media/Files/Webinars/2 Web viewBRIAN KEATING: All right. Thanks, Benita. Welcome. Welcome back, everybody. Thanks for joining us on a Friday afternoon for today's closing plenary

Workforce 3One

Transcript of Webinar

ETA 2016 SECTOR STRATEGIES VIRTUAL INSTITUTE

Closing Plenary Session

Friday, May 20, 2016

Transcript byNoble Transcription Services

Murrieta, CA

OPERATOR: Good afternoon. My name is Benita, and I will be your conference operator today. At this time I would like to welcome everyone to the closing plenary call hosted by WorkforceGPS. I would now like to turn the call over to Mr. Brian Keating with Maher & Maher. Sir, please begin.

BRIAN KEATING: All right. Thanks, Benita. Welcome. Welcome back, everybody. Thanks for joining us on a Friday afternoon for today's closing plenary of the Sector Strategies Virtual Institute. It looks like many of you were with us for the opening plenary Monday morning, and hopefully you got to attend some of the workshops that we've been conducting all week.

So thanks, everyone, for your participation. I'm going to go ahead and get myself right out of the way and introduce today's closing plenary. I'm going to introduce our moderator in a sec. Before I do, I want to encourage you, if you've got questions or comments about anything you hear our featured presenter speaking about today, then go ahead and type those into the chat, and we'll make time to answer as many of those as we can. So your chat window on the screen is where we invite you to ask questions or make comments.

Without any further ado, I'm going to turn things over to Virginia Hamilton. Virginia is the regional administrator with the U.S. Department of Labor's Employment and Training Administration. Virginia?

VIRGINIA HAMILTON: Thank you, Brian. Well, good afternoon, everyone. We're delighted to have you here for our closing plenary speech of our virtual sector academy, and I have the wonderful privilege to introduce our last speaker. I've known Manuel Pastor for, I don't know, close to 20 years and have followed his work with enthusiasm and awe. And then I thought I'd just say a couple things to frame his presentation.

The first is – and I love to invoke this always when we talk about this subject. Some years ago now the council on competitiveness did a study about what makes regions competitive. And what this study found was that sort of contrary to common – (inaudible) – maybe or certainly what people think, a competitive region is not competitive because of their assets, because of their infrastructure, because of their universities. But regions that are competitive are competitive because people in that region talk to each other and have important conversations about the health of that region. And I just think that's always a great way to frame what we're going to talk about today.

I think many people have asked over the course of this week, on the one hand we have this mandate to focus on regional demand-driven sector strategies. We need to talk to employers. We need to think about sectors in a regional way. And yet also tells us that we have to serve in the Workforce Innovation and Opportunity Act people who have basic skills needs, individuals who have disabilities who traditionally have not been able to participate in the workforce, people who are on welfare; people who have not worked for a long time.

And the question is, how do I do both? It feels very contradictory. Well, as I was thinking about that question, we came up with the idea of asking Manuel if he would talk to us today because I

ETA 2016 SSVI - Closing Plenary SessionFriday, May 20, 2016 Page 2 of 21

think the work that he does is such a wonderful way to think about how to hold that question as you're doing the work.

Dr. Manuel Pastor is a professor of sociology and American studies and ethnicity at the University of Southern California. He is a founding director for the Center for Justice, Tolerance, and Community at the University of California, Santa Cruz. And he currently runs – directs the program for environmental regional equity at USC and USC's Center for the Study of Immigrants Integration. He's recently written a book that I think he's going to talk about called "Equity, Growth, and Community: What the Nation Can Learn from America's Metro Areas."

And I won't steal his punchline, I don't think, but one of the things that he says in this book is inequity is bad for economic growth. I think for me that's really where we need to start in thinking about this mandate to both work in regions on the demand side and also work to get the people that need our help the most into jobs that can sustain themselves and their families. So with that I'm going to turn this over to Manuel Pastor who's going to talk to us for about 45 minutes, and then we'll have time for questions and answers. Manuel, take it away.

DR. MANUEL PASTOR: Thank you, Virginia. I'm glad to be with everyone. I think this is fascinating to be part of a virtual conference, and it certainly has helped with the GHD reduction program I'm personally on too not to have to travel. Thanks for the invitation, and actually thanks for the introduction. Virginia, it's true that we've known each other for 20 years. I think we were both 12 when we first met. We're younger than perhaps we've – (inaudible).

MS. HAMILTON: I think that's right.

DR. PASTOR: And – (inaudible) – talked a little bit. What I'm going to do today is talk a little bit about the demographic changes that are coming onto the country, the fact that these demographic changes are occurring everywhere and will have a big impact on our workforce.

I'll then sort of pivot and talk a little bit about the point that Virginia lifted up about some shifting economic thinking that really elevates both the role of equity and opportunity for generating economic growth and also the role of regional dialogues and being able to promote metropolitan prosperity. And then I'll close by thinking a little bit about the implications for workforce for the future.

So let's start with the demographic piece. It's familiar I think to many people at this point that the United States by the year 2043 or 2044 will become majority people of color, but what's important for workforce developers to understand and of course many of you do is that the majority of the workforce will actually be people of color by about the year 2032-2033.

Now, know that I didn't say the majority of entrance into the workforce. That's already the case because of who's young and coming on and immigrants, but the majority of the workforce by 2032, 2033. And that has to do with the fact that the white workforce is older, retiring. Those coming in younger are more people of color. By the end of this decade the majority of the people at the age of 18 youth will be people of color.


Now, when people look at that demographic change, there's a couple of misconceptions that's important to sort of realize are not really what's driving it. So if you were listening to the current electoral season, you would imagine that what's driving a demographic change is immigration. But in fact, immigration into the country has slowed down. That's actually something that's got demographers and economists worried because immigration has been so important to sustaining economic growth.

The majority of immigrants coming into the country are coming from Asia now and not from Latin America, and really interestingly, given the debate that's going on politically as well, net migration from Mexico, our largest sending country, is actually negative. There's more Mexicans returning to Mexico than are coming to the United States – startling fact.

And that's also something that is not likely to slow down in the future because the fertility rates in Mexico have declined dramatically. It used to be over the course of her lifetime a Mexican woman would have five children. That's 35, 40 years ago. Now, that fertility rate in Mexico is about 2.3. It's about 1.7, 1.8 in the United States. As those two come together, less of a push factor moving forward.

What is driving a demographic change now is not immigration but the sons and daughters of many of those immigrants. So this is the change in the youth population between 2000 and 2010. You can see that the young white population actually declined by 4.3 million. I always like to reassure people that's not because 4.3 million white people died. We might have noticed that. Rather it's that more young whites are moving into 19 and 20 that are moving into 1 and 2.

So the young non-Hispanic white population declining, the young African American population also in a slight decline, although some of that is sort of re-designation into the multiracial category. But the next America and the next workforce, 4.8 million new young Latinos, 800,000 new young Asian Pacific Islanders. That's the next America we're looking at. And interestingly about that, the following.

If you look at the demographic change in the United States between 2000 and 2040, moving from being about 69 percent non-Hispanic white to being about 50 percent non-Hispanic white by 2040, that demographic change, the projection for the United States, is basically the demographic change that California went through between 1980 and 2000. California, the state that I live in, is America's fast-forward in terms of its demographics and also in terms of income inequality and a number of other things.

But the fascinating thing to realize about this is that that demographic change is not straight-lining forward. Some people used to imagine that California – that all the demographic change in the United States was going to occur in California as it mostly did in the 1980s and '90s. Indeed Los Angeles County in the early 1980s, between '80 and '85 received one-quarter of the nation's immigrants coming into that single county.

But now, you can see as you look at the projections going forward, that California, where some people predicted that by the year 2035 California would be majority Latino, which you could see


if you were sort of straight lining just from '80 and 2000, you might have that projection. But in fact it's actually begun to taper off.

An interesting demographic tidbit, one that I find fascinating and that if you share at cocktail parties will make you enormously popular because people love demographic facts at cocktail parties. The only large metropolitan area in the United States in the last 10 years to not see an increase in the number of Hispanic children was Los Angeles because Los Angeles, which has gone through some much of this demographic change, is coming in some way to a demographic resting point.

Our immigrant population much more settled. Our Latino population and Asian population increasingly homegrown; fertility and marriage rates, etc., getting closer to that of the United States. So we're sort of coming to an end of a process. The rest of the country is continuing to go through that process in a way you'll see in a minute.

Little bit more of an illustration of that end of the process in California or in some ways the tapering of the process may be a better way to think about it. In Los Angeles and in San Francisco, our two major metro areas that were the recipients of immigrants, the share of foreign born has been on the decline for the last three or four years. It's been on the decline in the state of California for about the last year or two, even as the share of foreign born is increasing in the rest of the country.

We also have a much more settled immigrant population. These are the states of the United States arrayed by the percent of share of immigrants who've been in the country since 1999. California is at the top of the chart with about 72 percent of our immigrants having been in the country for longer than about 10 or 11 years. In fact, over half – probably about 55 or so percent of our undocumented immigrants have been in the country for longer than 10 years. So it's a much more settled immigrant population, and what that means is that the demographic change is actually occurring now and in the future in the rest of the country.

So if you look at this map of the United States from a project we've been doing with Policy Link, you can see that in this map the darker the shade, the higher the percent in a county of people of color. So darkest shade, greater than 50 percent people of color. Middle shade, sort of a tipping point, 40 to 50 percent people of color. Lightest shade, less than 40 percent people of color.

You can see that in 1980 the United States looked like a whole lot of folks still often think it is. The black belt of the south heading up into D.C. The Hispanic border lands of Texas with Mexico, the Native American and Hispanic areas of New Mexico and Arizona, some Native American areas in the Dakotas. But for California the only county that was majority people of color was Imperial County, the county on the border with Mexico. Los Angeles in 1980 was not yet majority people of color.

What happened over the next 30 years? You can see that there was a big shift. We'll go back and do that again. Big shift but a lot of that shift happening in – little bit in Florida but a lot in California and in Texas. But as you go forward from 2010 to 2040 you can see that that


demographic change is now occurring all over the rest of the country. In fact, occurring in places that may surprise some folks.

For example, Utah is a place where you're going to see big – this is 2020, 2030, and now 2040. So one thing you're going to notice about this, which is fascinating, is that Salt Lake City metro will now become majority people of color before the rest of the country does, something that may be quite surprising since some of us tend to think about Salt Lake as being overwhelmingly white and Mormon. It was indeed. It was about 95 percent non-Hispanic white in 1970 or so, but it will be majority people of color before the rest of the country.

If you go back – and we'll go back and do that from 2010 – you'll see that there's a lot less change occurring in California, a lot of change occurring in the rest of the country. One way to think about this is diversity is coming to a theater near you, and it's coming to a workforce near you. So while though there are some parts of the country have had to deal with the issue of – and been challenged to, seeing the opportunity and dealing with a diverse workforce in the past, this is something that's going to be important all over the United States. It is now. It will continue to be moving forward.

The other aspect of this, which I think is really critical, so we've talked about folks know that the country is turning majority people of color. What they don't realize is it's happening now all over the rest of the country. The other thing geographically most people don't realize is that where it's happening most rapidly within our metropolitan areas is not our central cities but rather our suburbs. This shows you the distribution of the white population across the largest 15 metro areas.

So you can see that the share in central cities, the gray bars, has declined moving from 1980 to 2009-2013. The share in suburbs – entering suburbs has declined. The share in the outer ring suburbs has increased. That's what a lot of people think, but what folks don't realize is when you look at the distribution of people of color, it's actually a much bigger increase that's going on in those outer suburbs and a lot of filling in where non-Hispanic whites are leaving the inner ring suburbs and actually also where the cities are changing as well.

We'll look at that geographically in a minute, but that – and let's just go ahead and do that. It will make the big point. So this shows you Los Angeles County. This is just a percent Latino in 1980. If you know Los Angeles, you'll see that in 1980 Los Angeles looked like people still think it is. That is the majority of the Latino population in the greater east side, East L.A. and moving east from there. Sort of a small population of Latinos in the San Fernando Valley, sort of the northern part of the city. That's where Ritchie Valens was from, "La Bamba."

But as you go through 2010 you can see that that Latino spread is now all over the county, including in the very famous San Fernando Valley. I always like to tell people that the famous "valley girls" is now "la muchachas del valle." That is there's been tremendous demographic transformation in our suburbs, and you can see that even more when you look at a place like Seattle. Pretty much ahead of the curve in terms of technology but also ahead in some ways in terms of the demographic transformations as well. In 1980 the minority or people of color


population mostly concentrated in the city of Seattle, very little in the suburbs of King or Pierce or other adjoining counties.

When you look at 2010 – and I'm going to do that again. So pay attention to two things. First, look at Seattle. It's actually whitening. Out of those suburbs think how much more people of color, in particular south King County. Why that's important for people who've done workforce development is when we've thought about workforce development for less advantaged populations, for more diverse populations, we've often thought of that as a sort of central city phenomena, but in fact it's something that's increasingly important for our suburbs.

And our suburbs are places where the social services structure has not been as developed. Sometimes the workforce development infrastructure has developed because that's not been where the perceived need has been in the past, but it's where the perceived need is emerging and is likely to emerge in the future because one part of what is driving that is the comeback city.

Across the United States central cities are on the comeback. There was a very interesting story in GQ, which is what almost all social scientists read to get their GQ or GQs about where the country is headed. And it had an article that said the hottest new city in the United States is downtown Los Angeles because downtown L.A. has staged a big comeback, moving from about 15,000 people, most of them homeless about 20 years ago, to a residential population that's now numbering in the 70,000s.

Now, we've been responsible for a gentrification of downtown Los Angeles, a spillover into a lot of the adjoining neighborhoods, and a pushout of poor folks into the inner ring suburbs that we were looking at before. That process is happening in many, many places across the United States, and it's a process that's likely to continue as the economy shifts in a way that's begun to value the creative class, that's begun to value the networked connections, that's begun to agglomerate people more in downtowns and in particular as millennials have evidenced that their preferred living and working situations are more urban.

That's leading to a pushout factor which concerns people with regard to gentrification, and that's something – (inaudible) – speak about often with people in the housing field from the workforce development field what it means. How do we make sure that people are able to get some of the jobs that are emerging in downtown, and how do we redeploy our workforce development systems?

The other aspect of this demography – then I'm going to jump into some of the economic and workforce implications of it – is that there's a very different age structure for our populations. So this is the median age by race and ethnicity for the U.S. for the pool of American Communities Survey 2008-2012. Median age, half younger and half older, for non-Hispanic whites about 43. For the Asian Pacific Islander population about 36. For the black – that includes African Americans and the share of blacks that are immigrants – about 33; 32 for Native Americans; 28 for Latinos. So 43, 28, 15 years.

It's a generation gap, and it helps to explain a couple of things. It does help to explain where the new and emerging workforce development needs are with that younger population. Twenty-


eight is a set of years where you're getting your footing in the labor market. Forty-three is hopefully years where you're more established, although we're finding that for a lot of older white workers in their 50s, hard hit by the recession, unable to sort of find a new path back into the labor market. So there's the set of needs there as well.

But the other thing it really helps to explain is some of our national politics as well because we've got a racial generation gap that is an older generation that's much whiter, doesn't necessarily see itself in a younger generation that's much more people of color, and that's filtered into a little bit of our politics. So I'll get to it in a minute.

At the same time that we had this huge demographic change, we've also experienced widening inequality in the United States. That widening inequality, there's been a couple of different types. One is the increase in income going to the top 1 percent. That's the set of blue lines that you see there, and you can see that really – and this is going from 1917 forward – that in an earlier pre-recession age, get pretty high levels of inequality. That really flattened out in the '50s to about 1980.

That's what a lot of people kind of called the golden age for the U.S. economy because it was an economy that was both growing and as it was growing income distribution was pretty stable. So everybody was benefitting from the growth. But from about 1980 forward we see a skew in the income distribution particularly to the top 1 percent but also to the 1 to 5 percent and the 5 to 10 percent in terms of where they are in the income distribution.

And there's really a couple of different things going on that often get confused in the public conversation around these issues. For the top 1 percent, a lot of that has to do with excess CEO pay. In the 1960s a CEO would make on average about 20 to 30 times what the average worker in his firm made. Now, the average CEO makes about 350 times what the average worker in his or her firm – more female CEOs now – makes. So there's been a big skew in CEO pay. There's been big returns for people in the financial sector like hedge fund managers, etc.. So – and there's been a big shift in taxes, although a lot of this is pre-tax and income as well.

But beneath that top 1 percent there's also been a shift in what's gone on for people who are actually full-time year around workers. And you can see here these are workers arrayed by where they are on the income distribution for full-time year around workers. So those at the 90th percentile, 10 percent of wage earners make more, 90 percent less. 80th, 20 percent make more. 80 percent make less. And you can see the 10th and 20th percentiles as well.

If you look at that pattern for the United States, which is the gray bars and then California in the orange bars, you'll notice two things. One is that even if you put aside the top 1 percent, those who are at the 80th and 90th percentile are making much more than they did in the past. Those at the 10th and the 20th and in the middle are actually making less than they did in the past.

What's gone on? A lot of that's about the higher returns to education partly because of technology and globalization, and another way to think about that is there's a much higher wage penalty for being less educated and less connected to the innovation economy and that that's sort of gradient from those at the bottom to those at the top where those at the bottom have been


losing while those at the – not even the top 1 percent but sort of the comfortable top where someone like me is that's a professor has been gaining. That pattern of inequality has been even more pronounced in California. Again, like California was America fast forward in terms of the demography, California's been America fast forward in terms of the widening gap.

I'm going to jump over that last slide and just there's also important to realize that while the country has become more diverse, the basic patterns around racial differences and income have not shifted. The gray going to the black line there is the share of black to white median income for families, and you can see there's only two periods with gain, the 1960s civil rights movement, booming economy connected to the Vietnam War. The other period of sort of closing the gap was the Clinton era, the '90s, booming economy, some government attention to closing the gap.

But you can see that basically that gap has remained or that ratio's remained quite flat in the ups, and that Latino to non-Hispanic white income has declined and become quite similar to that for blacks and whites. And you can see that pattern as well when you think about families below 150 percent of the poverty line for the U.S. as a whole. The poverty rates for African Americans and Latinos, about twice that of what they are for non-Hispanic whites. And the Asian Pacific Islander population also high rates of poverty because this is a very bifurcated population.

Now, this can also be seen in the share of workers making at least $15 an hour broken by race and ethnicity. I'm going to talk about this graph, but I do want to make it clear where this data here is coming from. We've created a website that's called the National Equity Atlas, and you can see the URL right there at the bottom. It's a website that's been created with Policy Link, and that website has data on both disparities and opportunities for all 50 states in the United States plus D.C., the top 150 metropolitan areas, and the top 100 U.S. cities.

And that data is broken in terms of income experience. There's stuff on health. There's stuff on concentrated poverty, and in the next few weeks, while it's been broken up mostly by race and ethnicity and also by nativity, we're going to take the larger groups, for example, of Asians and break them up by subgroups and make that available. So it should be a very useful data site for those of you trying to look at your own metropolitan region or, if you're in a big city, your own city and how it looks like relative to the metropolitan region.

But what this shows you is workers making at least $15 an hour, you can see that for both U.S. born whites and Asians, there's quite a large group making above $15 an hour, but for blacks and Latinos, that those rates of making more than $15 an hour much lower. So that's a lot of the low-wage labor force.

When you project those forward trying to think about jobs that require only a high school degree, the jobs that require only a high school degree, whites, both U.S. born and immigrants, have a small share. There are a share of workers with only a high school degree that do meet that, but when you look at the U.S. born blacks, U.S. born Latinos, and immigrant Latinos, you can see that these are the groups that don't have more than a high school degree and they're likely to filter into those low-skilled jobs in the future.


So what that means is that the racial inequality that we're looking at now is likely to get worse unless we address that with a much more effective set of workforce development strategies, some of which are about workforce development policy, some of which are about something that Virginia talked about at the beginning, a much more productive conversation about our shared metropolitan futures.

Going to jump over this and begin to – I'll say just one thing about this because this is part of that as well. This is kids of color who are concentrated in high poverty schools. What you'll see looking at the second line is that only 8 percent of white children are in schools where more than 75 percent of the population is on a free or reduced price lunch, but about half of black and Latino kids are in such schools. So it's not just a question of the current workforce not necessarily being prepared for the future.

That's what we were looking at when we looked at the data that who has a high school degree versus jobs that are going to require a high school degree. But if you look at the folks in essentially schools that are high poverty schools and often low performing, disproportionately black and Latino challenges then moving forward.

So one response to all of this has been really kind of generational warfare, and that's really what I think we see reflected in our national politics today. One generation continuing to want to protect what it's got on one end of the social welfare net, Medicare, Social Security, while another generation's needs around education and workforce development are winding up being fiscally starved.

Now, a lot of that is accompanied by another wide set of polarizations that are going on, and those wide set of polarizations are partly experiential. This is a chart, kind of complicated, but basically what it shows you with the red bars at the bottom is that more poor people are living in poor neighborhoods. With the blue line to the top, more wealthy people are living in wealthy neighborhoods. That is we've gotten more spatially segregated by income than we have in the past, and that breeds a sort of lack of concern about other folks because they're not as much a part of your daily life.

We've gotten much more spatially polarized in terms of our politics. In 1992 only about a quarter of voters lived in a county where a presidential candidate won by a landslide, meaning more than 20 percent. In 2012, which was nationally a pretty close election, most of the country was actually living in a politically polarized location where either most people were democrats or most people were republicans. What that suggests is, when people are spatially separated in terms of their income and in terms of their politics, it winds up being more difficult to have the kind of national conversation about where we need to go.

And just over these, but we're also seeing that this is something that's also just true in terms of the knowledge that people get. There's much fewer people reading newspapers, and you can see the age breaks here. You can see the newspaper readership has gone down dramatically, but it's gone down most dramatically for people between 18 and 34. Why is that important? We have really moved from broadcast news, three big stations, people reading papers, to narrowcast cable where people are either getting their news from Fox or from MSNBC or from their social media


feed. And that leads to people being able to reinforce their own thought processes rather than be challenged by other people's thought processes.

That's actually needed more than ever, and it's needed more than ever because if we're going to move forward, what we need to realize and I'm going to start to bring us to a bit of a close with this is two really key things.

First is something that comes out of this book that Virginia was talking about at the beginning, and it is that this current level of inequality, which has also been spatial separation and class distinctions that have been corrosive for our politics, have also been pretty corrosive for our economy. It used to be conventional thinking that more inequality – while it might be distasteful to people of a liberal political persuasion – was actually somewhat necessary for economic growth. That's why many economics – I was trained as one; got my PhD in economics – what we were taught to teach people in our basic economics classes.

What's been interesting is that over the last 10 or 15 years the economists have been increasingly suggesting that certainly too much equality can be damaging for economic growth. If you think of the Soviet Union in which you frustrate all differences, then you don't have incentives. You don't have money moving to high savings folks. You don't have the amassing of capital that you need for innovation.

But just like there can be too much equality and it can be damaging for economic growth, you can have too much inequality, too much money concentrated in the hands of a few, in which case you've killed consumer demand. You've really damaged incentives because many people are wondering how they're ever going to get ahead. You've created the kinds of conflicts around growth strategy that happen when people feel like they're not going to share in the prosperity. Too much inequality can be damaging for economic growth as well.

What's interesting about this shift is it's not a shift in economic thinking somehow led by people who are on the left of the political spectrum. One group of researchers who've found this to be the case, the Cleveland Federal Reserve. They did a study for a group called Fund for Our Economic Future in Cleveland. They looked at 120 metropolitan areas much the size of Cleveland, and they found that the big boosters of economic growth were things you would expect, things like having an anchor university, a diversified industrial structure, etc., but that one set of drag on economic growth were high levels of initial inequality, high levels of residential segregation, big distinctions between cities and suburbs. So equity is actually part of getting prosperity going at a metropolitan level.

Another set of researchers who found this out, not as you might expect, researchers associated with Occupy Wall Street but rather the International Monetary Fund, which did a study just two years ago – there's been some follow-up studies that have been quite interesting – looking at the relationship between inequality and the ability to sustain growth over time. What they found out was that countries that had a lot of inequality couldn't sustain economic growth over time.

And that's a very interesting finding, and it's one that we've replicated in our new book, "Equity, Growth, and Community," in which what we do is look at the relationship – we do three things.


We look at the relationship between equity and economic growth – job growth, actually – in 200 metropolitan regions between 1980 and 2010. We find, just like the International Monetary Fund, that high levels of inequality actually do an inability to sustain job growth. We also find political polarization does the same thing. So we find that relationship.

We then try to take a look at regions where people have been able to craft conversations about the regional future and talk about how those conversations – we can talk about this in Q&A – have been essential for being able to move forward both equity and prosperity. And we also talk about the role of conflict, something I'll come to at the end. If you're interested in that book – and I can't imagine why you wouldn't be.

It's a great book – you of course can buy it on amazon.com so you can feel the book, but you can also download a free copy of the book at our website called growingtogethermetro – that's all one word – .org. Growingtogethermetro.org. And UC Press has made available a free PDF or something that's called a "mobi" that you can download into your Kindle Reader. Pick it up. It's going to be a major motion picture soon. You'll want to have known the plot before it becomes a movie.

So what are the implications of this for workforce developers? First, I think we do need to know that there's been some shifts in workforce development paths and priorities, and in particular workforce is being asked to do a lot that it really wasn't asked to do before for a couple of different reasons. One is we could count on a growing economy with good jobs in the middle. Now, workforce developers learn as much about how they – to create those jobs that they are about getting people to be part of those jobs, something I'll talk about in a second.

Another thing is that when we talked about concentrated poverty and helping people in concentrated poverty in the past, there was a lot about people who have fallen out of the labor force. Now, it's got a huge group of people, particularly immigrants, who are in areas of concentrated poverty but they're working. It's just working in low quality jobs. That changes the workforce development task.

So what does it mean that workforce developers need to do? We increasingly tend to think about that as saying that workforce developers – and I know it's rough because you've been asked to do one thing in the past. You're actually asked to do another set of things now. Not just meeting markets, not just bringing together jobseekers with employers, but you're asked to mold the markets. You're asked to take the human capital side of the equation and help do the human development for it.

And you're also asked to make markets, that is to be involved in sectoral strategies that lead to the jobs to be created, and also to think a lot about the quality of employment and how do we intersect job creation with things like the fight for $15 with stabilizing immigrants in the labor force, etc.. So meeting, molding, and making markets, these are big tasks, and part of the molding markets are regional conversations which I'll get to in a minute.

So what do I think this means for labor force? Let me just get a quick drink of water. So one thing is what you've been involved in all this week, is understanding that sectors matter, that the


workforce development of the future is about identifying and targeting sectors that are slated to grow in the 21st century, and beginning to connect people to those and try to improve the quality of employment. For example, here in Los Angeles we're spending a tremendous amount of money on our rail system, and we're trying to think of a lot about how do we make sure that at least some of the rail car assembly occurs here and that people are connected to those jobs. Sectors matter.

But the other thing is that quality matters and trying to create upgraded quality of available employment. So, for example, something people don't often think about, the Restaurant Opportunity Center understands that as we're moving to the kind of economy we're moving to in the future, creative class, innovative sector, etc., lots more people are doing restaurants. And restaurants do not need to be the kind of low quality employment they are.

So how is it that we encourage employers to upgrade the quality of employment within restaurants? That's part of the what the raising of the minimum wage is all about, sort of cutting off the low road or bottom floor for that kind of employment, but that also there's a big distinction between those who are in the front of the restaurant and those who are washing the dishes and bussing. How do we create more paths from the back end of that labor ladder into the front end of that labor ladder? So that's a lot about upgrading the quality of available employment even as you've got sector strategies moving forward.

Institutions matter. The community colleges – don't need to tell you I'm a big promoter of community colleges. You know how important they are. They're incredibly important for these new and upcoming demographics I was talking about. They're also really important for the reentry in the labor force. When people talk about the Silicon Valley and the educational infrastructure, they often point to Stanford and UC Berkeley.

I often point to the really great community college system that's there that is helping to generate a new group of people who can do tech servicing and also become a resource for engineers to drop back in and get the kinds of jobs – classes they need to reskill themselves for changing jobs. Community colleges are going to be an important part of our institutional infrastructure moving forward. And then also there's a lot of anchor institutions. For example, so called eds and meds, people are studying locally, needing to buy part of their supplies locally. How do we make those better spenders, better job creators?

Connections matter. Even if we've got these well-functioning institutions, we need to connect them with low income communities, and that means dealing with barriers to reentry for the recently incarcerated, thinking about issues of legal and immigration status, and incorporating single female heads of households as we move forward.

Finally, a lot of what you're paying attention to, relationships matter and they matter pretty directly in terms of labor force connections but they also matter pretty dramatically in terms of simply connecting people in a region to be able to think about the future of the regional economy.


So those relationships are not just around workforce development, but it's whether or not the workforce developers are also part of the broader conversations in metropolitan regions about how to attract industries, what kind of industries to attract, how to connect people forward, and that's really what our book, Equity, Growth, and Community, most of it's about. We wind up looking at 11 metropolitan regions, some of which are getting thing right, some of which are not.

San Antonio turns out to be one of those places that's getting things right. It's a place that over the last 20 or 30 years by the standards of – (inaudible) – south have done well at generating job growth but also in lifting up the bottom of their labor markets. Fascinating because they were leaving a lot of people behind 20, 30 years ago.

Some of that has been luck of the draw, but a lot of it has actually been some pretty intentional leadership, so intentional that in 2012 when put on the ballot was a sales tax to support pre-K for disadvantaged kids, it passed not just with the support of obviously the voters, the majority of whom were not going to benefit from it because the majority of whom don't have disadvantaged kids; passed not only with the support of the mayor – we have Castro at the time – and the support of Social Justice Cribs (ph), who you think might like such a tax, but it passed with the support of the San Antonio Chamber of Commerce who argued that it was a workforce development issue for 20 years from now, that unless they were spending money on pre-K, particularly for disadvantaged kids, they were not going to be able to generate a workforce that could be in the future. And that is the special role that workforce developers have.

It's about job creation. It's about workforce prep. It's about reaching disadvantaged communities, but it's also that workforce developers can be part of broader regional conversations. You all have great credibility, more than you think and more than many other people, with business leaders, with civic leaders that are thinking about not just the future of workforce but the overall future of the metropolitan regions. And so there's a very, very special role for you to play in helping to – all of us to move forward frequently at the metropolitan level so that we are doing the training, the conversations, and the policy directions for the next America.

So that is where I will leave, and I will leave with this slide reminding you that all the good ideas, if you thought I had any, are in this book, Equity, Growth, and Community. Encourage you to buy it of course but again encourage you, if you're not – don't love that sort of solid tactile sense of a book, to think about downloading it from growingtogethermetro.org and think about the issues that are raised today and the issues that we will raise now in our Q&A. So I think I'm going to turn things over to someone besides me to tell you how to – because academics are notoriously bad with the technology stuff – to tell you how it is that you might be able to ask questions, raise issues so that we can have a bit of a conversation for the next period of time.

DIANE WALTON: Thanks so much. This is Diane Walton in San Francisco. There is a box available for people to put their questions into a chat window and then something miraculous happens and they show up on my screen and then I get to ask you. It's sort of old-fashioned and then again not. But as that all is happening, first of all, there are great comments with people recognizing your humor. And I think it started with the GQ remark, and so I just didn't want you to think that that had gone unappreciated by anyone.


There were some questions again wanting to know the name of the book, but I think we've solved that problem, and we've also giving them the growingtogethermetro.org website for them to go to, if they want to do it that way. So that one's taken care of.

There was a question about the $15 – the fight for $15 that I saw going by and wanted an example of if there were any efforts to make it – any kind of staging of it. And I know Oregon just passed an interesting up in the minimum wage with – so that it will go to $14.75 in the urban growth boundary, $13.50 in the mid-sized counties, and then $12.50 out in the rural areas. So it just starts stepping up, but is anybody else doing that kind of work?

DR. PASTOR: It's a very interesting issue, and it raises all sorts of really fascinating questions that I think are part of the conversation that we're having today. So the fight for $15, the attempt to raise the minimum wage to $15, is obviously a fight that has gone on in large cities and larger metros initially, and it's one that now has been won at the level of two states, at least California and New York. And what's been interesting about it is the following, and I think it really speaks to this idea of how do you get a conversation going.

Obviously, the impetus to raise the wage to $15 an hour comes from the way in which the bottom of the labor market has lacked, if you look at those charts that we had before, and the way in which people feel like also that work ought to be rewarded with a wage that brings you above the poverty level. And the fight, though, about whether or not to increase it has been a battle about whether or not, if you raise the minimum wage, is that going to have a negative effect on employment, particularly on employment of less skilled workers?

What's been fascinating, as I think many of you know, is that a very deeply held position within economics, which is that raising the minimum wage causes unemployment because a position for which – for moderate increases in minimum wage there's virtually no evidence. Even though it's been deeply held. A little bit like the idea that inequality might be good for economic growth, it hasn't been well sustained, particularly in the last 20 years.

What happened? Well, in the mid-1990s David Card and Alan Krueger put out a book called "Myth and Measurement" where they looked at the increases in the minimum wage in New Jersey, relative to Philadelphia, and in California over time. And they found that there were really no negative effects.

And now, most research has found that for moderate increases in minimum wage there's not a very big, if any, disemployment effect. Because those who are resisting a minimum wage, at least in my view, were so insistent that it would cause a lot of unemployment, because there was no space to have a rational conversation about this, we've actually moved to a pretty aggressive minimum wage strategy.

That is we know, for example, in the state of California, if you go from our current minimum wage to about $12.50, we can say with some degree of confidence it's not going to have a large disemployment impact. Do we know that about $15? We actually don't know that about $15, but because there's – because the other side was so insistent that any increase in a minimum


wage would lead to a huge increase in unemployment, it's been difficult to have a kind of rational conversation about what is the right minimum wage to set.

And the question that somebody asked, how do you stage it, so that's a very, very interesting thing. What we're doing in California, it's going to go up over about five or six years. There's a sort of ratchet but sort of a lever so that if the California economy moves into recession, which it certainly will because all economies move into recession, or if the budget deficit widens, then the governor can hold off on the increase for a year, which would stretch the pattern.

Oregon is experimenting with different geographies for increasing the minimum wage. We'll certainly see what happens. At a national level of course the Republican candidate has switched his perspective to say that states can raise the minimum wage, but basically before held that line and increased the minimum wage, which raised unemployment. Sanders has been arguing for $15 minimum wage all over the country. Clinton has been arguing for different geographic specificity to that.

But certainly the impetus to increase the minimum wage has really taken off and it's something that's popular in red states and in blue states and I think it's something that workforce developers are going to have to help businesses get used to because it's basically an irresistible force at this point.

MS. WALTON: Thanks. The question too about – you raised earlier in the whole – the coming back of the city, that there will be job ramifications of that so that the combination of the jobs ramifications of cities coming back to life and the minimum wage is an interesting moment; right? How do we take advantage of that in the best way, I guess is the real question.

DR. PASTOR: Yeah. I mean, I see it as part of an opportunity that's going to exist to upgrade the – what's basically low skill and low wage employment. And one of the things I think to realize is that there was a tendency to think about high skill and low skill as being very separate things, but if you spend any time in innovation economy, you realize that for every software programmer or biotech engineer, there's an army of childcare workers and gardeners and food service workers who are taking care of their children and getting them food because they're working too long and taking care of their lawns, etc..

There's a real clumping together of high-skill and low-skill workers in these innovation economies. And these vibrant downtowns are about creative workers and financial sectors, etc., but it's also about all the low=skill workers. And they're really not low=skill. I should say low wage workers because somebody who works in a restaurant, that requires skill. Someone who makes beds, they can do that in a very highly skilled way. It's really a question of us figuring out how to skill up those workers and then how to kind of push up the bottom of the labor market. The minimum wage is one tool to do that.

MS. WALTON: Thanks. They're pouring in. There's gratitude. There's lots of gratitude. There aren't any more remarks about your humor yet. Your insight, your knowledge, your – you're just getting a lot of gratitude over the wire, just so you know that.


The next question has to do with long-term regional collaboration. We're forming regional collaboratives at breakneck pace, but keeping them going and sustaining them has had its own difficulties. What have you seen in terms of the long-term?

DR. PASTOR: Well, part of what we covered in the book is trying to understand how do you make social norms of collaboration become part of the regional ethos. And that can mean that the particular organizational forms might shift, but the idea of collaboration persists. We looked at places that you might not expect like Salt Lake City. Its metropolitan area is home to something that's called Envision Utah, which has been a sort of voluntary planning mechanism that's brought together people across multiple sectors to try to think about the future of the Salt Lake metro together.

And that's resulted in a set of social norms around collaboration and conversation which have rubbed off in interesting ways. Salt Lake or Utah has been the home for something called the Utah Compact, which was an agreement amongst business leaders, civic leaders, faith leaders, immigrant rights leaders to have a more civil conversation around immigration.

And Utah is a state that has driver's licenses, which makes going to work easier, for undocumented individuals five or six years before California. They had in-state tuition for undocumented kids who grew up in the state about a year after California. So they've had much more civil conversation around immigration.

Seattle's got a set of social norms that are reflected in a thing called the Seattle Process, which can often also be just talking everything to death, but it's a norm around the fact that people should collaborate and talk. So the way that they came to their minimum wage was through setting up a commission and including business in it and making sure that some of its interests were represented, which is why they've got a long flight path to $15, particularly for smaller businesses.

So I think sustaining it over the long term is being less focused on the particular organizational form but whether or not that organization – that the forms change and manifest themselves over time. It is about establishing a set of roots and relationships that can help to sustain things over time.

MS. WALTON: Yeah. The social norms piece is huge for us for how we – because we – that talking, that discussion consistently about we all have to learn how to – everybody else should stop going to see the employers because we're the ones who should go see them; right? And then evolving to a very different way to look at it.

The next question has to do with the workforce implications with regard to older workers. As older workers secure second careers, as life expectancy increases, what are you seeing around that?

DR. PASTOR: Create a – (inaudible). I did want to say that you really want to pay attention to might call it social norm spillover. So when you start thinking about the workforce stuff, we think immediately about we're going to bring the employers in. We're going to bring the


educational systems in, community colleges in. And do we think about whether or not we're going to bring in the immigrant rights people, the people who really work with immigrants to make sure that they're part of this? And then so – because I want to talk about a different set of things.

We run a council for integration in Los Angeles along with the California Community Foundation. It's really the California Community Foundation that creates the table. We help run it. When you think about a council for immigrant integration, you're probably thinking that it's got a lot of immigrant rights people on it. It does, and it's got some people who provide immigrant services.

But it's also got the L.A. Chamber of Commerce. It's got the Los Angeles Police Department. It's got the Los Angeles County Sheriff's Department. It's got workforce developers. It's got people who do organizing in African American communities because a lot of our immigrants live in mostly black communities now or what – the communities that were mostly black in the past.

And so the spillover is whether or not you take the partnerships you're forming in one realm and make sure that they also get reformed in different realms that are key to people's daily lives, like housing, like education, like immigrant integration.

On the older workers, yeah. I think that there's really an important issue, and it's an especially important issue because a lot of the older white workers in particular who are being displaced by technological change are finding that it's very difficult to re-track into the labor market. And interestingly, the only demographic group that has seen a decrease in its life expectancy over the last half decade has been older white males who are finding themselves displaced, not finding routes back into the labor market.

That's leading to a lot of unhealthy behavior, an increase in suicide, an increase in drinking, an increase in depression. And all of that is contributing to poor health effects. So that is a set of workers that we need to be concerned with. It is true that it's also a set of workers that often are thinking about what they can do that was like what they used to do because there's not a lot of jobs like what they used to do. And so retraining is going to be really key.

MS. WALTON: So in trying to pull a couple of these threads together, I think you spoke earlier about really our challenge is the challenge of inequality. And so as we work with our business partners, have you noticed anything over time in terms of how business leaders value and talk about talent? I mean, do they see the inequality gap rising? And do they already know that they have a role to play in addressing it with us, or is that part of what we bring to the conversation?

DR. PASTOR: Well, I think it's fascinating. The thing I always say is that I spend as much time talking to business audiences as I do talking to community-based groups. I talk to philanthropy and civic groups probably most, but one year in particular, 2014, I began the year talking to Joint Ventures Silicon Valley Network which is the largest business organization in the Silicon Valley or one of them. Silicon Valley Leadership Group is also quite important -- and closed the year by talking to Deutsche Bank. And one of the things I was struck by is how do you talk to business leaders?


I think the way that you do it is, number one, by leading with a demographic change because one thing that's true about business leaders is they're thinking much more coolly and rationally about the demographic change than often the public is. The public sees the demographic change. Some people get really excited about it. A lot of people get really nervous and scared about it. For me – you can draw your own conclusions – that's part of what's driving this crazy electoral season is fear of the demographic other and of the next America that's coming upon us. So that's out there in the ethos (sic) but it's actually not there in the business community.

When you talk about the demographic change for the workforce, bringing on workers, etc., most businesses go, hmm, new consumers, new workers; what do we need to do to adjust and to make sure that we're getting the talent we need in the future?

So I think there's tremendous entrées to the business community, if we start with the issue of demographic change and begin to move from there to, if that's the workforce of the future, don't we want to make sure that they're equipped and skilled? I think that's the argument that won the day with the San Antonio Chamber of Commerce that I talked about and their support of a tax for pre-K.

The other thing I found, which I think is quite intriguing, is that the higher echelon of business are aware that inequality is extensive in the United States. They may be beneficiaries of it, and some may think that they're worth every penny. But a lot of business leaders understand that they're making so much more than they did in the past that it's so out of whack with whether or not they're that much more productive than in the past and that it's not possible to sustain a society when so many people feel disenfranchised.

Now, when you're speaking with the batters of inequality into an Occupy Wall Street kind of movement, you're feeding into a politics that's not going to allow us to sustain the kind of inequality that's actually healthy for economic growth where people do benefit from investments, do benefit from innovation, do benefit from talent. So if you don't want the pitchforks at the door, you got to figure out what to do about the level of inequality we have now. And again, for a lot of business leaders, the main entry point is demographic change.

A secondary entry point is the question of, what does that mean for workforce in the future, and how do we address that for – by preparing everyone? And there's a huge section of the workforce – sorry – of the business community that is actually, like many of us, looking at the skewness of the income distribution and saying, this is not right, this is corrosive politically, it's probably damaging economically; how do we deal with it without erasing some of the incentives of an economic source?

MS. WALTON: And then in terms of all of this – right, just to bring the whole kit and caboodle of the week back into this framework, can you just wrap up, give us some wrap-up about the role that the government intention might play in closing the gap and why the sector piece makes such a difference?


DR. PASTOR: Sure. And I can see why that question is important looking at the comment 11 here that says my presentation is a downer. But I'm kind of really actually optimistic, and I'll tell you why. I'm really optimistic because what I see is that if you look at polling data, this next generation is actually pretty optimistic about its future.

If you looked at the data, you'd think they might not be. I'm optimistic because I do think that people are beginning to understand that the demographic change is an opportunity and not a threat, particularly since so much of this demographic change is coming from people born in the United States. I think that we're making some really key inroads with the business community.

And looping it back to the sector strategy, I've been thinking about sectors and how they play out at a metropolitan level for quite a long time. I think that it makes – it's one of the reasons why the metropolitan economies are so important because that's where sectors cluster and where we can make a difference by understanding the sectors in our own economy. It's also a place where we can actually do the bridge-building between business and community and government is at a metropolitan level.

Even though things really look dysfunctional at a national level, at a metropolitan level those conversations can occur. The reason why I haven't focused on just sectors in this conversation is that the precursor to getting there is people beginning to understand that they do share one region, that they do share one future, and that if we allow ourselves to be polarized by generation, by race, by place, by those sectors of the economy we occupy, then we're not going to be able to come to the kind of coherent agreements around what we need to do to be able to move forward.

You've concentrated this week on a lot of the strategies that can bring people together to move sectors. Behind that is getting them to come together to think about the future of the metropolitan economy and how they can work together to do it. I certainly wish you luck doing it. It's work that I try to do as well. I know how difficult it is, but I'm optimistic about what we can do together and about the work that you'll be doing as you move forward in your own region. Thank you very much.

MS. WALTON: Dr. Pastor, thank you so much for spending time with us and inspiring us and making us smile and think. We're going to make sure that you stay a part of our greater conversation over the next couple years. It's just it's this huge moment of opportunity I think for us, and to be able to have somebody like you at our side makes all the difference in the world. I'm going to hand the mic over to Todd Cohen, my co-conspirator this week, and, Todd, take it away.

TODD COHEN: Thanks, Diane, and thanks, Dr. Pastor, for joining us. This is a great end to this week.

Just a last few things. This is the end. It was a great week. I think we've all rolled up our sleeves. We worked hard. We sweated. I'm not talking about our staff, although I congratulate our team over here. You all did a great job, but really all you participants, I mean, I think you


really participated and that's what makes this week so, so good when you ask questions, you engage, and that's what this session is all about.

One thing on this – I know it's probably about being daunting. It is daunting, yes. But it does put in context this idea of sector strategies and places a level of importance on this, which I think goes back to one of the very first things we said in the opening plenary, which is we're not talking about sector initiatives, a training program, or otherwise. We're talking about systems change, and it's hard. No one will say it's easy, but it's important. And I think if we can focus on the strategies – and I think this is what Dr. Pastor was alluding to – on the individual strategies that we learned about in each individual workshop and pull that all together, that over time that we will create the systems change.

So we appreciate everything that's been brought to the table. Thank you to all the speakers. Thank you to all of you that participated. All of these sessions will be recorded and available to play for anyone at any time for free. We hope you take advantage of that. We will send you all the information of where you go to get all the slides and all this information so it's available for you.

Thank you to the U.S. Department of Labor, Employment and Training Administration for hosting this and sponsoring this and being really the foundation for this and Diane, your work and Wendy Havenstrite and others. So thank you all, and really appreciate this. And Maher and Maher, our firm here, says thank you and have a great weekend.

MR. KEATING: All right. Very good, and we'd love to before you log off for the weekend give us some feedback about how you thought it went both today and just in general with the institute as a whole. This is going to wrap us up for the institute, but, like Todd said, all the resources that we have will be posted. So definitely be on the lookout for that. We're going to go ahead and bring up the place where you can give us any comments you might have, if you haven't already done so, before you log off for today.

And just to echo what Todd said, thanks so much for participating. It's been a great week-long institute and we hope to do it again some time and thank you for participating. We'll bring up the slides as well, if you haven't downloaded those. So feel free to get a copy of that before you log off today, and I hope to see you on future events on WorkforceGPS.

Have a great weekend, everybody.

OPERATOR: And this concludes today's closing plenary call. You may now disconnect. Presenters, please hold the line.

(END)


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media/Files/Webinars/2 Web viewBRIAN KEATING: All right. Thanks, Benita. Welcome. Welcome back, everybody. Thanks for joining us on a Friday afternoon for today's closing plenary