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A ‘Hesitantly Bullish’ Take on U.S. Unemployment Trends

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A WalletHub article on U.S. states where unemployment is ticking up cited Robert Fairlie, chair of Public Policy at UCLA Luskin and a member of the National Bureau of Economic Research. “I’m hesitantly bullish on the job market for 2024,” said Fairlie, explaining that national jobless rates are still relatively low and are not likely to increase rapidly in the coming year. But he added, “The major problem many people have is that their wages are not increasing as fast as inflation. That is making it hard for people to afford to live, especially in high-cost housing markets.” Moving savings out of non-interest-earning accounts and into money market funds that pay a higher interest rate is one way that people can protect their finances, Fairlie said. 

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When Personalized Service Collides With Staffing Cuts

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Urban Planning Professor Chris Tilly spoke to Forbes about staff cuts at Petco, whose business model relies on drawing customers into brick-and-mortar stores for services such as grooming, training and veterinary care. The staffing reductions come as Petco announced that it would be far less profitable this year than previously expected. “It’s ironic because Petco, like lots of other retailers, is saying our competitive advantage is we have stores where you can actually talk to somebody and they know your pet’s name,” said Tilly, co-author of  “Where Bad Jobs Are Better: Retail Jobs Across Countries and Companies.” “But it’s completely at odds with what they’re actually doing with their staff.”

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Europe’s Challenge of Fostering Growth, Sharing the Wealth

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Michael Storper, distinguished professor of urban planning, spoke to the podcast Regio Waves about strategies Europe can employ to foster growth without exacerbating social inequality. In parts of Europe, participation in the labor force is flagging and wages are stagnant. One factor contributing to the malaise is the rise of artificial intelligence. “This is the moment for Europe to shape its future with artificial intelligence and to make sure that it is deployed in a way that augments people’s skills,” Storper told the podcast, which is produced by the European Commission. “We have to think about the interconnectedness of all territories,” he said. “That means that even as we focus on making Europe dynamic and innovative, mostly in the big and middle-sized cities, we want to make sure the other territories are maintained in a way that makes their conditions of life good and makes the human potential of every new generation there ready to contribute to the overall European dynamic.”

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Tilly Navigates California’s Shifting Labor Landscape

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UCLA Luskin Urban Planning Professor Chris Tilly spoke to the California Sun podcast about the state’s shifting labor dynamics. High-profile strikes, concerns about inflation and the emerging role of technology in the workplace have raised the visibility of worker rights campaigns this year. “The cost of housing, of health care, of college tuition have risen on trajectories that are so out of sync with everything else, including pay,” Tilly said. One experimental approach to addressing these issues is a plan to raise the minimum wage for many fast-food workers in California to $20 an hour and create a nine-member council empowered to make future wage increases. “Having some space where labor interests and management interests and public interests can all sit down at the table and hammer out what might be a good way to go, I think that’s a good thing to do,” Tilly said. “If places like California don’t lead, the prospects for the country look a lot grimmer.”

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Tilly on Labor Actions Spreading Across State and Nation

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Urban Planning Professor Chris Tilly spoke to CNBC about labor actions across California — 55 in 95 locations that commenced just since the beginning of 2023. In Los Angeles, striking Hollywood writers and actors have joined city employees and hotel and hospitality workers on the picket line in what some are calling a summer of solidarity. Union representatives in the state say they are being contacted by organizers from around the country who are seeking guidance on stepping up their own labor actions. “I think California is ahead of the country, but it’s pointing to a crisis that’s likely to happen nationwide,” Tilly said.

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New Book by Fairlie Reveals Risks and Rewards of the U.S. Startup Economy

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A new book co-authored by Robert Fairlie, chair of Public Policy at UCLA Luskin, provides a broad view of entrepreneurship that challenges the assumption that startup companies in the United States create jobs and power economic growth. Federal, state and local governments spend billions of dollars each year on incubators, loan programs, tax breaks and investor incentives to encourage the formation of job-creating businesses, yet these expenditures are often made without knowing whether they lead to lasting, decent-paying jobs. In “The Promise and Peril of Entrepreneurship: Job Creation and Survival Among US Startups,” published by MIT Press, Fairlie and co-authors Zachary Kroff, Javier Miranda and Nikolas Zolas use a comprehensive new data set to provide clarity. Their findings show that startup job creation and survival rates are much lower than those typically reported by federal sources. Official statistics indicate that each startup creates six new jobs on average, and 50% of startups survive up to five years. However, those numbers reflect only new businesses that have employees, not the millions of startups that launch without employees every year, the authors found. “Understanding the early-stage dynamics of entrepreneurship is important,” they write. “Starting a business is difficult, with many potential barriers and risks,” including the legal requirements and resources needed to hire employees. The authors also explore who owns startups, focusing on differences by race and ethnicity and documenting how some minority groups face significant barriers to entrepreneurship. Fairlie’s book is among five recently getting capsule reviews by the Financial Times, which lauds its use of reliably sourced data and says it will “help those seeking to nurture an entrepreneurial culture themselves: the policymakers, academics, incubator operators and business degree students.”

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Tilly on Worrisome Economic Signals From California

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A Barron’s article about concerns that California’s climbing jobless rate and other economic indicators may be harbingers of a national economic downturn quoted Chris Tilly, UCLA Luskin professor of urban planning and an expert on labor and workplace trends. Tilly said four broad employment sectors in the state are either shrinking or stagnant: construction, particularly residential construction; durable goods; wholesale; and information, which includes media and entertainment jobs. The state economy, the largest in the U.S., grew by an annual rate of 0.4% in 2022, so it’s difficult to call California a “bad economy,” Tilly said. Still, “California is not in a recession at this point, but it is a risk,” and the state “may be a leading indicator for what’s happening elsewhere.”

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Tilly on the Struggle to Fill Jobs in the U.S.

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Chris Tilly, professor and chair of Urban Planning, commented in a WalletHub article about U.S. states where employers are struggling most to hire workers in the wake of the COVID-19 pandemic. In general, Tilly said, employers are having difficulty hiring and keeping workers because the unemployment rate has been so low in recent months — about 3.5% — that workers can be choosy and can demand higher wages. Employers “have been raising wages in response to their difficulty hiring, but they still have not come to terms with how much they will have to raise pay to fill open jobs,” Tilly said. He also noted that when unemployment levels were higher, employers could be more selective in the skills they wanted and could be pickier. “The reality is that workers are capable of learning, and businesses are going to have to do more training than they are accustomed to,” he said.

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Zepeda-Millán on What’s Ahead for LAUSD

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Chris Zepeda-Millán, associate professor of public policy, spoke to the Daily News about labor issues at the Los Angeles Unified School District and the road ahead for Superintendent Alberto Carvalho. After a three-day strike, LAUSD reached a contract with service workers including bus drivers, custodians, cafeteria workers and instructional aides. Now the district must negotiate a settlement with the teachers union, which has the upper hand, said Zepeda-Millán, chair of UCLA’s labor studies program. “The district knows [the unions] can shut [schools] down pretty easily,” he said. “That’s going to be in the back of both teams’ minds as they’re negotiating.” If successful,  the negotiations could strengthen the superintendent’s influence. “Carvalho has a chance to say, ‘I’m going to do things differently this time and let’s show the state and the country that if we have well-paid teachers, smaller class sizes — what all the research says works — we could have great public schools again,’” he said.

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Zepeda-Millán on Damage to Labor’s Influence

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A Los Angeles Times column on an L.A. labor leader’s role in the scandal that has upended city politics cited Chris Zepeda-Millán, associate professor of public policy. Ron Herrera resigned his post as leader of the L.A. County Federation of Labor after a leaked recording of a racist conversation that also involved three City Council members. Union members across the country were shaken by the recording, which undermined the labor principle that workers must stick together to ensure dignity for all. The timing of the leak, weeks before the midterm elections, also threatens voters’ trust in organized labor, one of the most powerful political players in California and the country. “With a scandal this bad, with the L.A. Federation of Labor being involved, it could really do some long-term damage,” said Zepeda-Millán, who chairs the labor studies interdepartmental program at UCLA.

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