Building a Better Airport

posted by Louise Auerhahn

Tuesday, April 29, 2008, at

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. (Continued...)

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.

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

posted by Louise Auerhahn

Friday, April 18, 2008, at

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.

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The Middle-Class Squeeze

posted by Louise Auerhahn

Thursday, April 17, 2008, at

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.

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Inflation Hits Home

posted by Louise Auerhahn

Wednesday, April 16, 2008, at

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.

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

posted by Louise Auerhahn

Tuesday, April 15, 2008, at

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, 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, 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.

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What's happening to the economy?

posted by Louise Auerhahn

Monday, April 14, 2008, at

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.

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

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

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Collaborating to Build Good Green Jobs

posted by Louise Auerhahn

Monday, April 7, 2008, at

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.

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