Ambitious Plan for Workforce Education Faces Washington Inertia

When David Perdue was chairman and CEO of Dollar General Corp., the company couldn’t satisfy the high demand for new locations.

One of the reasons was a lack of qualified employees to staff the discount retailer. “It limited to some degree the rate at which we built our own stores,” Perdue says.

Perdue now chairs the National Commission on Adult Literacy, which is urging Congress to significantly expand funding for workforce education and training programs and overhaul the way they’re administered.

The plan, outlined in a June 2008 report, “Reach Higher, America,” calls for $20 billion in annual funding for the workforce system by 2020. The goal is to use that investment to train 20 million people each year, up from the current 3 million.

Such a dramatic increase will require a political commitment similar to that seen in support of the GI Bill and for sending a manned space flight to the moon.

Commission officials say that the spending is more than justified by the need to upgrade U.S. work skills.

Cheryl King, the study director, says that 88 million of the 150 million people in the American workforce have at least one educational or language barrier that limits their job prospects. For instance, 18 million lack a high school education.

Even the 51 million people who have a high school diploma often fall short of the qualifications necessary to land work that provides a higher quality of life.

“The jobs that are going to be in demand over the next decade that pay living wages require [an] educational background beyond high school,” says King, who is president of Kentucky Wesleyan College.

The Workforce Alliance, a Washington organization that promotes funding for training, says that 45 percent of all jobs by 2014 will be in the “middle-skill” range, meaning they require more than a high school education but less than a four-year college degree.

The group praised the literacy commission report for highlighting that millions of Americans lack the educational background required for those jobs.

“This report helps us advance a case, an economic argument, for why workforce development matters and why we need to invest to build a skilled workforce,” says Rachel Gragg, federal policy director at the Workforce Alliance.

To achieve that goal, the commission is recommending substantial reform to the Workforce Investment Act, the federal training law, and better coordination between the disparate entities that participate in workforce development and adult education, like state agencies and community colleges.

“We’re calling for a significant redesign of federal and state funds earmarked for adult education and workforce training,” King says. “We’re asking Congress to take a fresh look at this.”

When that will happen is unclear. Congress has not updated the Workforce Investment Act since it was enacted in 1998. As a consequence, problems with the workforce system have not been fixed, critics say.

But a bill to reauthorize the law has stalled and is not likely to be placed on the congressional calendar before the end of the year. That means that Congress, as it has for several years, will again fail to make reforms. A number of logistical and policy disputes have stymied progress.

Gragg says her organization would support any effort to get the Workforce Investment Act moving again. “I don’t have the sense that those dynamics have changed,” she says.

Meanwhile, targeted workforce readiness measures have been introduced. They include a proposal by Reps. Rahm Emanuel, D-Illinois, and Jim Ramstad, R-Minnesota, to establish employer-matched portable education and training accounts. Another bill, written by Sens. Sherrod Brown, D-Ohio, and Olympia Snowe, R-Maine, would provide specialized training grants for regional emerging industries.

Reps. Ruben Hinojosa, D-Texas, and Patrick Kennedy, D-Rhode Island, are working on legislation that incorporates some of the literacy commission report’s recommendations. For instance, it would put a greater emphasis in the Workforce Investment Act on postsecondary education and job training; allow incumbent workers to access those programs; revise state funding formulas to reflect demographics; and increase the use of technology in skills training and education.

Focusing on a different workforce development area, the Financial Services Forum, a group of 20 CEOs of financial companies, recently recommended a $5 billion annual increase in education and training benefits for workers who lose their jobs because of international competition.

These efforts notwithstanding, a breakthrough on training policy this year in Congress is unlikely.

While Washington drags its feet, states are trying to tackle workforce challenges on their own. In Indiana, 931,000 working adults have an educational deficiency that limits their employability, according to a study by the Indiana Chamber of Commerce. They lack some kind of required credential—a high school, associate’s or bachelor’s degree—for jobs in demand.

The key to addressing that problem is to help people transition to higher skill levels, according to Mark Lawrance, senior vice president of the Indiana chamber.

But that process is undermined by the disparate nature of training initiatives. Federal and state programs for workforce development and adult basic education “tend to operate in silos,” Lawrance says.

The chamber is helping Indiana businesses cut through the clutter with Ready Indiana, a concierge service that points them toward national, state and community training options to upgrade their employees’ skills.

Lawrance says the state is poised to make progress in integrating training efforts because state government and business are working together.

“In Indiana, we have all the key parties at the table,” Lawrance says.

A national focus on workforce development is possible, according to Perdue, the literacy commissioner’s chairman. It’s happening in India, and Perdue, who has been working to launch a retail business there, has seen it firsthand. The Indian government prioritizes elevating labor-market skills, he says.

“They’re really very serious about it,” he says. That attitude increases the urgency for improving workforce development in the U.S.

“We’re getting left behind because we have so many kids who are not getting the minimal level of education and training,” Perdue says.