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Workers are more likely to abandon low wage jobs

According to new data released by the US Census Bureau, workers in high-wage jobs are the least likely to quit. That sounds like a no-brainer, but they have not said the quiet part aloud: workers in low wage jobs are more likely to leave their positions.

Low wages introduce instability in the job market, leading to high turnover rates and a workforce that is too small to meet consumer demand. Unfortunately, most community college graduates find themselves on the short end of the wage stick. Many community college graduates occupy chronically low wage positions. Frequent movement from job to job in search of higher wages may reduce their overall earnings; delay or prevent their entry into the middle class; derail their retirement savings plans; increase benefits costs; and make getting credit more difficult. They may take longer to pay off loans, remain income-ineligible to own a home, delay marriage and/or having children, or work two or more jobs to make up the difference.

The data all support the idea that those (increasingly rarer) community college degrees that significantly increase the salary of the degree-earner can help reduce volatility in the labor market. Labor volatility occurs in two primary ways: first, lower-wage earners may leave their current position but take a job in the same field that simply pays more. Second, lower-wage workers are more likely to exit the job market altogether. Neither of these outcomes is particularly desirable because they both lead to labor shortages, often in critical fields, like healthcare.

We do not need more low wage jobs in Washtenaw County

Beyond increasing wages associated with community college degrees, the data also deliver an incredibly good reason not to engage in “workforce development” with employers who have no plan to pay their workers an adequate wage. The return on investment to the community is exceptionally low; creating or facilitating more low-wage jobs simply feeds near-constant turnover. This erases any economic gains the employer would have earned. With that benefit gone, there is no benefit to the community, either. And of course, there was never a benefit to the worker. Eventually, the community will run out of individuals willing to accept low-wage appointments, which makes the labor shortage permanent.

The new SNAP eligibility guidelines took effect on October 1. A Michigan household of four with all earners combined making $26.68 per hour ($55,500/annual) could qualify for food assistance if the allowable deductions (heating and cooling, utilities, phone, childcare, rent/mortgage, insurance, and taxes) reduce the household’s net hourly wage by half.

When publicly funded “workforce development” can create jobs only in wage tiers that make workers eligible for food assistance, we need to stop and ask ourselves what we are doing. Under these circumstances, high paid community college administrators and disconnected “rich community” Trustees cannot continue to feign ignorance about why there are no takers for jobs that pay $21 an hour or less.

It is time to move along the country club sector that has perched itself atop the community college for their refusal to recognize, accept and address the issues facing low income residents in Washtenaw County. It is time to find individuals who are committed to allowing the institution to work as intended.

Photo Credit: Michigan Department of Health and Human Services