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If you look at all the economic indicators, virtually all signs but one point to good news for California's continued economic recovery. The outlier has to do with the law of supply and demand. In the Los Angeles and San Francisco areas, there is more demand for people to fill middle-skills jobs than there are people with the necessary skills and training to meet the need.
That means growth in sectors that employ large numbers of middle-skills employees could be slowed by an inability to fill positions and keep California's engines of growth running.
We call them middle-skills jobs because, while they don't require a college degree, they do require a high school education and specialized training – usually a certification program. These are good paying jobs being created in California. Besides better-than-average compensation, they provide career paths – real opportunities for skills development and job advancement that will improve the quality of life for many.
This should mean tremendous opportunities for L.A. and Bay Area residents. Unfortunately, too many of the unemployed and underemployed with the most to gain lack the education and skills employers require, leaving them on the sidelines of California's growing economy.
JPMorgan Chase has painted a clear picture of the job opportunities and employer needs in the L.A. County and San Francisco Bay regions as part of its five-year, $250 million New Skills at Work commitment to workforce readiness and training. It recently completed detailed analyses of employment in L.A. County and the Bay Area. Despite regional nuances, many Californians might be surprised to learn north and south aren't as far apart as they think.
In both regions, the health care sector has the greatest need for middle-skills employees. An aging population means more people have health care needs and it also means more health care workers are aging into retirement. In Los Angeles, health care will need to fill nearly 20,000 middle-skills positions over the next four years. Across the San Francisco Bay Area health care needs to fill about 4,000 middle skills jobs over the same period.
This is first and foremost a social need but it has major economic implications. The median hourly wage for a middle-skills health care worker (technicians, nurses, administrators, etc.) is $37.50 in L.A. County, going up to more than $52-an-hour for advanced practice registered nurses and nurse practitioners.
Compared to the hourly minimum wage pay of $9 and or even a living wage – $21.62 an hour – and that's a lot more money flowing into the economy and improving the lives of individuals and families.
The second fastest growing sector for middle-skills jobs in L.A. is global trade and logistics, which will add about 5,500 jobs through 2019. When contract issues with dockworkers were settled earlier this year, a cargo backlog created demand for more employees.
In the Bay Area, finance and insurance is the second biggest sector. The growth rate for the number of some finance positions (such as payroll specialist and billing clerk), is expected to hit 15 percent over the next decade. That's at least 3,000 new jobs with a median hourly wage of almost $31.
Unfortunately, our workforce paradox – thousands of people looking for good jobs while employers struggle to fill good jobs – threatens to impede prosperity, productivity and growth in both regions. But if government and the private sector can work together, thousands of Californians and their families can step onto career paths that offer not just much better pay but a real future with continuing advancement and job growth opportunities.
The opportunity is to enable unemployed and underemployed Californians not just the ability to fully participate in the economy but to help drive economic growth that benefits everyone through their productive, valuable work contributions.
But filling the middle-skills gap isn't a challenge government can fix by legislation or by itself. It requires a committed, collaborative effort between government, employers and nonprofit organizations to raise awareness of the problem and the solution, fund and operate skills-based training programs and connect people to jobs.
Step One, which the JPMorgan Chase study has helped us take, is to understand where the need is greatest. That knowledge enables us to focus training resources where they will do the most good – where the most jobs are.
Step Two, we need governments and the private sector working together to support local training and education institutions – community colleges and other technical training organizations – so more people can develop the skills they need to step up to these career entry points.
Step Three, we need to invest in community-based services to help individuals take advantage of career path opportunities. This includes job coaching, child care, housing assistance, financial coaching and education grants. In the coming months, The California Community Colleges Task Force on Workforce, Job Creation and a Strong Economy, commissioned by the Board of Governors, will be releasing its recommendations on how to provide workforce with relevant skills and quality credentials that match employer needs.
When business, government and community groups come together to help high-need populations by providing training, internships, jobs, mentoring, career advice and development, we are enabling the continued growth of our cities and the state of California, and improved quality of life for more of our citizens. We can help the unemployed and underemployed help themselves, and in the process help California's economy and communities grow healthier.
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