Changing the jobs report won’t fix America’s workforce crisis 

July’s weak jobs report caught economists and policymakers off guard, but it likely came as no surprise to millions of American workers. They’ve long been living the reality behind the statistics — earning a paycheck yet unable to afford rent, chipping away at student debt while locked in a dead-end job, or working overtime but still trapped in poverty.

The monthly jobs report has always been an important, but limited, economic indicator. It tells us how many people are employed and how many jobs were created — information that’s crucial for decision-making around government services, interest rates, hiring plans and more. But the real story of our labor market is in the daily struggle of workers who knew their economic prospects were deteriorating long before any government statistician measured it.

Looking at a broader set of data, the precarity of the job market becomes obvious. Despite supposedly robust employment, 54 percent of U.S. adults don’t have enough savings to cover three months of expenses, with almost a quarter having no emergency savings at all. Less than half of entry-level workers report confidence in their job stability, the lowest level since data collection began in 2016. Employee engagement is close to a 10-year low. Women are exiting the workforce in droves, while Black unemployment is surging.

The starkest indicator of poor job quality may be the rise in working homelessness. Between 40 percent and 60 percent of people experiencing homelessness are employed, but still unable to afford housing. That’s an indictment not just of our country’s housing crisis, but of a labor market that has broken its most basic promise: that a job should pay enough to live on.

It doesn’t help that federal policy choices, from deportations to tariffs, are actively making things worse for workers. In California, deportation raids coincided with a 3.1 percent drop in private sector employment — the steepest decline since the pandemic — with 58 percent of this job loss impacting U.S. citizens. Similarly, the administration’s erratic tariff policies are causing employers to freeze hiring and delay investments, while raising prices for working families.

These policies reflect a profound confusion about what actually strengthens an economy. At a time of rapid technological transformation, we should be investing in our workforce, not destabilizing it. Yet here too, the U.S. has long been falling short. Federal workforce spending amounts to just 0.1 percent of GDP, compared to 0.5 percent in other developed countries. Current funding through the Workforce Innovation and Opportunity Act is only sufficient to train about 200,000 workers per year, a fraction of what is needed. 

If we don’t fix this problem, it will erode the country’s economic competitiveness. Across sectors, there’s a worrying skills gap. AI is rapidly transforming the workplace, but only 31 percent of U.S. workers are receiving employer-provided training on AI tools. And despite the administration’s lofty reshoring goals, a recent analysis shows that more than 1.9 million U.S. manufacturing jobs could go unfilled because of a lack of skilled workers. Other developed nations that invest five times more in workforce development are building competitive advantages while we fall behind. 

To turn this around, we must stop pursuing policies that weaken the workforce and instead focus on three priorities that build economic strength.

First, we must invest in job quality. The current model creates a race to the bottom where employers compete by cutting labor costs rather than investing in their most valuable asset: their workers. We need to incentivize employers not just to create new jobs, but to create quality jobs with living wages, benefits and genuine opportunities for advancement. Quality jobs aren’t just better for workers; they drive productivity and reduce turnover, ultimately strengthening the economy.

Second, we need to dramatically increase investment in both education and workforce readiness to levels that match other developed countries. As investor Ray Dalio notes, America “needs to rethink public education as a way of building a workforce equipped for a rapidly changing world.” That means expanding apprenticeship programs, funding industry-specific training partnerships, creating seamless pathways between education and employment, and developing programs that help workers adapt to technological change rather than being displaced by it. Even in a time of belt-tightening, the math is simple: Every dollar invested in workforce training generates significant returns through increased wages and economic growth.

Third, we must remove structural barriers that prevent workers from accessing better opportunities. When workers can’t afford childcare, transportation or housing, good jobs remain out of reach. By contrast, studies show increases in women’s employment and decreases in household poverty risks in European countries with strong social safety nets. To boost our economy long term, we need policies that address the affordability crisis, from subsidized childcare to more affordable housing construction.

The jobs report will continue generating monthly headlines, but the real measure of our economic health lies in whether workers are stagnating or advancing, whether families are struggling or thriving. We can’t afford to let political theater distract from the real, urgent goal: building a job market that actually works for workers.

Lisa Countryman-Quiroz is CEO of JVS Bay Area, a nonprofit that’s spent 50 years advancing career opportunities for more than 100,000 Californians.