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DOCUMENT RESUME CE 078 313 ED 428 270 Elliott, Mark; King, Elisabeth AUTHOR Labor Market Leverage. Sectoral Employment Field Report. TITLE Public/Private Ventures, Philadelphia, PA. INSTITUTION Mott (C.S.) Foundation, Flint, MI. SPONS AGENCY PUB DATE 1999-00-00 NOTE 37p. Reports - Research (143) PUB TYPE MF01/PCO2 Plus Postage. EDRS PRICE Change Strategies; Community Programs; Disadvantaged; DESCRIPTORS *Education Work Relationship; Educational Practices; *Employment Programs; Entry Workers; Job Training; *Labor Force Development; Labor Market; Organizational Change; Organizational Development; *Partnerships in Education; Private Sector; Program Development; Program Implementation; Public Sector; *School Business Relationship; Systems Approach; Urban Areas; Urban Education ABSTRACT This document explains the concept of sectoral employment strategies and profiles 13 successful work force development programs based on such strategies. The first half of the document examines the increasing need for sectoral employment strategies and their key characteristics, role in achieving systemic change in work organizations, and benefits. First, the following key attributes of sectoral employment strategies are discussed: target an occupation or cluster of occupations within an industry; seek to become an important and influential actor in that sector; and intervene to benefit low-income workers by connecting individuals to better jobs and achieving system labor market changes that benefit low-income workers more broadly. Discussed next are the following: activities typically used in sectoral employment programs (training; business development; organizing; and research and policy analysis); qualities demonstrated by organizations that have successfully achieved systemic change; and factors constraining the implementation of sectoral strategies (economic changes that are reducing incomes and job security; increasing complexity and pace of change; and public policy's movement away from long-term, flexible support). The remainder of the document consists of profiles of 13 sectoral employment strategy-based work force development programs in a diverse group of economic sectors in 14 states. (MN) ******************************************************************************** Reproductions supplied by EDRS are the best that can be made from the original document. ******************************************************************************** EDUCATION U S DEPARTMENT OF and Improvement Office of Educational Research INFORMATION CATIONAL RESOURCES d ED CENTER (ERIC) reproduced as This document has been organization received frorn the person or originating it been made to CI Minor changes have quality improve reproduction stated in this Points of view or opinions represent document do not necessarily policy official OERI position or PERMISSION TO REPRODUCE AND DISSEMINATE THIS MATERIAL HAS BEEN GRANTED BY L RESOURCES ATI TO THE ED INFORMATION ENTER (ERIC) no 3i0 III COPY AVAILABLE 'BEST B OR L A AR K E M T LEVERAGE I II Mark Elliott and Elisabeth King Field Report Series Public/Private Ventures Winter 1999 3 ACKNOWLEDGMENTS ment Corporation and Focus: HOPEare This report attempts to shed light on how included because they exemplify a particu- sectoral employment programs can effect systemic change in the labor market. larly powerful approach to systemic change. The authors thank the staff of all Although pursuing systemic change has organizations included in the report for been a key attribute of sectoral employ- their many valuable suggestions and ment initiatives, it has remained an ambiguous concept, lacking definition and corrections. a conceptual framework. Many of the ideas expressed here reflect countless conversations with people long Labor Market Leverage builds on the excel- involved in the sectoral employment field, lent report by Peggy Clark and Steve including Peggy Clark, Steve Dawson, Dawson, Jobs and the Urban Poor: Privately- James Head, John Foster-Bey, Craig Initiated Sectoral Employment Strategies. In a Howard, Amy Kays, Frieda Molina, Rick sense, Labor Market Leverage is intended to Surpin and our colleague at P/PV, Joe serve as a companion to Jobs and the Urban Stillman. Thanks to all of you for helping Poor, which defines sectoral employment, refine thoughts that were often incomplete. describes a number of the more advanced sectoral employment initiatives, and Most of all, we would like to thank the illustrates several of the key challenges Charles Stewart Mott Foundation for facing sectoral employment practitioners. including P/PV in the Sectoral Employment Initiative, particularly Jack All but three of the organizations Litzenberg, for his interest in defining and included in the report are participating in advancing the sectoral employment field. the Charles Stewart Mott Foundation's Sectoral Employment Initiative, which Public/Private Ventures is evaluating. The othersCooperative Home Care Associates, the Garment Industry Develop- Dedicated to the memory of Jim Lund Executive Director of Project QUEST 1995-1998 EXECUTIVE SUMMARY Rapid economic change over the past 25 Sectoral employment strategies seek to years has dramatically altered the char- achieve systemic change by influencing acter and performance of the labor such key actors as employers, the public market. The increased importance of job sector and education/training entities so skills, the suburbanization of many that workers in the targeted occupations employment opportunities, the rise of benefit. Sectoral initiatives encompass a service industries, the growing reliance on diverse range of strategies, including contingent labor, and the decline in union training, business development, orga- representation have had an enormous nizing, and research and policy analysis, impact on who is hired, how much they several of which may be combined in are paid, and how long they are employed. order to effect change. Although these changes have brought Organizations that have demonstrated the genuine benefits to some workers, for ability to achieve systemic change are many others, particularly those with low characterized by five qualities: expertise in skills, finding their way to jobs and careers the targeted sector, leverage through that will enable them to attain a decent organized members or financial resources, standard of living is becoming even more key allies in the sector, the ability to adapt difficult. to change, and the capacity to persevere In this economic context, new workforce over the long term. development strategies are needed to keep At the same time, the effectiveness of even pace with economic change and intervene the most promising sectoral strategies is in labor markets in ways that benefit constrained by three critical factors: workers. Sectoral employment strategies are one promising approach. Though Economic changes are reducing the sectoral strategies vary considerably, they incomes and job security of low-skill share key attributes: workers; They target an occupation or cluster of The increasing complexity and pace of occupations within an industry or change makes it more challenging to sector of the economy; intervene in labor markets; and They seek to become an important and Public policy is moving away from the influential actor in that sector; and long-term, flexible support that is essential for launching such initiatives. They intervene to benefit low-income workers by connecting individuals to better jobs and by achieving systemic changes in the labor markets that benefit low-income workers more broadly. 2 I S 0 . 0 Working Partnerships USA Project QUEST 7 1 San Jose, California San Antonio, Texas 8 ARCH Training Center, Inc. Good Faith Fund 2 Washington, D.C. Pine Bluff, Arkansas Focus: HOPE Garment Industry Development 9 3 Corporation Detroit, Michigan New York, New York 10 Westside Industrial Retention and Expansion Network Cooperative Home Care Associates 4 Cleveland, Ohio South Bronx, New York 11 Training, Inc.-Essex County College Primavera Services, Inc. 5 Newark, New Jersey Tucson, Arizona 12 Direct Action for Rights & Equality 6 New Hampshire Community Loan Fund Providence, Rhode Island Concord, New Hampshire 13 Philadelphia Area Accelerated Manufacturing Education, Inc. Philadelphia, Pennsylvania BEST COPY AVAILABLE 3 INTRODUCTION Continued job growth, low inflation and The Challenge Facing Workforce lofty stock prices are contributing to what Development some have called a perfect economy. In this context, workforce development While such optimism will fade if we enter organizations have an opportunity to help a prolonged recession, many people have both low-income job seekers and their seen their incomes and assets grow potential employers navigate the increas- because of strong economic trends. But to ingly turbulent currents of today's labor job seekers and low-wage workers without market. Most organizations achieve this an advanced degree the perfect economy simply by preparing and connecting is far distant. workers to job openings that more or less Nearby manufacturing jobs that employed match their interests and abilities. The earlier generations have either disap- level of investment in the individual prior peared or are filled through informal to employment varies, as does the method networks that exclude local residents. Well- of connecting them to jobs, but, funda- paying jobs require more than a high mentally, the mechanism of helping school degree, but many unskilled career employers find staff and workers gain seekers do not know how or where to get employment proceeds job applicant by the right training; the only jobs available job applicant. are in poorly paid service-sector occupa- This retail approach to workforce develop- tions that offer few benefits and, more ment has much to be said for it: organiza- important, present little opportunity to tions can tailor their work to employers learn and advance. In sum, local and job seekers, creating the opportunity economies and labor markets have for a better match than might otherwise become considerably more complex and occur. It also provides workforce entities difficult to fathom, particularly for the with a practical feel for what works and unskilled. As Bennett Harrison and what does not, allowing for program Marcus Weiss point out, "It is becoming change and improved performance. increasingly clear that there is practically Nevertheless, the one-on-one approach no way that low-income, already socially has two major disadvantages: it cannot ostracized individualsno matter how respond to the prevalence of low-wage and highly motivatedcan single-handedly contingent employment opportunities that reconstruct and negotiate a city's map of characterize entry-level positions in many social and business connections." industries and, even under ideal circum- Employers are also paying a price. stances, it rarely adds up to much. If we Ongoing technological advances in hope to make significant progress in production, combined with the tightest affecting how well labor markets perform, labor markets in a generation, have made new approaches will be needed that go it exceptionally difficult to find qualified beyond the traditional individual training entry-level workers. And employers' and placement strategy. concerns about the quality of applicants for entry-level jobs are matched only by their worries about the caliber of their current employees.' 7 4 SECTORAL EMPLOYMENT STRATEGIES other key labor market entities, to the Unlike most workforce programs, which benefit of low-wage workers. In an era of even when successful merely respond to constrained resources for employment changes in the labor market, sectoral programs that serve the disadvantaged, employment programs aim to affect labor such strategies take on added importance. market outcomes. Sectoral employment The purpose of this paper is to shed light practitioners understand intuitively the on how sectoral employment strategies irregularity and complexity of the labor pursue systemic change and what charac- market, as described by Tilly and Tilly: teristics enable them to succeed. Conventional treatments of work and labor markets place them on a flat, Sectoral Employment Defined homogenous terrain.., marked only by Successful sectoral employment programs intersections between neat curves of understand and intervene directly in local supply and demand. We have looked labor markets in order to benefit low- closely at the terrain and found it income workers. These strategies vary pitted, riven and undulating, full of substantially from each other but share inequality, segmentation, segregation, some key characteristics: conflict and coercion.' They target an occupation or cluster of Much of the irregularity and fluidity of the occupations within an industry or labor market is not random but results to sector of the economy; some degree from the decisions and behavior of key labor market entities, They seek to become an influential including employers, unions, government actor in that sector; and agencies, educational and training institu- They intervene to benefit low-income tions, and other employment brokers, workers by connecting individual partic- such as staffing agencies. Sectoral employ- ipants to better jobs and by achieving ment strategies seek to benefit low-income systemic changes in the labor market that workers and job seekers by influencing the benefit low-income workers more broadly.' actions of these entities, thereby changing the terrain Tilly and Tilly describe. While there is considerable diversity in the approaches that are or might be taken by From a workforce practitioner's stand- programs with these key characteristics, point, this terrain is not only undulating sectoral employment initiatives tend to fall but is also occasionally rocked by large into two broad categories. The more earthquakes. To smooth the undulations common strategy seeks to improve the requires an intimate knowledge of the access of low-income workers to good sector, good relationships with key players, occupations in the targeted sector by and a keen sense of where and how to overcoming the barriers that prevent them intervene. Some might ask, "Why bother?" from getting those jobs. This is usually The answer is because achieving broader accomplished by providing participants sectoral impact addresses two key concerns with the specific skills needed to qualify for of the workforce field. First, sectoral such jobs, and by developing strong strategies can intervene in low-wage relationships among key organizations, occupations, which most training pro- usually employers and educational institu- grams ignore. Second, these strategies tions, so that low-income people can enable workforce entities to "reach scale." prepare for and enter the targeted occupa- In most situations, achieving scale means tion(s). The second type of sectoral pro- getting big. But training a large number of gram focuses on restructuring jobs that are people is often not possible given funding already accessible but offer poor pay, low limitations and is undesirable when benefits and little job securityusually expansion hurts performance. Sectoral service-sector positions in such areas as child approaches seek to achieve scale by affecting the behavior and performance of 5 care and home health care. In their efforts cult to develop the expertise needed to to benefit workers in these occupations, pro- intervene effectively in multiple sectors.) grams often make policy advocacy and or- Achieving Systemic Impact ganizing central components of the strategy. Perhaps the least understood aspect of Although many training programs for the sectoral employment and certainly the disadvantaged target specific occupations most hotly debated among practitioners is within an industry, what distinguishes the definition of systemic impact. As noted sectoral employment programs is that they in the definition, a key element of sectoral focus on a single set of occupations within employment is the effort by practitioners one industry and seek to achieve broader to achieve broader changes within the labor market impact within that industry. A sector that will benefit low-income single-industry focus enables organizations to become knowledgeable about the workers. In concrete terms, a program has industry, develop strong long-term rela- systemic impact when it directly benefits workers tionships with its key institutions, and beyond its own participants. For example, when a nonprofit workforce organization become players in policy debates affecting works with a local community college to the sector. Such knowledge and expertise change its courses to better prepare its enable programs to sense important participants, other students benefit as well. changes in the industry that will affect If the nonprofit organization simply overall demand for workers and the skill requirements of particular occupations. trained its own participants, it would have less impact. Adapting quickly and effectively to such changes is the hallmark of all good employ- Systemic change is possible precisely ment programs, and is a particular charac- because labor markets are not character- teristic of successful sectoral initiatives. ized by intersections of neat curves of supply and demand. Quite the contrary. Of course, the sectoral approach has risks. First, an organization's reputation becomes Critical labor market characteristics and outcomes are, at least in some significant well-known in a single sector because most measure, the result of the preferences and actors in any one sector are likely to interact and exchange information. For choices of institutions and individuals. strong organizations, such interaction is Critical institutional players in a local labor market include employers, educa- positive. They quickly become known for tion and training organizations, commu- delivering a quality product; poor per- formers, however, become known just as nity-based organizations, and the public quickly. Second, focusing on a single sector sector. Achieving systemic change depends subjects an organization to the ups and on organizations' ability to identify points of downs of that sector. Not only does leverage that can affect the behavior of one demand for workers fluctuate, but the or more of these entities so that low-income nature and quality of particular occupa- workers benefit in some tangible way. tions can turn good jobs into bad ones Deciding when and how to intervene in seemingly overnight. General training sectors is neither science nor art, but organizations can simply shift to more usually results from a combination of promising industries; sectoral employment necessity, perseverance and luck. initiatives must face such changes head on Development of sectoral strategies will and figure out how to adapt while main- depend on the sector and occupations taining their overall mission. (A few targeted, the organization's own history sectoral employment practitioners, most and philosophy, its relations with other key notably Project QUEST in San Antonio, actors in the local or regional market, and operate in more than one sector. While the vagaries of time and circumstance. No such diversification within one organiza- two strategies will be alike. tion has a certain appeal, it is ,quite diffi- 9 6 SECTORAL EMPLOYMENT IN ACTION tals, in which it helped convert minimum- In order to give a fuller sense of how wage clerk jobs into new positions re- sectoral employment strategies affect the quiring greater administrative dutiesfor actions of labor market institutions, it is which hospitals were willing to pay more. useful to examine strategies that are either in place or being launched. The examples The Good Faith Fund is encouraging cited here illustrate possible approaches: employers to recognize that certified they should not be read as the only way or nursing assistants (CNAs) who receive even the best way of pursuing change. intensive skill training, like Good Faith Although the descriptions are fairly Fund's graduates, provide better quality straightforward and may seem static, in care and consequently are worth higher practice, sectoral employment initiatives wages than are less well-prepared CNAs. operate in a fluid environment whose Even though this effort is just getting off shape and contours are determined by the ground, employers are beginning to powerful economic forces and institutions. offer higher wages in order to attract the Even the most successful sectoral practi- Fund's graduates. tioners often feel overwhelmed by the complexity and challenge of effecting The Garment Industry Development Corporation (GIDC) goes one step further: change. it helps garment manufacturers in New York modernize their plants and upgrade Employers the skills of their employees so they can Sectoral employment practitioners seek to operate the new equipment. By inter- improve the employment prospects of vening in both the capital and labor sides workers and job seekers by altering the of the production process, GIDC has a way firms recruit, pay and promote much greater impact on firms' produc- people. The most direct approach to tivity than it would otherwise, thereby achieve this is to work with employers. preserving employment opportunities for Although this is, of course, much easier workers. said than done, a number of organizations have had notable success with employers. Becoming a "yardstick" company. One particularly striking way to demonstrate Their strategies tend to fall into a few that companies can afford to pay workers general categories. higher wages is to do it. Entering the Restructuring jobs so they offer higher pay for market directly also has significant risks, higher skills. Most employment organiza- but if done successfully, it is a powerful tions focus simply on preparing people for approach. The trick is how not only to higher-skill jobs so they can earn more become profitable but also to alter other the high-skill/high-wage approach. firms' behaviorcreating the broader Sectoral employment organizations, in sectoral effect. contrast, work with employers to restructure low-skill jobs into higher-skill jobs so Cooperative Home Care Associates (CHCA), a worker-owned home health care company the employers can pay a higher wage. in the South Bronx, attempts to influence Pro*t QUEST, Inc. has worked with San a number of actors, including other Antonio's banking industry to restructure employers in the home health care field, bank teller positions as financial service by demonstrating that it is possible, even representatives, who are capable of advantageous, to connect the quality of offering customers a wider variety of care to the quality of the job. Unlike most services. Once banks had agreed to raise other home health care providers, CHCA hourly pay and make the jobs full-time, QUEST agreed to train people for the trains its workers before they visit clients, monitors thcir work closely, and seeks to jobs. It has done similar work with hospi- provide workers with higher-than-average 1