Written with Jack Mills, Chief Workforce Strategy Officer and Director of the National Network of Sector Partners, Insight Center for Community Economic Development.
As you read this, approximately 1,000 industry sector-focused workforce development partnerships are solving some of the most pressing challenges facing our businesses, job seekers, workers, and communities. However, these essential "sector partnerships" need far more funding to make a difference at scale - the kind of difference our nation desperately needs.
Last year, Congress provided sector partnerships with policy support through its enormously bipartisan passage of the Workforce Innovation and Opportunity Act. Now, Congress must allocate sufficient funding to make this policy support real.
The US needs to expand its work force pipeline. The stakes are enormous and time is definitely not on our side. If our country fails to expand our workforce, American businesses will not be able to compete successfully and our people will struggle to obtain middle class jobs.
A recent National Association of Manufacturers/Deloitte survey shows that 82% of manufacturers believe the skills gap will impact their firms' ability to meet customer demand; the average firm believes it will lose $3,000 per non-management employee. Other research shows that middle-skill jobs account for 54% of US jobs, but only 44% of US workers are trained to a middle-skill level. A study published by the Federal Reserve Bank of Cleveland analyzed the ten-year growth trajectories of 118 regions. It found that racial inclusion and income equality were positively associated economic growth measures including employment, output, productivity, and per capita income. However, persistent barriers Blacks and Latinos face cause huge differences in their employment rates, earnings, and occupational concentration in comparison to whites, even as demographic changes assure that workers with the skills necessary for businesses to grow are increasing likely to be black and brown.
Like all sector partnerships, the Industrial Readiness Training program in Memphis, Tennessee brings together businesses in an industry sector and organizations able to meet their workforce development needs. In this program's case, it's manufacturers such as Electrolux and Kruger Products, Southwest Tennessee Community College, and the Workforce Investment Network (a Workforce Investment Board).
Sector partnerships like the Industrial Readiness Training program are proven to not only provide bottom line benefits to an industry's businesses, but also significant earnings gains to job seekers and workers.
Graduates of the Industrial Readiness Training program and the businesses that hire them speak volumes about this sector partnership's impact. One graduate highlights what many would say: the knowledge and skills she gained helped her get a manufacturing job. Hers was at Electrolux, where it led to a promotion. The manufacturing job meant even more for another graduate, who said, "I just got my kids back. This program has changed my life." A Senior Human Resource Manager at Electrolux said of the program, "They've worked with us on the specific needs we've identified. They also know what our business is... so it creates that real partnership... the outcomes have been great."
A return on investment evaluation of another successful sector partnership, the Health Careers Collaborative of Greater Cincinnati, showed that its programs are "highly beneficial to health care providers, producing a return on investment of 146 percent."
A matched pair evaluation of New York City's industry sector-focused Career Centers found that participants earned $5,800 more than their matched counterparts at Career Centers that are not sector-focused in the year after they participated. Moreover, the participants who received targeted industry-specific hard skills training had average earnings increases of 82 percent ($9,071) in the year following completion. Demographic characteristics such as race/ethnicity, education level, and disability status, were unrelated to the income impacts.
A random assignment evaluation of sector partnerships led by non-profit organizations found that in the year following program participation, annual earnings of those in the program group were on average 30 percent higher than earnings of those in the control group. Milwaukee's WRTP/BIG STEP, one of the sector partnerships that was evaluated, achieved both the earning gains and pre-apprenticeship program participation by Blacks that equaled their high percentage in the city's population.
We know what works. Congress knows what works. We can solve these crucial problems for our country. Funding will make the difference. Congress needs to fully fund the Workforce Innovation and Opportunities Act. We also need bipartisan Congressional support for full funding of High Growth Sector Training Grants and the Apprenticeship Training Fund -- to provide funding to industry sector partnerships, as well as programs that sector partnerships can use to get things rolling again for the long-term unemployed and young people who are out of school and out of work. Congress promised support. The President's budget calls for support. Now America needs Congress to attach funds to their promises.
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Henry A. J. Ramos is CEO of the Insight Center for Community Economic Development.
Jack Mills is Chief Workforce Strategy Officer and Director of the National Network of Sector Partners at the Insight Center for Community Economic Development.