Labor and Employment

Last week, after Illinois Comptroller Leslie Munger announced that a cash flow problem caused by a deadlock in the state’s budget negotiations would force Illinois to delay its November pension payment, Fitch Ratings--one of the “Big Three” credit rating agencies--lowered the state’s bond rating. For many states, pension reform has been achieved only after long, and often contentious, battles across all three branches of government. To help state leaders better understand how their fellow policymakers are tackling pension concerns, CSG will host a public pension and retirement security policy academy on Thursday, Dec. 10, in conjunction with the CSG 2015 National Conference in Nashville, Tenn. The session will begin with Pensions 101, an overview of pension and retirement security issues facing states.

CSG Midwest
Across the country, the number of “earn while you learn” programs is growing rapidly, and some states in the Midwest are leading the way with new policies to expand apprenticeship opportunities.

The Department of Labor awarded more than $39.3 million in grants last week to enhance unemployment insurance programs in 43 states. “For more than 80 years, the unemployment insurance system has been a crucial lifeline for millions of working people who lost their job through no fault of their own,” said U.S. Secretary of Labor Thomas E. Perez in a press release. “These grants will help states use every tool at its disposal to ensure payments are available to those who are eligible, and take important steps to reduce and recover improper payments. The funds will also identify new ways to level the playing field for responsible employers.”

According to research from the Department of Commerce by Jeffrey Hall and Chris Rasmussen, goods exports (manufactured products, agricultural products, natural resources and used/second-hand products) supported 7.1 million jobs in 2014 – up one million jobs, or 16.4 percent, over 2009 levels. In 2014, export-supported jobs made up 5.1 percent of total employment. The importance of goods exports to states, however, varies significantly. In Alaska and Washington for example, goods exports support more than one out of ten jobs. In 16 states, exports support 3 percent or less of total employment. From 2009 to 2014, exports have become even more important to job growth. Over this period, the number of jobs supported by exports grew in all but seven states. 

Nearly 5 million white collar workers who make more than $23,660 a year are not eligible for overtime pay. This includes convenience store managers, fast food assistant managers, or office workers who may be expected to work overtime, yet receive no compensation for the extra time. But under a proposal by President Obama, this would soon change. Obama hopes to double the current salary threshold for overtime pay for salaried workers by 2016.

CSG Midwest
Through the summer of 2014, the news about rural employment was not good. While the U.S. economy as a whole was recovering from the recession, the number of people employed in rural areas remained weak, lagging more than 3 percent behind totals for 2007. And between the second quarters of 2010 and 2014, rural employment had grown only by 1.1 percent (compared to 5 percent in urban areas).
Though the number of people unemployed in rural areas was decreasing, that was due in part to factors such as outmigration and aging populations. Actual jobs had declined or stayed the same in the majority of non-metropolitan counties from 2000 through most of 2014.
But there has been a turnaround of late, especially in many of the Midwest’s rural counties. Over the past year, the rate of job gains in rural America, 1.2 percent, has come close to meeting those in urban counties, 1.8 percent.

 According to new data from the U.S. Census Bureau, median household income remains below pre-recession levels in 37 states, when adjusted for inflation. In 2007, median household income was $57,357 (in 2014 dollars) - $3,700 more than in 2014. State median household incomes ranged from a low of $35,521 in Mississippi to $76,165 in Maryland in 2014.

State policymakers hear frequently from employers that they cannot find skilled workers for open positions. Many of these positions are middle-skill jobs that require some form of postsecondary training, but not a bachelor’s degree. This article discusses state strategies to close skill gaps and meet employer skill needs.

The Council of State Governments released a report last week that outlines recommendations for state-level policies that help ensure students are prepared for postsecondary education and the workforce. The report, "A Framework for State Policymakers: Developing Pathways to Ensure a Skilled Workforce for State Prosperity," is the brainchild of CSG's 2014 national leaders who sought to help states prepare today's students for the jobs of tomorrow. Tennessee Senate Majority Leader Mark Norris, who served as CSG's 2014 national chair, led the State Pathways to Prosperity initiative, a multi-year effort to identify obstacles—and alternative pathways—to prosperity for many Americans.

Last week, New Jersey Gov. Chris Christie vetoed two bills: one that would have set up a required quarterly schedule for the state to make payments into its public pension fund and another that would have required making a $300 million lump payment into the fund for fiscal year 2016. Democrats argued that these measures were necessary to put the state’s pension fund on the right fiscal track. According to the Wall Street Journal, New Jersey’s pension system serves 773,000 current and retired state workers and is facing a funding shortfall of $37 billion. It also contributes to its fund at one of the lowest levels among all 50 states.