Pathways that help people access opportunities have to be created with purpose. 

In late July, Marcela Escobari and Ian Seyal of the Brookings Institution’s Workforce of the Future Initiative joined the Partnership’s Peter Beard in a discussion about urban strategies for inclusive economic growth that help displaced and low-wage workers transition upward into good jobs. During this UpSkill Works Forum event, Escobari and Seyal describe their work, analysis and tools focused on helping local policy makers and companies strengthen the regional economy, provide good jobs and support workers transitioning into those jobs.

“How you create pathways for people to access those opportunities has to be very purposeful,” Escobari said. “Our data show that there are pockets of opportunity even amidst this contraction, as well as long term strategic industries that will grow certain occupations, but you need to make those opportunities explicit and create those pathways and […] you need a responsive reskilling infrastructure.”

A recording of the full conversation between Escobari, Seyal and Beard can be viewed on YouTube. 

Key Take-Aways: 

• Low-wage workers tend to cycle from job to job without seeing much wage growth while high-skilled and high-wage jobs offer security and economic mobility. 
• Forces like automation, digitization and the rise of contract work will continue to create bifurcation and accelerate due the COVID-19 pandemic, but reskilling can help. 
• Public and private financial support for reskilling and upskilling is at an all-time low. 
• Internal job transitions data reveal some feeder occupations employers can use to transition low-wage workers to better jobs. 
• Vulnerable workers urgently need help getting back on their feet, and places can adopt strategies to protect vulnerable workers and limit unemployment. 

Barbell economy creates mobility challenges for low-wage workers
Marcela Escobari, senior fellow with the Brookings Institution’s Workforce of the Future initiative, opened the discussion and explored the interconnected questions of how to grow good jobs and recover from the contraction driven by COVID-19; how to help individuals transition into higher-paying jobs (or reenter the workforce in light of the pandemic); and what policies can make these transitions possible.

Escobari reviewed data-driven approaches that can help Houston could build back better, based on the research found in the initiative’s Growing Cities that Work for All report. Understanding the inherent industrial and occupational capabilities a city has today provides insights about capabilities that may be shared by other industries that are likely to thrive in the future. Specifically, cities should be able to identify and grow industries that have occupational similarities and are likely to emerge and colocate based on shared occupational needs.    

She also described a bifurcation of the economy resulting in an upper tier of high-skilled, high-wage jobs that offer security, stability and opportunities for advancement and a lower tier of low-wage jobs often held by workers who lack the social networks, resources, knowledge and skilling to move out of low-wage work.

Prior to the onset of COVID-19, about 53 million Americans held low-wage jobs, meaning they earned less than $16 an hour. This equated to roughly 44 percent of the workforce, varying from about 30 percent to 62 percent depending on the city. Data show that these workers – along with those who earned between $19 and $24 per hour – tended to cycle from job to job without seeing much wage growth. About 63 percent of these workers tended to earn the same amount or less when they switched jobs, Escobari said. 

Forces like automation, digitization and the rise of contract work will continue to create this bifurcation, “unless we actively are able to move people into this middle-skill [area] and create more of these middle-skill jobs,” she said.

However, internal employer-based training has been stagnant or declining, and government investment in the labor market has dwindled over the last 40 years. In 2017, federal funding for workforce development had declined to about a quarter of what it had been in the late 1970s, she said. 

“The federal funding for helping people transition is at an all-time low while the need for these digital skills at every level of work – low-skill, middle-skill – has increased in every job category,” she said.

Research in Brookings’ Realism about Reskilling report, released in 2019, explores these trends,  shows the probabilities for advancement in certain occupations, and discusses reskilling interventions that can help workers transition out of low-wage jobs. The report also includes an “end-to-end reskilling journey” framework to provide holistic support for workers as they seek to upgrade their skills and advance in the economy. 

“We're hoping that these data can help folks navigate and see a sense of possibility of what decisions are actually possible,” she said. “We want people to be able to escape that low-wage occupation and find the stepping-stones to a higher wage [jobs],” she said.

These data can also help employers identify viable pathways for workers to advance through their organizations with the help of internal training and investment, lessening the need to recruit from outside.

Vulnerable jobs and reskilling opportunities
Ian Seyal, Project Manager and Research Analyst on Brookings’ Workforce of the Future team, highlighted an interactive tool – “Visualizing Vulnerable Jobs Across America” – which the initiative released in July to help policymakers understand their local economies and remain attentive to job quality as they build long-term recovery strategies.

Vulnerable jobs are ones that pay less than the median wage (adjusted for location) and are not covered by employer-sponsored healthcare benefits. In 2018, roughly 19 percent of jobs in the U.S. could be classified as vulnerable; in Houston it jumps to 22.9 percent – nearly a quarter of all jobs. Many of these jobs are concentrated in hospitality, entertainment retail sectors – among those most affected by the pandemic.

Strategic employee sharing can be one approach to protect workers and help limit unemployment. Escobari emphasized that employers can use job transition data to identify where talent is becoming available from contracting sectors to meet labor demands in expanding sectors. Employers can then collaborate to reskill those workers as needed – especially as the pandemic shifts economic demands. 

Learn more about the Brookings Institution’s Workforce of the Future initiative.

The UpSkill Works Forum Series presents interviews with regional business, education and community leaders, policy makers, and high-profile thought leaders on key workforce issues the greater Houston region confront. View recordings of the complete series on YouTube.