Earlier this month, the Bureau of Labor and Statistics released employment data for July, and Stockton’s unemployment rate ticked up to 15.1%. Eight Central Valley cities rank in the bottom eleven out of 372 metro areas in the country for unemployment. But while the recession has taken away many construction, manufacturing and retail jobs, white collar positions for doctors, technology experts and nurses are still going unfilled, highlighting an underlying structural issue with the region’s workforce that threatens to keep bogging the local economy down even after the housing market recovers. While retail and construction jobs are sorely needed, attention must be paid to the need for a more skilled workforce, one that can fill the increasing demand for healthcare professionals.
The Brookings Institution recently released a report looking at the relationship between education and unemployment in terms of demand, and has provided some very intriguing information on the dynamics of the job market here in Stockton. Brookings wanted to find out how a gap in educational supply and demand is related to unemployment across different cities, and what they found shows that cities like Stockton need to beef up their education.
Brookings found that in the Central Valley, there is shortage of educated workers relative to demand. Essentially, there are jobs for people with college educations, but not enough college educated adults in the labor force to fill them. Brookings concludes that this gap between demand and supply is a big reason why unemployment is so high in the Central Valley. While the recession undoubtedly contributed to the high rate of unemployment, the city also suffers from an education gap that kept unemployment high even during the good times, and threatens to hold the city back even when the economy picks up again.
Contrary to what many may think, Stockton does have a lot of good, well paying positions, according to the data analyzed by Brookings. However, there are not enough people with the educational attainment to fill these positions. In January and February of 2012, 36% of all job openings required a bachelors degree or higher. However, the percentage of adults with a college education only comprise about 18% of the working population, and just 12% of the unemployed. What does this data mean? To put it simply, there are not enough educated workers in the Stockton region to meet the demand.
These numbers alone are a cause for concern, and the story becomes even more intriguing when we take a deeper look. The data compiled by Brookings indicates that we are specifically lacking health care professionals. Of all the job openings in the area for January and February of this year, by far the largest occupation was health diagnosing and treating practitioners (read: doctors and nurses), comprising 13% of total area job openings (1,463 jobs in total), more than double the next most available occupation (motor vehicle operator). The story is the same throughout the Central Valley as healthcare topped the list of most available occupation in Bakersfield, Fresno, and Modesto.
The good news is Stockton has a demand for educated workers. Bad news: our labor force does not have that education.
While white collar jobs seem to be in high supply, blue collar jobs are the ones that are tough to come by, and that is a problem as 50% of Stockton’s labor force has a high school diploma or less, while jobs requiring a high school diploma or less only made up 30% of job openings. The effect is that when Wal-Mart hires, throngs of Stocktonians submit their resumes for limited positions, while an opening for a nurse or health technician stays open for much longer.
What is the solution? More investment needs to be made in higher education, particularly in healthcare as the profession continues to expand in the region with the construction of the new prison health facility and the expansion of other area healthcare providers such as Dameron hospital. While healthcare continues to be an area of job growth, there is no medical school in the Central Valley (the closest is UC Davis). It is great to hear that Stockton has a lot of good jobs, but it means nothing if the workforce is not prepared to fill these vacancies. This is a cause for concern on two fronts: first, if demand for doctors and nurses is not being met, there is a gap in employment that will continue to drag down the economy. Second, a lack of doctors is bad news for the rest of us, given the rapid growth in population and general poor health of valley residents. Already, there are only 87 doctors per 100,000 residents in the Central Valley.
The valley needs a medical school, there is no other way around it. I don’t know the first thing about starting a med school, but perhaps this is something UOP and the city can discuss, because the demand is definitely there, and the state university system appears ill equipped to deal with the problem due to its precarious financial situation. In Merced, a program developed jointly with UC Davis Medical School to bring medical students to the region for their rotations brought in around 150 applications last year. Five were admitted in 2011, six were admitted in 2012. UC Merced eventually plans to open its own medical school, though this appears to be very far into the future, given budget restrictions at the state level.
An investment in education is also good for insulating against future cyclical economic problems (i.e. recessions). Brookings notes that the cities that weathered the recession the best had the smallest education gaps. Furthermore, an increase in educated workers means more demand for goods and services, which in turn leads to a stronger economy overall. Research shows that college educated workers drive an increase in demand for goods and services, leading to higher levels of retail employment. Investing in education can provide tremendous returns for everyone.
In the long run, the housing market will recover, construction crews will find more work, and the unemployment rate will dip. However, our education gap is not cyclical, but structural. Even before the housing bust, the city had unreasonably high unemployment. Unless a shift is made to try and meet the demand for skilled workers, Stockton and other Central Valley cities will always have an unacceptably high unemployment rate, even in good times.