The Real Winners

After a long period of rejections from employers and dependence on welfare, Adelicia Bermudez, a 23-year-old high-school dropout and single mother of two, recently dipped her toes back into the job market. She found it very warm.

The day after she interviewed with a Fountain Valley insurance business, the employer not only called but asked if she could start right away. “Yeah, of course,” Bermudez answered. The next morning she was working alongside college graduates and earning $9 an hour entering customer data into a computer.

“I did it, I got it, and I’m still here,” she says, now two months into her full-time job.

As the booming economy makes workers harder to come by, the once hard-core jobless typified by Bermudez are going to work in astonishing numbers.

Indeed, groups with historically high unemployment--minorities, single mothers, teenagers and the unskilled--have seen the strongest job gains over the last couple of years.

Already the jobless rates for African Americans and Latinos have fallen to their lowest since the government began collecting data on them in the early 1970s: 8.1% for blacks and 5.8% for Latinos in March, compared with the overall jobless rate of 4.2%. The rate for high school dropouts, 6.1%, is half what it was in 1992.

“It’s very hopeful,” says Dave McDonough, executive director of Chrysalis Labor Connection in Los Angeles. The nonprofit group helped 1,400 mostly homeless people find jobs last year--more than double the number three years earlier. They’re getting jobs much faster now, he adds, at an average pay of about $7 an hour.

One of Chrysalis’ success stories is Carlos Radillo, 30.

He still sleeps in a bunk at St. Vincent’s Cardinal Manning Center in downtown Los Angeles. But now he rises at 4 a.m., gropes downstairs for a shower, puts on one of his two pairs of boots and catches the first bus leaving Fourth and Main. His destination: New Roads School near Baldwin Hills, where he mops the floors and keeps an eye on students at the private school.

Radillo, who spent part of his youth on a Navajo reservation, says he finished high school but never had any luck in the working world. For years, he admits, he mooched off girlfriends and moved in and out of the informal economy.

But these days, Radillo lives for his new job. His wallet has a new ATM card in it, and he has given up drinking.

“I couldn’t believe it,” he says, recalling the January afternoon when he got word that he had been hired. He taps his chest, then chokes up, near tears. “A $10 [an hour] job. Oh, my God! To me, it felt like a million dollars.”

Meaningful Gains for Workers at the Bottom

How long can these successes last? Does today’s economy present a real opportunity for the nation to elevate masses of people like Radillo permanently out of the underclass?

The experiences of the last two decades are sobering. Optimism born during the booming Vietnam War economy and other periods of growth vanished once the economy retreated. Oil price shocks, double-digit inflation and massive industrial restructurings in the 1970s and ‘80s depressed opportunities, especially for workers with little education and those in the inner cities.

Labor Secretary Alexis M. Herman argues that it’s different this time.

She thinks the unemployment rates for blacks and Latinos can come down even further in this more productive, technology-driven economy. In contrast to the economic growth of the ‘80s, she notes, the last two years have seen meaningful wage gains for workers at the bottom of the economic ladder.

And they have another advantage today, Herman says. Because the 8-year-old economic expansion is the longest ever in peacetime, she contends that many of those workers already have acquired substantial work experience and skills, making them more reemployable.

“They are more solidly rooted in this economy,” she says.

In part that is because the worker shortage has pushed companies to be more aggressive about training their new, younger and less-skilled employees. Business is spending 50% more on building workers’ skills than it did two years ago, experts say.

Businesses have found that young workers without much education are often adept at picking up computer and other technical skills. That’s what Gina Sosa, who hired Bermudez, says of her new employee.

Sosa, president of Valley West Financial Insurance Services, says Bermudez needs to work on her reading and writing. “She’s quick, fast and can type pretty well,” Sosa says. “But if she wants to progress, she needs to learn the basics.”

Herman’s predecessor, Brandeis University economist Robert B. Reich, is decidedly less optimistic about whether these gains can be sustained.

He says the real problems remain structural: education and training, public transportation, and access to things like child care and health insurance.

“If unemployment starts moving upward again, then you can kiss those gains goodbye,” Reich says, adding that the latest earnings gain still leaves the working poor behind.

But there is another key factor that should tend to keep the current momentum going: the aging of the baby boomers.

Experts say the number of young workers is already beginning to shrink. That shrinkage has been a boon to people like Dave Vasquez.

The 27-year-old resident of Lansing, Mich., says he has worked off and on since age 15. But he has never had anything more than a minimum-wage job, and almost all of them were part time. Some employers turned him away because he has a learning disability.

But unemployment in the Lansing area has been a mere 3% for the last year, and some fast-food shops have shut down their dining areas for lack of workers. Six months ago, Vasquez, a high-school graduate, filled out an application for a custodial job offering $8 an hour, plus medical benefits. Three days later, he got the call. Nobody cared about his disability, he says.

“I sure was surprised,” says Vasquez, who plans to get married in August. “Oh, yeah, if I didn’t have this job, I would postpone my marriage. It would be hard to do.”

Even as more people than ever are working, the biggest overlooked group is urban youth.

Nationally, the black teenage unemployment rate still hovers at 30%. That doesn’t count those who have quit looking for work.

Bennie Swans, who works with inner-city youth in West Philadelphia, gauges unemployment in his area by counting teens shuffling on the tough street corners. “We’ve had some success, but when you look at the overall numbers, I think it’s like spitting in the wind.”

Businesses Recruit in Inner Cities

Then there’s the issue of the pay and quality of the jobs. Even as they welcome the greater number of jobs, many in low-income communities don’t think that the type of work they’re getting, largely retail and services, provides real opportunities to build skills and careers.

Tim Merrill, a pastor and founder of Teenworks Ministries in Camden, N.J., one of the poorest areas in the nation, finds irony in the current situation.

He says he sees a lot of young people forgoing more schooling to take dead-end jobs that require low skills. And for what? Too often, he says, the money goes for fashionable clothes and sneakers. “By the end of the day, they have nothing left to show for it.”

For others in the urban core, despite all the changes in the economy over the last two decades, the mundane matter of getting to work remains a big hurdle. That’s because most of the growth in metro areas, including the Los Angeles region, still occurs in the suburbs.

But even that might be changing. In metro areas where the unemployment rate is relatively high, as in Los Angeles County, where it is 6.3%, job counselors say companies like Pacific Bell have started to come into the center to recruit, whereas in the past, inner-city residents had to travel many miles just to apply.

“Now they come out here and hire right on the spot,” says Val Bush, head of the Maxine Waters Employment Preparation Center in Watts. “Our placement rate is around 75%. It used to be 50%, if that high.”

In America’s tightest labor markets, some businesses are actually bringing the jobs to the central city.

That’s what long-distance phone company Sprint, headquartered in a suburb of Kansas City, Mo., did in late 1997. The company had good reason for setting up a call-processing center at 18th and Vine, the historic jazz corner in the heart of the city.

Sprint operated two other centers in the suburbs of Kansas City, but with the region’s unemployment rate hovering at 3%, the company was struggling to keep those offices staffed. Even at a starting pay of $8.25 an hour, spokeswoman Laura Meyer said, 85% of the new hires were quitting within three months, some presumably to take better jobs.

Turnover has not been a headache for Sprint at its 18th and Vine operations. And if employees like Carla Williams have their way, they would work there forever.

Williams, 39, a dropout from 11th grade, says she spent 17 years on welfare. Now, after barely a year on the job, Williams has a lot to show for it: She got married. She bought her first car, a ’95 Chevy Lumina, and is arranging to buy a $33,000 house. She is socking away $20 a week in Sprint’s 401(k) plan. And she is signing up for computer training, fully paid by the company.

Like the other 45 workers, Williams sits in front of a computer, taking an average of 500 calls a day from customers, including rude ones. “I used to have a temper,” Williams says. But no more. “Only in my face was I mad. To me, every customer is ‘Yes, sir,’ or ‘No, ma’am,’ no matter what their age.”

California Poses Special Challenges

Ted Gibson, chief economist at California’s Department of Finance, says there is no question that the state and the country have a golden opportunity to “bring folks into the mainstream economy that have given up and been denied before. If there was ever a time to do this, it’s now.”

But the challenges for California are greater.

Its labor force is growing at roughly double the national pace because of the influx of immigrants and migrants from other states and a higher birthrate. Many of the new labor entrants are young and less educated.

The bulging labor force partly explains California’s higher unemployment rates for all groups of workers.

And yet California’s labor shortage is more pronounced because many of the people without jobs are unequipped to fill the jobs most in demand--in computer services, engineering and other high-skill industries.

As long as the state’s economy is creating a raft of entry-level service and construction jobs, the least educated and least skilled in California have a shot--but not a good one.

Even for seemingly easy jobs, economists say, the skill requirements are becoming more demanding, and people in the state can’t count on public training funds, which haven’t increased much in California or elsewhere.

The best hope for the low-skilled may be to follow the path of Shanna Wicks.

Four years ago, Wicks, 32, was one of 780 people on welfare hired by Packard Bell for its new computer assembly plant in Sacramento. She started out on the assembly floor wearing hard-toed shoes and a white smock. The high school graduate and single mother of three, she came in at $5.25 an hour.

Four months later, Wicks moved to another section, where she put diskettes into computers and noted whether a component was ready to be moved along the assembly line. It was unskilled work, but she took the opportunity to learn that software, as well as Microsoft Word and Excel, two popular office programs.

Six months later, Wicks saw a job posting on the factory floor and moved up to office technician in the document control department. Since then she has been promoted three more times, rarely missing an opportunity to attend training, even though that has meant a rigorous schedule in which she wakes up at 4:30 a.m., readies her children’s school clothes and lunches, and arrives at Packard Bell by 6.

But it has all paid off. As she was climbing the ladder over the last year, Packard Bell initiated a massive layoff to deal with the industry downturn, a result of Asia’s economic troubles. Three out of every four former welfare recipients were let go, compared with less than half of the remaining work force.

But Wicks escaped the cutback and now earns more than $12.50 an hour at the plant. She has her sights set on becoming an analyst, which would put her on salary. That would help her draw closer to her goal of buying a home. Two months ago, through an employee discount plan, she brought home the family’s first computer.

“I have no fears if I left here,” she said. “I can definitely find employment elsewhere.