September 4, 2003 | Read Time: 7 minutes
Work occupies a central place among American values. We believe work is more than a means to an end: It also teaches discipline, rewards determination, provides structure to our lives, and creates a sense of self-worth. International studies consistently find that Americans work more hours than do our counterparts in any other developed country. And as technology erodes the boundaries of the office, work pervades more and more of our private lives, as we check our e-mail before going to bed and keep in touch with the office via cellular phone from our cars and homes.
Consequently, it is not surprising that work has come to occupy a central place in our social policy. Numerous federal programs that serve the poor, such as welfare and housing, have been refashioned in recent years to benefit primarily people who hold jobs and to punish those who don’t.
But little has been done to deal with the most critical issue facing America’s work force: the looming shortage of skilled workers, which has the potential to dampen economic growth and increase income inequality. A recent report from the Aspen Institute notes that over the next 20 years the number of American workers ages 25 to 54 will stay stable — unlike the past two decades, when total growth was 44 percent. Second, the share of workers with post-high-school education will grow by just 4 percent by 2023, compared with the 19-percent increase in educated workers in the past two decades.
One would expect that the combination of a skill-hungry economy and a work-focused social policy would lead to a much greater philanthropic investment in preparing workers, particularly low-skill workers, to succeed in the job market. Unfortunately, a worrisome trend in the opposite direction seems to be emerging. At least three major national foundations have recently withdrawn entirely from making grants to employment and job-training groups that provide job seekers with the skills and support they need to keep good jobs. Program staff members at other foundations have told me that their boards are frustrated with job-training grants and are debating moving on to other causes.
To be sure, foundation assets have taken a beating in recent years and grant makers face competing priorities for a smaller amount of money. More worrisome is the growing concern about job-training organizations’ performance. Over all, the competence of job-training groups is uneven; many programs’ rhetoric far exceeds performance. With the current philanthropic emphasis on results, it is not surprising that some foundations are disappointed with the return on their investments in jobs training. However, that should prompt them to put more effort into dealing with the key problems that undermine the performance of such groups, not give up. Here are some key ways foundations could make a difference:
Politics. Federal investment in helping people find work has been in steep, steady decline over the past 25 years. Since the end of the Carter administration, federal funds to help people find employment and learn job skills have fallen from $23-billion a year to about $6-billion when inflation is taken into account, and now include just $1-billion for training low-income adults. As a result, Boston, a city that places a high priority on training, has about $1-million to train unemployed men and women, enough to enable about 400 people per year to attend short-term skills programs.
Unless our elected officials are persuaded to spend more money (which won’t be easy, given federal budget constraints), the need for skilled workers will just continue to grow. The only way to persuade policy makers to spend more will be to emphasize the economic problems this nation will face unless more is done to upgrade the skills of low-wage workers and the unemployed.
Job-training groups can’t simply focus on the social benefits of expanded worker training, such as reducing inequality and helping needy families, as they have in the past. Instead, employers must make the case that economic growth depends on more federal resources, joined by a broad coalition of labor unions, community colleges, and nonprofit groups.
To organize such a coalition to lead a high-profile campaign to press government to double the funds it provides for job training over the next five years would probably require about $1-million per year from foundations and other private sources. But it will take more than money: Job-training groups may have to make some compromises, particularly about who is eligible for training. For example, companies are more likely to get behind a lobbying effort for funds to upgrade the skills of their entry-level employees than to back programs that emphasize training the long-term unemployed.
Policy. The second major challenge will be to influence how government resources are used. Currently, government programs emphasize job placement, with little investment in workers’ skills either before or after they get a job. That approach does occasionally have a short-term payoff — it helps poor people find work and helps employers fill job gaps — but it does little to aid employers or workers in the long run.
Though some will argue that all the attention should be focused on getting Washington to change the emphasis of government job-training programs, the odds are that the federal government will continue to give considerable flexibility to states and localities. That means that to influence work-force-development policy, it will take effective institutions at the state and local levels. Again, to muster genuine credibility with policy makers, those organizations must have strong leadership from employers. The groups would work to ensure that state and local investments were designed to meet employers’ needs and directed to key elements of the economy. If national foundations put about $300,000 into each of the six statewide groups, that would help get them off the ground. The state groups should be required to raise matching money from state and local foundations to ensure their long-term viability.
Performance. Too many job-skills programs do little to help participants or employers. Their continued existence shifts money away from strong performers, and gives policy makers and grant makers ample ammunition to reduce the money they put into job training.
I recently spoke with more than 20 national work-force experts to identify the strongest job-skills organizations in the country. I simply asked them to name organizations that were at least three years old, trained at least 100 people per year, focused on key segments of the economy where they operate, and placed people in jobs paying at least $8 an hour.
Most people were familiar with just four or five organizations and, in total, I got about 30 nominations nationwide. While other groups are doing well, it’s clear that the United States doesn’t have enough strong job-training organizations.
Staff members of job-training groups need professional training to ensure they can perform their tasks well. Enabling low-skilled people to succeed in an increasingly competitive economy is no easy job; in fact, it may be among the most difficult challenges in the economic- and social-policy arenas. Despite the complexity of this challenge, foundations spend little to be sure that the leaders of job-skills programs, and the people who work on the front lines with unskilled job seekers, are equal to the task. In fact, many case managers and employment specialists are a few months removed from participating in jobs-training programs themselves.
Developing and delivering the training to improve the performance of job-skills groups will require patience and considerable resources. Grant makers could make a good start by financing six training institutes in major cities across the country, focusing resources in cities that have already begun building the necessary capacity to deliver effective professional development. National foundations could set up these institutes by providing $300,000 a year in operating expenses and requiring the groups running the institutes to get matching funds from local sources.
A total investment of $25-million over the next five years from the nation’s foundations could help stimulate government, business, and job-training groups to take the steps necessary to stave off a devastating shortage of skilled workers that could cause this nation’s economic growth to stall. That’s not a small sum, but it is well within reach if more foundations rally around the cause — and realize that their participation is essential if they hope to play a strong role in guaranteeing not only the health of the economy, but also the well-being of all Americans.
Mark Elliott is executive vice president of the Public/Private Ventures research organization, where he focuses on employment issues. He formerly was a program officer at the Ford Foundation, where he specialized in grants for housing and jobs programs.
