Workforce Spotlight

U.S. Chamber: Workforce is Key to Nation’s Economic Growth

Fall 2017 Catalyst

November 21, 2017

US Chamber“We need to create jobs!” This rally cry may be the most commonly-used phrase of elected officials and business leaders in the decade since the Great Recession, and it’s finally earned some vacation time. With the economy close to full employment, perhaps it’s time to shift our focus to the hard part: creating workers.

Consider this: 50 percent of available positions in America go unfilled due to a lack of qualified candidates; while 40 percent of firms miss out on additional business opportunities due to labor shortages. Chief executive officers report chronic labor shortages across middle- and high-wage occupations, such as nursing, construction, transportation and logistics, oilfield operations, automotive, industrial, heavy equipment, computer network, web development and insurance.

At the federal level, Congress and the Administration recognize how the business community has contributed to economic growth, and the conversation now frequently centers on the “skills gap,” or the gap between higher-skilled jobs and the employees who need training to fill them. To that end, the U.S. Department of Labor continues to implement the Workforce Innovation and Opportunity Act. Signed into law in 2014, WIOA is designed to help job seekers access employment, education, training and support services to succeed in the labor market, and to match employers with the skilled workers they need. It is the first legislative reform in 15 years of the public workforce system.

Another law that is important to addressing the business community’s workforce needs is the Every Student Succeeds Act. ESSA requires that all state and local education agencies coordinate K-12 education plans with career and technical education program plans, as well as encourages states to include the progress of students in attaining CTE proficiencies on state report cards.  ESSA implementation is currently underway in K-12 schools across the country. 

Closer to home, Pennsylvania is fortunate to have Congressman G.T. Thompson, R-PA, of the state’s 5th District leading the renewed charge on CTE as a member of the House Education and the Workforce Committee. He co-authored the Strengthening Career and Technical Education for the 21st Century Act (H.R. 2353), which reauthorizes the Carl D. Perkins Career and Technical Education Act.  The Perkins Act is the principal source of federal funding to states and grantees for the improvement of secondary and postsecondary CTE programs across the nation.

Here are a few important changes this bill makes:

  • Aligns CTE programs to the needs of the regional, state, and local labor market;
  • Supports effective and meaningful collaboration between secondary and postsecondary institutions and employers;
  • Increases student participation in experiential learning opportunities such as industry internships, apprenticeships and mentorships; and
  • Promotes the use of industry-recognized credentials.

Thompson’s bipartisan bill, also sponsored by Congressman Lloyd Smucker, R-PA, who represents the Commonwealth’s 16th District, overwhelmingly passed the House in June and is currently awaiting Senate consideration.

As in the past, the U.S. Chamber advises Congress and the Administration on workforce training and apprenticeship issues. It’s Center for Education and Workforce has been developing a workforce training initiative called Talent Pipeline Management to address the skills gap. Through extending lessons learned from innovations in supply chain management, Talent Pipeline Management encourages employers to play a new and expanded leadership role as “end-customers” of education and workforce partnerships. From there, employers can proactively organize and manage talent supply chain partnerships with measures and incentives tied to performance.

The benefits of using talent pipeline management practices are numerous: a reduced skills gap and a better-prepared workforce for employers, improved partnerships and job placement outcomes for education and workforce partners, increased transparency and opportunity for students and workers and higher returns on education and workforce investments for policymakers.

Workforce is keyWashington will also need to tackle some larger, systemic issues that contribute to a qualified-worker shortage. Congress passed several bills last term aimed at fighting the national opioid epidemic, but the funding allocated is a drop in the bucket for what experts maintain is necessary. A 2016 study estimated the total economic burden of prescription opioid overdose, misuse and addiction at $78.5 billion in 2013. The Trump administration has called the opioid epidemic a “national emergency,” but many other worthy issues will compete for an ever-shrinking piece of the discretionary spending pie – not least Hurricane recovery funding – and the budget and appropriations process looks murky at best.

The overall mobility of the U.S. population is at its lowest level since the end of World War II, falling by almost half since its most recent peak in 1985. A major reason for this is housing costs. During last decade’s housing bust, almost 30 percent of construction workers entered new fields of employment, which has exacerbated labor shortages, skyrocketing wages and increased material costs. With the prospect of fewer immigrant workers allowed into the country and Hurricane rebuilding efforts diverting labor to south Texas, the situation is not likely to improve in the near future.

To build a strong and capable workforce, policymakers at the federal level need to shoulder more of the burden that local and state governments and the private sector have been facing in their valiant efforts in hiring and training. Few issues are as important to our economic growth as this one.