Missing Workers and Students

Sliding labor market participation rates fuel urgency among state policymakers to do more on workforce development. Also, community college leaders on what keeps people out of the labor market and college, and a workforce recruiter says job-training candidates are overwhelmed by ads.

Economic Development’s Unsung Crisis

Unemployment is historically low and the U.S. economy appears likely to stick a soft landing. And while it’s still strong, the labor market may be cooling, easing pressure among some employers to fill jobs.

Yet workforce development remains the top bipartisan priority for state policymakers and higher education leaders. Why? Because more than a third of Americans over 16 aren’t working or looking for a job. At the same time, a growing share of young people are skipping postsecondary education and training—and even high school.

Sagging labor-force participation is perhaps the most important motivator behind state policy pushes to close gaps between education and work. 

The current U.S. labor-market participation rate of 62.5% is below pre-pandemic levels, and has been declining for most of two decades. Much of that dip is driven by an aging population. But the participation of prime-age workers also has stalled. Women had been driving growth, but their participation rates flatlined in the early ’00s, and then saw a long dip after the Great Recession that they’ve just now recovered from. And rates for prime-age men have been sliding since the 1960s.

Put simply, economic competitiveness suffers when one in three adults aren’t working. So do public services. 

The urgency is particularly intense for states, cities, and rural areas with labor-market participation rates that lag the national average. Alabama (57%), Arkansas (58%), and Philadelphia (58%) all have prioritized helping people without four-year degrees get into the workforce, for good reason.

In some rural Alabama counties, the rate hovers around 40% or even lower. Kay Ivey, Alabama’s Republican governor, sounded the alarm this week in her annual state of the state speech.

“Our state will not reach its full potential with nearly half our population sitting on the sidelines,” Ivey said. “We must make sure our efforts in workforce development match what we are doing to recruit business and industry.”

Many experts are watching Alabama’s Talent Triad project, which is perhaps the nation’s most ambitious attempt to connect people with personalized, skills-based paths to education, training, and jobs. Postsecondary education attainment and labor-force participation must be addressed jointly, argues a new report from the Alabama Workforce Council.

The state is at the forefront of making labor-market participation a priority, says Jane Oates, a senior policy advisor to WorkingNation and a former official at the U.S. Department of Labor.

“The leadership there understands that imported talent is too often transient, and hiring from outside the state doesn’t address all the social issues related to underemployment,” she says. “I hope other states follow their lead.”

At the federal level, more investment is needed in workforce programs and services with proven track records, as are experiments to expand successful sectoral job training programs, Harry J. Holzer, a senior fellow at the Brookings Institution, wrote in a recent analysis. His report estimated a three-percentage-point boost to labor-force participation through expanded workforce development programming.

Workers who remain out of the labor market frequently require wraparound supports and services to help them transition to employment, writes Brent Orrell, a senior fellow at the American Enterprise Institute. 

Orrell cites door-to-door outreach by Goodwill Industries of Columbus, Ohio, which seeks to identify out-of-work adults and to coax them into job-training and employment programs. He says this personal approach might work elsewhere.  

“Greater public investment in effective workforce development approaches and programs may be one of our best bets for helping workers and addressing the labor shortage,” Orrell writes.

Structural Unemployment and Two-Year Colleges

At a recent gathering, community college leaders described commonly heard reasons people in their regions aren’t looking for jobs or enrolling in college. Several two-year presidents at the meeting hosted by the American Association of Community Colleges said labor-market participation in their regions has been falling for decades. 

Top barriers for women include the availability and cost of childcare and transportation, they said. Among men, the time necessary to earn a degree or certificate can seem too long and impractical. And they said many justice-involved men face high hurdles to landing jobs. Drug testing by employers for marijuana usage also is a common barrier, even in states where the drug has been decriminalized.

One community college president pointed to a high cost of living as an omnipresent challenge to making work pay off. The data back that theory in Maryland, my home state, where steep housing and childcare costs are contributing to declining labor-market participation and a stagnant economy.

Georgia is experiencing big growth in advanced manufacturing, clean energy, and IT, says Jermaine Whirl, president of the state’s Augusta Technical College. He points to recent multibillion-dollar moves in Georgia by Rivian and Hyundai, which have helped flood the marketplace with EV-related jobs.

Yet like many states, Whirl says, Georgia is grappling with structural unemployment.

“Either jobs are too far away with limited transit options, or there is a mismatch of skill sets in the marketplace between the employer and prospective employees,” he says.

Childcare specifically limits labor force participation for women, says Whirl, especially minority women. And the length of education and training tracks is a particular concern for men.

“Two-year programs have been viewed as too long for young men, but they have responded favorably to short-term training programs that provide high ROI immediately after graduation,” Whirl says, including CDL truck driving programs and advanced manufacturing bootcamps.

The state has been working to make it easier for residents to access training that leads to high-demand jobs. It is moving toward smoother occupational licensing for veterans of the U.S. military. And Whirl notes that Georgia has fully funded its HOPE Career Grant and established the Georgia Match program, which offers automatic admission for all high school seniors to their local two-year college and select four-year public universities.

For the 30% of graduating high school students in Georgia who don’t go to work, college, or the military after graduation, Whirl says this new program “provides a gentle nudge to encourage them and their families that education is within their reach.”

Higher education leaders around the country are seriously underestimating the importance of labor market participation, Oates, of WorkingNation, says. People sitting on the sideline represent all age groups and genders. 

Colleges could do more to meet the specific needs of these potential students, she says. For example, they could offer a suite of services to women who left the workforce during the pandemic, with refreshers in data analytics, project management, sales, and other areas. These could be certificate programs, even add-ons to a bachelor’s, or on-ramps to a traditional degree.

The Kicker: “It’s an institutional opportunity and a local and state economic development necessity,” Oates says.

Too Good to Be True

Prime working-age Americans who are out of the job market and not attending college tend to be overwhelmed by pitches when they are trying to figure out how to break into a career.

“The constant barrage of advertisements to this group makes it challenging to build trust,” says Dennis Dahlmann, COO and co-founder of GetScale, a workforce recruiting company. “There are lots of great programs out there, but there are also some bad ones. It can be hard for individuals to tell the difference.”

Even when an education and training option is a reputable, good bet, workforce development pros and community college officials say it’s hard to cut through the ad noise with understandably skeptical working learners. 

GetScale’s founders previously worked on driver recruiting for Uber. The company offers one-to-one conversations and coaching, which Dahlmann says is key for recruiting workers—and potential community college students. That’s because people need to be able to tap in to their core motivations for putting in a lot of effort to succeed in job-training or postsecondary education programs.

Likewise, Dahlmann says, successful training options should include a flexible curriculum and extra effort to communicate how the learner can fit the program into a busy life. He says the best ones offer a blend of asynchronous learning with live human teaching, counseling, and coaching.

“Programs that don’t consider the competing priorities of adult learners are destined to fail,” says Dahlmann.

Open Tabs

Outcome-Based Loans
The career-impact bond funding model from the nonprofit Social Finance helped support learners who earned useful skills to find jobs in their chosen careers, according to early findings from a multiyear study by MDRC. But while the income-share agreements helped learners cover training costs, some had trouble understanding the terms, and more than half were not making required ISA repayments after completing programs.

Workforce Pell
A controversial proposal to help cover the costs of opening up federal Pell Grants to short-term programs likely would not generate the projected amount of savings, writes the Century Foundation’s Peter Granville. He says the plan to prohibit wealthy colleges from issuing federal loans could “fruitlessly complicate a financial aid landscape that is already highly complex,” while also curtailing college access for lower-income students.

Federal Money
The U.S. Energy Department recently announced $24M in new funding for community colleges, unions, and labor management partnerships to create industrial assessment centers to expand workforce pathways into energy-efficiency jobs, building on a previous $32M in grants, writes Shalin Jyotishi for New America. Jyotishi also wrote about community college funding and resources from the White House’s Advanced Manufacturing Sprint.

Nondegree Paths
Parents are open to nondegree education and training programs for their children, and educators see value in these pathways, according to a survey conducted by Morning Consult for American Student Assistance and Jobs for the Future. However, substantial numbers of educators said they struggle to judge the quality of these programs (33%) or that they think employers favor college degrees (35%).

Childcare for Students
A newly launched initiative will expand childcare options for student parents who attend community colleges. Announced last year, the partnership between the Association of Community College Trustees and the National Head Start Association will bring more Head Start programs to two-year campuses. Over the next five years, the associations will help qualifying student parents receive free, high-quality childcare and early education.

Tech in K-12
Taking a high-quality computer science course in high school increased the chance that a student will major in computer science, writes EdSurge’s Jeff Young, citing data from Maryland. The research also found that the high school experience gave a five-percentage-point bump to the odds that the student will complete a CS degree program. The biggest impacts were seen for women, Black students, and students from low-income backgrounds.

At the AACC meeting in NOLA, I saw a video with a fresh take on recruiting students for workforce education programs. The Metallica Scholars at Mississippi Gulf Coast Community College bring the noise in touting the value of their automotive program. Rock on. —PF