01/13/2025

News

California’s school war flares up on three fronts

Three recent and seemingly discrete events neatly frame California’s political and legal war over whether the state’s six million K-12 students are being adequately educated.

The conflict pits the state’s education establishment against a coalition of civil rights groups, education reformers and charter school advocates over the “achievement gap” that separates poor children, particularly Latinos and African-Americans, from more privileged white and Asian students.

The battle has been waged in the Legislature, before the state school board and local boards and quite often in the legal arena.

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Gross job gains 7.3 million and gross job losses 6.7 million in the 1st quarter of 2017

From December 2016 to March 2017, gross job gains from opening and expanding private-sector establishments were 7.3 million, a decrease of 127,000 jobs over the quarter, the U.S. Bureau of Labor Statistics reported today. Over this period, gross job losses from closing and contracting private-sector establishments were 6.7 million, a decrease of 391,000 jobs from the previous quarter. The difference between the number of gross job gains and the number of gross job losses yielded a net employment gain of 654,000 jobs in the private-sector during the first quarter of 2017. (See tables A and 1.)

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The small business myth

A key moment in the modern myth-making around small business came in 1978. That’s when MIT economist David Birch published claims – which he repeated in testimony before Congress – that small firms had accounted for 80 per cent of all new employment opportunities between 1968 and 1976. Critics quickly pointed out that Birch’s findings were quite wrong, largely because he defined firm size according to how many employees worked in a given location (like a branch office, factory, or store), not how many the firm employed altogether. In fact, most job creation, in the 1970s and today, comes from a small number of very fast-growing firms, while most small firms either fail (killing jobs) or remain small. Birch later admitted that the 80 per cent figure was a ‘silly number’, but the claims took firm root in popular mythology and political rhetoric by the 1980s. ‘Small businesses create eight out of every 10 new jobs,’ said Richard Lesher, president of the largest pro-business lobbying organisation, the US Chamber of Commerce.

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Job openings (6.1 million), hires, and separations little changed in September

Job openings were little changed at 6.1 million on the last business day of September. Job openings have been at or near record high levels since June. Over the month, hires and separations were little changed at 5.3 million and 5.2 million, respectively.

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Hiring Rebounded in October; Unemployment Rate Fell to 4.1%

U.S. employers hired at a strong pace in October, and revisions showed the labor market weathered hurricane damage better than previously estimated.Nonfarm payrolls rose a seasonally adjusted 261,000 in October, a pickup from the prior month, the Labor Department said. The unemployment rate declined to 4.1%, its lowest level since December 2000. Economists expected 315,000 new jobs and a 4.2% unemployment rate last month. Wages rose 2.4% from a year earlier, a slowdown from last month.September’s payrolls data, initially reported as the first drop in seven years, were revised to show employers actually created 18,000 new jobs that month, extending the economy’s streak of job gains to a record 85 straight months.

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CalChamber Poll Finds Voters’ Concerns at Odds with Political Leaders

For the first time in three years of polling, slightly more voters say that California is headed down the wrong track (52%) than in the right direction (48%). Their assessment for the nation is even worse: twice as many voters have a negative outlook on the country’s direction than have a positive impression.

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Review of the California Competes Tax Credit

The executive branch has made a good faith effort to implement California Competes, but the problems described above are largely unavoidable. We recommend that the Legislature end California Competes. In general, broad‑based tax relief—for all businesses—is preferable to targeted tax incentives.

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A Scratch Card in Every Pot

Stockton, California, announced last week that it will try out a new anti-poverty program that provides $500 per month for a small subset of eligible residents. Earlier this month, the province of Ontario mailed its first monthly checks to 400 lucky Canadians. Advocates for a “universal basic income” (UBI) call these programs “experiments,” or “pilots,” and they hope that positive results will build support for their proposals. But these governments are not testing a UBI; they are running a free lottery. No one should be impressed or persuaded if its winners prove to be fans.

. . . Treating this program as a useful test of the UBI, however, is a marketing gimmick that borders on fraud. The experiments ignore the UBI’s disquieting aspects. It’s generally accepted that people in need should receive short-term support. But limited, means-tested government support is not the same thing as rearranging cultural expectations and economic incentives by making self-reliance optional, which would devalue work, weaken families and communities, discourage young people from launching their adult lives, and subsidize an expanding and idle underclass.

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Bay Area hammered by loss of 4,700 jobs

For the second straight month, the Bay Area lost thousands of jobs in September, making it the worst month for employment locally since February 2010.

The setback for the local economy comes as the crucial holiday shopping and hiring season draws near, and contrasts with a strong hiring picture statewide.

The Bay Area’s job losses stem from two distinct phenomena: Some employers are slashing positions, and others are unable to hire. Some economists attribute this second problem to structural barriers posed by skyrocketing housing costs. The lack of affordable places for workers to live appears to have hobbled the region’s ability to fill jobs as briskly as in prior years.

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Poll: Public schools must do more to prepare non-college going students for the workforce

California’s public schools should be doing much more to prepare students who don’t go to college to enter the workforce, according to registered voters who responded to a Berkeley IGS/EdSource poll. But they are divided in their assessment of how well schools are doing in providing that preparation.

They also expressed strong support for community colleges and other institutions to offer more vocationally oriented apprenticeship programs that may not lead to a college degree but prepare students for specific jobs.

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Beige Book

Economic activity in the Twelfth District continued to expand at a moderate pace during the reporting period of mid-August through September. Overall price inflation was flat and remained low, while upward wage pressures strengthened somewhat, and labor market conditions tightened further. Sales of retail goods picked up, and growth in consumer and business services remained strong. Conditions in the manufacturing sector improved, while activity in the agriculture sector was flat. Contacts reported continued strong activity in residential real estate markets, and conditions in the commercial real estate sector remained solid. Lending activity grew at a moderate pace.

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Labor Department Taps Executives, Union Officials for Apprentice Program

Employers that use apprentices like the programs because they train future workers for specific, in-demand jobs. Apprentices earn a paycheck while they train, often eliminating the need to take on debt to fund their education. Upon completion of a training program, 90% of apprentices are offered jobs and earn a starting salary of about $60,000 a year, according to the Labor Department. Yet undergraduate students at colleges outnumber apprentices in the U.S. 26 to 1.

Apprenticeships have struggled to take hold in the U.S. in part because the education system is geared more toward college preparation, than, for example, in Germany, where teens are more frequently steered toward a vocation. And American students and families are often reluctant to pursue careers in fields such as plumbing or manufacturing, even if those jobs pay good wages.

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Tesla lays off hundreds of employees amid Model 3 ‘production hell’

Tesla confirmed Friday afternoon that it has laid off hundreds of employees this week following reports that the company had cut somewhere between 300 and 700 jobs.

The job cuts come as the Palo Alto-based electric car company ramps up manufacturing for its moderately priced Model 3. CEO Elon Musk last week said the company was delaying the unveiling of its all-electric semi truck as Model 3 production hit assembly-line snags.

The layoffs were not part of structured reductions but as a result of company-wide annual reviews, a Tesla spokesperson said in a statement to the Silicon Valley Business Journal on Friday afternoon. As part of the review process, some workers received promotions and bonuses, she said, and the company is continuing to hire.

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Record Job Openings Aren’t Enticing Workers to Quit

The rate at which workers quit their jobs—seen by many economists as a sign of confidence in the labor market—fell slightly to a seasonally adjusted 2.1% in August from 2.2% in July, according to the Labor Department’s Job Openings and Labor Turnover Survey, known as Jolts, released Wednesday.

The quits rate, or the share of employed people who voluntarily leave their jobs in a month, has held nearly steady for two years after slowly climbing after the recession ended in mid-2009. The sideways move in the quits rate comes at a time when the unemployment rate has fallen to a 16-year low and the number of available jobs has touched the highest level on records back to 2000.

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What Trump Bump? Businesses Aren’t Borrowing from Banks

Companies have grown more reluctant to borrow after an initial surge of optimism following the election, said Jeff Glenzer, vice president at the Association for Financial Professionals, a group for corporate finance and treasury professionals. “All the turmoil and the inability to move policy through Washington set in,” he said.

But analysts say the prolonged slowdown in commercial-loan growth may simply be a function of the metric returning to its normal level in recent decades. Growth in the category ran far above gross domestic product growth in the years following the financial crisis, a streak that is difficult to maintain for any prolonged period.

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