Education is Driving the Bus of Regional Economic Growth

February 2, 2015

By Melody Winter Head

A vital dialogue took place at the Fifth Annual Southern California Economic Recovery & Job Creation Summit in Los Angeles on December 4, 2014. The central thesis was the implication of the dramatic rise in poverty and its impact on future economic prosperity, particularly as it relates to regional job market challenges. The most important takeaway seemed to be the disturbing news that the low average educational attainment level in the SCAG-region (LA, Orange, Riverside, San Bernardino counties) is suppressing median household income. The Federal Reserve Bank of San Francisco, through its community development function, assists community-based organizations and agencies in the region in identifying solutions to the challenges in education and jobs generation.

According to the SCAG Regional Action Plan, only 29 percent of the adult population in the region have a bachelor’s degree or higher, as compared to 43.5 percent in the Bay Area of northern California.  The corresponding median household income in the Bay Area is $80,317 compared to only $58,455 locally.  The poverty rate is lower there, too. And to make matters worse, 1 in 15 Americans in poverty live in the SCAG region; a place where only 42.3 percent of the population has anything close to a high school education. The plan asserts that our lower levels of educational attainment are blocking our ability to attract employers with high paying, high skill jobs, which is affecting our economy and trapping poor families in poverty.

One specific solution found in the Regional Action Plan is to “Close the ‘Skills Gap’ through Improved Educational Opportunities.”  Embedded in it are specific recommendations to improve K-14 education, reform adult education, expand apprenticeships, and ‘Train to Maintain’ jobs. Other significant strategies at work in the Southland are worth mentioning. 

Public, private, charter and traditional schools implement “Linked Learning” strategies where their curricula are aligned around an industry theme.  The Common Core State Standards that emphasize critical thinking skills and project-based learning are good tools that benefit the workplace of tomorrow. Equally important is admitting to ourselves that a curriculum that uses industry knowledge across the board and that requires advanced levels of education and apprenticeships takes constant training, coaching, and time. 

The need to align multiple education systems is more critical now than ever before as we strive to improve California’s workforce.  The state has invested $250 million in the California Career Pathways Trust to create an infrastructure of regional partnerships to support such pathways.  Changing the curriculum and aligning community colleges, trade schools, and universities are essential to solving the workforce challenge. To achieve this, a shared language, bridging institutional norms and creating sustainable new integrated systems must be designed. It will also be critical to measure what happens to students once they leave school. If we do it, we will surely have a more accurate picture, better intelligence to guide the work, and a more compelling story. The reward could open up greater access to sources of financial resources for education at all levels. 

Addressing poverty and inequity head-on remain a real impediment to creating the desired workforce.  That is where an organization like Los Angeles Education Partnership (LAEP) provides value by engaging the business community in the issues.  Ingrained in its model for public high schools is a powerful framework for training workforce readiness skills.  In 2014 over 1,000 students participated. They train good teachers for greater educational impact and the students get to attend workshops or advisory periods to build their knowledge of the workplace. Employers open their doors to students (with some becoming interns) and encourage their employees to participate in LAEP at school. 

Several speakers at the SCAG Summit alluded to the importance of education as a driver in reducing poverty. One can easily see why. But a singular focus on education is not sufficient to end poverty. To achieve a more educated workforce and grow a vibrant economy we need greater support and integration of organizations that enable more children to receive the benefit of a focused education. We do know we need to educate and equip future workers with relevant skills that are demanded in the job market; to thoughtfully consider access to jobs in our transportation policies; and to work collaboratively across multiple organizations and sectors as future workers move from education to employment. Adopting a more systematic approach is not easy, but it is necessary if we are to effectively address the growing education and wage gaps. 

Kirkham, C. (2014), “Southland adding jobs at rapid pace but many have low pay, reports say,” Los Angeles Times, December 5, 2014.

Smith, K. (2014), “Economic summit addresses jobs, poverty in Southern California,” San Gabriel Valley Tribune, December 5, 2014.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.