The Los Angeles Coalition for the Economy & Jobs – Weekly Report – April 9, 2018

Each month, LinkedIn releases a monthly workforce report on employment trends in the U.S. workforce.  As part of that report, LinkedIn analyzes information from over 146 million profiles, over 20,000 companies, and more than 3 million jobs  to calculate which U.S. cities have the largest gap between the skills employers need and the skills people have.  Los Angeles ranks as #5 on that list.  
What is most troubling about the city’s rank is that the skill gaps reported tend to be in higher wage, higher skill occupations, such as in IT and Healthcare.  That is in addition to long running reported skill gaps in middle skill occupations, e.g. in industries such as construction and advanced manufacturing and in occupations such as auto mechanics, plumbers, and electricians.  With a population of almost 44 percent working age residents that have no more than a high school degree or less, there is no shortage of potential candidates that could be up-skilled for these living wage jobs that close the talent gaps employers need to grow.
However, a critical barrier for talent to up-skill is the financial cost of doing so.  That financial cost is substantially higher in our region because of the cost of housing, which has climbed significantly in recent years.  To put that cost into perspective, Oliver Wyman shared in a recent report that young professionals 18-34 making the region’s median income must spend 60 percent of gross income to afford a median priced 1-bedroom apartment, which is double of what is typically viewed as affordable.  As scholarships and grants rarely cover the full cost of attendance in Career and Technical Education programs that lead to high demand middle skill occupations, prospective students may be dissuaded to take out additional loans that will be difficult to pay back while covering the cost of housing.  Furthermore, students enrolling in Career and Technical Education often have limited means to cover these additional expenses out of pocket.  Half of the Los Angeles Community College District’s students fall below the poverty line and over two-thirds report not being able to afford to eat properly.
In short, our region can’t close the skill gaps in desirable positions without addressing the financial barrier individuals face when up-skilling.  The common way to address this issue in government and philanthropy has been to advocate for free tuition for all students.  The Coalition’s Books and Tools pilot last fall addressed another financial barrier that often goes under the radar: the cost of books and tools, which can far eclipse the cost of community college tuition, especially for positions in the skilled trades.  The pilot was just a start that we are committed to scaling this year to touch more students and more middle skill jobs that are hard to fill.
In addition to peeling back a financial barrier, the Books and Tools scholarship serves as a signal to students of which skills are in high demand by employers.  When we partnered with LACI to support interns training for positions in construction and transportation, we found that many prospective recruits were unaware of the positions available within these industries.  While employers and educational institutions certainly have more work to do to help students understand the needs of the local labor market, scholarships designed specifically to support pathways leading to careers in demand serve as a guidepost.  It’s a tool that helps educational institutions not just graduate more students, but students that are specifically prepared for regional employment opportunities.
Looking even deeper down the talent development pipeline, exposure to Career and Technical Education should be expanded in high school and even as early middle school.  Penny Pritzker, a former Secretary of Commerce, noted in an interview with CNBC that states like Delaware, Rhode Island, South Carolina, and Colorado have successfully filled middle skill gaps by making it easier for grade school and high school students to get technical training while it’s free in public school.  It also help young students learn about what their options are early, before they graduate high school and find themselves in a position where they must decide which career to pursue.  Currently, Career and Technical Education is offered in secondary schools in California, but school districts are not required to provide it, leaving many students with limited exposure to their options.