Making Education & Skills Development Integral to Economic Development

1. Making Education & Skills Development Integral to Economic Development Evelyn Ganzglass Center for Law and Social Policy WPFP/EARN Economic Development Academy September 4-5, 2008

2. Leveraging State ED Investments to Improve Outcomes for Low-Skill, Low-Income Workers • Efforts to align education & training capacity with ED goals • Recruitment incentives • State customized training programs (recruitment, expansion, retention)

3. Cultural Differences

4. State Workforce & Economic Development Coordination & Alignment • Administrative strategies • Regional planning & sector/cluster partnerships • Transportation & infrastructure funding • Special State Funding • Centers of Excellence • Work Readiness Certification

5. Funding to upgrade CTC capacity in key industries (CA) • Community College Incumbent Worker Responsive Training Fund: upgrade training in high growth industries & build basic skills bridges to high-end career pathways • The Job Development Incentive Training Fund: no or low cost upgrade training for skilled & low-wage entry-level workers (1 moves up & other fills in behind)

6. Centers of Excellence (WA) • Focused on driver industries where AA and certificate level training can increase industries’ competitiveness • Broker information & resources on industry trends and best practices for stakeholders • Coordinate, coach & mentor to help build seamless ed and work-related pipelines for their industries • Stimulate student interest in training where demand for skills outstrips supply • Each center is charged with developing career pathways- including I-BEST and bridge programs- to at least to 1-year certificate “tipping point”

7. Certified “Work Ready” Communities & Regions (GA) Communities must demonstrate: • A commitment to improving their public high school graduation rate & minimum county HSGR of 70% (some leeway of meet adult criteria) • Min. level of adults in certain groups,( incl. GED, unemployed) certified as “Work Ready” (State funded ACT Work Keys assessment ) • Work Ready Regions: Competitive grants to drive ed/trng alignment to regional strategic industries

8. Discussion Questions • How effective are these strategies from an economic development perspective for recruitment, expansion and retention? From a low-income advocate perspective? • Do you have other useful examples of Education: ED alignment efforts that benefit on low-skill, low-income populations?

9. States Incentives & Job Quality Standards Types of standards: • Wages (% of fed/state minimum wage or poverty, prevailing wage, living wage) • Full-time, permanent jobs • Benefits (VT: paid leave; a few locals) • No targeting, except for training incentives • No training or hiring requirements

10. NW Area Foundation Wage & Benefit Metric Job Attribute Points Full-time position 3 Permanent position 1 Wage exceeds mean 4 Group health insurance provided 2 Employer contributes to plan 1 Sick leave and/or vacation time 1 Financial asset building mechanism 1 Trade & technology-specific skills 1 Workplace skills training1 Score 11-15 Points *** 5-10 Points** 0-4 Points * Sample Report Types • Company profiles • Wage and benefits profiles per sector • Wage and benefits profiles for jobs created and retained

11. Strengthening Employment Standards • Apply minimum standards for all companies receiving a subsidy; don’t negotiate on a case-by-case basis • Include wage rates &/or health benefits as part of a formula for evaluating applications or calculating subsidy eligibility • Index wage standards • Require employers to provide, not just offer, health insurance; provide training for front-line workers • Provide -ongoing monitoring and enforcement of claw back provisions to ensure compliance • Bundle standards local hiring and 1st sources requirements

12. Local E&T Community Benefit Agreements Key Components: • Labor agreements • Prevailing wages and benefits • Pre-apprenticeship & apprenticeships • Local hiring requirements • First source agreements & referral systems • Developers must pay into Training Fund • TIF funds can be used for training

13. Could states require similar CBAs? • In state incentive deals? • In sector & cluster-based initiatives? • What local linkages would be required to make CBAs work? • State funding &/or MOU to make WIA one-stops 1st source referral system? • Data sharing with one-stops on companies that have gotten subsidies • Could CBAs work if the development project isn’t located in a distressed community?

14. Customized Training (CT) Overview Training designed to meet the specific requirements of an employer or group of employers • New hire training • Incumbent worker upgrade training • Short-term, quick turn-around, mostly not-for-credit • Provided on-and off-job site • Degrees of customization

15. CT Intended Outcomes

16. Economic Development Focus • Programs often target traded/ basic sectors, those threatened • by out-of-state competition

17. Providers: employers, for-profit, non-profit, CTC’s, in-house (GA, AL)

19. State Training Tax Credits • At least 6 states have tax credits for employer provided training • Serve same function as or complementary to CT programs (cover cost of wages (up to a limit) during training) • Some administered like and/or in conjunction with grant programs (must submit training plan, instructional materials and documentation )

20. Evaluation Findings • KY: CT’s employment& earnings impacts greater than for other incentives & financing; 5 yr earnings impacts are 4X the magnitude of short-term impacts • CA: Wages of completers consistently higher than controls, especially in slowing economy; greater employment stability • CA: Improved company performance; ability to change • MA: Firms tend to benefit more from training than workers

21. Strategies for Increasing Accountability • TA and training plan • Quality training • Employer-education partnerships • Match requirements • Performance-based contracts • Reimbursement v up-front payment • Eligibility for subsequent contracts

22. Leverage Points for Increasing Access

23. Leverage Points for Increasing Access (2)

24. Basic Skills/ESL Design Options Integrated into program Set-aside / explicit focus • Reduces stigma attached to remediation • Basic skills/ESL taught in context • Accelerates learning (non-sequential) Feeder program • Requires articulation and referral • Dedicated funding source • Ability to focus more on worker needs • But may lose employer interest and buy-in NJ: Employers not willing to provide match because training was too generic so state removed match requirement MN: sustained demand for program

25. Credit/credentials v Non-credit For credit Non-credit • Benefit to worker: opportunity to build toward postsecondary credential • Academic credit more likely if training is provided by CC • Can slow down ability to respond in a timely manner • Can work against customization • Most CT is short-term, quick turn around & not for credit • Employers either don’t care or worry workers will leave if get a credentail

26. Single Employer /Consortia Projects Single employer Consortia • Most feasible for recruitment • More effective in improving trng functions & increasing employer investment • Training more likely to continue with employer funding • More positive business performance impacts • Important to deliver training for intact groups of workers to achieve improved product quality, reduced error rates, internal communication, etc. • Economies of scale: • Reduces training cost for small employers • Aggregates demand for providers & less admin. cost • Potential business competitiveness benefits • Need intermediary to manage • Danger of becoming too generic • Workers skills at start & employer expectations for must match

27. Tensions • Employer focus >-< Worker focus • Employer interest & commitment>-< Longer-term & basic skills training, credit & credentials • Economies of scale >-< Customization • Business attraction >-< Community benefits • Integration of basic skills & special populations>-< Set-asides

28. Discussion questions • What strategies have worked best in your state? • What balance between meeting worker & employer needs is achievable in your state’s ED context? • Have all of the necessary dots been connected to better serve low-skill, low-income populations? • Where do we go from here?