Jobs and the Urban Poor:Privately Initiated Sectoral Strategies

by Peggy Clark and Steven L. Dawson with Amy J. Kays, FriedaMolina and Rick Surpin

The Aspen Institute

Copies of this book and its companion,Jobs and the Urban Poor: Publicly Initiated SectoralStrategies, produced by Mt. Auburn AssociatesInc., are available free of charge from the CharlesStewart Mott Foundation by sending an Emailmessage to infocenter@mott.org or calling itsPublications Hot Line at (810) 766-1766.

In addition, Mt. Auburn Associates Inc.has produced a separate volume of case studiesdrawn from the research used in Jobs and theUrban Poor: Publicly Initiated Sectoral Strategies.Copies are available for $15 (including shippingand handling) by contacting Judi Martinello ofMt. Auburn Associates at (617) 625-7770.

Jobs and the Urban Poor:Privately Initiated Sectoral Strategies

By

Peggy ClarkSteven L. Dawson

With

Amy J. KaysFrieda Molina

Rick Surpin

The Aspen Institute1333 New Hampshire Ave., N.W.

Suite 1070Washington, DC 20036

November 1995

This report and its companion, Jobsand the Urban Poor: Publicly Initiated SectoralStrategies, are part of a research effort designedto assess the potential of an emergingeconomic development approach — sectorstrategies — as a tool for alleviating urbanpoverty by increasing employmentopportunities. They were sponsored by theFord and Charles Stewart Mott foundationsand arose out of a growing interest inidentifying strategies that are appropriate andeffective at improving the economic status ofpoor residents of our nation’s cities.

Our economy remains the strongestand most productive in the world. Its vitalityhas provided greater opportunities for manyin recent decades as it absorbedsimultaneously the entrance of the babyboom and the return of women to the laborforce.

At the same time, more and morepeople are being left behind. Concentratedpoverty characterizes too many urbancommunities, income inequality is at anhistoric high, and working hard is no longer aguaranteed path into the middle class. As anation, we continue to seek effective ways ofalleviating poverty. Sadly, too often our effortshave proven unequal to the task, despite theexpenditure of billions of public and privatedollars.

The Ford and Mott foundationscontinue to believe that linking people togood jobs is the best solution to poverty.Toward that end, in recent years we havesupported several efforts to intervene incertain industries or sectors that have the

potential to provide good jobs for low-incomeindividuals. Given the success of somesectoral projects, Ford and Mott decided tofund two research projects to define and assessmore rigorously the potential of thisapproach. Jobs and the Urban Poor: PrivatelyInitiated Sectoral Strategies, looks at theexperience of community-based organizationsthat have undertaken sectoral employmentdevelopment strategies, and attempts todefine these strategies and assess their impact.Jobs and the Urban Poor: Publicly InitiatedSectoral Strategies, produced by Mt. AuburnAssociates Inc., looks at current sectoraleconomic development strategies undertakenby the public sector (state and citygovernments or quasi-public agencies) andassesses their potential for improving theeconomic status of urban residents.

Our goals in disseminating these twodocuments are: to spread the idea that thepoor can participate in the competitiveeconomy, to illuminate the practice of using asingle industry or occupation to create jobsand economic opportunity for the poor, andto promote the concept that povertyalleviation is linked to economicdevelopment.

We hope this report and itscompanion volume are instructive and spawnfurther thought, definition, anddemonstration leading to improved practice.

Mark Elliott Jack A. LitzenbergProgram Officer Program OfficerThe Ford Charles Stewart Foundation Mott Foundation

ii

Preface

Table of Contents

iii

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

I. The Problem: Few Jobs, Poor Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

II. Defining Sectoral Employment Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

III. Sectoral Programs as a Distinct Development Model . . . . . . . . . . . . . . . . . . . . . 9

IV. Program Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

V. The Four Defining Characteristics of Sectoral Development . . . . . . . . . . . . . . . 26

VI. Thematic Questions and Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

VII. Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

iv

The authors wish to recognize theexceptional efforts of the other members ofthe Aspen Institute’s sector project team: AmyKays, Rick Surpin, and Frieda Molina. Theirinsights, expertise, and commitment to theteam process helped make this paper anhonest reflection of a broad practice. Whiletheir contributions were critical, the viewsexpressed here are solely those of the authors.

We also wish to extend our warmestappreciation to Jack Litzenberg of the CharlesStewart Mott Foundation and Mark Elliott ofthe Ford Foundation for their support,guidance and the vision to see the importanceof the questions we have attempted toexplore.

We would like to thank FredO’Regan and Maureen Conway, whose earlierpublications were extremely helpful to thisproject. In addition, we appreciate theassistance of our advisory board in reviewingthe project publications at various stages.

Finally, we would like to express ourgratitude to the many sectoral programpractitioners who gave of their time andenergy to participate in the telephone survey,the practitioner’s meeting, and the on-site casestudies. In our efforts to find a theory todescribe a practice, you were our guides andyour work inspired our efforts.

Acknowledgements

v

A sectoral initiative represents adistinct employment model that: • Targets a particular occupation within an

industry;• Intervenes by becoming a valued actor

within the industry that employs thatoccupation;

• Exists for the primary purpose of assistinglow-income people to obtain decentemployment; and

• Creates, over time, systemic changewithin that occupation’s labor market.

Introduction

This paper is written as an initialattempt to define “sectoral employmentdevelopment” as a distinct community-basedmodel for employing the urban poor. Theauthors intend to accomplish four tasks:• Propose a definition for “sectoral

employment development,” byidentifying its essential characteristics.

• Describe the defining characteristics ofsectoral development, by referencingseveral case studies we believe are primeexamples of this approach.

• Identify thematic issues that appearrelated to sectoral development.

• Propose recommendations forpractitioners and others who are interestedin starting or supporting sectoralprograms.

MethodologyThe authors consider this paper an

initial exploration of a relatively new andunexamined community-based employmentmodel. In order to contribute to thebeginnings of a knowledge base on the field,this paper relies heavily on the experiences

and expertise of sectoral practitioners. Four urban, community-based

employment initiatives were studied in-depth,three of which were judged to be primeexamples of sectoral employmentdevelopment, and the fourth to be apromising new initiative:

• Chicago Manufacturing InstituteChicago, Illinois

• Cooperative Home Care AssociatesBronx, New York

• Focus: HOPEDetroit, Michigan

• Project QUESTSan Antonio, Texas

These four on-site cases studies wereaugmented by on-site visits and telephoneinterviews with 12 other community-basedemployment programs, a review of sectoralinitiatives assisted by the National EconomicDevelopment and Law Center, a literaturereview, and a series of meetings withpractitioners and advisers.

Part I: The ProblemNearly 40 million people in the

United States now live below the poverty line.Even low-income people who work haveexperienced declines in real earnings duringthe past 25 years, due primarily to changes inlabor demand that favor more educatedworkers, the displacement of good-payingmanufacturing jobs, and the decline of aunionized work force. These industrial,demographic, and labor-market shifts haveparticularly harmed the urban poor.

The federal government’s primaryresponse has been an array of employmentand training programs. However, evaluationsof these programs have consistently shownonly modest progress in employability andincome for low-income participants. Manyprograms do not explicitly address themismatch between the skills and education

This paper is

written as an

initial attempt to

define sectoral

employment

development as

a distinct

community-

based model for

employing the

urban poor.

Executive Summary

vi

levels of the urban poor and those required byemployers. Direct interventions in the labormarket on behalf of low-income people, suchas raising the minimum wage, appearpolitically unacceptable at this time.

Part II: Defining “Sectoral EmploymentDevelopment”

The paper introduces “sectoralemployment” development as having fouressential characteristics:

A sectoral employment programtargets an occupation within an industry, andthen intervenes by becoming a valued actorwithin that industry — for the primarypurpose of assisting low-income people toobtain decent employment — eventuallycreating systemic change within thatoccupation’s labor market.

Targeting a particular occupationwithin an industry is necessary, but notsufficient, to meet this definition. Whatmakes this sectoral definition distinct istwofold:

Goal: A sectoral initiative goesbeyond targeting through its intentional goalof achieving systemic change — explicitlyaiming to alter how the entire targeted labormarket either recruits, hires, or promotes low-income individuals.

Process: A sectoral initiative is alsodistinct from conventionally targeted jobsprograms in how deeply the interventionenvelopes itself within the related industry —how much the intervention itself becomes aninextricable part of the chosen sector.

Part III: Sectoral Programs as a DistinctDevelopment Model

Those relatively few community-based responses that have focused onemployment for the urban poor havegenerally formulated strategies using aneighborhood-based resource delivery model.

This model defines the problem of urbanjoblessness as an absence of resources, whichin turn has resulted in broad-based programsthat are applied across a variety of industriesand occupations — but applied within anarrow, neighborhood-defined geographic area.

This section of the paper suggeststhat, in comparison, sectoral initiatives form adiscrete model of community development —because they define the problem of urbanjoblessness not simply as an absence ofresources, but also as an absence of market-place relationships — relationships that cancreate opportunities of value to both low-income participants and employers.

Sectoral employment initiativestherefore seek to address the structuralmismatch of supply and demand in the laborforce by applying themselves in a moretargeted manner and penetrating deeplywithin a single industry — but applied to awide, regionally defined labor market.

Part IV: Program DescriptionsThe four case studies the authors

chose to study in-depth:Chicago Manufacturing Institute

(CMI) is a for-profit agency that developedout of the 13-year-old Industrial and BusinessTraining Programs (IBTP) of ChicagoCommons. Combined, CMI and IBTP havetrained more than 1,750 economicallydisadvantaged people, helping them obtainlong-term, skilled manufacturing jobs inscrew machine, spring machine, and plasticinjection molding shops in Chicago.Although these industries were declining ininner-city Chicago for many years, CMIfound that because of an aging work force,job openings were available that could befilled by CMI’s low-income participants. Inaddition to training, CMI also providesconsulting and educational services to themanufacturing companies that hire CMI’s

vii

graduates, making these businesses morecompetitive by enhancing management,finance, marketing, quality control,technology utilization, and human resources.Calling itself a “market-driven, occupation-specific” industrial training program, CMIhas trained and placed close to 1,000 low-income people in jobs with wages between $8and $12 an hour, while encouraging newtechnological applications and new qualitystandards to help restructure the industry.

Cooperative Home Care Associates(CHCA) is an employee-owned home healthcare company, founded in 1985 in the SouthBronx, that now employs 300 women ofcolor. CHCA leadership intentionally chosean occupation that many low-income peoplealready held — paraprofessional home healthcare aide — where the work typically is verylow-paying, often temporary, and oftenconsidered to be menial. CHCA then workedto restructure these jobs into decent, qualitypositions by creating a cooperative enterpriseand then creating an employer-based trainingprogram to develop and place low-incomewomen within the cooperative. CHCA’sprimary innovation has been to upgrade thevalue of the home care aide in themarketplace, creating a higher-qualityparaprofessional position that in turn couldcommand a higher wage. In this and otherways, CHCA became an important actoramong others in helping to raise paraprofes-sional wage rates in the late 1980s throughoutthe New York City home health aide labormarket. CHCA is currently helping initiatereplications in Philadelphia and Boston.

Focus: HOPE, founded in 1968, is aleading civil- and human-rights organizationin Detroit that operates several nationallyrecognized community-based programs.Among these is a highly successful programplacing inner-city minorities in machinetooling and metalworking jobs throughout

the Detroit area. The core employmenttraining program of Focus: HOPE is theMachinist Training Institute, which teachesprecision machining in a full-time classroomplus a hands-on production course. Othertraining programs include: FAST TRACK, aseven-week, school-to-work transitionprogram that serves high school graduateswho require basic skills; and the Center forAdvanced Technologies, which offers a six-year curriculum for engineer-technologists inadvanced manufacturing processes. Focus:HOPE also operates three manufacturingcompanies. Throughout Detroit’s precisionmachining and metalworking industries,Focus: HOPE is becoming a major actor inthe research and development of computer-based technological applications.

Project QUEST is a newly emergingproject that was created in January 1992 inSan Antonio by the Industrial AreasFoundation and two highly respectedcommunity organizations, CommunitiesOrganized for Public Service and MetroAlliance. QUEST was born from discussionsin local parishes, individuals’ kitchens, andwith local business leaders after the Levi-Strauss factory closed down in 1990, resultingin job losses for thousands of local people.QUEST’s training program is long-term andcomprehensive (two years with full stipendsand supportive services) and is intended toaddress continually and aggressively thespecific labor needs of industry. QUEST isactive in three sectors, targeting 26 specializedoccupations in the areas of health care,financial services, and environmentaltechnologies. Since 1992, more than 500people have attended or are currentlyattending the two-year program; 110graduates have been placed in full-time jobswith an average wage of $7.30 an hour.

Part V: The Four Defining Characteristicsof Sectoral Development

To provide a more detailedunderstanding of how sectoral initiatives arestructured, this section explores the fourdefining characteristics in more depth. Eachcharacteristic is based on a key concept:

Targeted: How was the particularoccupation (or cluster of related occupations)selected? The term sector is an occupation-based, not business-based, concept — andone that is more likely to be defined by aflexible system of marketplace relationshipsthan by industry type alone.

Interventionist: What entity orprogram was created to penetrate theindustry(ies) that employs that occupation? Asectoral initiative penetrates a single industryin order to become deeply embedded in asystem of market-oriented relationships. Asectoral initiative provides real “value added”to other actors in its sector to achieve its goalof improving low-income employmentopportunities.

Low-Income Focused: What newpractices were undertaken to improveemployment options for low-income people?A sectoral initiative constantly attempts tomaximize the value of the low-incomeparticipant to become more competitive inthe labor market. A sectoral initiative mayalso work to strengthen the chosen sector inorder to protect or expand employmentopportunities for their low-incomeparticipants.

Labor-Market Oriented: Beyond theinitial program, how did the program changerelationships or behavior among key actorswithin the sector? Systemic change within alabor market is achieved by participating in— and thus influencing — complex relation-ships among a variety of key actors. Therefore,sectoral employment development is a systems

approach, not simply a resource-deliveryapproach, to securing jobs for the urban poor.

Part VI: Thematic Issues andRecommendations

Sectoral initiatives appear to passthrough several stages of development: New,Emerging, Mature and Expansive. The papersuggests that all successful sectoral initiativeswill pass through the first three of thesestages, and that some will enter the fourth.Several important themes appear to cut acrossalmost all the initiatives studied, and tend tocluster within these stages. The authorsrecommend that practitioners considering asectoral initiative carefully address thesethemes:

New Initiatives• What is the proper “staging area” for a

sectoral project?• How formal or informal should the

initial stage of analysis be?• How should low-income be defined?

Emerging Initiatives• Do sectoral initiatives attempt to increase

only economic resources?• How do sectoral initiatives help make

low-income people more valuable in themarketplace?

Mature Initiatives• How can these complex organizations

remain focused?• How can these complex organizations

remain creative?

Expansive Initiatives• How can entrepreneurial leadership be

encouraged in sectoral projects?• How can sectoral programs sustain

themselves at such a large scale?

viii

Part VII: ConclusionThe authors believethat — although

sectoral programs hold promise as an effectiveapproach to job creation for the poor —sectoral employment development cannot yetbe considered a fully developed field. Furtherexperimentation and assessment are necessaryso that sectoral initiatives can grow innumber, attract more resources and expertise,and develop a common language allowingpractitioners to share and contrast theirexperiences.

The authors hope readers will findthis paper a thoughtful, initial attempt toidentify a range of defining characteristics andcommon principles — one that will facilitatethe emergence of the sectoral employmentdevelopment field.

ix

x

One of the most important, difficult,and pervasive problems America faces is thechallenge of securing jobs for the urban poor.The gap between the inner-city poor and jobsthat provide livable wages and benefits is wideand growing wider — while jobs that areeasily available to the poor typically offerinadequate wages and benefits, and offer littlehope for advancement.

The path that a low-income personfollows to secure a good job is strewn withmultiple barriers — economic, social, andpsychological. Dismantling these barriersrequires persistent, forceful, and informedaction that is responsive not only to the needsof potential employees, but also to the needsand interests of potential employers.

Designing programs that succeed indismantling these multiple barriers has provento be an exceptionally difficult task. Thesedifficulties have in turn contributed tomisgivings, increasingly widespread in theAmerican public, as to the efficacy ofattempting programmatic interventions onbehalf of the inner-city poor.

Together these two trends —worsening urban unemployment anddeepening skepticism as to whether suchinner-city problems can ever be addressed —highlight the importance of identifying andunderstanding any programmatic approachthat succeeds in employing the urban poor.

In this context, a few powerful yetdisparate sectoral programs stand out assingularly successful in their ability toeffectively employ, or improve employmentfor, disadvantaged people. This particular typeof promising community-based initiative hasbecome known as “sectoral employmentdevelopment” — so named because theseprograms focus on a single occupation (orrelated cluster of occupations) and attempt tochange employment practices systemically

within the industry sector that employs thatoccupation.

Yet while interest has increased insectoral employment development, very littlehas been written on the sectoral approach. Noshared theoretical framework, or an agreed-upon definition of the term exists amongemployment practitioners and funders. Inresponse, the Ford and Charles Stewart Mottfoundations asked a team of community-based employment specialists, convened bythe Aspen Institute, to explore and helpdefine the concept.

The Aspen team identified severalinitiatives as representative of the sectoralapproach. Each of these initiatives is an urban,community-based program that has gainedbroad respect among both funders andpractitioners for having secured good jobs forlow-income people.

At first glance, these programs appearquite diverse — among them two Midwesterntrainers of black youth for positions inmanufacturing industries; an East Coastemployer of low-income women for homecare services; and a new long-term trainingand employment program in the Southwestthat targets occupations in three differentindustry areas. Indeed, each of the programsdiscussed here developed in completeisolation from one another, in entrepreneurialresponse to their local circumstances. Someof these initiatives describe themselves assectoral; several do not.

Specifically, this paper is intended toaccomplish the following four tasks: • Propose a definition for “sectoral

employment development” by identifyingits essential characteristics.

• Describe the defining characteristics ofsectoral development by referencingseveral case studies we believe are primeexamples of this approach.

A few powerful

yet disparate

sectoral programs

stand out as

singularly

successful in

their ability to

effectively

employ, or

improve

employment for,

disadvantaged

people.

Introduction

1

• Identify thematic issues that appearrelated to sectoral development.

• Propose recommendations forpractitioners and others who are interestedin starting or supporting sectoral programs.

Finally, the authors wish toemphasize that what we present here is aconceptual framework — one that helps to

define and describe the sectoral model ofemployment development. This framework isintended to provide readers with an analytictool to help distinguish sectoral initiativesfrom other community-based responses tourban joblessness, and to provide guidance tothose who are interested in establishingsectoral programs.

2

While a significant body of researchexists on the scope and effectiveness ofemployment and training programs ingeneral, little has been written on sectoraldevelopment as we describe it here — that is,occupation- and industry-specific, nonprofitprograms intended to create systemic changein inner-city labor markets.

Given this paucity of information,and the challenge of defining a much-discussed but little-understood model ofdevelopment, the methodology we employedfor this paper intensively studied a fewselected successes that appear to represent thatmodel. Intentionally, our methodology is notan exhaustive or comprehensive survey of thebreadth of the sectoral phenomenon, but isinstead an attempt to describe selectedexamples of the approach. From these we tryto illuminate a useful theoretical frameworkfor identifying and understanding sectoralprograms.

Another characteristic of ourmethodology derives from our belief that, atthis time, expertise about sectoralemployment development resides primarilyamong those local leaders who are operatingsectoral programs. This is in large part due tothe fact that the approach is new, little hasbeen written about it, and there is not yet acommon understanding of what the approachentails. These practitioners are immersed inthe day-to-day practice of the approach andare intimately familiar with its strengths,shortcomings, and potential.

Because of this interest in focusing onthe expertise of practitioners, we formed ateam that was composed in part ofcommunity development practitioners fromtwo leading sectoral developmentorganizations: the Home Care AssociatesTraining Institute and the National EconomicDevelopment and Law Center. We believethat this practitioner-based team composition

and methodological approach led to arichness of data about program operationsthat would otherwise have been unavailable tous.

The scope of work we address herespecifically directed us to study sectoralprograms initiated by community-basednonprofit programs in urban areas. Therefore,while sectoral projects are found in bothurban and rural communities, we provide inthis paper little information about the sectoralphenomenon in rural settings.

A Few Words About the Word “Sectoral”As recently used among funders

and practitioners, the term “sectoral” hascommonly described a portion of an industryusually focused around a particular occupation— such as entry-level occupations within thecarpentry trades, or the single spindlemachine tool industry, or day-care services.

However, an economist defines a“sector” as a macro grouping of businessactivities — the manufacturing sector, theservice sector, the nonprofit sector — not as amore narrowly identified industry. The term“sub-sector” is closer, but even that termtechnically describes a sizable group ofeconomic activities — for example, the autoindustry — while the sectoral initiatives mostcommunity-based organizations employ tendto deal within far more narrowly definedlimits — for example, occupations related tothe machining of parts for the auto industry.

Given that community developmentpractitioners at times work closely witheconomists, the imprecise use of the termmay cause some confusion. However, sincethe term “sectoral” as used in this paper hasalready gained wide currency within thephilanthropic and practitioner communities,the authors believe it appropriate to continueits use.

The scope of

work we address

here specifically

directed us to

study sectoral

programs

initiated by

community-based

nonprofit

programs in

urban areas.

Methodology

3

America has always believed itself tobe a country where a dedicated, hard-workingperson could get a decent job that pays alivable wage. The theme of economicopportunity fuels our conscious sense of whatis fair and what is possible in America. Yet notonly is this notion far from the truth, but alsoit is becoming more so each day. Incomeinequalities between the rich and the poorhave never been so disparate, and the ranks ofthe poor have never been so full. Close to 15percent of the U.S. population — 39.3 millionpeople — now live below the poverty line.

Since the 1970s, low-wage workershave experienced large declines in realearnings, especially during the 1980s whenadjusting for inflation. The major cause ofthis increased inequality has been a shift inlabor demand favoring more educatedworkers (Freeman & Katz: 1994; Blank:1994). The job market for the low- or semi-skilled worker has changed dramatically in thepast decade. Jobs providing good wages andbenefits in the manufacturing sector, onceplentiful, are now scarce and unlikely toreturn. Structural changes in the economy —away from goods-producing industries andtoward service industries — have transformedthe U.S. labor market (Kasarda: 1985;Wilson: 1987).

The significant decline in theunionized portion of the work force has alsoplayed a major role in the widening of wageinequalities. Historically in the United States,union membership has generally offered a 20-to 25-percent wage advantage and has exertedpressure on nonunion employers to payhigher wages and provide benefits (Freeman& Katz: 1994).

Working But Poor in Urban AmericaThese industrial and labor market

shifts have particularly exacerbated urbanpoverty, joblessness, and underemployment.

Also, the low quality of jobs available in thecurrent urban economy diminishes the long-term earnings prospects of the inner-citypoor, and thus their ability to escape poverty.

The overall decline in the real valueof wages and a widening gap in the earningsequality of jobs have resulted in a steady dropin the standard of living for a large portion ofthe work force. The phrase “working butpoor” has come to describe many householdswith one- and two-income earners who aresurviving near or below the poverty line —even while they labor full-time in low-wageoccupations.

In 1993 a family of four, with twoadults working full-time for minimum wage,earned just $17,544. With only one workingadult, family income was $8,772, or 39percent below the poverty line. Even whenfamily size is very small, full-time minimum-wage employment does not lift the family outof poverty. In a family of two with oneworking adult, a minimum-wage job stillleaves the family 7 percent below the povertyline.

Education as a Primary Factor ofEmployment

These economic changes poseparticularly daunting challenges for the urbanpoor. Many workers with a high school degreecould once expect to find a good job in themanufacturing sector where required skillscould be acquired through informal learningon the job. However, as businesses haveincreasingly adopted new technology toimprove productivity, workers with computerand problem-solving analytical skills are indemand. Continuing technological changealso means that, over time, workers must beretrainable and adaptable (Lynch: 1994).

Yet many workers with a high schooldiploma now enter the job market with weakacademic competencies and few technical

4

I. The Problem: Few Jobs, Poor Jobs

The job market

for the low- or

semi-skilled

worker has

changed

dramatically in

the past decade.

work skills. Firm-based training musttherefore include remedial reading and mathas well as basic technical skills. Informallearning in a technology-based workplace stilloccurs, but it requires that entry-level workershave considerable basic skills when they enterthe workplace.

In this context, employer-basedtraining systems are generally regarded ashaving a higher payoff, in terms of bothincreased wages for the worker and increasedproductivity for the firm, when comparedwith third-party training programs. This isprimarily due to the fact that employer-basedprograms are linked directly to the skillsrequired by the particular company (Lynch:1994).

The Public ResponseOver the past 20 years, the primary

national strategy to increase the employmentand earnings of the urban poor has been anarray of government-funded employment andtraining programs. Evaluations of theseprograms have shown some progress inemploying people and a modest increase inwages (Blank: 1994; Lynch: 1994).

Generally, however, research hasshown that government-led training programsare disconnected from contemporaryemployer needs. While the Job TrainingPartnership Act (JTPA) was enacted in 1982to replace the Comprehensive Employmentand Training Act (CETA) in order toemphasize the needs of the private sector, thispromise has gone largely unfulfilled. Specificissues regarding problems with currentemployment and training programs includethe following:• The connection of employment and

training efforts to public assistanceprograms has led to the perception on thepart of employers that employment andtraining programs are part of the welfare

system. Thus stigmatized, such programsare typically isolated and viewed withsuspicion by the employer community(Osterman: 1988).

• The overly bureaucratic and inefficientnature of the current federal and stateemployment and training systems hasconsistently frustrated community-basedorganizations reliant upon governmenttraining funds (Harrison: 1993).

• Training programs are not well-connectedto mainstream institutions in the privatesector, and often do not address thechanging labor needs of industry (Taggart:1981).

• Training does not necessarily provideparticipants with greater employmentchoice, and it generally does not applystrict standards of individual performance(Taggart: 1981).

• Research findings on program effectivenessare neither widely understood nor widelydisseminated, nor is there a nationalsystem to replicate “proven” modelssuccessfully (Pines and Carnevale: 1991).

In effect, the key problem with thecurrent employment and training system isthat it has not kept pace with the continuousand dramatic changes in U.S. labor markets.

On the other hand, most company-based training programs are designed forworkers who are already educated. Trainingprovided for blue-collar workers is typicallylimited. Employers have little incentive toprovide basic literacy and math skills trainingthat is necessary before blue-collar workerscan build technical skills. Therefore, someform of incentive is generally necessary todayfor a firm or employer-based training systemto include blue-collar, not just white-collar,workers in any technically oriented trainingprogram (Lynch: 1994).

5

Interventions in the Labor MarketMany low-income workers will be

able to upgrade their skills and increase theirearnings if such training is available. However,training, while important, is not a sufficientresponse to low and falling wages.Unfortunately, no other public policyresponses are readily apparent that would fullyaddress this issue without directly interveningin the labor market.

For instance, raising the wage floor —i.e., the minimum wage — would increasethe earnings of the least skilled workers and inmany cases more properly reward them fortheir work. The purchasing power of theminimum wage is now at its second lowestlevel in four decades. After adjusting forinflation, its current value is above the 1989level, but is below the level of every other yearsince 1955. In 1995 the minimum wagewould have to be set at $5.75 an hour, ratherthan the current $4.25, in order to have thesame purchasing power as it averaged in the1970s (Shapiro: 1995).

Yet such direct intervention seemsunlikely in the current political environment.Even the Clinton administration’s currenteffort to raise the minimum wage to $5 anhour appears unlikely to pass Congress.

Although such direct intervention is

currently unlikely, public policy in the recentpast nonetheless successfully emphasized“making work pay” for less skilled workersthrough the use of more indirect means, suchas transitional public assistance benefits andthe expansion of the federal Earned IncomeTax Credit (which provides low-incomeworkers additional income through a taxcredit). Both measures have, at least untilrecently, been deemed politically acceptablebecause they support and reward anindividual or family for their participation inthe labor market. Yet while these areimportant and effective responses to cushionthe decline of real wages, they are not areplacement for employment-based strategiesto reverse this trend.

In this context, government toolsalone appear to have been too limited,inflexible, and distant from private labormarkets to make a significant difference inaddressing the problem of “few jobs, poorjobs” in major urban areas. This paperdiscusses how a few community and regionalorganizations have attempted to improveupon these public efforts by meetingsimultaneously the needs of low-incomeworkers and the needs of the businesses thatemploy them.

6

Having studied four programs indepth and interviewed 12 other employmentinitiatives that possess some but not all of thecharacteristics of sectoral programs, we believewe have isolated four core strategic character-istics that define “sectoral employmentdevelopment.”

The four characteristics, whencombined, result in the following definition:

A sectoral employment program targetsa particular occupation within an indus-try, and then intervenes by becoming avalued actor within that industry for theprimary purpose of assisting low-incomepeople to obtain decent employmenteventually creating systemic changewithin that occupation’s labor market.

We emphasize here that this definitiondescribes a sectoral initiative, not an entireorganization. A community-based organizationmight undertake several different anti-povertyprograms, only one of which is a sectoralemployment initiative. Another organizationmight undertake several different sectoralinitiatives directed at several differentindustries.

To parse this definition in moredepth: the following four defining character-istics must be present — or at least intendedin the design of the program — in order foran initiative to be considered sectoral. Asectoral initiative is one that:1. Targets a particular occupation within

an industryA sectoral initiative targets a specifictype of occupation (or a cluster ofclosely related occupations) that has thepotential for providing low-incomepeople decent employment.

2. Intervenes by becoming a valued actorwithin the industry that employs thatoccupationA sectoral initiative requires that theinitiative become deeply enveloped

within the sector by establishing withinthe related industry (or cluster of closelyrelated industries) one or more programsor entities — e.g., a training program; amarketing federation; an enterprise; acollaboration — that provides value tokey actors within that industry, therebydeveloping market-based relationshipsthat are mutually beneficial for both thelow-income participants and industry.

3. Exists for the primary purpose ofassisting low-income people to obtaindecent employmentA sectoral initiative may assist a varietyof income classes, but the peopleprimarily assisted are those whose familyincomes fall below poverty guidelines,are unemployed, or who have limitedemployment qualifications. To “obtaindecent employment” means workingtoward providing livable pay andbenefits to lift low-income individualsout of poverty.

4. Eventually creates systemic changewithin that occupation’s labor marketA sectoral initiative increases access toexisting good jobs that are currentlydenied to low-income people, expandsexisting or develops new good jobsexplicitly for low-income people, orimproves poor-quality jobs that arealready accessible to low-income people.Sectoral initiatives do this in a way thatcreates over time systemic changeamong the key actors who influence thetargeted occupation’s labor market.

We wish to emphasize that targetinga particular occupation within an industry —say, training participants exclusively for entry-level construction jobs — is necessary, but notsufficient, to meet this definition. What makesthis sectoral definition distinct is twofold:

Goal: A sectoral initiative goesbeyond targeting through its intentional goal

We believe we

have isolated four

core strategic

characteristics

that define

sectoral

employment

development.

II. Defining “Sectoral Employment Development”

7

of achieving systemic change — explicitlyaiming to influence how the targeted labormarket either recruits, hires, supports, orpromotes low-income individuals. Forexample, a training program for entry-levelmachine tool occupations must not simplyplace its low-income participants in areabusinesses, it must work to change the hiringand/or employment practices of thosebusinesses — and furthermore it must workto do so not only to benefit its own trainingparticipants but also other potential low-income workers who might wish to becomemachine tool operators within the regionallabor market.

Process: A sectoral initiative is alsodistinct from conventionally targeted jobsprograms in how deeply the interventionenvelopes itself within the related industry —how much the intervention itself becomes aninextricable part of the chosen sector.1 Forexample, that same training program mightwork to become so much a part of the area’smachine tool industry that employers andother key actors within the area’s machine toollabor market will come to value it as a leadingsource of technical and policy expertise.

We also wish to emphasize thatachieving even small degrees of success in all

four of these characteristics — particularlysystemic change within a labor market — isextremely challenging and may take manyyears to accomplish. Therefore, newer initia-tives may not meet a full sectoral definition interms of accomplishments, but instead shouldbe measured in terms of effective design.

In addition, we emphasize that sectoralemployment development is an approach tocreating or obtaining jobs for the poor; it isnot limited to any particular strategy. Forexample, a community-based organizationmight engage in a “sectoral microenterprisestrategy” that works exclusively with low-income individuals in the garment industry(which in many large urban centers typicallyrelies heavily on at-home microenterprises).Another might develop a sectoral businessdevelopment strategy that provides technicalassistance exclusively to local foundries inorder to expand entry-level manufacturingjobs for low-income people. In short, nearlyany employment strategy could be re-shapedinto a sectoral initiative — if all four definingcharacteristics described above wereincorporated into its design.

Finally, we emphasize that althoughsectoral development is one approach toachieving systemic change within a labormarket, it is not the only approach. That is, asectoral strategy is not the equivalent ofsystemic change — the latter is an end, theformer is merely one of several possible means.Alternate means to systemic change in a low-income labor market might be a policystrategy advocating legislative reform (i.e.,increasing the minimum wage); anothermight be one based on union organizingamong low-wage occupations. These alternatemeans therefore have the same goal ofsystemic change in the labor market, but theirprocess toward that change is not sectoral.

8

1 It is this essential aspect, the altering of how an industryemploys low-income people, that places sectoral initiatives onthe “demand” side of the labor market. Yet being a demand-side strategy does not necessarily differentiate sectoralinitiatives from traditional employment initiatives. Any low-income job creation or retention strategy also is attempting toaffect the demand side of the labor market. Furthermore,sectoral initiatives often work simultaneously on the “supply”of the labor market as well, typically by designing market-oriented training programs. However, what does helpdifferentiate sectoral initiatives is that they are so deeplyenveloped within the sector that they influence the demandside of the mainstream labor market — that is, a sectoralinitiative cannot be considered successful until it has improvedhow key employers within the regional labor market employlow-income people.

In the face of an insufficient publicpolicy response to urban unemployment andunderemployment, community-based groupshave struggled to create effective programs toemploy the urban poor. We suggest thatamong community-based responses:

Sectoral initiatives form adiscrete development model — distinctprimarily because sectoral initiativesdefine the problem of low-incomeunemployment in a manner funda-mentally different from a traditional,community-based model.

ContextFor the past two decades, community-

based nonprofit organizations have addressedissues of urban poverty armed with scantresources. Community development corpora-tions (CDCs), revolving loan funds, communityaction agencies, microenterprise, and smallbusiness programs have all attempted to findor create employment for the urban poor withvarying results.

Yet such employment and trainingprograms have accounted for only a smallportion of community-based efforts to assistthe urban poor; the true foundations ofcommunity-based anti-poverty efforts havebeen housing and housing finance, real estatedevelopment, and social services.

Employer Strategies andParticipant Strategies

The relatively few community-basedorganizations that have undertaken employ-ment and training programs have experimentedwith a diverse range of strategies. Thesestrategies are generally drawn from two distinctpalettes — those that provide services orincentives to low-income participants, andthose that provide services or incentives toemployers:

Participant strategies includetraining, counseling, placement, and othersupport services to prepare or place thedisadvantaged in jobs.

Employer strategies include suchservices as providing grants to businesses thathire welfare recipients; requiring thatbusinesses hire a set number of women orminorities; and providing loans or technicalassistance to businesses to expand or hiremore low-income workers.

Participant strategies are called“supply strategies” in that they attempt toaddress deficits or remove obstacles that blockthe supply of potential low-income workersinto the labor market. Strategies that focus onthe employer are called “demand strategies” inthat they focus on the demand for theamount and types of labor that employers areseeking in the market for labor.

The Neighborhood-Based “Resource-Delivery” Model

Yet no matter how diverse the mix ofemployment strategies, most communityorganizations have chosen to formulate thosestrategies using a broad “resource-delivery”model that is implemented within a limitedneighborhood base. This conventional modelof community development is different, webelieve, from sectoral employmentdevelopment in the following ways:

Resource delivery: Whenapproaching an employment problem withina disadvantaged neighborhood, communitygroups traditionally have chosen to beginwith an assessment of needs. This “needsassessment” typically documents a profoundshortage of, or inaccessibility to, basicresources required for economic development— e.g., a lack of capital, managerialexperience, or work-readiness skills.

From this analysis a natural logic

The relatively few

community-based

organizations that

have undertaken

employment

and training

programs have

experimented

with a diverse

range of

strategies.

III. Sectoral Programs as a Distinct Development Model

9

flows: if the community organization can onlyredress those deficiencies by supplying themissing resources, employment options willexpand accordingly. And in turn — becauseresources such as capital, managerialexperience, or work-readiness skills are notunique to any particular industry — thetypical implementation strategy has been todistribute those missing resources across abroad range of industries and occupations.

Therefore, for example, aconventional community-based loan fund willlend capital to a foundry as readily as to a taxicompany; a training institute will honemanagement skills for the catering industry aseasily as for the auto repair industry; acounseling program will attempt to place low-income participants in jobs ranging fromseamstresses to construction workers.

Neighborhood-based: The traditionalurban community organization is organized atthe neighborhood level. Therefore, the typicalcommunity-based employment strategy tendsto use a narrow geographic lens. Yet, with theexception of small retail stores and somepersonal service providers, businesses andlabor markets do not respect the borders of asingle neighborhood — either for customers,suppliers, or workers.

This geographic mismatch is onereason, we believe, that neighborhood-basedemployment strategies often have experiencedfrustration, while service strategies such ashousing (which more naturally conformwithin a single neighborhood boundary) haveachieved relatively greater success.

Sectoral Initiatives: A DistinctDevelopment Model

In direct contrast to the conventionalcommunity-based model, the sectoralinitiatives we describe in this report employ amore narrow occupation focus within aspecific industry (or related cluster ofindustries) that is applied with a more broadgeographic lens.

The distinction between these twomodels is driven, we believe, by how eachdefines the problem of low-incomejoblessness. We have stated that conventionalemployment strategies tend to applythemselves broadly across sectors — becausethey define the problem primarily as anabsence of resources. However, sectoralinitiatives define the problem not simply asan absence of resources, but more importantlyas an absence of marketplace relationships —relationships that can create opportunities ofvalue to both participants and employers.

For this reason, sectoral employmentinitiatives apply themselves in the labormarket in a more targeted manner — basedon the assumption that truly effective marketrelationships can best be forged by becomingdeeply immersed within a single industryfrom the perspective of a particularoccupation.

This distinction is then reinforced bythe difference in geographic lens. Sectoralinitiatives apply themselves regionally —because they recognize that most businesses,and thus most labor markets, are regional incharacter. Sectoral initiatives are thereforetypically fielded either by a regionwidedevelopment organization, or by ageographically broad coalition ofneighborhood organizations, rather than asingle neighborhood organization.

10

In preparing this paper, we studiedin-depth four urban, community-basedprograms. We consider three of these projectsto be prime examples of sectoral employmentdevelopment, and the fourth to be apromising new initiative.

However, while all four projects sharesectoral attributes, they are very differentfrom one another, for each developed quiteindependently. Therefore, while the term“sectoral” has recently been used widelywithin the foundation and practitionercommunities, it is not a label that leaders ofthese prime examples necessarily embrace astheir own.

In these four examples, eachorganization chose one of three strategicpaths. For the most part, each has worked inone of three ways:• Increase access to good jobs, based on an

analysis that good jobs exist within atargeted occupation or set of relatedoccupations, but that barriers block low-income people from securing those jobs.Examples of this approach include Focus:HOPE and Project QUEST.

• Increase access to and restructure goodjobs, based on an analysis that while goodjobs exist within the targetedoccupation(s), the targeted industry itself,not just its hiring practices, can or mustalso be shaped over time either to expandnew job opportunities for low-incomepeople and/or to protect current jobopportunities if they are endangered. Anexample of this approach is ChicagoManufacturing Institute.

• Restructure poor-quality jobs, based onan analysis that poor-quality jobs currentlyavailable to low-income people (within aparticular occupation) can be improvedsufficiently to become, over time, goodjobs. An example of this approach isCooperative Home Care Associates.

On the following pages are a briefdescription of the four organizations westudied in depth and a list of 12 additionalemployment programs that possess somesectoral characteristics that we visited orinterviewed. We also include here adescription of the sectoral work of theNational Economic Development and LawCenter, a national intermediary that hassupported new sectoral programs in severalsites across the country.

Chicago Manufacturing InstituteChicago, Illinois

The Chicago Manufacturing Institute(CMI) is a for-profit spin-off from ChicagoCommons, a large nonprofit, community-based human services agency. CMI wasformed from a division of Chicago Commonscalled the Industrial and Business TrainingPrograms (IBTP). CMI is an example of asectoral program that has succeeded inincreasing access to and restructuring goodjobs for disadvantaged populations in themachining trades in Chicago, an industrysector that was experiencing overall declinebecause of the advent of new technologies andan aging labor force.

IBTP was created in 1982 by RicGudell, a manager at Chicago Commons,who was struck by the severity ofunemployment in the inner city, particularlywhile jobs in the high-skilled metalworkingtrades went untaken. He began to walk theunemployment lines and talk with theunemployed — at that time, primarilyminority males — about their skills and whattheir experiences had been in looking forwork. Most of the people he talked to hadlittle employment history or training.

He also began a dialogue with localindustries — primarily in metal work, which

We consider

three of these

projects to be

prime examples

of sectoral

employment

development, and

the fourth to be a

promising new

initiative.

IV. Program Descriptions

11

has traditionally been Chicago’s leadingindustry — to assess the gap in skills andeducation needed for this group to enter themetalworking sector. Gudell found twothings: first, that focused “occupation-specific”training to satisfy entry-level requirements fora number of trades could be given to low-income participants with an education levelequivalent to 10th-grade reading and mathskills (later dropped to 8th-grade levels); andsecond, that industry consistently reportedthat they had labor shortages in a number ofskilled job positions because of a lack ofsufficiently trained workers. Further, industryleaders said they would work with Gudellspecifically to link training to jobrequirements and to placement.

Dissatisfied with the training offeredby vocational schools, which he found to beout of touch with the industries and their skillneeds, Gudell spent a year working as anentry-level worker in screw-machine andmetal job shops to learn firsthand the skillsinvolved. With this knowledge base, he beganestablishing a network linking 40 to 50medium-sized businesses that donatedequipment and worked with him to redesignthe training curriculum.

Over the past 13 years, CMI hasgrown to provide services to a network ofmore than 500 local businesses. It operatesfive specialized training centers that trainnearly 300 people a year, and it placesapproximately 150 of those people in jobseach year. Through the West HumboltCenter, it also offers comprehensive remedialtraining for people who are not yet ready forindustrial training.• CMI works with small- and medium-sized

Chicago area manufacturers, particularlyin the screw machine products, plasticsprocessing, and spring-making industries.These companies make component partsfor finished products such as automobiles,

agricultural machinery and equipment,appliances, electronic equipment,airplanes, recreational vehicles andequipment, and all types of industrialmachinery. They use standard molding,screw, and spring machines that requireindividuals skilled in setting up, operating,and maintaining machines.

• CMI is the only organization offeringscrew machine set-up operator training inthe country. It offers two programs thattarget different student populations andfocus on different machinery:▪ Single spindle automatic screw

machine set-up and operator trainingis the original CMI training program.This program was developed by CMIin collaboration with 30 screw machineproduct manufacturing firms andgraduates a class of approximately 25participants per year who attend the10-month course. Average startingsalaries for graduates are $9.22 per hour.This program is funded by the federalJob Training Partnership Act (JTPA).

▪ Multiple spindle automatic screwmachine set-up operator training wasdeveloped as a collaboration with thelocal screw machine products industryand the City Colleges of Chicago. Theprogram began in 1992 and has 50students on two shifts at DaleyCommunity College. Students pay fortraining at a rate of $35 per credithour either through financial aid fromthe community college, throughemployers, or from their own resources.Expert screw machinists from partici-pating firms administer performanceassessments and certify those whosuccessfully complete the assessment. The multiple spindle program admittedits first students in the summer of1992. Since then, 12 students have

12

completed the whole two-yearcurriculum, which includes ninecollege academic courses. Others havecompleted simply the screw machinecourses, without all nine academiccourses, and gone on directly to workin the industry. Average wages for allgraduates in the multiple spindletraining are over $9.22 an hour.

• CMI offers the only comprehensivetraining in the United States in setting upand operating automatic coiling machines,which manufacture precision springs. Thisprogram has operated two six-monthclasses since 1991, graduating approximately30 people a year who obtain an averagestarting salary of approximately $8.83 anhour. Funding is provided through JTPAdislocated workers funds.

• CMI has operated a plastic injectionmolding training program since 1985.Two five-and-a-half-month courses areoffered a year with an average of 32participants per course, from which anaverage of 24 graduate. Graduates prepareand set up molding machines to produceplastic parts and products, at an averagestarting wage of $7.60 an hour. Funding isprovided through JTPA.

CMI also offers technical trainingand services in two other functions that arerequired in most all manufacturingoperations:• Quality assurance: CMI’s quality assurance

training prepares graduates for positionssuch as quality assurance inspectors,quality control inspectors or auditors, andstatistical control supervision. Theprogram began in 1993, and offers twosix-month sessions each year. Thirtystudents have graduated a year to date andearn between $6 and $8 an hour. Fundingis provided through JTPA.

• Maintenance mechanics: CMI’s industrial

maintenance mechanics program wasstarted in 1986 and is a nine-monthprogram. Thirty-four students havegraduated and receive between $10.50 and$14 an hour. The program currently isfunded through federal Trade AdjustmentAssistance for displaced workers.

Finally, CMI also provides manufac-turers with a full range of technical servicesfrom consulting to educational services formanagers. These consulting services help thebusinesses in those sectors to survive andgrow, which, in turn, allows them to hiremore CMI graduates and, over time, upgradethose positions. For companies that havespecific needs, CMI offers customized, short-term training modules ranging from basicmath and print reading to more advancedskills training at the employer’s facility. Eachyear CMI also offers short-term upgradingtraining based upon the demand of areamanufacturers at CMI’s six training facilities.Some of CMI’s intensive short-termupgrading courses draw participants frommanufacturing firms across the United States.

During the next five years, CMI isplanning to expand significantly. The range oftraining services in each manufacturing sectorwill be broadened to include upgrading theskills of current employees of industry. At thesame time, CMI will seek to become lessdependent on government training funds byoffering its training services to students whocan pay their own fees or whose employerspay their fees for them.

CMI also intends to start a generalmachining center in conjunction with a groupof area manufacturers. Many firms produceparts on turning, milling and grindingmachines and need skilled machinists. Otherfirms need machining skills in maintenance.Since CMI programs currently incorporatemachining skills training because it is basic tomanufacturing, this program is a natural

13

extension of CMI’s current training and willrun two entry-level classes and two upgradeclasses a year.

Eventually, CMI plans to consolidateall of its programs and administration in onefacility. This consolidation will help CMIestablish a stronger identity and presencewhile enabling a more efficient operation. AsCMI continues to formalize its structure,potential stakeholders such as area manufac-turing firms and trade associations will joinCMI’s board of directors.

CMI as a Sectoral Initiative

Sectoral GoalCMI is clearly a sectoral initiative

in that its ultimate goal is fundamentally toalter labor markets in its selected occupationand industry sector areas. The ChicagoManufacturing Institute targeted machine set-up, operations and maintenance in threerelated industries in order to provide a rangeof avenues to employment for low-incomepeople.

While these machine tool industriesare now generally stable in terms of overallemployment, a significant number of jobopenings exist because the Eastern Europeanimmigrant craftsmen who once dominatedthe industry have reached retirement age. Forthe past decade, trained, skilled employeeshave been difficult to find, and this laborshortage has become a major factor indetermining whether firms can survive andexpand.

CMI’s training activities primarilybenefit African American and Latino low-income Chicago residents who do notnormally have access to these skill-based jobs.These individuals are normally excluded fromthe informal hiring networks that firms use,are unfamiliar with shop floor practices, andare not skilled on any of the machines for

which firms have job openings. The jobs thatgraduates are being hired for provide pay andbenefits substantially higher than most otheroccupations available to low-income people inChicago.

CMI’s activities have played a majorrole in maintaining the viability of a largeportion of Chicago’s manufacturing sector.CMI has become a major actor in its threeindustries as a key source of best practice andstate-of-the-art information. It has also servedas a catalyst for defining training needs andquality standards for the industry as it evolves.

Finally, CMI’s new thrust inupgraded training is meant to ensure that thenew work force — increasingly consisting ofAfrican American and Hispanic men andwomen — will have the technologicallysophisticated skills required to perform in thework force of the future.

Sectoral ProcessCMI has established several training

programs in related industries where it is theonly organization offering specific, high-quality training for entry-level jobholders.Before the establishment of CMI, these jobseekers learned primarily through informaltraining. In this sense, CMI is, in many ways,serving as the industry’s training program.

Each of CMI’s activities is the resultof a collaboration with firms in the industry itserves, and it constantly reviews itscurriculum and materials with employers toverify the relevance of its approach. CMIviews itself as providing a “second chanceeducation” to make up for the inability of thevocational high school and communitycollege systems to determine what employersneed and to help their students learn it.

In the process of developing andmaintaining relationships with key actors inthe industries, CMI staff realized that it wasalso providing much needed consultation and

14

research to these firms. This industrialextension service gradually became formalized,and allows CMI to offer valuable services toboth potential employees and industry.

In summary, CMI has integrateditself so completely within a highly selectoccupation-defined industry sector area that ithas changed the standard of training for thoseoccupations within the regional labor market,and has, as well, changed the demographicprofile of the labor sector within the sector.CMI has also through its extensioninformation services strengthened the viabilityand competitiveness of the industry.

Cooperative Home CareAssociates

South Bronx, New YorkCooperative Home Care Associates

(CHCA) is a for-profit, worker-ownedcooperative located in the South Bronx, NewYork — one of the most distressed inner-cityareas in the United States. The cooperativeprovides home health care aides on a contractbasis to large health-care providers such as theVisiting Nurse Service and major hospitals.CHCA is an example of a sectoral programthat has attempted to restructure poor-qualityjobs for the benefit of the worker as well asthe industry.

Founded in 1985 by Rick Surpin andPeggy Powell, CHCA now employs more than300 women of color, and successful replicationprojects employing a total of 120 women ofcolor have been established in Philadelphiaand Boston.

The cooperative was established onthe premise that by aggressively intervening asan employer in the home care industry, theentry-level occupation of home health aide —which is already accessible to women with lowskills and education — could be improved for

the benefit of the worker.Home care services, although

technically not temporary work, arenonetheless organized in much the samemanner as other temporary industries. Casesassigned to home care paraprofessionals varyin schedule by number of hours, time of day,day of week, and duration of case. Mosthome care agencies fill their rosters with asmany part-time aides as they can hire, trainthem to minimum required standards, andassign work with little regard for the aidesneed for full-time hours or other professionaltreatment. As a result, turnover in theindustry is high, care provided is erratic, andboth home care aides and home care clientssuffer.

CHCA leadership believed that bychanging the nature of the home care job, theindustry could be shown that a strategy ofinvesting in the front-line worker couldprovide both better jobs and better patientcare. In an industry characterized by part-timework, low wages, and high turnover, CHCAcurrently pays workers between $7 and $8 perhour with health insurance and paid vacationtime. Seventy percent of CHCA employeesare employed full-time, and turnover is just20 percent annually (compared to theindustry average of 40 to 60 percent).

All CHCA home care aides are firsttrained by the Home Care Associates TrainingInstitute (HCATI), a nonprofit organizationhoused in the same offices as CHCA andfunded by public (33 percent) and philan-thropic (67 percent) sources. Trainees must below-income — 85 percent were dependentupon public assistance immediately beforeentering the training program. All CHCAhome care aides are minorities; all but two arewomen. Only 40 percent of workers havecompleted high school or a GED, and mosttest at 5th- to 8th-grade levels in readingand math.

15

The CHCA model has three essentialcomponents:• The enterprise. The core of CHCA’s

innovation as an enterprise is to replacethe low-investment temporary personnelapproach with a strategy of high-investmentin front-line employees — emphasizingcareful recruitment, decent wages andbenefits, full-time work, and most impor-tantly, ongoing support and counseling.The worker-ownership structure furtherreinforces the enterprise both as a para-professionally oriented business and as acommunity of co-workers.

• The entry-level training program. Theentry-level program includes four weeks ofon-site classroom training, plus 90 days ofon-the-job training. In particular, theCHCA training model recognizes thatmany inner-city women are uncomfortablein a traditional “school” setting. Therefore,the training model uses a large amountof role-playing, educational games,simulations, and hands-on demonstrations.

• Career upgrading programs. Sinceparaprofessional home care tends to be adead-end job, the CHCA model emphasizesinnovations in creating a career path —both within the home health aide position,and onward to other health-relatedemployment. CHCA’s upgrading programstherefore range from a guaranteed hoursprogram (assuring senior aides a salary-likeminimum number of hours per week) to anurse education program (which hasassisted several CHCA aides to becomelicensed practical nurses).

A participatory organizationalculture, combined with a commitment to aworker-ownership structure, gives employees avoice, encourages company loyalty and keepsboth turnover low and patient care high.

In 1993, HCATI initiated a replica-tion program to introduce the CHCA model

into other inner-city home care markets. Thefirst replication site was started in Philadelphiain 1993 and now employs 75 home healthaides; the second was started in Boston in1994 and now employs 45 aides. Two moresites are slated for the Midwest by 1999.

CHCA as a Sectoral Initiative

Sectoral GoalCHCA was created in an effort to

improve the quality of jobs for low-incomewomen in the home health-care industry. Thehome care industry has been growing for thepast 10 years and the paraprofessional homecare aide position is one of the few jobs stillavailable to inner-city women.

However, these jobs are typicallypoor-quality jobs offering part-time work, lowpay, few benefits, inadequate training, andlittle or no career upgrading opportunities.

In addition, hospitals and homenursing agencies that contracted for homecare services also complained of poor serviceand problems with patient care. CHCA’sfounders felt that these concerns over poorquality were directly related to the poorquality of home care jobs. They thus soughtto create a new context that recognized thisrelationship.

CHCA today is a model employer inthe industry with wages and benefits 20percent above industry average, 34 to 35hours of employment per week for the typicalaide, and an annual turnover rate that is halfthe industry average. The worker-ownershipstructure essentially acts as a guarantor toensure that the firm remains committed tobeing “built around the front-line employee.”

At the same time, contractors haveacknowledged that CHCA’s home care aidesare more desirable than those of othercompanies. They deliver a higher level ofreliability and responsiveness, and have raised

16

standards of expectations industrywide aboutwhat a home care aide is capable of doing.The linking of quality of job to quality of careis what CHCA attributes its success to on twofronts: first, the original mission to creategood jobs for low-income people; and second,becoming a valued and integral player in thehome care sector.

Sectoral Process Since the home care industry in

large inner cities is structured with privatecompanies funded primarily by publicagencies, CHCA’s strategy has been forced toaddress both private industry practice andpublic funding and regulatory policies.Although highly regulated, home care agenciesare nonetheless market-driven. Theyconstantly look to one another for standards— both of “best practice” and of what isminimally acceptable. Over time presumptionssettle into all home care providers within agiven area, shaping perceptions as to whatworks best and what does not work at all.

CHCA’s leaders decided that themost effective way to influence practicewithin the home care industry was todemonstrate what changes are possible. Overtime, CHCA’s contractors sought similarinnovations from their other sub-contractors(CHCA’s competitors), improving thepractices of the home care industrythroughout New York City.

Therefore, CHCA was established asa new, competitive, for-profit business in theindustry to lead as a model, proving to therest of the industry that workers who arebetter trained, who receive better wages andbenefits, and who have a voice in theircompany would provide better patient care.

After CHCA had establishedlegitimacy with both its contractors and itscompetitors, the company was then well-positioned to achieve a public policy labor-

market impact. CHCA is now perceived as a“yardstick corporation,” one that is respectedby various local stakeholders — from patientadvocates to labor leaders, and from agencymanagers to regulators — for balancingemployee and client needs while remaining aprofitable business. In coalition with thesestakeholders, CHCA has been able toencourage improved reimbursement rates andregulatory reform throughout the New YorkCity home care market.

Focus: HOPEDetroit, Michigan

Focus: HOPE is a civil and humanrights organization in metropolitan Detroitthat was founded in 1968. Focus: HOPEseeks to unite white and black people in a“common effort” to “safeguard and develophuman capability and create new opportuni-ties for entry into the mainstream” of society.The program was started by Father WilliamCunningham, a Catholic priest and universityprofessor, and Eleanor Josaitis, a localvolunteer. Focus: HOPE is an example of asectoral program that has increased access to“good” jobs.

Focus: HOPE operates a number ofprograms that serve Detroit’s low-incomepopulation. Among these is the Focus: HOPEIndustry Mall, a complex of 11 plant-officebuildings that provides training andemployment in precision machining andmetalwork, Southeast Michigan’s largestindustry. This industry is primarily orientedto providing component parts for theautomobile industry. Focus: HOPE beganacquiring these properties as several largecorporations closed down and left the area.

Focus: HOPE’s manufacturingtechnology education consists of a sequenceof three programs:• FAST TRACK is a seven-week, school-to-

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work transition program that began in1989. It seeks to upgrade the basic skillsof new high school graduates to the levelsneeded for further technical training.Gains of two grade levels in math and onegrade level in reading have been commonduring the seven-week program. In the1993-1994 training year, 844 people wereenrolled in FAST TRACK, of whom 407graduated. Of these graduates, 157 wereplaced in jobs with wages over $5 an hour,and 254 were enrolled in further schoolingor a school-to-work program. Approxi-mately one quarter of FAST TRACKgraduates enroll for further training in theMachinist Training Institute (MTI).FAST TRACK is essentially a simulatedworkplace where young adults experienceindustry standards of discipline, produc-tivity, and personal conduct, as theyimprove academic and communicationskills and learn computer applications.Funding is provided through the State ofMichigan as well as private and corporatecontributions.

• The Machinist Training Institute offersstipend-supported, state-licensed coursesin precision machining and metalworkingat a basic level (31 weeks, full-time) andan advanced level (21 weeks, full-time).Since it opened in 1981, MTI has placed90 percent of its graduates at startingwages that now average $8.50 an hour at125 different companies. Graduates canexpect to average $13 an hour, the industryaverage, within four years. In the 1993-1994 training year, 190 students enteredthe MTI training, and 142 graduated.Two-thirds of MTI’s graduates are AfricanAmericans and 10 percent are women.Participation by women has grown to 25percent during the past two years.The advanced course prepares trainees tomanufacture parts using computer-aided-

manufacturing systems and software forcomputer numerically controlledequipment. MTI trainees who completethe basic precision machining curriculumare awarded 29-31 credit hours toward thetotal of 60 credit hours required for anAssociate of Applied Science Degree, which,if successfully completed, is awarded fromthe local community college.MTI was started with grants from privatefoundations and equipment from the U.S.Department of Defense, which consideredskilled machining essential for “industrialpreparedness” in terms of national securityand independence from foreign suppliers.Most trainees are funded through the JobTraining Partnership Act (JTPA) or thestate of Michigan.

• The Center for Advanced Technologies(CAT) is committed to developing a newcurriculum and methodology for trainingtechnologist-engineers who know how tobuild, operate, maintain, diagnose, andrepair complex, computer-integrated,flexible manufacturing equipment. CATopened in 1993 although the curriculumdesign process is near completion.The CAT educational program isstructured for three stages of increasingskill level, with exits at three-, four-and-one-half- and six-year intervalscorresponding to associate, bachelor’s andmaster’s degree levels of engineering. Thecurriculum emphasizes hands-on technicaltraining and interdisciplinary engineeringinstruction. It is a collaborative effort ofsix engineering colleges, universities, andtechnology experts from manufacturingcorporations. The CAT program currentlyhas 135 students, or “candidates,” enrolledin the program. The CAT educationalprogram also has an affiliated, nonprofitmanufacturing production unit called TecMachining, which employs more than 100

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people, some of whom are Focus: HOPEemployees, and some of whom are traineeswho have been given jobs in the enterprise.The facility is a large shop laboratory withmore than $50 million of state-of-the-artequipment. Funding for the building cameprimarily from the U.S. Department ofHousing and Urban Development, theEconomic Development Administration,the state of Michigan, and private founda-tions. The equipment was purchasedthrough Department of Defense grants.Support from the U.S. government is theresult of a 1989 agreement among fourfederal departments to collaborate in theestablishment of a national demonstrationcenter for advanced manufacturingeducation.

Focus: HOPE also has developedthree manufacturing-related businessesthrough its for-profit subsidiary, Focus:HOPE Companies, Inc.:• High Quality Manufacturing, Inc.

supplies engine hoses to Detroit DieselCorporation and emissions controlharnesses to Ford Motor Company. Thecompany employs 23 production workers,at an average hourly wage of $5.80, all ofwhom are women who were on publicassistance at the time of hire, plus twomanagers.

• F & H Manufacturing, a small machiningcompany, makes cam shaft thrust platesfor Ford and machines casting for DetroitDiesel. The company employs 12 peopleat an average hourly wage of $7.64.

• TEC Express was started in 1992 andserves as a General Motors redistributionsite for transmissions, converters, andengines that have failed under dealerwarranty. The company identifies and re-deploys the parts to re-manufacturingcenters around the country. It employs 31people at an average hourly wage of $9.

Focus: HOPE as a Sectoral Initiative

Sectoral GoalWhen Focus: HOPE first established

the Machinist Training Institute, its goal wasto create job opportunities for AfricanAmericans in precision machining and metal-working. Its intention was to meet a localneed for jobs by providing high qualitytraining to a group of people who had noaccess to training opportunities in that sector.

The auto-related industries had nothad a major vocational school since theclosing of the Henry Ford Trade School 30years ago. MTI, in essence, intended to fillthis void. From the beginning of MTI,Focus: HOPE emphasized a contextualized,competency-based curriculum and focusedon creating job opportunities for AfricanAmericans. This was in marked contrast tothe trade school’s more traditional educationalapproach and its apparent commitment totraining the male children of Europeanimmigrant craftsmen who had dominated theindustry to the exclusion of blacks and women.

Eventually MTI became the middlecomponent of a comprehensive trainingprogram with FAST TRACK introducingcomputer usage to low-income participantson a large scale and CAT introducing theworkplace of the future and the requirementsfor its work force. CAT has increasinglybecome a showcase facility, while the heart ofthe current intervention is still MTI. Throughits success in creating a very high-quality,large-scale training program, and in continuallymoving to seize opportunities as they arose,Focus: HOPE has had a profound effect onthe regional labor market.

Sectoral ProcessOver time, MTI graduates became

more widespread throughout the industry andFocus: HOPE businesses became integrally

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related to such major corporations as GeneralMotors and Detroit Diesel. Through theserelationships, several senior executives fromthe highest echelons of the industry began toplay critical advisory roles, guiding Focus:HOPE on how to meet the industry’s needsand further its mission of increasing access tohigh-quality jobs for African Americans andwomen in the Detroit area.

Furthermore, Focus: HOPE is servingas an important industry training program,establishing effective linkages between themanufacturing companies and the highereducation system through both MTI’s agree-ments with the local community colleges andthe engineering schools collaborative effort indeveloping the CAT program. As theselinkages develop, the academic programs mayincreasingly come to adopt Focus: HOPE’shands-on, competency-based approach withintheir own educational systems.

Obtaining a significant amount ofpublic and private resources to build, renovateand equip the Industry Mall and then theCAT facility has both solidified andsymbolized the presence of Focus: HOPE as amajor actor in the industry. As CAT develops,Focus: HOPE will be well-positioned to bringsignificant value to the industry while itsimultaneously helps to diversify the industry’semployment base.

In effect, Focus: HOPE will likelyaccelerate a shift toward a future for theindustry that will both increase the industry’scompetitive advantage and ensure that its owngraduates play a major role in that process.

Project QuestSan Antonio, Texas

Project QUEST is a new, emerginginitiative that was founded in 1992 inresponse to growing job loss and unemploy-ment among low-income residents of San

Antonio. QUEST’s mission is to prepare low-income San Antonians for good jobs inselected industries in the city’s rapidlychanging economy. While San Antonio wasonce home to a number of manufacturingfirms that offered stable, full-time jobs withbenefits to residents with low education levelsand skills, today the city’s leading industriesare generally in the business service andmedical care sectors. San Antonio’s other largeindustry, tourism, offers jobs that are for themost part low-wage, part-time, with fewbenefits or opportunities for advancement.QUEST is an example of a sectoral programthat increases access to “good” jobs for low-income populations.

In this context, San Antonio residents,through Communities Organized for PublicService (COPS) and Metro Alliance, developeda new labor-market broker in Project QUEST(Quality Employment through Skills Training).These two community-based organizationsbrought together business and communityleaders — employers of high-skill workers,representatives of the City of San Antonio, theregion’s Private Industry Council, educationand training institutions, state and localsocial-service agencies, the Texas EmploymentCommission, and then-Governor AnnRichards herself — to garner political andfinancial support and to gain commitment toQUEST’s goals.

In launching QUEST, COPS andMetro Alliance used their communityorganizing expertise as well as relationshipsdeveloped through previous communityadvocacy efforts to form strategic alliances forQUEST. They made convincing demands forpublic financial support, and persuadedemployers to participate. Many area employershave come to believe it is in their self-interestto participate to help ensure the stability ofthe larger community.

QUEST is a long-term training

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project that promises graduates good jobs.While the project is new, results to dateindicate they are fulfilling this promise. As ofDecember 1994, 110 graduates had completedtraining and had secured jobs in their fields.Another 30 were in the job-match stage.QUEST has currently enrolled another 400students in various education and trainingprograms.

QUEST regularly works in closecollaboration with a large number ofemployers, community colleges, and commu-nity organizations in its training programs. Inorder to stay abreast of employer needs andindustry developments, QUEST has on staffprofessional occupational analysts whoconvene employers and representatives of localeducation institutions. These committees ofemployers, educators, and QUEST staffidentify shortages in jobs that pay over $7 perhour, discuss appropriate training, anddetermine if it is likely that at the end of thetraining process a need will still exist for thetrained worker.

Because the San Antonio economy isextremely diverse and QUEST began withcommitments of jobs from a wide variety ofemployers, the project is not sectoral in thesense that most sectoral projects target aspecific set of occupations within one industry.It is, instead, an attempt to field simultaneouslythree sectoral initiatives — in medical,business systems services, and environmentaltechnologies. Occupations within these sectorsare numerous and include, for the medicalfield, biomedical equipment technician, dentalhygienist, licensed vocational nurse,occupational therapy assistant, respiratorytherapy assistant, and medical transcriber,among others. In the environmentaltechnologies sector, occupations for whichQUEST offers training include environmentaland hazardous material technician, chemicallab technician, and field engineer and

surveyor. In the business systems sector,targeted occupations include accountingtechnician, information systems and networkadministrator, financial customer servicerepresentative, and office systems technician.QUEST staff recognizes the tremendouschallenge of maintaining intimate industryknowledge (which is a definitional character-istic of sectoral programs) for 26 job categorieswithin the three sectors.

Recruitment of Project QUESTstudents — “QUESTers” — begins in thecommunity. Applicants contact their neighbor-hood committees, made up of communityresidents, for an initial interview. Practitionershope that through this process, a sense ofcommunity responsibility will be instilledin students.

Neighborhood committees attemptto determine an applicant’s motivation anddesire to succeed and his or her ability topersevere through what can be as long as atwo-year program. Applicants who arerecommended by neighborhood committeesmust possess a high school diploma or aGED, and remedial education, combinedwith their program of study, cannot exceedtwo years.

QUESTers also receive help withchild care, transportation costs, medical care,and tutoring.These support services are fundedfrom a combination of sources including theTexas Employment Commission, JTPA,general funds from the city of San Antonio,and CDBG funds. All of Project QUEST’sstudents are economically disadvantaged. Fiftypercent receive food stamps, and 20 percentare on welfare. Sixty-two percent are women,and 35 percent are single parents.

Project QUEST as a Sectoral Initiative

Sectoral GoalProject QUEST’s goal is to alter how

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employers in the San Antonio area recruit andhire low-income individuals throughout theentire city within the key occupational sectorswithin the health care, financial services andenvironmental technology industries. Althoughsimultaneously targeting three major sectorsmakes Project Quests goal ambitiouslycomplex, it nonetheless can properly beunderstood as sectoral in intent.

Sectoral ProcessWhen Project QUEST was initiated

just three years ago, it used a sophisticatedsectoral tool — a careful formal analysisresulting in a decision to select its first threesectors. This analysis involved both potentialtrainees and potential employers in a way thatcreated a very effective organizing tool forimplementation of the program. Then,working with the existing community collegesystem, Project QUEST created an effectivetraining and brokering program that hasalready placed several hundred low-incometrainees in good jobs that they probablyotherwise would not have obtained.

Since Project QUEST is relativelynew, it has not yet been able to enjoy thebenefits of becoming thoroughly envelopedwithin any of the three sectors. Althoughsome important industry expertise has alreadybeen gained within each of the three sectors,the project has not yet had time to developintimate relationships among the key actors.Therefore, given that it has chosen to spreadits attention across such a large number ofoccupations, the particular challenge facingProject QUEST will be how quickly anddeeply it can establish those critical market-based relationships.

Telephone Surveys: ProgramDescriptions

During the course of our research,telephone interviews were conducted with 12other organizations that were sectoral or thatpossessed some sectoral characteristics. Thefollowing are descriptions of the programsthat possess some or all of the defining charac-teristics of sectoral employment development.

ACENET, Athens, OhioACENET provides assistance to local

metal-working and furniture manufacturers toform networks to produce new products andenter new markets. It coordinates the designof accessible furniture products that small-scale firms can produce and market together.It also operates a business incubator and acommercial kitchen for use by small-scalespecialty food products manufacturers on ashared basis.

Asian Neighborhood Design (AND),San Francisco, California

AND is a community developmentcorporation providing housing, architecturaldesign and planning, and employment andtraining services to the Bay area. Through theEmployment Training Center (ETC) andSpecialty Mill Products (SMP), AsianNeighborhood Design provides training,employment, and job placement in theconstruction, furniture manufacture, andwoodworking fields. ETC trains low-incomeex-felons, long-term welfare recipients, andrecovering substance abusers in computer-assisted design, drafting, project management,woodworking, and warehouse work skills.SMP provides transitional and permanentjobs producing high-end mill work forcorporate offices, and furniture for nonprofithousing developers. AND is currentlyfounding a replication in Boston.

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Careers in Health Care Collaborative(CIHC), Denver, Colorado

CIHC is a collaborative, organized bythe Piton Foundation, of several nonprofittraining and social service providers to prepareand place low-income Denver residents injobs in the health care industry. Participantstake part in an orientation that introducesthem to the health care industry and providestraining in job-readiness skills. They are theneither referred to education provided by oneof the collaborative members or deemed “job-ready” and assisted in finding a job.

Childspace Day Care,Philadelphia, Pennsylvania

Childspace is a for-profit worker-owned cooperative founded to provide bothhigh quality child care and high quality jobsto child care providers. Childspace currentlyoperates two child-care centers that payhigher than average wages and provide healthbenefits to full-time and part-time workers.The centers enjoy a national reputation forproviding exemplary child care — whichChildspace attributes to the quality of the joband the work environment of the cooperative.

Coastal Enterprises Inc. (CEI),Wiscasset, Maine

CEI operates several businessassistance programs that focus on key industrysectors in Maine. One sector is family daycare where CEI provides training to child-careproviders and loans and technical assistance tostart and grow child-care businesses. CEI alsoprovides loans, business assistance, andemployment services to the fisheries industryin an effort to expand local employment.

Eastside Community Investments,Indianapolis, Indiana

Eastside’s overarching purpose is tocreate opportunities for local families to

acquire assets in order to move out of poverty.Two of their programs (among many) havesectoral attributes. The first is a project thatworks with family day-care providers toprovide education and technical assistance tohelp day-care operators to formalize theirsmall businesses. The second is a constructiontrades training program for youth and tworelated construction companies established tohelp local residents gain skills and employ-ment and to support a local low-incomehousing construction program.

Jane Addams Resource Corporation(JARC), Chicago, Illinois

JARC provides a broad range ofassistance to local metalworking factories,training employees within those companies toensure that they will be able to weather changesin technology and production. Factorymanagers are offered courses in Total QualityManagement, and assistance with developingtheir employee relations skills. JARC’s goal isto enhance the competitiveness of localmetalworking factories that are facing seriouschallenges by significantly upgradingproduction processes.

Mountain Association for CommunityEconomic Development (MACED) (ForestProducts Center), Berea, Kentucky

MACED’s goal is to affect structuralchanges in the timber processing industry inthe Appalachian region of Kentucky for thebenefit of local small businesses and workers.MACED provides technical assistance totimber growers to help them access marketsand increase the value-added of timber. It alsohas founded timber processing enterprises toincrease local value-added economic activity aswell as create jobs.

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Northern Economic Initiatives Corporation(NEICorp.) (Manufacturing Services Unit),Upper Peninsula, Michigan

NEICorp. organizes peer networksbetween manufacturing firms to encouragecontinuous improvements in local manufac-turing processes. It diagnoses competitivenessproblems and prescribes improvements suchas training or technology upgrades to helppreserve both the viability of area businessesand local jobs.

Osage Initiatives, Inc., Denver, ColoradoOsage is an umbrella organization

that provides opportunities for nonprofit andfor-profit organizations in the Denver area towork together for social goals. They operateseveral for-profit contract manufacturing andassembly firms that complete short-termpackaging jobs and other assembly work andemploy at-risk populations served by localsocial service agencies. Agencies under theOsage umbrella operate autonomously, butthe initiative coordinates joint fundraising toeliminate duplication of efforts and tocoordinate activities.

Warren/Conner Community DevelopmentCorporation (Partnership forIndependence), Detroit, Michigan

Warren/Conner is implementing acomprehensive community and familysupport and employment program to helpvery low-skilled, disadvantaged residents ofpublic housing obtain and keep decentemployment in area businesses — mostlyhealth care and manufacturing. It hasidentified employment tracks in these twosectors that their residents can fill, and it iscurrently helping participants work throughvarious structural barriers (e.g., child care,transportation, job readiness) to help themsecure and hold jobs.

Watermark Association of Artisans,Camden, North Carolina

Watermark is a worker-ownedcooperative that serves as a marketing agentfor member’s craft products. The cooperativedevelops products and obtains contracts thatemploy over 700 members (full- and part-time)making crafts for national and internationalmarkets. Operating in a high poverty, remotearea, Watermark has become one of theregion’s largest employers. As well as operatingthe for-profit cooperative, it also providestraining and other social services.

The National EconomicDevelopment and Law CenterSectoral EmploymentDevelopment Program

The sector demonstration project ofthe National Economic Development & LawCenter (NED&LC) is based on the premisethat community-based organizations can helpbuild competitive work forces in the innercities. NED&LC and its local partners areattempting to make an impact on industry byrestructuring training programs so they aremore closely tailored to labor demand, and bychanging the recruitment and hiring patternsin selected industries so residents of low-income neighborhoods can gain better accessto industries offering better qualityemployment. Project sites include:

Denver, ColoradoThe oldest NED&LC sector project

is the Careers in Healthcare Collaborative(CIHC) sponsored by the Piton Foundationin Denver. CIHC’s goal is to prepare NortheastDenver residents for careers in the health careindustry. To date CIHC has established a newtargeted industry referral service, HealthWorks;it has worked with the community college to

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design a new training program for selectedhealth care occupations; and the collaborativeof community-based organizations hasdeveloped an aggressive recruitment strategythat identifies residents and provides themwith career counseling, life skills, andoccupational training.Portland, Oregon

A newer effort, the Portland project isworking in collaboration with the NortheastWorkforce Center to access jobs in theconstruction industry. The NED&LC hascompleted a sectoral analysis of the localconstruction industry as well as a comprehen-sive profile of demographic diversity withinconstruction apprenticeship programs.Findings have already prompted severalsignificant changes in the local industry: threegovernmental agencies have committed tohiring minorities and women on publicly-sponsored construction projects; anemployment clearinghouse has been establishedwhere contractors and subcontractors of aconstruction project can find minority andwomen apprentices; and the city of Portland hassignificantly changed its bidding guidelines.

Milwaukee, WisconsinThe Milwaukee Foundation’s

Neighborhood and Family Initiative has joinedwith the Law Center to develop an employ-ment initiative entitled MORE (MaximizingOpportunities in a Restructuring Economy),which has researched and identified the healthcare industry for intervention. Other indus-tries will be targeted after opportunities inhealth care are exhausted. The collaborativestructure of the Neighborhood and FamilyInitiative — with diverse membership ofHarambee neighborhood residents, and civic,industry, and community leaders — providesa governing body able to undertake a compre-hensive approach to expand employmentopportunities for residents. MORE’s programhas four components: leadership skills andempowerment training, employmentacculturation training, health care skillstraining, and the health care employmentcollaborative.

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Targeted

The first characteristic of the sectoralmodel is the targeting of an occupation orrelated cluster of occupations within anindustry. In surveying the four case studiesand a dozen other projects, we have come tounderstand the term sector primarily as anoccupation-based concept — one that isdefined and shaped by a flexible system ofmarketplace relationships.

The definition we propose for “sector”— as it relates to the field of low-incomeemployment development — is the following:

A sector is a system of occupation-basedmarket relationships among certain “keyactors” — businesses, organizations, andagencies. The practitioner identifiesthese key actors over time — bydetermining who can influence theparticular occupation that has beentargeted as an employment opportunityfor low-income people.2

The occupation selected determinesthe parameters of the industry sector for thesectoral development practitioner. If a sectoralpractitioner targets machine tool equipmentset-up operators within the single spindlemachining industry, the sector that thispractitioner will interact with will include notonly machining firms, but also suppliers,unions, community colleges, and others thatinteract with the businesses and workers in

that occupational sector. For example, Focus: HOPE in Detroit

initially identified its sector around thetechnical positions hired by suppliers whoprovided products to the auto industry —jobs that Focus: HOPE believed would offeran opportunity for low-income minorities toobtain good jobs. From there, Focus: HOPEdeveloped a set of relationships that facilitatedplacing low-income people in those jobs, anetwork that eventually reached out to suchunlikely actors as the U.S. Department ofDefense.

Similarly, Cooperative Home CareAssociates defined its initial sector aroundparaprofessional home care jobs — jobs thatCHCA believed could be improved toprovide better pay and working conditions forthousands of women of color. From there,CHCA developed a set of relationships thatinclude such unlikely partners as advocates forthe disabled community and local laborunion representatives.

Chicago Manufacturing Institutefocused initially on single spindle screwmachine occupations, and over time expandedinto different, yet closely related, occupationsin the screw machine, spring making, andplastics processing industries. Therefore,although CMI places low-income people intoa range of distinct occupations, practicallyspeaking they focus on a cluster of similaroccupations within three closely relatedindustries.

In each sectoral program, the firststep is to identify the particular occupation(s)within a specific industry that appears to holdthe promise of employment opportunities forlow-income people. Among the four casesstudied, the processes used to identify thetargeted occupation and sector differedwidely. In some cases the analysis was quiteformal and extensive, as was that which led tothe careers in Healthcare Collaborative

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V. The Four Defining Characteristics of Sectoral Development

A sector is

a system of

occupation-based

market

relationships

among certain

key actors —

businesses,

organizations,

and agencies.

2 Our occupation-based definition is similar to the business-based definitions of a sector used by the economist MichaelBest, who defines “sector” as including a “variety of inter-firmpractices and extra-firm agencies such as trade unions,apprenticeship programs, labor education facilities, jointmarketing arrangements, and regulatory commissions, each ofwhich facilitates inter-firm cooperation” (Best: 1990). Best’sdefinition of a sector extends beyond the parameters of a singlefirm, or a set of firms within an industry, to include otherorganizations that train or organize workers, conductmarketing activities, or interact in other ways with firmswithin an industry.

strategy in Denver. In others it was quiteinformal and personal, as was that which ledRic Gudell to begin work in the machine tooltrades, resulting years later in the ChicagoManufacturing Institute.

StrengthThe targeting of a particular

occupation within a specific industry givessectoral initiatives their distinctive strength:focus. A sectoral initiative recognizes thatwithin a complex urban economy no singleobstacle — whether lack of work-readinessskills, inadequate child care, inaccessiblehiring networks, or racial bias — is the solelimiting factor blocking low-incomeemployment development. Instead, abewildering array of these multiple barriersobstructs the path to securing good jobs or re-structuring poor-quality jobs.

With barriers so complex and inter-twined, a sectoral initiative proposes that onlyby viewing inner-city unemployment fromthe single, pointed perspective of a particularoccupation within a specific industry can sucha web of factors be intimately understood andeffectively addressed.

WeaknessThe corresponding weakness of a

sectoral focus is also clear: because programsare so narrowly targeted, failure can arriveswiftly and completely, particularly in theearly stages of an initiative. A sectoralapproach is by definition narrow — it fails toenjoy the protective benefits of diversification.

Thus if the occupational opportunitiesin the chosen sector should dramaticallychange in the early years of a sectoral program(for example, Medicare is drastically cut,reducing the demand for home health aides,or a major technological change disrupts thehiring patterns in a manufacturing industry),then all the targeted investment of time and

effort in a particular sector may quickly berendered useless. Worse still, that investmentmay have been so narrowly targeted (specialexpertise in home care industry; directrelationships with the carpentry unions) as tobe difficult or impossible to re-deployeffectively elsewhere.

Interventionist

The second defining characteristic ofsectoral employment programs is that theyintervene deeply within the chosen sector.The key to understanding how sectoralstrategies intervene is embedded in the factthat these programs are strongly oriented tothe market. Each of the initiatives we studiedimproved employment options for low-income people by actively meeting the needsof the marketplace.

This market orientation has disci-plined sectoral practitioners by forcing themto provide real value to other key actorswithin their sector. For example, if CHCA’shome health aides had not provided high-quality service, its contractors would not havehelped CHCA expand, and the cooperativewould never have been able to employhundreds of aides. If Focus: HOPE’s traineeswere not of a high enough quality to work formajor automobile manufacturers, Focus:HOPEcould never have had the credibility to have amajor impact on labor markets in that sector.

Yet real value cannot be providedwithout a sophisticated knowledge of thesector’s ever-changing needs, and sophisticatedknowledge can be obtained only throughparticipating in a mutually beneficialexchange within the sector. Therefore marketorientation — knowing and delivering whatemployers need for high-quality workers;knowing and delivering what purchasers needfor high-quality products or services —

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requires intimate engagement within thesector.

“Intimate engagement” within theoccupation-defined industry sector is centralto understanding the strengths of a sectoralapproach. For example, a program that trainsindividuals exclusively for the financialservices industry — but has little or no directcontact with local banks in the shaping of itscurriculum, is clearly not a sectoral initiative.However, a training program that intentionallyforges close working relationships withindustry actors — not only to shape thetraining to meet industry’s labor-force needs,but also to shape over time the way that thelabor market in that industry identifies,employs, supports, or promotes low-incomepeople — clearly is a sectoral initiative.

In order to intervene within a sector,a practitioner must determine which program,service, or product to offer. In the casespresented here, programs intervened byoperating training programs, operatingbusinesses, providing services to industry,brokering employment placements, operatingworker-owned cooperatives, and providingother support services to program participants.

In many cases, the initial program-matic intervention led to later interventions.As the practitioners we studied delved moredeeply into their sector, and as their initialintervention identified additional problemsand opportunities, new programs or entitieswere established. Thus the sectoral process,which clearly must be adaptive to marketchanges, will always be an evolving one.

Finally, we found that some programsoffer non-employment-related consultingservices to industry. CMI, for example, offersmanagement consulting services to firmswithin the machining sector. Although theseservices do not directly influence CMI’semployment efforts, they do help to deepenintimate ties of information, expertise and

trust between the sectoral initiative and otheractors in the industry. Also, they strengthenthe sector’s overall viability. Such services areparticularly important for programs that notonly are attempting to gain access to decentjobs for their participants, but also areattempting to restructure their chosen sectorin order to protect or expand opportunitiesfor the targeted occupation.

StrengthThe strategy of direct intervention or

engagement provides sectoral initiatives with asecond critical strength: position. By beingpositioned inside an industry from theperspective of a particular occupation, asectoral initiative — simply by functioning inthe day-to-day environment — obtainstimely, high-quality information and over timeachieves a highly nuanced understanding ofthe many factors influencing job developmentwithin that sector.

A direct engagement model not onlypositions the initiative to be aware of industryor market changes quickly, but also maximizesthe likelihood that the sectoral program itselfcan solve a particular sector’s problem, orseize a particular opportunity. For example,Focus: HOPE has not only responded totechnological change within its sector, but alsomoved ahead of those changes by becomingone of the primary sources of computer-basedapplied technology. Therefore, “intimateengagement” is a dynamic response to thedynamic reality of the employmentmarketplace.

WeaknessThe corresponding weakness of

intimate engagement is that a practitionerfunctioning within a narrow sector will bevery closely watched by the other key actors.News of a mistake made by the practitionerwill likely circulate almost immediately — if

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an error is grave enough, competence may bequestioned by business partners, or trustamong allies may be seriously injured.

Another way of understanding thischaracteristic is in terms of accountability. Atargeted sectoral strategy over time becomesdirectly accountable to the other key actorswithin its sector. A sectoral program cansurvive only by consistently providing avalued product or service, and thus itssurvival is wholly dependent upon remainingvalued by other key actors. This is distinctfrom many nonprofit programs that tend tobe accountable more to their funding sourcesand clients than to their market relationships.

Low-Income Focused

The third defining characteristic is atargeted emphasis on low-income people.Each of the initiatives studied is “maximizingthe position of low-income labor” — aceaseless effort to improve job opportunitiesfor their participants. This orientationtowards the disadvantaged is a critical elementin each organization’s strategic and tacticalchoices over time.

A labor-focused approach is quitedistinct from that employed by conventionalbusinesses. For example, some businessesorganize their strategies around maximizingthe satisfaction of their customers, while othersorganize their strategies around maximizing areturn on capital for their stockholders. Tosurvive, each of these business strategies mustpay attention to the other key factors —capital, or customers, or labor — but the logicof day-to-day decisions differs, at least in part,depending on each business’ central focus.

Sectoral strategies, in contrast,compete in the world of business from a laborperspective. One clear example of this isCHCA, which has been consistently profitable

for the past seven years, while in each of theseyears CHCA has accepted a lower profitmargin than industry standards. This is truebecause, compared with its conventionalcompetitors, CHCA directs a greater portionof its resources to its employees, rather thanto the bottom line, allowing CHCA workersto receive wages and benefits averaging 10 to20 percent higher than employees in otheragencies. In turn, this investment in CHCA’swork force has paid off in the marketplace bygenerating a high-quality service that CHCA’scontractors have rewarded through increasedrequests for CHCA aides.

This focus on improving the worker,and the worker’s job, has meant that all ofthese programs have pioneered innovationspremised on the hypothesis that investmentsin front-line workers will yield high returnsfor employers. Every day, each of the initia-tives is posing essentially the same question:“How can we make our low-income partici-pants more valuable in the marketplace?”

StrengthThis characteristic, — of building

strategies around the low-income participantthat simultaneously meet the needs of themarketplace, — provides another strength tosectoral initiatives: a unique organizationalmission that works to reconcile seeminglyparadoxical social and business goals.

This special mission gives sectoralpractitioners a type of “dual citizenship,” onein the for-profit business world and the otherin the nonprofit social/labor world. Typically,practitioners in nonprofits have little businessexperience, and thus they often lack bothlegitimacy and self-confidence when attempt-ing to interact with the business community.Yet all of the fully established sectoralinitiatives we studied (Focus: HOPE, CMI,and CHCA) were remarkable in that in eachcase its practitioners had achieved recognition

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as true leaders within their chosen industrysectors.

For example, Ric Gudell is a leadingvoice in several machine tool trade associa-tions; Rick Surpin was recently elected to thegoverning board of the New York State HomeCare Association. Each is able to speak withconfidence, not only about the current stateof his chosen sector, but also about its likelyfuture. This dual citizenship appears to be ahighly motivating force throughout the staffsof all of these initiatives; they are not onlydoing good, they are succeeding in thecompetitive world of business.

Weakness The corresponding weakness of this

emphasis on making low-income participantstruly valuable in the labor market is: Theskills and temperament required to constantlyreconcile paradoxical social and business goalsare quite rare — and thus identifying and/ordeveloping staff leadership for sectoralinitiatives is a particularly challenging task.

This problem has consistentlypresented these initiatives with a difficultchoice: Either select staff leadership fromwithin the targeted industry and then“acculturate” that individual into the role ofdeveloping low-income people; or selectindividuals who already have the values andperspective of developing people, and teachthem the technical information and skillsrequired of the industry.

Identifying and training staff leadershipis therefore critical, and the development offounding leadership — “social entrepreneurs”— is worthy of particular attention in orderto build the field of sectoral development.

Labor-Market Oriented

The fourth and most definingcharacteristic is that sectoral programs areoriented toward long-term, systemic changein a labor market on behalf of their low-income participants. We observed from thecases studied that systemic change within alabor market can be achieved only byparticipating in — and thus influencing —complex relationships among a variety of keyactors. This focus on the complexity of therelationships in a labor market is therefore asystems approach, not a resource-deliveryapproach, to securing jobs for the urban poor.

By “systems approach” we mean thatwithin the business community — as in anycommunity of shared and competing interests— decisions are made by people; and further,these people are strongly influenced in theirdecisions by their interaction with their peers,competitors, co-workers, and friends.Relationships — involving communication,trust, respect, and intimate knowledge — areessential to influencing, and thus changing,behavior within the business community.

Changing employment practicesbeyond the boundaries of the initial program— outside the original training program, ortraining enterprise, or business — is anexceptionally long-term process. CMI, forexample, over time has influenced hiringpractices within the screw machine, springmachine and plastic injection moldingindustries in Chicago. They have done this bytraining low-income minorities to fill jobs leftby retiring workers. More importantly, theyare now redefining the standard package ofskills and competencies required for entry-level jobs in these industries. CMI’s intimateknowledge of industry operations, practices,and needs for the future effectively enables

30

them to recommend the new set of skillsneeded as the industry evolves.

QUEST, on the other hand, isattempting to influence hiring practices inselected industries by upgrading the skills andcompetencies of San Antonio residents whohave, to date, been excluded from these labormarkets. QUEST, at this juncture, is notattempting to fundamentally change the set ofskills and competencies required for any of itstargeted jobs. It is, instead, serving as a brokerbetween excluded job seekers and good jobs.

StrengthRather than simply trying to

convince industry employers to hire whatmight otherwise appear to them to be theleast attractive potential employees, sectoralprograms add value to those potentialemployees in the eyes of employers and at thesame time change the way those employersvalue entry-level employees. In the selectedprime examples, this has been achieved by

directly changing the skills and competenciespackage that industry requires for a particularoccupation — in such a way that eventuallymakes the industry more efficient andsimultaneously delivers to the labor marketlow-income trainees who match those skillsand competencies.

WeaknessSystemic labor market change — by

its organic, often indirect nature — can bedifficult to assess. Determining cause andeffect in such a highly complex system as alabor market can be nearly impossible. Also,systemic change requires many years toachieve. Each of the three established sectoralinitiatives profiled here is ten years old ormore, and most grew out of community-based institutions that are much older. Thetypical initiative might require five years evento perceive what is possible for systemicchange within the chosen sector, and fivemore years to begin to achieve full impact.

31

In assessing the various sectoralinitiatives, we identified several themes thatappear to cut across all of the initiatives. Werecommend that practitioners who wish tolaunch sectoral initiatives consider the real-lifechoices that arise from the thematic questionsthat are discussed below.

Each of the thematic questionsaddressed here seemed to manifest at approxi-mately the same point of development foreach initiative. Therefore, dividing thesectoral process into chronological stages —though inevitably arbitrary — may proveuseful to this discussion. We suggest thefollowing four-stage evolution. Everysuccessful sectoral initiative will pass throughat least the first three of these stages, andsome will enter the fourth:3

New Initiative: (Usually from 0 toapproximately 2 years old.) The initiative isdetermining what type(s) of occupationswithin industries to select and what type(s) oflow-income populations to assist. By the endof this phase, the new initiative will havebegun to experiment with its first interven-tion into a sector.

Emerging Initiative: (Approximately2 to at least 5 years old.) The initiative hasestablished a programmatic presence withinthe targeted industry, and thus has penetratedthe chosen sector by becoming an actorwithin that industry. Innovations on behalf oflow-income people will have substantiallyassisted the program’s own participants.However, the emerging initiative will not yethave influenced relationships among keyactors outside the boundaries of its ownprogram.

Mature Initiative: (Usually at least 5years old.) The initiative has demonstratedsystemic influence on the regional labor

market and, in response to problems oropportunities encountered along the way, itmay have established additional programmaticinterventions within the sector.

Expansive Initiative: (Usually at least8 years old.) The initiative has begun either toreplicate within the same sector in othergeographical areas, or diversify locally intorelated sectors, or both.

New Initiative Issues

What is the proper “staging area” for a sectoral project?

Of the four prime examples we studiedin depth, it is interesting to note that all werestarted by community-oriented groups, butnone was started by an organization whoseterritory was limited to a single neighborhood.This regional orientation is critical because, aswe noted earlier, sectoral initiatives are market-oriented — and markets do not generallyrespect neighborhood boundaries. Mostmarkets for products or services are regional,and therefore a program hoping to affect thelabor practices of a market must also beregional.

Successful sectoral projects tend to beinitiated by large nonprofit organizations orby a coalition of several neighborhood groups— Community Service Society in New Yorkspawning CHCA; COPS spawning ProjectQUEST; Chicago Commons spawning CMI;a multi-faceted, 15-year-old Focus: HOPEspawning its machinist initiative. Each ofthese is a broad, stable organization thatinitiated a high-risk experiment in creatingjobs for the urban poor. Each of these largeorganizations or coalitions was able toaccommodate this high level of risk not onlyin financial terms, but also in programmaticterms — because these sponsoring organi-zations were firmly established enough toaccept the possibility of failure.

32

VI. Thematic Questions and Recommendations

We recommend

that practitioners

who wish to

launch sectoral

initiatives

consider the

real-life choices

that arise from

the thematic

questions that

are discussed

below.

3 We re-emphasize the distinction between a sectoral initiativeand the organization that is sponsoring that initiative. Thesponsoring organization may be years or even decades old; it isstages of the initiative’s development we describe here.

33

How formal or informal should be theinitial stage of analysis?

Of the three fully establishedinitiatives we studied closely, each started itsanalysis rather informally, without in-depthstudies contrasting the pros and cons ofvarious industries. For example, 15 years agoRic Gudell walked the local bread lines andasked what kinds of jobs people wanted,talked to local employers, and then talkedwith training programs. From thosediscussions Ric decided to work as a laborerin a machine tool company himself for a year,to understand it from the inside.

Ric’s story is particularly instructive,for at that time machine tool companies werefleeing inner-city Chicago and overallemployment levels were dropping — a formalanalysis might have passed right over machinetools as a good employment opportunity. ButRic saw the opportunity: Despite theshrinking employer base, new employees werenonetheless in demand — because the older,European males who once held those jobswere retiring, and their sons were no longerinterested in those trades. By training peopleof color and women for those positions, Richelped fill those employment needs, and, inso doing, helped stabilize the machine toolindustry in inner-city Chicago.

Similarly, Father Cunningham atFocus: HOPE did not commission a broadstudy of employment opportunities 10 yearsago in Detroit; instead he saw a factory beingabandoned across the street from his churchand began to explore ways to use it to employhis members (although, once his initialmachinists strategy was forged, he thenconfirmed his informal approach by usingformal data that had been collected by theU.S. Department of Defense). While theconsistency of this informality is remarkable,we do not mean to eschew all forms ofstructured analysis. Simply because many

programs started with an informal, nearlyidiosyncratic process does not mean thatinitiating a sectoral program cannot be mademore systematic. As we saw in the case ofProject QUEST’s start-up, formal analysis canidentify and document information that canbe a powerful organizing tool.

In addition, once the sector has beenselected, formal analysis is usually essential tohelp refine whatever program is chosen tointervene in that sector. For example, RickSurpin had worked on elderly issues for 15years and selected home health care jobs moreon the basis of his personal knowledge thanon any formal analysis — yet having chosenthe industry, he then initiated a formalbusiness plan to help design the CHCA homehealth enterprise.

However, we do caution here thatformal analysis — particularly if focused toomuch on general industry trends and notenough on opportunities for particularoccupations — can be too abstract anddistant for useful application in the field.

How should “low-income” be defined?Low-income populations are not

uniform; they vary among demographicgroups (e.g., young African American males;single Latino female immigrants; displacedwhite workers) and within those groups (interms such as education, self-esteem, or jobexperience). A spectrum of low-incomeindividuals exists — from the most difficultto employ to the easiest. A new initiativemust choose what part, or parts, of thatspectrum to target.

As we noted earlier, each of theinitiatives we studied focused on making itslow-income participants as “valuable to themarketplace as possible.” Of course, the morea low-income participant is already“employable” — job experience, schooling,maturity, etc. — the easier it will be for the

program to convince the marketplace to hirethat individual.

Therefore, in the drive to improvethe competitiveness of the low-incomeparticipant, standards for those participantsmust be kept very high. The result isfrequently that many participants cannotmeet these standards, and they are thus eitherselected out of the program from the verybeginning, or are asked to leave sometimelater down the road.

In short, the high standards of thesesectoral programs make them very selective —they may not be designed for many of theurban poor. For example, Project QUESTrequires all their participants to have at least ahigh school diploma or equivalent.

And although CHCA does notrequire a high school education, it nonethelesscarefully selects participants into its trainingprogram based on maturity, goodcommunication skills, and a caring attitude.

Practitioners argue that these highstandards appropriately place significantresponsibility on participants to perform totheir highest abilities. Although this appearstrue, the unavoidable result is that only aselect set of low-income individuals is assistedby sectoral strategies.

In sum, when a new sectoral initiativedetermines which low-income people to assist,it will be influenced by a pressure to deliverwell-qualified candidates to the marketplace,and this pressure in turn may influence theproject to select participants from the mostemployable end of the low-income spectrum— especially in the early stages as the projectworks to build credibility.

Emerging Initiative IssuesOnce a sectoral project has chosen a

particular sector and started to intervene byestablishing a programmatic entity withinthat sector, issues of implementation begin to

emerge. These include:

Do sectoral initiatives attempt to increaseonly the economic resources of low-incomepeople?

We have defined sectoral initiatives inpart by stating that the purpose of thoseinitiatives is “to obtain decent employment”for low-income individuals. Furthermore, wehave defined “decent employment” to mean“working toward providing livable pay andbenefits to lift low-income individuals outof poverty.”

However, it is important to note thatall of the practitioners we spoke with definedtheir work in terms of human developmentoutcomes as much as economic outcomes.Although all were quite aware that economicimprovement was absolutely essential, eachspoke, often quite eloquently, of his or hercommitment to helping low-income peoplefeel and act “whole” — in ways such asenhancing participants learning abilities, self-esteem, sense of community, and leadershipskills. Therefore, throughout our research webecame convinced that human developmentvalues, not hard numbers alone, inspirepractitioners to create and sustain theirinitiatives.

How do sectoral initiatives help make low-income people more valuable to themarketplace?

Although every sectoral initiative westudied has pursued different strategies intotally different industries, each sooner orlater developed its own training program. Nomatter which kind of training programdeveloped, all appear to share similar attributes.These attributes are not unique to sectoralprojects — that is, they do not define asectoral project. Rather, they appear typical ofother market-oriented training programs thatwork closely with employers — who will

34

decide whether or not to hire the program’sgraduates — and that use state-of-the-artadult education and peer support techniques.

However, the similarities among thesemarket-oriented training programs do appearto be essential to the success of all the sectoralinitiatives we studied. These similaritiesincluded:• Clear selection standards: Candidates for

training are carefully interviewed to matchthe profile of a successful graduate.

• Self selection: Candidates must passcertain “hurdles” on their own to indicatethe seriousness of their intent before beingaccepted into the program — perhapsrequiring something as simple as calling tomake an appointment for a follow-upinterview.

• “Tough love:” Trainees must closely followthe rules of the program — arriving ontime, completing homework assignments,cleaning up. In some programs just a fewinfractions can be cause for dismissal. Allprograms expect to dismiss at least a fewtrainees during the course of the program,underscoring the importance ofmaintaining high standards to theremaining trainees.

• Remediation: All programs invest a greatdeal of resources on “remediation” — verybasic schooling and work-readiness skills.The newer initiatives consistently reportedto us their surprise at the degree ofremediation required — even for thoseparticipants who had a high schooleducation and some work experience.

• Participant-oriented: The programs are alldesigned specifically for inner-city popula-tions who have had little success withformal education. Trainers tend to startrealistically “wherever the students are,”and then move them step-by-step —rather than simply presenting a set ofrote materials.

• Participant-supportive: Each of theprograms recognize that a variety ofbarriers, both personal and institutional,block the path of those transitioning frompublic assistance to employment. Thereforeeach has incorporated a counselor or someother support component to help thetrainee resolve transitional problems —whether an abusive boyfriend at home, ora recalcitrant case manager at the publicassistance office.

• Customer designed: The content of thetraining materials is designed, and regularlyupdated, by maintaining close communi-cation with the types of employers whoare expected to hire the graduates.

Each of these attributes contributestoward making the trainee ready and able towork, with the skills demanded by a com-petitive marketplace, and also helps shape thelabor market expectations and strategies ofemployers.

Mature Initiative IssuesInitiatives that have started to have

systemic effect on their chosen sector, despitetheir differences, appear to share at least twothematic issues:

How can these complex organizationsremain focused?

By the time an initiative has achievedsome sectoral success — usually at least fiveyears after its inception — it has typicallycreated a variety of program components inresponse to problems and opportunities.

Some of these components may beentities that have their own distinct staffstructures, and some may even be separatelyincorporated. For example, Focus: HOPEhas three training programs and threemanufacturing-related companies, with achild-care service supporting the variousprograms.

35

Not only are these models complex,but also they typically include a mix ofnonprofit and for-profit entities. For example,the for-profit CHCA spun off a relatednonprofit called the Home Care AssociatesTraining Institute for training anddevelopment activities; CMI is a for-profittraining school that originated from theIndustrial and Business Training Programs ofthe nonprofit Chicago Commons — and aclose working relationship remains betweenthe two entities.

This complexity of structures reflectsthe complexity of purpose that these matureprograms have developed in adaptation totheir perpetually changing environments. Yetthese complexities pose for all these programsa constant challenge of maintaining a unifiedstrategic direction while still encouragingadaptation and growth.

Complexities of strategic planningand legal structure seem inevitable in matureprojects that originate from a nonprofitcommunity base but function in the for-profitbusiness environment. Therefore, initiativesentering into this phase should be prepared toinvest considerable resources in addressingthese challenges.

How can these complex organizationsremain creative?

The tendency for large complexorganizations is to become rigid andbureaucratic. Yet each of the initiatives westudied appears not only to be maintaining itsflexibility, but also constantly working todirect its own future. This in part may beexplained by the market orientation of theseprograms, coupled with their constant effortto maximize the position of labor — all withlimited resources.

Yet a more intentional process alsoappears common in these initiatives. They allappear to be crafting themselves as “learning

organizations” — much like those describedin recent business literature by managementauthors such as Peter M. Senge in The FifthDiscipline (Senge: 1990). This process requiresan organization to consciously seek outinformation and create systems that help itnot only adapt (“survival learning”) but alsocreate its own future (“generative learning”).

Each organization has pursued thisprocess with differing levels of attention andintention, yet all seem to have been similarlyengaged in creating a unique learningenvironment for their staffs and boards.

Expansive Initiative IssuesOne of the sectoral programs has

matured to a point where it has replicated itsprogram in other geographic areas (CHCA).Others have diversified their programs intoclosely related industries (Focus: HOPE andCMI), or are planning for such diversification(CHCA). Project QUEST, although relativelynew, is currently planning for replications inother cities through its founder, MetroAlliance.

At this final stage of development, webelieve two thematic issues are of particularimportance:

How can entrepreneurial leadership beencouraged in sectoral projects?

All of the sectoral initiatives areremarkable in that they are led by a creative,effective, social entrepreneur. These leadersshape the direction of their programsinternally, and they tend to personify theirprogram to the other major actors in theirchosen sector. This type of leadership appearsessential to the success of sectoral initiatives.

We place this question in the“Expansive Initiatives” portion of thechronology because we believe that oncesectoral programs reach this level — wherethey are replicating and diversifying their

36

programs — they offer a unique opportunityto address this leadership issue structurally.For the first time in the field of communityemployment development, sectoral operationsare reaching a scale that will require constantrecruiting, hiring, training, developing, andpromoting of entrepreneurs and managers.This process of constant leadershipdevelopment will be essential to an expansiveprogram’s own continued growth, andtherefore it will be necessary for all of theseinitiatives to institutionalize their own processof leadership development.

How can sectoral programs sustainthemselves at such a large scale?

As these programs have grown inboth breadth and complexity, they all havecome to rely significantly on public dollars.None of these programs could have achievedscale without substantial government funding.

For example, Focus: HOPE hasdeveloped a close relationship with the U.S.Department of Defense, and its variousprograms name 12 other federal, state,county, and city “partners” that support itstraining initiatives. CHCA’s business incomederives almost totally from Medicare and

Medicaid government funds, and CHCA’srelated nonprofit training institute has relieduntil recently on government training dollarsfor about one-third of its budget, includingJTPA monies that originate from the U.S.Department of Labor. CMI also relies heavilyon JTPA funding.

These programs’ widespread relianceon JTPA funding for training programs is ofparticular importance. All of the sectoralprojects that are currently replicating ordiversifying have relied on JTPA funds, yet allare frustrated by it. JTPA programs, althoughfederally funded, are run locally — and all thesectoral programs we spoke to reported thatthey had found JTPA funding exceptionallyrigid.

Unfortunately, no funding strategyother than significant reliance on publicprograms appears readily available. Yet givenrecent statements by federal and state electedpublic officials of their intent to restrictgovernment funding — with explicit calls tocut or remove entirely the JTPA program —sector program’s reliance on public fundsmust be reviewed in light of the new, moreconstrained, public policy realities.

37

As the tenor of the welfare reformdebate escalates and the possibility becomesmore real that many new, unskilledAmericans will enter the job market, the needto find solutions to bridge the gap betweenthese individuals and the job market becomesmore urgent.

While sectoral employmentdevelopment appears to provide significantpromise, it is not yet a “field” of employmentdevelopment practice. Our preliminaryresearch shows that projects have arisenindependently, methodologies are diverse, andthe types of institutions that operate sectorprograms are very different. Therefore,practitioners are only now beginning toidentify themselves as part of a communitythat calls itself sectoral employmentdevelopment.

To the extent we have documented inthis paper that sectoral initiatives showpromise, we believe the encouragement ofsuch a field is important. Just as communitydevelopment corporations and micro-enterprise initiatives each over time came todevelop a distinct profile of practice, so mustthe sectoral model if it is to engender asignificantly larger number of initiatives,attract more resources, develop standards for

“best practice,” and craft a common languageallowing practitioners to share and contrasttheir experiences.

In order for sectoral initiatives todevelop into a field, several steps must betaken: • Greater agreement must occur among

many actors — including community-based practitioners, funders, policymakers,and the private sector business community— of the potential that sectoral employ-ment development holds for low-income,urban job seekers.

• These actors must come to share greaterclarity regarding the defining principlesthat community-based organizationsshould follow in their attempts to establishnew programs.

• These actors must come to appreciate thebroad range of forms a sectoralemployment methodology mightundertake.

The authors hope readers will findthis paper a thoughtful, initial attempt toidentify a range of defining characteristics andcommon principles — one that will facilitatethe emergence of the sectoral employmentdevelopment field.

38

VII. Conclusion

To the extent we

have documented

in this paper that

sectoral

initiatives show

promise, we

believe the

encouragement

of such a field is

important.

Best, Michael. 1990. The New Competition:Institutions of Industrial Sector Restructuring.Harvard University Press, Cambridge,Massachusetts.

Blank, Rebecca M. 1994. “The EmploymentStrategy: Public Policies to Increase Work andEarnings,” in Confronting Poverty: Prescriptions forChange. (Sheldon H. Danziger, Gary D. Sandefusand Daniel H. Weinberg, eds.) Harvard UniversityPress, Cambridge, Massachusetts.

Freeman, Richard and Katz, Lawrence B. 1994.“Rising Wage Inequality: The United States vs.Other Advanced Countries,” in Working UnderDifferent Rules. (Richard Freeman, ed.) RussellSage Foundation, New York, New York.

Harrison, Bennett. 1993. Building Bridges:Community Development Corporations and theWorld of Employment Training. Final Report to theFord Foundation, New York, New York.

Kasarda, John D. 1985. “Urban Change andMinority Opportunities,” in The New UrbanReality. (Paul E. Peterson ed.) BrookingsInstitution, Washington, DC.

Levitan, Sar A. 1990. Programs in Aid of the Poor,Sixth Edition. The Johns Hopkins UniversityPress, Baltimore, Maryland.

Lynch, Lisa M. 1994. “Payoffs to AlternativeTraining Strategies at Work,” in Working UnderDifferent Rules (Richard Freeman, ed.) Russell Sage

Foundation, New York.

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Pines, Marion and Anthony Carnevale. 1991.“Employment and Training,” in Human Capitaland America’s Future (David W. Hornbeck andLester M. Salamon, eds). The Johns HopkinsUniversity Press, Baltimore, Maryland.

Senge, Peter M. 1990. The Fifth Discipline.Doubleday, New York, New York.

Shapiro, Isaac. 1995. Four Years and Still Falling:The Decline in the Value of the Minimum Wage.Center on Budget and Policy Priorities,Washington, D.C.

Taggart, Robert. 1981. A Fisherman’s Guide: AnAssessment of Training and Remediation Strategies.W.E. Upjohn Institute for Employment Research,Kalamazoo, Michigan.

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Bibliography

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40

Sectoral EmploymentDevelopment On-Site Agency Case Studies

List of InterviewsCooperative Home Care Associates,Bronx, New YorkAugust 1-2, 1994

Rick Surpin, President

Peggy Powell, Executive Director, TrainingInstitute

Kathy Perez, Director of Training

Jeanie Taylor, Manager of Patient Services

Florinda DeLeon, Senior Home Health Aide,Assistant Instructor

Christine Edey, recent graduate, CHCA NursingProgram

Vivian Carrion, Team Leader

Marva Diggins, Home Aide

David Gould, United Hospital Fund

Betsy Smulyan, Finance

Focus: HOPE,Detroit, MichiganAugust 29-30, 1994

Father William Cunningham, Executive Director

Eleanor Josaitis, Associate Director

Charles Grenville, Development Officer

Tim Sullivan, Manager, Focus: HOPE CompanySales

Thomas Armstead, Assistant Director for For-Profit Companies

Kenneth Kudek, Assistant Director for TrainingPrograms

Alice Swanger, Center for Advanced Technology,Education Manager

Clifford Appling, Manager, FAST TRACK

Focus Group with FAST TRACK participants

Focus Group with MTI participants

Gail Lutey, Complete Business Solutions

Jerry Madynski, Detroit Edge Tool

Chicago Manufacturing InstituteChicago, IllinoisSeptember 14-15, 1994

Ric Gudell, Director

Harry Tobin, Assistant Director for InstructionalServices

Leigh Diffay, Assistant Director for Training

Kathleen Dowling, Director, EmploymentAssistance

Steve Lucas, Director, Manufacturing Services

Art Perez, Director, Industrial MaintenanceMechanics Training

Peter Tremmel, Director, Single Spindle ScrewMachine Operator Training

Ricardia Davis, Instructor, Quality Control

Valores Carter, Instructor, Quality Control

Focus Group with Industrial MaintenanceMechanics and Single Screw Machine participants

Project QUESTSan Antonio, TexasJanuary 9, 1994

Jack Salvadore, President

Jerry Barucky, Director of Occupational Analysis

Clifford Borofsky, Associate Director ofOccupational Analysis

Mary Pena, Counselor

Appendix

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