II. Labor Demand
In addition to the size and characteristics of the labor pool within which mandated public housing residents will compete, their success replacing welfare income with income from employment will depend on the existence of sufficient entry-level jobs matching their skills. This section describes the local economies including indicators of their ability to provide such jobs. Among the indicators are unemployment rates, job growth rates, and the number of people seeking entry-level jobs compared to the number of jobs that might be available (see the Assumptions section for important assumptions concerning estimation of jobs). A special feature of the analysis is looking at job availability at the neighborhood level. Neighborhood analysis rests not only on the number of jobs estimated to exist but also on where they are located and their "accessibility" -- how long it would take to reach such jobs by whatever mode of transportation is available.
A. The Economies Of Richmond and Norfolk
In both Richmond and Norfolk, the services, retail and administrative sectors are viewed as potential sources of most of the new job opportunities for entry-level job seekers, public housing residents and others. But some of the largest developments on the horizon in the two cities are not likely to directly benefit public housing residents because the jobs they will generate require a level of education or training that many public housing residents do not have. In San Francisco, Columbus, Dallas and Richmond, unemployment rates are below four percent. Dallas and Los Angeles are predicted to lead in terms of job growth.
The economy in which RRHA residents will be competing for entry-level jobs is diverse. The City is the headquarters of eight Fortune 500 and an additional eight Fortune 1000 companies. It is also home to the Fifth District Federal Reserve Office, is the Capitol of the Commonwealth of Virginia, and is Virginia's leading manufacturing, distribution, finance and university center. But none of this may be of much direct benefit to mandated public housing residents since their education and skills may not qualify them to participate in any of these sectors of the economy. Nor are there clear opportunities associated with Richmond's recent entrance into the burgeoning semiconductor industry. Memory chips and microprocessors will be produced at the largest new facilities coming to the area, one involving Motorola and one a joint venture between Motorola and Siemens. These two are expected to employ about 6,500 people in jobs with an average salary of $35,000. But in general, TANF recipients are not viewed as qualified for these jobs which will require at least a high school diploma and, in many cases, more advanced education or specialized training. In some cases, employers may rise to the challenge and prepare some TANF recipients for higher-skilled jobs through a variety of training efforts.
However, there could be some indirect benefit since service industry growth usually accompanies major economic developments. This growth includes the hotels and motels and restaurants with jobs that do not require a high school diploma. Furthermore, in some cases welfare recipients may benefit when people who will be hired by Motorola and Siemens vacate lower-level jobs they currently hold. In fact, there may be a large number of people in this category. A recent advertisement for 150 job openings at Motorola/Siemens drew 15,000 applications, many from people who are already employed.
In any case, a fair number of vacated jobs can be expected in the retail sector, which presently has an annual turnover rate of between 200-300 percent.11 Public housing residents and other assistance recipients are viewed as potential candidates for these jobs.
The economy in Norfolk is not as diverse, has not grown as rapidly as that of Richmond and is particularly sensitive to fluctuations in defense spending. Therefore, it has been especially hurt by recent cutbacks in this sector. The City has also lost better paying and more secure civilian jobs including 1,800 civilian shipyard jobs. According to economic development specialists in the City, those jobs which have been created in recent years offer wages below those of the better paying defense jobs and, many of these new jobs are considered transient.
On the other hand, a better economic future is projected for the Norfolk area.12 An influx of military personnel is expected as base closings elsewhere cause transfers of personnel to Norfolk. And, despite defense cutbacks, the Norfolk metropolitan area still remains the site of the world's greatest concentration of permanent naval installations. In addition, there are some major new developments slated for the military sector including the Oceana project, which, when built, will become the Navy's largest fighter plane base and will employ 5,100 persons. The Gateway 2000 company will also offer many new jobs in computer assembly. Expected expansion of foreign-based firms and increased port activity should also add to the employment base. In addition, the area has a large and growing tourist industry.
There are several other projects on the horizon that may provide more opportunity. One of these is a big new retail development within the City of Norfolk -- the MacArthur Center Mall. Although such large-scale retail development is now usually suburban, the City had an empty downtown site large enough to accommodate this development. The new Mall, a one million square foot venture in which NRHA has an interest through its redevelopment arm, is expected to provide about 3,000 jobs. Though some of the new jobs would be appropriate for entry-level job seekers including residents of NRHA, the City has no formal arrangement obligating the mall developers to set aside any of these jobs for City residents, let alone those to be affected by welfare reform.
In general, the services sector, which includes hospitals, hotels, and food service establishments, is viewed as the single largest source of entry-level jobs in Norfolk.13 In particular, a major medical center, though not in the immediate downtown area, is close to some neighborhoods where public housing is located.
How much of this new development will benefit public housing residents is an open question. As was the case with the Motorola jobs in Richmond, few of the new jobs associated with the Oceana project are viewed as appropriate for a TANF population. Even in the stronger sectors of the Norfolk economy, many jobs have not traditionally gone to women or to those without technical skills. These include jobs associated with the shipbuilding industry and those involving the shipment of goods through the Port of Hampton Roads, one of the most active ports in the world.
B. Entry-Level Job Availability
In all of the metropolitan areas included in this study, there are more people, including public housing residents, seeking entry-level jobs than there are jobs for them to fill. However, the Richmond metropolitan labor market alone is expected to have enough jobs for the majority of these job seekers. In other cities, public housing residents and other entry-level job seekers are expected to face a more difficult job search, with entry-level jobs for not much more than one-quarter of the job seekers. Among the housing authorities studied, entry-level job seeker-to-job ratios vary from a low of 1.6 job seekers for every job in Richmond, to a high of close to 13-to-1 in Toledo. In the cases of Richmond and Norfolk, the entry-level job seeker-to-job ratio is more favorable for residents of the former, not because the job pool is larger -- it is in fact smaller than in Norfolk -- but because public housing residents in Richmond face many fewer competitors for the jobs that do exist. More favorable ratios holding out greater job prospects for mandated residents may reflect fewer competitors, as in Richmond, or may reflect more entry-level jobs.
When the two Virginia housing authorities and the Virginia Department of Social Services refer to the entry-level jobs for which they think their residents or clients might qualify, they are referring to jobs that ordinarily do not require specific previous experience nor more than a high school diploma if, in fact, they have any educational requirements. Indeed, on-the-job training is provided in many of the entry-level occupations available in Richmond and Norfolk eliminating the need for previous specific experience. However, in a major component of the entry-level new job market, the administrative sector, most jobs, including most clerk jobs, ordinarily require a high school diploma or the equivalent.
In contrast, assembly line workers making such products as computers or televisions often do not require a diploma.14 Such jobs may have fixed routines while jobs in the administrative sector may require the kinds of verbal and quantitative skills associated with a high school diploma. Undoubtedly, there will be a small number of mandated residents who will qualify for more than entry-level jobs, but these are more than offset by those with very minimal educational attainment who will have difficulty qualifying for any entry-level job.
In the year 2000, when currently mandated RRHA residents will have exhausted the three years of TANF assistance they are entitled to in any five-year period, job opportunities will be available in the sectors of the local economy that have traditionally absorbed entry-level job seekers. The annual number of new retail sector job slots in the MSA is projected to be around 2,700. In the same year, the average number of new service job openings is projected to be about 3,500 and there are expected to be about 3,600 jobs in the administrative support and clerical area.15 Overall, there are projected to be 20,600 jobs available in the MSA in the year 2000.
Since about one-third of all openings are entry-level jobs,16 there will be about 1.7 entry-level jobs seekers for every entry-level job in the MSA (see Table 4).17
Overall, the Norfolk labor market is expected to produce about 25,600 jobs per year through the year 2000. The great majority of these will be from turnover, not from new job growth. In the sectors that are expected to provide most of the entry-level opportunities for TANF recipients, there are projected to be 3,000 retail, close to 2,000 administrative support, and over 4,000 service sector job openings in the year 2000. If about one-third of all MSA projected openings are for entry-level jobs, there would then be about 8,453 entry-level openings in the year 2000.18 In this case, there would be 3.6 entry-level job seekers for each entry-level job. Part IV below discusses some of the fiscal implications of these ratios.
C. Job Accessibility At The Metropolitan and Neighborhood Levels
Before the beginning of the decade, a majority of workers were employed in jobs located outside of the central cities where five of the eight housing authorities are located. Because of the trend toward greater suburbanization of jobs, metropolitan job seeker-to-job ratios may overstate actual job accessibility for mandated city residents. In fact, neighborhood level ratios of job seekers to jobs which account for the obstacles of time and distance and the competition of nearby job seekers show that the odds are even further stacked against mandated residents living in certain city neighborhoods. In Toledo, Columbus, and Cleveland, where such information was available for this study, there is a very large number of other entry-level job seekers competing for the limited pool of jobs that lie within reasonable access of some neighborhoods where mandated residents are concentrated. In some of these neighborhoods, being female and relying on public transportation adds to the difficulty of finding a job. On the other hand, there are some neighborhoods where mandated residents are concentrated in which the odds of finding an entry-level job are at least as good as they would be anywhere in these cities.
A large majority of mandated public housing residents in Richmond are concentrated in just two City zip code areas, both with high levels of poverty and low levels of economic activity.19 Total jobs there and elsewhere in the City of Richmond declined by over six percent between 1979 and 1994, and the decline is expected to continue through the year 2005.20 During the same period, total employment in the Richmond MSA grew by over 34 percent and is expected to grow by another 15 percent or so by 2005. The greatest job growth is expected to occur in Henrico and Chesterfield Counties.21 The City has lost jobs to other jurisdictions in the MSA in almost every industrial and occupational category. About sixty percent of entry-level jobs are located outside of the City.22 As a result, the search for entry-level jobs among mandated residents of these neighborhoods has been made all the more difficult because many of these jobs have moved away from the City and are not easily accessible by public transportation.23
It is not simply the fact that the City has slipped in its share of MSA jobs that is significant, but that it has lost jobs which are appropriate to entry-level job seekers. The loss of retail and manufacturing enterprises in Richmond has particularly reduced the number of less skilled jobs available there. Although there are a number of suburban malls in the Richmond area, much of the core retail sector that used to be in the City no longer exists and the last remaining department store is now boarded up. Many of the retail sector jobs expected to open in the Richmond area will require commuting to suburban job sites. The two industries in which the City has increased its share of metro-wide employment, tobacco and apparel, are industries where overall employment is steadily falling.24
Spatial mismatches are, of course, not an issue to the extent that residents are able to get jobs that are close to home. In this respect, the areas in which the Norfolk public housing developments are located are not without opportunity. Although the majority of residents have incomes below the poverty level, the fact that these areas are poor has helped them to obtain Enterprise Community status. This status is expected to stimulate economic development which will benefit community residents, including public housing tenants. Even before the Enterprise Community designation, these areas already had hundreds of enterprises including restaurants, cleaners, hair salons, etc. Furthermore, the developments are within a mile of the downtown area where new development is taking place and where entry-level jobs exist.
The majority of new job growth in the metropolitan area, however, is occurring outside of the City of Norfolk in places such as Virginia Beach, Chesapeake and Newport News. This includes most new entry-level jobs at hotels, motels and restaurants slated for development in the metropolitan area to support its burgeoning tourist sector.25
No doubt reflecting these urban/suburban shifts that have occurred in metropolitan (MSA) employment, it should not be surprising to find that mandated residents concentrated in particular inner-city neighborhoods are faced with even more difficult odds than MSA-level ratios of job seekers to jobs would suggest.26 This is certainly the case in Toledo, Columbus and Cleveland where neighborhood level information is available.27 And, it would be the case in the other cities as well for the simple reason that MSA ratios of job-seekers to jobs assume a metropolitan labor market that is a perfectly porous sorting system for connecting job seekers anywhere in the area to jobs anywhere in the area. And, even at the metropolitan level, there is an inadequate supply of entry-level jobs for the entry-level job seekers in these cities. In Toledo, Cleveland and Columbus, there are about 13, 11, and 6 entry-level job seekers, both male and female, respectively, for each entry-level job and 12, 12, and 6, respectively, female job seekers for each entry-level job open to women (see Table 5).
Neighborhood-level ratios take into account the obstacles of time and distance encountered by the residents of particular neighborhoods as well as the competition they face from others competing in the same restricted entry-level job pool.28 They do so by incorporating a reasonable commuting time into the estimates. Jobs that cannot be reached within such a time period are regarded as not realistically accessible to mandated residents and other entry-level job seekers living in particular neighborhoods. They do so as well by factoring in the total number of entry-level job seekers from the same and nearby neighborhoods who could be competing for the same pool of jobs and siphoning off some that might otherwise go to mandated residents. Given economic divisions within cities, it is not surprising that large numbers of other entry-level job seekers, including the unemployed, share the same commuting zone as mandated entry-level job seekers.29
For the most part, female entry-level job seekers living in the Toledo, Columbus, and Cleveland neighborhoods where mandated residents are concentrated will have an even more difficult job search than if they had access to the entire metropolitan area job market.30 While there are 13 entry-level job seekers for each entry-level job at the MSA level, the odds of finding an entry-level job are even lower in three of the four Toledo neighborhoods where residents are concentrated.31 Likewise, in three of the five Columbus neighborhoods where residents are concentrated, female entry-level job seekers face greater odds than they would if all entry-level jobs in the MSA were accessible to them. And in Cleveland, in three of the four neighborhoods where mandated residents are concentrated, neighborhood ratios of seekers to jobs are higher. In the Cleveland neighborhood with the greatest concentration of mandated residents, there are a staggering 76 female entry-level job seekers for each entry-level job while at the MSA level there are 12 such job seekers for each entry-level job. On the other hand, in all three cities, there is a neighborhood in which female entry-level job seekers face better odds than the MSA ratios would suggest.
The probability that mandated residents living in particular neighborhoods can find entry-level jobs is reduced to the extent that most rely on an inadequate public transportation system and many suburban jobs are inaccessible by public transportation within a reasonable commuting time. Because of the fact that the population of entry-level job seekers consists mainly of low-income mandated residents and people who are unemployed, the analysis above of neighborhood-level seeker-to-job ratios was based on the assumption that all entry-level job seekers will use public transportation.32
However, the assumption that all entry-level job seekers used an automobile was also considered to see if it made a difference in job participation rates. Although access to an automobile confers an advantage to the residents of some neighborhoods, this is not true in all cases. In Cleveland, assuming all commute by car, job seekers are distinctly better off in one neighborhood where mandated residents are concentrated, but in the others, their probability of finding a job does not seem to depend on how they commute. In three Columbus neighborhoods, use of a car increases the probability of finding an entry-level job, but in two other neighborhoods using public transportation confers an advantage. Assuming that all mandated residents use autos instead of public transportation, there is one Toledo neighborhood in which mandated residents have the advantage. In the cases where public transportation does as good or better than autos in transporting people to jobs, the system may take more efficient routes.
Dependence on public transportation is not the only obstacle that mandated residents could face. To the extent that occupational segmentation by gender reduces the number of jobs available to women more than it does jobs available to men, women would face greater odds.33 It is historically the case that women have been underrepresented in certain occupational categories. But, at the MSA level, men seem to have only a very small advantage in the three Ohio cities, and in Columbus, this is true at the neighborhood level. Just as there are some occupations where women are underrepresented, there are others where men are underrepresented and these seem to balance out, at least for the residents of these Columbus neighborhoods. However, in all four of the Toledo neighborhoods where mandated residents are concentrated, men seem to have an advantage over women. In these Toledo neighborhoods, the location of jobs that are more frequently held by women may make them inaccessible to female job seekers.
Like metropolitan ratios, the probability of finding an entry-level jobs for residents of a given neighborhood come down to how many jobs there are within the commuting radius of neighborhood residents and how many competitors they face from the same or nearby neighborhoods. In the Columbus neighborhood with the most favorable odds for women using public transportation, about 1.5 job seekers for each entry-level job, the jobs within reasonable commuting range open to women happen to represent the highest concentration of such jobs in the entire metropolitan area. By contrast, in the Cleveland neighborhood with the most unfavorable ratio by far of all neighborhoods in the three cities -- 76 job seekers for each entry-level job -- the number of nearby job seekers competing for entry-level jobs is the highest of any neighborhood in the metropolitan area. This neighborhood, which is also the neighborhood where the largest number of mandated residents are concentrated, actually has more jobs than the average Cleveland neighborhood, but the job pool is overwhelmed by the very large number of entry-level job seekers.
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