Poverty costs businesses and society

Pasadena Star News

By: Cynthia Kurtz

Posted: 8/27/2014 

Being broke is an economic condition. Being poor is a disabling frame of mind and spirit. Fifty years after the signing of the War of Poverty Act by President Johnson on August 20, 1964, there are more Americans who are both broke and poor than ever before.

Over 48 million people in the United States live in poverty - almost 16 percent of the population.

"Putting Poverty in Southern California in Focus" was the theme of a recent forum convened by the Southern California Association of Governments (SCAG). Within the SCAG region - which includes the counties of Los Angeles, Imperial, Orange, Riverside, San Bernardino and Ventura - over 3.2 million people or 1 in 15 live in poverty. One in four children live in poverty.

The forum brought together government, non-profits, business and faith based organizations to talk about why poverty still plagues our society. Why haven't the safety nets worked? What needs to be done differently? Who needs to be involved?

It is clear that poverty concerns everyone. Take one example: poverty can lead to and exacerbate health issues. When people can't afford healthcare, the emergency wards become overwhelmed and the costs go up affecting us all financially.

Businesses rely on people who can buy goods and services. There is a reason that businesses in poor neighborhoods don't do well. The poor do not have enough disposable income.

Even though the organizers didn't call for the definitive answers from this single forum, there was much agreement about the causes of poverty and steps required to end it.

First, social safety nets do work at helping those in poverty. There are many effective programs on the front line feeding, clothing and sheltering those who need some extra assistance. These programs have helped millions of people have better lives.

What the programs have failed to do is move people from poverty to prosperity. That needs to be the new goal. Or, as Frank Talarico, Jr., President & CEO of Goodwill of Orange County put it, "A hand up not a hand out."

It starts with education. Former Governor Gray Davis stressed California must "double down on education." For every dollar spent on pre-K for poor children, an estimated $7 is saved on future government services.

People need jobs. The consequences of public policies that are detrimental to job growth are crippling. It is time to get serious about regulatory reform. You can't produce jobs quickly when it takes years for projects to go through approval processes and the accompanying lawsuits.

Keep families together. A two parent family is the best predictor of the social mobility of children. Changes in tax policy for married couples would help.

Raise the minimum wage. We all know that minimum wage can't stay the same forever. Today, there must be some number between no increase and $15 per hour that reasonable people can agree on.

Finally, everyone must become involved. Raising people out of poverty, raises us all.

Voter opposition linked to costs involved

Pasadena Star News
By: Cynthia Kurtz
Posted: 8/13/2014  

The Public Policy Institute of California - a nonprofit, nonpartisan think tank - just released its July 2014 survey on the environment. PPIC has been surveying California residents since 1998 on a variety of public policy issues. Through their work, policy makers are able to gage likely voter’s positions on important issues. Survey questions are repeated from year to year allowing readers to see how opinions change over time.

Over two-thirds - actually 68 percent of the state’s adults support AB 32 - the law requiring California to reduce its greenhouse gas emissions. But this is 10 percent lower than at the peak of the law’s popularity in 2007. 

When considering how to meet these new emission requirements, three out of four adults favor stricter emissions on power plants. Similarly, 76 percent favor requiring oil companies to produce fuels with lower emissions unless producing those lower emission fuels would mean an increase in gas prices. Then, the support for lower emission fuels drops to 39 percent with 57 percent opposing.

This is a particularly interesting finding since a new fuel tax increase of between 16 cents and 76 cents is scheduled to go into effect on January 1, 2015. It is part of the implementation of AB 32. Currently, the state legislature is considering AB 69 (Perea) that would delay implementation of the increase for three years but Sacramento insiders are predicting that the bill will stall in committee without ever receiving a floor vote.

There is also strong support for requiring automakers to improve fuel efficiency - 85 percent of adults and 79 percent of likely voters support. And there is strong opposition to building more power plants - 64 percent of adults and 56 percent of likely voters oppose. Support for nuclear power use to be stronger but started to decline after the 2011 nuclear disaster in Japan. 

Increasing federal funding for developing wind, solar and hydrogen is strong - 78 percent of all adults and 73 percent of likely voters say yes. Requiring that one-third of the state’s electricity come from these renewable sources is also popular among adults (76 percent favor) and likely voters (73 percent favor) unless it means an increase in power bills. Then support drops to 40 percent with 50 percent opposing

Clearly most Californians want to be good stewards of the environment. But paying for it is a different matter. If someone else, such as business or government, is required to foot the bill, then support is strong. But when the cost shifts directly to consumers, popularity drops dramatically.

The flaw in this thinking is that consumers pay regardless. We pay in taxes or in the cost of products and services. Making a direct connection between cost and benefit would provide a better way to set priorities on what environmental policies we want and what we are willing to pay.

Today's office environment is more mobile

Pasadena Star News

By: Cynthia Kurtz

Posted: 8/6/2014 

There is cautious optimism about the economy. We have achieved six months of job growth averaging over 200,000 new jobs per month. The housing market is slowly recovering. Without the fear of job losses looming, home owners are ready to move into larger homes freeing up homes for first time buyers.

Industrial space is scarce, especially in the San Gabriel Valley. Vacancy rates dropped to 3.3 percent in 2013 the lowest in the Los Angeles region and almost a full point below the Los Angeles County average.

The holdout in this good news story is the commercial office market which is recovering at a much slower pace. Vacancy rates in the San Gabriel Valley have dropped from the 2009 peak of 18.4 percent, ending 2013 at 16.2 percent.

The essence of what workers are looking for in office space has been set on its ear. Just 10 years ago the individual 250 square foot office was considered standard and everyone eyed the carpeted "corner office" with the double doors - preferably with a view. 

The office was where you kept everything you needed to do your job - files, phone, contacts, computer, books, and an ergonomic chair. It was literally a home away from home.

The recession and technology have changed everything, partially due to necessity and partially because it is possible. 

As workforce numbers contracted and extra overhead became a drag on the bottom line, leases were re-negotiated for less space. Workers adapted to taking conference calls in their cars, meetings in coffee shops, and working from home. 

As the economy rebounds, the demand for office space is not keeping up. Why not? Don't we all want our large offices back? There are several factors that are influencing the office market. Certainly the recovery is not strong enough to throw caution to the wind. Many businesses are still holding on to cash rather than committing to long-term leases.

But there is a change in what workers want and need as well. Recent trends are toward non-dedicated work space with more amenities like natural light, on-site cafes, open floor plans, and sound control. Younger workers want more flexibility, common space and an environment that is conducive to team projects. 

Wireless technology, mobile devices and less paper are trumping large desks and private offices. Computers and phones fit in the palm of our hands. And our contacts and files? Well, they reside in the "cloud." 

Companies are finding that is more important that their employees be able to work anytime from anywhere than it is to come to the office every day. The average office size has dropped to 185 square feet and it may go lower yet.

The commercial office market is already adjusting. New companies that lease "shared co-op" styled space are popping up. Smart developers and architects are retrofitting and reconfiguring existing buildings to respond to the changing demand. Some are even adding residential units.

It isn't as easy as taking down walls. More employees in a building mean more parking, more restrooms and more elevators. But it is clear that offices of the future are going to look very different.

A look behind June's employment report

Pasadena Star News

By: Cynthia Kurtz

Posted: 7/30/2014 

It was good to read the headlines announcing that California has created more new jobs than it lost in the recession. But the California Center for Jobs and the Economy - a non-profit public benefit corporation dedicated to providing objective information on California's economy - was quick to add a few caveats in its California Employment Report. There are hidden numbers and some pain lurking behind that announcement.

In June 2014 the California unemployment rate dropped by 0.2 percent to 7.4 percent. Some 15,472,000 people are now employed (seasonally adjusted) compared to 15,449,000 who were employed in July 2007. Before we declare victory, however, let's look at some other numbers.

First, those new jobs aren't distributed equally across the state. Los Angeles County and the San Gabriel Valley have not added back "all" the jobs lost in the recession. In 2003 the SGV had approximately 644,000 jobs. Over the next five years that number steadily grew to reach 674,000 jobs in 2008.

Then the SGV lost 55,000 jobs in less than two years bottoming out at 619,000 jobs in 2010. Jobs are coming back - over 3,000 new ones in 2011, 11,000 more in 2012 and an additional 12,000 in 2013. But we still need to add an 29,000 more jobs before we are back to 2007 levels and that will take at least two years.

The SGV isn't alone. What California is seeing is a two-tiered recovery. Unemployment numbers vary widely across the state. Imperial County has the highest unemployment rate at 22 percent followed by Colusa County at 14.9 percent and Sutter County at 13.3 percent. Los Angeles County has an unemployment rate of 7.9 percent - 0.5 percent higher than the state average.

Compare those figures with Marin County's unemployment rate of 4 percent, San Mateo County at 4.2 percent, and San Francisco County at 4.5 percent.

Second, while the state unemployment rate dropped by -1.9 percent, the participation rate also dropped by -1.0 percent. The participation rate is the number of people who are employed or actively looking for work. In June 2014 the California rate was 62.1 percent compared to 62.8 percent for the country.

When more jobs are created the participation rate should stay the same or increase to reflect that more people are entering the work force with population growth. When it drops, it is an indication the workers are discouraged and have stopped looking for jobs.

Between June 2013 and June 2014, California added 137,200 jobs but the population increased by 1.73 million people. The California Center for Jobs and the Economy estimates that there were 73,500 fewer people looking for work in June 2014 than in June 2013.

Finally, the Center for Jobs found that middle class job creation is lagging and remains 222,700 jobs behind the 2007 number.

What does this mean? It means we are not done. Both the public and private sectors are creating jobs. Things appear headed in the right direction. But public policy makers, regulators, and employers must stay focused on the issues that impact the economy and California's ability to create jobs.

Special Olympics: a win-win event

Pasadena Star News

By: Cynthia Kurtz

Posted: 7/23/2014

On July 25, 2015, just one year from now, there will be a big kick-off in Southern California for the largest event hosted in Los Angeles since the 1984 Olympic Games - the 2015 Special Olympics World Games.

Over nine days 7,000 athletes from 177 counties will compete in 25 events at 27 venues throughout Southern California. 

Don't for a minute think that this won't be real competition. Over 4.2 million athletes are training and competing in 70,000 events this year with their eyes on landing one of those 7,000 spots in the World Games.

The World Games are held every two years alternating between Summer and Winter Games. The 2013 Games were in Pyeongchang, South Korea and 2011 in Athens, Greece.

Just like the Olympic Games, countries compete for the privilege of hosting. And just like the Olympics, there is a big economic impact not just from the visiting athletes but also from 3,000 coaches, 30,000 volunteers, 5,000 VIP guests, 500,000 spectators and 2,000 media representatives who will come to cheer, coach, report, and enjoy the fun. The LA Tourism and Convention Board commissioned a study that estimated a fiscal impact to the Los Angeles region of $415 million.

Patrick McClenahan is President and Chief Executive Officer for the 2015 Special Olympics World Games. He also served as the Chair of the LA Bid Committee that successfully brought the Games to Los Angeles. 

Mr. McClenahan knows how to put on sporting events. As President and General Manager of CBS2 and KCAL9, he oversaw coverage of over 100 live sporting events per year and has been honored with six Emmy's for his work in sports television.

He also understands how important the World Games are for special athletes having served as Chair of the Board of Directors for Special Olympics of Southern California for the past 11 years.

Mr. McClenahan and his team were recently the guests of the San Gabriel Valley Economic Partnership. They visited the SGV to encourage San Gabriel Valley cities and civic groups to be part of the Host Town Program. They are looking for 100 towns across Southern California to host the athletics for three days before the Games begin.

For many of the athletes this will be their first trip to the U.S.A. The Host Town Program will make sure they get a special welcome and a taste of our California lifestyle. A schedule of cultural and sports activities are being planned by the World Games and Host Towns will also have the opportunity to plan some events for their guests.

The Arcadia Chamber of Commerce and a consortium made-up of the Fairplex, La Verne, Pomona and Claremont have already signed up. Pasadena and Duarte are planning to do the same. I know there will be others.

There are 200 million people worldwide with intellectual disabilities. Too often they are marginalized, misunderstood and even mistreated. During the World Games they will be the stars.

We need more cities, more businesses and more individuals to get involved. If you would like information on the Host Town Program, becoming a sponsor, making a donation, supporting an athlete, or becoming a volunteer, go to www.LA2015.org  or contact me at the Partnership ckurtz@valleyconnect.com.