On 10th December, American think tank Roosevelt Institute held a webinar to discuss inequality in the labor market and what can be done to rebalance. Elisabeth Jacobs, Executive Director of WorkRise, hosted a discussion which focused on workforce training among frontline workers, a key mechanism to reducing inequality in the American workforce.
Roosevelt Institute fellow and Columbia professor Suresh Naidu opened by presenting findings from his latest research on the impact of “specific” and “general” training. Specific training is designed and delivered by an employer to service their own operational needs. General training applies to an entire sector, improving skills that apply across all employers in a common role.
Naidu referenced The Beveridge Curve - the relationship between unemployment and the job vacancy rate - and how employers model wages as a trade off against employee turnover / churn. Employers won’t pay for training that is portable and could be used at a competitor company - a monopsony (single buyer control) that needs to be challenged if the American economy wants to move ahead. By introducing specific training to cope with the “future hurricane of technologies”, these employers serve to widen any pre-existing imbalance - those in the best position to upskill according to new technologies will be given the opportunity to do so. The more skills, greater effort and more bodies approach will attempt to keep best workers at the lowest wage, while employers continue to ask public institutions and non-profits to fund general training.
Another dualism is presented by Naidu - government training programs (Job Corps, Workforce Investment Act) which have not delivered significant results. More impact (“big gains”) come from sector employment programs which are curated, offer coaching, job search assistance. These include PerScholas, WIRP and WorkAdvance. Aaron Sojourner of Carlson School of University of Minnesota echoes Naidu’s points and provides the recommendation that sectors should “harness competition between employers” and use portable credentials to help with this.
On the industry side, Amanda Cage, President and Chief Executive Officer of the National Fund for Workforce Solutions, opened by mentioning how little the U.S. spends on training - less than 0.1% of GDP, the lowest rate of every developed nation with the exception of Mexico. Good institutions do exist - Culinary Academy in Las Vegas and SEIU in healthcare - but the pathways to development aren’t there. Later when speaking in the Q&A, Cage references the importance of transferrable skills, especially those learned and reinforced in the service sector.
Howard Rothschild from the Realty Advisory Board on Labor Relations indicated that sector-wide approaches enable the scaling of new curriculum content, especially pandemic-informed training. This helps to reduce the cost to the employer - $170 per year per employee is the pricing a set of 160 courses. Roth was clear - this price point allows the curriculum to move quickly, offering respected curriculum “on a dime.”
Lenore Friedlaender from 32BJ SEIU took a broader approach - “training doesn’t take place in a vacuum.” Safety needs to be on the agenda, likewise the wage floor itself. Freidaender cites an example when a company employing of janitors in both New York and New Jersey had different wages and benefits at the start of the century. Through their work co-ordinating across the Cleaning sector, wages increased from $5.25 to $9.75 overnight, now at $16-18 today.