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The New American Dream: Workforce Training Solutions in Brief

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The U.S. is on pace to set a record for the longest economic expansion in its history by July 2019, and the unemployment rate is the lowest it’s been in nearly 50 years.  By many measures the U.S. economy is thriving. And yet, far too many American workers in far too many places are being left out and left behind.

Consider:

  • In the period between 1990 and 2015, the U.S. has lost about 30% of its factory jobs.
  • Distressed rural communities have lost 1.4 million jobs since the Great Recession.
  • The percentage of men out of the labor force, which includes people who are unemployed and also those not looking for work, has jumped from 14% in 1950 to 31% in 2018. At the same time there are over 7.5 million job openings as of March 2019 that were unfilled.

Innovation – the creation of new products, industries and jobs, and the elimination of old ones – has always brought disruption. And leaders in Washington have often held up “workforce training” as the panacea to help workers and communities deal with the disruption.

But it isn’t working, due to significant underinvestment and poor performance from many of the programs that are funded.

According to a report by the National Skills Coalition, since 2001 the government has cut funds for workforce training programs by 40%. While the U.S. spends $500 billion each year on higher education, it spends only $8 billion on workforce training. Meanwhile a publication by Mathematica Policy Research found that participation in public workforce services and training did not translate into an increase in earnings.

It’s time for a real and sustained investment in worker training and retraining, and a different approach to designing the programs. In a new paper released today by The New Center, we outline six key tenets for the next president to consider in revitalizing American job training:

Emphasize the Job, Not the Training

The goal of any workforce training program is to provide workers with the right skills and qualifications to get in-demand jobs. But too often workforce training programs focus on teaching skills without also ensuring that participation in the program will lead to employment. A prerequisite for workforce training ought to include identification of a job opening where the skill shortages are located.

Cut through the Licensing Thicket

Around 30 percent of American workers need licenses to do their job — a sixfold increase since the 1960s, and may licensing requirements make it unnecessarily difficult for people to pursue new careers. To fix this problem:

  1. State agencies should make use of cost-benefit analysis to determine whether requests for additional occupational licensing requirements are warranted.
  2. The federal government should promote the determination and adoption of best-practice models through financial incentives and better information.
  3. State licensing standards should allow workers to move across state lines with a minimal cost for retraining or residency requirements.
  4. Certain occupations that are licensed should be reclassified to a system of certification or no regulation.

Fix Job Corps

The U.S. Department of Labor carried out an audit of Job Corps in 2011 to assess its job training outcomes, and the overwhelming conclusion was that Job Corps “could not demonstrate the extent to which its training programs helped participants enter meaningful jobs appropriate to their training.” Congress needs to fix this program or shutter it altogether because it simply is not working.

Promote Awareness of Workforce Training Resources

Most workers recognize the importance of staying ahead of the curve with their education and skills to be qualified for jobs in the rapidly changing modern economy, but too many people are unaware of workforce training programs that could benefit them. Promoting greater awareness of workforce training resources through increased advertising or marketing could help to close this gap.

Improve Reporting on Outcomes

It is essential that the government has adequate data on the outcomes of participating workers in areas such as long-term employment and wage growth. One method to ensure that workforce training programs are effective would be for state-level data sets to be linked to help training providers better track participants over time.

Provide Flexibility for State Funding

Local workforce organizations that receive state funding are often more innovative and successful thanks to their knowledge and expertise in the local job market. State governments should have more authority to allocate federal funds to programs run by local organizations that have a proven track record of success rather than adopting a one-size-fits all approach that fails to meet the needs of their citizens.

The full “The New American Dream: Workforce Training Programs” paper is available for download here.