Coaching and Cash

Washington State taps state and federal funds to offer longer-term training, coaching, and financial support. Also, a Tech Hubs redo as Republicans advance tax benefits for workers and cuts to Pell Grants, Colorado’s push to align education with the workforce, and an essay on the great career reinvention. (Got this as a forward, subscribe here.)

Career Coaching, Education—and Cash

Ann-Jannette Molinari was feeling defeated when she showed up at WorkSource SW Washington. She’d been barely scraping by for years—while taking care of her daughter and mother with Alzheimer’s—and she was about to have her hours cut at Costco, where she made $20 an hour.

She needed full-time work and was interested in trucking. A caseworker at WorkSource SW Washington, a nonprofit overseen by the local workforce board, walked her through the training process and gave her financial support through the state’s Economic Security for All (EcSA) program—covering $6,500 in tuition and giving her about $1K to take the commercial driver’s license test, an additional $1K a month while she looked for full-time work, and new work clothing.

“I had a hope that things were going to get better, and I didn’t have that before,” she says. “I didn’t know what I was going to do.” 

Molinari, now 50, ultimately landed a position at United Salad Co., where she’s making $26 an hour and working full-time with the opportunity to earn overtime pay. 

The Big Idea: Molinari is one of more than 4K people in Washington who have participated in EcSA, a poverty-reduction program that combines financial assistance and support services with career coaching. The program aims to address the many different barriers that people face to getting better jobs, an issue that most of the country struggles to address.

Launched with a small portion of federal Workforce Innovation and Opportunity Act (WIOA) dollars, it has become a multimillion‑dollar state program and a leading example of how states can move beyond check‑the‑box job placement toward tackling the roots of poverty and the need for broader skill development, according to a recent report by Harvard University’s Project on Workforce and the National Governors Association.

The state’s 12 workforce boards partner with the Employment Security Department and more than 160 community service providers to deliver the program. “One piece that stood out to me is that it was cross agency,” says Kerry McKittrick, co-director of the Harvard Project on Workforce and one of the report’s authors. “It was an effort to break down the silos between workforce and education and other social services.”

Success Factors: Nearly 90% of participants who complete the program attain their self-sufficiency goal, according to a December legislative report. And the majority start out the program making less than $10K per year, while the median income after exiting is almost $50K.

Two features distinguish EcSA. First, its eligibility standards aren’t tied to the federal poverty line, but to the University of Washington’s Self-Sufficiency Standard, which takes into account location and the high cost of living in cities like Seattle. Second, the program’s funding and design give staff time to work with participants over a longer period.

“You can actually carry a participant year after year and continue to invest in them if they’re showing some sort of mark of improvement,” says Miriam Halliday, CEO of Workforce Southwest Washington, which oversees the nonprofit that helped Molinari. “Those that are in training, and it can be expensive training, go for a longer duration, like a two-year degree or three-year program, and then go into employment.”

Engaging Employers: Business partnerships have also been crucial to success, says Mark Mattke, CEO of the Spokane Workforce Council. Mattke meets with hundreds of businesses each year to talk about their needs and how the board can support their talent pipelines, including with people coming through EcSA. 

“Working both sides of the street, on the resident side and then on the business side, is important,” Mattke says. “These funds help us do that.”

Despite the program’s promise, however, that funding is now vulnerable. Governor Bob Ferguson, a Democrat, announced in February that the state faces a projected budget shortfall of $15B. As a result, EcSA may face significant cuts.

The Kicker: And with more than 800K people in the state living in poverty, the program has just scratched the surface. —By Colleen Connolly

Tax Breaks, Budget Cuts, and New Tech Hubs

The U.S. House of Representatives passed a broad domestic policy bill this morning. The legislation includes several noteworthy provisions relating to workforce education.  

For example, the section from the Ways and Means Committee would incrementally raise the long-standing cap on the tax exclusion for workers who receive employer-provided educational assistance. It also would make permanent a pandemic-era exclusion for employers that pay off student loan debt as part of educational assistance programs. Going forward, both of those tax benefits would be increased based on inflation rates.

The first $5,250 of employer-provided educational assistance is excluded from an employee’s income. That cap hasn’t been raised for almost 40 years and fails to cover the tuition costs of many education programs. Tying the exclusion to inflation doesn’t come close to the increase wanted by a broad coalition of advocates. But it adds long-sought momentum and could encourage companies to invest more in education benefit programs.

Because most companies cap tuition benefits at the current $5,250 IRS limit, even a modest increase could open faster and more affordable pathways to career-aligned degrees and credentials for working adults, says Nick Greif, vice president of corporate partnerships and external affairs at InStride, which partners with employers on workforce education.

“Working and learning simultaneously deserves our support, not tax burdens,” he says.

Labor Secretary Lori Chavez-DeRemer last week spoke at a McDonald’s in Ohio to join the company in celebrating the 10th anniversary of its education benefits program. McDonald’s has spent $240M to help more than 90K employees earn their high school diploma, pay for college, or learn English as a second language.

Pell Grants: The bill’s contribution from the House Committee on Education and the Workforce would cut $350B from the federal budget over the next decade, mostly through student loan reforms, according to the Congressional Budget Office.

It would increase the number of credits students need to pursue to receive the maximum federal Pell Grant award. Students would have to enroll in 30 credits per academic year to hit the full-time threshold. Those who are enrolled less than half-time would not be Pell eligible. The changes would reduce spending by $7B. Critics say they also would pose substantial challenges for the large share of college students who work while attending college.

For example, students who take 12 credits per semester, the current threshold, would see a $1,479 cut to the max award of $7,395. A spokesperson for the committee’s Republican majority told The Washington Post that the move is aimed at encouraging students to take a course load to earn a credential on time.

The bill also would open up Pell Grants to shorter-term programs, at an estimated cost of about $300M over 10 years. The so-called Workforce Pell proposal would make programs that can be completed in eight to 15 weeks eligible for the federal grants.

Republicans included several ROI and completion quality checks on short-term Pell eligibility, echoing previous versions of the proposal.

However, it also would allow noncollege education providers to award Workforce Pell. That move is a “dramatic and unexpected change,” writes David Baime, senior vice president for government relations at the American Association of Community Colleges. The two-year college group opposes the shift.

SHRM, the HR association, backs both the Republican bill’s tuition and loan benefits and its Workforce Pell proposal.

Tech Hubs Redo: Beyond the budget drama in Congress, the Trump administration continues to make substantial changes and cuts to Biden-era workforce policies. 

Commerce Secretary Howard Lutnick last week announced a plan to revamp federal Tech Hubs. That program seeks to create regional centers of innovation and prosperity in overlooked regions. It features an unusual combination of goals on economic growth and mobility for workers. 

Lutnick said six awards to Tech Hubs would be pulled back—with those amounts ranging from $22M to $48M—charging that the Biden administration named the recipients in a “rushed, opaque, and unfair” way as it was leaving office. The Commerce Department will conduct a new funding competition, he said, with awards to be announced early next year. 

A department fact sheet said terms of that competition will “remove references to policy priorities of the previous administration,” including those that prioritize unions, reference the Good Jobs Principles, and contradict President Trump’s executive orders on energy and DEI.

The Tech Hubs selection process was highly transparent and executed by an “exemplary team of public and private sector experts,” says Jonathan Lovitz, a former director of public affairs at the Commerce Department’s Economic Development Administration, who was a senior advisor during the program’s two phases during the Biden administration.

“They used metrics that were explicitly clear in the Notice of Funding Opportunity to make a data-driven and evidence-supported series of decisions,” says Lovitz. “Every day wasted by slowing down this process because of ridiculous political grandstanding makes America less successful, less safe, and less ready to compete.”

U.S. Representative Michael Baumgartner, a Republican from Washington State, criticized Lutnick’s announcement to nix a $48M award for an advanced aerospace materials Tech Hub in Spokane. The decision was disappointing, he said in a statement, and “puts the entire effort at unnecessary and potentially irreversible risk.”

Strong bipartisan majorities in Congress reaffirmed support for Tech Hubs in December, noted Jon Schnur, CEO of the nonprofit America Achieves. And Lutnick himself endorsed the program last week, calling it an exciting initiative that “can ensure that critical industries, companies, and jobs start, grow, and remain the United States.”

Yet only 8% of the bipartisan authorization for Tech Hubs has been funded by Congress, as a coalition of 40+ business, economic, and workforce groups that America Achieves helped pull together wrote in a recent letter to Congressional leaders.

“While we were disappointed that the work of the six Tech Hub projects awarded in January will not be funded at this time,” Schnur says, “we were pleased to see that the program is being re-launched and that those six coalitions will also be given ‘heightened consideration’ in the review process.”

Open Tabs

Certificate Boom
Undergraduate enrollment in the U.S. was up 3.2% this spring, according to preliminary data from the National Student Clearinghouse Research Center. Community colleges led the way, with a gain of 5.4%, or 288K students. Undergraduate certificates continue to gain in popularity, with a 4.8% increase in enrollment, which is now 20% higher than in 2020. The two-year college sector accounted for nearly two-thirds of the growth in certificate programs.

Regional Public Colleges
Three-quarters of U.S. metropolitan areas that are especially reliant on higher education suffered weaker economic growth between 2011 and 2023 than the U.S. as a whole, reports The Wall Street Journal, citing an analysis from the Brookings Institution. The most prominent state universities had enrollment growth of 9% in 2023 while regional public institutions had a decline of 2%. The arriving enrollment cliff could widen this gap.

Declining Mobility
The relative college wage premium for lower-income students has been cut in half since 1960, finds a new study. This was driven by a relative decline in funding, retention, and economic value of public colleges where lower-income students are concentrated; the disproportionate diversion of these students to community colleges and for-profits; and higher-income students leaving the humanities while increasingly enrolling in computer science.

Career Exploration
The OECD is out with a fascinating dashboard on teenagers’ career expectations and experiences across the countries that participate in PISA. American 15- and 16-year-olds rank relatively high for low-intensity career exploration, such as doing internet research on careers, but are in the bottom of the pack for experiences such as internships or meeting with outside advisors. American teens’ expectations about their jobs at age 30 are also wildly out of line with labor market demand, but they aren’t alone in the world in that.

Jobs in Fabs
The semiconductor industry projects a 67K worker shortfall in the 238K additional workers needed by 2030. A new dashboard from the nonprofit Natcast, which operates the National Semiconductor Technology Center, tracks the flow of talent from postsecondary institutions to roles in the industry, establishing a baseline for workforce development efforts. Natcast also announced the 19 members of the NSTC’s inaugural technical advisory board.

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