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Summary The United States needs a skilled technical workforce to remain competitive in the global economy and to ensure that its workers participate in the nationâs economic growth. There are significant opportunities as well as major challenges in this regard. Notably, rigorous evidence indicates that the returns to investments in technical skills in the labor market are strong when students successfully complete their training and gain credentials sought by employers. At the same time, the committee found that in many instances, workers either are not taking advantage of these opportunities or are failing to complete their training programs. To understand why, it is necessary to recognize that in the United States, the responsibility for developing and sustaining a skilled technical workforce is fragmented across many groups, including educators; students; workers; employers; the federal, state, and local governments; labor organizations; and civic associations. For the system to work well, these groups need to be able to coordinate and cooperate successfully with each other. Unlike most other advanced economies, the United States lacks formal mechanisms that require governments, educators, labor representatives, and employers to coordinate on workforce development policies and practices at the national level. In fact, workforce development in the United States is polycentric in nature, driven by a variety of private and public investments in workforce education and training. Workers often pay for on-the-job training through lower wages. Although employers and governments share an interest in developing and maintaining a robust skilled technical workforce, their respective investments often are uncoordinated. At the same time, public investments are guided by a complex and similarly uncoordinated set of policies associated with achieving similarly divergent goals related to economic development, education, employment, health and human services, and veteransâ affairs. In this polycentric system, making better use of available resources and generating better outcomes requires improving coordination between students and educational or training institutions, between secondary and postsecondary institutions, and especially between training institutions and employers through a variety of public, private, and hybrid mechanisms. 1
2 BUILDING AMERICAâS SKILLED TECHNICAL WORKFORCE The good news is that promising experiments currently under way across the United States can provide guidance for innovation and reform, although the scalability of some of these experiments has not yet been tested. As detailed in Chapter 6, evidence suggests that integration of academic education, technical training, and hands-on work experience improves outcomes and return on investment for students in secondary and postsecondary education and for skilled technical workers in different career stages. The findings and recommendations presented below are designed to help overcome some of the barriers identified within the current framework of federal governance, state implementation, and market incentives. They address the key elements of the statement of task for this study. To the extent possible, the recommendations call for specific actions by Congress, federal agencies, state governments, employers, and civic organizations to improve the American system of workforce development. FINDINGS 1. The skilled technical workforce includes a range of occupations that require a high level of knowledge in a technical domain, but many of these occupations do not require a bachelorâs degree for entry. 2. Although widely used to describe this segment of the workforce, the term âmiddle skillsâ fails to capture the high value and dynamism of this segment of the U.S. workforce and is seen by some as having pejorative connotations. This label can deter students and workers from these occupations at every stage of their career. 3. To remain competitive in the global economy, foster greater innovation, and provide a foundation for shared prosperity, the United States needs a workforce with the right mix of skills to meet the diverse needs of the economy. Conversely, an insufficiently skilled workforce imposes significant burdens on the U.S. economy, including higher costs to workers and employers and lower economic productivity. 4. The evidence suggests that as a nation, the United States is not adequately developing and sustaining a workforce with the skills needed to compete in the 21st century. 5. It is difficult to find rigorous evidence on how well skilled technical labor markets are functioning at aggregate levels of analysis across the nation. 6. The nation is experiencing, and will continue to experience, imbalances in the supply of and demand for skilled technical workers in certain occupations, industry sectors, and locations. The nature of the problem differs across sectors and locations. These imbalances arise from multiple sources. 7. In the United States, educators, students, workers, employers, the federal government, state and local governments, labor unions, industry and trade
SUMMARY 3 associations, and other civic associations all play a role in skilled technical workforce development. 8. Skilled technical workforce development in the United States is guided and supported by a complex and often uncoordinated set of policies and funds at the local, state, and federal government levels associated with achieving goals related to economic development, education, labor and employment, health and human services, and veteransâ affairs. Most resources are allocated by formulas based on demographic factors, which serve as a proxy for need, rather than on performance, outcomes, or evidence of what works best in workforce development. 9. The incentives for students and employers to invest in skill development depend on the return on these investments. 10. Policy makers and participants in workforce development lack the information they need to adjust policies and make choices. User-friendly tools that provide direct access to information about options and performance can assist labor market participants in their decision-making processes. 11. Several strategies and initiatives show promising results by improving rates of successful completion of education and training and by coordinating education and training opportunities with employer needs. These experiments, which link the different parts of the ecosystem for workforce education and training, could be instructive for designing and enforcing policy and allocating resources within appropriate contexts. 12. The Armed Services, one of the largest employers in the United States, could do a better job of assessing employment transition risks for military personnel, and designing and delivering services to mitigate these risks. They could also coordinate better with civilian policy makers, regulators, and educators to improve the transferability of military education, training, and certification. 13. Policies and governmental structures used to support education and training in such countries as Germany and Switzerland may not be directly applicable in the United States because of differences in political and economic structures. However, applicable lessons can be learned from specific programs or innovative educational techniques, and policy makers in the United States can benefit from more rigorous cross-country comparisons. RECOMMENDATIONS 1. State and federal policy makers should support and enhance strategies that help students successfully complete their training for the skilled technical workforce. In addition, public policies should ensure that stakeholders, including students, workers, employers, and educational organizations, have
4 BUILDING AMERICAâS SKILLED TECHNICAL WORKFORCE the right incentives to improve the quality of technical education and training, encourage experimentation and collaboration, and improve the collection and use of relevant information. 2. An alliance of industry, trade, academic, and civic associations and labor unions, in cooperation with the U.S. Departments of Labor and Education, should organize a nationwide publicâprivate communication campaign to raise awareness of the value of and demand for skilled technical workers and the return on investment for individuals preparing for these careers. This campaign should be customized to recognize local variations in skilled technical workforce education, training, and labor market requirements. 3. Congress and state legislatures should improve oversight of public policies and resources, highlighting the implementation of reforms such as those called for in the Workforce Innovation and Opportunity Act (WIOA). Reforms should be accelerated through targeted incentives. 4. Congress, state legislatures, and agencies of the federal and state governments should improve the workforce labor market information system (WLMIS), labor market data, and research tools and methods, including by providing funding for such activities. 5. Federal and state agencies should remove barriers to worker mobility, such as licensing and certification requirements that are not related to public safety. They also should improve labor market information on the changing requirements for skilled technical workers to help reduce imbalances in labor markets and to align workforce development with advances in science and technology. 6. The Department of Defense should further integrate skills transition into military training rather than treating it as a separate component at the end of the service memberâs career. 7. While selected programs and policies from other countries have been adapted in the United States, federal agencies should further study the conditions under which particular attributes of apprenticeships or other programs can be effectively applied more broadly.