To this point it has been shown that the economic restructuring of the 1970′s and 1980′s, and other factors such as housing and labor market discrimination, have disproportionately impacted minority residents of the central city.  As a result, many of these individuals are unemployed, involuntarily live under poverty conditions (i.e low income), reside in public housing neighborhoods, and some receive public assistance benefits.

Many public assistance recipients are poorly prepared for labor market entry because their skills and education levels are low.  Low-skilled jobs, when available, are located in  the suburbs away from where most of these individuals reside, and pay relatively low wages and benefits.  As a result of these conditions, employment opportunities for low-skilled individuals and public assistance recipients are limited.  Yet, it is thought by some Americans that public welfare recipients are lazy and would rather collect a welfare check than work.

There is plenty of research to support and contradict the ideas presented here.  However, most of the research falls short of finding a bottom line to answer the following question.  Are there enough jobs that are reasonably accessible to public assistance recipients, for which public assistance recipients have appropriate skills and education preparation, or for which they can be trained, and that pay liveable wages?

Recent work by Leete and Bania (1995a and 1995b) provides evidence that seems to answer this question for two specific populations of public assistance recipients who live in the Cleveland-Akron metropolitan area.  In the following sections, this study discusses the Leete and Bania model, examines the potential use of the model, and applies a variation of the model to the New Orleans metropolitan area.

What if the public assistance recipient can find and take full-time employment?  Does this guarantee that the individual can earn enough money to support his or her family at or above the poverty line if the individual remains employed?  The chances are that the individual will not be able to because most public assistance recipients are poorly prepared for labor market entry, which limits the types of jobs they can get.  These jobs are mostly in service-based, entry-level, low-skilled occupations, which pay relatively low wages and benefits, compared to the wages and benefits of jobs in higher skilled occupations.

Leete and Bania found that entry level workers in these occupations in the Cleveland-Akron MSA were paid only $4.04 per hour in 1990, or $4.70 per hour in 1995 terms (1995a).  According to Leete and Bania, $4.75 per hour was not enough of an hourly wage in 1995 to allow an individual to provide for two children above the poverty line which they estimated to be $12,343.  A single parent working full-time (2,000 hours per year) must earn at least $6.17 per hour in order to support two children at or above the poverty level (Leete and Bania, 1995a).  As children are added to the family, the wage needed to remain above poverty increases to $7.91 or $9.35 per hour with three or four children, respectively.

Another reason why public policy faces a tremendous battle in helping central city residents overcome the economic restructuring of the mid-20th century is a common perception held by many Americans.  This perception is known as the “culture of poverty” or “welfare-dependency” (Murray, 1984; Mead, 1986; 1992), and portrays welfare recipients (in actuality mainly AFDC recipients) as “undisciplined”, “lazy”,”dishonest”, “belligerent”, (Skinner, 1995) and “shiftless” (Tienda and Stier, 1991).  Shiftless is defined by Random House as those that are lacking in resourcefulness, are inefficient, or are lacking in ambition, incentive, or aspiration (College Edition, 1988).

The basic argument of this perception holds that there are plenty of minimum-wage jobs available and accessible to central city minorities, primarily the black minority, which are being looked over in favor of government assistance (Skinner, 1995).  Additionally, those who believe in this “culture of poverty/welfare-dependency” perceive that because of government assistance the urban poor’s work ethic, initiative, and self-reliance have decayed and have caused a “self-generating cycle of dysfunctional behavior and poverty” (Skinner, p. 48).

Some authors suggest that this perception is underpinned by the “Protestant/Puritan Ethic” (Washington, 1995), and rooted in the old English poor law system that preceded the modern welfare state (Marmor, Mashaw, and Harvey, 1990).  This ethic “is a holdover of the Calvinist doctrine which associated industry, thrift, prudence, decorum, cleanliness, self-discipline, and sobriety with righteousness and wealth.  Sin was almost exclusively identified with personal vices such as laziness, improvidence, frivolity, dirt, swearing, gambling, drinking, and acquired a distinctly lower-class look while success and wealth were associated with middle-class virtues” (Washington, p. 15).  Based on this ethic, persons living in poverty and receiving welfare (AFDC) are seen negatively by middle-class America.  This view is commonly perceived without taking into consideration external forces, or externalities that are due to no fault of the individual experiencing them (i.e. catastrophic events such as fires; poor health; poor economic conditions; manufacturing plant closures, etc.), the poor wages associated with the jobs available to low-skilled individuals, and the distances that these individuals have to travel to obtain jobs.

The “culture of poverty” perception is also based on the belief in the free market system, or capitalism, that is prevalent in American society.  Inherent in capitalism is the belief that market forces are unbiased so every individual has an equal opportunity and an equal responsibility to provide for his- or herself and his or her family.  Additionally, because the market provides equal opportunity for every individual, there is no need for government provisions to able-bodied individuals in society.  Thus, the welfare state, which includes providing legitimate health and retirement benefits to the sick, the young, and the old is seen as a waste of the taxpayer’s money and as an insult to the working class because it is perceived that the majority, if not all, of the individuals receiving benefits are able-bodied and are taking advantage of the system.

However, work by Tienda and Stier (1991) demonstrates a considerably different reality from the “culture of poverty” or “welfare-dependency” perceptions.  These authors show through analysis of two 1987 studies called the Urban Poverty and Family Life Survey of Chicago (directed by William Julius Wilson) and the National Survey of Families and Households (co-directed by Larry Bumpass and James Sweet) that nearly 85 percent of those individuals surveyed by the two studies who were not in the labor force or actively looking for employment wanted a job.  Over 90 percent of those individuals who were not in the labor force and did not want a job offered poor health, family responsibilities, and that they were in education programs as reasons why they did not want a job at the time of the surveys (Tienda and Stier, 1991).

Bellah et al. (1985) approach the “culture of poverty” perception from this angle:

“Our American traditions encourage us to think of justice as a matter of equal opportunities for every individual to pursue whatever he or she understands by happiness.  Equal opportunities are guaranteed by fair laws and political procedures–laws and procedures applied in the same way to everyone.  But this way of thinking about justice does not in itself contain a vision of what the distribution of goods in  a society would end up looking like if individuals had an equal chance to pursue their  interests.  Thus, there could be great disparities in the income given to people in different occupations in a just society so long as everyone had an equal chance of getting a well-paid job.  But if, as is now becoming painfully apparent, there are more qualified applicants than openings for the interesting jobs, is equal opportunity  enough to assure justice?  What of the socially disadvantaged for whom a fair race is to no avail since they are left well short of the starting line?” (pp. 25-26)

In addition to inner city blacks not having feasible transportation to suburban jobs nor the skills (i.e academic and workplace skills learned through formal training and education scenarios) to participate in the technologically advancing information based labor market, several other barriers are present which prevent them from obtaining jobs when they become available.  Kirschenman and Neckerman (1991); Turner, Fix, and Struyk (1991); Hill, Rittenhouse, and Allison (1994) list these barriers as being low wage/low benefit employment opportunities (entry-level occupations) in the central city, lack of information about job openings and their locations, lack of basic workplace competencies (i.e. not knowing what employers expect of them while in the workplace such as proper dress, being to work on time, being at work everyday, resource and time management, and problem-solving skills), and “institutionalized” business hiring and promotion practices.

These barriers prove to be difficult public policy dilemmas because programs such as affirmative action and minority set-asides, and education and skills training are often narrowly scoped and poorly implemented.  For example, Lafer (1992) found that education and skills training programs for inner city residents in New York City were ineffective because while they trained inner city residents, there were no nearby jobs for program graduates to take.  Thus, while these programs focused on much needed skills training, they were criticized as a waste of resources because they failed to improve the employment status of program participants.  Yet, if the programs had been broader in scope and incorporated methods to ensure jobs were available to graduates (by either getting graduates to jobs or by bringing jobs to the graduates), then they might have been much more effective and not open to as much criticism.  By adding a broader vision, these types of programs could be expanded in metropolitan areas.  But as it stands now, programs designed solely for training participants are becoming harder to fund and promote politically.

There is a long-standing debate in public policy over whether job development strategies should be targeted at people or place, or both.  In other words, should these strategies be designed to get people to where the jobs are or should jobs be located where people live?

Most economic development strategies of the 1970′s and 1980′s were place oriented strategies which tended to limit their success. Where they might have been successful ventures for their host cities (in terms of revitalization and social gains), these strategies tended to have little or no impact on job creation strategies designed for residents of the city who needed them most: the city’s disadvantaged, low income citizens (Cleveland Tomorrow, 1992; Krumholz, 1994; Marlin, 1990; Rosentraub, Swindell, Przybylski, and Mullins, 1994).

Often, the unemployed and underemployed workforce remained so because jobs that were provided in low-income areas where they were needed could not be fully taken advantage of by readily available unemployed workers because they lacked the proper job skills that the jobs required. A second, equally devastating blow to the employable but disadvantaged, was that large amounts of jobs had located to the suburbs. This meant that these jobs were not available to many central city residents because personal transportation costs made these jobs financially unreachable.

Public transportation systems offer little option for those who need to commute to the suburbs. The design of these systems is to bring people to the inner city to work, rather than to take people from the inner city out to the suburbs to work. Therefore, these systems are too inefficient and inflexible to provide services to employment destinations in the suburbs due, in part, to the low-density, dispersed nature of suburban employment opportunities (Downs, 1994; Leete and Bania, 1995a).

Kain (1968) was the first to formulate the spatial mismatch hypothesis. As he described it, mismatch is the distribution of and reduced opportunities for black employment as a result of housing market discrimination and urban area job loss. As Kain argued, job search and commuting costs, and discrimination by employers who were driven by their desire to appease the wishes of their white customers were the result of residential segregation, which tended to isolate minorities from living in areas of employment growth (i.e. in the suburbs).

Expanding on Kain’s reasearch, this study considers spatial mismatch a bit more generally. It examines the relationship between where low-skilled, low-income central city residents live and where jobs for which they qualify, and that pay a liveable wage are located, regardless of causality (i.e. housing and labor market discrimination).

Leete and Bania assess the spatial mismatch for welfare recipients and residents in a public housing neighborhood located in the outskirts of Cleveland (1995a), and for welfare recipients residing in a federally designated Empowerment Zone in the heart of the inner city (1995b). Leete and Bania’s results indicate:

1. The skill levels, and job experience of welfare recipients residing in the outlying public housing neighborhood and in the Empowerment Zone are low, and that most of the occupations that these persons might have access to, given their skills and experience, pay relatively low wages and benefits;
2. That these two sets of residents who wish to establish long-term economic security through better paying occupations will require at least two to three years of education training; and
3. That even if skills training were received, significant spatial mismatch exists between the residence and expected location of new job openings for both population groups.  Although the outlying neighborhood is located in a high-growth area near highways, the residents are isolated from employment opportunities in other parts of the metropolitan area because of poor local public transit system access near the neighborhood, and private transportation for the residents are limited (Personal Communication, Leete, 1996).

The U.S. economy, as a whole, has not performed well since the early 1960′s.  Sclar and Hook (1992) point out that since 1960, the rate of productivity increase in the U.S. has only grown at an average annualized rate of 1.21 percent, while countries like Japan, Italy, and Germany have experienced rates of between 2.87 to 5.71 percent.  The slowdown in productivity is hypothesized to be directly related to the widening skills gap being caused by the demand in U.S. industries for high-performance work and skills in their workers (Packer and Wirt 1992; Howell and Wolff, 1991; Levy and Murnane, 1992; Juhn, Murphy, and Pierce, 1992; EQW, 1995; See Spenner, 1983).

Packer and Wirt (1992) posit that the dimensions of skills that labor force participants must have in order to gain employment and/or to maintain their relative real wages are changing from traditionally defined skills to those that involve flexibility in problem solving and adaptiveness, “and other skills necessary for high-quality production” (p.32).  These changes are reflected by differences in real wages within human capital categories, which include workers with and without college education, workers with and without high school education, and workers with and without job experience.  According to Packer and Wirt (1992), evidence of the widening skills gap is derived from studies that show changes in relative wages and incomes between those at the top and those at the bottom of the wage and income distribution.

As a result of the industrial/manufacturing decline and the rise of service producing companies in the central city during the 1960′s and 1970′s, demand in the central city for low-educated labor has declined as the demand for higher educated labor has increased.  Additionally, despite overall improvements in the overall educational attainment (as measured by years of schooling) of central city residents, they still lack sufficient and/or appropriate schooling to gain access to the jobs in the new urban growth industries (Kasarda 1990).  This suggests that the labor force skills mix has not been able to match that required by demand, and over time has caused either an under supply of skilled workers, an over supply of low-skilled workers, or both (Peterson and Vroman 1992).  Indeed, the fact that the returns to college education for black workers fell during the 1980′s as their education levels rose, suggests that the skills and education they obtained through standard secondary and post-secondary education programs were not of the type that the labor market required (Peterson and Vroman 1992).

Other research show an increasing demand among most U.S. employment sectors for higher skilled workers  (Packer and Wirt, 1992; Howell and Wolff, 1991; Levy and Murnane, 1992; Juhn, Murphy, and Pierce, 1992; EQW, 1995).  The National Center on the Education Quality of the Workforce (EQW) conducted a survey of 4,000 establishments, across the U.S., that employed 20 workers or more, from both the goods producing and services producing sectors.  The study found that skills required by 95 percent of the employers either increased or stayed the same from 1991-94 (1995).

What types of skills are industries looking for?  Bailey (1989) concludes a series of case studies analyzing the banking and textile industries by saying that firms have growing requirements for workers who can: understand complex systems, deal interpersonally with a wide range of people, and effectively communicate ideas and information.  In particular, cognitive skills, general education, interactive skills, and motor skills make up the primary skill categories that these researchers have analyzed over the past three decades.  Three of the four categories have seen an increase in demand, while the “motor skills” category has seen a decrease.  Presumably, the decrease in demand for motor skills is because of the shift away from manufacturing sector employment where motor skills are most important (Packer and Wirt, 1992).

However, these skills are not necessarily correlated with the normative human capital variables associated with wage increases and career success: “years of education” and “experience”, respectively.  This suggests that these skills are not able to, or are not being taught through traditional secondary, or even post-secondary academics (i.e. college prep or general education courses of science, math, and English).  Instead, acquisition or development of these skills seems more likely to be correlated to the type and quality of job experience and social background of an individual (Wirt and Packer, 1992).  Additionally, most forms of secondary education standardized testing (i.e. ACT, SAT, PSAT) do not test for these types of skills.

This skills mismatch between labor force supply and demand is important because it has, in part, led to increased income inequality, poverty levels and unemployment in the metropolitan inner city.  The income gap that exists between those at the top of the wage and income distribution and those at the bottom of the wage and income distribution continues to increase.  Packer and Wirt (1992) state that “the total amount of income inequality has increased at an average rate of about 1.3 percent per year over the past 20 years, for a total increase of about 30 percent” (p. 35).

Juhn, Murphy and Pierce (1993) show that the real average weekly wages for the least skilled workers (measured by the 10th percentile of the wage distribution) declined by nearly 5 percent, while the wages for the most skilled (as measured by the 90th percentile) increased by approximately 40 percent.  These authors also show that the bottom 40 percent of younger workers in the U.S. earn less in the 1990′s than they would have in the 1960′s.

A common hypothesis in social and urban studies is that the loss of blue-collar manufacturing jobs in the central city, through a combination of reasons (i.e. institutional barriers such as housing and labor market discrimination in the suburbs), has led to an increase in unemployment of black male residents in the central city.

A main reason for this increase in black male unemployment is the idea that these lost manufacturing jobs required relatively unskilled workers (i.e. workers with manual as opposed to cognitive skills). Thus, when the jobs in the central city were lost, many unemployed workers had few marketable skills, which prevented them from moving into other viable (in terms of pay and benefits) occupations.

Many white males, on the other hand, picked up their families and moved to the suburbs to live and work “white flight”.  Black males remained behind because, for the most part, they faced housing and labor market discrimination which hindered their quest for other forms of work in the suburbs (Massey and Denton, 1993).  As a result, black male unemployment increased in the inner city.

As late as 1970 over 70 percent of all blacks working in metropolitan areas held blue-collar manufacturing jobs (Kasarda 1993; Wilson 1987).  In the central city the percentage of blacks working in these types of jobs increased to 80 percent (Kasarda, 1993).  But, as the central city manufacturing job base declined so did the number of central city black males working in these jobs.  Indeed, by 1992, Kasarda determined from Census Population Survey (CPS) data that only 50 percent of all central city black males were working in blue-collar positions (1993).

From 1959 to 1991, the percentage of central city residents living in poverty, increased from 27 percent to 43 percent (Kasarda, 1993).  During the same time period, Kasarda found that the proportion of African-Americans living in poverty in central cities rose from 38 percent to 80 percent.  Additionally, Downs (1994) found that in the 1980′s, the number and percentage of central city residents living in concentrated poverty neighborhoods rose sharply.  He also found that cities with rapidly declining populations (loss of 4 percent or more between 1980 and 1990) had 16.83 percent of their population living in extreme poverty census tracts, and 23.5 percent of their population living on poverty incomes.

New Orleans, in specific, had 30.51 percent or 151,624 persons out of 497,000 total population living in extreme poverty census tracts, and 31.6 percent or 157,052 persons of 497,000 total population living with poverty incomes.
Blakely (1993) presents the following statistics from the years 1979 to 1987.

1. First, Americans faced a decrease in the real hourly wages of 3.3 percent, and of workers laid off in 1987 only 41 percent found employment at or above their previous wage rate.
2. Second, worker turnover rates in the U.S. increased to over 4 percent/month while Japan, the U.S.’s strongest foreign competitor,  experienced a turnover rate of only 3.5 percent/year.
3. Finally,  the American job base expanded 48 percent, yet inner-city neighborhoods and rural communities continue with high poverty and unemployment rates because 60 percent of all jobs in the nation are now located in the suburbs.

In their 1992 study, Holzer and Vroman assessed the link between manufacturing job loss, and black male unemployment and labor force participation rates by analyzing CPS data and decennial censuses for 1970 and 1980 for 52 metropolitan areas. These authors concluded that black male (especially young and poorly educated) unemployment rates increased as manufacturing employment, as a share of total metropolitan employment, decreased. Additionally, Holzer and Vroman showed that this trend was valid when controlling for cyclical effects, and that black unemployment changes were felt similarly across the entire metropolitan area (central city vs suburb) or for the central county as manufacturing employment changed.

As this research stands, it appears to suggest that the spatial mismatch might not be as valid as previously thought.  However, it is not clear whether these authors controlled for spatial effects within suburban areas across the metropolitan areas they studied.  If they did not, then it is difficult to determine the impact of their study on the spatial mismatch theory as being a barrier to employment for black males because a spatial mismatch could exist within suburban areas.  Research by Schneider and Phelan (1990) shows evidence of spatial mismatch within suburban areas.  Also, Leete and Bania’s work (1995a) compliments what Schneider and Phelan found because it indicates some spatial mismatch for residents living in a public housing neighborhood which is located in the suburbs of Cleveland and Akron.

Johnson and Oliver confirm the research by Holzer and Vroman that black male unemployment increased as manufacturing employment decreased (1991; 1992).  These authors further suggest that in deindustrializing and deconcentrating metropolitan areas central city blacks have been disadvantaged because of their poor skills preparation, lack of access to adequate transportation to and information about jobs in the suburbs (1992).

As a result of the restructuring discussed above, since the 1960′s, the U.S. economy has experienced a decline of traditional, high-wage, highly unionized manufacturing employment in most metropolitan areas and a dispersal of these jobs from the traditional central city to the suburbs (Phillips and Vidal 1986), and to counties just outside the MSA (Nelson, Drummond, and Sawicki, 1993).

Schneider and Fernandez (1989) show that from 1972 to 1982: (1) the percentage of manufacturing jobs of all jobs across metropolitan areas decreased from 46 percent to 36 percent; and (2) service industry jobs (including government jobs) increased as a percentage of total jobs across metropolitan areas from 41 percent in 1972 to 51 percent in 1982.  Both of these changes were due to advances in transportation, communication, and improvements to industrial technology (Downs 1994; 1993; Sassen 1994), and changing cost considerations of restructuring companies (Berry, 1994).

In their analysis of County Business Patterns published by the U.S. Department of Commerce, Bureau of the Census, Holzer and Vroman (1992) show that in six Northeast metropolitan areas central county manufacturing jobs decreased by 31 percent in the 1970′s, and by 35.2 percent in the 1980′s up to 1988.  Furthermore, in eight metropolitan areas in the Northeast and Midwest, central county manufacturing job loss increased by 14 percent and 30.4 percent respectively for the same time period.  For the South and West, manufacturing job loss occurred only during the period between 1980-88.  Adding to this, Harrison and Bluestone (1982), Kasarda (1993), and Wilson (1987) found that the cities hardest hit by manufacturing job loss were in the Northeast and Midwest, and were typically older cities.  For example, between 1967 and 1987, Detroit lost 51 percent of its manufacturing jobs; New York, 58 percent; Chicago 60 percent; and Philadelphia, 64 percent.

Gone are the days of a robust U.S. economy boasting a predominance of low skill urban/central city jobs paying relatively high wages and the days when the U.S. economy was largely uninfluenced and insulated from foreign labor markets and product competition (Peterson and Vroman 1992). Barkley and Hinschberger (1992) show that American manufacturing is shifting from large “fordist” plants to smaller, more specialized firms. Coupled with this shift are changes in input and location requirements of restructuring companies. Location requirements are shifting from pure cost factors of input–land, labor, and capital–to factors of skilled and adaptive labor, proximity to markets with efficient transportation systems, and business services and communications (Berry 1994; Barkley and Hinschberger 1992).

Harrison and Bluestone (1988), Barkley and Hinschberger (1992), and the National Council for Urban Economic Development (1992) offer these four trends in the U.S. manufacturing sector. First, increased international trade and foreign products in the U.S. market exposed U.S. citizens to wider consumer choices and prices for products. As a result, demand for standardized U.S. products decreased. Second, U.S. firm profitability decreased because of increased international competition. As a result, capital for competitive integrated, mass-production facilities weakly materialized, and U.S. firms fell behind international competitors. Next, technological change and consumer preferences placed limits on product life cycles. This, in turn, further reduced capital outlays for production plant improvements.  And finally, labor demand decreased because improved production technology (e.g. microcomputer processing and robotics) reduced efficient production plant size.

Sassen (1994) and Harrison and Bluestone (1988) attribute national and local economic restructuring and distress to the overshadowing, in both value and power, of international trade and productivity by international financial flows (i.e. loans, equities, or foreign currency transactions). Sassen further iterates, “In the 1980′s, finance and specialized services emerged as the major components of international transactions. The crucial sites for these transactions are financial markets, advanced corporate service firms, banks, and the headquarters of transnational corporations” (9). This type of restructuring resulted in three times as much growth in foreign direct investment in the U.S. than in the growth of foreign trade of U.S. exports, and directly translated into an increase in demand for services and a sharp decrease in demand for manufacturing and raw materials extraction (Sassen 1994).

A. Overview

The economic decline of older, northeast and Midwest U.S. central cities that occurred in the 1970′s and 1980′s can be attributed to two principal causes.

1. First, many manufacturing jobs were lost to international locations, in part, because labor in foreign locations was cheaper.
2. Second, massive developments in production technology, telecommunications, and the ascendance of information industries encouraged large-scale population, office and factory relocations to less congested and lower cost, suburban and exurban areas (Sassen 1994; Downs 1994; Kirlin 1993; Rusk 1993; Miewskowski and Mills 1993; Harrison and Bluestone 1988).

As a result of these factors, many central cities have declining human capital and physical infrastructures, and tax bases. Wilson (1987) suggests that the difficulty central cities encountered in coping with the growth of their suburbs and the emerging global economy is a major cause of concentrated inner-city unemployment and poverty. Additionally, these factors have severely and disproportionately impacted minority residents of the central city who depended on the urban manufacturing job base for survival. Many of these residents have been prevented from leaving the central city because of various “institutional” barriers (i.e. housing and labor market discrimination) (Turner, Fix and Struyk, 1991; Kirschenman and Neckerman, 1991; Hill, Rittenhouse, and Allison, 1994; Massey and Denton, 1993).

As the socioeconomic status of central city residents has worsened, the direct financial requirements from local economies in the form of public assistance, subsidized housing, and other public expenses have increased (Bluestone and Harrison, 1988). In an attempt to cut costs by reducing the number of public assistance recipients (AFDC recipients), current welfare reform proposals require that the recipient either find work or work in exchange for assistance. However, the work available to, or that can be found by, these individuals provides little relief from poverty: increasing costs of living (i.e. increasing housing costs and gasoline and transportation costs) are not matched by increasing wages. In fact, wages in jobs for the lowest skilled individuals have not increased at the same rate as wages in jobs for higher skilled individuals (Juhn, Murphy, and Pierce, 1993).

Further exacerbating the problems of the public assistance recipient are:

1. the fact that the typical recipient is poorly educated and has low skills (Bane and Ellwood, 1994; and Burtless, 1995 for a national perspective; and Leete and Bania, 1995a for a local labor market perspective), or has outdated skills that are no longer needed in today’s increasingly technical and information-based workplace; and
2. the response of the private sector to the new global economy in modifying some of the types of jobs that are available (Capelli, 1993); thus requiring a more skill-diversified employee.

In the public sector, addressing these problems through governmental action is problematic because public administrators face the difficult task of balancing social and economic growth and stability with the uncertainty and reality of shrinking public, private, and nonprofit fiscal budgets, increasing economic division, and deeply entrenched and opposing political ideologies. Private sector concern for economic and social decline centers around lost labor force productivity, smaller markets for goods and services, increased private sector expenses in workforce training, security, and insurance, increased reluctance to invest in central cities, and increased social instability (Stilman, 1994).

In requiring the public assistance recipient to work in lieu of benefits, several policy questions arise. These questions include:

1. Are there sufficient jobs paying “liveable” wages to employ every public assistance recipient?
2. Do public assistance recipients possess sufficient skills to take the newer service and information based jobs of the global economy?
3. Are the jobs of today and in the future realistic (i.e. skillswise and void of discriminatory hiring practices) and physically accessible (i.e. does the public recipient have adequate and reasonable means of transportation to employment locations) to the public assistance recipient?

Answers to these questions are necessary from both the public and private sectors in order to assure that the worker will be sufficiently and gainfully employed.

While the answers to these questions might be intuitively obvious, the basis for this tuition has not been well shown in research. For instance, while it is well documented that welfare recipients have low skills nationally (Bane and Ellwood, 1994; and Burtless, 1995), little conclusive evidence has been brought forth which compares the skills of a specific population group to its local labor market demand. Furthermore, few studies portray the geographical relationship between where jobs are located in the metropolitan area and where public assistance recipients reside.

Another limitation to answering these critical policy questions is the fact that labor market experts cannot conclusively determine what effect technological change has had on the education and skills content of occupations in the labor market (Spenner, 1983; and Capelli, 1993). So far, three theories dominate this field of research: technology has caused either an “upgrade” of skills (Packer and Wirt, 1992), a “downgrade” of skills (See Spenner’s discussion (1983) of Braverman for a richer discussion of this theory), or has not appreciably affected the education and skills content of occupations (Keefe, 1991; Mishel, 1992).

The uncertainty of labor market research raises questions about available data for studying the labor market. For example, the U.S. Department of Labor (DOL) issued  occupational characteristics to describe over 12,000 occupations in the U.S. labor market, but this data is over twenty years old as most of it was developed prior to 1975. Are these data still representative of the education and skills needed in today’s technologically based workplace?

Two recent studies by Leete and Bania (1995a; 1995b) appear to provide a way to  bridge the gap between these DOL occupational characteristics and the education and skills presently required in the labor market. Furthermore, Leete and Bania show the coexistence of the skills and spatial mismatches for public assistance recipients in the Cleveland-Akron Metropolitan Statistical Area (MSA). These studies conclude similar things:

1. Education, skill levels, and job experience among welfare recipients are low;
2. Most occupations which would be accessible to welfare recipients are entry level, low-skill occupations which pay relatively low wages and benefits;
3. Long-term economic security will require a major training and skill upgrade for most welfare recipients; and
4. There exists a significant spatial mismatch between where most welfare recipients reside (public housing neighborhoods in the central city) and the location of new job openings.