,458 -34.1%Total Slots 366,362 357,210 -9,152 -2.5
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Geographic Mismatch of Jobs and Workers
Average Annual Number of Unemployed per 1,000 Labor Force Participants, 2018 Online Job Postings by County
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Michigan and National Real and Nominal Wages, 2007 - 2016
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$12
$14
$16
$18
$20
$22
$24
$26
$28
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Michigan - NominalU.S. - Nominal
U.S. - Real
Michigan - Real
Rent Cost in Michigan, Midwest States, and U.S. Average, 2007-2017
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$600
$700
$800
$900
$1,000
$1,100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mon
thly
Ren
t Cos
t U.S. Average
Midwest States
Michigan
Call to Action
• Age• Policies that encourage young adults to stay in Michigan • Policies that bring in workers from outside of the state: domestic or
international migration• Childcare
• Advocate for state expansion of eligibility and amount of reimbursement• Employer provided facilities
• Geography• Bring workers to the job opportunities or• Employment opportunities where there are workers
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Call to Action• Health and Substance Abuse
• Affordable, accessible health care• Continue to provide resources for awareness and treatment of opioid
addiction • Housing
• Community issue – supply of affordable housing • Transportation
• Mass transportation plan, funding, implementation• Replicate Uber/Lyft models to supplement transit failings
• Wages• Employer issue – do pay scales attract/retain workers?
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State Policies
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Michigan Talent ProgramsDepartment of Corrections • Prisoner Education: Adult Basic Education (ABE) & General Education
Development (GED) • Prisoner Education: Career and Technical Education (CTE) • Prisoner Education: Employment Readiness and Workforce Development • Prisoner Re-Entry and Community Support • Vocational Village
Department of Education • Child Development and Care
Department of Health and Human Services • Business Resource Networks • Employment and Training Supportive Services • PATH • Vocational Rehabilitation (VR) • FAP Employment & Training Program (FAE&T) • Employment Assistance • Healthy Michigan
Department of Transportation • Michigan Wounded Veterans Internship Program (WVIP) • Veteran Internship Program (VIP)
Department of Licensing and Regulatory Affairs • Vocational Rehabilitation (VR) Services for Blind Persons
Talent Investment Agency • Adult Education and Family Literacy Programs • Food Assistance Employment and Training (FAE&T) • Partnership. Accountability. Training. Hope. (P.A.T.H.) • Trade Adjustment Assistance (TAA) • Disabled Veteran Outreach Program (DVOP) and
Local Veteran Employment Representative (LVER) Program • Wagner-Peyser• Workforce Investment and Opportunity Act • Going PRO (Skilled Trades Training Fund) • WIOA National Emergency Grants (NEGs) • Fidelity Bonding Program • Community Ventures • UIA: Work Opportunity Tax Credit • Various Marketing and Awareness Efforts • Career Exploration and Job Search Tools
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Restrictions by Source of Funding
• Majority of talent programs rely heavily on federal funding
• Specific requirements and limitations regarding
• Who they can serve• What services can be provided• Reporting metrics
• Funds often apportioned using unemployment rates
Federal Funding, $30.2
State Funding, $7.1
Going Pro
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Mismatch of Services
• Emphasis on• Job search• Job placement• Job training
• Fewer resources for• Work readiness• Work supports• Basic education
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Not All Populations are Being Served
• Programs targeted at• The unemployed• Those in or very near poverty• Specific sub-sects of the workforce
• Lose access to programs if income exceeds poverty rates or similar benchmarks
• Hard cut-offs result in employee attrition• Cycle of unemployment and public assistance
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Significance of Program Failings
• Current programs do not account for changes in the demographic and economic landscape that are impeding the labor market
• Success defined by • Declines in unemployment rate• Declines in number of households in poverty
• Focus on work search and occupational skill attainment as opposed to work supports and soft skills
• Fails to acknowledge the long-term, seismic shifts occurring in the labor market
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Call to Action
• Opportunities for Change• Expand Eligibility
• Measure Labor Market Health Differently
• Broaden Scope of Talent Strategy
• Coordinate Programs
• Multi-Pronged Approach
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