Highest Common Denominator

Let’s drink to the hard-working people.

Let’s drink to the salt of the earth.

--Mick Jagger & Keith Richards

I am writing this on my birthday.

Ordinarily, posts to this blog are not personal. But given my background, and that my birthday falls shortly after Labor Day, I decided to break my own rule.

Today, I lift my glass to the worker.

I come by my convictions honestly. My great grandfather helped to bring the United Mine Workers to his small town in northeastern Pennsylvania, at a time when union organizing could get a man killed. Until she retired, my mother was a teacher, and very involved in her National Education Association local. So I grew up believing, as Margaret Mead* noted in the quote that has made its way onto way too many t-shirts and posters, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”

I grew up believing in the value of work, and the value of workers.

So it is with great dismay that I observe the growing sense of anger and resentment toward workers -- union and government workers, to be sure, but also workers in general.

I understand some of these emotions:  those who are unemployed resent those who seem to have good jobs – jobs with security and benefits. Fear and desperation breed anger. I get that.

But I am increasingly upset with what seems to be a new mindset:  that shareholders and Wall Street and bankers matter more than workers. When did working women and men become the enemy?

I am worried. I am worried that current economic challenges will increase the divisions already present in our society – especially here in the District of Columbia – and lead to fractures in the civil infrastructure that undergirds our society.

But we can change this. We can be that “small group of thoughtful, committed citizens.”

Instead of watching our economy and our society spiral downward, we have the chance to stop, think, and reverse course.

Instead of resenting unions and other workers’ organizations for negotiating fair wages and benefits, let’s resolve to bring fair wages and benefits to *all* workers. Let’s bring the wages and benefits of all American workers *up* -- to the highest common denominator.

If we agree that work and workers should be valued, then we all need to make some changes. Instead of seeking the lowest price, perhaps our quest should be for the best value.

We pay dearly for our pursuit of the lowest price. We pay in lower wages for workers, in reduced health and safety protections, in weaker environmental regulations, in job losses to other countries where labor costs are lower. When we demand low prices instead of good values, we set up a perfectly vicious circle that results in further depression of wages.

And at the same time, corporate executives demand higher and higher profitability to satisfy Wall Street and keep shareholders happy.

When consumers demand low prices, corporations have to keep the costs of goods down.  When at the same time, corporate shareholders demand high rates of return on their investments, corporations have to keep their profits high. The result is a squeeze on labor costs – and on flesh-and-blood workers – that is unsustainable. Something has to give.

Turn the equation upside down for a minute. What if we agreed that the best approach is to help everyone find a job on a career ladder that leads to good, family-sustaining wages? The result would be workers with more income, who would be better able to provide for their families, to meet their own needs, and to contribute to the economies in their neighborhoods, their cities, their states, and the country. We would then create a virtuous circle, spiraling upward, and supporting a thriving, growing economy for all.

In the District of Columbia, the DC Jobs Council works for that virtuous circle. We invite you to join us in that work. If we all pull together, we can ensure every District resident has the chance to prepare for, find, and keep a good job, one that offers a solid step on a career ladder to family-sustaining wages.

Kind of a nice wish for a birthday ...

Marina

*In an interesting side note, Margaret Mead and I grew up in the same small Pennsylvania town - albeit a few years apart.

Whither the District’s Adult Job Training Money?

If you have been following the work of the DC Jobs Council for the past few years, you may remember all of our hard work to get local funds for adult job training in the District’s budget. Thanks in large part to Councilmembers Marion Barry (who got $4.6 million in the FY2010 Budget Support Act of 2009) and Michael Brown (who saved the FY2010 money, and got $4.6 million more in the FY2011 budget), the District made a commitment to fund job training for adults facing barriers to employment, and to disburse those funds via an RFP process.

The DCJC has been following up – relentlessly, some would say – with elected officials and staff in both the executive and legislative branches of the District government to ensure these local funds were spent effectively. After much effort, we can report on what has happened to the local funds budgeted for job training for DC adults.

First, none of the money budgeted in FY2010 for adult training was actually spent in FY2010. The DC Council made the funds nonlapsing, so they rolled over for use for the same purpose in FY2011. That gave us approximately $9.2 million in local funds for adult job training to use in FY2011.

According to the DC Department of Employment Services and the office of the District’s Chief Financial Officer, the money was spent as follows:

Reprogrammed by then-outgoing-Mayor Adrian Fenty to cover severance pay for departing senior-level staff	$500,000
To The Excel Institute, as directed by a mayoral earmark in the FY2011 Budget Request Act	$600,000
To Carlos Rosario International Public Charter School to support training programs in culinary arts, nursing, and information technology	$2,200,000
To replace funds designated to support DOES’ Transitional Employment Program (Project Empowerment)	$3,500,000
Other expenses	$300,000

For those of you keeping score, that totals $8.1 million, leaving $1.1 million for FY2011. Some of that $1.1 million is being held to ensure DOES is able to fund all of the Individual Training Accounts (ITAs) to which it has committed. Any funds unspent by the end of FY2011 will roll over to FY2012.

A bit more explanation of some of the expenditures may be helpful.

Then-Mayor Fenty earmarked $600,000 for The Excel Institute in the FY2011 Budget Request Act of 2010. The funds were to be used to support Excel’s automotive service training program. And in the Budget Support Act for the same year, $2.2 million in local funds were directed toward a DC nonprofit that (1) offered training programs in culinary arts, nursing, and information technology; (2) could serve 300 clients immediately; and (3) could demonstrate a placement rate of at least 90 percent. Carlos Rosario is the only nonprofit in the District that met all of the criteria.

We should note at this point that The Excel Institute and Carlos Rosario are excellent organizations that provide high-quality programs and services to their clients. Our concern is not with the fact that these entities received funding, but rather that the RFP process laid out in the authorizing legislation was not followed.

The need for DOES to transfer funds between agency line items to support the Transitional Employment Program is a bit more troubling. For some time, the District has been using excess monies from the Workers’ Compensation Trust Fund to support TEP. Recently, it came to light that such a practice might be impermissible. Until the question is resolved, the District cannot use the excess dollars in the Trust Fund. To keep the TEP functioning, the city had to find another source of funds. As TEP serves adults, the local funds allocated for adult job training seemed a logical choice.

Again, our question is not about the Transitional Employment Program. We question the process by which the decision was made – a process that left out not only the public, but the DC Council as well.

We recognize that we cannot go backwards and undo these decisions. But we can ask that the District government move forward by ensuring that the local funds set aside in the FY2012 budget for adult job training are used for that purpose, and that the funds are disbursed via a transparent and rigorous RFP process.

We understand from Acting DOES Director Lisa Mallory that RFPs for adult job training will be issued very early in FY2012. She promised that these RFPs will ask a lot of prospective providers in terms of data collection and outcomes. But she also promised a commitment to clarity and to transparency throughout the process, a commitment we find encouraging.

We’ll be watching and keeping you informed every step of the way.

Truths, Helpful Explanations … and Statistics

I just returned from testifying at the Council of the District of Columbia Committee on Housing and Workforce Development hearing regarding the budget for the DC Department of Employment Services (DOES) for FY2012.

As always, this hearing offered a chance for me to learn something new. Advocates, residents, service providers, and government officials always provide interesting and valuable perspectives on workforce development in the District.

But I also heard some information that was not quite accurate. To that end, I want to share a blog post from The Brookings Institutions’ Benjamin Orr. His post, which first appeared in The District Dime, the blog of the DC Fiscal Policy Institute, offers new and clarifying insights into District unemployment figures.

Without further ado …

Guest Blog: Unemployment in Ward 8 is high, but not worst in the nation or even the District

Cuts to the Left of Us, Reductions to the Right

Residents of the District of Columbia – particularly those who are part of the DC advocacy community – are awaiting anxiously the Friday, April 1, release of Mayor Vincent Gray’s proposed budget for FY2012. The budget is expected to be challenging. With the District facing a projected shortfall of $322 million, no program is likely to be spared completely. That includes workforce development, job readiness, adult literacy, and related supportive services.

The FY2011 budget for the DC Department of Employment Services (DOES) includes a total of $75 million in general (non-federal) funds. Of that, approximately $41 million is dedicated to workforce development, which includes adult job training, the Summer Youth Employment Program, year-round youth job training and placement programs, and other related services. From that $41 million total, rumor has it that DOES was required to cut more than $5.2 million for the FY2012 budget – a cut of more than 10 percent. While not catastrophic all by itself, this cut will be painful.

Unfortunately, the bad news does not end there.

As you may remember, the US House of Representatives passed HR 1 in February, which proposed drastic cuts to a broad range of federal program. HR 1 cut federal funding for job training in the current fiscal year – FY2011 – to zero. The continuing resolutions passed since HR 1, while slightly less draconian, also slash spending for job training.

The US Senate is expected propose a lower level of cuts to job training, but it is clear that the final picture will be grim.

In the District of Columbia, as in many other jurisdictions, federal funding supports One-Stop Career Centers, probably the single most accessible source of assistance for people who need to file for unemployment, find jobs, and connect with job training programs. The DC Works! Career Centers – our One-Stops -- are funded entirely with federal monies. If the federal cuts are as large as it appears they may be, that resource will become much less available to DC residents as soon as July.

To recap -- we are facing federal funding cuts to job training programs for the balance of FY2011 – cuts which will likely extend through FY2012. Those cuts will be followed by significant cuts to local funding for job training for FY2012.

If you’re scared, you are not alone. But you are not powerless. You have a voice regarding the District’s budget.

The Council of the District of Columbia will hold hearings to address the Mayor’s budget beginning in early April. The hearing on the DOES budget is set for Tuesday, April 12, at 1:00 pm, before the Committee on Housing & Workforce Development. The committee will meet in Room 500 of the John A. Wilson Building, 1350 Pennsylvania Ave NW. If you wish to testify, please contact Drew Hubbard, Clerk of the Committee, at dhubbard (at) dccouncil.us or (202) 724-8198. While you will be limited to 3 minutes of oral testimony, your written testimony becomes part of the official record in full.

With an unemployment rate in excess of 9 percent in the District, It is critical that we preserve and strengthen our city’s workforce development system. A strong system will ensure the long-term viability of the District’s economy, and help ensure that all of its citizens have the opportunity to participate. With sufficient resources devoted to job training, workforce readiness, adult literacy, and supportive services, we can, in a sense, create tens of thousands of taxpayers. These taxpayers, in turn, will contribute to the District’s coffers and those of their neighborhoods, climb the ladder to self-sufficiency, and help prepare themselves and their children for good jobs in a growing economy.

We’ll see you at the hearing on April 12.

First, Let’s Fix First Source

Here is an interesting fact to ponder: approximately 70 percent of jobs in the District are held by people who do not live in the District.

This imbalance is problematic. One reason it is problematic is that the income earned by that 70 percent goes home to be taxed in Maryland or Virginia. The District's Chief Financial Officer has estimated the lost revenues at $34 out of every $100 earned.

In a time of tight budgets, we need to address this leakage of potential revenue from DC into the suburbs.

But how do we change the percentage? How do we get DC residents back to work?

The answer to that question is complex. We need to help long-term unemployed residents address many of the serious challenges and barriers they face. But we also need to ensure that qualified DC residents have access to job opportunities.

One tool to help ensure such access is the First Source law.

Our tax dollars support many projects that create jobs. Look around the city – there is a good chance that the building going up in the construction site across from your office is partially funded by the taxpayer-funded DC government.

Support can be direct – in the form of a contract to erect a building for a District agency, for example, or to provide job training or some other service. It can also be indirect. DC, like every other city in the nation, offers businesses a variety of tax and other incentives to encourage them to build buildings or open stores and restaurants here.

The District's First Source Act is intended to ensure that when our taxpayer dollars are invested in these projects, they increase employment opportunities for District residents.

The law requires nearly all employers that receive contracts or other forms of government assistance worth $100,000 or more to give priority for new jobs and apprenticeship opportunities to residents of the District.

Priority here means that employers must use the DC Department of Employment Services (DOES) as the "first source" for recruitment, referrals and placements for projects in which District taxpayers have made some kind of investment, financial or otherwise.

This process is supposed to result in the hiring of DC residents for at least 51 percent of all new jobs created by the publicly-supported project and at least 35 percent of apprenticeship hours.

Unfortunately, the First Source law has not been terribly successful in generating jobs for DC residents.

There are two primary reasons the law has not worked well.

First, the First Source law has not been effectively enforced. Last year, the DC Auditor reported that only one-fourth of the projects reviewed met the 51 percent goal, mainly because DOES was not sufficiently staffed to monitor them appropriately. As a result, the District and its residents lost more than $14 million in job revenues.

And last year was not an anomaly. There is no record of any employer ever having been fined for noncompliance with the First Source law. And it was enacted in 1984.

A second equally important reason is that the First Source law has major weaknesses that allow District contractors to legally avoid compliance with the law. For example, they can comply with the law by proving they made a "good faith effort" to hire DC residents, but were unable to find suitable candidates.

This may seem reasonable, but the law sets the bar pretty low in defining what constitutes "good faith." All employers have to do is show that they ran an ad in the classified section of the paper of record (in DC, that’s the Washington Post) and posted a notice on the District's online career center.

A broad coalition of local organizations, including the DC Jobs Council, recently produced a brief that recommended a new structure to address these weaknesses. It offers an alternative to the current DOES referral process—an independent "workforce intermediary" that would serve as a broker between covered employers and local training providers.

With a workforce intermediary to complement current First Source requirements, job seekers would get training tailored specifically to jobs the employer expects to create. The employer would get qualified candidates who had been pre-screened and directly referred by the intermediary.

And the District would have more residents working in good jobs—and paying taxes.

DC Council Chairman Kwame Brown, joined by Councilmembers Michael Brown and Harry Thomas, Jr., has introduced a bill – the “District of Columbia Workforce Intermediary Establishment and Reform of First Source and Living Wage Amendment Act of 2011” -- that would establish such an intermediary. Among other provisions, the bill also closes – at least partially -- some of the loopholes that allow employers to comply with the letter, but not the spirit of the law.

The bill is no silver bullet, and we believe it could be improved in several specific ways, but it is a good start.

I will be presenting testimony on the bill at a hearing of the Council of the District of Columbia’s Committee on Housing and Workforce Development on Monday, March 14, beginning at 10:00 am. My testimony will be posted on the DC Jobs Council website by COB on Monday.

In addition, I am scheduled tentatively to talk with News Talk host Bruce DePuyt on Friday, March 11 at 10:00 am. You can watch it on News Channel 8 or online at www.tbd.com/tv. The show reruns at 4:00 pm and again at 6:00 pm.