S. E. Williams
For years the Inland Empire economist, Dr. John Husing, has raised awareness about the intimate relationship between the region’s need to develop and/or attract a more educated workforce and the local economy.
This focus is essential as it relates to the kinds of businesses the region is able to attract. The level of education achieved by local residents has a compelling impact on the region’s ability to expand economically while also improving the quality of life.
Husing is a research economist who, for more than fifty years, has specialized in the study of Southern California’s economy. His informed understanding of the inland region, coupled with focused economic analysis and ongoing discussions with business executives and entrepreneurs, has helped shape specific economic development strategies for the area.
Recently, the nonprofit Brookings Institute released a report that confirmed statistically what Husing has long stressed regarding the relationship between higher education and economic growth. According to the report, “Over the last decade, the share of the U.S. labor force comprised of people without high school diplomas fell from 9.3 percent to 7.3 percent, the share with no more than a high school degree fell from 28.9 percent to 25.7 percent, and the share with some college training but no B.A., fell from 28.2 percent to 27.1 percent.”
In an interview with The Voice, Husing commented on the report’s revelations. “It supports what we have known intuitively, the nature of work is changing to the disadvantage of the marginally educated,” he stated. “For our region, this is a disadvantage given that those with a high school or less education constitute 46 percent of our adult population.”
America has experienced large-scale changes in its job market in the last decade, and by now the importance of college degrees in finding employment is widely understood. However, it may be surprising that, based on Bureau of Labor Statistics (BLS), “Americans with college degrees can account for all of the net new jobs created [in America] over the last decade.” Perhaps most shocking is the stark and devastating impact this change has had on workers with high school diplomas or less.
In this ninth year of the nation’s economic expansion, the number of those with high school degrees or less who are employed has fallen by nearly three million workers. The agency’s December 2017 household employment survey further dramatized this reality. According to the report, “the number of college graduates with jobs jumped by 305,000—while the numbers of employed Americans with no high school degree fell by 132,000.” In addition, the December report showed the number of high school graduates with jobs dropped by 38,000, and employees with some college but no degree also declined, by 45,000 jobs.
This reality has remained the focus of Husing’s analysis of the region’s economic potential. It is now abundantly clear his cautions were also a reflection of what is happening throughout the current business cycle and across the nation’s economy.
The report compared and contrasted economic evolution between January 2008 and December 2017. During the first five years (January 2008 to January 2013), the nation experienced the Great Recession, followed by a modest recovery. Since then, both locally and nationally, the economy has enjoyed steady economic expansion.
During normal periods of transition from recession to recovery, economists expect substantial job losses followed by offsetting job gains, and that is basically what happened during this cycle—by 2013, the number of those employed had recovered to a level on par with the rate of employment in January 2008. However, it was the composition of the employees who found work during the recovery that raised a red flag.
In other words, those who lost their jobs compared to those who gained employment changed in significant ways. Between January 2008 and January 2013, millions of workers without college degrees who lost their jobs never regained them, “all of the job gains went to the one-third of the labor force (as of January 2008) with at least a B.A. degree.”
More succinctly, although total employment in January 2013, was just slightly less than in January 2008—the number of people employed without a high school diploma fell by 1.6 million, the number of high school graduates with jobs fell by more than 2.8 million, and the number of individuals with some college training but no B.A. fell by more than a quarter-million. During this same period, the number of college-educated with jobs increased by 4.3 million.
Since 2013, the economy has continued to expand, job growth has remained steady and, as a result, employment opportunities continued to expand. By December 2017, net job gains exceeded 10.6 million and although all educational levels experienced some benefit, those without college degrees were least advantaged.
The numbers tell the story. In January 2013, high school graduates comprised 27.3 percent of the labor force yet since that time, this segment has enjoyed barely 6.8 percent of all employment growth. In another example, those who attended college but did not earn a B.A. degree accounted for 27.9 percent of the labor force in January 2013, but to date this group only accounts for 15.3 percent of the subsequent net job gains.
During this same period, net employment gains among those without a high school diploma showed minimal degradation from 8.2 percent of the workforce in January 2013 to 7.0 percent of net new jobs since 2013.
This is discouraging news for an economically challenged community like the Inland Empire and further supports the counsel of Husing to bring focus to raising the level of education among the region’s residents.
As Husing pointed out in his 2017 Detailed Status of the Inland Empire Economy, among the key challenges faced by the area is 46 percent of the region’s adults aged 25 and older had a high school diploma or less in 2016, while the rest of Southern California averaged 39 percent in this regard. In addition, those in the region with AA degrees or higher totaled 29.2 percent which was far below the rest of Southern California, at 41 percent. “These facts,” Husing stressed, “limit the kinds of firms for which the area is competitive.”
Husing further noted that these realities, combined with the serious public health issues in the inland region, where 16.4 percent of all people and 23.5 percent of children under 18 lived in poverty in 2015, when compared to 14.5 percent and 20.0 percent respectively for the rest of Southern California, is a further disadvantage in regard to attracting the types of businesses to the region that could further elevate the area’s economic competitiveness.
Despite these stark realities, under Husing’s economic guidance, the region has continued to leverage sectors where it has some competitive advantages. They include Logistics, due to available land and the expansion of logistic centers; Health Care, inland area health care workers serve 27.5 percent more people than the state average; Construction, historically, the major driver of the area’s economy due to swaths of undeveloped land and the region’s need for single family homes, apartments, industrial facilities and infrastructure; and Manufacturing, although growth in this sector remains sub-par, it is estimated the sector will add jobs due to the growing need to replace aging baby boomer technicians.
This is not the Inland Empire’s only encouraging news in regard to job expansion and economic growth and development. According to Husing, for the first time, one of the Inland Empire’s high paying sectors is beginning to add to the area’s economic growth.
The inland region’s Professional, Management and Scientific sector is expanding. Husing credits the expansion to the area’s 93.0 percent gain in residents with bachelor’s degrees or higher between 2000-2016, as well as to the area’s increasing need for professional service providers as a result of its growing population and firms, and the re-emergence of the construction sector which has created the need for engineers and other such specialists.
As the Inland Empire continues to move forward in light of the current distribution of job opportunities and its impact on the labor force, the Brookings report further noted how these changes have serious social consequences. Such consequences must be considered in the equation as the downward spiral for those who fall into what might now be identified as the “under-educated” has not ended with their joblessness.
Research has found that nearly half of working age men who are no longer in the work force use pain-killers daily. Even more concerning, new research indicates “each percentage-point increase in unemployment is now accompanied by a 7.0 percent increase in hospitalizations for opioid overdoses and a 3.6 percent increase in opioid-related deaths.”
According to the Centers for Disease Control and Prevention, the rate of drug overdose deaths involving opioids tripled between 2000 and 2014. A new report by the National Bureau of Economic Research showed a decline in economic opportunities for some segments of the population that has led to a rise in what experts define as “deaths of despair,” which includes deaths related to drug use.
Analysis further showed some of the recent increase in drug deaths coincides with the Great Recession and its aftermath, “highlighting the importance of the connection between economic conditions and drug deaths.
Last October, Congressman Pete Aguilar announced a $517,554 grant to the inland region to fund treatment and prevention resources to combat opioid addiction. “The opioid crisis in our country has impacted millions of families, including many here in the Inland Empire,” he stated at the time. “I was relieved to see this funding come to our region, and I’m hopeful that it will result in prevention and treatment efforts that will help families overcome the devastation of addiction.”
At the same time, Nancy Young, President and CEO of the SAC Health System talked about the dire need for this funding in the inland region. “The opioid epidemic that is devastating our community—and our entire nation—is heartbreaking,” she stated. “We are so pleased to have been awarded this special, specific funding to provide the highest quality care to assist those struggling with this addiction.”
It is clear from the Brookings Institute report, nothing happens in isolation. Its assessment makes it clear the necessity to increase the education of the Inland Empire’s marginally educated and their children “is the single most important need for both the standard of living and quality of life for our region.”