'Building Back Better' Means Focusing on the Labor Force & Systems That Support Recovery
The new administration faces labor market challenges not seen before. Prior to the pandemic, there were already significant issues including Black unemployment between 50 and 100 percent higher than white unemployment, low labor force participation, long-term unemployment due to job losses from the Great Recession, and far too many working adults earning too little to meet basic household needs.
But now, the pandemic has heightened these challenges and disparities. Women’s labor force participation has fallen to where it was 30 years ago. People of color have lost their lives and their jobs at much higher rates. Many of the jobs are unlikely to return, forcing workers to change occupations and industries to earn a living. If policymakers today built an infrastructure to support pathways for economic success, they would never conceive of the current collection of systems.
These profound challenges are growing more complex amid increasingly rapid changes in technology and labor markets. Yet we’re fighting a wildfire with a garden hose. The federal government addresses workforce development and transition assistance with a calcified patchwork of policies, many of them decades old.
The country, especially in rustbelt and many rural areas, urgently needs good jobs and workforce institutions that ensure workers are prepared for and connected to them. How do we get there?
To start, the new administration has to accelerate short-term recovery. Second, it must modernize the policies through which it promotes workforce and economic development.
President Biden’s Build Back Better plan proposes significant investments in infrastructure development, public service jobs to fight the pandemic, and the education and care sectors.
Yet, the recovery plan risks missing out on investments that prepare long disadvantaged workers for opportunities created through stimulus. A deliberate investment in systems and institutions that foster job creation, ensure effective training, and address the needs of those who have been set back by the current crisis, especially women, workers of color, and young adults, will be essential if we are to truly Build Back Better. Workers, and the institutions and systems that support them, need to be at the center of solutions. While still early in the current crisis, stimulus payments have been larger than those of the Great Recession, but investments in programs that create jobs and help workers train for and transition into them have been smaller. Now is the time for these investments.
The new administration should immediately create a cross-agency, cabinet level working group to coordinate these investments, braid and utilize programs that cut across multiple Congressional committees, and identify opportunities to advance and connect displaced workers to good jobs. There are multiple models of these executive branch driven programs from the Obama-Biden administration, including the Auto Recovery Taskforce and the Partnership for Sustainable Communities. These cross-agency partnerships created vital coordination in the complex federal systems.
The challenge, however, is not just one of short-term recovery; it is to modernize outdated workforce policies that no longer help many Americans secure good jobs or our economy to compete and grow. The proposed cabinet working group should also develop plans for modernizing the country’s unemployment insurance (UI) system and strengthening worker protections. Our UI system currently covers only half of workers, and in many states replaces only a small fraction of their wages. A large share of workers lacks basic wage and hour protections.
The group should also reimagine the workforce development system to significantly expand and target investments in the skills a modern economy demands, ensure the full integration of technology into the nation’s career navigation and reskilling efforts, foster public-private partnerships, and help workers navigate the confusing training and job markets. The group should consider how to promote worker power through unions, including potentially sectoral bargaining. At the same time, it should promote improvements in job quality, especially for low-wage workers, as virtually all other advanced countries have done. In the process, the government should ensure that its policies aren’t working at cross purposes — specifically that the safety net doesn’t penalize workers for building skills and climbing the wage ladder.
To continue this conversation and help develop the needed policy reforms, we have formed the Better Employment and Training Strategies (BETS) taskforce. In the coming weeks we will release briefs that focus on immediate recovery efforts and longer-term solutions — education and training, job quality strategies, unemployment insurance modernization, and coordination with other aligned policies. The current crisis is grave but presents an opportunity to finally modernize our country’s woefully outdated workforce policies.
Stuart Andreason (Federal Reserve Bank of Atlanta Center for Workforce and Economic Opportunity), Burt Barnow (George Washington University), Kisha Bird (CLASP), Amanda Cage (National Fund for Workforce Solutions), Mary Clagett (JFF), Maureen Conway (Aspen Institute Economic Opportunities Program), Steve Crawford (GWU Institute of Public Policy), Maria Flynn (JFF), Larry Good (Corporation for a Skilled Workforce), Bob Jones (former Asst. Secretary, ETA/DOL), Clair Minson (Sandra Grace Consulting), Todd Greene (WorkRise, Urban Institute), Annelies Goger (Brookings Institution), John Irons (New America), Chris King (Ray Marshall Center, University of Texas), Andy Van Kleunen (National Skills Coalition), Jeanine LaPrad (Corporation for a Skilled Workforce), Ann Lichter, Mary Alice McCarthy (New America), Sarah Miller (Federal Reserve Bank of Atlanta), Jane Oates (former Asst. Secretary, ETA/DOL), Brent Parton (New America), Martha Ross (Brookings Institution), Bob Sheets (GWU Institute of Public Policy), Thomas Showalter (National Youth Employment Coalition), Martin Simon (formerly National Governors Assn.), Katie Spiker (National Skills Coalition), and Carl Van Horn (Rutgers University Heldrich Center for Workforce Development).