Hard Data on Equity for U.S. Workers

TRANSCRIPT
Horizons podcast - Season 3, Episode 2 Jed Kolko

 

Karin Kimbrough

I think that's why we're here, right? We want to see how do we go through a transition without leaving a horrible wake of people left behind who feel disempowered, disengaged, and don't have the same access opportunity. 

 

Tameshia Bridges Mansfield

That was Karin Kimbrough, chief economist at LinkedIn. Today, we're talking about the U.S. labor market, who are the workers that are getting ahead and who is getting left behind, and why. As millions of women get back to work post-pandemic, how are they still at a disadvantage in the workplace? And what potential changes could we see in the labor market with a shift towards skills-based hiring? 

Welcome to the third season of the Horizons podcast, where we take the inspiring discussions from the stage at Jobs for the Future's annual Horizon summit and invite a special guest to help us move that conversation forward. I'm your host, Tameshia Bridges Mansfield. 

Today, we'll be joined in our studio by special guest, Jed Kolko, undersecretary of commerce for economic affairs. Jed coordinates economic analysis for the United States' Commerce Department and oversight for the Census Bureau, the Bureau of Economic Analysis, and the Chief Economist in the Office of the Undersecretary for Economic Affairs. Jed has professional roots in the tech world as former chief economist at the employment website Indeed, as well as online realtor Trulia. But before we sit down with Jed, let's return to the stage at the Horizon summit for a closer look at the current state of the workforce. 

An estimated 12 million women left the workforce during the pandemic, many to care for their households as the care industry was largely forced to shut down. So, where are the women in the workforce now? And it's not just women who have been affected in this unusual labor market of the past few years. A core group of men are feeling the residual effects of the pandemic. Here again is LinkedIn Chief Economist Karin Kimbrough in conversation with Richard Reeves, non-resident senior fellow at the Brookings Institution and president of the American Institute for Boys and Men and JFF board member. 

 

Karin Kimbrough

Largely, I think women are starting to get back to that point where they're showing up at the same rates. The one thing that is lagging, though, is hiring of women for leadership positions. Frankly, after George Floyd in a move towards equality, we saw a big boost and it's starting to flag now. And so, it's a little disappointing to see that women's rates that are being hired into leadership positions is starting to slow down significantly. 

 

Richard Reeves

Do you think that's more on the supply side or the demand side? Is it more women parents generally just saying, maybe not men, but seeing the trade-offs differently post-pandemic? 

 

Karin Kimbrough

I think part of it is seeing that trade-off, that wanting to embrace flexibility, but I think it's a mistake to say, "Oh, women don't want these leadership roles." I think also we've taken our eye off the ball a little bit as we focus on this question of, will we get a recession in America? And my answer is, I think we will, but I think it'll be extremely short and mild. I don't think it'll be catastrophic like prior recessions. But you know what? I really want to turn it to you, Richard, because if you don't already know, he wrote this amazing book, Of Boys and Men, and I want to hear a little bit about your take because my take is a lot on gender differences, particularly with a lens through women, but men are important here too and are also having their own experiences. Tell me more about that. 

 

Richard Reeves

Yeah. So, in terms of the labor market, the way I see this in particular is we had this... Every recession since World War II except the pandemic hit men harder. It was a he-cession, and that's because of these long-run trends including automation, outsourcing, et cetera. And what I've seen happen is this very weird thing happened in the pandemic. It was like an asteroid hit the economy and all kinds of weird stuff happened, and clearly women were hit hardest first. But now, I'm seeing the resurgence of long-run problems, which is the falling labor force participation of men, especially men with lower levels of skill. So, that speaks a lot to here, especially men of color. And so, the long-run issues of labor force participation of working class men didn't go away. And in some ways post-pandemic, I think was returning to that conversation. And I think that's part of a broader conversation that, frankly, we all need to have, which is about the fact that various groups of men and women are struggling in different ways at different points in the labor market. 

 

Tameshia Bridges Mansfield

Welcome back to our studio. I'm now joined by special guest Jed Kolko, undersecretary of commerce for economic affairs. Jed, welcome to the Horizons podcast. 

 

Jed Kolko

Thanks so much for having me here. 

 

Tameshia Bridges Mansfield

Great. So, let's start with Karin's first point. Women lost a lot of traction during the pandemic, and there's actually been a little bit of debate about exactly how many women left the workforce, but for whatever the exact number was, we know that it was enough to bring on what has been referred to as a she-cession and now women are back to work but are still seriously lagging behind, and there's a suggestion that it's by their own choice. I'd love to hear a bit about what your thoughts are about reversing the decline of women in leadership positions and in the workforce overall. 

 

Jed Kolko

So, what we've seen this year is that women's employment is actually up to a record high. When we look at women age 25 to 54, more than three-quarters are employed, and that's actually never happened in the U.S. in recent history until this year. So, women's employment is actually fully recovered from before the pandemic and hitting record numbers. I think a couple of things are behind this. 

First, the strong labor market definitely helps. The ability to work remotely also helps. Remote work provides flexibility and makes it easier for moms with young kids to work, especially compared to before the pandemic and labor market participation has risen the most in the past few years for women with kids younger than five. There is of course a continued gap in leadership positions. Claudia Goldin, this year's Economics Nobel Prize winner explains this in terms of what she calls greedy jobs. Greedy jobs are those that tend to reward employees who can work long and unpredictable hours, and that of course describes many leadership positions. And it's a huge challenge for women who don't have adequate or affordable child care to be able to work those kinds of long and unpredictable hours. Those types of greedy jobs, which again includes lots of leadership jobs, tend to favor men and others who don't have caregiving responsibilities and holds women's employment back, especially relative to other rich countries. 

 

Tameshia Bridges Mansfield

So ,thank you for bringing that up, Jed. And I think it really resonates with a lot of what I hear of other women leaders and how they are navigating their positions, their caregiving responsibilities, and what they actually need to be able to succeed and contribute in the workforce. And that there is also a whole other group of women for whom flexibility is not something that is available in their work, and we also have to keep that in mind as well. But I want to turn the conversation to men now. So, it's an interesting point that Richard Reeves makes about the tough economic times historically that has brought on what is called a he-cession. And so, what I want to ask you is what are the different circumstances in men and women's participation in the labor force and what it will take to bring them both back in? 

 

Jed Kolko

Sure. So, I think one of the really important ways in which the pandemic recession was unusual, it was that the hardest hit industries were leisure and hospitality, which is a sector that employs a pretty high share of women. Whereas previous recessions in the U.S. were concentrated in the mining sector or construction and home building or manufacturing, all traditionally male-dominated industries. So, what's really different here is the nature of the recession and the types of people who are employed in the industries that were hardest hit. 

After the pandemic, after leisure and hospitality essentially shut down at the worst of the pandemic, we've seen a pretty strong rebound with a lot of hiring and big wage gains in those sectors. Male-dominated industries have been more hurt over the longer term by trade and technological change, and that especially hurt men without college degrees in the labor market. So, I think some of the differences that we see in how men and women are faring has a lot to do with broader trends in terms of which industries are most affected rather than men and women competing for the same jobs. 

 

Tameshia Bridges Mansfield

Yeah, I think that's right. And I think in Richard Reeve's book, he talks about this, and I think we'll get into some of this a little bit more as we get into the conversation around a lot of the investments that have been made in the Biden administration with CHIPS and IRA and things like that, and how do we bring about more balance and more opportunity in some of those more male-dominated sectors and occupations to both bring men back and also kind of bring some gender equity balance into that. But for now, we're going to head back to the stage at Horizons where the conversation turns really to the potential of new hiring practices in today's labor market. Here again are Richard Reeves from the Brookings Institution and Karin Kimbrough with LinkedIn. 

 

Richard Reeves

So, how do you see the skill driven dimension of inequality playing out in this new labor market? 

 

Karin Kimbrough

Yeah, and I think that's why we're here, right? We want to see how do we go through a transition without leaving a horrible wake of people left behind who feel disempowered, disengaged, and don't have the same access to opportunity. 

One answer that we are thinking a lot about at LinkedIn is this idea of how can we approach skills-based hiring where we give this sense of like, I don't want to hire just for someone who had that job title, who held a degree that I've decided is required, but rather how do I filter across a multitude of candidates just based on the skills that they may have no matter what job they did? And what I would say here is when we look at the counterfactual, what would happen if I searched just by degree or job title? I'll get X number of people, but if I say, "Don't worry about that, just look for skills." What I find in the U.S. is I can expand the talent pool 19 times, right? Okay, it doesn't mean that all 19 times of those people now included are getting hired, but I've now cast up wider net again. 

And what we also find coming back to the gender issue is that often it disproportionately benefits people of color, women, other underrepresented groups who haven't had that job title, haven't had that network access to get them the job they needed. 

 

Tameshia Bridges Mansfield

Welcome back to our studio. Once again, I'm joined by Jed Kolko, undersecretary of commerce for economic affairs. So, Jed, as technology changes the way we work and the way we find work, we have this opportunity to shift decades long processes with hiring, focusing on skills and not just degrees. And so, we're seeing some success with a shift as some government agencies and corporations are embracing this, but how do we really ensure that this is adopted more broadly to create more opportunity and equity? 

 

Jed Kolko

So, skill-based hiring can help people who are clearly qualified for jobs but lack formal educational credentials. I think one challenge, though, with focusing more on skills than degrees is defining and measuring who has what skills. Official economic surveys and statistics have really good data on educational attainment, what degrees people have, the industry they work in. and their occupation, but not the skills they have. There's not an agreed upon definition, the full list of skills, nor is there any sort of comprehensive data on what skills people have. And so that makes it harder to track how much skills-based hiring is going on, and to incorporate skills-based hiring into job search systems. 

I think it's also important to understand that automated systems are increasingly used, at least at early stages of the job search and review process. They scan resumes and profiles, and it's really important to measure and reduce the bias in these tools. Now of course, there's also plenty of bias that humans introduce into the job search process, but some of that bias can carry through into automated systems, but automated systems make it easier to measure and then hopefully reduce the bias in those tools as they are looking for people who have the right skills. 

 

Tameshia Bridges Mansfield

Jed, thank you for raising the issue of bias and equity and how important it is as we are thinking about skills-based hiring and that move right now. And that's something I think that the Commerce Department is also thinking about. So, just this summer, the Commerce Department released a report on geographic income inequality, which has risen 40% in the past 40 years, and it shows that the richest cities have become much richer while the poorest have only experienced a slight growth in income. And while it may not always affect standards of living, how might this growing disparity shift mobility and equity for many Americans, and what is the formula to remedy this? 

 

Jed Kolko

Yeah, as you say, geographic inequality is at its most extreme in several decades. The gaps between richer and poorer places have widened. I think there are at least two reasons for this. The first is that many high paying sectors like finance and tech, they tend to cluster in particular places. Firms in these sectors want to locate where other firms in that same industry are. It's where the specialized workforce is and it's also where cutting edge ideas are shared. And so, these forces that keep growing high-paying sectors clustered in a relatively small number of places adds to this geographic inequality. But on top of that, it has gotten harder for people to move to where economic opportunities are. 

A lot of these places that have clusters of finance and tech and other high paying jobs also tend to have very high housing costs, and there are rules that make it hard for people in some occupations to move to another state without having to get recertified or relicensed. People also have caregiving responsibilities. All these things end up keeping people in place, and it means that people are a lot less likely to move than they were 20, 40, 60 years ago. And so, because of both this concentration of opportunity in certain places and the fact that fewer people are moving, the Biden-Harris administration has announced tens of billions of dollars in place-based investments, really trying to bring economic opportunity to where people live. 

 

Tameshia Bridges Mansfield

I think bringing economic opportunity where people live is really, really important. And the work that the Biden administration has done to do that, I think it really shines a light on spatial mismatch and all of those factors that make mobility and people's ability to move, as well as access to really good transportation networks, really important for people to have access to the jobs that are increasingly available. So, can you talk a little bit more about how else the Commerce Department is working to enable a more equitable workforce, and how might this effort benefit the individual worker, as well as the U.S. economy? 

 

Jed Kolko

Sure. Workforce development and training is at the center of numerous commerce investment programs, including the CHIPS Program that's investing tens of billions of dollars in semiconductor manufacturing. Let me describe three ways in which workforce is a focus. First of all, the Commerce Department, we're calling for better partnerships between companies and high schools and community colleges to train a hundred thousand new technicians over the next decade through apprenticeships, career and technical education, and career pathway programs. 

Second, we're really encouraging companies to include plans for supporting child care in order to reduce this key barrier that parents, especially mothers of young kids, face. We know that reliable and affordable child care is critical to getting women to work, and the lack of reliable and affordable child care is one of the reasons why we see women's employment in the U.S. lower than it is in other rich countries. 

The third thing, as we started talking about, is we are investing in places across America, including those where employment is especially low and there are fewer jobs. Many people aren't mobile, they can't just move to where there are economic opportunities. Of course, in some sectors, remote work has the potential to narrow some of those inequities in the workforce by giving people access to jobs that might be far away. But lots and lots of work can't be done remotely, and that's why we still need to make sure that there is economic opportunity where people live. 

 

Tameshia Bridges Mansfield

And it sounds like through each of those, through investing and partnerships at the local level, by addressing barriers that people face like child care, and by really putting money into where jobs are actually available on the ground, I think will go a long way in helping to address some of the issues that we're seeing right now in the economy. 

One last question that I have, if you have any sense with the money that is really on the ground now and the investments that are being made, do you have any sense or any idea of what is working or what is giving you hope right now about the direction that these investments are really going to take us? 

 

Jed Kolko

We're already seeing two effects from these investments. The first is that we've seen lots and lots of private sector announcements of investing in semiconductors, in batteries, electric vehicles, and other sectors in all regions of the country. And those private sector investments are a vote of confidence in these programs that the administration is leading. Second, we've also seen a big increase in construction, construction of manufacturing facilities. So, we've seen in addition to overall very strong employment growth, spending growth, in particular, there's been a boom in construction in the types of facilities needed to make these investments. But the truth is that the biggest effects are still to come. These investments take time for them to create long-term good jobs, will take more time than we've seen so far. Whenever you invest in infrastructure, in new industries, these are investments that need to be done carefully, and there's a process before we see the effects that years from now we'll be able to evaluate. 

 

Tameshia Bridges Mansfield

Yeah, so it's a long game, right? Like most investments are, you have to kind of stay tuned so you can fully see the good return on the other side. So, thank you so much, Jed, for joining me in this conversation and really kind of bringing to bear the data of what is actually happening in this economy and really the opportunity that the investments will bring us. So, thank you for coming today. 

 

Jed Kolko

Thanks so much. It was a pleasure to join you. 

 

Tameshia Bridges Mansfield

And thank you to our listeners for joining us for this episode of the Horizons podcast. Please let us know what you thought about today's conversation by sharing a comment wherever you find your podcast, and mark your calendar for the next Horizon summit, July 22 and 23 in Washington, DC I look forward to the conversation next time. For now, I'm your host, Tameshia Bridges Mansfield. 

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