Click here to read the report: Meet the out-of-work
The monthly jobs report, released by the U.S. Bureau of Labor Statistics (BLS) on the first Friday of every month, is a staple among economy-watchers. And beyond the audience of economic and employment wonks, the jobs report is frequently announced to the public as breaking news (particularly during election cycles) and perceived as a gauge of the economy’s health and the current administration’s policies. The data it provides on topics like labor force participation, unemployment, job growth, and earnings are central to understanding economic trends. But national and top-line data will only take you so far in understanding the vast and diverse American economy. And what isn’t necessarily depicted in each month’s report and ensuing media coverage is the fact that not all places and people fare equally well.
Most people experience the labor market locally, through their own experiences and those of their family, friends, and peers. Even in an era of low national unemployment, with recent jobs reports showing the national unemployment rate ticking down close to 4 percent, jobs are not always available and not everyone who wants work can find it. Both job availability and demographics vary markedly around the country, yielding diverse local populations wanting and/or needing work. And it is local officials in the public, private, and social sectors who are on the front lines of connecting job seekers to employment opportunities. With that in mind, my colleague Natalie Holmes and I delved into the data for a diverse group of 130 large cities and counties across the country to get a better understanding of the people on the sidelines of the labor market.
Borrowing the logic of market segmentation, we used cluster analysis to sort out-of-work individuals at the local level into groups most likely to benefit from similar kinds of employment-related assistance, based on their likeness to each other across characteristics such as educational attainment, age, work history, disability, English language proficiency, and family status. Focusing on out-of-work adults ages 25-64, we created seven groups:
- Young, less-educated, and diverse (11 percent)
- Less-educated prime age (38 percent)
- Diverse, less educated, and eyeing retirement (6 percent)
- Motivated and moderately educated younger people (14 percent)
- Moderately educated older people (12 percent)
- Highly educated and engaged younger people (9 percent)
- Highly educated, high-income older people (11 percent)
A clear takeaway is that the out-of-work population shows considerable variation within and across places, and there is no one-size-fits-all approach to help people prepare for and find jobs. The question of what works best in workforce development is more usefully conceptualized as “What works best for whom?” Not all people want or need the same kinds of assistance, and there are multiple evidence-based strategies local leaders can use to connect residents to work.
The largest group by far (38 percent) is the “less-educated prime age” group, consisting of people with a high school diploma or less. They are mostly in their prime working years of 25 to 54, with a median age of 45. The plurality is Latino (43 percent) and one-third of this group are caring for a child under 18. The next largest group (14 percent) is motivated, moderately-educated, and younger, made up of people with at least a high school diploma and either an associate degree or some post-secondary education/training but no degree. They are also nearly all in their prime working years, with a median age of 33. The plurality is white (41 percent), with blacks and Latinos together accounting for another 50 percent in roughly equal shares. Nearly 40 percent are caring for a child under 18. Compared to other groups among the out-of-work, they are more likely to have worked in the previous year and to be in school.
The relative sizes of the seven groups vary considerably across places, but a few broad trends emerge. Cities are more likely than counties to have high concentrations of both less-educated and highly educated out-of-work individuals; places with higher unemployment rates are more likely to have larger shares of the less-educated prime age group; and places with higher levels of population growth since 2010 are more likely to have larger shares of the highly-educated younger group.
The analysis presented in our report puts faces to the numbers contained within the monthly jobs report, and provides context for how national economic trends play out locally. After all, it’s the mayors, county executives, employers, community college presidents, community-based leaders, and other local stakeholders who have to execute the plans to get their constituents, students, and community members to work.