[This is the second part of a two-part blog. In the first part, we examined the critical need for the USA to develop a 21st century workforce. In this part, we focus on the current status of America’s workforce development “system” and provide recommendations on what needs to be done to enhance that system in order to produce a 21st century workforce and position the U.S. for success in the future.]
4.3 million American workers quit their jobs in August. That’s 2.9 percent of the American workforce.
The Bureau of Labor Statistics (BLS) report released on October 12 stated that this was a record number of departures. The BLS didn’t explain why these folks left their jobs.
There are undoubtedly a variety of reasons. The overriding one, however, appears to be that they were tired of getting 20th century wages, benefits, and treatment in this third decade of the 21st century.
This conclusion is supported by a Washington Post analysis, which shows that a large number of those quitting are in low-paying and low mobility occupational sectors. The Post states “…the speed of quitting among low-wage service workers stands out. Almost 2 in 5 workers (38 percent) who quit in August worked in retail or in restaurants and hotels.”
It’s not just the down-trodden who are quitting. The Post also notes “In almost every sector tracked by the BLS, workers are quitting at or near the highest levels on record…”
Take this job and shove it might be the American workforce’s song of choice today. That is not the anthem that the USA needs for a vital and vibrant economic future.
If this nation is to maintain its competitive advantage in the world, it needs to change the current trajectory and create a 21st century workforce. To accomplish this, it needs to put a national framework in place for creating that workforce.
At a minimum, the framework should be constructed to:
- Address the needs of the marketplace
- Be fully inclusive
- Develop essential occupational competencies
- Establish pathways for career success
- Reward workers appropriately
- Support workers’ personal lives
- Enhance the existing workforce development “system”
- Position the U.S. for the 22nd century
We outlined the rationale and requirements for the first six items on this list in part one of this blog. In this second part, we turn our attention to the last two:
- Enhancing the existing workforce development “system”
- Positioning the U.S. for the 22nd century
Building Upon the Cornerstone Components
The current workforce development “system” in the U.S.is a loosely-knit one. It is a patchwork quilt, rather than a woven rug. That’s the bad news.
The good news is that it has the cornerstone components in place for establishing a more effective system. Those elements can be used as the foundation for, and expanded upon, to build a 21st century workforce development system.
That system should be designed and organized to ensure that all of the moving parts and players are brought together in a coordinated manner in order to: address marketplace needs; be fully inclusive; develop essential occupational competencies; establish pathways for career success; reward employees appropriately; and support workers’ personal lives.
The three cornerstone components of the workforce development system should be: the Workforce Innovation and Opportunity Act; community colleges; and apprenticeships.
The Workforce Innovation and Opportunity Act
The Workforce Innovation and Opportunity Act (WIOA) is the primary federal workforce development law. It was enacted in July 2014.
WIOA is “designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy.” WIOA is the principal federally-funded vehicle for assisting individuals with barriers to employment such as those earning low incomes, being long-term unemployed, or looking to learn new skills.
WIOA funds programs in each state that are planned and managed through state and local workforce development boards and operated through American Job Centers (One Stop centers). Each state is required to have a WIOA strategic plan, covering a period of four years. There are currently more than 550 workforce development boards and 2500 American Job Centers across the country.
WIOA supersedes the Workforce Investment Act of 1998. It instituted a number of reforms intended to align all of the various workforce development programs within a state, with one of its key goals being to create a comprehensive, high-quality workforce development system by aligning workforce development, education, and economic development.
WIOA is the successor to three federal workforce development programs: the Job Training and Partnership Act of 1982; the Comprehensive Employment and Training Act of 1973; and the Manpower Development Act of 1962. These programs were focused primarily on providing training and assistance to lower-income and dislocated workers.
America’s community colleges have moved into the forefront in providing training and education for workforce development in this 21st century.
As noted in a working paper issued in March 2019 by Community College Research Center at Columbia University, this momentum dates back to the public and political response to the Great Recession of 2008–2010. In its conclusion, the paper notes,
Adults facing employment disruption sought out community college programs to gain skills in new jobs. Furthermore, the Obama Administration considered community colleges ‘an undervalued asset in our country’ and many programs were developed to position community colleges as the major workforce training providers in the nation.
The American Association of Community Colleges (AAAC) initiated a 21st century initiative in response to Obama’s education agenda. The Initiative’s goals included increasing college completion rates and closing the American skills gap.
The AACC’s Workforce and Economic Development section section “brings together community colleges, offices of economic development, workforce board, labor market entities, employers, and other organizations to improve the economic prosperity of business, workers, and communities.”
There are more than 1,000 community colleges located in all the states across the country. The programs offered vary substantially from college to college and are defined at the community level. The students in the colleges tend to be much more diverse, of lower income backgrounds, and more likely to be working while attending school than those in four-year institutions.
In spite of the increased emphasis on vocational skill development, according to recent data approximately 80 percent of those students who attend community college indicate their plans are to earn a bachelor’s degree, as opposed to being certified to work in a trade.
Apprenticeships date back to the founding of this country. George Washington served as an apprentice (surveyor) and so did Benjamin Franklin (printer).
The federal government did not begin to regulate apprenticeships in any manner, however, until 1937, with the passage of the National Apprenticeship Act. This led to the establishment of the Registered Apprenticeship program, which for decades served primarily the construction, manufacturing, and utilities industries.
The apprenticeship model has evolved over time. For years, the primary federal requirement to complete a registered apprenticeship program was a time-based approach for on-the-job learning requiring at least 2,000 hours of on-the-job training. Then, in 2008, two new approaches were added: A competency-based approach involving on-the-job learning, related technical instruction (RTI), and demonstration of acquired knowledge and skills; and a hybrid approach, requiring a specified minimum number of on-the-job learning hours and RTI hours.
On its website, the Department of Labor states that “Apprenticeships combine paid on-the-job training with classroom instruction to prepare workers for highly skilled careers.” The Department of Labor reports that 94% of individuals who complete registered apprenticeships earn an average starting wage of more than $70,000 per year.
Through a contract with the Urban Institute, the Department of Labor’s Office of Apprenticeship (DOLOA) has designed 43 occupational frameworks for competency-based apprenticeship programs, ranging from advanced manufacturing to health care and hospitality. DOLOA also oversees the Industry-Recognized Apprenticeship Program, which was launched in 2017 to enable entities such as industry trade groups, non-profit organizations, and educational institutions to implement programs that meet the Department’s standards.
Potential Workforce Development System Enhancements
Most of the headlines on job creation and workforce development press coverage this year have related to the Biden infrastructure bill and the original $3.5 trillion Build Back Better Act. Meanwhile in the shadows, there has been other legislation crafted and ideas generated in this year that, if implemented, could provide substantive enhancements to the existing workforce development system.
Workforce Development-Related Legislation
Three pieces of workforce development enhancing legislation proposed in 2021 are:
- The National Apprenticeship Act of 2021 (H.R. 447)
- The Upskilling and Retraining Assistance Act
- The Manufacturing Reinvestment Corporation Act (H.R. 5124)
The National Apprenticeship Act would expand the scale and scope of the apprenticeship system by creating 1 million new apprenticeship opportunities. The most recent data available shows that only 0.3 percent of the overall workforce in America have completed an apprenticeship. The thrust of this Act is to increase investments in apprenticeship and to codify the standards for apprenticeships, as well as the role and responsibilities of the Department of Labor’s Office of Apprenticeship and State Apprenticeship Agencies.
The Upskilling and Retraining Assistance Act would make two changes to the tax code to allow employers to support the training and education of their workforce. The first change would be to increase the non-taxable amount paid to workers for educational programs from $5,250 to $12,000 for the next two years without its inclusion in the worker’s taxable income (the current exclusion was enacted in 1986). The second change would expand the tax exclusion to allow it to pay for the cost of education-related tools and technology.
The Manufacturing Reinvestment Corporation Act would establish a national Manufacturing Reinvestment Corporation (MRC) in the Department of Commerce to develop a strategic plan and create local “manufacturing renaissance councils.” The Act would provide grant funding to those councils to establish multi-stakeholder partnerships and to implement economic and workforce development programs designed to maintain and renew existing manufacturing in urban areas and small towns. The MRC would be similar to the successful Neighborhood Reinvestment Corporation.
Each of these Acts has a different primary target. The Apprenticeship Act focuses on the employee. The Upskilling and Retraining Act focuses on the employer and incumbent workers. The Manufacturing Reinvestment Act focuses on the manufacturing sector and the community. This illustrates that enhancing America’s current workforce development system will require a multifaceted and multi-tiered approach. Because of that, it will require improving what is there and filling in the gaps for what is not there
Workforce Development Improvement Recommendations
There is no shortage of ideas on what to do to improve various elements of America’s workforce development system. They come from a variety of sources. To name just a few, they include: The American Association of Community Colleges Workforce and Economic Development Section; the Association for Career and Technical Education; the National Association of Workforce Boards; the National Council for Workforce Education; the U.S. Chamber of Commerce Foundation Center for Education and Workforce; New America; the American Enterprise Institute; and the Brookings Institution.
The Brookings Institution has a focus on Workforce Development and a Workforce of the Future Initiative. The Institution has issued numerous workforce development-related papers and recommendations this year. Among those most relevant to this blog are those on worker’s upward mobility; alternative training and certification; and actions regional leaders can take to prepare infrastructure workers.
In their report on upward mobility, Marcelo Escobari, Ian Seyal, and Carlos Daboin Contreras explain that there are tens of millions of Americans stuck in low-wage, low-mobility jobs. Their policy proposals to help more workers move up include:
- Using occupational transitions analysis data to establish jobs programs, infrastructure investments, targeted training, wage subsidies, portable benefits, and public-private reskilling programs.
- Companies unlocking bottlenecks by measuring the mobility of their workforce and identifying gaps or barriers to address to increase mobility.
- Providing better wages and benefits to workers in low-wage jobs who will be unable to advance.
Marcus Casey and Ember Smith stress that traditional four-year college may not be the best path forward to develop skilled workers for today’s and tomorrow’s workforce in their article on alternative training and certification. They cite a number of programs being run today by groups such as Google, and then state: “Appropriately designed programs that support students and workers may be effective and require a much smaller investment than sending workers back to school for a 4-year degree.” Casey and Smith advocate funding to promote partnerships between educational institutions and the private sector to create these programs and support apprenticeships and on-the-job training.
In his piece written in mid-September, Joseph W. Kane sets out five ways regional leaders can take now before the infrastructure bill is passed — assuming that it will be — to be prepared for quick action. They are: 1. Rethink what an “infrastructure” job means. 2. Emphasize high growth jobs and jobs with enormous replacement needs. 3. Strengthen regional coordination around planning and training. 4. Focus on equity and inclusion. 5. Experiment with new projects and procurement strategies.
Workforce Development System Strategic Planning
Let us build upon Kane’s recommendations and put forward two of our own. Specifically:
- The USA needs a national 21st century workforce system development strategic plan.
- The USA needs targeted high quality 21st century regional and local workforce system strategic plans in all of the communities and states across this country.
The Trump administration de-emphasized the federal government’s roles and responsibilities in all domestic domains. Trump proposed several budgetary cuts for the Department of Labor and on the workforce front during his four-year tenure. The Trump administration’s advocacy — especially in terms of wages and benefits — was much more employer-friendly than it was employee-friendly. Because of this, there is a need for a turnaround.
Near the end of March of this year, a group of 70 state and national organizations, led by the National Skills Coalition, sent a letter to President Joe Biden asking for $100 billion in workforce development investments in Biden’s recovery/infrastructure/jobs plan. This money would have been dedicated to inclusive job training, job creation, assistance to the un- and under-employed, and supporting the rebuilding of the workforce system, which “has had its funding cut by more than 40% over the past two decades.” Biden included it in his plan, but the bipartisan bill that came out of the Senate, and which is currently in the House, does not contain the $100 billion.
The apparent loss of this $100 billion investment, along with the consequential and continuing impact of the pandemic, and the diminution of the “system” aspects of our workforce system over the past four years, highlights the need for a comprehensive, objective, and nonpartisan study of the current status of the nation’s workforce development system.
This study should be used to develop a national 21st century workforce development strategic plan. The three key words for the study are:
- Comprehensive — draw upon all available resources;
- Objective — be data-based and driven, and
- Non-partisan — not be controlled by a political party or ideologically-centered group.
The study should include an in-depth situational analysis that identifies the strengths, weaknesses, opportunities, and threats of the current system and its key components. As part of this analysis, it should feature a needs assessment that includes the critical dimensions identified at the beginning of this blog. Specifically, how well does the system do in producing results that: address the needs of the marketplace; promote inclusivity; develop essential occupational competencies; establish pathways for career success; reward workers appropriately; and support workers’ personal lives. It should also include a competitive assessment of the system’s capacity and performance, in contrast to the workforce development systems of other major countries.
The study should be used to produce a 21st century workforce development system strategic plan that would enhance the existing system significantly and position the U.S. for a competitive advantage in the 22nd century. (See the final section of this blog.)
At a minimum, the workforce development system strategic plan should clearly spell out a vision, goals, roles and responsibilities; key result areas, strategies, strategic action programs, implementation requirements, facilitating factors, potential obstacles or barriers, and critical success factors. It should cover a ten-year period and outline a process to be used to update the plan every ten years going forward. It should also have a budget and cost-benefit analysis for plan implementation.
Who should conduct such a study and develop such a plan? Here is a radical idea that might not be quite so radical. We recommend that the plan should be developed by the American Enterprise Institute (AEI) in collaboration with the Brookings Institution (Brookings)
These two think tanks have collaborated successfully before. The right-leaning AEI and the left-leaning Brookings came together to produce a report titled Opportunity, Responsibility and Security: A Consensus Pan for Reducing Poverty and Restoring the American Dream (Consensus Plan) that was issued in December 2015. The Consensus Plan was a serious and significant document jointly crafted by a working group of 15 representatives.
The plan was built through consensus. As such, it did not align to the ideological biases and blinders of either the right or left.
We need a plan of this type for the nation’s workforce development system. Those on the extreme right would eliminate federal involvement altogether. Those on the extreme left would nationalize the system completely.
Because of who we are as a country and our constitution, we need in-between. To maximize results, we need a system that is top-down, bottoms-up, and managed in the middle. We need a decentralized system of systems that are interdependent in terms of general guidance, knowledge, and information sharing, and independent for direction-setting and operations.
This brings us to our second recommendation, which is to develop high quality regional and local workforce development strategic plans. An executive summary of the national workforce development system strategic plan should be provided through the states to the local and regional workforce development boards, along with a 21st Century Workforce Development System Planning, Management, and Evaluation Guide (PME Guide).
The local and regional workforce development boards can use the national findings as input for their discussion and decision-making, using the PME Guide:
- The Planning Section of the Guide should outline a planning process similar to the national approach, customized for the local and regional levels.
- The Management Section should present best practices and tools to direct and oversee the implementation of the strategic plan produced using the Planning section.
- The Evaluation Section should present methods for ongoing review and continuous improvement of the strategic plan and the workforce development system.
This combination of national and regional/local strategic planning will provide the necessary framework for constructing a 21st century workforce development system that produces a 21st century workforce for the USA. That will position the USA for success in the remainder of this century and into the next.
Positioning the USA for Success in the Future
It might seem a bit too soon to be thinking about the 22nd century. We believe it is not. To maintain its leadership status in the world, the USA will need a competitive advantage that’s established today and is sustainable into the future.
In 2010 we published a book titled Renewing the American Dream. The first chapter of that book begins as follows:
The United States has stood alone atop the world stage for nearly a quarter of a century. It has enjoyed a competitive advantage on almost all fronts. Now as we stare into the second decade of the twenty-first century, America’s primacy is challenged. Whether on the playing field or the battlefields, in the board room or the anterooms, nothing seems the same anymore.
In 2021, as we look back at the decade just past and ahead at the third decade of this twenty-first century, things are absolutely not the same anymore. In Renewing, based upon data that we had examined, we predicted that the U.S. and China in this century “…will clearly be the dominant economic forces in the world.”
It’s not just in economics. The U.S. and China are in competition on almost all fronts.
Look at the dozens of ships backed up on the West Coast bringing Chinese goods to the United States. Look at China’s Belt and Road Initiative in 70 developing countries around the globe. Look up in space at the Tianhe space station, which has three Chinese astronauts who were carried there by the Shenzhou-13 spacecraft and will be staying aloft for six months. Look at what is happening in Singapore and the Chinese planes flying over Taiwan. Look at AUKUS, the security deal that President Joe Biden cut with the United Kingdom and Australia to counteract China’s growing military strength and presence.
Look in your closets, cupboards, and car. You will see China written all over. Look all around. But, don’t look away.
The competitive race for global supremacy in this 21st century and beyond is definitely between the U.S. and China.
What is the status of the race today? Who will win it? There are a variety of opinions.
In a recent report, based upon its analysis, the Scowcroft Center for Safety and Security, in a publication issued through the Atlantic Council, concludes “…that Chinese influence has grown in both size and reach around the world.” The Center goes on to state, however, that the U.S. “still has many opportunities to counterbalance the expansion of Chines influence…”
Ryan Hass, in his piece for the Brookings Institution, sees US-China competition hardening, and a “widening gap in America’s and China’s overall national power relative to every other country in the world.” He also sees a “deep interdependence” between the two great powers, primarily because of their shared trade and investment ties.
Looking at it from a business publication perspective: in July, Bloomberg ran an article with the headline, “When Will China Rule the World? Maybe Never.” In August, drawing upon Moody’s forecasts for GDP for the next five quarters, the Wall Street Journal had a headline: “U.S. Economy Likely to Outgrow China’s Due to Contrast in Pandemic Responses.” And, on October 18, a CNN Business headline was “China’s Economy is Getting Walloped by Crises in Energy, Shipping, and Real Estate.”
Who will win this race? In Renewing in 2010, we wrote:
The United States has been, and still is a champion. To stay a champion and to renew the American dream, however, we need to win the race for competitive advantage. The race will not go to the swiftest, but to the one who understands the critical requirements for success going forward, prepares properly, and perseveres.
There are many critical requirements to be addressed to win this race. In closing this blog, we leave you with three that are most pertinent at this point in time:
1. To win, we need to compete against them and not us. Today, we are fighting among us and against one another. The January 6 storming of the Capitol and the bipolar partisanship where people support a single person rather than the country demonstrate that we need to rediscover how to celebrate the US in USA and to elevate democracy above demagoguery.
2. To win, we must understand that what got you here will not get you there. The business model that promotes exclusiveness and inequality is a path backward, and not forward. The future can be reached by looking out the windshield, and not into the rear-view mirror.
3. To win, we need all hands on deck equipped and treated properly. A 21st century workforce and a 21st century workforce development system will accomplish that. They will unite employers and employees in a common cause to help give the USA an ongoing competitive advantage.