Narrative: II. a. 1. A.

(a) Economic, Workforce, and Workforce Development Activities Analysis

(1) ECONOMIC AND WORKFORCE ANALYSIS

(A) Economic Analysis. The Unified or Combined State Plan must include an analysis of the economic conditions and trends in the State, including sub–state regions and any specific economic areas identified by the State. This includes:

On January 2, 2015, Muriel Bowser was sworn in as Mayor of the District of Columbia and promised to deliver a “Fresh Start” for residents. As a candidate and as Mayor, she has focused on expanding economic opportunity to residents across the District of Columbia so that more residents are able to access a pathway to the middle class. Reforming the District’s workforce system is a top priority for the Bowser Administration, and the Workforce Innovation and Opportunity Act State Plan is the roadmap we will use to guide our reform efforts. These reforms come at a critical time in the city’s history because economic growth has happened unevenly over the course of decades, leaving some residents ill equipped for the jobs available today and leaving historically overlooked communities hungry for opportunity.

The District of Columbia is in the midst of significant change. Beginning in the 1950s, the District experienced a sharp, significant decrease in population that lasted into the 1990s, and witnessed an economy on the verge of collapse. In subsequent decades, both population numbers and the city’s economy have climbed such that today, Washington, D.C. is the anchor of a strong and highly competitive regional economy. The city’s skyline is dotted with cranes demonstrating large–scale construction projects in every Ward, including areas that had not seen significant development in decades. While the economy is thriving; thousands of District residents have not yet seen or felt the prosperity or economic growth in their families and their communities.

Washington, D.C. is divided into eight Wards that have each experienced the city’s economic resurgence differently. While some communities have had a front seat to job growth, economic development, and prosperity for decades, some areas have only recently seen growth, and other communities – particularly within Wards 7 and 8 located east of the river, which serves as a critical dividing line, have seen limited change. A majority of all jobs in the District are located in the downtown core, primarily in Ward 2 and immediately surrounding areas.

The District has seen significant changes to its population in the past decades. In 1998, the city’s population dropped to 565,230, the lowest since before the Second World War. Today, the District of Columbia’s population is steadily climbing, adding more than 1,000 residents each month.^[1] The District’s 2015 population estimate is now at 672,228, a 1.9 percent increase over the revised 2014 population of 659,836[2]. According to the US Census Bureau, the main driver of the increase was domestic and international migration – people moving to the District from other parts of the United States, and from abroad. However, an ongoing “baby boom” also contributed to the increase with more than 9,400 babies born to District residents in each of the past three years[3].

The District’s economic and population growth comes at a time when the entire nation is still reeling from the recent economic recession. The recession was felt throughout every industry and community across the U.S., but for some professions and for some areas of the country, the effects were greater.

Collectively, the District of Columbia weathered the economic recession relatively well compared to similar cities across the U.S. Overall growth slowed but did not stop, and job loss was focused on a limited number of industries, such as construction, real estate, legal services, and scientific research and development. Job losses were highest in early–mid 2009, and except for a short period in 2010 when job gains were barely measurable, jobs have been increasing steadily ever since. The District of Columbia added 7,300 jobs over the one–year period from November 2013 to December 2014, with private sector employment increasing by 10,400 jobs, but public sector employment decreasing by 3,100 jobs^[4]. Since January 2015, the Bureau of Labor Statistics has reported that the District of Columbia has added 23,500 jobs[5].

However, unlike the overall jobs trajectory, wages have not seen a steady climb. Average wages in the region grew steadily between 1990 and 2010, according to the Center for Regional Analysis at George Mason University, but then fell by 3% between 2010 and 2012, and regained only half that value by the end of 2014[6]. Wages fell for many groups of DC residents during the recessions, and have grown unevenly since the start of the recovery[7]. While the highest–earning DC residents have fully recovered and now earn more than before the recession started, low–wage workers, African American and Hispanic workers, and those without advanced degrees still earn less today than before the start of the recession.

For African–American residents, wages grew just 2 percent between 2008 and 2012, a difference of just $0.38 an hour; and wages for Hispanic residents barely grew at all. Yet the typical wage for white workers rose about 9 percent. Residents without college degrees saw their wages fall in the wake of the recession. The typical wage for a resident with a high school diploma fell from about $15 per hour in 2008 to about $12 per hour in 2012. Even those with some college, but without a bachelor’s degree saw wages decline from about $17 to $16 an hour. Meanwhile, wages for those with college degrees grew from $30 to $31 an hour[8]. Average expenses for the typical household are higher in DC than in any other metropolitan area in the country though, according to the Bureau of Labor Statistics[9]. Based on an estimate from MIT, a family of four in DC would need to have two earners working full time and making an average of $20.27 an hour to meet all basic living expenses[10]. Below that level—even for people above the federal poverty line—having enough money for food and housing is often very difficult.

Economic Development Strategies

Due to these pervasive disparities that exist in the District of Columbia, Mayor Bowser opened the first ever Mayor’s Office east of the Anacostia River and created the Office of the Deputy Mayor for Greater Economic Opportunity (DMGEO). DMGEO, working in close partnership with other government agencies and community stakeholders, is responsible for facilitating job creation, small business growth, and investment in the District’s historically overlooked communities.

This has created a culture change within District government wherein a Deputy Mayor is focused on building a skilled workforce, working with employers, and ensuring residents are better prepared for the jobs available today, as well as those on the horizon.

With a strong and growing economy, the District is employing a number of targeted strategies to promote continued growth and greater economic opportunity for all residents. Several key entities drive these efforts, including the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Washington DC Economic Partnership (WDCEP), and the Department of Small and Local Business Development (DSLBD).

DMPED is charged with executing the Mayor’s economic development strategy, which includes a number of priority strategies that will help build the Pathways to the Middle Class:

1. Supporting Job Creation for Residents

2. Directing Investment to Overlooked and Underserved Communities

3. Producing, Preserving and Protecting Affordable Housing (HPTF, Preservation Strike Force)

4. Fostering Innovation & Entrepreneurship

DMPED recognizes that resident job creation is critical for growing and diversifying the District’s economy and increasing economic opportunities. Toward this end, its Business Development team helps businesses identify space, connect with financial resources, attract and retain key employees, and identify strategic alliance partners. In 2015, the team helped retain The Advisory Board Companies and Blackboard, two of DC’s largest tech employers. The Advisory Board alone will produce 1,000 new jobs for District residents over the next 15 years. The Business Development team also runs the Great Streets grants program, which assists small businesses with capital improvements, so that they can thrive and expand, while also helping to revitalize commercial corridors in the District. The team also has focused on international investment, leading a trade mission to China as well as upcoming trips with regional partners to Cuba and Canada.

Given the District’s thriving technology sector, one of DMPED’s priority areas is technology, entrepreneurship, and inclusion. DMPED has led the District’s delegation to South by Southwest to highlight its strengths for startups and funders and has run a month of innovation programming in May called InnoMAYtion. Looking forward, DMPED will seek to capitalize on the District’s diverse and publicly–minded workforce to drive efforts at making the District the capital of inclusive innovation. Already DMPED has led a partnership with Howard University to create the first ever inclusive tech hub. It has also commissioned a report to better understand opportunities in the space.

DMPED’s Real Estate Development team helps create vibrant and stable neighborhoods, rebuild retail corridors and ensure that every District investment yields real benefits for residents and local businesses. The team manages a portfolio of projects worth more than $13 billion across all eight wards ranging from small–scale neighborhood retail to the $10 billion initiative to reclaim the long–neglected Anacostia Waterfront. Under Mayor Bowser, it has been charged with helping to direct investment to underserved communities and to help produce more affordable housing. Already, DMPED has gained significant traction at its Saint Elizabeth’s East Campus in the Congress Heights neighborhood of Ward 8. It has partnered with Monumental Sports and Events DC to create a 5,000 seat Sports and Entertainment Arena and with a developer to create housing, retail and commercial space. In both cases, the District is working with neighborhood residents to ensure they can take advantage of job and housing opportunities.

The Washington DC Economic Partnership (WDCEP) is a non–profit, public–private organization created by the District Government whose core purpose is to actively position, promote, and support economic development and business opportunities in Washington, DC. They work closely with public and private organizations that contribute to the District’s economic ecosystem to help support business retention and attraction. WDCEP provides an array of programs and services in support of these objectives, including corporate recruitment programs, providing market intelligence to investors, educating businesses on resources and real estate opportunities, and convening public officials and private industry leaders to move deals forward.

The Department of Small and Local Business Development (DSLBD) supports the development, economic growth, and retention of District–based businesses, and promotes economic development throughout the District’s commercial districts. They provide a range of services to meet the needs of District based small businesses that are available to both start–up and existing businesses. DSLBD’s services include one–on–one counseling, workshops and seminars for both entrepreneurs and small business owners, as well as microlending opportunities and financial resources for small business owners seeking free or low–cost capitol to improve enhance, or expand their businesses. The agency also manages the District’s Certified Business Enterprise program, which provides procurement preferences for District–based businesses and helps facilitate their inclusion in economic development projects.

Existing Demand Industry Sectors and Occupations. Provide an analysis of the industries and occupations for which there is existing demand.

Government continues to be the District’s largest industry, accounting for about 237,000 jobs and 41 percent of the gross regional product (GRP). Nonprofit organizations, while not officially classified as an industry and instead spread across a range of sectors, accounted for over 125,000 jobs or 26 percent of total employment in 2012. Professional and Business Services is the second largest local industry with about 165,000 jobs, and Education and Health Services is the only other industry that employs over 100,000 people. The Leisure and Hospitality and Other Services (Except Public Administration) each account for over 70,000 jobs.

Chart 1: Employment by Industry

http://dcworks.dc.gov/sites/default/files/dc/sites/dcworks/page_content/attachments/Chart%201.jpg

Source: Bureau of Labor Statistics.

Emerging Demand Industry Sectors and Occupations. Provide an analysis of the industries and occupations for which demand is emerging.

While Government employs a plurality of District–based workers, hiring demand in this sector has been limited due to sequestration and other budget factors at the federal level. Since 2010, private sector growth has been relatively steady, while public sector employment has decreased or remained flat (see chart below).

Chart 2: Public vs. Private Sector Employment in DC

http://dcworks.dc.gov/sites/default/files/dc/sites/dcworks/page_content/attachments/Chart%202.jpg

Among private sector industries, broken down into more targeted industry sectors, Professional, Scientific and Technical Services is projected to be the fastest growing industry, with 22,258 new employees over the next ten years; and Healthcare and Social Assistance, Educational Services, Administrative and Support and Waste Management and Remediation Services, Other Services (Except Public Administration), and Accommodation and Food Service all projecting significant growth (see chart below).

Chart 3: DC Top 10 Fastest Growing Sectors: 2015–2025

http://dcworks.dc.gov/sites/default/files/dc/sites/dcworks/page_content/attachments/Chart%203.jpg

Source: DC Department of Employment Services

An analysis of job postings in the District during 2015 confirms that most of the positions employers are hiring for fall into the sectors identified above. Additionally, 14 of the 20 most listed occupations from January – October 2015 required a bachelor’s degree or above to qualify for the position (see table below). While the District boasts a rate of educational attainment higher than the national average, the majority of unemployed District residents (69%) do not have a bachelor’s degree (more analyses on this issue included in workforce analysis below). Additionally, many positions that do not typically require a bachelor’s degree are filled by individuals that do have that credential in the District. For example, major occupations in the District such as Registered Nurses, Paralegals and Legal Assistants, and Web Developers that do not typically require a bachelor’s degree nationally typically do require a bachelor’s degree in DC[11].

Table 1: Top 20 Occupations with Highest Number of Postings (Jan 2015–Oct 2015)

Source: DC Department of Employment Services

The WIC updated its previous Demand Occupation List in September 2015, consistent with new WIOA requirements directing that state and local workforce systems identify in–demand industry sectors and occupations and develop sector–focused workforce initiatives^[12]. The previous list only accounted for specific occupations, rather than groups of occupations within sectors that may be linked through Career Pathways, and did not take into account different skill level and experience requirements between occupations.

To produce its updated High–Demand Sectors and Occupations List, WIC staff worked with DOES’s Office of Labor Market Research and Information (OLMRI) to develop a data set that captured projected job openings for each occupation over the next ten years in the District, weighted it to account for openings at or above the District’s Living Wage (currently $13.85 per hour), and sorted occupations into both sectors and skill levels (denoted by groupings of the US Department of Labor’s Job Zone categories, which account for relevant education, training, and experience needed to gain entry to an occupation). WIC staff analyzed this data set to identify key sectors^[13] and occupations for jobs generally requiring an Associates’ degree or less, which are most likely to have entry points and advancement opportunities for adult learners and better match the characteristics of the District’s unemployed residents and those not currently participating in the workforce (see workforce analyses that follow). Analyses were shared broadly with a number of government stakeholders and other workforce experts to produce a final list of high–demand sectors and occupations within those sectors.

The WIC’s High–Demand Sectors and Occupations List identifies five key high–demand sectors:

1. Business Administration and Information Technology,

2. Construction,

3. Healthcare,

4. Hospitality, and

5. Security and Law.

Of the more than 12,000 average annual job openings in the District that do not typically require a bachelor’s degree and/or other advanced education and training, about 76 percent of all entry–intermediate skills openings and 87 percent of middle skills openings fall within the five high–demand sectors after weighing for Living Wage criteria as follows:

Table 2: Job Openings by High Demand Sector

Source: DC Department of Employment Services, Office of Labor Market Research and Information, with supplemental analyses by DC Workforce Investment Council staff. See full District of Columbia High–Demand Sectors and Occupations List document for complete methodological details and criteria.

The WIC has designated these five sectors as high–demand in the District, indicating that federal workforce funding from the US Department of Labor should be aligned with these areas, as well as most other workforce programming focused on individuals at the middle skills level or below – including job training and apprenticeship, and education up to the associate degree level. Within these five sectors, 86 occupations have been designated as high–demand in the District, which account for the majority of all average annual openings in each area (see Appendix 2 for full list).

Employers’ Employment Needs. With regard to the industry sectors and occupations identified in (A)(i) and (ii), provide an assessment of the employment needs of employers, including a description of the knowledge, skills, and abilities required, including credentials and licenses.

The District’s business and industry employment needs were assessed through the Workforce Investment Council, the Career Pathways Task Force, and with additional research. The Career Pathways Task Force, a locally mandated task force convened by the WIC, worked within the WIC’s high–demand sector and occupation framework to assess relevant career pathways opportunities and formulate recommendations on next steps. To help inform the Task Force’s work, the WIC, with assistance from the DC Chamber of Commerce and Council for Adult and Experiential Learning (CAEL), convened focus groups of business stakeholders in each of these sectors and administered a follow–up survey to capture key information and facilitate the development of specific pathways that may be implemented in the District. Additional research by CAEL and WIC staff was incorporated with this feedback and data to produce career pathway profiles that reflect findings from these efforts. The table below is a career pathway profile for hospital occupations in the Healthcare sector that was produced by CAEL. All of the career profiles by high–demand sector and job in the family can be found in Appendix 3.

Table 3: Healthcare Career Profiles

FOUNDATIONAL SKILL SETS IN HOSPITAL OCCUPATIONS: Basic Knowledge of Medicine, High Quality Customer Service, Effective Time Management, Manual Dexterity/Coordination, Data/Information Analysis, Highly Organized, Attention to Detail, Knowledge of Health Technology, Good Decision–Making, Ability to Prioritize Work Tasks, Gather/record critical information, Knowledge of Privacy/Security Protocols

ESSENTIAL SKILL SETS IN HOSPITAL OCCUPATIONS: Active Listening Skills, Ability to instruct others, Responsible, Self–Motivated, Social Perceptiveness, Monitoring, Adaptable/Flexible, Able to work in teams, Effective Communication, Able to follow guidelines/standards, Reading/Writing Comprehension, Drug Free

Ongoing business engagement efforts will inform investments and coordination efforts that meet business needs in these areas and connect jobseekers to opportunities. The District is also considering additional labor market intelligence efforts to help identify the best opportunities for investments and employer outreach.

[1] US Census Bureau. State and County QuickFacts, http://quickfacts.census.gov/qfd/states/11000.html (December 1, 2015).

[2] Ibid

[3] Ibid

[4] Department of Employment Services Office of Labor Market Research and Information in cooperation with the U.S. Bureau of Labor Statistics

[5] Not seasonally adjusted data, meaning that overall gains for the year may be lower when data becomes available.

[6] U.S. Census Bureau of Labor Statistics (Quarterly Census of Employment and Wages), and GMU Center for Regional Analysis.

[7] DC Fiscal Policy Institute, Trends in DC Wages, http://www.dcfpi.org/wp-content/uploads/2009/03/Wages.pdf (April 4, 2014).

[8] U.S. Census Bureau of Labor Statistics (Quarterly Census of Employment and Wages), and GMU Center for Regional Analysis

[9] Ilana Boivie, Latest DC Minimum Wage Increase Helping Improve Families’ Security, DC Fiscal Policy Institute, http://www.dcfpi.org/latest–dc–minimum–wage–increase–helping–improve–families–security (July 7, 2015).

[10] Ibid.

[11] BW Research Partnership (2014). District of Columbia Labor Market Analysis. http://does.dc.gov/sites/default/files/dc/sites/does/page_content/attachments/BW%20Research%20–%20Labor%20Market%20Analysis%20–%20DOES%20Report%20Final.pdf (July 2014) and WIC analysis of U.S. Department of Labor ONET Online data.

[12] District of Columbia Workforce Investment Council, District of Columbia High–Demand Sectors and Occupations List, September 2015 (Washington, DC).

[13] Sectors were established using the U.S. Department of Education’s Career Clusters, rather than North American Industry Classification codes as used for industry information above. This criteria was used to help group relevant career pathways within each defined sector to better inform education and training activities.

[14] Note that the District’s First Source Law and robust apprenticeship system and requirements in this sector create additional demand and opportunities for District residents that is not captured in labor market data for this sector.