To Succeed in the Post-pandemic Economy, US Workers Need Job-Training Reform
The post-pandemic economic recovery is progressing surprisingly quickly. Vaccinations are progressing, Consumer Confidence is rebounding, and jobs are growing. But serious challenges loom for the US economy, among the most important — whether the American workforce will have the needed skills to meet the demands of the postpandemic economy.
The pandemic’s acceleration of trends toward digital transformation and automation has only accelerated the need for aggressive reskilling of the US workforce. While the pandemic’s hardest impact on less educated and low-wage workers underscores that a college degree is an important bedrock for economic success, even those workers who seemingly weathered the storm risk falling behind. Jobs in emerging industries, such as health science and cybersecurity, demand new and advanced skills. Over the next five years, the average job is expected to change 40 percent of its core skill set, while half of all employees will need to reskill.
The president has unveiled trillion-dollar plans that include dramatic increases in funding for free community college and other postsecondary education investments, with the intent, as the president has stated, of providing support for American workers to build their skills and remain competitive. But, providing free tuition for two- and four-year degrees that do not match skills that businesses need will not help Americans succeed and share in the benefits of the new economy.
Instead, first and foremost, the plethora of job-training programs need to be reformed to teach skills that match demand, and focus more on stackable credentials, short-term certificates, and learn-and-earn programs, such as apprenticeships. Today’s training efforts lack the collaboration, coordination, and future-skill focus needed to address the upcoming challenge. In response, business leaders, educators, and policymakers should work together to advance careers through training focused on marketable, tech-forward skills.
Employers and the learners fund most US workforce training. In 2019, consumers spent nearly $250 billion on higher education and vocational programs while US employers laid out $83 billion. The federal government spends an estimated $14 billion annually on employment and training activities, mostly supporting the unemployed and vulnerable populations, as well as roughly $75 billion for higher education, including Pell Grants.
Consequently, business leaders are at the fulcrum of a training reform effort. They could propel reform by identifying and filling worker skill-gaps — including technology skills and the “soft” skills that cannot be automated, such as creative thinking and complex problem solving, and, thus, facilitating career mobility. A first-order objective could be to prepare strategic assessments of their companies’ integration of emerging technologies and to map out the required skills and roles. And they could improve employees’ technical literacy — by increasing basic understanding of AI, cloud, and blockchain technologies, for example — enabling workers to upgrade their skills and adapt to ever-changing roles. The problem: As recently as 2018 only 55 percent of companies had training budgets.
But, business leaders will not be successful if they act alone, making partnerships essential with educators/trainers, labor leaders, and local and national policymakers. Such partnerships can foster industry-based apprenticeships, including labor-management and union-sponsored ones, design curricula for needed skills, and help establish credentials based on skills rather than degrees. Only 42 percent of employers work with educational partners to upskill employees, and only 29 percent work with governments to obtain skill-based training grants.
Policymakers are also critical in this collaborative effort. So far, they have missed the opportunity to leverage the federal support for unemployed workers to upgrade their skills. To this end, they could provide incentives such as unemployment benefit tax relief to recipients without four-year degrees if they incur skill-development expenses, or consider a more generous training subsidy in lieu of the enhanced unemployment benefit. They could also support unemployed workers’ access to online training by extending the Emergency Broadband Benefit or expanding the Federal Communications Commission (FCC) Lifeline program to reimburse high-speed internet providers that affordably serve furloughed or unemployed workers.
Existing federal resources could also be directed to support postsecondary skilling efforts by making short-term certificate/credential programs eligible for Pell Grants; and, by consolidating the Workforce Innovation and Opportunity Act (WIOA) Adult and Dislocated Worker programs into a single funding stream.
Public policymakers could also incentivize public-private partnerships. This could be achieved by establishing a national goal that every student participate in employer-connected training in high school, expanding apprenticeships in the public and private sectors, or creating a consortium of business leaders, educators, and policymakers to establish a national credentialing system to augment workforce mobility.
Pre-pandemic labor shortages have given way to post-pandemic talent shortages. This challenge can only be met successfully by American business leaders working collaboratively with educators and policymakers as part of a strategic partnership approach to preparing, upskilling, and reskilling a future-ready workforce.
Paul Decker is President & CEO, Mathematica; Howard Fluhr is Chairman Emeritus, Segal. They serve as Trustees of the Committee for Economic Development of The Conference Board and co-chair its Workforce Committee.