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Good piece by @rodrikdani on creating more good jobs. Key points: need to work on both labor supply side & demand side; services beat subsidies, in particular need to do sectoral training & services to improve business inputs; these services need to be coordinated at local level. https://twitter.com/rodrikdani/status/1336676829223145480
I participated in a seminar chaired by @rodrikdani on good jobs by @InequalityHKS . I think video will be posted soon. Here is a link to my 7-minute speech draft (pdf listed under additional files) and the powerpoints (the download button): https://research.upjohn.org/presentations/76/
My basic point: we can do a lot to address lack of good jobs with programs that target the most distressed local labor markets, comprising 30% of U.S. population, and most distressed neighborhoods, comprising about 10% of U.S. population.
The most distressed local labor markets are shown in this map. As can be seen, this includes distressed cities such as Detroit, Flint, many inland metros in California such as Fresno, upstate NY. But also most of rural south and southwest and Appalachia. Politically red & blue
On local labor market level, although we can do tax incentives, it is more cost-effective to increase labor demand/induce job creation via services that enhance business inputs, such as: customized job training; business advice programs such as manufacturing extension;
infrastructure; land development programs such as brownfield redevelopment. This chart compares present value costs per job created of incentives versus these services:
But we also need to link folks in distressed neighborhood with jobs. This can be done by locating workforce development programs in these neighborhoods at trusted nbhd institutions (churches), by having "success coaches" to help nbhd residents retain jobs, &
by supporting nbhd residents with childcare services and help with transportation (mass transit, help in getting loans to buy reliable used cars or get cars repaired).
For more on neighborhood employment hubs & succcess coaches for job retention, see the First Annual Report of the @UpjohnInstitute place-based research initiative, which I co-chair w/ @mmilleradams & @BHershbein : https://www.upjohn.org/research-highlights/upjohn-institute-report-offers-ideas-help-communities-build-broadly-shared-prosperity
A good recent theory/conceputa analysis of why labor market policies must get very involved with employers is provided by @aaronsojourner & @snaidunl in @rooseveltinst piece. https://rooseveltinstitute.org/publications/employer-power-employee-skills-workforce-training-programs-labor-market-power/
What would it cost to address good job availability at local labor market level and neighborhood level? In a recent policy paper, I outline a program to do so at an annual cost of about $19 billion, done annually for 10 years. https://research.upjohn.org/up_policypapers/24/
This broadens a policy proposal that I made in September @BrookingsMetro . (My thanks to @MarkMuro1 & @amy_liuw for feedback). My policy paper broadens this proposal by adding additional local labor markets but still directing more $ to most distressed. https://www.brookings.edu/research/helping-americas-distressed-communities-recover-from-the-covid-19-recession-and-achieve-long-term-prosperity/
My broader proposal based on conversations with Congressional staff to address additional needs in moderately distressed local labor markets, as well as in distressed neighborhoods, whose residents face job challenges even if local area is booming. https://research.upjohn.org/up_policypapers/24/
The broader program has historical precedents. The most distressed areas receive per capita aid similar to Tennessee Valley Authority. The moderately distressed areas get aid similar to Appalachian Regional Commission. Nbhd aid levels similar to Empowerment Zones.
As @rodrikdani points out, Biden has promised to address good jobs via higher min wage & promoting unionization, and also through tax incentives. But altho these all can work, a federal program to spur good job creation & access in distressed local areas & nbhds would help.
