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