For the past year, we have (understandably) been focused on the pandemic. Its impact has sent shockwaves through the economy in ways we could not have predicted. One thing that economists did predict however, was a contraction in the number of low-wage jobs. They issued that prediction before anyone had heard of COVID-19. That’s why getting Michigan workers back into the classrooms is critical to the State’s well-being.
COVID-19 has exposed the clear differences between low-wage and high-wage workers. While most high-wage workers have hardly skipped a beat, low-wage workers have borne the brunt of the pandemic. In large part, thanks to public and private investments in infrastructure, high-wage workers (and their employers) could easily shift to work-from-home. Low-wage workers, on the other hand, typically needed to be present in their workplaces to earn a living.
Economists predicted that the number of low-wage jobs in the economy would shrink. That’s bad news for a state like Michigan, where more than half of its workforce does not have a college degree. A variety of factors has decimated Michigan’s manufacturing sector over the past five decades. Michigan workers have never completely recovered from that, so the loss of more low-wage jobs will be devastating.
Automation, advances in manufacturing technologies, and the relocation of manufacturing facilities to other states and nations have all eliminated jobs. That happens with or without the pandemic. Without a clear path to retrain existing workers or engage new workers in different career options, Michigan’s economy will suffer. Then, add the impact of the pandemic, and the picture becomes very dismal for Michigan workers with no college background.
Moving Michigan workers out of low-wage jobs
According to the Federal Reserve Board of New York, fewer than 10% of low-wage jobs could fit into a work-from-home strategy. As a result, about 1 in 6 low-wage workers who were employed pre-COVID-19 are now unemployed. Employment among high-wage workers, however, is up slightly over March 2020.
Therefore, programs like Michigan Reconnect and Futures for Frontliners are so important. People who have college degrees weathered the pandemic far better than those who did not. People with college degrees not only earn more, and can typically work from home, but they also benefit in other ways.
Most high-income workers own stocks, for example. Fewer than 12% of workers making less than $20K per year own stock. And during the pandemic, the stock market has grown in value. On March 11, 2020, the Dow closed at 21, 237.38. On March 10, 2021, the Dow closed at 32,778.64. That’s a more than 54% gain, which most low-wage workers were closed out of.
Real estate is another economic area in which low-wage workers don’t typically participate. In many areas (including Ann Arbor), the number of houses sold dropped slightly, but the average sales price for the houses that did change hands rose.
WFH workers didn’t lose their health insurance during a pandemic. While overall consumer credit card debt fell and savings rose, 51% of US consumers with existing credit card debt increased their balances during the pandemic and drained their savings accounts. (That’s the so-called “K-shaped recovery.”)
Return to the classroom requires readiness on WCC’s part
Whether part of the pandemic recovery or just a shift away from lower-wage work, some Michigan workers need to return to the classroom if they want to survive the coming workforce changes. And WCC needs to be ready to support that need. That’s why we – the taxpayers – provide money to WCC in the first place.
Being ready means not spending the money that Washtenaw County taxpayers provide on buildings we don’t need, “free puppies” like the Health and Fitness Center, and bloated executive hiring and compensation. Washtenaw County taxpayers need WCC to focus all the money it provides on training and retraining programs for low-wage workers. That is literally the only way that poverty in Washtenaw County will decline. Right now, diverting WCC’s General Fund dollars from actual operations to debt service for construction we don’t need is stealing someone’s opportunity to escape poverty.
The Board must recognize this kind of spending for exactly what it is and eliminate it. If they do not, they will be complicit in maintaining Washtenaw County’s poverty level indefinitely.
Photo Credit: Richard Binhammer , via Flickr