Don't Forget the Workers: Congress Should Fund Better Skills Training Now
Though talks have not seemed promising, Congress still may reconsider another coronavirus economic relief package and, if so, it is urgent that they approve additional robust funding for reskilling and upskilling workers.
Congressional action should encompass opportunities for workers still on the job, as well as those who are out of work, those whose jobs will never return, and younger individuals seeking to enter the job market. If done well, such programs will boost employment, the economic recovery and the future of U.S. workers and businesses.
Before the pandemic, American businesses already faced significant difficulty in finding skilled workers. Manpower’s 2019 talent survey found 69 percent of U.S. employers reported talent shortages. The numbers were higher for medium (75 percent) and large (77 percent) companies. And, the U.S. shortfalls were much larger than the worldwide average of 54 percent.
My 2019 study of workforce development across North America suggests that the Manpower figures reflect a structural problem of underinvestment in workforce development and skills-focused education, accompanied by poor public policies and too little private-public-academic cooperation. The U.S. still has significant economic might and star performers in the private sector, but its competitiveness is undermined by weak and uncoordinated responses to the technological transformations in workplaces and markets that demand regular skills updates.
A 2019 McKinsey study, for example, predicted that workers without college degrees would be four times more likely to lose their jobs to automation than those with a bachelor’s degree over the decade. Those same workers have experienced the greatest losses of employment and income during the pandemic. The pandemic could well fuel even greater negative effects for less-skilled U.S. workers, as companies adopt new technology to help deal with the health-related workplace challenges for manufacturing, supply chains, service provision, etc.
Businesses that have available capital will press ahead to apply technologies and digital tools to deal with the pandemic’s effects on markets and workplaces. But many other companies and workers now have less money to invest in developing the skills to succeed. Small and medium enterprises (SMEs), which employ 48 percent of the U.S. workforce, are under great pressure just to survive during the downturn, putting up to 30 million jobs at risk, according to McKinsey, and SMEs generally have less capacity to upskill workers than larger companies.
Public policies and funding are needed to fill the gaps, especially because we still don’t know what the lasting employment effects of the pandemic will be, or whether real unemployment might bounce back. Inequality seems to be widening, with higher-skilled workers adapting more successfully to the downturn than less-educated, less-skilled workers. The economy that emerges from this crisis will not return to old ways, nor will it put aside the technologies and automation being adopted. More jobs will be transformed, requiring new skills, and some will be permanently eliminated.
More widely, the pandemic is driving home the lessons of America’s relative underinvestment in primary and secondary education, with tough lessons for many families.
Workers know that they need more skills. The August 2020 Global Learner Survey by Pearson found 84 percent of Americans surveyed believe new jobs and skill needs will arise because of the pandemic. Seventy-six percent of them think the federal government must do more to help adults pay for job training or reskilling.
Congressional action to invest seriously in workforce training programs as part of the next relief package would be widely welcomed. At least two bills already introduced would provide a solid boost in near-term funding, and both propose more spending than is in the House passed relief package. Robust congressional spending now would be a down payment for the longer-term structural changes and investments needed to educate and reskill workers, as well as students.
Taking a fresh look at examples from around the world, and developing new policy tools and coordinating mechanisms, is vital for America’s workers and businesses. Technology and automation will continue to fuel rapid change, inventing new jobs and skill needs. If the U.S. does not adapt its systems and programs to provide expanded opportunities to acquire skills and knowledge, the costs will be immense. Other countries will press ahead in educating their youth and workers.
At present, the United States has some good government-academic-business partnerships, and some businesses have good models of serious skill programs for workers. However, there is no effective nationwide framework for learning from such best practices, or for helping to fund beneficial public-private partnerships. U.S. states have a variety of skills-related programs, with different requirements and funding levels and a range of outcomes. Establishing coordination and funding mechanisms is even more important now, as many companies struggle to survive with less money available to retrain employees or even to use available tax breaks.
Congress should take bold action to get urgent skills training under way. After the November elections, the U.S. should move to thoroughly modernize and upgrade its approach to workforce development to help assure a better future.
About the Author
The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute. Read more