Posts about Unemployment

Politicians often release estimates of jobs they created, and perhaps cynicism around such estimates explains the lack of credit given to One City One Hire for the hiring of 1,400 jobless residents.

The difference here is that the leader of One City One Hire, Director of Employment Services Lisa Mallory, actually knows who these 1,400 people are. She knows who they are because her staff personally introduced them to their current employers.

Understanding One City One Hire requires understanding that one of the biggest barriers to employment in DC has nothing to do with skills, criminal records or addiction issues. A major barrier to employment is the lack of trust by local employers in jobless residents, particularly those east of the Anacostia River.

While this barrier is not often mentioned by the local media, any job training provider can attest to its reality, and the discouraging effect it has on District residents who are otherwise job-ready.

Chris Hart-Wright, Executive Director of Strive DC which works with chronically unemployed District residents, says she spends much of her time seeking to build trust on the part of local employers in her clients. She says that all training providers are doing the same thing, and that they need the city to use its influence to play this role so they can focus on training and case management.

That's what One City One Hire is all about. Run by the Business Services Group within the Department of Employment Services (DOES), One City One Hire asks local employers if they will consider a small number of resumes pre-screened by DOES for their open positions.

Director Mallory has transferred DOES employees into the operation of working with employers to understand the requirements of particular positions and evaluating thousands of resumes of jobless DC residents to fill those positions.

Now, overcoming the trust gap between local employers and jobless DC residents is only one of several difficult steps that need to be taken to address chronic unemployment. But the success of Gray and Mallory in conquering this first barrier raises hopes that they will live up to their promises on other barriers to employment.

First, Mallory has committed to transforming the One-Stop Centers that are responsible for empowering jobless residents with access to training, transportation and child care benefits, and other resources needed to get a job. This is no small task, as these centers have historically been more like DMV centers in the 1990s.

It will require strong leadership in each One-Stop, implementation of a uniform assessment process so that employees are trained in uncovering and addressing barriers to employment, and tight coordination with agencies like DHS that can address barriers like transportation and child care.

If this transformation doesn't occur, then the body that oversees One-Stop funding, the Workforce Investment Council, could conceivably pull all funding from DOES and contract with a private agency to run One-Stops.

Second, Mallory has committed to providing data on jobless residents who enter One-Stop Centers that would provide the first ever profile of DC's jobless and their barriers to employment. Finally, Mallory has committed to holding training providers accountable to metrics of job placement.

These are significant challenges, but the success of Mallory and Gray in addressing the challenge of trust in jobless DC residents should give us cautious optimism they can be met.

Tackling chronic unemployment is not optional. It is essential to improving education outcomes of the 30% of District children living in poverty. It is essential to limiting gentrification and ensuring all residents benefit from the District's resurgence in recent years.

Gray deserves credit for his accomplishments thus far and greater interest in his vision for finishing the job on unemployment.

It doesn't take long to figure out that a key reason why parts of DC face high unemployment is due to lack of preparedness for DC-area jobs, not a lack of jobs. Dozens of job training providers have cropped up to address this need, and dozens of programs across 13 city agencies have been formed to help finance those training providers.

With so many chefs in the kitchen of workforce development, there is little coordination, oversight, or accountability. The DC Fiscal Policy Institute this week released a groundbreaking "resource map" that identifies all of these sources of workforce development funding across the city government, and the various non-profit training providers that receive this financing.

Councilmember Michael Brown, chair of the Workforce Development Committee of the DC Council, says that his committee staff only knew where 30% of DC job training dollars went when he took over the committee. After the past year, they know where 60% of the money goes.

The Workforce Intermediary position is intended to coordinate these training providers and funding streams with the needs of local businesses to optimize our workforce development investments. However, it's not hard to imagine this position becoming yet another layer of bureaucracy.

That's why the DC Council first charged a Workforce Intermediary Task Force to design the position. The report of the task force is due on January 15th.

If the Workforce Intermediary is to be a true change agent, reversing decades of deepening poverty in parts of our nation's capital, it is essential that measurable performance metrics be tied to the program, and to the agencies that support the Intermediary.

Three elements are critical to the creation of a successful Workforce Intermediary that is able to turn the corner on joblessness in DC.

1. Workforce Intermediary performance metrics

The Workforce Intermediary should be held accountable for the percentage of DC jobs that go to DC residents and for DC's unemployment rate. When employers are cutting jobs, more focus would be placed on the former metric, When employers are adding jobs, more focus would be placed on the latter metric.

The Workforce Intermediary will become a waste of money if it is simply a resource to job training providers and city agencies financing training providers to advise them on hiring needs of local employers.

If the Workforce Intermediary is held accountable for these metrics, then we would expect that he or she will contact local employers with prescreened resumes of DC residents for open positions. Currently, dozens of job training providers across DC have to form redundant relationships with employers, and this "hiring manager" role of the Workforce Intermediary would free training providers to train.

Not surprisingly, the Mayor, who is also held accountable for these metrics by voters at election time, is currently playing this "hiring manager" role in his One City One Hire campaign. If the Mayor is held accountable for these metrics, it makes sense that he would delegate to someone to improve them.

2. Job training provider performance metrics

Job training providers currently get access to DC government funding by getting on one of several lists of authorized training providers. No data on training outcomes is required to get on these lists or receive DC taxpayer money. This has to change, and Councilmember Michael Brown has said that it will change.

If job training providers had to demonstrate a placement rate for their clients, within 6 months and 2 years after training, they would be incentivized to work closely with the Workforce Intermediary who provides qualified resumes to local employers. After all, the Intermediary, as hiring manager for DC's unemployed trying to reduce the jobless rate, would be their lifeline to continued financing from the city.

If the Intermediary doesn't provide many resumes from their clients to employers, a natural conversation will ensue about the needs of local employers that the Intermediary doesn't believe are being met by the training provider.

3. One-Stop Center performance metrics

When DC residents want a job, they are supposed to go to a One-Stop Center. These centers, called DC Works! in the District, are federally mandated for states that receive federal workforce development dollars.

Sadly, the One-Stop Centers in DC are more like First Stop Centers, as they historically send jobless applicants to other offices depending on their needs. Or they send applicants to a computer to look at training providers on the Internet.

The current director of the DC One-Stop Centers, Hugh Bailey, acknowledges the reputation they have received and has pledged to turn them around in coming months. However, when asked what metrics the One-Stop Centers should be held accountable for, Bailey was hesitant to suggest any.

Each One-Stop Center should be held accountable to the same performance metrics as job training providers - placement rate of clients within both 6 months and 2 years of entering the One-Stop Center.

One-Stop Centers would aggressively case manage clients to improve their placement rates, and only send them to training providers with high placement rates. One-Stop Centers would naturally collaborate with the Intermediary to learn how to get more resumes of their clients placed in front of local employers.

These metrics will create a virtuous circle of coordination between the Intermediary, training providers and One-Stop Centers that will actually reduce unemployment and ensure the Intermediary places a useful, and not bureaucratic, role in workforce development.

Every mayor in DC history is known primarily for some singular goal—whether it was helping blacks enter the middle-class, improving our fiscal management, or reforming education. Mayor Gray clearly wants reducing unemployment to be his singular achievement. He can leave his mark on the city with a bold stroke of accountability as described above. Let's hope that he finds the political will to pull it off.

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.

On Wednesday, the Post reported the latest jobless numbers from July: 5.9% of the region-wide workforce lacks a job, a rate that is "well below the national rate of 9.1 percent". This represented an increase, according to the article, from the June rate of 5.8% due to a "steep decline" in the public sector which is "facing turmoil."

A similar report appeared about June unemployment. Joblessness in Ward 8 continued its increased from 16.9% in June 2008 to 28.2% in June 2011.

And the turmoil doesn't end there. Black teenage unemployment nationally is 40% according to the Labor Department, and is no doubt that or higher in the District, whose overall teen jobless rate is the highest in the nation at a whopping 50.1%. The jobless spike along with the housing crisis has destroyed black wealth, which has fallen from 1/7 that of whites in 1995 to 1/11 in 2004 and 1/19 in 2009 according to the Pew Research Center.

Unfortunately, the Post article on these statistics gave little attention to the issue of black unemployment. The only articles discussing the issue in the Post have mentioned it in the context of how it may affect President Obama's chances at re-election.

A Post blogger on media issues, Erik Wemple, who previously covered the District at TBD.com and the City Paper, posted recently on "How to measure the coverage of black issues." Wemple concludes:

Who's right? Has the coverage dipped or increased? Alas, even with Internet search engines and news archiving services, ascertaining volume trends over such a large coverage area is an undertaking fraught with practical and methodological problems.

Mayor Gray and President Obama will both announce new measures today to address unemployment. Leaders and journalists should ask the questions: What are the causes of the spike in crisis-level unemployment in DC? Do the proposals of the Mayor and the President to reduce joblessness address those causes? Why has the Council passed over 300 pieces of legislation this year and nothing on unemployment?

Do jobless citizens east of the Anacostia River need to riot, like in London, for us to see them? Or will the rest of the city finally notice the tragedy happening in slow motion before us and start debating its causes and solutions?

When District residents hold DC jobs, only 36.1% of them commute by car. But when non-DC residents hold DC jobs, 61.3% of them commute by car, according to 2009 American Community Survey data.

As a result, a whopping 81% of those commuting by car to DC jobs are non-DC residents.

Are city leaders doing anything to prioritize DC residents' access to DC jobs? No. The Transition Report of the Economic Development Committee for then Mayor-Elect Gray, led by Chamber of Commerce head Barbara Lang and former George Washington University president Stephen Joel Trachtenberg, had this recommendation:

Reduce the amount of time people spend driving into and out of the city. The District would stand to retain and attract more businesses that demand ease of access and improvements to quality of life by easing traffic congestion.

Why do we shoot ourselves in the foot like this? It's one thing to complain about taxation without representation, but when we spend our own locally raised tax money primarily to promote employment to those living in the suburbs, we have no one to blame but ourselves.

It's time to end the old, ineffective approaches to fighting unemployment - more roads and more corporate tax holidays. They don't work anymore. A major campaign to economically integrate our city is needed to reverse the decades-long trend that resulted in ever larger roads shuttling a larger percentage of DC's jobholders in and out of the District.

The jobs that could employ a large portion of DC's jobless are there, particularly in the leisure and hospitality sector, which is the second fastest growing sector in DC, adding 10,700 District jobs from 2001 to 2011. Educational and health services, the fastest growing sector, added 26,500 jobs in the same period. The new University of the District of Columbia Community College is furiously training residents for these growing health careers.

Existing job growth is sufficient to provide opportunities for DC's 34,600 unemployed, 8,824 of whom live in Ward 8 where 1 in 4 workers is jobless. Companies that would not locate in the District because the CEO doesn't like driving from Potomac to DC are rarely part of these two sectors, and are thus not needed to address our unemployment crisis.

Furthermore, the surging creative class in the District, whose spending is largely responsible for the growing service sectors, are attracted by public transit and public spaces. That's why their employers, like LivingSocial, are compelled to stay in the District.

We clearly don't need to spend locally-raised tax money to buy more jobs, particularly when 72% of the jobs will go to suburban residents and the jobs city residents need are here and growing. We must make it easier for DC residents than non-DC residents to access jobs in the city, while providing targeted training when needed for expanding job areas in DC.

And the local policies that promote employment for suburban residents over those who live in DC don't end there. DC has an 18% tax on parking garages, but with a loophole so large you could drive an SUV with Virginia plates through it. Garages that provide free parking to employees rather than contracting through a commercial garage are somehow exempt from this DC tax.

This self-defeating deference to suburban commuters is found in the design of streets across the city. My residential street (33rd Street in Georgetown) is primarily used by Virginians crossing the Key Bridge to get to jobs in Upper Northwest. Two of the most iconic streets in our city, M and Wisconsin in Georgetown, have become car sewers for suburban commuters during rush hour. Unsurprisingly, most jobs in Georgetown, including the large percentage of leisure and hospitality positions, are held by Virginians.

Why do we allow this? Let's replace a lane on each side of M and Wisconsin with a dedicated transit lane or widened sidewalks, and push to get streetcar service into Georgetown to help DC residents access Georgetown jobs. Let's cut off my Georgetown residential street and others to through traffic.

If DC is to leverage the disrespect we get in Congress for real unity and action, we must start caring about and investing in our own residents first. Let's start by vastly improving public transportation and bicycling infrastructure to economically integrate our city.

Seegars is the only challenger who has filed thus far. In 2008, Seegars received 498 votes against Barry, or 8.85% of all ballots cast in the Ward 8 Democratic primary.

She proposes a moratorium on new housing construction in Ward 8 until all of the ward's vacant properties are first taken care of. At the weekend's Ward 8 Community Summit, many residents identified vacant properties as a key concern.

Seegars argues that vacant properties are just one of the many issues Barry has failed to address. "People are really just punishing themselves voting for Barry, because the ward never does improve," she said.

In the citywide primary next April, voters in Ward 8 will presumably have a choice. Some have openly questioned the wherewithal and electability of past challengers, and whether this trend will continue.

If Barry is worried, he is not letting on. His inconsequential rhetoric might use different clichés, turns of phrase, and doubletalk, adroitly changing as the day-to-day or week-to-week wind blows, but the crux of his message has not deviated: You know me, I know you. We know each other, so let's keep this party going. What do you say?

Ward 8 Community Summit reviews problems with the ward

At this weekend's Ward 8 Community Summit, Barry repeatedly implored the audience to forget about the past while concurrently emphasizing his nearly four decades of public service to the city.

In his closing remarks Saturday, Barry shamelessly said, with the tacit reinforcement of Mayor Gray, "We can't do anything about the past but learn from it, right? We can't do anything about yesterday. We can't do anything about half-a-hour ago. But we can do something about the future. And we're going to have a brighter future in Ward 8 than we've ever had in recent years."

Smothered by high rates of unemployment, illiteracy, substance abuse and crime, Ward 8's dependent population is unlikely to offer their vote to anyone other than Barry, admitted participants at table 8 of the summit.

"I don't think people know what changes they're really looking at," said Ray Watson, a contractor with a small business in the ward. "If the police are going to monitor people on the corner drinking their beers then they won't like that." He later said, "People aren't going to give away their money to move and live over here. The new people won't be your everyday public assistance clientele."

Statistics shared at the summit indicated 40% of the ward's population lives in some form of public housing.

"Most residents don't want new development. They are comfortable with the gun shots, people sitting on their porch drinking liquor and being loud as they do, things of that nature," said John, a rising sophomore at a charter school east of the river, an employee within the Executive Office of the Mayor for the Summer Youth Employment Program and a resident of Highland Addition off Atlantic Street SE.

"People will do what they can to resist changes," said John, who expressed frustration with a stigma that can pervasively label residents of public housing "low class."

Potential challengers remain on the sidelines

One potential challenger is Jacque Patterson, president of the Ward 8 Democrats. Patterson said, "It's time for Ward 8 to have new ideas and innovative public policies. To substitute Barry with someone who doesn't have any new approach to addressing the concerns of Ward 8 residents shouldn't be the goal."

Patterson ran against Barry in 2004 "because I was tired of the ward languishing undeveloped and underserved during the years that Ms. Sandy Allen served as our councilmember." He recently ran in this past April's at-large race but was disqualified after failing to collect the required signatures for inclusion on the ballot.

Patterson argues Barry "has not articulated the reasons why he should receive my vote" and, unlike "council members in other parts of the city," has not engaged with the Ward 8 Democrats. With a council that "seems at this point to be self-serving," Barry's credibility has been strengthened by his longevity in city politics and "provides a sense of stability" while the public's trust increasingly wanes, says Patterson.

"Residents want more than just the show or the party," says Charles Wilson, an ANC, attorney and five-year resident of the ward. In 2008 the Washington Post endorsed Wilson's novice campaign for the Ward 8 council seat. Wilson finished second in the Democratic primary with 622 votes, 11% of all that were cast.

"Ever since the 2008 campaign, every week somebody is asking me if I am going to run or they tell me I should run again," says Wilson. "It's nice people are mentioning my name, but I'm going do this on my time."

In the 2008 Democratic primary, Barry received more than three-quarters of the total ballots cast and claimed more than 90 percent of the total vote in the general election. Barry was first elected as Ward 8 councilmember in 1992 following his release from federal prison on drug charges. He would subsequently defeat incumbent Sharon Pratt (Dixon) Kelly in the Democratic primary en route to his fourth-term as "Mayor 4 Life" defeating Carol Schwartz (R) in 1994.

At Saturday's summit, Barry was referred to as mayor repeatedly by different speakers throughout the day. The septuagenarian thrives off these displays of fawning romanticism and admiration knowing Ward 8 is his perpetual meal ticket while asking for very little in return.

It is detrimental to the District for Ward 8 to continue to be Barry's fiefdom of "the least, the last, and the lost." Evidenced by citizens' recent reactions to Barry's request for Ward 8 to absorb parts of Ward 6 in redistricting, there is a collective malaise outside Ward 8 about Barry.

As long as his influence is confined to Ward 8 people seem content to disregard him. When he makes unwanted excursions into other parts of the city, voters promptly and viscerally reply in full. But the livelihood of the city and Ward 8 are not mutually exclusive. Barry is not just Ward 8's problem; he's a citywide problem requiring a united citywide solution.

A challenger must develop a citywide organization that can outwork Barry at the retail level from door knocks, to steady surrogate presence at community meetings and well-formed and committed coalitions that can raise the money necessary to pay full-time staff, purchase collateral (t-shirts, yard signs, and bumper stickers) and fund an aggressive 72 hour get-out-the-vote effort.

Unless this happens, after once being set-up himself Barry will continue to strut, knowing he has Ward 8 sewn up.

These jobs, primarily in leisure, hospitality and personal care, are rapidly growing as a share of the total jobs. The growing creative class of knowledge workers have higher incomes and demand more and better services.

Hence the growth of education and health care services, at the high end, and leisure, hospitality and personal care services, at the low end. Both types of services are producing jobs faster than any other sector in the District. The latter, lower-end services are performed by what Florida calls service class workers.

Despite this, no one thinks of them as a solution to unemployment because they are usually crappy jobs - low-wage, dead-end jobs with few benefits.

But factory jobs were also crappy jobs a century ago, argues Florida. As millions of workers left the farms people wondered who would employ them, and the only solution were low-wage, dead-end manufacturing jobs.

By the end of WWII, these crappy jobs were the pathway to the middle class. Thanks to unions and to the professionalization of management, factory jobs became higher value jobs that were more highly compensated.

As evidence that service class jobs are being upgraded in the same way, Florida points to the 20 firms employing primarily service workers on the Fortune list of 100 best companies to work for. In the top 10 are Wegmans, Zappos.com and REI.

There are three steps that Mayor Gray should take to help DC's jobless get and retain good service class jobs.

Expand transit links across the Anacostia to leverage the city's natural advantages
Unlike lots of jobs that have been outsourced, service class jobs are primarily done in person with end customers. That means service class workers have to commute to the neighborhoods where their customers live.

Factory jobs are usually located away from residential areas. While manufacturing has never been a large part of Washington's economy, much of America's present sprawl and auto-dependency is attributable to the zoning of neighborhoods by single use (residential, commercial, industrial) in response to the rise of factories.

Because service jobs are usually done in person, cities have a natural advantage in employing their service class residents. In fact, service class workers before the rise of manufacturing often lived in alleys directly behind the homes of wealthier residents.

The District should be leveraging this natural advantage by improving transit links across the Anacostia River to economically integrate the city. Metro, like other transit systems that arose in the 70s in Atlanta and San Francisco, exists primarily to shuttle suburban workers in and out of the city. Mayor Gray and DDOT Director Bellamy should increase their investment in the Circulator and Streetcar routes that shuttle District workers to District jobs.

Look for soft skills training models that work
Mayor Gray often points to the new Community College of DC as an example of his investment in training. While the training provided by CCDC is helpful for jobs in the growing health care field such as nursing assistants, the District's service class needs primarily soft skills training. Instead of focusing exclusively on technical intelligence for particular careers, we need to also focus on social intelligence for service class workers.

Lack of these soft skills is the barrier that keeps less educated workers from getting and keeping leisure, hospitality and personal care jobs. The Department of Employment Services (DOES) and the Deputy Mayor for Economic Development should find models for soft skills training that work.

Perhaps DOES could pay for soft skills case workers to connect clients with service class jobs and then meet regularly with the worker and their manager on-site to discuss their performance. This would effectively provide free training and personnel management for employers, and would target the specific skills mismatch that keeps service class workers jobless.

Target firms with good service class jobs for attracting to the District
Service class jobs will become better jobs the same way factory jobs became better jobs - re-engineering of workers' jobs to address demand for better quality from customers and better pay from workers.

DC's rapidly growing, well-paid class of knowledge workers increasingly demand more and better quality services in food, personal care and home care, and leisure. We need to build up a class of service sector managers who are skilled at re-engineering service processes and positions in order to meet these demands.

Ultimately it's these managers who will circulate between service sector firms in DC and make the District a center of excellence in services. Targeting those service providers in the 100 best companies to work for to attract to DC will build up this cadre of managers in the city who then make other service sector firms in DC great places to work.

It's a source of shame that 30% of our workers are out-of-work and 30% of our children live in poverty. Until this third of our city is lifted up, we cannot speak of progress in any other area.

While many talk about unemployment, few provide specific solutions. Whether one agrees with Florida or not, let's join him in offering specific solutions to the challenge rather than reiterating common platitudes.

Why have companies like MCI, Nextel, Corporate Executive Board, and the Friedman, Billings, Ramsey Group left the District? According to Ein, the culprits are corporate tax rates and the high cost of real estate.

By that logic, Omaha and Tulsa should be the nation's high-tech hotspots.

I co-founded a tech company in the District in 2000 that now has 60 employees and is headquartered in Tysons Corner. We moved there despite very high rents for two reasons. First, my partners who live in northern Virginia would have far longer commutes into the District than I would have to Tysons. Second, Tysons Corner is where the potential software partners and vendors are—it's where the action is.

Slashing the corporate tax rates in the District would benefit owners of DC businesses like Ein. It would do little to attract outside businesses and even less to help the unemployed, who are already threatened by cuts in social services by the cash-strapped city government.

Technology hubs form where there is a large source of very talented developers, capital and a large number of similar technology companies that serve as rivals or partners. According to Michael Porter, who wrote the definitive text on industry hubs or clusters, these are factors that contribute to clusters in any industry.

Tax rates, according to Porter, are not relevant to the rise of tech hubs. If they were, the largest enterprise software firm on the planet (SAP) probably wouldn't be in Germany, and the largest tech hub in the world (Silicon Valley) wouldn't be in the state that has the second-highest business tax rates in the US.

Ein claims that Washington has "been a place for people to start companies that want to tap into the deep population of one of the most well-educated, computer-savvy young workforces anywhere in the nation". But Northern Virginia's tech cluster didn't just happen; firms located there to take advantage of federal government contracts.

Non-government software firms have been only a knock-on effect, or consequence, of the government contracting hub. My company, which sells software to phone companies, is such a knock-on effect, benefiting as we do from the local telecom sector hub that arose when telecom was heavily regulated by the government.

Washington is quite unlike Silicon Valley, Austin, or New York City with their legions of talented software developers. There is no leading computer science department in a Washington-area university, and there is no rivalry amongst local firms for the best developers as exists between Google, Facebook, and Twitter.

The number of tech companies founded in DC, to which Ein points as evidence of our lost potential, is actually not high for a city our size. One of the largest software companies in the world, Compuware, is based in Detroit, and no one is looking to the Motor City as the next Silicon Valley.

DC's unemployed also aren't jobless due to a lack of jobs. They simply lack the skills that even the bulk of existing jobs demand. More than 40% of jobs in DC require a college degree, while nationally only 20-22% of jobs require a college degree. Yet 36% of DC residents are functionally illiterate.

DC lacks a manufacturing base and is a hub for public policy, non-profit and legal sectors that require college or advanced degrees. We need to solve the root problem and not waste our time attracting more employers that require higher education.

Mayor Gray thinks job training will close this skills mismatch. That sounds great, but one wonders what cluster will form in the District that can provide 10,000 jobs for which functionally illiterate residents can train in a year or less. Gray hasn't delved into such details, but it's these details that must be worked out if job training in the District is to avoid being a multimillion dollar boondoggle.

Is there an industry that could employ the 30% of Ward 8 that is unemployed, yet find a home in a knowledge-based economy? The answer is key to the city's ability to wash the moral stain of 30% of its children living in poverty.