435: How To Create a Job

Ira Glass

Here's what it's like to hold political office in the current economy. In the last year, Jay Nixon, the governor of Missouri, has done a steady stream of events announcing new jobs in this state, a new IBM office with 800 jobs, a Sabreliner expansion that'll create 400 new jobs. And in November, he went to a plant in Macon, Missouri, that makes fishing reels to announce not hundreds of jobs, or dozens of jobs, but eight jobs. Eight. He did a press event for eight jobs.

Ira Glass

This is what it's come to, America. You can hire your very first employee and the governor shows up with TV cameras. You can't be politics in America right now without promising people jobs. Right? You know what I'm talking about? You've heard this from like every politician in America?

Ira Glass

That would be, of course, Newark Mayor Cory Booker, Alaska Senator Lisa Murkowski, Democrats Nancy Pelosi and Harry Reid, Florida Governor Rick Scott, and Donald Trump. In fact, if anyone these days brings up any subject besides jobs, people complain, why aren't we talking about jobs?

Ira Glass

This is Rush Limbaugh last week, when they Obama administration was still deciding whether or not to release photos of the dead Osama bin Laden.

Ira Glass

Or, on the opposite side of the political divide, on the Rachel Maddow Show, Dean Baker of the Center for Economic and Policy Research asks here why are we focusing so much on the deficit?

Ira Glass

Or, just to show the all-purpose usefulness of this trope, here's Republican Congressman David Rivera being questioned about an investigation into his campaign finances. The interviewer tells him,

Ira Glass

See how easy?

Well today on our radio show, with all these people saying it is time to create jobs, and promising that they're going to create jobs, and asking why aren't we spending more time talking about creating jobs, we ask, what does it even mean for a politician to create a job? Can they really create many jobs? Is that real? Is that a real thing? Is it possible the whole thing is just a lot of well-meaning hot air? From WBEZ Chicago, it's This American Life distributed by Public Radio International. I'm Ira Glass. We've been looking into this for months with our colleagues from Planet Money. And we have answers. Stay with us.

Ira Glass

Act One, Can the Government Move My Cheese?

All right. One of the big ways that politicians used to create jobs, the way that FDR did it back in the '30s-- put more people on the government payroll, build dams, build roads, spend and spend and spend-- nobody, nobody with any power anyway, seems to be talking about doing that. But there are all sorts of things that politicians are doing to create jobs, only they're jobs in the private sector. Chana Joffe-Walt explains how.

Chana Joffe-Walt

In this story, I'm going to be talking about Wisconsin Governor Scott Walker. But I should tell you up front, I'm not going to be talking about any of the things you know or have heard about him, which I'm assuming are mostly this.

Chana Joffe-Walt

Yeah. Yeah, all that, I am not going there. I will not be saying the words union or collective bargaining in this story-- except for that time, and that's it. I want to talk about something else.

So before Walker became famous nationwide for taking on Wisconsin's public unions, in Wisconsin, he was famous for this-- his pledge to create jobs, something Walker has never been understated about. Here he is at a campaign event in February of last year.

Chana Joffe-Walt

Walker's pledge to create jobs wasn't earth-shattering in and of itself. But what was interesting about it was that he was so specific. If we're going to look at how a politician creates jobs, this guy named a number, and not just once.

Chana Joffe-Walt

This is Craig Gilbert, a political reporter for the Milwaukee Journal Sentinel.

Chana Joffe-Walt

Last February into the spring, Scott Walker had two opponents, Democrat Tom Barrett and Republican Mark Neumann. For months, the two men ridiculed Walker's number, his specificity. They called his 250,000 jobs number meaningless, arbitrary, an empty promise. "Why 250,000?" they'd say? "Because it's a round number? Why not 285,000? 300,000?"

This went on and on, until around June it quietly stopped. And the next thing that happened was that, one by one, Walker's opponents named their own numbers. First Barrett.

Chana Joffe-Walt

Then Neumann.

Chana Joffe-Walt

They couldn't beat Walker at the numbers game. On November 2, Scott Walker, the first to name a number, won the election for governor. The 250,000 jobs man would have his opportunity to job create.

So, is it working? Are jobs being created in Wisconsin? Sure, we're in a recovery from the worst recession since the Great Depression. You may have heard that. So yeah, there are new jobs in Wisconsin. All you have to do to see job creation happening is look in the newspaper, the Milwaukee Journal Sentinel classifieds. Bed Bath & Beyond has a couple positions, as do several fast-paced dentist offices. There are opportunities for self-starters interested in selling Hondas. Titan LED invites sales representatives to join the lighting revolution with a splashy full-pager.

Chana Joffe-Walt

This is John Ruscigno performing his job title, Titan LED Marketing Director. He told me they're hiring sales agents like crazy right now. And these are newly created jobs. The company is brand new on the LED lighting scene, a booming industry.

Chana Joffe-Walt

Two sections down in the want ads, Brookdale Senior Living is hiring 15 people. The ad explains, "Brookdale Senior Living is growing fast." And in person, the Executive Vice President and Treasurer Kristen Ferge explains why.

Chana Joffe-Walt

Translation, there's about to be a lot of old people. There aren't enough places to put them. And that's what Brookdale offers, places for old people.

But-- and this is an important but-- I asked the LED guy if he had heard of Governor Walker's job creating plans. He had not. Nor had the majority of people I called in the classifieds. Kristin at Brookdale had. But she Walker was not the reason Brookdale is building new old age homes and creating jobs. That, again, is thanks to the supply-demand disconnect.

Governor Scott Walker is not behind these jobs. He's not aging people or making them crave LED lighting. These jobs are created on their own. In fact, before Walker was elected, before he did anything in office, the Wisconsin Department of Revenue projected that the state would add about 190,000 jobs by 2015, Walker's deadline. So 190,000 jobs if Walker stepped into his fancy governor's office day one and proceeded to do exactly nothing all four years. If he played FarmVille on Facebook his entire term, jobs would still be created.

So another way to think about the 250,000 jobs man is that he's got 190,000 that are freebies, which means he's actually going for 60,000 to reach beyond what would happen anyway. Now, how's he going to that?

The Wisconsin Capitol was sieged by anti-Walker protesters for weeks in February, early March. When I arrive, it's almost April. And the Capitol looks kind of like the front lawn of a frat house Monday morning. There are a few soppy posters poking out of garbage cans, small groups of protesters show up at random hours, the drum circle has been reduced to one guy with a pail.

Governor Walker sits one floor above that scene. There's no whiteboard in his office with a jobs tally, no big red 250,000 target, just him in a suit with a slogan.

Chana Joffe-Walt

Scott Walker has a Clark Kent thing going on. He's sort of generically handsome. He blinks in sync with his speech. He's a fan of the word "literally." And he begins our interview by telling me about the night he won the election and introducing me to his sign, a move I'm pretty sure he uses with all the reporters. It's green. Picture a campaign poster. But this one just says,

Chana Joffe-Walt

Walker and I talked in circles for a bit. I ask him, "But how do you do that, create jobs?" He tells me, "The private sector create jobs. The government just has to get out of the way." But, of course, his pledge was that the government led by him would create jobs. I asked for clarification, and eventually we come to this. Walker believes government helps create jobs through incentives. He speaks mostly of taxes and exclusively about lowering them, something he started working on right away.

Chana Joffe-Walt

Under these new laws, employers who create jobs now get a tax deduction, $2,000 to $4,000, depending on the company size, per head. So $2,000 to $4,000 deduction for each new hire. Companies that relocate to Wisconsin get two years tax free. And Walker expanded another tax credit program for companies to make capital investments that create jobs.

Now all this, I should say, is an incredibly typical approach. Hand out goodies to entice the private sector to hire. Republicans tend to do it through tax cuts, Democrats through spending, many do both. But they're all basically after the same thing-- less money for the government, more money for the private sector, get the jobs numbers to go up.

Chana Joffe-Walt

This is kind of a weird thing to say. On the one hand, Walker is saying he didn't create those jobs. Government can't create jobs. But on the other hand he's saying it's helpful to have all these incentives to encourage businesses to create jobs.

Chana Joffe-Walt

Right now Walker is on target. If job growth continues at the current rate, he'll make his 250,000. And in his mind, he will have done it in a very subtle, specific way. The role Walker has cast for himself is one of professional government seducer, in which he makes the idea of hiring-- something you maybe had on the mind already-- look that much more appealing. He's adding some alcohol to a singles mixer, maybe dimming the lights a bit. And then, let the hiring begin.

Chana Joffe-Walt

Walker signed part of his jobs legislation into law at a company called Saris in Madison. They make bike racks. It's a small business that's growing, likely job creator, good place to make an announcement like this. So a good place to test his theory, too, right? To ask if these incentives actually make a difference.

The CEO, Chris Fortune, was in Dallas at the Super Bowl when the governor visited. When I visited Saris, he was in the back office with a cold. And he got out a calculator.

OK, let's say at the end of the year, I've hired five people. I get a $4,000 deduction for each. So $20,000 off my total income, that's a deduction, which at the end saves me something like $270 per new employee.

Chana Joffe-Walt

Are there employers for who the math does work who could get Walker those extra 60,000 jobs? I asked Governor Walker.

Chana Joffe-Walt

I called City Brewing. They told me yes, the governor's tax incentives played a role-- at one point they even said a large role-- in their decision to hire. They'd been wanting to add that sixth line for a while. It was in the plans a year ago. They're making a $13 million investment, so $490,000 off their income taxes is a small incentive. But they said it did help push them over the edge to do it now, to say yes to job creation.

So, add 100 jobs to Walker's white board. I ask him for more examples.

Chana Joffe-Walt

Stoughton Trailers is 20 miles southeast of Madison. You know the boxes you see trucks pulling around the highways carrying fruit, and toys, and toasters from one place to another? Stoughton makes them. Keith Wise makes the hires, 478, which is a lot of people to hire.

Chana Joffe-Walt

Stoughton will get a $750,000 government loan for investing $11 million in a new plant. I ask if they would have hired the 478 people without these government programs.

Chana Joffe-Walt

So out of 478 jobs, maybe Walker gets to count half? Keith would not play this game with me.

And I can recognize that it's kind of a ridiculous game. Andrew Reschovsky, an economist at the University of Wisconsin-Madison basically told me as much. He kept repeating, look, the decision to hire someone is so complicated. Any employer he told me, has a long list of factors to consider.

Chana Joffe-Walt

It's kind of a genius political move to say that you, the politician, are going to create jobs. A job gets created and it could have been you. Or it could have been because people are getting old, because we're coming out of a recession, or because people are buying more bikes.

Chana Joffe-Walt

Which is, of course, exactly what you want if you're a governor. You have four years. You want the jobs now. Reschovsky says, well, if you get a governor who's willing to be patient, there are things he or she can do that will likely help create jobs. Such as--

Chana Joffe-Walt

But you won't see those results until the end of your second term-- if you're lucky-- or until the next guy is in office.

So in the meantime, politicians with a jobs number to achieve focus on the short term. Republicans and Democrats hand out tax cuts and other incentives to seduce employers into hiring. And of course those goodies cost something. In Wisconsin, they account for $117 million in taxes that will not be collected over Walker's first two years. This in a state where they're fighting over every dollar.

So that leaves the government with less money to do the things Reschovsky is talking about, to spend on education so that employers can hire smart people, to build good roads and internet infrastructure so businesses can transport goods and innovate.

If you go with tax cuts, you might seduce some employers to hire now. But you'll hurt future employers who needed you to spend on schools so they could find educated workers to come up with great new ideas. If you go with long-term spending, schools and internet, you have to increase taxes to pay for it, which can mean businesses on that job creation fence might be pushed to the anti-job-creating territory.

In both cases, you've zeroed out your efforts. You've had some effect on the one side but canceled it out with what you did on the other side. But that's the choice you have, long-term or short-term. Whether the governor is Democrat or Republican, someone you love or someone you hate, politicians don't have a lot of options. At best they'll get a bunch of new jobs for the somersaults it took to get there. At worst, they had some impact, did something, but have no idea how to measure exactly what.

Ira Glass

Chana Joffe-Walt. She's part of our Plant Money team. Planet Money is a co-production of our program and NPR News.

Coming up, Oklahoma versus California, and Oklahoma wins. That is in a minute from Chicago Public Radio and Public Radio International when our program continues.

Ira Glass

It's This American Life, I'm Ira Glass. Each week on our show we choose a theme, bring you a variety of different kinds of stories on that team. Today's show, how to create a job.

Ira Glass

Tuesday, Holland, Michigan.

Ira Glass

Deborah Ozga leads five people through a sea of cubicles to be interviewed for call center jobs at Novo 1. People on headsets look up and watch them pass. Not long ago, that was them. The facility has gone from 10 employees last summer to 315 as of Tuesday. Novo 1 got a $1 million grant from the federal government and $115,000 tax abatement from the city to locate here in Holland to create those jobs.

Tuesday they were looking to hire 15 more people, which, in the current economy, seemed like it might be a nice thing to hear. So our producer Lisa Pollack went there to record.

In the conference room, Deborah explains about the company and the positions that she's filling. They're call center jobs doing roadside assistance. The pay is $9 with full benefits, $10 if you do well in your first 90 days. That's $20,800 a year.

Ira Glass

She's explains that it's a job where you log in and out every time you take a break or go to the bathroom, that computers and phones are monitored, that you pay an $80 deposit for your headset, taken from your paycheck in two installments. That it is a very structured job for people who thrive in a structured environment.

And then the interview begins. And it's a group interview, all five people at once.

Ira Glass

This woman was the oldest in the group, and the only one in a pantsuit, had one of those executive, leather notebook folder portfolio things with her, and seemed like a shoo-in.

Ira Glass

Once that gauntlet of an answer had been hurled-- in her downtime she simply does more work-- what's everyone else supposed to say?

Ira Glass

Touche. Where does anybody go from there?

Ira Glass

When Deborah asked the group how they feel about working in a place that's so regimented, with strict attendance policies the way Nova 1 has, again they're being interviewed. What are they going to say?

Ira Glass

Deborah did two group interviews on Tuesday, 13 people in all. And a few hours after they left, Deborah sat down at her office [PHONE DIALING] for the moment of truth.

Ira Glass

This, of course, is John. He's 21, worked at a Pizza Hut, sold some vacuum cleaners on commission, worked at the mall during holidays. He has never made over $8 an hour. So he was pretty excited.

Ira Glass

This is Heather, who's 30, worked at the photo studio in a Walmart for five years, but was laid off a year and half ago. Collected unemployment, which ran out in March.

Ira Glass

She and John start work May 23.

Ira Glass

Which brings us to act three, Job Fairies. If you think about it, who wants to create jobs? Not businesses. Most companies would love to do whatever they do with fewer people and fewer jobs. It would be cheaper. It's us who want more jobs, and the politicians we elect. And the people who work for those politicians who are supposed to do the dirty work and make the magic happen, make the jobs appear, these are the economic development officers. And just about every town or county above a certain size, every state, has an economic development team going around trying to figure out how to get more jobs for the people who live in that place.

Julie Snyder and Planet Money's Adam Davidson spent some time at one of their conventions in San Diego for the International Economic Development Council.

Julie Snyder

When we got to the IEDC leadership conference at that Westin Hotel in San Diego a few months ago, the national unemployment rate was at 9.4%. The US lost 6 and 1/2 million jobs in the last few years.

Adam Davidson

I know. And we were thinking, god, these people are going to be so miserable. These are the people on the front lines. They're counting jobs every day. So we figured the mood here would be really bleak. We were wrong.

Julie Snyder

This, I swear, is only a small sample of all of the times Adam and I were assured that not only are Casper, Nashville, and Augusta doing great, but it's boom time in Houston, Oklahoma City, Jefferson Parish, Louisiana, Rio Rancho, New Mexico.

Adam Davidson

Everybody, every single person told us about their great, great economy. The moment for me when I realized oh, they're lying, or at least oh, they're spinning, was when the economic development person from Saginaw, Michigan, was telling me how great things are going there.

At that moment, Saginaw had an unemployment rate well above 13%. That is way worse than the national average. The FBI says Saginaw is the number one most violent city in America.

Julie Snyder

We heard so much boosterism at this conference. It turns out getting jobs to your city is a lot like dating. You want to act like the last thing in the world you need are jobs in your town. Your city is so cool, so in demand, so business friendly that jobs are everywhere.

Julie Snyder

This is this guy Walter Sprouse from Augusta, Georgia. He literally talked for a straight minute and a half listing off all of the companies in the Augusta area.

Adam Davidson

Yeah, he's showing that he's business friendly. That's the key for economic development. If you have a lot of unemployment--

Julie Snyder

Wait, Adam.

Adam Davidson

Yeah?

Julie Snyder

He's not done.

Adam Davidson

OK, OK, I get it. But, of course, you don't want any business who might be thinking of coming to your town to hear that you have high unemployment, the people there are near depression levels. Because that might signal that you're some lame loserville with high taxes, tons of regulation, or a low skill base, meaning people in your town are uneducated or stupid.

Julie Snyder

So how do these people create jobs in their communities? First they do something that they like to call business attraction.

Adam Davidson

Yeah, that's what they call it, business attraction. I came up with a different word. I call it stealing. They're trying to steal jobs from each other. After a few hours, I was thinking this conference is like a convention of incredibly collegial pickpockets. Everyone's politely sharing tricks of the trade, telling war stories, and all the time they're sizing each other up, figuring out, hey, what has that guy got that I could steal?

Julie Snyder

The economic developers definitely did not like to talk about stealing. When it would come up, they would smile awkwardly and try and change the conversation. Let's go back around to listing all the advantages of their city. That's basically what Janet Miller did, the head of Nashville's Chamber of Commerce, when I asked her about stealing. But she did admit it's her job to pay attention to what's going on in other places.

Julie Snyder

Nashville took some hits during the recession, primarily in manufacturing. But it's a powerhouse for health care companies and, of course, music and entertainment. Now Janet is focusing her business attraction skills on those two industries. She doesn't always expect whole companies will move, but maybe she can get one department or a growing division to relocate.

Adam Davidson

You really got the sense that the number one activity for economic development people all over the country is to figure out, how do I steal companies away from California? California is, of course, the most populated state, the biggest economy in the US. And it's got some of the strictest regulations in the country, some of the highest taxes.

I met this one woman, Ioanna Morfessis, from Phoenix. She used to run the Greater Phoenix Economic Development team. And she was the one person who loved talking about how much fun it was to steal jobs from California.

Adam Davidson

Oklahoma, the hero at this conference. The most business-friendly state according to lots of the people who spoke here. Most of the country has been suffering, and Oklahoma's economy is on fire. Oklahoma City has been a leader in job growth. Over the last five years, it was ranked America's most recession-proof city by Forbes magazine.

Julie Snyder

Oklahoma city is known for what's called a low-cost, high-value combination. And they're snagging jobs from across the country, making headlines last year when Boeing announced a plan to move 550 engineers there from Seattle.

Adam Davidson

This is what drove me crazy about this conference, actually about the whole profession of economic development. They're not creating jobs. They're just moving jobs around. Arizona steals a company from California by offering some tax break and lighter regulation. Then Texas cuts taxes a bit more, does away with even more regulation, and gets the company to move there. That doesn't help anything. We still have the same number of jobs. But now we have this race to the bottom. Who can cut back government services the most? Who can eliminate the most regulation?

Julie Snyder

Something else we learned here, economic development is actually really trendy work. Everyone gets obsessed by the same way of attracting businesses. It used to be smokestack chasing, trying to get that one big factory to come to your town. But then that one big factory ended up in China and places like that.

Adam Davidson

Then the big trend was clusters, getting lots of the same kinds of companies in the same industry all in one place, you know, like Silicon Valley. Suddenly every small town with a junior college was announcing we're going to become a major biotech cluster.

Julie Snyder

Which then leads to the next big trend. Creative cities, modeled after places like Austin, Texas, create a quote unquote "cool place for people to live." The young and smart will flock there. They'll open a coffee shop. They'll open a tattoo parlor. And hopefully those crazy kids will start to build a tech empire.

Adam Davidson

You know, I've always said it, Julie. Tattoo parlors means massive economic growth.

Julie Snyder

The next wave, the one just getting popular now, has kind of a dorky name. Economic gardening. But the idea is forget about bringing the big, established companies to your town. Help the people who already live there become entrepreneurs, start their own businesses. This involves a lot of small, painstaking work, gathering market research for local businesses, helping them look for expansion opportunities, set them up with small business loans, things like that.

I talked to Robert Barnes, an economic developer from Casper, Wyoming, and told him I thought it seemed like a lot of work for maybe a small return. But he disagreed.

Julie Snyder

Is that frustrating, though? Because really you could do a ton of work-- help them secure loans, help them with expertise on getting going-- but five years from now they still could only be 15 people.

Julie Snyder

Really, you don't mind?

Julie Snyder

It doesn't look that impressive.

Adam Davidson

When I learned about this, the economic gardening entrepreneurship approach, I loved it. Because if it works, it actually is increasing the number of jobs in the world. It's making the country richer.

Julie Snyder

But how many jobs is it increasing?

Adam Davidson

Yeah, we couldn't get an answer to that question, could we? This turned out to be a major issue for economic development people. Because they just don't know how to count those jobs. In fact, they're so obsessed with it, there were two separate sessions at this conference devoted to figuring out how to solve this problem.

Adam Davidson

This is Tim Chase, head of the Chamber of Commerce in Wichita Falls, Texas. And he runs this committee of economic developers. They're trying to solve this problem. It's not just how do we count the jobs we create through economic gardening. Perhaps more importantly, it's how do we convince our bosses we're creating jobs through economic gardening?

Julie Snyder

But actually I don't understand what that means. A reward ratio?

Adam Davidson

I think, if I understand what he's saying correctly, is basically in this new world, where there aren't many big factories moving around, you've got to spend a lot more money and a lot more time to get a lot fewer jobs. That's a lower reward ratio.

Adam Davidson

And you'd better hope that your bosses, your leadership, are OK with those realities, or the job you'll have to worry about the most will be your own.

I found this particular section the most revealing of the whole conference. Because most of these economic developers come from places that have been losing jobs for years. And they really have one assignment, increase the number of jobs in your town. And when you don't have a lot of success to show for it-- they're great at sales, they're great spinners-- but they really need to be able to prove to their bosses, hey, I'm worthwhile. I'm doing something valuable to our community even if you can't see it, even if we have fewer jobs this year than we did last year.

Julie Snyder

You and I had a different take on the conference, though. I left there thinking, good. These people are good. I think it's good to support businesses. It's good to help them grow. It's good to be thinking about how to bring more jobs into the city in the future. Even more important now during a slowdown to be planning this stuff.

Adam Davidson

I don't know, I didn't think they were evil or anything. But I just felt like they're not making a big difference. We tried to figure this out. We tried to measure the impact that all these economic development people have on the national economy. What we found is that there's no data. There's no way to measure. Do they make America richer? Do they make America poorer? Do they have no effect at all?

Julie Snyder

OK, but we could find local numbers, local economic developers have those numbers. So let's use, for an example, Houston.

Adam Davidson

Yeah, they're considered one of the best economic development teams in the country and one of the best economic development states.

Julie Snyder

Yeah, so the guy who runs economic development there, he told me that they're doing great. And because of an economic development plan that they've had in place, they're increasing the number of jobs in the Houston area by 140,000 jobs over a 10-year period. They're halfway there into their plan now, and they're right on track.

Adam Davidson

All right so that they've created around 70,000 jobs over five years. And that's great news for those 70,000. Let's do some math, though. That's around 14,000 jobs a year. Now I looked it up. The Houston area has around 2.7 million jobs. So if their numbers are right, the economic development people added 1/2 of 1% of the jobs in Houston each year.

Julie Snyder

Oh, that does seem kind of low.

Adam Davidson

I also saw that Houston has 240,000 people who are out of work who are looking for work. So it just shows you that economic development, even when it's at it's best, even when it's really, really successful, it's just not going to solve the fundamental problems of our economy. And maybe that's just asking too much anyway. I mean, most of these economic developers said that they're basically like the rest of us. They're waiting. They're waiting and hoping that this economy will turn around, that companies will start doing better, and they'll start hiring again.

Ira Glass

Adam Davidson and Julie Snyder.

[MUSIC - "OKLAHOMA" BY THE ANSWERING MACHINE]

Ira Glass

Act Four, Be Cool, Stay in School.

OK, here's something I didn't know before we started working on this week's radio show. I knew that 9% of Americans are unemployed. But college graduates, their unemployment rate is half that, 4.5%. People with PhDs, it's even better, 2% unemployment. High school grads are right near the national average, 9.7% unemployment. And people who did not graduate high school, their unemployment rate is almost 15%, which means the unemployment problem in this country is mostly a problem for the uneducated, the unskilled.

And what's strange is that those economic development people that Adam and Julie just talked to, they are mostly focused on attracting jobs for the highly educated, for people with at least college degrees. In putting together this week's show, we spent a lot of time looking for some economic development person, some politician, who's trying to attract or help businesses that specifically employ the population that needs the jobs the most, the undereducated. We reached out to industry groups. We called people around the country. We couldn't find anybody specifically trying to attract jobs for this group.

But what does exist for this population are programs that try to transform those high school dropouts into people with the skills that employers are looking for. Adam Davidson visited one of these programs in Rochester, New York, to see it in action.

Adam Davidson

Pathstone is a large nonprofit that tries to get jobs for the people who have the hardest time getting employed, former drug dealers, high school dropouts, people with prison records.

Adam Davidson

Danielle Johnson is teaching a class that's part of the Pathways Out of Poverty program. This session has about 15 people, most of them women, mostly in their 20s. There are a few guys with prison records, a few older people. The first class focuses on the most basic of life skills, like identifying what it is you want out of life.

Adam Davidson

The main thing going on here is just a weeding people out, the people who can't show up on time, or can't act appropriately, or who wear the kind of clothes that employers would not want. A big issue, they tell me, is basic hygiene. They need to teach some students about deodorant. The idea is, if you can't behave correctly in this class, we're not going to recommend you for a job.

The other big challenge? Getting the people in class to think long-term, to understand that sacrifices today can mean good things in the future.

Adam Davidson

The students who make it on time most days, who show the teacher they can behave, dress, wash, they get to graduate to phase two. Of the 170 students who started the two-week class, 88 graduated to phase two.

In phase two you get some training in things like energy efficient construction techniques. Of the 88 people who started, 45 finished that second course, and now get paid around $12 an hour to do things like weatherize homes, you know, spray insulation in old houses to make them more energy efficient. All of this-- the classes, the weatherizing jobs-- are paid for by a multimillion dollar stimulus package grant from the US Department of Labor to simultaneously promote employment and green technology.

That means that when the grant runs out in early 2012, those jobs will go away. By that point, the government will have spent $2 million to create 90 jobs. That's around $22,000 a job.

Rochester actually has some really good jobs. The big companies in town-- Kodak, Xerox, Bausch and Lomb-- created this cluster of companies that deal with lenses, camera lenses, copier lens, contact lenses. And lenses are really hot business right now. Every phone's got one, every computer, DVD player, scanner.

Around 1/3 of the people at these companies have advanced degrees like PhDs in optical engineering to do research into new lens technology. But 1/3 to 1/2 of the jobs in these companies are for people who don't even have BAs-- high school grads, even some people with GEDs. And those jobs pay pretty well. Even with just a high school degree, you could easily make $50,000 a year. And in Rochester, that's solidly middle class.

And that's what Pathstone wants for their clients. Their most ambitious goal is to get the graduates from the weatherizing program to eventually get those good paying jobs in the lens business. They worked with Monroe Community College to develop some training programs. I talked to Tom Finch from Monroe. And he says they are fully focused on getting this population jobs in those high-tech areas.

Adam Davidson

Most of the students at Pathstone, their parents or grandparents came to Rochester in the 1960s and '70s. That was when Rochester was one of those incredible places where everyone who wanted a job could have a job. Kodak, Xerox, Bausch and Lomb, they just needed bodies to work their factories.

One guy at Pathstone told me how his mom and uncles moved to Rochester from West Virginia to get away from the coal mines. They didn't have a lot of education. But they came to town, and right away everyone got good jobs at Kodak. They were able to buy their own houses, take vacations, live a real middle class life. That just doesn't exist anymore. But not for the reasons you think.

It's not true, even though you hear it all the time, that the US doesn't make stuff anymore. We're still the world's number one manufacturer, although China will probably edge us out sometime this year. We still have lots of factories turning out lots and lots of stuff. But pretty much everyone in those factories needs to have some basic math proficiency. They need to be trusted with expensive, precision equipment.

You're probably not getting a factory job if you don't have at least a high school degree and some advanced technical training. The experts call it high school plus. If you don't have a high school degree plus some more training, some more specialized skill, you are increasingly locked out of the middle class. And that's a lot of people, 80 million Americans over 25. That's 40% of the adult population are in that group.

Having some training or education after high school used to be a great way, one of the most reliable ways, to make it into the middle class. But over the next few years, more and more, it'll be the only way.

Ira Glass

Adam Davidson from the Planet Money team. Their free podcast and blog is at www.npr.org/money. Planet Money also has the cover story in the June issue of Wired magazine.

Ira Glass

Well, our program was produced today by our senior producer, Julie Snyder, and Adam Davidson, with Alex Blumberg, Ben Calhoun, Jane Feltes, Sarah Koenig, Jonathan Menjivar, Lisa Pollak, Robyn Semien, and Alissa Shipp. Production help from Eric Mennel. Seth Lind is our production manager. Emily Condon's our office manager. Jen Berman's filling in as our West Coast producer.

[ACKNOWLEDGEMENTS]

Our website, which has all kinds of new features as of this week, thisamericanlife.org. This American Life is distributed by Public Radio International. WBEZ management oversight for our show by our boss Torey Malatia, who was upset when I showed up at work yesterday late, mean, and just wanting to be left alone.

Ira Glass

Oh well. I'm Ira Glass. Back next week with more stories of This American Life.

Announcer

PRI. Public Radio International.