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Building America's Skilled Technical Workforce (2017)

Chapter: 7 Findings and Recommendations

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Suggested Citation:"7 Findings and Recommendations." National Academies of Sciences, Engineering, and Medicine. 2017. Building America's Skilled Technical Workforce. Washington, DC: The National Academies Press. doi: 10.17226/23472.
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7 Findings and Recommendations The United States needs a skilled technical workforce to remain competitive in the global economy and to ensure that its workers participate in the nation’s economic growth. There are significant opportunities as well as major challenges in this regard. Notably, rigorous evidence indicates that the returns on 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 veterans’ 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 161

162 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE institutions, and especially between training institutions and employers through a variety of public, private, and hybrid mechanisms. 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 in this chapter 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. 1 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. 2 FINDINGS TASK: Define the skilled technical workforce. Finding 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 bachelor’s degree for entry. 3 1 The statement of task is presented in Box 1-2 in Chapter 1. The findings and recommendations in this chapter are cross-indexed to the tasks undertaken by the committee as follows: • Define the skilled technical workforce: Findings 1 and 2, and Recom- mendation 2. • Consider gaps and market failures: Findings 3, 4, 5, and 6, and Recom- mendations 3, 4, and 5. • Consider the current public- and private-sector roles in financing and providing employment training and skills certification: Finding 7. • Consider policy-making challenges and experiments that affect incentives and information to improve work skills: Findings 8, 9, 10, 11, and 12, and Recommendations 1 and 6. • Consider selected employment preparation practices in other countries: Finding 13 and Recommendation 7. 2 A summary list of selected appropriate actions for stakeholders is presented at the end of this chapter. 3 See also the summary in Box 1-1 in Chapter 1.

FINDINGS AND RECOMMENDATIONS 163 a. Estimates of the number of skilled technical workers range from 11.9 percent to 23.1 percent of the total U.S. workforce, depending on how the workforce is defined. b. Nonroutine, interpersonal, and analytic skills are becoming increasingly important for skilled technical work. It has been estimated that as of 2009, more than 60 percent of all work tasks required these skills. Competencies associated with skilled technical workers include the following: • Personal skills. These include interpersonal skills, integrity, initiative, dependability and reliability, adaptability and flexibility, and lifelong learning. • Academic competencies. These include basic academic skills such as reading, writing, and mathematics; advanced knowledge and skills in science and technology relevant to the technical occupation; and critical and analytical thinking. • Workplace competencies. These include teamwork and collaboration; customer focus; planning and organizing; problem solving and decision making; working with tools and technologies; scheduling and coordination; and checking, examining, and recording. • Industry-wide technical competencies. These are the knowledge, skills, and abilities associated with a particular industry such as health care or manufacturing. They are “cross-cutting” competencies common to most occupations within the industry. These competencies usually deal with comprehension, awareness, or analysis. • Occupation-specific technical competencies. These are the knowledge, skills, and abilities associated with specific occupations such as emergency medicine or automotive manufacturing technicians. Finding 2: Although widely used to describe this segment of the workforce, the term “middle skills” 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. 4 a. Social Perspectives. Students, parents, and workers often fail to appreciate the value of many skilled technical occupations and wrongly believe that skilled technical jobs do not offer adequate wages, working 4 See Section 1.4 of Chapter 1 on “Defining the Workforce.”

164 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE conditions, employment security, social prestige, opportunities for advancement, or other important benefits. 5 Consequently, many students and workers overlook occupations and career opportunities that have high social value and potentially good returns to education and training, or they do not properly prepare themselves for these opportunities. b. High-value jobs. In fact, the data show that skilled technical occupations are well-paying jobs with high social value and multiple points of entry that require academic preparation combined with postsecondary technical education and training and experience on the job to achieve competency. 6 c. Multiple pathways. Workers in skilled technical occupations may hold any one of several different types of credentials, including associate’s, bachelor’s, and master’s degrees; certificates; certifications; and occupational licenses. 7 TASK: Consider gaps and market failures. Finding 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. 8 a. Higher costs. An insufficiently skilled workforce imposes costs on employers who struggle to find skilled workers, and also hurts workers who could otherwise have higher skills and earnings, thus exacerbating inequality. b. Lower employment and productivity. Some economists are concerned that an insufficient number of skilled workers can limit growth rates in employment, output, and productivity. If employers cannot hire workers with the right skills locally, they cannot produce enough of the higher-value products and services that are associated with sustained innovation and growth in their location. This in turn creates pressure to relocate either within the United States or abroad. In 5 See Section 1.4 of Chapter 1 on “Defining the Workforce.” 6 See Section 1.4 of Chapter 1 on “Defining the Workforce.” 7 See Section 1.5 of Chapter 1 on “Structure of the System for U.S. Skilled Technical Workforce Development.” 8 See Section 2.1 of Chapter 2 on “The Supply of and Demand for Skilled Technical Workers.”

FINDINGS AND RECOMMENDATIONS 165 a global economy, employers often offset the lack of qualified labor in one country by seeking qualified labor in another (offshoring). c. Other impacts. Citizens with lower skill proficiency tend to report poorer health, lower civic engagement, and less trust. Lower skills also make it difficult for workers to attain more education or training when structural changes require adapting to new methods and processes. Finding 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. 9 a. Americans perform poorly on a large international assessment of adult skills compared with citizens of other leading economies. For example: • Compared with the working-age population in 24 Organisation for Economic Co-operation and Development (OECD) countries, Americans rank 16th in literacy skills, 21st in numeracy skills, and 14th in problem solving in a technology-rich environment. • U.S. average mathematics and science literacy scores are below the average scores for all developed countries, and Americans have substantially fewer high scores and more low scores than citizens of other developed countries. b. Americans perform poorly on U.S.-based assessments of skills: • Only 46 percent of Americans can demonstrate an understanding of scientific inquiry. • On average, American students are not proficient in mathematics, reading, or writing as measured by the National Assessment of Educational Progress (NAEP). c. Americans are concerned about the nation’s ability to develop and sustain a skilled workforce: • According to the National Science Board (NSB), most Americans think other countries are doing a better job of providing technical education and supporting lifelong education and training. • Spurred by concerns about the need for a skilled technical workforce, public officials at the federal, state, and local levels have undertaken numerous initiatives related to improving the skill of the workforce. 10 • Employers, industry associations, and labor unions share these 9 See Section 3.6 of Chapter 3 on “Current Policy Issues Related to Developing a Skilled Technical Workforce.” 10 See Section 3.3 of Chapter 3 on “Federal-Level Policies and Programs” and Section 3.5 of Chapter 3 on “State-Level Policies.”

166 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE concerns. Industry surveys and policy reports find evidence of current and long-term skill gaps in technical occupations. • The available evidence suggests that efforts to create stackable credentials and career pipelines and pathways may not in themselves lead to an increase in the supply of technical workers. A recent report of the NSB cites decades of data showing that in the United States, “degree is not destiny” and that there is only a very loose association between degrees and jobs at all education levels and in all degree fields. 11 Finding 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. 12 a. Evidence indicates labor market imbalances in certain skilled technical occupations, industry sectors, and locations; however, analysts disagree as to whether there are gaps or failures in the aggregate in skilled technical labor markets, with some arguing that there is no overall evidence of market failures. b. Labor supply and demand for skilled technical occupations vary across sectors and locations, and it is difficult to disentangle these two factors using traditional analytical methods. 13 c. By definition, an innovative economy is likely to experience some lag in producing workers with the latest skills. 14 The ability to measure skill shortages is hampered by the dynamic nature of the labor market in that it is difficult to know whether an imbalance will be permanent or temporary. The measurement challenge arises because it is difficult to consistently identify levels of supply and demand in multiple sectors, at varying levels of aggregation, and in changing markets for skilled labor. Finding 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 11 See Section 2.1.1 of Chapter 2 on “National Trends in the Demand for and Supply of Skilled Technical Workers.” 12 See Section 2.1 of Chapter 2 on “The Supply of and Demand for Skilled Technical Workers.” 13 See Section 2.1 of Chapter 2 on “The Supply of and Demand for Skilled Technical Workers.” 14 See Section 1.2 of Chapter 1 on “The Importance of Skills.”

FINDINGS AND RECOMMENDATIONS 167 problem differs across sectors and locations. These imbalances arise from multiple sources: a. Sectoral gaps. Gaps are particularly evident in health care and manufacturing, industries that have undergone a shift from high- volume, low-tech jobs to dynamic, high-tech jobs and that encompass several occupations that require proficiency in science, technology, engineering, and mathematics (STEM) skills, as well as other foundational skills. 15 b. Demographic factors. Changes related to population growth and the retirement of the baby boom generation create the potential for gaps and imbalances in skilled labor markets. c. Structural changes. The functioning of skilled labor markets is affected by structural changes related to technological advances, changing business models, global competition, and sectoral changes associated with price movements. 16 d. Outmoded or misaligned policies and regulations. Examples of misaligned policies include lengthy training requirements or licensing laws that constrain the supply of skilled technical labor for long periods of time in certain occupations, such as health care. 17 e. Advances in science and technology. New technologies will impact the demand for applied technical skills: requirements will evolve over time, and continual education and training will be needed. 18 f. Poor incentives facing the nation’s institutions. Federal and state funding formulas can distort educators’ incentives by emphasizing the volume of enrollment in institutions and programs rather than the quality of the institutions and programs or outcomes. 19 Funding formulas also can divert resources from programs that actually add value in skilled technical workforce development. TASK: Consider current public- and private-sector roles in financing and providing employment training and skills certification. Finding 7: In the United States, educators, students, workers, employers, the federal government, state and local governments, labor unions, industry and 15 See Section 2.1 of Chapter 2 on “The Supply of and Demand for Skilled Technical Workers.” 16 See Section 2.1.2 of Chapter 2 on “Exploring Imbalances across the Skilled Technical Workforce in the United States.” 17 See Section 2.3 of Chapter 2 on “Trends in Supply and Demand in Health Care.” 18 See Section 2.3 of Chapter 2 on “Trends in Supply and Demand in Health Care.” 19 See Section 5.2 of Chapter 5 on “Impediments to Better Training Outcomes.”

168 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE trade associations, and other civic associations all play a role in skilled technical workforce development. a. Educators are responsible for designing and delivering education and training that will meet current and future skilled technical workforce requirements. The current education system works well to prepare some students for some skilled technical occupations. • Elementary and secondary education, which is intended to provide the foundation for qualifying for jobs in skilled occupations, is provided both publicly and privately. Public education is funded primarily with local tax revenues. Career and technical education (CTE) of varying quality and scope is provided in 9,500 comprehensive high schools, about 1,000 vocational high schools that also offer academic subjects, and about 800 area regional vocational schools that offer mainly CTE courses. • Postsecondary education, which is increasingly necessary to qualify for jobs in skilled technical occupations, is typically subsidized with state and federal funding provided to individuals and institutions. Depending on the location, options of varying quality, cost, and scope for postsecondary education and training for skilled technical jobs may include the following: − Community and technical colleges were created to provide affordable lifelong academic and technical education and training for all individuals in a local area. They offer associate’s degrees that are transferrable to higher education degree programs, terminal associate’s degrees, certifications, apprenticeships, and contract or custom training on a noncredit basis. Community colleges in the United States currently enroll nearly half of all students pursuing undergraduate education. − Colleges and research universities provide academic and technical education and training for skilled technical jobs for youth and adults on a competitive basis at a wide range of costs. They offer bachelor’s degrees, clinical training, graduate degrees, and doctoral degrees in the arts; such vocations as business, education, government, and law; and science and technology. Slightly more than half of all students pursuing undergraduate education are currently enrolled in 4-year colleges and research universities. − Apprenticeships provide education and training in a wide range of skilled occupations and are expanding nationally. The registered apprenticeship network in the United States currently includes more than 1,000 occupations, although active programs may not exist in all of these occupations.

FINDINGS AND RECOMMENDATIONS 169 There are about 400,000 registered apprentices in the United States, and they are typically clustered in a few occupational sectors, such as construction, certain areas of manufacturing, and services. 20 However, there are numerous barriers to the wider adoption of apprenticeship programs, including confusion about what constitutes an apprenticeship; the high costs of starting a program; a lack of intermediating institutions needed to connect firms, workers, and educational organizations; and insufficient in-company training resources. 21 − Certifications are offered by approximately 4,000 entities in the United States, including industry groups, professional organizations, and employers, often with little quality control through third-party review or accreditation. − Certificate programs—typically lasting 1 year or less—are widely available at community colleges for many skilled technical fields. The limited research available suggests that the value of these certificates varies widely. b. Students and workers are responsible for identifying education and training requirements, but may not be making informed choices. Higher education in public institutions in the United States is subsidized by the state governments. Even so, most postsecondary students are responsible for the up-front costs, including tuition, books, supplies, child care, and transportation. c. Employers often provide on-the-job training, as well as tuition assistance for postsecondary education and training for employees. However, it is difficult to determine accurately the motivation for, the scale of, or the effectiveness of employer training because of limited independent data and analyses. The data that have been collected show wide variation across surveys. For example, estimates of the proportion of workers who participated in training in the years 2003 and 2004 vary from 22 to 57 percent. About 30 percent of employees use tuition reimbursement programs. 22 d. Civic organizations, including labor unions, worker associations, industry and trade associations, religious organizations, and philanthropies, also support workforce development based on their specific missions and interests. However, there have been no 20 See Section 4.3 of Chapter 4 on “Other Postsecondary Education and Training Programs.” 21 See Box 4-1 of Chapter 4 on “Apprenticeships: Challenges from Concept to Application.” 22 See Section 4.2 of Chapter 4 on “The Primary Components of Workforce Development.”

170 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE comprehensive studies of the scale or effectiveness of the role of civic associations in skilled workforce development. 23 TASK: Consider policy-making challenges and experiments that affect incentives and information to improve work skills. Finding 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 veterans’ 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. a. Federal policy frameworks include the 2015 Every Student Succeeds Act, the 2014 Workforce Innovation and Opportunity Act (WIOA), the Perkins Act, the Higher Education Act (HEA), and the Post-9/11 Veterans Educational Assistance Act of 2008. 24 − The majority of federal workforce training funding is distributed by formula grant programs that allocate funds to state and local entities based on established noncompetitive criteria; the rest is distributed through competitive grant programs administered by federal agencies. − Of the $145 billion in federal education assistance provided in 2013, the vast majority ($130.7 billion) was governed by Title IV of HEA, while $10 billion was governed by the Post-9/11 Veterans Educational Assistance Act of 2008, $2.5 billion by WIOA, $1.1 billion by the Perkins Act, and $575 million by the Trade Adjustment Assistance Act (TAA). − Many federal programs support workforce development; however, 95 percent of this funding is managed by four federal agencies: the Department of Labor (45.2 percent), Department of Education (29.9 percent), Department of Health and Human Services (12.5 percent), and Department of Veterans Affairs (8 percent). − WIOA is intended to better align federal and state workforce development efforts. However, it has not yet been fully implemented; resource allocations are uncertain; and in the past, 23 See Section 4.4 of Chapter 4 on “Funding for Skilled Technical Workforce Education and Training.” 24 See Section 3.3 of Chapter 3 on “Federal-Level Policies and Programs.”

FINDINGS AND RECOMMENDATIONS 171 congressional oversight of performance against policy goals has been limited. b. State and local policy frameworks include those related to K-16 education, CTE, labor, and veterans’ assistance. 25 − The National Center for Education Statistics reports that state and local expenditures for public elementary and secondary schools alone are projected to be $634 billion for the 2015-2016 school year. − State and local government agencies are the primary source of funding for community colleges. In 2013-2014, expenditures for community colleges totaled $55.9 billion, nearly half (49.4 percent) of which came from state or local funding, 22.6 percent from federal funding, and the remainder from student tuition and fees (16.7 percent) and other sources (11.3 percent). − Some forms of education and training, such as CTE, apprenticeships, certificate programs, certification programs, licensing programs, and veterans’ transition assistance programs, require systematic collaboration across educators, employers, labor unions, industry and trade associations, and policy makers at the local level. − Although there are many examples of effective systematic coordination that prepares skilled technical workers to meet local employer needs, these models remain isolated. Many policy makers are concerned about the effectiveness of local coordination and resource allocation. Finding 9: The incentives for students and employers to invest in skill development depend on the return on these investments. 26 a. Overall, there is strong evidence of high positive returns to postsecondary education and training for skilled technical jobs. However, students face major hurdles in starting and completing their education and training. Students in public community colleges have lower completion rates relative to students in private technical colleges or 4-year colleges. Key factors affecting the initiation and completion of postsecondary education and training programs include • the rising cost of tuition; 25 See Section 3.5 of Chapter 3 on “State-Level Policies.” 26 See Section 5.1 of Chapter 5 on “The Return-on-Investment Calculus.”

172 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE • inadequate preparation in elementary and secondary education and the high costs of remedial programs needed to overcome this lack of preparation; • a lack of support services to address challenges faced by many students in establishing their household, raising their children, and caring for aging family members; • limited career guidance, which makes it difficult for students to identify appropriate courses of study; and • the perceived low social prestige of CTE among some students and parents. Finding 11 addresses effective strategies for improving completion rates for programs in skill training. b. Evidence on employer investments in education and training and the return on these investments is mixed, in large part because data are missing or incomplete. • Some employers may look to public resources for education and training for students and workers because they fear that other employers may free-ride on their investments. • With the growth of contingent work arrangements, which shorten the timeframe within which employers can recoup investments in training, some employers may have insufficient motivation to invest in some types of skilled technical workforce development. c. Investments in certification programs by students, workers, and employers depend on the perceived value of these programs. The value of certain programs may be difficult to measure or may be lower when alignment is lacking among credentialing institutions, states, or employers within an industry. • The available research on certificates and certifications indicates that outcomes are highly context-dependent. Certifications appear to have more labor market value in some sectors than in others, and some degree of quality control is exercised through third-party review or accreditation. Certificates that require long periods of study and are aligned with industry certifications provide more benefits to holders relative to those that require short periods of study. • State and local credentialing and licensing requirements can increase the costs of preparing for and entering skilled technical jobs, and make it more difficult and costly to move from one job to another or from one location to another.

FINDINGS AND RECOMMENDATIONS 173 Finding 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. 27 a. Limitations in data and analyses make it difficult to determine whether and how individuals, employers, and the public are investing in skilled technical education and training, and whether they are realizing a sufficient return to continue or increase their investments. 28 b. To make adjustments that will improve workforce development outcomes, both policy makers and labor market participants need better data with which to analyze labor market dynamics, returns on investments in workforce development, and the effectiveness of alternative strategies. • Students and workers, guidance counselors, and educators need better information on skill requirements, career pathways, and potential returns on their investments in education and training. • Employers can benefit from better information on effective education and training resources and on viable pipelines for producing skilled workers. c. Much of the data for the information system that supports U.S. labor market functions is funded and administered by the Department of Labor. However, this information system is less effective than it could be; funding has been stagnant over the past decade, and Congress has provided limited oversight. d. Many analysts are using outdated and ineffective research methods. Investing in more research will not necessarily generate new knowledge if analysts continue to use outmoded analytical methods and tools. Advances in mathematics, statistics, and the computational sciences make it possible to capture and analyze data from a broad range of very different sources. The evidence suggests that more analysts need to apply these advances to improve workforce analysis tools and methods. e. Local data warehouses and analytical applications, such as those funded by the Department of Labor’s Workforce Data Quality Initiative, help policy makers better estimate returns on investments in education and training. 27 See Section 5.2 of Chapter 5 on “Impediments to Better Training Outcomes,” and Section 6.5 of Chapter 6 on “Improving Links through Better Data.” 28 See also Section 2.3 of Chapter 2 on “Trends in Supply and Demand in Health Care” and Section 5.2 of Chapter 5 on “Impediments to Better Training Outcomes.”

174 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE Finding 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. a. The first set of policy measures is intended to link students to education and training and improve success rates. 29 They include the following: • Counseling services. Career guidance is particularly important to skilled technical workforce development because it can counter the common perception that the only path to lifelong occupational success is through immediate entry into a 4-year college and advanced degree programs. Without career counseling and reliable occupational information, students pay insufficient attention to labor market trends when choosing a field of study. • Financial aid. Some federal aid, such as Pell Grants, is limited to undergraduate students in for-credit programs and is not available to students taking continuing education classes, even when they earn a certificate. Evidence indicates that providing financial aid tied to academic benchmarks as a supplement to other financial aid increases the likelihood that students will enroll full-time and earn more credits. • Braiding of financial sources. Some states are finding effective ways to combine public resources to support postsecondary education and training programs by using “braiding strategies,” which merge public dollars for a common purpose while keeping categorical funds distinct. More analyses of funding sources and financial flows are required to ensure that public funds can flow freely to meet changing workforce development needs. • Continuing education and training. Lifelong learning is essential for the U.S. workforce to remain globally competitive. Overall participation in all forms of adult education among Americans aged 16 and older is about 44 percent. Some states are experimenting with strategies for ensuring that U.S. workers will continue to invest in education and training throughout their work lives. Maine, for example, is experimenting with portable, employee-owned Lifelong Learning Accounts that permit employees, employers, and the state to pool funds for continual worker education and training. 29 See Section 6.1 of Chapter 6 on “Linking Students to Skilled Technical Education and Training Opportunities and Improving Success Rates.”

FINDINGS AND RECOMMENDATIONS 175 • Wraparound services. Providing a wide range of services, such as counseling, tutoring, child care, and transportation assistance, that support students in achieving education and training goals appears to improve student outcomes and returns on investment. • Remedial programs. Students who need to take remedial classes in college are more likely to drop out. Although it has not been validated through randomized controlled trials, anecdotal evidence suggests that integrating remediation into skills training improves completion rates. Schools also can do a better job of assessing student readiness for education and training and designing more appropriate and cost-effective prerequisite requirements. Online education may be a key component of improved remediation, and the use of online simulation modules may be effective at improving training opportunities economically. • Career pathways. Some evidence suggests that articulating career pathways improves education and training outcomes. Career pathways, which are roadmaps of the education and training required to attain credentials associated with success in specific industries, have been adopted in several states and often are used to guide linked learning, sector strategies, talent management, and career pipeline initiatives. • Online and blended learning. New information technologies can supplement traditional educational methods. Although the use of online training has proven effective in certain professions, such as air transportation (e.g., flight simulators) and health care (e.g., surgical applications), it also offers the promise of aiding with remedial education, which may improve community college completion rates. • Incentives for community colleges. Although many states have already implemented funding incentives based on such indicators as course completion and time to degree, these formulas may encourage community colleges to accept only the best students or to lower standards for completion. To boost completion rates, community colleges and other educational organizations will require incentives and funding to create more flexible and integrated programs and offer supportive services. b. A second set of policy measures is intended to improve links between secondary and postsecondary education. 30 Better integration of academic and technical education and training can improve the quality 30 See Section 6.2 of Chapter 6 on “Linking Secondary and Postsecondary Education and Training.”

176 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE of postsecondary education and increase the return on investments in education and training for skilled technical occupations. • Dual-enrollment programs and early college high schools. The existing evidence suggests that these programs, which involve formal linkages between secondary and postsecondary school credentialing programs, improve incentives for high school students to earn their high school diploma and an associate’s degree in an applied science or technology and to obtain a job. • Career academies. Evidence suggests that career academies, a type of small learning community within a school that provides a college preparatory curriculum with a career-related theme, improve outcomes for students during and after high school. First founded in 1969 in Philadelphia with the Electric Academy at Edison High School, career academies in the United States now number more than 7,000 and cover a wide range of career areas. c. A third set of policy measures is intended to link training and work. 31 Many employers are seeking to partner more closely with community or technical colleges. Similarly, many educators are seeking to partner with employers to develop more relevant education and training programs. These educational institution–employer partnerships have the potential to create better-integrated learning environments and meet local employer skill requirements. • Strategic centers of excellence at community and technical colleges. These centers are designed to foster flexible and integrative learning in strategically important local industries. They can serve as a point of contact and resource hub for industry trends, best practices, innovative curriculum, and professional development. • Sector strategies. Evaluations of sector partnerships suggest that they have the potential to produce positive outcomes for youth and adults. Advocated by the National Governors Association (NGA), the Department of Labor, and civic associations, sector strategies are partnerships of employers within a single industry that focus on coordinating policies and resources to address the workforce needs of a strategically important industry, including through apprenticeship programs targeted to those sectors. NGA estimates that more than 1,000 sector partnerships now operate across about half of all U.S. states. d. Apprenticeship and joint labor–management programs can serve to link employers and workers. 32 31 See Section 6.3 of Chapter 6 on “Linking Training and Work.” 32 See Section 6.4 of Chapter 6 on “Employer-Based Training Programs.”

FINDINGS AND RECOMMENDATIONS 177 • Apprenticeship programs. As noted earlier, these programs combine occupational education and training with paid on-the-job work experience. A number of states have developed apprenticeship programs over the past 10 years, although the impact of such programs has not been rigorously evaluated. The most interesting of these models move beyond time-based workplace training to integrate dual-learning principles whereby academic courses are linked to workplace training and standardized competency-based certifications. • Joint labor–management strategies. More evidence is needed on joint labor–management strategies for establishing workplace learning systems and community-based workforce and economic development initiatives. 33 Unions have a prescribed role in job training programs under the 2014 WIOA, and they have a long history of designing and implementing innovative and effective job training and apprenticeship programs that potentially benefit workers, businesses, and local communities. • Talent pipelines. The use of supply chain management principles to create talent pipelines that link investments in workforce development with business strategy is being promoted by the U.S. Chamber of Commerce Foundation; the National Network of Business and Industry Associations; industry trade associations, such as the Precision Machined Products Association, the National Tooling and Machining Association, the Technology and Manufacturing Association, and the National Institute for Metalworking Skills; and major employers, such as IBM. e. A final set of policy initiatives is intended to increase the portability and wider recognition of acquired technical skills. 34 Roadmaps that link selected competencies also can help guide students and workers through the education and training they need to address the needs of local industries. • Portable credentials and licenses. Given the proliferation of training programs and types of credentials, standardizing credentials would provide certainty to employers and workers about the value of the credentials. The evidence suggests that efforts to ensure that education and training accomplishments and licenses transfer across education and training programs, employers, industries, and geographic boundaries can reduce the costs of education and training and improve returns on investment. 33 See Section 6.4 of Chapter 6 on “Employer-Based Training Programs.” 34 See Section 6.6 of Chapter 6 on “Other Policy Initiatives.”

178 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE • Competency models. The Department of Labor’s Employment Training Administration has developed a structured approach to articulating the competencies required in occupations in an industry or sector, from foundational competencies, to industry- wide competencies, to technical competencies within a specific subsector. The competency strategy is used to identify specific employer skill requirements, define career pathways and credentials, introduce competency-based curricula and training models, create industry-defined performance indicators and certifications, and develop resources for career exploration and guidance. The evidence suggests that assessments against competencies are a better basis for education, training, and employment decisions than credentials, which are imperfect proxies for occupational capacity and competency. Those who are engaged in linked learning, sector strategies, talent management, career pathways, and career pipeline initiatives can use the competency model to guide their work. Finding 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 also could coordinate better with civilian policy makers, regulators, and educators to improve the transferability of military education, training, and certification. 35 • Many Americans join the uniformed Armed Services as a pathway to education, training, and preparation for life and careers: 43.2 percent of all uniformed active duty personnel are aged 25 or younger. 36 Military personnel receive training in the competencies associated with skilled technical work. As of the end of November 2015, about 1.3 million individuals were working in the Armed Services. • Each year, tens of thousands of military personnel transition back into civilian life after serving in the armed forces for just under an average of 7 years. Veterans’ transition assistance programs include federal and state government programs, private-sector initiatives, and public– private partnerships. However, additional action is needed to improve 35 See Section 5.3 of Chapter 5 on “Challenges in Training and Transitioning the Skilled Technical Workforce.” 36 See Section 5.3 of Chapter 5 on “Challenges in Training and Transitioning the Skilled Technical Workforce.”

FINDINGS AND RECOMMENDATIONS 179 the effectiveness of these programs. Data suggest that some veterans have more difficulty with transitions than others. • The Department of Defense (DoD) spends approximately $1 billion per year on unemployment benefits for transitioning service members but does not track how long members claim unemployment benefits or other characteristics of these benefits. DoD tracks only information on the characteristics of those who initially file for the Unemployment Compensation for Ex-servicemembers (UCX) program, regardless of whether they actually use those benefits. TASK: Consider selected employment practices in other countries. Finding 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. a. Unlike most other developed countries, 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. 37 Also in contrast with many other developed countries, federal and state-level policy in the United States requires most students and workers to pay for most of the cost of postsecondary education. b. Nevertheless, state policy makers may be able to learn from the experience of other developed countries that have more coordinated employer training programs and a tradition of technical invention and innovation. 38 With regard to establishing apprenticeship programs, for example, a key lesson is the need to set clear rights and responsibilities for employers, workers, and educational organizations. Also needed are strong intermediating institutions that can coordinate individual employers’ participation and help schools work with business, as well as clear industry standards and the competencies that apprentices should acquire in order to meet those standards. 39 c. Moreover, there is a growing interest in developing apprenticeship programs in the United States, particularly in high-growth industries 37 See Section 4.2 of Chapter 4 on “The Primary Components of Workforce Development.” 38 See Section 6.4 of Chapter 6 on “Employer-Based Training Programs.” 39 See Box 6-9 of Chapter 6 on “Key Lessons from Foreign Apprenticeship Systems.”

180 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE such as health care, advanced manufacturing, information technology, and biotechnology. These programs use various approaches that often differ from the European dual-education model, and therefore direct comparisons are difficult. 40 RECOMMENDATIONS TASK: Consider policy-making challenges and experiments that affect incentives and information to improve work skills. Recommendation 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 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. a. The Department of Education should collect and disseminate information on best practices at community colleges that facilitate timely completion and enhance employment of graduates who are being trained to be a part of the skilled technical workforce. • The Department of Education should provide information to states and community colleges around the country to help them adapt and craft programs based on principles underlying successful programs. • Based on this information, students should be encouraged to embark on and complete education and training programs for skills that are in demand, and educational institutions should be incentivized to support them in doing so. In this regard, mandatory counseling and better student support can improve completion rates. In addition, studies in several states have shown that integrating remediation into skill training is very helpful. b. The Department of Labor should encourage employers to partner with industry and trade associations, labor unions, and other civic organizations; educators; workers; and policy makers to develop workforce skills. Employers are encouraged to • consult regularly and partner with policy makers, educators, labor unions, industry and trade associations, and other civic associations on skilled technical workforce development issues; 40 See Section 6.4 of Chapter 6 on “Employer-Based Training Programs.”

FINDINGS AND RECOMMENDATIONS 181 • engage in workforce planning for future labor needs, and actively seek education and training partners to address those needs; • create incentives and resources for employees to invest in continual technical education and training throughout their careers; and • support programs, such as apprenticeships, that link work-based learning with contextualized coursework and competency-based standardized certifications. c. The Department of Labor should develop and disseminate information on the return on student and worker investments in training for skilled technical jobs. • Support state initiatives. Congress should prioritize the provision of resources to support the states in investigating the return on investment in education and training as part of local skilled technical workforce development. • Collect and disseminate information. The Department of Labor should collect and disseminate information on investigations of return on investment, and provide technical assistance and resources for such investigations. • Request studies. State legislatures also should request studies of return on investment. These studies should include efforts to develop a better understanding of how students make decisions about education and training. d. The secretaries of education and labor should incentivize stakeholders to: • Develop context-based learning strategies. Review and evaluate funding formulas and grant rules for education and training programs to ensure that they provide incentives and funding for all stakeholders to participate in the development of an equal- opportunity skilled technical workforce using integrated, work context–based learning strategies. For example, allow federal and state education and labor funds to be used for all postsecondary education and training programs at all ages and levels of career advancement. • Reduce the need for remediation. Encourage community colleges to reduce the need for remediation, integrate remediation into skills training, and improve the readiness of high school students for postsecondary or adult education programs. • Reward program completion. Implement funding formulas tied to employment metrics, such as earnings of students after graduation, or metrics focused on increasing rates of enrollment and completion for programs that are in high demand among local employers.

182 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE • Enhance the portability of credentials. Work with and encourage efforts of local workforce boards to harmonize key features related to the quality, portability, and labor market value of credentials. • Encourage participation. Develop incentives for employers and industry and trade associations to contribute to workforce development and transition management. The secretaries of education and labor should report to Congress or state legislatures on the results of these efforts. e. Innovate, experiment, and assess. The secretaries of education and labor should encourage educators to innovate and experiment in their skilled technical education and training programs to improve the linkage between education and employment, the quality of programs, student services, information about programs, and return on investments in education and training. Examples are provided in Chapter 6. • Specifically, states should provide competitive funding grants to community colleges to encourage such innovation, along with accountability structures that enable assessment of what works. Principles underlying successful interventions should be identified and applied statewide and across state lines. • Regular internal and external assessments are essential to identify and learn the lessons of these experiments. TASK: Define the skilled technical workforce. Recommendation 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 public–private 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. a. Labor unions, industry trade associations, and other civic associations can enhance this message by providing financial and in- kind support to the Department of Labor’s communication campaign. b. Educational institutions can participate by providing more transparent information about their programs and curricula that can be showcased in these campaign efforts. c. Employers can help by providing salient examples of high-paying jobs and the education and training that can lead to these jobs.

FINDINGS AND RECOMMENDATIONS 183 TASK: Consider gaps and market failures. Recommendation 3: Congress and state legislatures should improve oversight of public policies and resources, highlighting the implementation of reforms such as those called for in WIOA. Reforms should be accelerated through targeted incentives. a. Expand. Given the gaps in data and the failure to measure important parts of the skilled workforce ecosystem, the Department of Labor should consider the need to revise and expand current data collection approaches to better monitor this ecosystem. b. Monitor. The Department of Labor should continue to monitor the state of the workforce through oversight and produce data particularly relevant to the technical skill arena. These activities are important given that efforts to address the issues are spread across several stakeholders and arenas. c. Analyze. Congress should require the secretaries of education and labor to prepare annual reports on progress in implementing reforms such as those called for in WIOA and on the allocation of resources and financial flows associated with implementation. d. Oversee. Congress and state legislatures should conduct regular hearings on progress in implementing education reforms. e. Incentivize. Community colleges and other educational organizations should be incentivized and provided the means to adopt policies and programs aimed at boosting degree or credential completion, including better integration of academic and technical education and training. Recommendation 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. a. Prepare a roadmap. Congress should require the secretary of labor to prepare a roadmap for implementing WLMIS reforms required under WIOA and to submit an annual report on progress against this roadmap. b. Conduct hearings. Congress and state legislatures should conduct regular hearings on WLMIS issues and reforms. c. Provide support. • The Department of Labor should provide resources for improving and developing the WLMIS, as called for in WIOA. • Civic organizations and private industry also can provide financial and in-kind support for WLMIS initiatives.

184 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE d. Analyze data. • The National Science Foundation should develop a program to expose labor market analysts to innovations in data and information sciences, develop new user-friendly information tools and research methodologies, and train and incentivize analysts to apply these innovations in their work. • Labor market researchers should be required to learn about and apply advances in data science and such new tools as screen scraping, and to conduct investigations that produce useful insights for stakeholders. e. Disseminate results. State departments of labor should develop an understanding of what data are required and how they are used, and provide information for students, workers, and employers that meet these requirements and help them calculate returns on investments in education and training. • To make well-informed decisions, high school and postsecondary students need more direct career counseling based on accurate information, as well as advice about the challenges and opportunities made available by various kinds of academic programs. • Educational institutions also need information about alternative pathways available to students and completion rates of various programs. For example, community college students often avoid technical fields because they plan to transfer to 4-year colleges and obtain bachelor’s degrees, but most do not do so. • States need to include data on the labor market outcomes of students in their state student information systems so that school districts can use the data to evaluate and improve their career programs. Recommendation 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. a. Enforce fair employment standards. Labor law enforcement agencies, employers, labor unions, industry and trade associations, and other civic associations should help ensure that, consistent with the laws in place, all qualified workers can participate in all occupations in the skilled technical workforce, have access to education and training

FINDINGS AND RECOMMENDATIONS 185 opportunities throughout their careers, and be paid the regular and overtime wages to which they are entitled. b. Disseminate labor market information. The National Science Foundation should develop a program to rapidly disseminate useful information to K-20 faculty and students, employers, and policy makers about changing labor market requirements and job opportunities that may result from advances in science and technology. c. Remove barriers. The Department of Education should consider ways to reform financial aid that is currently limited to undergraduate students in for-credit programs so that it includes students taking continuing education classes in certificate programs. d. Review licensing requirements. States should review their licensing requirements and reduce the number of licensed occupations or the number of requirements that do not pertain to public health and safety. e. Align training programs. The states should consider a collective agreement with DoD that would facilitate alignment of DoD training with their 50 separate sets of certification and licensure requirements, perhaps modeled on the Military Child Education Compact. TASK: Consider policy-making challenges and experiments that affect incentives and information to improve work skills. Recommendation 6: DoD should further integrate skills transition into military training rather than treating it as a separate component at the end of the service member’s career. To further develop military training as a major pathway to the acquisition of technical skills, DoD should a. investigate career pathway and transition issues in each of the Armed Services, which are among the largest employers in the United States, and use data from these investigations to better coordinate with civilian policy makers, regulators, and educators to improve the transferability of military education, training, and certification; b. assess transition risks for military personnel, and design and deliver services to mitigate these risks, including ensuring that the military culture encourages service members to do everything they can to transition without drawing UCX assistance; and c. collect better information on the cost and duration of unemployment benefits used by transitioning military personnel, as well as the incentives these programs create to use benefits.

186 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE TASK: Consider selected employment practices in other countries. Recommendation 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. a. The National Science Foundation should commission a study of how countries with more proficient workers develop their skilled technical workforces. This study should utilize concepts and methods that are common in organizational and institutional analysis, and should include the development of a rigorous methodology for conducting comparative studies and the application of insights from these studies to policy analysis and design. b. Similarly, the Department of Education should use data from comparative organizational and institutional studies to identify ways of strengthening relationships between employers and educational institutions to improve state employment rates of graduates. Box 7-1 organizes the committee’s recommendations according to the various stakeholders to which they are targeted.

FINDINGS AND RECOMMENDATIONS 187 BOX 7-1 Summary of Selected Recommended Actions for Stakeholders Congress • Prioritize the provision of resources to support the states in investigating the return on investment in education and training as part of local skilled technical workforce development. (Recommendation 1c) • Require the secretaries of education and labor to prepare annual reports on progress in implementing reforms and on the allocation of resources and financial flows associated with implementation. (Recommendation 3c) • Require the secretary of labor to prepare a roadmap for implementing WLMIS reforms required under WIOA and to submit an annual report on progress. (Recommendation 4a) Congress and State Legislatures • Improve oversight of public policies and resources, highlighting the implementation of reforms such as those called for in WIOA. (Recommendation 3) • Conduct regular hearings on WLMIS issues and reforms. (Recommendation 4b) State Legislatures • Request studies of return on investment. (Recommendation 1c) Federal and State Departments of Labor and Education • Review and evaluate funding formulas and grant rules for education and training programs to ensure that they provide incentives and funding for all stakeholders to participate in skilled technical workforce development. (Recommendation 1d) • Collect and disseminate to students, workers, educators, and employers information on investigations of return on investment, and provide technical assistance and resources for such investigations. (Recommendation 1c) • Encourage educators to innovate and experiment in their skilled technical education and training programs to improve the linkage between education and employment, the quality of programs, student services, information about programs, and return on investments in education and training. (Recommendation 1e) • Monitor the state of the workforce and produce relevant data for students, workers, and employers. (Recommendation 3b) • Provide resources for improving and developing the WLMIS. (Recommendation 4c) (Continued)

188 BUILDING AMERICA’S SKILLED TECHNICAL WORKFORCE BOX 7-1 Continued Department of Defense • Further integrate skills transition into military training rather than treating it as a separate component at the end of the service member’s career. (Recommendation 6) • Investigate career pathway and transition issues, and use data from these investigations to improve the transferability of military education, training, and certification. (Recommendation 6a) • Collect better information on the cost and duration of unemployment benefits used by transitioning military personnel, as well as the incentives these programs create to use benefits. (Recommendation 6c) National Science Foundation • Expose labor market analysts to innovations in data and information sciences, develop new user-friendly information tools and research methodologies, and train and incentivize analysts to apply these innovations in their work. (Recommendation 4d) • Commission a study of how countries with more proficient workers develop their skilled technical workforces. This study should include the development of a rigorous methodology for conducting comparative studies and the application of insights from these studies to policy analysis and design. (Recommendation 7a) Educators (with the encouragement of the Secretaries of Education and Labor) • Innovate and experiment in their skilled technical education and training programs to improve the linkage between education and employment, the quality of programs, student services, information about programs, and return on investments. (Recommendation 1e) Employers, Industry and Trade Associations, Labor Unions, and Allied Training Partners (with the encouragement of the Department of Labor) • Consult regularly and partner with policy makers, educators, and other civic associations on skilled technical workforce development issues. (Recommendation 1b) • Create incentives and resources for employees to invest in continual technical education and training throughout their careers. (Recommendation 1b) • Support programs, such as apprenticeships, that link work-based learning with contextualized coursework and competency-based standardized certifications. (Recommendation 1b) • Raise awareness of the value of and demand for skilled technical workers. (Recommendation 2)

FINDINGS AND RECOMMENDATIONS 189 BOX 7-1 Continued Other Civic Associations • Consult regularly and partner with policy makers, educators, and employers on skilled technical workforce development issues. (Recommendation 1b) • Raise awareness of the value of and demand for technical skills. (Recommendation 2) • Provide financial and in-kind support for a skilled technical workforce communication campaign. (Recommendation 2a) • Provide financial and in-kind support for WLMIS initiatives. (Recommendation 4c) • Help ensure that all qualified workers can participate in all occupations in the skilled technical workforce, have access to education and training opportunities throughout their careers, and be paid the wages to which they are entitled. (Recommendation 5a) Researchers • Learn about and apply advances in data science, and conduct investigations that produce useful insights for stakeholders. (Recommendation 4d)

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Skilled technical occupations—defined as occupations that require a high level of knowledge in a technical domain but do not require a bachelor’s degree for entry—are a key component of the U.S. economy. In response to globalization and advances in science and technology, American firms are demanding workers with greater proficiency in literacy and numeracy, as well as strong interpersonal, technical, and problem-solving skills. However, employer surveys and industry and government reports have raised concerns that the nation may not have an adequate supply of skilled technical workers to achieve its competitiveness and economic growth objectives.

In response to the broader need for policy information and advice, Building America’s Skilled Technical Workforce examines the coverage, effectiveness, flexibility, and coordination of the policies and various programs that prepare Americans for skilled technical jobs. This report provides action-oriented recommendations for improving the American system of technical education, training, and certification.

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