The W.E. Upjohn Institute for Employment Research has released a new study — A Future of Good Jobs? America’s Challenge in the Global Economy — focused on improving middle-class jobs and upgrading low-income workers. Based on a conference last year, the report is a set of papers containing specific policy recommendations. (The introductory chapter, which provides an overview and summary of the recommendations is available online.) The list of policy ideas include many of the old standbys we have talking about for years: tie education and training closer to workplace needs; provide universal health insurance; expand employment and training programs; strengthen the unions; increase the minimum wage; expand the Earned Income Tax Credit. It also includes some newer ideas such as wage insurance and tax incentives for companies that create “good jobs.”
There are two really new ideas. As the introductory chapter notes, in his chapter on employment and training Robert Lerman, almost as an aside apparently, “recommends changes in financial accounting rules so that firms count their workforces’ human capital as assets and thereby are encouraged to invest more in worker training.” As regular readers of this blog note, that is something I support — but it is something that is easier said than done.
The second new idea comes from Paul Osterman on encouraging job upgrading. Again, as the introductory chapter notes:
Osterman proposes that the U.S. Department of Labor establish a “Low Wage Challenge Fund” to assist employers in improving the skills of their workforce and thereby the quality of jobs. The Low Wage Challenge Fund would also provide matching funds to states for customized training programs oriented toward the low-skill workforce and would provide funding to community colleges to increase their involvement with employers and the low-skill workforce.
Getting companies to invest in their workforce, especially at the low end, is an ongoing problem. Both of these ideas might help.
Getting policymakers to understand that this is a public policy issue is another problem. As Kevin Hollenbeck points out in his new paper Is There a Role for Public Support of Incumbent Worker On-the-Job Training?, successful state programs already exist, but at a very low level of funding. In one state he studied intensively, “Primary sector jobs were created or retained at a public cost of less than $9,000 per job—a cost that rivals or bests most economic development initiatives.” Thus, “Public subsidy of incumbent worker training, especially in export-based firms, may be an effective economic development tool for states.” What is true on the state level is also true on the national level (although you may want to design the delivery system on the state level).
As we move more and more into the I-Cubed Economy, ongoing training and skill development will become more and more important. For all the talk about training, we need policymakers to start walking the walk.