Posts

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

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.”


Tilly on Worrisome Economic Signals From California

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.”


 

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

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.


 

Zepeda-Millán on What’s Ahead for LAUSD

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.


 

Zepeda-Millán on Damage to Labor’s Influence

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.


 

Zepeda-Millán on Labor Organizing, Activism and Scholarship

Chris Zepeda-Millán spoke of his Boyle Heights roots, early activism in labor and anti-war movements, and inspiration to pursue a doctorate to broaden the perspectives heard in academia during an interview marking his selection as chair of the UCLA Labor Studies Interdepartmental Program. An associate professor of public policy and Chicana/o and Central American Studies, Zepeda-Millán grew up hearing about the challenging conditions his grandparents faced as garment workers and migrant farmworkers and learning about the importance of labor organizing. It was not until pursuing higher education that he would discover the connections between his family’s work, economic and social inequality, race and immigration status. In college, “for the first time in my life I was able to read books and stories that literally took place in my neighborhood,” he said. “I saw these courses as intellectual ammunition. I was learning how to defend my beliefs, to be able to call out things that I knew were wrong.”


 

Tilly on Labor Needs Met by Relocated Migrants

The New York Times and NewsNation spoke to Urban Planning chair Chris Tilly for an article about immigrants who found steady work and a fresh start after being moved from Texas, Florida and Arizona to Democratic strongholds. While the high-profile relocation of thousands of migrants has created a burgeoning humanitarian crisis, straining the resources of cities trying to provide social services, it has also cast light on the economics of supply and demand. Many of the migrants are Venezuelans who have applied for asylum, allowing them to receive employment permits while their cases are pending. Others remain in the shadows, trying to find work without legal documentation. Many have found jobs in construction, hospitality, retail, trucking and other sectors facing worker shortages in an economy still recovering from the impact of the COVID-19 pandemic. “In most big cities, including the ones where governors are shipping migrants, employers are scrambling to find workers,” Tilly said. “They are meeting a need.”


 

Tilly on Rise in Union Organizing

Urban Planning chair Chris Tilly spoke to the Wall Street Journal about a steep rise in the number of U.S. workplaces where employees have started trying to organize unions. In the first half of the year, workers at 1,411 U.S. workplaces filed petitions with the National Labor Relations Board, the first step in joining a union. That figure represents a 69% increase from the same period in 2021 and the most of any year since 2015. The story also cited a Gallup poll last year that found that 68% of Americans approve of unions, the highest share since 1965. Still, the share of American workers who belong to unions — roughly 10% — remains low by historical standards. Economists say workers, whether in unions or not, are benefiting from a significant labor shortage in some industries where employers are struggling to fill open positions. “Tight labor markets certainly are conducive to organizing and to workers having more leverage in general,” Tilly said.


 

Tilly on Retail Workers’ Fight for Better Conditions

Grocery Dive spoke with Urban Planning chair Chris Tilly about evolving labor dynamics in the supermarket industry and other large retailers. Energized by a pandemic-spurred labor shortage, workers and labor advocates have made progress in their quest for better working conditions, including higher pay, guaranteed hours, and stronger health and retirement benefits. However, in an age of declining union membership and pressure on businesses to hold down expenses, it will be difficult for workers to make significant long-term gains in their relationships with large companies, Tilly said. In the past, publicly traded retailers were often controlled by families that could make workers a priority, but today they frequently answer to large-scale investors, like mutual fund managers, who are focused on quarterly results, he said. “Shareholders trying to squeeze dividends and increase share price … shifted the balance of power within public companies,” Tilly said.


 

Tilly Wins Award From Labor Relations Group

Urban Planning chair Chris Tilly has been named a 2022 Academic Fellow by the Labor and Employee Relations Association (LERA). The award, which recognizes scholars who have made contributions of unusual distinction to the field of labor and employee relations, was given at the association’s annual membership meeting, held virtually from June 3-5. Françoise Carré of the University of Massachusetts, Boston, was also honored with an Academic Fellow award. Tilly and Carré are co-authors of the award-winning 2017 book “Where Bad Jobs Are Better,” which identifies room for improvement in the U.S. retail sector. Citing a rigorous study of working conditions in seven countries, the authors conclude that low wages, unpredictable work schedules and limited opportunities for advancement are not inevitable characteristics of the retail sector. Tilly and Carré also collaborated on a chapter in 2020’s “Creating Good Jobs: An Industry-Based Strategy.” The LERA Academic Fellow awards are given annually to scholars who have served more than 10 years studying disciplines including industrial relations, labor law, economics, human resources, business, sociology, political science and organizational behavior. The nonprofit association also bestows Fellow Awards on practitioners in the labor and employment relations field. A full list of the award winners is available on the LERA site.