By Dave Oberting
The unemployment rate in Greece is 26%. The unemployment rate in Spain is 24%. For youths under 25, it’s as high as 50%. Both countries face near daily demonstrations, general strikes, and riots. The governments of both countries have collapsed and new elections have had to be called. More than once. In the District of Columbia, the unemployment rate in Ward 8 is 22%, in Ward 7 it’s 15%, and in Ward 5 it’s 12%, and yet sometimes you can hear crickets chirping. If the unemployment rate in our Capitol Hill neighborhood was 22%, there’d be demonstrations every day.
Unemployment rates as high as these are the only near-existential threat the District faces. President Obama recently spoke of how inequality is fraying the fabric of society. Ironically, one of the worst examples of this inequality phenomenon can be found less than two miles east of the White House. As is evidenced in Greece and Spain, these types of unemployment rates threaten social stability. There is not only a moral imperative, but an economic one to at minimum cut these rates in half within the next five to seven years. The question is how.
The foremost mechanism available for lowering the unemployment rate in all parts of the city, but specifically in these wards, is to help our economy grow faster so that it is creating more jobs at all skill levels more quickly. The total number of jobs in the civilian labor force in DC — 369,900 in July, 2013 — is up 7,100 jobs from May of 2012, but has declined from 372,200 in May of this year. Some of these losses stem from public sector jobs lost to sequestration, but the private sector labor force must grow faster in order to make a serious dent in these rates. To get the jobs engine back on track, we have to increase the rate of growth of the District’s economy. Over the last decade, our economy has grown at an inflation-adjusted average rate of 2.18% annually. Yes, it has produced some budget surpluses, but those surpluses are temporary, and that rate of growth is not high enough to produce the new jobs we need in sufficient numbers.
We can make the economy grow faster by making it easier to do business in the District and by lowering the cost of doing business here. A more competitive tax and regulatory regime are the best ways to accomplish these goals. Mayor Gray and the Council have taken two huge steps in this direction by forming both a tax commission to suggest changes to our tax system, and a regulatory reform task force designed to get rid of or change overly burdensome regulations. Economic Growth DC is engaged with both entities and we look forward to helping make our economy more competitive.
The District’s extensive workforce development system is our next best vehicle for lowering the rates in these key wards. In 2011, the District spent approximately $110 million on 31 separate programs. There is a resource map below, but the text is very small. If you hit the link below you will see the full report from the DC Fiscal Policy Institute. The Workforce Investment Council has oversight over much of the workforce development system. The Council had fallen into disrepair under Mayor Fenty. Mayor Gray took another very important step in reconstituting the WIC and appointing Allison Gerber as its Executive Director. In just the last two years, the WIC has made important strides in improving a range of programs, but there is still much to be done, and it needs to be done faster.
There are a number of measures being explored for strengthening various job training programs and a number of ideas circulating that we support. Finding a strong president for the District’s fledgling community college should be a high priority. A great president could bring to the District a number of training programs that have proven effective in other parts of the country. The DC Jobs Council and its Executive Director, Marina Streznewski are hard at work fostering more effective training by our non-profit training providers. Her organization is worthy of your support. There are a number of other good ideas circulating among a small group of dedicated workforce development activists. Some will require substantial financial resources, but others can be implemented at a relatively low cost.
The unemployment rate east of the river is an emergency and should be viewed as such. We encourage our readers to take this situation seriously and to get involved. If you believe that income inequality is a fundamental threat to the long term interests of the country, there is much to do right in your backyard. The Council is constantly looking for solutions to these challenges. Chairman Mendelson is committed to this issue and knows what’s at stake. Much of the actual day-to-day job training in the District is conducted by a group of 40-50 lightly funded non-profit job training providers. Most of them struggle with funding. We urge concerned citizens to find a good non-profit job training organization and support them financially or volunteer. The DC Jobs Council can help you identify a good provider. Their website address is below:
Dave Oberting is the Executive Director of Economic Growth DC. Follow him on Twitter @GrowthDC.