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The most recent unemployment number released on Friday makes me think of a twist on the often cited business maxim, “If you can’t measure it, you can’t manage it.” Today I would say if we are not paying attention to it, we can’t expect to improve it. The federal government announced Friday that the national unemployment rate crept down again to an historic low of 3.9%. No doubt, this is an impressive number ‑ none of us working today ever experienced a rate this low in our working lives, so you would think that there might be more of a discernible impact. For sure, many employers are scrambling to find workers, and more people overall are working, but as we look around, we don’t see a corresponding historic improvement in quality of life to go along with the historic rate of employment. One reason, which was also reported on Friday in many news stories, is that wages have not increased as one might expect in this recovery period. To understand more, you must look deeper.

While the San Francisco Bay Area has enjoyed remarkable growth and amazing, world-class innovation, we have also created an economic divide in our communities that could become our undoing. According to the Brookings Institution, the Bay Area also has one of the largest gaps between the high wage earners and the low wage earners, and the gap has only become greater in recent years. These findings seem to be echoed in some of the other federal data on unemployment. Digging deeper beyond the headline grabbing 3.9% national number, we find that the unemployment rate for California is 4.2%. This unemployment rate is referred to as the Bureau of Labor Statistics “U3” statistic. Going a little deeper still, we find the “U6” statistic, which includes people who are working but who must work multiple jobs in order to try to make ends meet. If we add them in, the California unemployment rate –or what we might term and the labor underutilization rate, jumps up a full 5 points to 9.2%! This number seems closer to what we are experiencing in the Bay Area. In fact, nationally the year over year change in those who must work multiple jobs has shown an increase of 7.25%. This is what we refer to as underemployment ‑people who are forced to work multiple jobs or people who are not employed at the level of their skill and competence.

The question that is shaping up is: can the Bay Area have both an innovative and an inclusive economy? While we have some of the world’s top talent in the Bay Area, it is also true that about 50% of our residents between the ages of 25 and 65 do not have a bachelor’s degree. We need to be paying attention to more key indicators like the U6 number, and levels of education and training to be able to chart a course to ensure that we have sustainable communities in the future.

In December of 2016, JobTrain commissioned a report: The Broken Pathway Uncovering Economic Inequality in the Bay Area. This report was an attempt to shed more light on key indicators that can broaden our perspective, like labor underutilization and the impact of the high cost of living in the Bay Area on labor and workforce issues.  The next edition of The Broken Pathway is due out this Fall, and again will help draw our attention to key indicators that can help us understand what is really happening in our economy, and can serve as starting points for us to begin improving the lives of millions of our fellow residents and the sustainability of our cities.  The Brookings Report from June of 2018 makes it clear that, “Whether Bay Area residents like it or not, city leaders across the country are watching how this high-tech region grapples with the consequences of dizzying economic growth.”  The Report also notes the Bay Area’s “path in years ahead could serve as an exemplar to other regions for how to navigate economic inclusion in the 21st century –or as a cautionary tale.”

 

About the Author

My name is Steven Schmidbauer, I help lead nonprofit organizations to an effective accomplishment of their missions. Nonprofits are driven by missions and we accomplish them not all at once but in stages. Success comes in steps. It’s being able to see the big picture and knowing how to break it up so it can be accomplished.

Nonprofit management involves taking stock of the mission and mining it, not only for the good that it can do for those it serves, but also as a road map for organizational development. Once the mission is flowing within, as well as outward, the organization begins to exude authenticity in a way that draws talent & resource development.

KEY ACCOMPLISHMENTS

✔ As COO at JobTrain, I am part of an experienced and dynamic program design team leading an organization at the forefront of its sector, and showing real success in addressing workforce issues that are some of the biggest challenges our country faces today.

✔ As CEO, of CFHI, I was able to bring an organization to prominence as an industry leader nationally and globally.

✔ Under my leadership, our nonprofit business model was published by Oxford University Press.

✔ I am extremely proud to have gained the organization Special Consultative Status as an NGO with the United Nations in 2008.

I believe a successful organization treats its staff members in the same way that external clients are expected to be treated, creating a congruence that makes the organization healthier & more effective. It’s important to look for the strengths within the organization and within the people, and build from there. This allows people to take ownership quickly & become invested in the success of the organization.

I deeply understand the nonprofit sector & the strengths of that model. I also have a strong appreciation for business outcomes & entrepreneurial initiatives. I gain tremendous satisfaction knowing that I have helped not only an organization, but the people it aids.