Case Study: Labor Market Information and Career Pathways

More than one out of seven (over 180,000) young adults in New York City are neither in school nor employed. The are a myriad of factors that may lead youth to this point, but one may be perceptions about the labor market. So what does NYC's labor market look like?

Well, the good news is that the vast majority of job openings do not require more than a high school education. The bad news is that very few of these jobs pay a living wage. In fact, only 1 out of 3 of all annual entry-level job openings in NYC pays a living wage! 

A living wage is the income necessary to cover a region’s basic living expenses. Workers earning less then a living wage generally rely on additional public services to make ends meet. Another way of looking at that, is that taxpayers are indirectly subsidizing these jobs (e.g. fast food workers, retail workers, home health aides, child care professionals, etc.) and businesses. According to one analysis, more than half of all federal and state spending on public assistance goes to working families who still require food stamps, Medicaid, or other support! (http://laborcenter.berkeley.edu/the-high-public-cost-of-low-wages/)  Those calculations don't include public spending on education and training to prepare workers for these jobs. 

New York City is not unique in this regard. Fewer than half of the state’s 322,440 annual job openings pay entry wages that allow a New Yorker to make ends meet and this is consistent across almost every region of the state. 

New York along with California recently passed state-wide laws to more closely align minimum wages with the living wage, joining cities such as Seattle, Washington, DC and St. Louis.

Developing Career Pathways

Policymakers have zeroed in on industry-recognized postsecondary certificates as a means to provide upward mobility to out-of-school youth. In fact, the Workforce Innovation and Opportunity Act makes earning postsecondary credentials one of the primary indicators for measuring the success of all workforce development programs.

Yet, in NYC, less than 10% of entry-level jobs that pay a living wage without a four-year degree currently require a postsecondary credential. But nearly 50% of these jobs (the green sections) require up to one year of on-the-job training, some college credit, or a postsecondary credential. This suggests there may be additional opportunities to work with employers to create industry-recognized postsecondary credentials.

For example, few public training programs focus on sales. Yet, just four sales-related positions alone account for almost 20 percent of all gainful employment opportunities for those without a Bachelor’s degree. In addition to being a lucrative and transferable skillset, college coursework already exists to advance along the career path.

In practice, some employers may require college degrees or education for these jobs. This is worth conversations to understand whether these qualifications are actually correlated with job performance. New services like Knack(r) could help identify the key characteristics associated with top employees.

Collaboration to Minimize Wage Stagnation

The healthcare and skilled trades industries account for the second and third most gainful employment opportunities. These positions are also among the most lucrative - 9 out the 10 most lucrative entry-level positions are in these industries. However, only 1 of these 9 positions has more than 100 annual job openings. In fact, the median openings for healthcare positions is 50, while the median openings for qualifying skilled trade positions is 70.

TABLE: Median openings, pay, industry

In the absence of a living wage floor, the workforce system must consider its broader impact on the labor market. For example, there are only 360 annual openings for Medical Assistants in NYC, which pay an average entry-level wage of $XX. Yet nearly 30 different publicly-supported workforce programs collectively offer more training slots than there are openings.  

As in any market, too much supply (too many workers trained in a field) contributes to price (wage) stagnation. It also sets workforce programs up as competitors. Workforce programs should instead collaborate to avoid oversupplying the labor market and indirectly disadvantaging students who don’t secure jobs as well as those that do. Collaboration can minimize public costs, while maximizing participant outcomes and wages. 

*** This analysis is based on data from NY State. 

Executive Assistant

Supervisors

Managers

Long-term OJT

RNs may require BA/BS

Sales jobs in practice may require BA

Data is not complete - Based BLS classifications of these jobs which may not reflect actual requirements in NYC. For example, sales jobs in NYC often require a BA, though it is arguable that this is less related to the tangible skills required for the job than the HR practices. Becoming a NYC policy officer requires a minimum of 60 college credits or two years of military service.