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UEDA Summit 2012: Factors Shaping the Workforce: Development & Education Environment (Vanderford & Zeuli)


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The modern era of “workforce development” can trace its roots back to the Manpower Development and Training Act (MDTA) of the 1960s and the Comprehensive Employment and Training Act (CETA) of the 1970s. Notable legislative milestones that followed included the Job Training Partnership Act (JTPA) of the 1980s that established a stronger role for employers via “private industry councils”, and then the Workforce Investment Act in the 1990s that emphasized service/funding coordination via “one stop centers.” It seems apparent that we are desperately in need of another transition as the Workforce Investment Act (WIA), passed in 1998 as a 5-year law continues to operate on year-to-year extensions combined with funding reductions. This session will discuss the needs and demands of the current workforce system and future policy course.

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UEDA Summit 2012: Factors Shaping the Workforce: Development & Education Environment (Vanderford & Zeuli)

  1. 1. Convergence of Workforce Development, EconomicDevelopment & Education 1 ROY VANDERFORD CENTER OF WORKFORCE INNOVATIONSRVANDERFORD@INNOVATIVEWORKFORCE.COM
  2. 2. The World Wants a Good Job 2 Gallup organization has studied human nature & behavior for over 70 years Jim Clifton, CEO of Gallup, author of The Coming Jobs War, cites the “10 demands” that America must master to win the jobs war Conclusions based on literally trillions of combinations of data & opinions worldwide Job creation is the new currency of all world leaders The will of the world is first and foremost to have a good job
  3. 3. Gallup‟s 10 Demands 31. The biggest problem facing the world is an inadequate supply of good jobs.2. Jobs creation can only be accomplished in cities.3. There are 3 key energy sources of job creation in America: our top 100 cities, our top 100 universities, & our 10,000 local “tribal leaders.”4. Entrepreneurship is more important than innovation.5. America cannot outrun its healthcare costs.
  4. 4. Gallup‟s 10 Demands (cont.) 46. We must fix the dropout rate – 1/3 of public school students drop out – ½ of minorities.7. We must double our number of engaged employees – only 28% of U.S. workforce meets standard.8. Jobs occur where customers appear – we must understand global customers better than anyone else.9. Every economy rides on the backs of small & medium-sized businesses.10. So go exports, so goes the coming jobs war.
  5. 5. Do We Need More Jobs or More Skills? 5 Nature of the “skills gap” is hot topic at the moment Peter Cappelli, Wharton School, & author of Why Good People Can’t Get Jobs, says “If you can‟t get the right person for the job, chances are you‟re a bad manager and maybe a little cheap” Martin Scaglione, President of ACT Workforce Development Division, states “there is not enough talent coming through the system to meet the demand for jobs at the middle-skill level, and there is an over-abundance of low-skilled workers”
  6. 6. Workforce Development & Education Convergence of Interests 6 Skills certification – the common language for communicating with each other, and with employers Remediation – contextualized with occupational skills Transferability & stack-ability of credits – industry certifications, dual credit, prior learning assessments STEM – core “polytech” base for employers, with additional education & training provided by employer Self-employment & entrepreneurship – not enough jobs for laid-off workers 12th to 13th year transitions – assumption that all students need post-secondary education in some form
  7. 7. Attention-Getting Statistics 7 70+% of all high school grads pursue some form of additional education within 2 years of graduation – most fail to obtain credentials 83% of companies report moderate to serious shortages of skilled workers – 69% expect shortage to grow in next 3-5 years 86% of Americans view the “trades” as essential for our prosperity –but only 1 in 3 parents would encourage child to pursue a trade 19.5% unemployment rate for bachelors degree in clinical psychology – 16% for high school dropout
  8. 8. A Few Thoughts on Solutions 8 Focus on hard-wiring the high school grad to a 13th year of education & call it college If an applicant for a 4-year school doesn‟t meet entry standards, don’t let them in (yet) Sell students on social status of technical & “middle skill” jobs – not just the economics Differentiate ROI for types of degrees – not just advise to get a college degree
  9. 9. More Thoughts 9 Student spending own money can purchase anything (even Russian Literature) – if spending public money, career plan should be required Employers need to be more specific about skills they need – many require college degrees for jobs that don’t require them Don‟t approve large student/parent loans for those who don‟t have the ability to pay off the loan – we are moving down same path as housing market
  10. 10. Thank You 10Questions/Answers
  11. 11. Long-Term Unemployment and Workforce Development Findings from a Federal Reserve Initiative 11 Kim ZeuliFederal Reserve Bank of Richmond October 23, 2012
  12. 12. Disclaimer 12The views expressed in this presentation are the views of the speaker and do notnecessarily reflect the views of the FederalReserve Bank of Richmond or the Federal Reserve System.
  13. 13. Initiative Goals 13 Gather information that complements or enhances employment data. Develop a deeper understanding of factors that create long-term unemployment. Identify promising workforce development solutions.
  14. 14. Initiative Overview 14 Information collected through forums held throughout the country.  Small focus groups and listening sessions.  Larger sessions with formal agendas focusing on a particular demographic or employment sector. Participants included local employers and organizations providing workforce development services.
  15. 15. Employment Outlook: A Disaggregated View 16
  16. 16. Source: Bureau of Labor Statistics 17
  17. 17. 18This recession is Unemployment Rate in thedifferent. United StatesWe have notexperienced asignificant drop inunemploymentduring recovery aswe have had inprevious recessions.
  18. 18. 19 Not all age groups Unemployment Rate by Age Groups have felt the recession equally. 30.00 Younger groups have noticeably higher 25.00 unemployment rate unemployment rates than older groups. 20.00 16-19 yrs One in every four 20-24 yrs young adults has been 15.00 25-34 yrs unemployed in recent years. 10.00 35-44 yrs 45-54 yrs 5.00 55 and over 0.00Source: Bureau of Labor Statistics
  19. 19. 20 We heard a lot about Unemployment Rate by Gender men vs. women (so- called „man-cession‟). 12.0 Jobs in fields where men are 10.0 disproportionately represented have been 8.0 hit harder. The gap has started to 6.0 converge as the urate-m unemployment rate 4.0 urate-w has started to decline in recent months. 2.0 0.0 2005 2004 2008 2007 2006 2009 2011 2003 2001 2002 2010Source: Bureau of Labor Statistics
  20. 20. 21Recovery byGenderWomen, who faredbetter than men in therecession, have notdone as well in therecovery.
  21. 21. 22 Unemployment Rate by Race The unemployment rate 18.00 has almost doubled for every race since the 16.00 beginning of the recession. Unemployment rate 14.00 For all races other than black, the unemployment 12.00 rate has begun to decline. 10.00 white 8.00 black 6.00 asian hispanic 4.00 2.00 0.00 2001 2011 2002 2005 2008 2010 2007 2003 2004 2006 2009Source: Bureau of Labor Statistics
  22. 22. 23Recovery byRace andEthnicitySteady but unevengains in employmentfor all groups ofworkers.Hispanics and Asiansare experiencing afaster rate of growth injobs than other groups.
  23. 23. 24 Unemployment Rate by Educational The unemployment rate for those with a Attainment bachelor‟s degree or greater currently stands 16 unemployment rate around 4%. 14 12 Unemployment rate for 10 those who have not completed high school is 8 over 14%. 6 4 The unemployment rate 2 for each level of educational attainment 0 has stabilized or started to go down recently. less than highschool diploma high school graduate, no college less than bachelors degree college graduatesSource: Bureau of Labor Statistics
  24. 24. Labor Force Participation Survey and Interviews: Summary of Results 25
  25. 25. 26 Labor Force Participation Survey and InterviewsOverview  What did we do?  Interviews (10) and survey (143 respondents) ofTo better understand employment/training and social service providers in allformal and informal states of the 6th District.labor forceparticipation of low-  What were we looking for?education/ low-wage  Employment barriers for individuals with a high schoolindividuals in the diploma or less who would typically fill low wage jobs.Southeast.  Approximately one-third of the U.S. workforce has a high school diploma or less.  Low-education occupations largely fall into the following categories: Construction and Extraction; Installation, Maintenance, and Repair; Food Services; Production; Transportation and Material Moving.  Low wage job = $39,821 or less annual household income for a family of four (about $3,300 per month).
  26. 26. 27 No jobs available in the area where 64%Main barriers to the applicants live or where 6% 28% applicants can access with…finding Existing job vacancies require 77%employment experience, skills, and/or certification that individuals do… 2% 21% Individuals do not have the social• Skills mismatch/lack skills, appearance, and/or attitude 35% 55% of skills. required by employers. 8%• No jobs available. Submitting job applications require 36% technological skills or access to 52%• Lack of soft skills. technology that individuals do not… 12% 33% Individuals can‟t pass a drug test. 44% Drug tests and 14% background checks Individuals can‟t pass a background 39% check (such as driving record or 46% were considered credit check). 10% relatively minor Wages for potential jobs are not as 24% barriers. good as unemployment benefits. 38% 33% Significant Unemployment compensation is 19% Barrier providing sufficient support to 34% continue looking for more… 35% Minor Some aspect of the available jobs is Barrier 23% undesirable, such as 34% Insignificant shifts, weekends, overtime, travel,… 29% Barrier
  27. 27. 28 Potential earnings cannot 57%Main reasons cover costs of child care or 31%for dropping out elder care. 8%of job search Receive unemployment 32% Potential earnings not compensation that is• 35% sufficient to cover their able to pay for child financial needs. 22% and elderly care.• Discouragement. Looking for a long time but 51% could not find the right job 28% and gave up. 13% Very Returning to school important and seeking training reason were not as important 17% Somewhat Currently pursuing college or 35% important to this group. technical school degree. 41% reason Not an 17% important Currently pursuing training 40% reason or certification. 35% 0% 20% 40% 60%
  28. 28. 29 “Mainstreaming” earnings are too 11% low and there is no incentive to file 31%Turning to the or report income. 33%informal sector Individuals have worked in the underground economy for a long 4% 40% time (culture, language, networks). 35%52% agree that theunderground economy 32%increased during the recession Reporting income is too 30% complicated or difficult to do.and recovery. 14%Main reasons: Individuals prefer to receive cash 6% 31% payments (no bank accounts). 44% o Fewer barriers to entry (no job 10% application, interview, e Fewer barriers to entry (no job 23% tc.). application, interview, etc.). 48% o Preference for cash payments. Retired from “mainstream” 28% o Individuals have worked workforce, but seeking more 32% in this sector for a long flexible employment. 11% time 3% (culture, language, netw Other. Please explain. 8% ork). 35% Not an important reason Somewhat important reason Very important reason
  29. 29. Round Tables:What We Heard 30
  30. 30. Labor Force Supply Chain Issues: Fragmentation of Workforce System 31 Lack of coordination between array of workforce training programs and funding.  Providers of government-funded employment and training services are hampered by the fact that there are more than 40 separate federal programs with separate funding streams and eligibility criteria (New Jersey). Lack of alignment between K-12 education, technical and community colleges, workforce agencies, employers, and social services networks.  “Systems disconnect” between educational and workforce programs (Baltimore, MD).
  31. 31. Labor Force Supply Chain Issues: Disconnect Between Education and Labor Market 32 Grade school curriculums typically focus on higher education and not job skills.  While employers must take responsibility for communicating their labor needs, educators must be responsible for designing systems nimble enough to respond to workforce demands (San Antonio, TX). Communities have seen cutbacks in vocational training and a push toward making all students “college ready.”  People perceive a lack of respect in the community for jobs such as plumbers and electricians. As a result, many secondary schools have subordinated vocational training to college preparatory tracks (Dyersburg, TN).
  32. 32. Employment Barriers: Job Skills 33 Applicants lack hard skills required to fill vacant positions in growing sectors.  Shortage of local candidates with critical thinking and problem- solving skills to fill the jobs in the digital media sector (New Orleans, LA).  Applicants lack the hard skills required to fill healthcare positions, particularly the computer knowledge to work with health care systems (Elkins, WV).  The healthcare sector will likely be demanding the greatest numbers of workers over the next ten years but clearly there is no sufficient supply of trained workers to fulfill these jobs (Birmingham, AL). Applicants also often lack soft skills such as professional conduct.
  33. 33. Employment Barriers: Transportation 34 Logistics are a major hurdle for the chronically unemployed, the urban poor, and individuals with disabilities.  Public transportation schedules heavily targeted to rush hours do not work for swing or night shifts workers, or workers who may have early report times (Baltimore MD). Transportation is also a significant obstacle to employment for residents of rural communities and small towns.  Long travel times lead to significant expenditures on support networks such as babysitters (Elkins, WV). Delays lead people to miss work or spend more time than can be justified to commute to their jobs.
  34. 34. Employment Barriers: Employer Risks 35 Long-term unemployment in itself decreases an individual‟s likelihood of landing a job.  Employers perceive risks in hiring those who have been unemployed for a long time and are therefore less willing to hire them (Kansas City, MO). Participants differentiated between individuals who had lost a job due to layoffs during the recession and those hard to employ because of life situations (e.g. criminal history).  People with criminal backgrounds face hiring practices that are inconsistent across industries (Baltimore, MD).
  35. 35. Employment Barriers: Disincentives 36 The unemployed face trade-offs between public assistance and low wage jobs.  “Cliff effect” – an increase in wages leads to a sharp reduction in income-tested public benefits, especially childcare subsidies (Omaha, NE).  Public assistance create disincentives for people to fill entry- level positions. Employees even request a part-time schedule or reduced hours in order to retain government benefits (Elkins, WV).
  36. 36. Sector-Specific Issues: Manufacturing 37 “Broken supply chain”  Community‟s workforce development pipeline is not equipped to meet demand for specific skilled labor, such as welders and technicians (Mobile, AL). Cities that experienced significant and widespread manufacturing layoffs continue to suffer from high rates of persistent unemployment.  Workers have had difficulty adjusting and retooling after the decline of their traditional industry – textiles (Eden, NC). Community and technical colleges cannot always keep up with labor demand.  Difficult to get retrained after a layoff as many educators have trouble accommodating student demand (Eden, NC).
  37. 37. Sector-Specific Issues: Healthcare 38 Major growth industry; experienced robust growth throughout the last three recessions. Yet, positions are going unfilled.  Workers lack requisite hard and soft skills. For example, employers have trouble with employees disobeying company policies and protocols that are essential in a healthcare environment (Elkins, WV). Training is inadequate or inappropriate.  Despite a high demand for nurses, there is a lack of available nursing educators to meet the need (Memphis, TN).  Credentials are not standardized, leading to difficulties placing workers with the “wrong” skills. There is a steady stream of individuals being certified as Licensed Practical Nurses (LPNs); however, the local healthcare sector places a higher value on trained nursing certifications other than the LPN (Baltimore, MD). Rural healthcare facilities have a particularly difficult challenge in filling vacancies.  Rural communities compete with each other on a regular basis for nurses and technicians (Elkins, WV).
  38. 38. Thank You!