Improving skills through workforce development
Policymakers at the state and federal levels have expressed concern over the emerging “skills gap”—the mismatch between the job skills employers are looking for and the skills that applicants in the labor market possess. The skills gap is most acute for middle-skilled jobs, jobs that require training beyond high school but less than a four-year college degree program.
The Workforce Innovation and Opportunity Act (WIOA) is the primary federal legislation that authorizes many training and workforce development services. These services help train job seekers with skills, but administrative hurdles limit its effectiveness.
Congress allocates $4.8 billion for WIOA programs that serve six million participants. According to a recent report from the American Enterprise Institute, few WIOA participants receive and use funding for actual training services. The AEI recommends that policymakers prioritize training and simplify reporting requirements to encourage a healthy marketplace of WIOA-eligible training providers.
The skills gap can be illustrated as follows. Middle-skilled jobs account for 53 percent of the United States labor market, according to analysis by the National Skills Coalition, yet only 43 percent of the labor force is trained to the that level. Estimates have concluded the skills gap costs the US economy $160 billion annually in unfilled labor output, reduced productivity, and depressed earnings.
Recent efforts in Congress and from the White House confirm that policymakers are serious about expanding job-training opportunities, according to the AEI report, but “even with the heightened focus, a shockingly small percentage of individuals leveraging the workforce system combine available Department of Labor training funds with money from other federal and state programs—despite that many more might qualify for additional aid.”
AEI concluded that bureaucratic processes inhibit the effectiveness of workforce training, and policy requirements are not effectively communicated to potential trainees and those who administer the programs. “If the goal is to increase the number of job seekers that participate in high-quality training programs,” the reported concluded, “more can be done to improve the coordination between the Department of Labor and these groups.”