As President Obama turns up the heat on Congress to pass his $447 billion dollar job bill, a growing number of employers, unions, educators and employment experts are grappling with a related and urgent imperative: A widespread“skills gap,” which leaves many employers struggling to fill job openings even as millions of Americans search for work.
“Contrary to popular belief, there are plenty of job openings out there. Problem is that there aren't enough Americans trained to do them,” says Donna Klein, Executive Chair and CEO of Corporate Voices for Working Families, a non-profit, nonpartisan organization aimed at improving the lives of all working families.
“We regard this skills gap as one of the most pressing issues facing business competitiveness and the economic security of working families today,” said Klein.
In Across the Divide, a report Corporate Voices published this year in partnership with Civic Enterprises and others, 53 percent of business leaders surveyed said their companies face a “very or fairly major” challenge recruiting employees with the skills, education and training their business needs. Those at smaller companies, who were responsible for more than half of new jobs created in recent years, felt the skills gap most acutely: Fully 67 percent said it was difficult to find and hire the right employees.
“We've got to do a better job of retraining workers so that unemployed workers are able to go back to a community college, maybe take a short six-month course or a one-year course that trains them on the kinds of skills that are going to be needed for jobs that are actually hiring,” Obama said at a recent town hall meeting in Mountain View, Calif.
Last week, Gov. Jerry Brown signed into law Senate Bill 734 requiring local employment centers to divert more of the $500 million in annual federal funding on programs that teach the jobless new skills and less on helping unemployed workers write resumes, practice interviewing and search for work.
SB 734 was co-sponsored by JVS Los Angeles, Chicana Service Action Center, California Labor Federation, California Manufacturers and Technology Association, and State Building and Construction Trades Council.
The bill requires local workplace investment boards (WIBs) to increase spending of their Adult and Dislocated Workers Fund on quality programs and services that provide workers with job training. Under this bill, spending would increase annually to a minimum of 30 percent of the Fund in 2016 and thereafter.
California receives almost $500 million annually in Workforce Investment Act (WIA) dollars for job training and employment services for youth, disadvantaged adults, and dislocated workers. Despite the need for targeted and effective training, local WIBs in California spend very little, about 20 percent of WIA funds on skills training.
Brown rejected last-ditch pleas by local government groups and operators of jobless centers to veto the legislation. They said the bill restricts their focus on getting the unemployed in jobs quickly and that it could lead to layoffs at the centers.
Some local workforce investment boards in California devote less than 10 percent of their federal funds to training, less than they spend on their own operating costs, according to a study the state Senate Office of Research released in May based on 2008 data, the most recent available.
“If we only spend 5 percent to 10 percent of these funds on training, it will be hard to achieve long-term employment for out-of work citizens,” said Gino DiCaro, a spokesman for the California Manufacturers Assn. trade group.
The mismatch of skills between what a worker has and what an employer needs often boils down to a lack of basic reading and mathematics proficiency, DiCaro said. The problem is evident in such mechanical trades as steel making and the aerospace fastener industries.
The legislation, backed both by labor unions and manufacturers, comes as President Obama barnstorms the country in support of a proposed jobs program that includes retraining.
A change in priorities was needed because “manufacturers are telling us they actually have jobs, but the workforce is not trained for the jobs,” said California State Sen. Mark DeSaulnier, author of the bill, SB734.
DeSaulnier said his bill was in line with the practices of other states that have been hit with mass layoffs and slumping housing markets. Florida and Michigan, for instance, require that half of workforce investment board money go to training; Illinois mandates 40 percent, and Wisconsin 35 percent, according to the Senate Office of Research. vThe other states “have a sense of urgency to get people counseling and on a career track,” the senator said.
Community colleges and private companies are also helping to address the skills gap. The two groups, with encouragement from the Obama administration, are deepening their alliances to better prepare students for jobs ranging from health care to manufacturing to retail.
“Employers are turning to community colleges because those lining up at the door aren't qualified,” said Anthony Carnevale, director of Georgetown's Center on Education and the Workforce. “The skills requirement has gone up and employers don't train entry-level workers anymore.”
Companies such as GE and Boeing are helping schools design their curriculum, providing more internships for students, and in some cases, even helping the cash-strapped schools finance their programs and pay their teachers.
There's no guarantee the effort will do much to erase the so called skills gap. Community colleges have long provided job training, but execution has been uneven. Job training initiatives have spotty records, and some experts say the problem starts in high school or even middle school.
But there are already signs that when colleges and companies work together, students benefit.