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Est Need for Jobs & Job Readiness

4/28/ 2 10:29: QKW_RITE: GatherM3Ms: Data ID 3165

Derivation of Estimated Need for Jobs and Job Readiness

(this report was created 11/18/14 22:25)

This is a draft of a memorandum which builds upon data reported in The Rockefeller Foundation 1996 Annual Report (pages 38 and 124). The data "compares the employment needs of two poor inner-city communities with the larger metropolitan region in which they are located". It has been developed in response to the question: "How many jobs would it take to employ former welfare recipients and the unemployed in Baltimore, Sandtown-Winchester, Dade County, and Overtown?" The data and logic supporting this analysis is based on work done in the "Cost of Poverty" studies done in Sandtown-Winchester and Overtown and on an extensive database of census information developed for all urban areas of the U.S. The two "Cost of Poverty" studies were funded by Enterprise Foundation and by the W. K. Kellogg Foundation. (this report was created 11/18/14 22:25)

Part I: Census Data (1990) (this report was created 11/18/14 22:25)

This analysis is based entirely on data from the 1990 Census of Population and Housing, including population, labor force, unemployment, households with public assistance income, and civilians age 16-19 not in school and not working.

Both Sandtown-Winchester and Overtown are inner-city communities of approximately 10,000 people located in large metropolitan areas. Both have persistent urban problems related to crime, health, housing, poverty, education and employment. In both neighborhoods, these problems are as severe as they are in any other neighborhood in their metropolitan area. (this report was created 11/18/14 22:25)

  Baltimore Dade County
Balt. MSA Sandtown Dade county-wide Overtown
Persons (population) 2,382,172 10305 1,937,094 10296
Employment age persons (age 16-64) 1,586,165 6201 1,249,106 5800
Labor force 1,276,614 3670 982191 2791
Civilian labor force 1,253,496 3663 976754 2791
Unemployed persons (age 16+ in civilian labor force) 61314 809 74926 640
Labor force participation (persons 16-64) (%) 0.8048 0.5918 0.7863 0.4812
Unemployment rate (%) 0.0489 0.2209 0.0767 0.2293
Households with public assistance income 67812 1327 68963 1127
Households with public assistance income (%) 0.0771 0.39 0.0996 0.333
Civilians age 16-19 not in school, not working 13509 248 11806 205
Civilians age 16-19 not in school, not working (%) 0.1124 0.3724 0.1141 0.3208

Part II: "Normal" Employment Levels (this report was created 11/18/14 22:25)

The following shows how the above census data has been used to estimate the number of jobs needed and the number of people who must be made job ready. (this report was created 11/18/14 22:25)

The most severe measure of unemployment in many inner city areas is depressed labor force participation resulting from people being discouraged and no longer seeking work. These people are not counted as unemployed. If we take a labor force participation level of 80% as "normal", we can then estimate the number of people who would be working or seeking work under "normal" conditions. By subtracting the civilian labor force as reported, we have a measure of under participation in the labor force. (this report was created 11/18/14 22:25)

  Baltimore Dade County
Balt. MSA Sandtown Dade county-wide Overtown
Normal labor force participation (80%) 1,268,932 4961 999285 4640
Under participation in the labor force 15436 1298 22531 1849

Some level of unemployment is essential to an economy simply to allow for people changing jobs. In this analysis, 5% is taken as "normal unemployment". By subtracting the number of people reported to be unemployed, the level of "excessive unemployment" is estimated. (this report was created 11/18/14 22:25)

  Baltimore Dade County
Balt. MSA Sandtown Dade county-wide Overtown
Normal unemployment (5%) 63447 248 49964 232
Excessive unemployment -2133 561 24962 408

By adding together under participation in the labor force and excessive unemployment, we get a measure of "under-employment". We might conclude from this analysis that an inner city neighborhood of 10,000 people needs approximately 2000 new jobs and people prepared or trained for these jobs to achieve a normal level of employment.

It is also clear that neither unemployment nor households on public assistance are adequate measures of the need for jobs and job readiness in the inner city. Both of these two inner city communities have 22% unemployment and 33-39% of households with public assistance income, while "under-employment" is 37-49% of the "normal labor force" (after adjusting for normal labor force participation and unemployment). In other words, the metropolitan areas have many more households receiving public assistance than they have persons under-employed, while the inner-city areas have many fewer households receiving public assistance than they have persons under-employed.

This conclusion is further proven in examination of other metropolitan and inner-city areas below. (this report was created 11/18/14 22:25)

  Baltimore Dade County
Balt. MSA Sandtown Dade county-wide Overtown
"Under-employment" 15436 1859 47493 2257
"Under-employment" (%) 0.0122 0.3747 0.0475 0.4864

Part III: Reconciling "Under-employment" and Public Assistance (this report was created 11/18/14 22:25)

Let's look at "households receiving public assistance income" to see how it checks with this measure of "under-employment". In the Baltimore MSA and Dade County the number of households receiving public assistance income is much greater than our measure of "under-employment". In Baltimore city it is about the same, and in the two inner city neighborhoods the number of households receiving public assistance income is smaller than "under-employment". I believe we would explain fewer households on public assistance in inner city areas on the "informal sector". In other words, inner city households are more likely to depend on support from the informal sector than households in other areas. Areas that are more "normal" include proportionately more households depending on public assistance rather than on the informal sector.

If we consider that inner city areas have been under-served with with regard to public assistance and if we wish to reduce the dependence on the informal sector, then we might increase the number of jobs and job ready people needed to provide "normal" employment in an inner city neighborhood. In order to do a better job with this assumption, we might make a cross-tabulation of households receiving public assistance income vs. unemployment using PUMS or other data. (this report was created 11/18/14 22:25)

Part IV: Conclusions (this report was created 11/18/14 22:25)

Certain conclusions are evident from this data on two inner city areas and the metropolitan areas of which they are a part. (this report was created 11/18/14 22:25)

1. Inner city areas are underserved by public assistance. The number of Sandtown and Overtown households receiving public assistance is 50-71% of the number of persons who are under-employed (1327÷1859 in Sandtown and 1127÷2257 in Overtown). By contrast, the metropolitan areas of which they are part have 145% to 440% as many households receiving public assistance as they have persons under-employed. (It should be noted here that "under-employed" is expressed in terms of full time job equivalents.) (this report was created 11/18/14 22:25)

2. Assuming a goal of "full employment", an employment agency seeking to place inner-city people in jobs will find that most of its clients will need to be persons who heretofore have not been seeking employment. They are likely to be people who have been depending on the informal sector. If 80% labor force participation and 5% unemployment are to be achieved, then 70% of successful job placements in Sandtown and 82% from Overtown will be of people not in the labor force in 1990. (this report was created 11/18/14 22:25)

3. An inner city neighborhood of 10,000 people needs to make approximately 2000 successful job placements (1804 in Sandtown-Winchester and 2192 in Overtown) in order to achieve full or normal employment (80% labor force participation and 5% unemployment). (this report was created 11/18/14 22:25)

(this report was created 11/18/14 22:25)

  Baltimore Dade County
Balt. MSA Sandtown Dade county-wide Overtown
Ratio public assistance to "underemployment" 4.3931 0.7138 1.4521 0.4993
Clients from under participation in labor force 1 0.6982 0.4744 0.8192
Clients from excessive unemployment   0.3018 0.5256 0.1808
Ratio underemployment to unemployment 0.25 1.7 0.62 2.12
Placements needed per 10,000 population 65 1804 245 2192

Part V: Employment Needs in Other Urban Areas (this report was created 11/18/14 22:25)

In order to test the conclusions of this work, similar analysis has been undertaken in other inner-city areas of the U.S. and the metropolitan areas of which they are part. (this report was created 11/18/14 22:25)

1. Overtown is as badly underserved by public assistance as any of the inner city areas examined. South/Central LA and Southeast DC were similarly underserved (50%). The South Bronx, Detroit and Chicago inner city areas were underserved at the level of Sandtown (71%), while the Carver neighborhood in Atlanta and the Kansas City inner city were served somewhat better at 78% and 93% respectively. Most major inner city areas examined were below the level of service in their metropolitan areas. But three areas might be exceptions. The South Bronx was served as well as Bronx County. The Kansas City inner city was served about as well as Wyandotte County (Kansas). And, the Detroit inner city area was served about as well as Wayne County. (this report was created 11/18/14 22:25)

2. It is consistently true in all inner city areas that if "normal employment" levels are to be achieved, most successful job placements must be of people who were not in the labor force in 1990. Of nine major inner city areas examined, the range is from 67% in Chicago Southeast to 87% in the South Bronx. (this report was created 11/18/14 22:25)

3. There are big differences in the number of successful job placements needed to achieve "normal employment" among inner city areas. South Central LA and Carver in Atlanta are at the low end with 1348 and 1560 placements per 10,000 population while the South Bronx and Detroit inner city were at the high end with 2324 and 2541 placements per 10,000 population respectively. (this report was created 11/18/14 22:25)

(this report was created 11/18/14 22:25)

Employment Needs in Major Urban Areas

  Families living below poverty level Labor force participation Unemployment rate Underemployment Rate Ratio public assistance to "underemployment" Clients from Under participation in labor force Placements Needed per 10,000 Population
Bronx County 0.2574 0.6554 0.119 0.2292 0.6924 0.7933 1167
South Bronx 0.5274 0.4623 0.1991 0.4872 0.7147 0.8665 2324
               
Lynchburg city, VA 0.1277 0.7545 0.0598 0.0651 0.8634 0.903 329
Lynchburg inner city 0.4292 0.6035 0.1392 0.3009 0.8673 0.8164 1281
               
District of Columbia, DC 0.1331 0.7838 0.0716 0.057 1.1478 0.6687 319
Southeast DC 0.3907 0.5882 0.1694 0.3659 0.5064 0.8112 1895
               
Florida 0.0904 0.7828 0.0578 0.0431 1.0828 0.8681 213
SE Florida 0.0981 0.8015 0.0637 0.0163 3.1119 0.17 80
Dade 0.1415 0.7863 0.0767 0.0475 1.4521 0.4744 245
Overtown 0.5289 0.4812 0.2293 0.4864 0.4993 0.8192 2192
               
The Atlanta Project 0.2225 0.7486 0.1001 0.1126 0.8397 0.6163 593
Carver 0.5221 0.5904 0.1608 0.3351 0.7812 0.7978 1560
               
Wyandotte County, KS 0.1391 0.7762 0.0853 0.065 1.0474 0.5001 319
Kansas City inner city 0.6419 0.4636 0.2532 0.5171 0.9255 0.8137 2054
               
Los Angeles County 0.1165 0.7694 0.0737 0.0629 0.9897 0.6722 336
South/Central LA 0.3558 0.646 0.1497 0.2639 0.4985 0.7319 1348
               
Baltimore MSA 0.0743 0.8048 0.0489 0.0122 4.3931 1 65
Baltimore city 0.1781 0.7358 0.0919 0.1173 1.024 0.708 602
Sandtown-Winchester 0.4385 0.5918 0.2209 0.3747 0.7138 0.6982 1804
               
Wayne County 0.1685 0.7193 0.1239 0.1636 0.7131 0.6256 831
Detroit inner city 0.4815 0.5009 0.3322 0.5324 0.6905 0.7037 2541
               
Cook County 0.1114 0.7894 0.0804 0.044 1.5144 0.3363 230
Chicago SE 0.4705 0.5767 0.2632 0.4201 0.71 0.6685 1889
               
Florida 0.0904 0.7828 0.0578 0.0431 1.0828 0.8681 213
Palm Beach 0.0624 0.8165 0.0515 0.0025 13.7102   12
PBC Rural Empwrmnt Zone 0.3249 0.7045 0.189 0.2366 0.5097 0.5086 1096
               
Greensboro inner city 0.3255 0.7426 0.1159 0.1294 1.0727 0.5545 634
               
Florida 0.0904 0.7828 0.0578 0.0431 1.0828 0.8681 213
SE Florida 0.0981 0.8015 0.0637 0.0163 3.1119 0.17 80
Palm Beach County 0.0624 0.8165 0.0515 0.0025 13.7102   12
Belle Glade city 0.2553 0.7444 0.1635 0.1717 0.4687 0.4047 860
               
Florida 0.0904 0.7828 0.0578 0.0431 1.0828 0.8681 213
SE Florida 0.0981 0.8015 0.0637 0.0163 3.1119 0.17 80
Palm Beach 0.0624 0.8165 0.0515 0.0025 13.7102   12
PBC Development Regions 0.2642 0.7741 0.1176 0.0978 0.9225 0.3506 471
Riviera Beach/WPB east 0.2596 0.7874 0.1084 0.0742 1.2308 0.2385 353
               
Henderson County, NC 0.075 0.7706 0.0372 0.0379 1.0781 1 181
Hendersonville inner city 0.2839 0.8047 0.0951 0.0478 2.6613 0.0645 218
               
Easton inner city 0.1896 0.8769 0.0502 0.0051 23.6   24

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