This blog post is an excerpt from the Future of Work Initiative’s report Automation and a Changing Economy, released April 2019. The report is divided into two parts. Part I: The Case for Action, explores the impacts and history of automation, why this time may be different, and why action must be taken to maximize opportunity, minimize disruption, and ensure that the gains of automation are broadly shared. Part II: Policies for Shared Prosperity proposes 22 policy solutions to ensure that our increasingly automated economy is also one that promotes greater opportunity and broadly shared prosperity for all. Throughout the year, the Future of Work Initiative will republish many of these policy solutions.
Upskilling and reskilling the workforce requires local stakeholders to work together to identify current and future skills needs in their area or region. For example, employers need to work with education and training providers to develop coursework and training that meet relevant skill needs. Workers benefit from instruction in in-demand skills, awareness of emerging job opportunities, and guidance on which degrees and certifications to pursue based on what local employers look for when hiring.
Developing effective workforce partnerships among employers and training providers can be a heavy lift, especially for smaller employers. Sector partnerships bring together local stakeholders—employers, colleges, education and training providers, labor representatives, and workforce development experts—to address these challenges by developing education-to-employment talent pipelines. Pipelines are sensitive to local, regional, and industry-specific workforce needs, and create cross-industry standards. Research has established sector partnerships’ effectiveness in improving training programs’ participation and completion rates. They also yield better employment and earnings outcomes for workers. At the same time, employers gain access to qualified talent that can support growth and competitiveness. For example, the World Economic Forum found that while 95 percent of workers at risk of dislocation could theoretically transition into positions that have similar skills and higher wages, it would require reskilling investments, and only 25 percent of workers could be reskilled by their employers profitably. But if businesses formed industry and sector partnerships to reduce their fixed costs and times by 30 percent, they could profitably reskill nearly half of at-risk workers.
There are a variety of encouraging examples of successful sectoral partnerships. In 2010, a Toyota plant near Lexington, Kentucky partnered with the Bluegrass Community & Technical College to create KY FAME, a work-based learning program to provide a pipeline of manufacturing technicians. The program has since expanded across the state. Other successful sectoral partnerships include Jewish Vocational Service–Boston (JVS–Boston), Per Scholas, Wisconsin Regional Training Partnership (WRTP), and Capital IDEA.
The Workforce Innovation and Opportunity Act (WIOA), passed in 2014, recognized the importance of these strategies by requiring states and local workforce boards to develop sector partnerships. Yet, as the National Skills Coalition outlined in a recent report, there is currently no dedicated funding to support development and implementation of these partnerships. While WIOA requires states to assist localities in creating these partnerships, the funding for doing so comes from the Governor’s Reserve fund, requiring states to balance partnership development against other discretionary workforce spending priorities. The 2008 reauthorization of the Higher Education Act authorized grants to educational institutions that partnered with employers to develop training programs for in-demand jobs, but these grants have never been funded. The Trade Adjustment Assistance Community College and Career Training (TAACCCT) grant program provided $1.9 billion to over 60 percent of the nation’s community colleges to develop or redesign over 2,600 programs of study to align with local and regional employer needs. However, the TAACCCT grant program ended in September 2018, with no similar funding to take its place.
As the National Skills Coalition proposed, state policymakers should support sector partnerships with funding, technical assistance, and program initiatives. In addition, federal policymakers should authorize and appropriate funding for competitive grants to highly effective sector partnerships.
