If policymakers can’t remedy the situation, labor and education experts warn it could permanently cripple the US economy and hamper its ability to compete with other economic powerhouses like China. particularly given the time it takes for changes to produce results.
“This is a critical point,” said Boston University professor Scott Solberg, vice president of research for the Coalition for Career Development Center. “We need to have a national conversation about how we’re going to improve career readiness because it’s all about economic competitiveness.”
Labor Secretary Marty Walsh and congressional Democrats are working to shore up the supply chain’s little-known Achilles’ heel before inflation soars further. Prices have risen 8.3% over the past year, well above the 5.5% rise in the average hourly wage over the same period.
“Industries are struggling to find workers right now; a lot of it is that they’re not qualified or trained to work in those industries, because they’ve left and gone to other industries,” Walsh said recently in a classroom at The Apprentice School. in Newport News, Va. , which trains shipbuilding workers. “Right now is the time to make sure we continue to invest in workforce development [and] professional training.”
Before the pandemic, the United States was spending just 0.03% of its GDP on worker training, according to a POLITICO analysis of the most recent data from the Organization for Economic Co-operation and Development. This is less than a third of what OECD countries spent on average, or 0.10%.
“We let our workforce strategy atrophy because we thought it would just be the engineers – those with advanced degrees – who were going to solve our competitive position,” Andy Van said. Kleunen, CEO of the nonprofit National Skills Coalition. “We need to invest in people at all levels of our workforce if we are to truly succeed.”
Even what is spent does not always have the best return on investment. Critics of the current system say it is disjointed, inconsistent and inefficient. By Walsh’s own admission, “some of our workforce development programs haven’t been as successful as they should be,” he told officials last week. bedroom.
This shortage has contributed to a shortage, reported by employers, of workers with the skills they need. Seventy-four percent of hiring managers said in 2020 that there is a skills gap in today’s job market, according to the United States Chamber of Commerce Foundation. Forty-eight percent said applicants lacked the skills to fill vacancies.
“It’s not just that there aren’t enough workers, it’s that the workers they have don’t have the skills they need to fill those positions,” said Rachel Greszler, labor economist at the Heritage Foundation, right. “And that has a lot to do with [how] the United States does not teach people what they need to enter the job market.
Thanks to the pandemic, the need is greater than ever. Covid-19 has accelerated automation – and with it the need for workers to learn new skills. As a result, companies believe that four out of 10 workers will need reskilling six months or less.
America’s workforce development system “is actually quite broken and not very responsive to the needs of industry,” said Cheryl Oldham, vice president of education policy at the American Chamber of Commerce. “We are in this crazy dynamic economy; jobs are changing faster than ever before…and yet we have this system doing things the way it always has.
Nearly six in 10 workers said a lack of skills had kept them from applying for a job they wanted in the past two years, new poll for Goodwill by PerryUndem found.
“In fact, 84% of our respondents who are unemployed said they would like help getting the skills, training and support they need to enter the job market,” Steve said. Preston, President and CEO of Goodwill.
The organization partners with Google and other employers on a newly launched initiative focused on workforce development.
Things have gotten so bad they have united some of Washington’s most unlikely allies to demand a solution. In addition to the United States Chamber of Commerce and Republican lawmakers like Rep. Kevin Brady (R-Texas)unions are also calling for change.
“Employers have actually invested less and less money in training over time and offloaded to the government,” said AFL-CIO President Liz Shuler. “The government lacks resources; they unloaded it on the individual. And so that means they take more risks.
Democrats are scrambling to fix the problem before it can exacerbate existing pressure on the supply chain — and to do so without a lot of money. According to the National Skills Coalitionworkforce development spending has fallen by two-thirds over the past four decades, while the labor force has grown by 50%.
The pandemic has been no exception to the trend: Of the $5 trillion the federal government has spent so far in response to the coronavirus, lawmakers have allocated just $345 million to the top security agency. Workforce Development Department of Labor, Employment and Training Administration. That’s less than a tenth of the nearly $6 billion it appropriated to respond to the Great Recession.
“You don’t spend money you don’t have,” Walsh said. “What you do is make the programs you have impactful as best you can.”
The Department of Labor is working to expand career apprenticeships throughout the supply chain, including the recent creation of a pilot program to recruit and train more truck drivers.
And Chair of Education and Home Work Bobby Scott (D-Va.) is leading a campaign to reauthorize the Workforce Innovation and Opportunity Act, which funds the bulk of the federal government’s 43 employment and training programs.
“Vocational training — people producing more, more efficiently — deals with the supply side of supply and demand,” Scott said. “We are doing something against inflationary pressures.”
The house is gone at Scott legislation, which would bring funding to $74 billion over six years, this week. What’s next is less certain: Republicans are unhappy with the measure, which Democrats themselves put in place following a failure to reach an agreement on funding levels and union influence, among other things. .
“I was Charlie Brown, and [Scott] was Lucy with football,” Rep. Virginia Foxx (RN.C.), the top Republican on the House Education and Labor Committee, said. “He just took it away from us.”
Should his party take control of the House in November, Foxx is already planning to pass a new alternative WIOA authorization “very early in the session” that would allow employers “to be more involved in what is happening to prepare their employed in those jobs,” including adjusting state and local labor commissions to give more leverage to the private sector.
“Everyone in this country knows that if they have their eyes open, every employer has ‘help wanted,'” Foxx said. “There are jobs everywhere. In all sectors of the economy, there are jobs.
“What we need to do is make sure that workforce development programs ensure that workers have the skills that employers are looking for,” she added. “Having a one-size-fits-all Washington is not the way to do it.”
Before it collapses, Democrats $1.7 trillion “Building Back Better” package contained $20 billion for workforce development. Nearly $14 billion would have gone to the Department of Labor for programs like apprenticeship. More than $6 billion was reportedly earmarked for Department of Education efforts, including $5 billion to run community college programs in partnership with businesses.
Talks have resumed on how to resuscitate the legislation in one form or another before lawmakers return to their home states ahead of midterms. But it’s unclear whether the Workforce Development money would do the trick – which would leave Scott and Walsh without.
“Just because the skills training element of Build Back Better hasn’t passed doesn’t mean we’re not continuing to do our job,” Walsh said. “We get creative.”
Walsh pointed to employer-funded initiatives like The Apprentice School. “This facility that we are in today is funded by industries,” he said. “An industry can create something like that.”
As for the legislative path forward, Democrats are pushing to include workforce development provisions in the final version of a multibillion-dollar package – known in the House as the COMPETES Act – intended to improve the ability of the United States to compete with China in the field of technological manufacturing. This wording would expand Pell Grant eligibility to include fast-track programs aimed at providing workers with industry-based credentials and ultimately employment, among other things.
“Building back better may or may not happen, but it’s not the only bill,” Scott said. “It’s not the only way to fund vocational training. Along with WIOA and the ownership process, “there are significant opportunities in COMPETES”.
But that could be cut as House and Senate negotiators tussle over a compromise, leaving supporters like Van Kleunen worried the United States will end up spending billions through COMPETES just to miss its economic goals.
“If we don’t have skilled workers in the plan, we don’t have a supply chain strategy,” Van Kleunen said. “Components don’t make themselves; they will not ship.