By Emily Engel
Community Development departments across the Federal Reserve System have for many years focused on workforce development measures as a means to address poverty. Low- and moderate-income (LMI) populations tend to have less education than higher income populations. Less education correlates with jobs that pay less and offer less employment security. Public high schools around the country, facing budget shortfalls, have cut vocational training programs thereby further diminishing employment prospects for young adults who do not plan to attend college. In 2011, Community Development and Policy Studies (CDPS), a division of the Chicago Fed, launched its Industrial Cities Initiative (ICI) to take a close look at ten former industrial/manufacturing hubs and their economic evolution over the last 50 years. The ICI has paid particular attention to the labor force in these cities and the steps taken by community colleges to meet demand for vocational and technical training by major employers nearby.
In conjunction with the ICI, CDPS has collected information that suggests a skills/education shortage may play a significant role in employment rates across the Seventh District, a role that the recession likely intensified but did not cause. Evidence predating the recession shows that firms noted shortages of skilled labor prior to the recession. For a more detailed discussion of labor market participation rates by educational attainment, see the August 2011 Chicago Fed Letter.
A recent survey of Seventh District community development leaders revealed a general consensus that inadequate education and job training represent serious obstacles to employment. Some respondents also noted a geographical skill shortage in rural areas, stating that workers lack essential skills for complex jobs in certain fields. Most respondents noted that the generalized skills mismatch cuts across populations of LMI workers, non-college educated workers, older workers, and the long term unemployed. Respondents also observed that few/poor child care and public transit options represent obstacles to participation in training classes.
The ICI research revealed that cities of all sizes have relatively current information about their workforce development needs and employ cooperative strategies with local colleges to address these demands. Community colleges and technical colleges are an important part of skills training at the local level. Leaders throughout the Midwest emphasize that these programs are flexible, responsive to business needs, and provide structured training and certification programs designed to address skills gaps. They also help build partnerships between governments, businesses, and local colleges.
Research shows that the vast majority of the nation’s workers do not hold undergraduate degrees, and non-degreed workers with outdated skills are currently experiencing higher rates of joblessness. Data from the National Center for Education Statistics for 2011 (most recent available) indicate that 28 percent of the nation’s population 25 years of age and older hold at least a bachelor’s degree. Further, the data shows a 64 percent increase from 2002 to 2012 among sub-baccalaureate workers earning certification or licensure at a community or four-year college. U.S. Census data, which employs somewhat different measures and thresholds, indicate the percentage of the population with at least a high school degree has been increasing since 1970, as has the percentage of the population with post high school education (if not a four-year degree). The percentage of people with some college or a college diploma increased 160 percent during this time. While these trends are encouraging, demands in the labor market for highly skilled workers reinforce the value of investing in skills training. Community colleges are working, often with active participation and input from major employers, to train workers in the skills they need.
With all that information at hand, CDPS decided to look in depth at what some of the community colleges around the 7th District are doing to try and close the skills gap. For a more in depth analysis, please read the full article.