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Los Angeles finds new ways to tackle labor shortage

  • February 11, 2020
  • by: mhalim
Tesla students doing diagnostics

The national unemployment rate is sitting at 50-year lows, but millions of Americans are still on the sidelines of the labor market. And a low headline number on unemployment may be masking an ugly truth: that the workforce of today is ill-prepared for the work of tomorrow.

A recent survey from the NFIB even showed that 26% of small business owners identified “finding qualified labor” as their No. 1 business problem. In Los Angeles, public and private industry are floating higher wages and skills retraining programs as remedies for the shortage of qualified workers.

In the eastern LA city of Whittier, Tesla (TSLA) has been teaming up with Rio Hondo college on a 12-week crash course on electric vehicles that transitions students into full-time jobs as Tesla technicians. All 18 students in Frala’s first Tesla START class were placed in jobs.

“I’m just a piece of the puzzle but I think it’s a piece a lot of other programs could model after,” said John Frala, a Rio Hondo professor who manages the “Tesla START” program.

The program is just one example of addressing the labor market puzzle of technological changes displacing some types of skilled work.

But other structural changes, such as the ballooning cost of living and a rapidly aging population, mean that preparing the workforce for the jobs of tomorrow requires more than simple job retraining.

And that problem is being observed nationwide.

The Federal Reserve’s beige book, which measures economic activity across the country, noted in January that “widespread labor shortages” were to blame for weaker job growth and business expansion.

Getting older

In addition to moving over a million people daily through the public transit system, the Los Angeles Metropolitan Transportation Authority also employs almost 10,000workers as one of the area’s largest employers.

But 69% of Metro’s employees are 40 or over and 47% of Metro’s workforce will be eligible for retirement over the next five years.

As a result, Metro is now collaborating with local colleges and community groups on a “Workforce Initiative Now” program to provide job retraining for those interested in working in the transportation industry or at Metro.

But WIN-LA is not trying to retrain those already at work. The program specifically places priority on those either marginally attached to the workforce or removed from it entirely, such as veterans or the homeless.

Metro deputy executive officer Shalonda Baldwin told Yahoo Finance that in a city continuing to build out its infrastructure, pulling in workers from the sidelines is critical to filling jobs in a tight labor market.

“We are all competing to some degree,” Baldwin said. “We are an industry across the nation that is facing the same issues, we have a workforce that we need to build.”

In one of its early cohort of 80 participants, 27 have found jobs, a majority of whom have no education beyond high school. The others are in WIN-LA’s “qualified candidate pool” and are in the process of looking for jobs.

Wages, wages, wages

Job retraining isn’t necessarily the answer to all hiring gaps.

The aging population is also creating a conundrum in one of Los Angeles’ fastest-growing industries: personal care workers. As a lower skill job, the answer may be higher wages.

Source:
https://finance.yahoo.com/news/los-angeles-labor-market-job-retraining-wage-growth-191127705.html

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