How to generate more good jobs for Americans? Conventionally, policy-makers and economists give great weight to two strategies -- education and economic development. Presumably, a better educated workforce will command higher pay. And economic development will generate more jobs, one hopes good jobs. But there are limits to what these two approaches can accomplish, given how they are practiced through flawed government policies in the face of new global conditions.
Education per se no longer guarantees good jobs. There is a glut of liberal arts graduates. Global trade has put tens of millions of American workers, however well-trained, into direct competition with low-paid Asian and other third-world workers. In many occupations, increased training makes sense only if we upgrade the character of the jobs. Otherwise, a nurse aide or day-care worker can study more about her craft, but still earn dismal wages. America in fact had a much more equal distribution of income half a century ago when only half of American adults had a high school diploma, and fewer than 10 percent attended college.
As for economic development, we do need a dramatic new effort to promote new domestic technologies that offer good jobs. But currently, the main federal economic-development policy is tax breaks, many of them economically wasteful and inefficient. And at the state and local level, a huge amount of money is spent in a zero-sum game to lure employers to locate or relocate, but not to stimulate genuinely new technologies and well-paid jobs.
A lot of local development activity -- building stadiums, financing casinos, attracting Wal-Marts -- produces few good jobs other than the initial construction jobs. The roughly $50 billion in public funds given away annually by cities and states to corporations in tax abatements and other subsidies often underwrites activity that would have taken place anyway. We do need to link economic development with a better trained and compensated workforce, but that will require a very different set of development policies.
In some cases the most efficient route to good jobs is simply to raise pay directly, with higher minimum wages and stronger unions. The federal minimum wage has not been raised since 1997. Nineteen states have set or will set higher minimum wages; and since Baltimore's living wage law passed in 1994, 25 cities -- including Boston, Chicago, Los Angeles, and San Francisco -- have enacted similar laws. As we shall see, much of America's “good-jobs” strategy today is states, localities, foundations, and nonprofits heroically, and inadequately, trying to make up for nonexistent or negative national policy.
Linking education and reward: the strange case of nursing
No job category better illustrates the complex relationship between education, job definition, and economic development better than nursing. With an average salary of $56,888, registered nursing should be an attractive occupation. But the United States had about 126,000 nursing vacancies last year. And the U.S. Bureau of Labor Statistics predicts that the shortfall could go as high as 800,000 by 2020. Meanwhile, 500,000 RNs have left the profession and are working in other jobs. Why are these seemingly good jobs going unfilled?
There are two sides to the problem -- more nurses are leaving the profession and fewer people are entering because of training bottlenecks. Both reflect massive failures of national policy. And instead of making it possible for more Americans to take these good jobs, policy is luring immigrant nurses from poor countries.
The main reason so many nurses have left the profession is deteriorating working conditions. Cost cutting and managed care have resulted in stagnant wages, short staffing, decline in mentoring of new nurses, higher patient loads, mandatory overtime, and use of “floating” nurses who aren't familiar with cases or protocols and may not specialize in the area in which they are placed. As Gordon Lafer points out in Labor Studies Journal, “The health care industry has created its own Catch-22: as working conditions worsen, more nurses opt out of the profession, creating shortages on hospital floors and resulting in even greater speedups, stress, safety worries, and similar conditions that drive additional nurses out of the industry.” So, improving the work environment could go a long way toward bringing back nurses who left the field and retaining those still there.
Nursing also suffers from a training bottleneck. In 2005, fully 150,000 qualified applicants were turned down at U.S. schools of nursing (both associate and baccalaureate degrees) due to insufficient faculty and classroom or lab space, or lack of clinical sites. The problem is mainly low pay for teachers of nursing, combined with the fact that nurse-training programs are often money losers for community colleges and universities, so too few slots are offered. Few nurses are attracted to teaching because the pay is much lower than that of practicing nurses. Master's level faculty average $55,712 annually -- about the same as an associate degree RN in clinical practice and substantially less than a nurse-practitioner with a master's degree who makes $72,480 a year.
But instead of investing in addressing these problems to make this profession more available to Americans, we are importing immigrant nurses from the Philippines, India, Nigeria, and elsewhere. Although there are no government statistics on the number of immigrant nurses working in the United States, in 2005 about 23,000 foreign-educated nurses took the nursing licensure exam. While investing token amounts for educating U.S. nurses, the Bush administration and the hospital lobby are promoting the Brownback Amendment, which would remove all caps on hiring foreign nurses. And the administration added 50,000 new green cards for immigrant nurses. Rather than investing in it, the policy response has been to outsource nursing education.
Ultimately, the solution to the nursing shortage requires federal regulation of working conditions and federal subsidy of nurse training. While every nurse union and professional organization supports legislation to set nurse-patient staffing ratios and eliminate mandatory overtime, opposition by the American Hospital Association and the Republican Congress have blocked its enactment.
Meanwhile, federal programs to increase the supply of U.S.-trained nurses are feeble and underfunded. The Nurse Education Loan Repayment Program repays 60 percent to 85 percent of student loans for nurses who agree to practice two years in a facility experiencing a critical staff shortage. The Nursing Scholarship Program provides scholarships and stipends to students in exchange for the same two-year commitment. In fiscal year 2005, the programs provided just 599 loans and 210 scholarships for the whole country. The government rejected 82 percent of the applicants for loan repayment and 94 percent for scholarships due to insufficient funding.
A number of states are trying to fill this vacuum in national policy. Several, including California, now regulate patient-nurse ratios. New York funds community colleges, hospitals, unions, and other partners to help workers in lower-level health occupations to advance into RN and other health-care professions. Washington state is providing $140,000 to two community colleges to raise nursing faculty salaries by $10,000 for fiscal year 2007. Several local and state initiatives are attempting to attract students in inner-city middle and high schools to increase minority presence in the occupation and provide good jobs in urban neighborhoods near hospitals.
Oregon is trying to maximize resources through a comprehensive planning initiative. The Oregon Nursing Leadership Council, a consortium of state nursing and credentialing organizations, community colleges, and university deans, developed a statewide strategic plan for addressing all aspects of the problem. This initiative has increased the state's nursing graduation rate by 11 percent per year since 2001 by having nursing schools share some clinical facilities and maximizing use of faculty by developing a shared curriculum and simulation education. The Oregon Council for Nursing also created a software program to coordinate clinical placements regionally. Typically hospitals have affiliations with schools with an agreed upon number of clinical placements. Sometimes scheduling is such that a school can't fill its allotted slots, so they go unused. Now, all hospitals and schools in the Portland region pool their unused slots so that none are wasted. Potential students, particularly minorities at the high school level, are being recruited into nursing through several creative programs. Hospitals are offering scholarships to nursing students who agree to work at the hospital for at least three years after graduation. Several universities are developing new graduate nursing programs and there is a statewide partnership between eight community colleges and the public university to create a shared, competency-based curriculum. Once in place schools will have the same prerequisites, with one application and dual enrollment so students and their financial aid can move between programs.
A related Oregon leadership initiative is attempting to change the workplace culture to give nurses more of a voice. The effort focuses on nurses exerting leadership and assuming the responsibility to practice to the full scope of their professional authority. These efforts will require changes in management practices, in doctor-nurse relations and among staff nurses. This foundation-funded initiative demonstrates that improving the work culture and coordinating state resources and strategies can reduce quit rates and attract new people to the profession, yet the problem of nurse overwork and underfunded nurse training cries out for national policy.
To drill down into this rich subject is to appreciate that the challenge goes far beyond merely educating more nurses. It has to do with how nurses are treated on the job, what career progressions exist, the pay structure for nurses and nurse educators, as well as the role of immigration policy.
The health professions not only connect education to job definition, compensation, and career structure; they also raise the role of economic development. In many cities, hospitals and other health-care facilities are among the largest employers. Remarkably, Business Week recently reported that literally all of the net job growth in recent years has been in the health occupations. Public policy -- or its absence -- has a great deal to do with how these jobs are defined and structured, and whether scarce health dollars are spent rationally, or wastefully.
Human services: turning bad jobs into better ones
Below the profession of registered nurse are literally millions of semi-skilled and routine human-service occupations in health care and in the care of children. They include everything from certified nurse assistants (CNAs) to lab technicians in health care as well as child-care worker to teacher in child care. The education requirements of these occupations range from short-term training to associate degrees, and in some cases, bachelor's degrees. In the case of CNAs and child-care workers, where much of the cost of providing services is ultimately reimbursed by government, it is public policy that consigns these caring positions to the category of high-turnover, low-wage work.
But we could decide, as national policy, to professionalize home care and child care, which would be better for both workers and the people they serve. The initial cost might be more, however, studies demonstrate that most, if not all, of the cost could be recouped in lower turnover, and higher-quality patient care.
Here, unions often lead the way. Unionization campaigns in California, Illinois, and Iowa have increased the pay and benefits of home-care workers dramatically, although they have a ways to go. In each case, protracted campaigns won the right to collectively bargain and resulted in pay raises, benefits, and in some cases, a change in workers' status from independent contractor to either regular employee or part of a recognized bargaining unit. In order for the funds to be there to upgrade earnings, these agreements also use political leverage to commit government to pay higher wages.
In Illinois, a 1984 campaign led by the Chicago Homecare Organizing Project (CHOP) initially unionized 250 home-care workers under SEIU Local 880. The union now represents more than 80,000 members (including more than 50,000 home child-care providers). Since then, Local 880 has fought for periodic wage increases for home care workers and home child-care providers. The collective bargaining agreement covering more than 21,000 personal assistants working through Illinois' Office of Rehabilitation Services/Department of Human Services will raise the hourly wage to $9.35 by August 2007 (a 34 percent increase from the $7 rate before unionization). Chicago private home-care agencies reimbursed by the city government receive an average of $2 more per hour than their state-funded counterparts, thanks to the success of Local 880, ACORN, and the Chicago Jobs and Living Wage Campaign in passing a living wage ordinance. These workers receive $9.63 an hour for clients they serve through the city contracts and get annual cost-of-living increases.
In 1997, an SEIU campaign in California also started with changing workers from independent contractors to county employees eligible for union representation. Since then, newly unionized workers have gone from the minimum wage to as much as $11.50 an hour, averaging $8.35. The political power of this movement was sufficient to rally bipartisan opposition in 2005 when Governor Arnold Schwarzenegger proposed cutting wages back to the minimum wage to balance the budget.
Most recently, in July 2005, Iowa Governor Tom Vilsack signed an executive order allowing home-care workers to organize. AFSCME led that campaign. Hourly wages for Iowa's home care workers now average $9.98, but some earn as much as $12.70 and contract negotiations are under way. These state efforts are encouraging as far as they go -- they offer an employment model as well as a growing political coalition. But what's needed is a national commitment to turn human-service work serving children, shut-ins, and the elderly into paraprofessional or professional careers that pay good wages and offer career advancement.
Tens of millions of other service jobs pay inadequate wages, but could likewise offer middle-class earnings. Two emblematic successes are the campaign by the Hotel and Restaurant Employees International Union (HERE) to turn hotel jobs such as room cleaner into living-wage positions with career opportunities, and the Justice for Janitors campaign by the Service Employees International Union. In Las Vegas, where HERE made a showcase for its strategy, 48,000 unionized workers represent 90 percent of the city's hotel jobs. Today, their median wage is 40 percent higher than in nonunion Reno. And they have family health insurance, vacation, and defined-benefit pensions. The high growth rate of the Las Vegas economy reveals that higher wages and strong unions are not a damper on economic growth. [See Harold Meyerson, “Las Vegas as a Workers' Paradise.”] The SEIU has unionized 250,000 janitors in at least 29 metropolitan areas, with unionized janitors representing the majority of office building janitors in 21 cities. The campaign has transformed these jobs from poverty wages to up to $17 per hour, some with benefits.
These campaigns challenge the established belief that service-sector jobs are inherently low paying. There is no reason for semi-skilled service sector jobs to pay significantly less than manufacturing did in its heyday for semi-skilled industrial workers. These unions have begun to do just what the industrial unions accomplished starting in the 1930s -- turn bad jobs into middle-class ones. Today, of course, this project is much more difficult. In the 1930s and 1940s, government was benignly neutral toward unions; and after World War II, most large employers reluctantly concluded that they had to live with unions. In 2006, the federal government and nearly all employers are actively hostile to unions. Creative organizing at the state and local level can still make some inroads, however, national policy restoring the neutral role of government would make an enormous difference.
Fostering new industries that provide good jobs
In September 2004, Gamesa, the second largest wind energy company in the world, announced that it would build a $40 million plant in Ebensburg, Pennsylvania, to produce lightweight blades for commercial-scale wind turbine generators. The plant is now up and running and Gamesa is building three other facilities and 18 wind farms in Pennsylvania that ultimately will create 1,000 manufacturing jobs over five years. The company is also locating its U.S. headquarters and a marketing office in Philadelphia. By the time Gamesa establishes a 200-person business for training engineers in these operations, the company's total investment will be $84 million.
Pennsylvania wasn't just lucky. Gamesa and other new facilities have located there because Governor Ed Rendell's administration is linking energy efficiency to economic development and good jobs. Kathleen McGinty, environmental protection secretary, explains, “What makes us different from other states promoting clean energy and efficiency is that for us it is a means to revitalize manufacturing and be an engine of job creation rather than being first and foremost an environmental strategy. We only put state dollars in energy investments that create jobs.”
One of Rendell's first initiatives after taking office in January 2003 was to establish the Pennsylvania Energy Harvest to allocate about $5 million a year in grants to companies to encourage investment in renewable energy sources, energy-saving production processes, and alternative energy production. The success of the program -- $15.9 million leveraging $43.7 million in private investment -- enabled the governor to persuade the Legislature to do something bigger. At Rendell's request, the Legislature reactivated a defunct state agency and energy program, the Pennsylvania Energy Development Authority (PEDA), to invest even more in the jobs-energy strategy.
PEDA can now float up to $1 billion in tax-free bonds to finance construction of energy projects and provides grants and loans to support public-private ventures. In two years, PEDA has awarded $15 million in grants and loans for 41 clean energy projects expected to leverage $220 million in private investment and 1,558 permanent and construction jobs. PEDA will begin issuing bonds for large-scale clean power projects in 2007.
For example, one such grant, for $1.3 million, went to Plextronics, a cutting-edge solar technology company spun off by Carnegie Mellon University. The grant will subsidize continued development of an organic conductive polymer technology. This will replace the more costly silicon wafers that make solar electricity prohibitively expensive. Plextronics already has added 12 jobs to its base of 19 and leased space for a facility to produce the product, Plexcore, which could employ as many as 327 full-time workers within the next five years.
Attracting energy companies requires policy changes as well as investment. Gamesa didn't demand the typical package of tax subsidies. Rather, it asked the state to create a market by becoming a major purchaser of alternative energy. The state legislature passed an advanced energy portfolio standard that requires that 18 percent of the state's electricity come from renewable sources by 2020. Already the largest producer of wind energy east of the Mississippi River, the Gamesa plant positioned the state as the largest producer of wind turbines as well.
Pennsylvania's energy portfolio standard also requires 10 percent of electricity to be generated from waste coal and byproducts from pulping and wood manufacturing. This will help eliminate mine-scarred landscapes and the acid mine drainage and other pollution associated with waste coal. PEDA provided $400 million in bond financing toward a 272-megawatt waste coal electric generation facility developed by Robinson Power Co. LLC in Washington County, southwest of Pittsburgh. The facility is scheduled to begin construction in October. It will create 350 permanent unionized jobs and eliminate 60 million tons of waste coal in 25 years. It will produce more than twice the electric power -- with lower air emissions -- than the plant it is replacing.
The portfolio standard will also increase capacity in solar energy. By 2021 utilities will be required to purchase 700 megawatts of solar-produced electricity, the second largest solar requirement in the nation. Since 2003, the commonwealth has helped to fund over half of the solar photovoltaic installations in Pennsylvania -- about 505 kilowatts. The nearly $3 million in state funding was matched by more than $10 million from other sources. To encourage continued technological innovation Pennsylvania has invested more than $2 million in solar research, including $500,000 in direct funding to Pennsylvania's only solar manufacturer, Solar Power Industries, to enhance its manufacturing capabilities. Talks are under way with a leading German solar energy company about locating a facility in the state. If successful, the commonwealth will gain still more manufacturing jobs and millions in state-of-the-art equipment.
Pennsylvania can attract these high-tech facilities because manufacturing has not been written off. Tom Croft is executive director of the Steel Valley Authority, an economic development agency focused on manufacturing. He explains that building next-generation manufacturing required the commonwealth to fully reassess which of its manufacturers could be suppliers to, and customers for, these new technologies. After an unprecedented accord between labor, business, and community stakeholders, Pennsylvania gave new priorities to retaining and modernizing manufacturing, providing new capital and pension fund investments in the field, investing in incumbent workers, and even addressing the unfair trade crisis. Without a manufacturing infrastructure and skilled workers, we can't build the industries of the future.
Can these policies go national?
As these examples show, states can be both laboratories for creative good-jobs policies and incubators of political coalitions on their behalf. For the moment, a national good-jobs policy is precluded by the Bush administration and the Republican Congress. In the meantime, the Apollo Alliance, a coalition of labor unions, environmentalists, and some business leaders is attempting to push the green jobs agenda forward on the national level.
The Alliance was created after September 11 to promote a national commitment of the magnitude of the Apollo space mission to move the nation toward energy independence and in the process create good jobs in manufacturing and other sectors. The Alliance proposes a $300 billion national investment over 10 years, which would add more than 3.3 million jobs to the economy and stimulate $1.4 trillion in new gdp, with the cost being repaid through increased federal tax revenues and earnings.
Pending a more congenial national administration, organizers focused on giving visibility to the notion that clean energy creates good jobs and building a base of state and local coalitions supporting the agenda. These state and local groups have achieved clean energy and green projects and policies, although Apollo may never come up as a player. In Pennsylvania, Apollo represented the United Steelworkers on the Governor's Energy Task Force and were critical in gaining United Mine Workers support for the energy portfolio standard. In Washington state, Apollo helped get the machinists union, which represents woodcutters in the lumber industry, to back the state's green building standard.
All of this is prologue to what needs to be a massive shift in national policy, to put good jobs in both manufacturing and services at the heart of America's economic agenda.
Joan Fitzgerald, author of Moving Up in the New Economy, directs the graduate program on law policy and society at Northeastern University.