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New report on Boston’s labor market brings issues of income inequality and wage disparity among local workers into focus

Mar 15, 2016

Underscores pressing need for education and job training resources for residents
A new labor report, commissioned by Mayor Martin J. Walsh's recently restructured Office of Workforce Development (OWD), shows that many Boston families continue to struggle, despite an economic boom that has seen unemployment rates drop to 4.3 percent.
The OWD partnered with the Boston Redevelopment Authority’s (BRA) Research Division to produce the report, “Boston's Workforce: An Assessment of Labor Market Outcomes and Opportunities,” in order to determine the extent of economic need in the city and to identify the most promising methods for increasing access to living wages.

Their findings show that a quarter of the city's fully employed workers and just under half of all labor force participants earn less than $35,000 a year. The median wage of Boston residents, $35,273, has remained the same, in real terms, for nearly three decades.
“As mayor, I have made confronting income inequality a cornerstone of my citywide economic agenda," said Mayor Martin J. Walsh. "A first step to effecting meaningful change is to collect good data. This report gives us an early roadmap for expanding access to the city's prosperity.”

The OWD, a department that is supported by the BRA and aims to broaden economic opportunities for residents, funds workforce development programs throughout the city.
“These findings underscore the imperative of our mission,” said Trinh Nguyen, Director of the OWD. “We must work to create viable career pathways between disadvantaged workers and living-wage jobs.”
The report, released today, comes on the heels of a recent Brookings Institution study that named Boston the most income-unequal major American city. Indeed, the BRA-authored report finds that although roughly 10,000 jobs a year have been created since 2010, many of these jobs have been added to low-paying industry sectors that rely heavily on part-time labor. The increase in the city's part-time jobs, prompted by the 2008 recession, has not subsided with economic recovery.
Reflecting national trends, Boston's low-income jobs fall disproportionately to people of color, immigrants, and non-native English speakers. The city’s average Hispanic worker, for example, earns less than half as much as the city’s average Non-Hispanic White worker. BRA researchers also discovered income disparities between Boston's resident and non-resident workers. After controlling for demographic differences between the two groups, they found that those who commute into the city for work make 8 percent more than Boston residents working in the city.
Although education has long been recognized as a key predictor of income, the report found it is an especially powerful force in Boston, where higher paying jobs tend to be in the knowledge economy. For example, over three-quarters of the city's nursing jobs require only an associate's degree, and yet, 80 percent of Boston's nurses possess a bachelor's degree, suggesting that college degree-holders are competing for jobs traditionally available to those with less education.   

The report predicts the importance of education will only grow. By 2022, 41 percent of Boston jobs are expected to require a bachelor's degree (compared to 27 percent nationally), and 36 percent will be available to those with a high school degree or less (compared to 50 percent nationally).
For those without college degrees, the report predicts that Boston’s growing construction, healthcare and social assistance sectors will offer greater opportunities for job entry, advancement, and wage growth.
“The emerging picture of the city’s labor market helps us concentrate our job training and placement efforts in Boston's most promising fields," Nguyen said. "Fortunately, we've started paving those career paths through programs like the Greater Boston Apprenticeship Initiative, which uses an earn-and-learn model to prepare low-income residents for the booming construction, hotel, and hospitality industries. We must also continue to connect literacy, high school equivalency, and adult basic education programs to workforce ones to create powerful engines of economic mobility.”
The report is a component of a three-phase process to maximize the efficiency of the city's workforce development programs. Job training consultants recently inventoried all such programs as part of the effort. In the final phase, they will organize facilitated discussions across the workforce development ecosystem to identify gaps in service. As early as Summer 2016, they will issue recommendations for best aligning program efforts with the needs highlighted in the report.
Operation Exit, a recent initiative managed by the OWD's Youth Options Unlimited Boston program and the Mayor's Office of Public Safety Initiatives, is just one example of a promising approach to greater economic inclusion. The initiative, which prepares high-risk and court-involved youth for construction and other trade union apprenticeships, has placed 87 percent of its graduates – all formerly under- or un-employed members of low-income households – into jobs and apprenticeships paying at least $18 per hour, well above the city's living wage.
Another recipient of OWD funding is YouthBuild Boston, a program that trains low-income youth for careers in the trades. Funded through the Neighborhood Jobs Trust, which is managed by the OWD, YouthBuild Boston has helped this year's participants increase their annual income from an average of $3,000 to nearly $35,000 with benefits.

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