Hamstrung by the tightest labor market in a generation, employersare turning to a long overlooked and largely untapped labor source:the urban and rural poor.
As jobless rates hover at 4.3 percent nationally and 3.3 percentin Massachusetts, more companies are recruiting from communities onceignored, offering jobs and training to candidates with limitededucation.
That strong hiring has helped drop unemployment among minoritiesto historic lows nationally: 7.8 percent for blacks and 6.6 percentfor Hispanics in January."Basically, one in five people with a high school diploma or lessis not actively engaged in the job market, but this group is thelargest untapped source of labor in the country," said economist PaulHarrington, associate director of the Center for Labor Market Studiesat Northeastern University. "So, when we say some employers arestarting to tap this group, we are talking about a pretty big laborpool."Retailers and supermarkets were among the first to turn topreviously shunned candidates. Now the trend is showing up amonghigh-tech companies and financial services firms.In the first private partnership of its kind, nine financialinstitutions in Boston have pledged a total of $1 million over threeyears to send underemployed and jobless candidates from four inner-city training programs to an academy created by the New EnglandCollege of Finance. Their goal: to fill thousands of future jobswith trained recruits from urban areas who will earn $18,000 to$25,000 per year, plus benefits.In Watertown, NewRiver Investor Communications Inc. hired 10staffers from Boston neighborhoods to fill $10-to-$15-an-hour basicprogramming jobs, and it is looking for more. The company, whichsends financial information over the Internet for such companies asPrudential Insurance, Loomis Sayles, and Salomon Smith Barney, has 53employees.Said Karl Johnson, managing director of production: "When you havelow unemployment it is very difficult to recruit people because somemay be over qualified and they are not looking to stay and grow withthe firm . . . We are looking for people who want to stay and arewilling to learn."Similar local efforts are tapping people like Ali Fernandes, whothree years ago was a high-school dropout with dim job prospects.But after a stint with City Year, a volunteer civic organization, the21-year-old from Dorchester earned his high school equivalencydiploma and landed a job at Cambridge-based CitySoft Inc., anInternet software firm that hires inner-city workers to develop Websites at $10 to $15 per hour."Before, I did not know what I wanted to do," he said. "Now, Iknow I want to go to school for computer science and business. I'vegrown in my interests."I'm a lot more marketable than I was before," said Fernandes,whose goal of some day owning a high-tech marketing company no longerseems out of reach.A key difference between such programs and many previous ones:Employers are motivated overwhelmingly by bottom-line self-interest,not the societal greater good. "This isn't philanthropy," saidCitySoft cofounder Nick Gleason."We have an enlightened self-interest," acknowledged GeorgeRussell, senior vice president and director of community affairs atState Street Corp. "We need workers, and we need them in an economywith a very low unemployment rate."Nevertheless, some question whether companies are simply lookingto reap gains by hiring easily exploited workers and paying them lowwages to do entry-level, dead-end jobs."Obviously, this is better than no job, and better than workingat McDonald's," said Brandeis University labor historian JacquelineJones, author of "American Work: Four Centuries of Black and WhiteLabor.""But if we are talking about the big picture and the long run,then the jobs must lead to skill acquisition, to higher annualsalaries, and to an incentive to get more education," she said."Otherwise, what we are really seeing is the 20th centuryequivalent of dead-end factory jobs in industries that already relyon a vast army of telemarketers, keypunch operators, and low-leveldata programmers."Robert Regan, president of the New England College of Finance,maintains the partnership between the Boston area financialinstitutions, the college, and several community organizations is a"win-win" situation for all. "These are real career ladder jobs,"Regan said. "These are not maintenance jobs. . . These are career-track jobs, with benefits and a fully paid education at the college.The emphasis is on long-term retention, not hiring people and thenwishing them well."Months before the pledge was announced last month, Regan and StateStreet's Russell began discussing the idea of bringing employment toinner-city workers while focusing on intense training, job placement,and mentoring."We decided to focus our energies on putting people to work,particularly African-Americans and minorities who have been left out,are unemployed, or underemployed," said Russell. "We aren't lookingfor college graduates. We need people who are articulate, with goodwork habits and a good work ethic."The agreement comes at a critical time for Boston's financialservices industry. Twenty-five percent of the mutual fund industry'sassets are housed in Boston, making it a vital center for an industrywhose growth is expected to lead to hundreds of job openings inBoston this year alone.The Urban League of Eastern Massachusetts is expected to refer 90people to the New England College of Finance's new training academythis year. Action for Boston Community Development, a nonprofitcommunity organization, will send 100 recruits who have completedbasic skills training and meet partnership qualifications."If we can pilot a successful year and demonstrate what can bedone, the jobs are out there and they are in the thousands, not justthe hundreds," said Joan Wallace Benjamin, president of the UrbanLeague of Eastern Massachusetts. "This will definitely have animpact on the community. People will be able to be more activeconsumers in this economy. These companies have been around for along time, which means an opportunity for long-term work and careergrowth."Recruitment of the nation's poor is hardly limited to thefinancial services industry. Two years ago, Gleason, 31, then anewly minted Harvard MBA, and James Picariello, a 27-year-oldcomputer whiz, launched the Web development firm CitySoft from theirlivingrooms with the aim of recruiting directly from Roxbury, Dorchester,and Mattapan.Their motivation was two-fold: to inexpensively tap the Internetmarket by training their own people rather than hiring recruitsdirectly from college, and to spur hiring in long forgotten inner-city areas. Gleason, a former community activist turnedentrepreneur, hopes other firms will follow their lead.CitySoft now has four consultants and six employees from Roxbury,Dorchester, and Mattapan who create Web pages for the firm's 30clients, including ITT Sheraton, Allaire Corp., and BankBoston. Thecompany founders say earnings should reach a modest $1 million byyear's end. It also plans to extend recruitment efforts to include amajor community development corporation in the South Bronx. CitySoftlends its consultants and some of its employees out to clients inneed of Web site development. Other employees work out of CitySoft'sCambridge office.Among its employees: 23-year-old Kelby Mendes. He was making $7an hour and struggling to pay for classes at Roxbury CommunityCollege when he heard that a South End training center run byactivist Mel King had a direct link to jobs at CitySoft. Last year,Mendes enrolled. Today, the Roxbury resident earns $11 per hourdeveloping Web pages. "I see myself always taking programmingclasses on and off just to stay up to speed," he said. "That's theonly way to solidify my progress in this field."Such efforts in the Boston area are mirrored by efforts in otherregions of the nation. When Beverly Lucas and partner Jerry Hill,owners of The Software Factory, moved from the Washington, D.C., areato South Boston, Va., two years ago, unemployment in that town ofabout 9,000 farmers and textile workers was hovering between 11 and13 percent. Since then, they have been training jobless andunderemployed workers to do basic computer programming. Lucas andHill say their start-up will hit $4 million in sales this year --more than double earlier projections."We came here because there was a pool of people available, and aneed for tech jobs," said Lucas, 48, whose company employs 25. "Theupshot is we're benefiting and people in the town are too."For high-tech companies that venture into poor areas in search ofworkers, however, the road can be rocky. CitySoft cofounderPicariello said he has gone to Massachusetts training centers torecruit, but limited funding has made it difficult for them to fullysatisfy the company's needs. Plus, he said, "There is a realdisconnect between what people are being trained to do and what wereally need."Royal Bolling, director of a technical training program at theMandela housing development and at Castle Square Apartments inRoxbury, trains 20 people in day classes at each location per year.Of those, 88 percent land jobs. The retention rate? Eighty-five to90 percent.But, Bolling said, more needs to be done -- and his hands aretied."I can't produce what (software companies) need overnight," saidBolling. "We take people with zero skills to the point where theycan do, for example, Microsoft Word for Windows. When they leave,they have the foundation for further training. To prepare people forthe employment the software companies have, the industry would haveto get involved."
