Closing the Skills Gap, Creating Opportunity: We Have a Way, But Do We Have the Will?

February 13, 2013

As President Obama renewed his oath of office last month, he affirmed that we must "empower our citizens with the skills they need to work harder, learn more, and reach higher." Indeed.

America faces a labor market that has improved since the double-digit unemployment of the "Great Recession." But there are still 12.3 million unemployed U.S. workers while 3.6 million jobs remain open and employers report that they cannot find workers with the right skills to fill these jobs. Most jobs require a skilled credential, but 88 million U.S. workers have low literacy, limited English, or lack a credential past high school. There are many reasons for stagnation in the U.S. labor market; the skills gap is one notable cause. With skill gaps, come opportunity gaps: Too many workers don't have a chance to join the middle class.

We can close the skills gap, light a spark in our economy, and create opportunities by investing in what works: sector partnerships.

Sector partnerships are a specific approach to training local workers with the skills needed not just by one company, but by multiple companies within an industry. This shared training strategy means that employment opportunities for local workers are not dictated by the success or failure of one company. If a firm closes or sheds jobs, workers trained by the sector partnership have the skills needed by other local companies in that industry.

Sector partnerships bring multiple firms within an industry together with education and training providers and other key partners like organized labor and community organizations to ensure that workers — particularly those who have had limited opportunities — have the support they need to succeed in their education and employment.

Better for Industry

Because sector partnerships involve local stakeholders, they are able to respond quickly to local needs. For example, in Washington the Pacific Northwest Center of Excellence for Clean Energy brings together major power generation plants, organized labor, workforce boards, public utilities and community colleges to develop skills standards manuals for several middle-skill power generation occupations. These standards are used by industry to create job descriptions and advancement requirements and by educators and job training programs to train workers in skills that are exactly right for the industry.

Better for Workers

The local responsiveness of sector partnerships benefits local employers, but it also creates better opportunities for graduates to join the middle class. A multi-year study of sector-focused training programs by Public /Private Ventures found positive outcomes for graduates including steadier employment with increased earnings and better access to benefits than those who did not complete these types of programs.

In Baltimore, the city's emerging biotechnology industry had high turnover as workers with bachelor degrees sought more advanced degrees. However, these positions only required short-term training to work in a sterile environment, not bachelor degrees. The BioTechnical Institute of Maryland (BTI) now trains low-income Baltimore residents to be entry-level technicians, opening up a new industry to low-skilled workers.

Better Use of Public Dollars

Sector partnerships are a more efficient use of public training dollars, which is why more than half of U.S. states are exploring or implementing these strategies. The National Skills Coalition, in partnership with the National Governors Association and Corporation for a Skilled Workforce released a report this week highlighting why governors and regional leaders are incorporating these partnerships as part of their comprehensive economic agenda. With fewer public dollars available, sector partnerships reduce inefficiencies and target resources to better serve workers and industry.

The Challenge

Unfortunately, federal expenditures are dwindling as the need for workforce development programs increases. Since 2001, federal workforce development programs have been cut by 30 percent — with $1 billion of those cuts just since 2010. These programs stand to lose more funding as Congress continues to debate deficit reduction before sequestration takes effect in March. Some in Congress have proposed completely eliminating workforce training funds.

Even if workforce development funding is protected, the Workforce Investment Act — the primary federal job training program which Congress has repeatedly failed to reauthorize — provides no dedicated support for sector partnerships. In July 2010, the House of Representatives passed — with bi-partisan, unanimous support — the SECTORS Act, which would dedicate federal funding to the creation of sector partnerships. But this bi-partisan proposal has not moved forward.

While closing the skills gap cannot in and of itself solve unemployment, it is one essential component of the solution. With the growth and evaluation of sector partnerships over the last decade, we are fortunate to have one answer the question: "What works?" Expanding and supporting sector partnerships will get more people back to work, grow industries and help ensure long-term economic health. The only question remaining is this: "Do we have the political will and leadership in Washington to accomplish what works?"

Only President Obama and Congress can answer that question.