There’s a skills gap in our country that is preventing unemployed Americans from filling available jobs. Legislation I authored is going to help close that gap.
We need it, now more than ever. The policies coming out of Washington aren’t getting the job done for those Americans who are unemployed or underemployed. Too many Americans are still struggling through a weak economy and a frustratingly slow recovery. While the unemployment rate has dropped, much of the decline is the result of people simply giving up even looking for work; in fact, the workforce participation rate is near 40 year lows. Meanwhile, economic growth has slowed, with GDP during the first quarter of this year actually declining by 2.9 percent. The skills gap makes things even worse for our economy. If businesses cannot access a skilled workforce that meets their needs, they will make investments elsewhere.
Unfortunately, the skills gap has been growing. Even while our friends and hundreds of thousands of neighbors around our state are still struggling to find work, there are 140,000 unfilled jobs in Ohio. And that’s just a fraction of the 4.5 million jobs that remain open across the country. This disconnect between workers looking for jobs and businesses that are looking for workers is largely driven by a lack of skills and credentials; a lot of the jobs that are available require training or the qualifications the unemployed don’t have.
The U.S. Bureau of Labor Statistics tells us Ohio has gained some manufacturing jobs over the past four years. That’s great news. And yet, according to the latest Skills Gap Report by the Manufacturing institute, 74 percent of manufacturers are experiencing workforce shortages or skill deficiencies that keep them from further expanding their operations and improving productivity. Our state could be doing so much better if our workforce had more opportunities to get the training they need.
Washington has a role to play to close the skills gap, but the federal workforce development system put in place for that very purpose hasn’t been getting the job done. According to the Government Accountability Office (GAO), the federal government has spent as much as 18 billion of our taxpayer dollars annually to operate 47 different workforce development programs spread over nine different departments and agencies. Forty-five of them overlap with at least one other program, and only five have conducted an impact study of their efforts since 2004, leading GAO to conclude that “little is known about the effectiveness of most programs.”
It’s a story I hear every time I visit with workers, businesses, and educators across Ohio, including from employers at a roundtable discussion I had this week. People are frustrated, and for good reason. The way Washington has handled workforce development is simply unfair. It’s unfair to employers who have open positions because they cannot find qualified candidates to fill them. It’s unfair to taxpayers who send their money to Washington believing that the government will be good stewards of those funds. And, most importantly, it is unfair to the millions of Americans who want to build a better life for their families and yet find that the federal resources allocated to help them aren’t getting the job done.
I know we can do better, and that’s why I joined with my colleague Senator Michael Bennet to work on bipartisan legislation called the CAREER Act to bring some important reforms to federal retraining programs. I’m pleased to report that I was able to include key components of this legislation in the Workforce Innovation and Opportunity Act that recently passed the Senate and the House of Representatives. These steps will save taxpayer dollars, help get our economy back on track, and most importantly, make a difference in the lives of millions of unemployed workers who are ready for a new start.
First, we reduced wasteful and inefficient overlap, trimming fifteen programs from our nation’s workforce development system.
Second, we increased the focus on helping unemployed workers attain high quality credentials that give them a leg up in the local job market, requiring local boards to give priority consideration to programs that lead to credentials that are in-demand.
Third, we called for new and innovative accountability in the system called “Pay for Success.” Currently, the workforce development programs provide funding regardless of performance, so long as certain rules are followed or input requirements are met. This has resulted in unaccountable, complacent programs that have fallen short. “Pay for Success” is an approach that turns this model on its head by linking payment to outcomes. Job training service providers who do well will be rewarded under this model. And those who fail to deliver results will be held accountable.
And finally, we called for access to better data to make it less difficult and expensive for state and local officials to assess the effectiveness of their training activities in real-time, commissioning a study of how access to better data can help this system deliver better results for taxpayers and the unemployed.
These four reforms can change lives and help turn around our economy. They are the kind of reforms that can empower millions of Americans to take the kinds of good jobs that fund retirements, buy homes, and pay for college educations.
Our success in reforming worker retraining is only the beginning. This week, I introduced with Senator Kaine of Virginia legislation that will reform our career and technical education system—the Educating Tomorrow’s Workforce Act of 2014. Experts tell us an astonishing 81 percent of high school drop outs say that real-world learning opportunities would have kept them in school. Our bill will provide those kinds of opportunities by helping kids get the skills they need to take advantage of good jobs that are available today.
I’ll keep fighting to build on these and other successes that I believe can put our country on the right track. At a time when the two parties in Washington have been at odds over how to finally get our economy moving again, these are the kind of steps that can make a big difference in the lives of Americans, young and old, who are ready to get back to work.
Weekly Column from U.S. Senator Rob Portman