Blog

The Merc is asking: How is the recession affecting you?

Louise Auerhahn — Wed, 07 May 2008 16:20:00 +0000

The U.S. may not officially be in a recession yet, but with four straight months of job losses, an imploding housing market, gas at nearly $4 a gallon, and food prices spiraling up so quickly that some stores are rationing rice, most Americans don't need anyone to tell them that times are tight.

Columnist Mike Cassidy at the San Jose Mercury News wants Silicon Valley residents to tell him how the downturn is affecting their lives. Read all about it on his "Loose Ends" blog -- and send him your stories.

Some possible discussion sparkers:

On top of immediate strains to your household budget, how is the recession affecting you through its impacts on your neighborhood and community?

What fallout are you feeling from the housing market collapse and the credit crunch?

Do you worry about being affected by recession-inspired budget cuts to services like schools, health care, parks, libraries, public safety, and other proposed cuts?

In the longer term, do you see a hopeful future for your kids if they stay in Silicon Valley?

Building a Better Airport

Louise Auerhahn — Tue, 29 Apr 2008 18:10:00 +0000

To counteract all the gloom and doom from the previous week, here's some good news: a new campaign for a living wage for all workers at San Jose Airport.

Last week, WPUSA released a report documenting alarming security and retention challenges at Mineta San Jose International Airport, stemming from the practice of subcontracting airport duties to workers who are paid minimum wage with no benefits or time off and receive little to no training on security procedures.

Community, labor and faith leaders have now come together to call on the City of San Jose to adopt a policy that assures a living wage for all workers at the Airport, along with improved oversight of job and training standards at subcontractors.

The rapidly rising cost of living in the San Jose region makes this campaign especially timely; surviving in Silicon Valley at minimum wage, difficult at the best of times, is becoming nearly impossible.

On the scale of the regional economy, establishing a comprehensive living wage policy will help to make San Jose Airport competitive with SFO and OAK, which have been gaining air passenger market share at the expense of SJC. Both of these neighboring airports have already implemented Living Wage policies. If San Jose does the same, it will help hundreds of workers and their families climb out of poverty, and could give the local economy -- particularly the visitor and retail sectors -- a boost that we badly need.

Find out more at the campaign website: Building a Better Airport.

SV Jobs Report: Unemployment jumps to three-year high; job growth slows, but remains positive

Louise Auerhahn — Sat, 19 Apr 2008 00:25:00 +0000

Not too much good news in today's employment report from the state -- but it could be worse.

The unemployment rate for the San Jose metro region rose to 5.5% last month, reaching its highest level since July 2005.

On the bright side, employment growth remained small but positive. Unlike many regions of the state, Silicon Valley has not begun to lose jobs.

As the rising unemployment rate indicates, however, we are not adding enough new jobs to keep up with demand for work. In part, Silicon Valley may not be losing jobs because we've already lost them: the San Jose metro area remains far off of its peak employment, with 150,900 fewer jobs in the region now than in March 2001.(Continued...)

The chart at right shows which industries have gained or lost jobs over the most recent economy cycle. The only sector that has seen any substantial growth is Educational and Health Services, with 15,900 net new jobs. Most major sectors have declined, with the biggest job losses over the cycle in Manufacturing (-87,600 jobs) and Professional and Business Services (-53,200 jobs). Both of the latter sectors began to grow modestly in the past year or two, but they remain far from regaining the jobs lost.

Highlights of the local jobs report:

Compared to the previous month, the San Jose metro area added a net 4,900 non-farm jobs in March. The largest gains for March were in leisure and hospitality, with 1,700 new jobs, and professional and business services, with 1,200 jobs. The retail sector lost jobs for the third consecutive month, shedding 400 positions.

Over the year, the San Jose metro area added 7,200 jobs, a 0.8% increase from March 2007.

The biggest year-over-year gains were in manufacturing (+3,400 jobs), private educational and health services (+2,000 jobs), information (+1,600 jobs), and trade, transportation & utilities, which includes retail (+1,100 jobs).

The construction and financial activities sectors -- both strongly tied to the housing market -- continued to weaken, with construction losing 1,200 jobs over the year and financial activities losing 1,300 jobs. The region also lost 500 jobs over the year in leisure and hospitality.

For March 2008, the unemployment rate stood at 5.5%, up 0.3 percentage points from February and up 1.0 points over the year. That translates to 9,100 more unemployed residents (by official measures) than in March 2007.

Seven years after the tech crash, Silicon Valley holds 150,900 fewer jobs than it did in March 2001.

The Middle-Class Squeeze

Louise Auerhahn — Thu, 17 Apr 2008 23:10:00 +0000

A recently released study of inequality shows that nearly all the benefits of California's growth since the late 1990s have gone to just one group: the wealthy.

The "Pulling Apart" study from the Economic Policy Institute analyzed income gains state-by-state for low, middle, and upper-income Americans. Between the late 1990s and the mid-2000s, in California:

The poorest fifth of families (with average income of $18,312) saw no significant income growth.

The middle fifth of families (with average income of $50,981) grew by just $1,889, or roughly $315 per year.

Average income for the highest-income fifth of families grew by $16,772. Most of this growth was at the very top of the scale; for the top 5% (with average income of $243,386), average income grew by $41,988.

This tremendously uneven distribution of growth led to stagnation for the middle class and the poor, and accelerated the growing gap between the very high-income and everyone else.

The gap between California's middle class families and the state's wealthiest residents is now the 3rd largest of any state in the country. (We can congratulate ourselves on providing a fairer shake for the middle class than Oklahoma or Mississippi, which were ranked #1 and #2.)(Continued...)

Because it does not include capital gains, this analysis actually underestimates the gap between the superrich and everyone else.

How do middle class Americans view this decade's economic shifts? In a recent poll of the U.S. middle class, 54% of respondents said that in the past five years, they had made no financial progress or had fallen behind. "Middle class" for this poll was self-defined by the respondents, 53% of whom identified as middle class (another 19% identified as lower-middle and 19% as upper-middle).

The Pew Research Center has been asking this survey question -- "Are you better off now than you were five years ago?" -- since 1964. This year, more middle class Americans said they were not better off than at any point in the past fifty years. An ever higher proportion, 79%, said that it's become more difficult for middle-class families to maintain their standard of living.

Inflation Hits Home

Louise Auerhahn — Wed, 16 Apr 2008 17:12:00 +0000

According to Forbes Magazine, San Jose boasts the highest cost of living of any major metro region in the country.

If you've been to the grocery store or stopped at a gas station recently, you know that prices are headed higher still. Inflation indexes released today revealed big jumps in the prices of energy and food in March, leading to the second-largest monthly increase in wholesale inflation since 1975 (the largest increase was last November).

Apparel prices were down, though. Food, gas, housing and healthcare may all be unaffordable, but at least you can buy new clothes!

Here are the price increases for major household budget items since 2000[1] (not including the last couple months):(Continued...)
Healthcare costs lead the pack; in the past seven years, insurance premiums have more than doubled, up 110 percent. Gas isn't far behind, with an 86% increase (and the price is rising so fast that that's already out of date). Childcare is incredibly expensive; the average annual cost at a center for one preschooler is $10,200. Even food -- which has historically been cheap in the U.S. -- has started to shoot up. And then, of course, there's housing (see yesterday's blog post on the thankless tradeoff of renting vs. owning.)

The cost of living is rapidly becoming a worldwide problem. In recent months, the costs of basic necessities have been rising rapidly in international markets, leaving millions of people without enough to eat. Escalating prices for staple foods including wheat, rice, corn and soy are crating a global food crisis.

Here in the U.S., wobbly financial markets, overstretched banks and bankrupt mortgage companies are still getting more attention. But given the choice between a starving family or a Bear Sterns shareholder -- which one is more in need of government aid, and which one should be left to the mercies of the free market?

[1] Data from multiple sources. Food cost is an average for the U.S., based on USDA Moderate-Cost Food Plan. Health care cost is an average for California, based on worker's share of premium for job-based family health coverage. Electricity cost is based on residential rates in the PG&E service area. Gasoline cost is for regular unleaded in the SF-Oakland-San Jose metro area. All other items are based on costs in the Silicon Valley region. Housing costs reflect only the trend through 2006, as 2007 data is not available. Childcare cost reflects the trend from 1998-2006 as costs for 2000 and 2007 were not available.

Rent vs. own: Between a rock and a hard place

Louise Auerhahn — Tue, 15 Apr 2008 16:52:00 +0000

Finding affordable housing may be the toughest financial challenge that most Silicon Valley residents face. Whether you rent or own your home, the last few months have not been good.

Caught by the nationwide mortgage meltdown, in Santa Clara County alone tens of thousands of homeowners are at risk of losing their homes. This chart pretty much says it all:

According to foreclosures.com, 3,133 Santa Clara County homeowners received notices of default on their mortgages in the first quarter on 2008 -- an increase of 64% over the first quarter of last year, and five times the number of defaults in Q1 of 2001. (A notice of default is the first step in the foreclosure process; not all of these homes will end up in foreclosure.)

Renters are feeling the pain too.(Continued...)
To afford a modest 2-bedroom apartment for their family, a worker in Santa Clara County must earn a minimum of $24.87 per hour, according to a study released last week by Housing California and the National Low Income Housing Coalition. That's $51,720 annually. At least a third of all county households had incomes below that standard last year.

And there's worse: these numbers are based on the "Fair Market Rent" for 2008, which was set by federal agency HUD at 40% of median rent last year -- $1,293 for a 2-BR in Santa Clara County. But as more families lose their homes or are reluctant to buy, there are more folks looking to rent, so rents have been shooting up. In San Jose, rents rose by an estimated 14.5% last year and are projected to grow another 7.8% this year, according to the Business Journal.

In addition to rising rents, renters are also being hit by the fallout of the mortgage crisis. The New York Times reported on Sunday that even renters are not immune from the mortgage crisis; as landlords are hit by foreclosures, tenants are increasingly being forced out of their homes. The NYT quotes Mark Zandi, chief economist for Moody's Economy.com, saying, "Landlords of all stripes could potentially get caught up in this very severe downturn. I suspect that it's going to be more of a problem for lower- to middle-income markets."

Local nonprofit organizations like Neighborhood Housing Services Silicon Valley, Project Sentinel, and ACORN Housing are urgently trying to help homeowners avoid foreclosure. If you are having trouble keeping up with your mortgage, or believe you may have been the victim of predatory lending, contact one of these agencies -- they may be able to help. Project Sentinel also helps renters.

What's happening to the economy?

Louise Auerhahn — Mon, 14 Apr 2008 19:44:00 +0000

With gloom about the economy beginning to overshadow even sunny San Jose, more and more folks are concerned about what's really happening, how long it will last, and how the downturn will impact already-stretched working families.

This week WPUSA will post a blog entry each day on one aspect of the economy - housing, cost of living, the state of the middle class, and more.

Lots of new data and studies have recently come out that may shed some light on both the immediate recession and longer-term trends. We'll try to hit the highlights. Check back for updates.

Silicon Valley companies post record profits -- but no job growth

Louise Auerhahn — Mon, 14 Apr 2008 19:33:00 +0000

The Mercury News yesterday published their annual feature on the "SV150" -- the top 150 public companies in Silicon Valley for 2007, ranked by worldwide sales. The top 150 companies had a good year. Both sales and profits reached record highs, with sales growing by 10.6% over the year and profits roaring ahead with growth at 35%.

So, what about jobs? It turns out that employment at the SV150 dropped in 2007 by -0.5%, down about 4,700 jobs from 2006, even as sales and profits grew. It was the first year since 2004 that total jobs among the SV150 declined. (This number represents total employment at each firm, not just jobs in Silicon Valley.)

The chart below (adapted from the Merc's chart) shows the top 10 companies that added and eliminated the most jobs, along with their sales trend and profit margin. Some of the job-losing companies performed poorly overall in 2007; it's no surprise that a company like Sanmina-SCI, with falling sales and a negative profits margin, would lay off workers. But what about the top two job eliminators -- Intel and Sun -- both with substantial profit margins and increasing sales? (Continued...)

If these companies created no new net jobs even with record profits, the prospects for job creation in 2008 look dim indeed. Many of the companies that finished strong in 2007 have been struggling in 2008, and the SV150's stock prices have been dropping for the last several months as investors shy away from tech.

While the Merc article still tried to paint a rosy picture, the story has a whiff of desperation about it. The front-page graphic lists four reasons "why Silicon Valley isn't in a recession" and leads with the line "If there's a recession going on, someone forgot to tell Silicon Valley."

Unfortunately, the people who live and work in this economy don't need anyone to tell them that times are tight. Bay Area residents now rate the economy as the region's number one problem, according to a recent poll by the Bay Area Council. Last year the economy wasn't even among the top three concerns. Silicon Valley's slowdown has also drawn the attention of the New York Times, which notes that "Job growth has slowed, start-up companies are hiring and spending more cautiously, and early-stage investors who nurture the start-ups with money and expertise are growing more frugal."

In another worrisome sign for the local economy, chip-maker Advanced Micro Devices (AMD) laid off 1,600 workers last week. One analyst suggested AMD might close its Sunnyvale headquarters altogether by the end of the year. Even the mighty Google recently laid off 300 employees

Collaborating to Build Good Green Jobs

Louise Auerhahn — Mon, 07 Apr 2008 22:39:00 +0000

Check out the following article from the Partnership for Working Families (PWF) newsletter describing WPUSA's focus in the emerging new policy area of "green jobs". You can read more about green jobs campaigns around the country at the PWF website.

----------------------------------------------
Collaborating to Build Good Green Jobs
By Working Partnerships USA

Over the past year, the enormous challenge posed by climate change has been catapulted into the limelight. Prominent leaders in all sectors are now calling for serious and immediate efforts to fight global warming. As mainstream interest in the "green economy" explodes, so too has the concept of green jobs: the alluring idea that efforts to defend the environment can also create new job opportunities that will enable millions of people to climb out of poverty and restore the middle class.

Green jobs present an enormous opportunity. But we also see a growing threat: as investment capital pours into the field, the concerns of marginalized communities and even the underlying climate threat may be overridden by business concerns.

Job quality is key. Will green jobs be good jobs, accessible to all our communities? Or will the green economy be an hourglass economy, with a handful of people making huge profits at the top, propped up by a huge force of low-wage, disposable workers? (Continued...)

Unless we organize and advocate for high-quality jobs in our communities, we won't get them. We will just get more of the same -- poverty-level jobs and zero respect for workers -- while businesses brag about their freshly washed green credentials.

These aren't easy problems to solve, but communities and unions around the nation (and the world) have jumped into the fray. Many of these grassroots groups gathered at the Good Jobs, Green Jobs conference in March; more will come together at the Dream Reborn conference in April; all are organizing and strategizing around how to bring green jobs to their communities.

WPUSA's vision for a green economy is one in which union-community coalitions don't just fight for a piece of the green pie, but take the lead in creating new green jobs. Starting from our base of knowledge and experience with our grassroots base's needs and their potential, our organizations should be designing green policies and bringing in capital to make them work. If we design the programs ourselves, we can insure that they emphasize environmental justice for all neighborhoods, high standards for jobs, and integrated training and career ladder programs to fill those jobs with a local, highly qualified and motivated workforce.

What kinds of local green jobs can we create? In our own region of Silicon Valley, WPUSA is looking for opportunities in several sectors, including:

Energy efficiency building retrofits. Updating buildings with insulation, efficient lighting, and improved heating and cooling systems can save as much as 50-60% on energy costs. This is a golden opportunity to create new jobs for the construction trades and help families save money on their gas and electric bills.

Green building maintenance. As companies create green buildings and green processes, they need janitors, groundskeepers and other maintenance workers who have the training and resources to make the new processes work. But too often, these needs are ignored, and building services workers are expected to do twice as much work in the same amount of time with little to no training. There is an urgent need to turn this dynamic on its head by making green-focused building owners and managers aware of the key role building services workers will have in achieving their environmental goals, and convincing them of the value-added they gain by investing in responsible building services contractors and trained workers.

Waste management and reduction. Sanitation workers, environmental advocates, and communities impacted by landfills or waste disposal all have a common stake in reducing waste, increasing recycling or reuse, and finding safer ways to dispose of what waste remains.

Public transit. Inadequate or unaffordable public transit hits low-income communities the hardest; at the same time, lack of good public transit drives people into their cars, spewing out ever more CO2 into the atmosphere. Building effective transit systems and transit-oriented development would create jobs in construction and operations, help meet the needs of low-income families, and contribute enormously to the fight against global warming.

To pursue these possibilities, WPUSA has entered into a collaboration with the Silicon Valley Toxics Coalition, a San Jose-based environmental justice group. At the same time we are engaging with our region's Building Trades Council and with local service sector and public sector unions, while reaching out to community- and faith-based organizations, environmentalists, and local business associations.

Collaborating in regional, state, national and international partnerships will be critical to succeeding at this ground-breaking effort in which communities across the country are now engaged: to make green jobs good jobs.

Silicon Valley Jobs Report: Annual job growth falls below 1%

Louise Auerhahn — Mon, 24 Mar 2008 20:08:00 +0000

Just a quick note on the February job numbers. Friday's employment report from the state showed that job growth in the San Jose metro region fell to 0.8% over the year, as the region added just 7,600 nonfarm jobs between February 2007 and February 2008. That puts our job growth rate below 1%: not a recession, but not a good sign either.

The graph below shows annual growth rates over the past three years.

While job growth is slowing, working families continue to face rising prices for basic goods, especially food and gas. The Mercury News reports that prices for flour, milk, and eggs have all risen more than 24% just in the past year. Gas is up to $3.66 per gallon for regular unleaded and a shocking $4.24 for diesel.

And don't think you can drown your sorrows -- thanks to a worldwide hops shortage, the price of beer is up too.(Continued...)

Highlights of the local jobs report:

The San Jose metro area added a net 2,900 non-farm jobs in February, with major industries showing a mixed picture. The largest gains for the month were in private educational and health services, which added 2,000 jobs (largely in higher education); leisure and hospitality, with 1,300 new jobs; and professional and business services, with 1,100 jobs. Meanwhile the retail sector lost jobs for the second consecutive month, shedding 2,100 positions. The government sector lost 800 jobs in February, due largely to school staffing reductions made in anticipation of state funding cuts for K-12 education.

Over the year, the San Jose metro area added 7,600 jobs, a 0.8% increase from February 2007.

The biggest year-over-year gains were in manufacturing (+3,300 jobs), private educational & health services (+2,400 jobs), information (+1,700 jobs), government (+1,300 jobs), and trade, transportation & utilities, which includes retail (+1,100 jobs).

The construction and financial activities sectors -- both strongly tied to the housing market -- continued to weaken, with construction losing 800 jobs over the year and financial activities losing 1,300 jobs. The region also lost 400 jobs in leisure & hospitality and 400 jobs in professional & business services.

For February 2008, the unemployment rate stood at 5.2%, down 0.1 percentage points from January (which normally has the highest unemployment rate of the year) and up 0.5 points over the year. That translates to 4,500 more unemployed residents (by official measures) than in February 2007.

Seven years after the tech crash, Silicon Valley holds 148,800 fewer jobs than it did in February 2001.

Silicon Valley Jobs Report: Job growth slows, but remains positive; housing crisis impacts economy

Louise Auerhahn — Fri, 29 Feb 2008 21:53:00 +0000

Today's employment report from the state shows that the San Jose metro region lost 13,100 jobs last month. This isn't nearly as bad as it sounds: we always lose jobs in January, as retailers and others lay off the extra help they hired on for the holiday season.

However, with just a 1.3% increase in jobs since Jan. 2007, this month's employment continued to show evidence of a slowdown in Silicon Valley. The annual growth rate peaked in September 2006 at 2.8%, and has been on the decline ever since (see graph).(Continued...)

Job growth is still positive, but at just over 1% it is unlikely to keep up with the growth of the working-age population. The jobs picture may well continue to weaken, driven by actions like the recent layoffs at Yahoo and planned layoffs at the Mercury News, both of which won't show up in the jobs data until next month.

Sheila Bair, chair of the Federal Deposit Insurance Corp. (FDIC), warned last week that "Silicon Valley is not immune" to the economic challenges brought on by the national mortgage crisis. With foreclosures exceeding home sales in California last month, industries tied to the housing market are feeling the pain. Construction firms in Silicon Valley lost 500 jobs in January, and the financial activities sector dropped 1,200 jobs.

In more encouraging news, Silicon Valley added 4,500 manufacturing jobs in the past year: a small but significant reversal of the decade's trend of devastating losses in manufacturing, the region's largest employment sector.

Highlights of the local jobs report:

The San Jose metro area lost 13,100 non-farm jobs in January, due in part to seasonal declines. The retail sector eliminated 3,500 jobs, accompanied by declines of 2,500 jobs in leisure and hospitality (mostly in restaurants), 1,900 jobs in construction, and 1,600 jobs in professional & business services.

Over the year, the San Jose metro area added 11,400 jobs, a 1.3% increase from January 2007.

The biggest year-over-year gains were in manufacturing (+4,500 jobs), educational & health services (+3,300 jobs), trade, transportation & utilities, which includes retail (+2,000 jobs), information (+1,900 jobs), and government (+1,000 jobs).

The construction and financial activities sectors -- both strongly tied to the housing market -- continued to weaken, with construction losing 500 jobs over the year and financial activities losing 1,200 jobs. The region also lost 300 jobs in leisure & hospitality and 100 jobs in professional & business services.

For January 2008, the unemployment rate stood at 5.3%, up 0.2 percentage points from last month and up 0.5 points over the year. That translates to 4,900 more unemployed residents (by official measures) than in January 2007.

Seven years after the tech crash, Silicon Valley holds 151,000 fewer jobs than it did in January 2001.

3 out of 10 elders face inadequate incomes in Santa Clara County

Louise Auerhahn — Tue, 26 Feb 2008 20:59:00 +0000

In high-priced Silicon Valley, families of all types and ages find it hard to make ends meet. But older adults face particular challenges.

A new standard developed by UCLA indicates that the basic costs of living for elders (age 65+) in Santa Clara County range from $17,632 for a single senior homeowner with no mortgage, up to $47,354 for a couple with a mortgage -- and at least 31% of elder households in the county do not have enough income to meet these minimum standards of living.

The Elder Economic Security Standard Index, released today by the UCLA Center for Health Policy Research and the California Elder Economic Security Initiative, measures the costs for older adults of meeting their basic needs for housing, food, transportation and other necessities.

Here are the annual costs of basic needs for older adults living in Santa Clara County:

Elder Standard Per Year

Elder Person:
Owner w/o mortgage: $17,632

Owner w/ mortgage: $37,641

Renter, one bedroom: $25,391

Elder Couple:
Owner w/o mortgage: $27,345
Owner w/ mortgage: $47,354
Renter, one bedroom: $35,104

Source: UCLA Center for Health Policy Research. Standard per year is based on basic monthly costs for housing, food, transportation, health care (assuming good health), and miscellaneous needs.

(Continued...) As of 2006, at least 31% of households including elders had incomes below these standards, meaning that they face serious challenges in affording the basic necessities of life.

This points at the urgent need in Silicon Valley for initiatives to tackle the high cost of living, including affordable housing for families of all types and income levels; affordable and accessible health care providers; public transit that meets the needs not only of commuters, but also of retirees and transit-dependent residents; and planning future development so that grocery stores, pharmacies, clinics, hospitals, parks, community centers, and other amenities are nearby and accessible by walking or transit for all neighborhoods. We've made progress on many of these fronts, but with more than three out of ten elder households still struggling to make ends meet, it's clear we need to do more.

Source: Elder Standard Index from UCLA/WOW. Housing and population data from the American Community Survey was used to approximate the number of Santa Clara County households containing seniors which fall below the income levels provided in the Elder Standard Index. Because the Index does not provide standards for elders living in larger households, the standard for an elder couple was also used for elders in households of three or more, resulting in a conservative estimate of elders living below the standard.

Bay Area private sector workers achieve highest unionization rate since 1999

Louise Auerhahn — Wed, 13 Feb 2008 17:49:00 +0000

Bay Area union membership was on the rise in 2007, driven by increased unionization in the private sector.

An estimated 57,000 additional private-sector workers chose to join unions last year, bringing the private-sector unionization rate for the San Jose-San Francisco-Oakland region up to 12.1%: the highest rate this decade.

Combining the public and private sectors, 18.2% of all workers in the Bay Area were covered by a union contract in 2007, up from 17.1% in 2006.

The United States as a whole saw an uptick from 12.0% to 12.1%: a small increase, but notable as the first recorded growth in the nation's unionization rate since the 1970s.

However, union membership in the Bay Area -- and the United States -- remains near historic lows following decades of decline. In the 1960s, about 30% of workers belonged to unions. Today, union coverage has been cut to the rock-bottom rate of 12%, despite the fact that survey after survey shows most U.S. workers want a union.(Continued...)

Although a majority of nonunion workers say they would vote for union representation, few ever get that opportunity, due to employer intimidation combined with ever-more-regressive federal labor laws that block workers from exercising their right to choose a union. This assault on workers intensified under the Bush administration, with the appointment of a strongly anti-labor National Labor Relations Board (NLRB) and Secretary of Labor.

The New York Times writes:

There is little doubt that American workers need unions. Wages today are almost 10 percent lower than they were in 1973, after accounting for inflation. The share of national income devoted to workers' wages and benefits is at its lowest since the late-1960s, while the share going to profits has surged. The decline in unionization has been a big part of the reason that workers have lost so much ground.

Source: Union membership data for the SJ-SF-Oakland region is from the Union Membership and Coverage Database, http://www.unionstats.com/, constructed by Barry T. Hirsch (Georgia State University) and David A. Macpherson (Florida State University). All unionization data used originates from the Bureau of Labor Statistics.

Community Budget Working Group presents San Jose Excels! recommendations to City representatives

Working Partnerships USA — Fri, 08 Feb 2008 22:46:00 +0000

The final report of the Community Budget Working Group was presented to officials from the City of San Jose today.

The seven-page document articulates the community's driving budget principle and 10 keys to assure excellence from the City's budget process. Each key includes specific recommendations that stemmed from multiple conversations with scores of community members and suggestions that were submitted through the Working Group's website, MyBudgetIdea.com.

"We're pleased to be able to provide the community's thoughts on how best to allocate the City's resources," said Working Group member Tamara Alvarado. "We heard repeatedly that the City's top budget concerns should be public safety, neighborhood services, the environment, a vibrant artistic and cultural life, and a government that is community-oriented and friendly. Today, we're able to present the ideas of some of the City's brightest minds on how to ensure that those concerns are met."

Representatives from the Mayor's office and several Councilmembers' offices were on hand to receive the report, which the Working Group intends to present to the entire City Council during an upcoming Council meeting.

The full document can be downloaded from the group's website, MyBudgetIdea.com.

The Community Budget Working Group was formed by a group of community leaders to ensure that a broad range of voices is heard by elected leaders as the City of San Jose discusses how to allocate increasingly scarce resources. Convened by Working Partnerships USA, the Working Group features a steering committee of representatives from a broad range of community organizations and constituencies. Participants include City commissioners, heads of ethnic Chambers of Commerce, religious leaders, environmentalists and neighborhood activists.

Breaking news: Firefighters get paid more than cashiers

Louise Auerhahn — Tue, 05 Feb 2008 22:34:00 +0000

That should have been the title of this weekend's USA Today article. Instead, the front-page article was titled "Public jobs see pay gains" and purported to show a trend of "better pay and benefits for public employees" as compared to their counterparts in the private sector.

But USA Today is comparing apples to oranges. Different industries have different cost structures (think of the costs involved in running an auto plant versus a beauty salon), and the mix of skills and occupations involved in state and local government is entirely different from the mix of occupations in the private sector.

Nationwide, the top five occupations in the private sector, making up 12% of the workforce, are:

Retail salespersons

Cashiers

Office clerks

Combined food prep and serving workers, including fast food

Waiters and waitresses

And the top three occupations employed by state and local governments, making up 15% of the workforce:

Police and sheriff's patrol officers

Fire fighters

Correctional officers

Do we really want a force of firefighters and police officers who get paid minimum wage with no health care? Or maybe correctional officers should all work for tips. (Continued...)

Not only is USA Today's analysis flawed, but they can't even seem to keep their own numbers straight.

The chart accompanying the article claims to show "Average hourly wages" in the public and private sectors, revealing that public sector employees in 2007 earned an expansive-seeming average wage of $39.50. Two mistakes here. First, the article is about state and local government only, not the entire public sector; if you factored in federal employees (who aren't included in the survey), results would be different. And second, the average wage for state and local government in 2007 was not $39.50, but $26.26. (What's the difference? For a full-time worker, nearly $28 grand per year...)

That $39.50 represents not wages but total compensation, factoring in the high cost of health coverage (a nationwide problem not confined to the public sector) and retirement. The text of the article gets this right, but apparently whoever drew up the chart didn't bother to read the article. Can't say I blame them.

(All data is from the Bureau of Labor Statistics. The National Compensation Survey is available at http://www.bls.gov/ncs/; occupational employment is at http://www.bls.gov/oes/.)

Silicon Valley Jobs Report: Unemployment rises as housing crash, national slowdown hit home

Louise Auerhahn — Fri, 18 Jan 2008 20:26:00 +0000

Great news, folks -- our economic indicators are all headed up!

Within the last month:

Silicon Valley's unemployment rate rose to 5.1%;

the Labor Dept. reported U.S. inflation for the year reached a record 4.1% (highest in 17 years);

and the San Jose region won back our #1 spot (tied with L.A.) for the most expensive rents in the state.

Doesn't sound so great? Part of the problem is that the U.S. economy appears to be headed for a recession -- if we're not already in one. However, not everything can be blamed on the national economy. Silicon Valley faces a unique set of challenges, from familiar problems like the high cost of living to emerging issues like a shortage of affordable child care.

Today's employment report from the state shows that the San Jose metro region added 1,900 nonfarm jobs last month: the weakest performance for December since 2002. While 1,800 jobs were added in retail, several other sectors lost jobs over the month, including construction (-300 jobs), information (-400 jobs), and education & health services (-400 jobs).

Employment growth remained moderately strong over the year, with 1.4% more nonfarm jobs than in Dec. 2006. However, the declines in these three critical industries may be an indicator of troubled times ahead. (Continued...)

In another troubling sign, more people were forced into bankruptcy, with personal (non-business) bankruptcy filings in Northern California up 51% in the third quarter of 2007, compared to the same period in 2006. Even with new stricter laws making it harder for individuals to declare bankruptcy, we've seen 8,482 personal bankruptcies in No. Cal just during Jan-Sept 2007: another indicator that expensive debts, high cost of living, and inadequate wages are forcing families to take drastic measures.

Is there a silver lining in all this gloomy economic news for working families?

How about a green lining? The idea of investing public and private funds to create "green-collar jobs" is gaining more and more momentum in California and nationally. When the federal Energy Bill was passed late last month, it included a provision calling for $150 million to create the Green Jobs Corps, which aims to recruit and train Americans needing work for careers in the new green economy. Just this past week, state leaders from labor, business, government, environmental groups, and community-based organizations came together for "Advancing the New Energy Economy in California", a summit focused on how our state can take the lead in both fighting climate change and creating green jobs that will lift people out of poverty.

And economists at the Center for Economic and Policy Research suggest that the national economic slowdown may in fact provide an opportunity for creating new green jobs and helping low-income consumers save energy, through including credits for energy conservation, support for public transit operations, and heating assistance for low-income households as part of a targeted economic stimulus package. President Bush today joined in the call for an economic stimulus, but many of his proposals would do more to reward his wealthy supporters than to help the economy; hopefully more sensible heads will prevail in developing an effective plan that stimulates economic growth and helps those who most need it.

Highlights of the local jobs report:

The San Jose metro area added 1,900 non-farm jobs in December. Similar to November, nearly all of these jobs were added in the retail sector, likely reflecting an increase in hiring for the holiday season.

Over the year, the San Jose metro area added 12,800 jobs, a 1.4% increase from December 2006.

The biggest year-over-year gains were in educational & health services (+3,000 jobs), leisure & hospitality (+2,200 jobs), manufacturing (+2,300 jobs), trade, transportation & utilities, which includes retail (+1,700 jobs), government (+1,400 jobs), and professional & business services (+1,400 jobs).

The construction and financial activities sectors – both strongly tied to the housing market – showed signs of weakness, with construction adding just 100 jobs over the year and financial activities losing 100 jobs.

For December 2007, the region's unemployment rate stood at 5.1%, up 0.1 percentage points from last month and up 1.0 points over the year. That translates to 9,500 more unemployed residents than in December 2006.

Seven years after the tech crash, Silicon Valley holds 158,600 fewer jobs than it did in December 2000.

City budget should ensure security, safety and superior services

Working Partnerships USA — Mon, 14 Jan 2008 22:01:00 +0000

San Jose's city budget should maintain and support security and public safety, provide superior services to neighborhoods, protect the environment and encourage a vibrant cultural life in a community-friendly, efficient way, the Community Budget Working Group believes.

The Working Group's meeting Saturday produced three informed and detailed discussions that will shape its report to the City Council: "Neighborhood Services and Safety," "Efficient and Open Government" and "Increasing Revenue and Strengthening the Tax Base." The subject areas and the topics within them were distilled from the Working Group's initial meeting in December by an independent financial analyst and targeted for greater scrutiny by the public.

Working Partnerships USA, which originally convened the group, expects to produce a final report to the City Council in a few weeks.

"The City's financial situation evolved over years," said Phaedra Ellis-Lamkins, WPUSA's executive director. "We need to realize that it will also take time to solve these problems, and that it's better to take time to come up with the right solutions than the quickest ones."

Community Budget Working Group Reconvenes Jan. 12

Working Partnerships USA — Tue, 08 Jan 2008 19:58:00 +0000

A financial analysis of more than 60 public suggestions for allocating the City's resources will be presented to the Community Budget Working Group when it reconvenes at 9:30 a.m. Saturday, Jan. 12 at the Northside Community Center, 488 North 6th St.

The independent financial consulting firm Applied Development Economics, hired to assess the proposals, has been working on the budget ideas for more than a month since they were generated from a standing-room only crowd at the Working Group's first meeting, which was convened by Working Partnerships USA to ensure the full community has input in the City budget process.

A package of budget suggestions will be prepared for submission to the City Council following the Jan. 12 meeting. You can see some of the ideas presented at the Working Group's first meeting here.

Silicon Valley Jobs Report: Modest growth in November, but more jobs are needed

Louise Auerhahn — Fri, 21 Dec 2007 20:32:00 +0000

Today's employment report from the state shows that the San Jose metro area experienced moderate job growth in November, adding 11,700 jobs over the past 12 months for an annual growth rate of 1.3%. Most of the region's major industries added some jobs over the year, with the biggest gains in educational & health services, professional & business services, and manufacturing.

While it is a positive sign that Silicon Valley is adding jobs broadly across most sectors of the economy, job growth of only 1.3% over the year is inadequate to bring employment and incomes back up to the point where Silicon Valley's working and middle-class families can make ends meet.

This is especially the case now that Santa Clara County is beginning to see more rapid population growth, perhaps spurred by people who left during the dot-com bust moving back in. With population growth for 2006-07 at 1.67% -- the highest in the Bay Area -- the demand for employment is rising faster than job creation. Even though the region added jobs over the past twelve months, unemployment rose from 4.4% in November 2006 to 5.0% in November 2007.

At the same time, home sales plunged yet again in November. Just 1,317 homes were sold in Santa Clara County, (Continued...) down 35.1% from November of last year, and far below the 2,624 homes sold in Nov. 2004.

The ongoing housing market crash may signal a decline next year in jobs in the construction and financial activities sectors -- which could put more people out of work. (Construction jobs fell by 1,000 this month, but much of that is probably a seasonal decline due to winter weather.)

Highlights of the jobs report:

The San Jose metro area added 1,800 non-farm jobs in November. Nearly all of these jobs were in the retail sector, likely reflecting an increase in hiring for the holiday season.
Over the year, the San Jose metro area added 11,700 jobs, a 1.3% increase from November 2006.
The biggest year-over-year gains were in educational & health services (+3,200 jobs), professional & business services (+2,200 jobs), manufacturing (+1,700 jobs), information (+1,400 jobs), government (+1,200 jobs), and leisure & hospitality (+1,100 jobs).
For November 2007, the region's unemployment rate stood at 5.0%, up 0.1 percentage points from last month and up 0.6 points over the year. That translates to 5,800 more unemployed residents than in Nov. 2006.
Seven years after the tech crash, Silicon Valley still holds 153,600 fewer jobs than it did in November 2000.

(The San Jose Metropolitan Statistical Area (MSA) encompasses Santa Clara and San Benito Counties.)

The ballooning housing crisis: San Jose, Morgan Hill and Gilroy most at risk

Louise Auerhahn — Mon, 17 Dec 2007 03:43:00 +0000

Thousands of Silicon Valley families have lost their homes to the ongoing housing crisis, with ten of thousands more impacted as the ripple effects of the crisis continue to spread. Sunday's Mercury News mapped out foreclosures in Santa Clara County so far this year, focusing on the hard-hit East Side neighborhoods of San Jose. Unfortunately, the picture of the housing crisis in Silicon Valley is even worse than revealed by foreclosures alone.

A Working Partnerships analysis of houses currently in foreclosure or pre-foreclosure shows where we can expect more families to face losing their homes in the coming months.

San Jose and South County both have reason for concern: in San Jose, 38.7 houses per every 10,000 residents are currently in foreclosure or pre-foreclosure, with an even higher rate of 43.9 per 10,000 in Morgan Hill and a shocking 62.3 per 10,000 in Gilroy. (Los Altos, on the other hand, is getting along fine with just 3.6 per 10,000.)

Not everyone who's currently in pre-foreclosure (those who, after one or more payments, have received a Notice of Default on their loan) will ultimately have their home foreclosed upon. Some will be able to sell and pay off the mortgage, work out a deal to give up the house without a formal foreclosure, or in the best case scenario, find the money to bring the mortgage current and keep their house. But unless they get help, all of the homeowners currently in pre-foreclosure will be struggling to pay their bills and save their homes.

And the problem won't end there; the biggest wave of ARM (Adjustable Rate Mortgage) rate resets is projected to continue through the end of 2008 and possibly the first half of 2009, sparking still more foreclosures.

Given how many American families have been or will be impacted by the housing crisis, President Bush's proposal for selective, voluntary rate freezes by lenders is wholly inadequate to the scope of the problem. The Federal Reserve's proposal today looks like it may help to curb some of the worst abuses (something the Fed should have stepped forward to do a long time ago), but also does not adequately tackle the big picture. We need to help those currently affected, fix the laws and practices that encouraged irresponsible or predatory mortgage loans, and make homeownership affordable for working families. The Center for Responsible Lending discusses proposals that could help embattled homeowners and help prevent this crisis from recurring.

On a local scale, homeowners who need help can contact Neighborhood Housing Services Silicon Valley, Project Sentinel, or ACORN Housing.

(Thanks to Brian Darrow for the map.)

Child Care Costs Skyrocket for Valley Families

Louise Auerhahn — Fri, 14 Dec 2007 18:37:00 +0000

Are families with kids being priced out of Santa Clara County?

A new report by the California Child Care Resource & Referral Network reveals that the average cost of care for one preschooler in the county is up to $10,597 per year, a 45 percent increase since 2001. Working parents are increasingly hard pressed to keep up with the cost (have you gotten a 45% raise recently?)

The first five years of a child's life are a time of critical intellectual, emotional and physical development. They learn to walk, talk, explore their world and interact socially with adults and other children.

Quality care and early childhood education may be the single most important investment we can make for our community's future. Research overwhelmingly shows that early education is critical to children's success in school and later on in life. Yet right now, kids, parents and providers are all suffering from the under-resourcing of child care and early education.

The cost for infant or toddler care is even further out of reach: $14,454 per year. A minimum wage earner working full-time makes just $15,600 per year. There's simply no way most low-wage workers can afford the market rate for quality child care.

Ironically, the people who are providing care and early education for our youngest kids are themselves in the ranks of low-wage workers. The median wage for child care workers in Silicon Valley is $11.41/hr. No wonder we've got such a shortage of child care (only 50,551 available slots for 195,871 kids, according to the Resource & Referral report.)

Over the next year our region will be making critical decisions about economic development, public budgets, and investments. A key topic in those discussions needs to be figuring out how to make early education work for all kids, parents, and providers.

'Las Posadas' urges Code of Conduct for contract workers

Working Partnerships USA — Wed, 12 Dec 2007 23:45:00 +0000

A large crowd of marchers plus reporters from El Observador and KLIV participated in Tuesday's symbolic re-enactment of "Las Posadas" -- a Mexican holiday tradition remembering Joseph and Mary's search for an inn in Bethlehem -- in support of a Code of Conduct for Silicon Valley contract workers.

More than 8,000 members of South Bay religious congregations have signed cards urging companies using contract workers to endorse a Code of Conduct calling for fair wages and benefits, respect in the workplace, job security and non-interference in their efforts to form a union.

The march, organized by The Interfaith Council, went to Applied Materials and WebEx in Santa Clara, two high-tech companies that contract with Guckenheimer Enterprises for their cafeteria services, and ended with candlelit prayer at the Shrine of Our Lady of Peace.

LeaderNet alumni gather for annual breakfast

Working Partnerships USA — Mon, 10 Dec 2007 23:33:00 +0000

Members of the Working Partnerships Leadership Network (LeaderNet) gathered Friday to reflect on key events in the past year and issues to watch for among those committed to the well-being and power of working families in Silicon Valley. Phaedra Ellis-Lamkins, executive director of Working Partnerships USA, gave opening remarks about the value of collaboration across sectors and communities. Conversations over pancakes ranged from construction and health care workforce development, to the role of the faith community in the immigration debate, to inclusionary zoning and beyond. We thank our table hosts who led these discussions:

Marlene Bjornsrud, Bay Area Women's Sports Initiative; Chris Block, Charities Housing Development Corporation; John Mills, Office of County Supervisor Ken Yeager; Andy Reid, SEIU United Healthcare Workers-West; Kathy Sakamoto, Japantown Business Association; Sal Ventura, International Brotherhood of Electrical Workers, Local 332; and Chris Wilder, Valley Medical Center Foundation.

Important Announcements

Phaedra Ellis-Lamkins — Fri, 07 Dec 2007 14:30:00 +0000

First, the follow-up meeting around the budget ideas has been scheduled! It will be held on January 12th, 9:30 am. (Stay posted for the location.) At this meeting, the consultants will present their analysis of the ideas we've generated, and we'll prepare a package of suggestions to give to the City.

Second, by popular demand, Working Partnerships Policy Director and former City of San Jose Budget Director Bob Brownstein will present a workshop about the City Budget on January 7th at 7:00pm at Working Partnerships' offices, 2102 Almaden Road. Please respond to this email address if you're interested in attending.

Finally, the ideas we've generated so far have been posted at mybudgetidea.com/ideas.html. If reviewing them inspires another idea
for you, feel free to submit it to the site! We'll accept ideas through December 15th.

We hope to see you on the 12th!

First Community Meeting is Big Success

Working Partnerships USA — Sun, 02 Dec 2007 00:23:00 +0000

Below is the press release from the Community Budget Working Group about today's meeting.

On Saturday, December 1st, the Community Budget Working Group held its ﬁrst budget discussion, hosting over 100 San Jose residents in a discussion of how the City can best allocate its resources. Community members generated several dozen ideas that will be studied by a professional analysis ﬁrm and ultimately presented to the City. Councilmembers Pierluigi Oliverio and Kansen Chu attended the meeting, as did representatives of Mayor Chuck Reed and Councilmember Forrest Williams.

"It was very educational. I'm glad I was invited," said Myrtle Ferrande, one of the community members present. Other participants echoed her enthusiasm, and expressed appreciation for the opportunity for their voices to be heard.

"It was wonderful to see the public involved in a budget conversation," said Michelle Lew, Executive Director of Asian-Americans for Community Involvement, and member of the Working Group's Steering Committee. "Our fear was that without public input, the City's process would have been incomplete. We feel conﬁdent today that we've appealed to the best minds in our community and can help complete the picture."

The Working Group will continue to solicit ideas and recommendations at its website through December 15th. A second meeting will be announced for January, at which the analyzed ideas and proposals will be discussed and released publicly.