The Future of Work is Still A Bipartisan Issue
Recent reports suggest that we may be fast approaching a Goldilocks economy, where inflation is low, stocks surge — and growth is neither too hot nor too cold. And according to the latest jobs report, unemployment still hovers at just 3.6% — which matches the lowest nationwide unemployment in nearly half a century.
But just-right economic indicators belie a troubling trend for US workers. By some estimates, 44 million working Americans still lack the credentials they need to pursue job opportunities that will enable them to support themselves and their families. Employers are, in turn, struggling to fill roles in not just fast-growing fields like blockchain and machine learning, but retail and hospitality. According to the Strada-Gallup survey, more than half of the U.S. workforce now believes they need additional education and training to advance in their career.
Against that backdrop, our education and workforce development system is facing increased pressure to think differently.
We’re seeing a convergence of old business models (like staffing) and new approaches to upskilling that help employers expand and diversify their talent pipeline — and reduce costly frontline turnover. The rise of education-as-a-benefit is making it possible for employees to work full-time while earning a college degree. And employers, from Disney to Adobe, are experimenting with modern-day apprenticeships to address skill shortages and build a more diverse talent pool. Both colleges and training providers are experimenting with pay-for-performance models that aim to de-risk educational investments.
Although new models rarely fit neatly within vestigial policy frameworks, we’re seeing signs of bipartisan support for shifts aligned with both the potential of new providers and the needs of today’s learners. How should policy adapt to unlock the potential of untapped talent — and close skill gaps? We’ve compiled a list of six impactful policy ideas, each with support on both sides of the aisle.
Expand and Index Tuition Benefits to Inflation
Section 127 of the Internal Revenue Code allows employers to provide employees with up to $5,250 in tax-free reimbursements for higher education — an amount that has not changed since 1986. Indexed to inflation, this benefit would be worth over $11,500 today. We’ve already seen indications of bipartisan support for not only boosting today’s limits, but expanding tuition assistance to include pre-apprenticeship and apprenticeship programs.
Link Education Funding to Outcomes
Federal policymakers from both sides of the aisle have proposed the expansion of federal student aid to non-accredited education providers. But such shifts must start with a focus on quality. In 2016, General Assembly worked with two Big Four accounting firms to develop a framework for tracking and reporting outcomes annually — a practice that could serve as a model for policymakers and other providers.
Expand Portable Benefits
From Bank of America to Verizon to Procter & Gamble, as much as 50 percent of the total workforce is outsourced. This increasingly flexible relationship between individuals and their jobs has led to calls for a “new social contract” that enables contingent workers to access benefits historically linked with employment. At the federal level, a bipartisan group of policymakers has called for legislation to fund experimental portable benefits programs.
Pass Consumer Protections for Income Share Agreements
A spate of colleges and training providers are taking a new approach to financing education designed to de-risk the investment for students — and align cost with outcomes. But income share agreements (ISAs) currently lack the federal oversight and consumer protections provided by federal loans. Bipartisan legislation proposed in both the House and the Senate is taking a first step toward setting standards for tax treatment of ISAs, disclosure to consumers, and maximum payment windows for graduates.
Promote Data Transparency for Students
In 2008, the Higher Education Act banned the creation of a federal student data system. The College Transparency Act, first introduced in 2017 with bipartisan support, aims to address this issue by overturning the ban. Allowing non-accredited providers to voluntarily participate in such a system would enable more transparent evaluation of new providers, so that consumers can make apples-to-apples comparisons among higher education and training opportunities.
Create Tax Incentives for Lifelong Learning
In addition to supporting employer-based education and training, policymakers should take steps to ensure that workers themselves are resourced to embrace a more continuous approach to learning. Last November, Senators Mark Warner and Chris Coons introduced the Lifelong Learning and Training Account Act, which would enable individuals (as well as employers and governments) to make a pre-tax contribution to an account they could then use to fund education or training at any stage of their career. The Skills Investment Act, introduced last year by a bipartisan group of House members, proposes a similar framework for individual investment in training.
Liz Simon is Vice President of External Affairs for General Assembly. Tom Ogletree is General Assembly’s Senior Director for Social Impact and External Affairs. This op-ed is based on “Talent Development for Tomorrow’s Economy,” a series of policy recommendations recently released by General Assembly.