DC needs better data to fight unemployment

Mayor Gray has made employment for DC residents a top priority. But without good data, policies are little more than a stab in the dark.

It’s quite surprising how little data DC collects on unemployment. What obstacles do the unemployed face in getting jobs? If the obstacle is a skills mismatch, are there training providers available that teach those skills?

Do those trainers have a track record of results? If it’s lack of jobs, have past development incentives created jobs as promised for DC residents?

We don’t know the answers to these questions because the District government isn’t collecting or reporting the data to answer them. When the data exists in some database, it’s often not organized or delivered to policymakers. At other times, the data doesn’t exist at all, but agencies could collect it cheaply.

Who are the unemployed?

Tackling crisis-level unemployment is one of Mayor Gray’s top priorities. Yet the DC government appears to have no profile of the unemployed in DC and their barriers to employment.

Even the number of unemployed by ward that DC provides each month is deeply flawed. Each month, the federal Bureau of Labor Statistics samples DC residents and reports unemployment for DC. The DC Office of Labor Market Research then allocates that number to each ward based on out-of-date ratios from the last census. Ben Orr of Brookings has shown that the resulting numbers of jobless by ward are sometimes wildly inaccurate.

The government also has no data on the reasons why the jobless don’t have a job. This lack of data creates a vacuum that is then filled with assumptions and stereotypes about the obstacles faced by jobless residents.

Advocates for cutting off Temporary Assistance to Needy Families (TANF) benefits after 5 years, as the corresponding federal program does, say that dependency on TANF is the cause of unemployment. Those who support tax incentives for developers say that lack of jobs is to blame. Smart growth advocates point to lack of affordable transit access to most jobs. Training providers say that the problem is a mismatch between workers’ skills and available jobs.

Who is right? What policies should we invest in to address unemployment? We don’t know because we lack basic data about the unemployed.

Investment in a survey of unemployed DC residents by a research company on an annual basis would cost a fraction of what these policies cost, and would help ensure we are actually targeting the true causes of unemployment.

Who are the training providers and are they effective?

The District has no data on the effectiveness of training providers across the city. In fact, the director of one training provider recently told me that the Department of Employment Services (DOES) actually has no comprehensive list of training providers at all.

The training providers, known as Workforce Development Organizations, provide a range of services from soft skills training and hard skills training to case management of jobless clients. What percentage of their clients get a job? More importantly, what percentage of their clients are still employed a year or two later? No one knows.

The DC Department of Employment Services (DOES) should require such reporting by recipients of government funding. This data could presumably be verified using payroll tax data.

Of course, no one knows the extent to which we should even invest in job training because we have no definitive profile of the obstacles to employment faced by jobless residents.

What development projects have received incentives, and have they been worth it?

The CFO’s office does not track economic impact of development projects that receive incentives. In fact, there appears to be no comprehensive list in existence of companies that have received tax incentives for development projects over the past 5-10 years.

The District has provided billions of dollars in tax abatements and TIF financing to developers over the past decade. The rationale of proponents is that these investments bring a return to the District in the form of corporate property taxes, sales taxes and jobs for DC residents. If proponents of what some call corporate welfare are so sure that these returns are real, then why not track and report them to bolster their case?

All this data should exist in the Office of Tax and Revenue’s (OTR) integrated tax system. OTR says that sales taxes cannot be tracked by address when retailers have multiple DC locations. However, recipients of incentives could simply be required to report such data by address as a condition of receiving incentives.

Hotels under construction currently in the District are receiving over $500 million of tax incentives in total. While some are questioning whether we will really see that money in higher tax revenues, the reality is we will never know.

It’s difficult to solve problems when you don’t know their causes or whether previous attempted solutions worked. When such information is lacking, then dogma and stereotyping supplants reasonable, data-driven policy discussions.