The beginning of the year always makes me revisit my annual budget, evaluate my savings plan, and start to think about taxes. As I think about the additional amount of money I still need to save for my family to be comfortable in the future, I am reminded that there are many people I encounter on a daily basis that are not as fortunate. When it comes to having enough income to cover my basic expenses, I’m lucky. I can pay my bills and still save for my family’s future—assuming we don’t have any unexpected medical expenses that deplete our savings. My job pays me a family-sustaining wage, but what about the people I depend on to take care of my family and me on a daily basis?
Last year, Fortune reported that more than 42 percent of U.S. workers hold jobs that pay a low wage. The article assumes any job with wages below $15 an hour is a low-wage job. The $15 an hour rate is based on national studies which have calculated an equilibrium where wages are high enough to lift families out of poverty, but still low enough to not result in massive job losses. In North Carolina, the percent of jobs paying a low wage is 48.7 percent.
We often associate jobs that pay low wages in our economy with low skilled or unskilled labor. Many of us think of fast food jobs and teenagers. However, many of the jobs that pay a less than what is needed to maintain a normal standard of living are the very jobs our society depends on to take care of our family members and teach our children. As the Fortune article points out, low-wage jobs are held disproportionately by women, people of color, and persons 20 years of age or older.
Is $15 an hour enough?
Another definition of low-wage job is one that pays less than a living wage, which is defined as the amount of money a person must earn to cover their family’s basic living expenses. In 2014, MIT and the Living Wage Project calculated the living wage for North Carolina to be $10.53 for one person, living alone. The addition of children obviously increases a family’s expenses. Hence, one adult with a one child will need to make $44,990 a year ($21.63 an hour) to break even every month. This amount does not include emergency savings or funds to splurge on birthday and holiday gifts. Overall, 72 percent of our state’s workforce makes less than $44,990 a year. Here are the living wage calculations for other family configurations:
Many of the jobs that pay less than a living wage typically require postsecondary credentials and are occupations that are growing in our economy:
Half of the preschool teaching jobs in the state earn less than $11.35 an hour. At this wage rate, someone working as a preschool teacher, with a child at home, would not be able be able to cover his basic living expenses. He would not be able to save for his family’s future, and he is probably asking himself a different set of questions at the beginning of the year. All of the jobs listed in the table above require some kind of investment in postsecondary training; the very investment that is touted for getting ahead and securing employment that leads to economic security. But the investment can’t just be on the worker’s side of the equation. We have to invest in making those jobs that require skill and training—and there aren’t many jobs that don’t—quality jobs that provide wages commensurate with the training and value they bring to individuals and communities. Our society is dependent on a host of skilled labor to take care of our families, so we need policies and wage rates that help them take care of theirs.
A recent update to the Annie E. Casey Foundation Kids Count Data Book shows that 1.3 million youth ages 16-19 in the U.S. were disconnected from both work and school in 2014. That’s a national disconnection rate of 7 percent. In all Southern states except Virginia, the rate is at the national average or higher:
In total, nearly half a million youth ages 16-19 in the South were disconnected from both work and school in 2014:
U.S. youth disconnection also is higher than average for OECD countries, as shown below.
What’s a NEET, you ask? That’s the UK acronym for young people that are Not in Education, Employment or Training. Wherever you are, a delay in high school graduation, postsecondary study, and employment can have life-long consequences, so national and local governments are investing in a variety of programs to get these youth on track. In the UK, that means apprenticeship grants and wage incentives for businesses that employ young people; sector-based work academies that offer training, work experience, and a guaranteed job interview; funding for local initiatives that support education; and training for these young people. In the South, we see some similar efforts, like the South Carolina Technical College System’s Apprenticeship Carolina initiative; All In Brownsville that is, among other things, increasing the college application rate of the Texas town’s high schoolers; and local partnerships like Made in Durham that are linking educators and employers to help young people stay connected.
But efforts like these are operating in a South that still doesn’t have enough good jobs. Poor labor market opportunities are hitting our young people—particularly our young people of color—the hardest: 27 percent of black 20- to 24-year-olds, and 14 percent of white 20- to 24-year-olds, are unemployed—twice the levels for workers 25 and older. And even if employed, those without education struggle to get ahead: in the South, the median income of high school graduates is $26,500; for people with some college, $32,299; and for four-year graduates, $48,317. All the more reason that we need to build an Infrastructure of Opportunity—the systems that provide pathways to opportunity and re-connection efforts—to ensure access to education, employment, and training for all the young folks on that map.
What’s one thing that most growing occupations have in common? They require high levels of social skills. A recent New York Times article highlighted this trend, noting that “skills like cooperation, empathy and flexibility have become increasingly vital in modern-day work.” The article included a telling chart:
It’s clear that social skills are an important characteristic of our modern workforce, and most individuals will need them in order to compete for career opportunities. Even as our education and training systems seek to teach and hone those skills, questions remain about how social skills are evaluated by the labor market. Who decides what social skills are, and how can an employer tell if someone has them or doesn’t? It’s likely that the definition and measurement of social skills are subjectively determined, which means employers searching for good social skills must be wary of unconscious bias. A candidate with a different background from the typical employee of a given company may not be perceived to have the same level of social skills as someone whom the employer finds relatable.
The power of unconscious bias in skewing our perception of subjectively defined skills is seen in a recent study: academic fields that prioritize brilliance and raw talent tend to have lots of white men in them, while fields that emphasize the importance of hard work tend to have larger percentages of women and people of color. Women make up less than a third of PhDs in economics and philosophy, and 20 percent or less of PhDs in physics and computer science. Unconscious bias influences who we think of as brilliant and talented—if you don’t look like the typical applicant, then the employer may not be as able to see your unique talent.
Our educational pathways shouldn’t be designed to focus too specifically on one career or occupation. While a combination of real-time job-opening data and labor market projections can help target programmatic offerings, unpredictable innovations and macroeconomic trends still cause a lot of uncertainty. Students deserve a strong return on investment from their educational program, but we also need to make sure we do not develop parallel systems of higher education for students based on socioeconomic background: adaptable skills for the affluent to compete in an ever-changing knowledge economy, and narrow skills for low- and moderate-income students to get a technical job right now. Students need flexible skills that will allow them to compete in an unpredictable future labor market. Even as we prepare students who do not have the luxury of exploration for entry into the workforce—students who need the economic boost of a credential, and as soon as possible—we can make sure their education has long-term value.
We’ve got some STEMpathy if you’re kind of over stories about science, technology, engineering, and math (STEM) jobs, and the education and training required to get them. But there’s a good reason for all (or at least most) of those stories: employment in STEM occupations tends to be higher-wage and higher-growth than other occupations. With startlingly low economic mobility for young people in the South, STEM jobs could provide new pathways into stable careers.
In many Southern metros, STEM employment makes up a significant portion of the workforce. According to Bloomberg Business, in Austin, Huntsville, Raleigh, Durham, the figure is at least 10 percent:
Source: Bloomberg Business
These jobs typically pay better than many occupations, and they are more likely to have the characteristics that allow for economic security and wealth building, like paid sick and family leave, health insurance, and retirement accounts. The gap between median pay in STEM occupations and non-STEM occupations is substantial in many Southern metros:
Source: Bloomberg Business
The prevalence of these jobs in certain areas is not based just on luck; they are areas that have seen sustained investment in innovation and education over time. From Bloomberg Business descriptions of Huntsville and Durham:
Like many high-tech locales, Huntsville owes its 21st century economy to an initial burst of funding for government research. It was a town of 16,000 residents working in cotton mills and on watercress farms when, in 1950, the U.S. Army relocated a team of rocket scientists to Redstone Arsenal, a local installation that produced chemical munitions during World War II. In the decades that followed, NASA designed, assembled, and tested the rockets that put the first men on the moon. Boeing, Lockheed Martin, and dozens of lesser-known aerospace and defense companies have swarmed to Huntsville.
Durham, N.C., has a STEM labor force that’s 13.9 percent of all workers. Its biotech economy started with a sprawling research park that began to grow around the same time that Huntsville’s high-tech transformation was getting started.
The Bloomberg author notes that these jobs pay good salaries and those salaries support other draws—like good public schools, restaurants, and arts and entertainment that make the communities appealing to potential employers and potential workers.
Job growth doesn’t happen automatically, and it’s happening less and less through traditional industrial recruitment. STEM jobs are growing in the places where there’s been investment in the services, amenities, and institutions that support those sectors, and particularly in places with a highly educated workforce or the ability to attract one.
These occupations are typically high-skill and require targeted training and education, but the majority are going to populations that are the most likely to connect with high-wage work anyway: white men. Women and people of color are underrepresented in STEM fields. Women make up less than a third of all STEM employment in every Southern state:
Source: IWPR’s Status of Women in the States
Southern cities that are seeking to take advantage of STEM job growth must make sure that the pathways into those jobs are strong and equitable. We have to consider what barriers, both real and perceived, are preventing women and people of color from pursuing those careers in greater numbers.
As the Institute for Women’s Policy and Research found, women are significantly less likely than men to get degrees in STEM fields, and the proportion of women receiving associate’s degrees in STEM fields decreased between 2001 and 2009:
Though these data show a significant gender gap, community colleges are an important part of the pathway to STEM careers for both women and men, as detailed in an article this week by Lane Florsheim in Marie Claire magazine. More than half of people who receive bachelor’s degrees or higher in a STEM field completed some of their coursework at a community college, including 55 percent of women (63 percent of women with young children) and 44 percent of men.
Florsheim cites research that suggests community colleges are often more accessible and inviting to women interested in these fields:
… a recent study by two Iowa State University researchers found that women at community colleges reported a friendlier atmosphere in STEM-related classes than at four-year colleges. “It is just such a global community,” one student said of her community college experience. The researchers found that similarity in backgrounds and lifestyles made women feel more comfortable stepping into leadership roles in activities and assignments. Strong advising and support from faculty also marked a major difference. Since so many students transfer out, they often work closely with guidance counselors to develop transfer plans. “The two-year plan keeps me focused, and saved me with financial aid,” another woman said.
That welcoming atmosphere, where women and people of color are encouraged and expected to thrive instead of being seen as unusual, must be sustained at community colleges and created at other educational institutions. It hasn’t always been so unusual: computer programming was once thought of as women’s work, but it became overwhelmingly male starting in the mid-1980s as stereotypes about gender and computer science shifted:
Stereotyped messages about who “belongs” in a field matter to young people who are trying to envision themselves in careers.
Holding that vision is difficult to do while women in corporate leadership, especially tech corporate leadership, are few and far between. Only 5 percent of Fortune 500 companies have female CEOs (women make up 15 percent of C-level executives and 17 percent of board members, even though research shows that boards with women tend to outperform board without women). A TechCrunch analysis of 84 “unicorn” companies, or U.S. software or internet-oriented companies that are backed by venture capital and valued at more than $1 billion, found that only two CEOs are women, 30 percent have no women in senior leadership, and approximately 70 percent do not have women on their boards. And a Fortune analysis of 191 major U.S. venture capital firms—the crucial backers of tech innovation—found that only 5.6 percent of decision-makers and 10 percent of all investment professionals were women.
The power of these stereotypes is seen in a study of academia that found fields that prioritize brilliance and raw talent tend to have lots of white men in them, while fields that emphasize the importance of hard work tend to have larger percentages of women and people of color. Unconscious bias influences who we think of as brilliant and talented—if you don’t look like the typical applicant, then the employer may not be as able to see your unique talent. Women make up 20 percent or less of PhDs in physics, engineering, and computer science; it’s understandable that young women may not see STEM fields as welcoming for either education or employment.
For the Southern economy to thrive, our workforce needs the skills to compete in the global economy and emerging fields—and we need those skills be to accessible to a broad range of workers, including women and people of color. STEM skills will often be highly technical and specialized, requiring both postsecondary training and job-based experience. Developing equitable education and hiring systems can help us shift patterns of economic mobility and ensure that more Southerners can connect to living-wage careers.
Over the weekend, The News & Observer ran an op-ed by MDC president David Dodson about efforts to improve economic mobility for low-income young people in North Carolina:
It’s starting to happen in Durham. Just ask Zavier Eure.
Eure was in the first graduating class last spring from the Southern School of Energy and Sustainability at Southern High School and spent the summer as an intern at the Durham manufacturing plant of Biogen, a global biotechnology company. There, Eure was a temporary member of Biogen’s global project engineering team tasked with creating a process flow diagram depicting each step in the drug purification process.
“I never took an engineering class, and I never had any interest in the field,” said Eure, an aspiring veterinarian. “But now I’m thinking I can put my engineering experience to good use in a company that works with robotic prosthetics for animals.”
He was one of the first Durham students to participate in a new career internship program launched by Biogen with Made in Durham, a nonprofit created and incubated at MDC, and its partners on the Business Engagement Team of the Durham YouthWork Summer Internship Program. These partners include Durham Public Schools, Durham Technical Community College and Youth Employed and Succeeding.
Made in Durham is an example of what it means to start building an infrastructure of opportunity. It’s a public-private partnership that strives to ensure all Durham youth and young adults complete a post-secondary credential and begin a rewarding career by the age of 25. This summer, Made in Durham matched 72 student interns with 21 local employers in the high-growth fields of health and life sciences, education, banking and construction. Overall, Made in Durham and the YouthWork Business Engagement Team recruited, trained, placed and evaluated 481 youth interns this summer. And they’re just getting started.
Economic mobility – the idea that your success is not dependent on your situation at birth – is core to our vision of America. While it’s always been a myth (particularly for women and people of color), we know ways to make mobility more realistic. By investing in the infrastructure of opportunity, we can get closer to making sure that young people like Zavier Eure have the chance to thrive.
Read the full op-ed here.