Investing in America's Workforce: Improving Outcomes for Workers and Employers

How can well-structured and effective workforce programs and policies result in better economic outcomes for individuals, businesses, and communities?

Explore contemporary research, best practices, and resources from more than 100 authors in the book Investing in America's Workforce: Improving Outcomes for Workers and Employers.

The book is divided into three volumes: Investing in Workers, Investing in Work, and Investing in Systems for Employment Opportunity. Within each volume are discrete sections made up of chapters that identify specific workforce development programs and policies that provide positive returns to society, to employers, and to job seekers. Download the three volumes and individual chapters below.

Note: The policies and practices presented in the book are intended to spur innovative thinking that results in context-specific solutions. The perspectives are not intended as an endorsement from the Federal Reserve System or its partnering institutions.

Download Individual Chapters Below
VOLUME 1: INVESTING IN WORKERS

Front Matter and Table of Contents
Acknowledgments
Foreword: The Evolving U.S. Labor Market by Patrick T. Harker
Introduction: Investing in America's Workforce by Stuart Andreason, Todd Greene, Heath Prince, and Carl E. Van Horn

   
Chapter Titles   Authors and Affiliations   Abstracts
Leveraging Evidence-Based and Practical Strategies to Reduce Skills Gaps   Anand Marri
(Federal Reserve Bank of New York)
Jennifer Schramm
(AARP Public Policy Institute)
  Section introduction
Turning the Skills Gap into an Opportunity for Collaboration: Case Studies from New York and Puerto Rico   Anand Marri
Edison Reyes
(Federal Reserve Bank of New York)
 
Employers often cite the skills gap, or talent shortage, when explaining their challenges with filling positions. Rather than enduring frustration with the current workforce supply-and-demand model, employers and educational institutions that tackle the skills gap can forge mutually beneficial partnerships. Although employers are expected to compete in a much larger and more globally connected world than ever before, the current system and resources dedicated to building the future workforce call for greater and more-strategic partnerships between industry and the education sector. Because of these demands, researchers believe engaging employers in the development of job training programs serves as an essential strategy for aligning industry needs and increasing job seekers' chances of securing work after completing training. This chapter explores the partnership experience of three employers with educational institutions in New York and Puerto Rico. By detailing some of the factors that contributed to these employers partnering with higher education institutions, the chapter provides insight to employers seeking to engage with educational partners and highlights some of the lessons learned through these collaborations. In the three cases, employers developed strategic partnerships with educational institutions in their region to address labor market concerns and support the development of skilled industry talent.
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Bridging the Talent Gap through Data Insights and Community Action   Bridgett Strickler
Dan Ash
Hadass Sheffer
Zachary Zimmerman
(The Graduate! Network)
 
Communities need objective information to attract investments in workforce development that reinforce employers' goals, employees' educational attainment, and regional economic prosperity. The Graduate! Network's Bridging the Talent Gap initiative is a locally focused, data-driven approach for building the case for employers to partner with their employees and their communities. The authors' findings from a national survey show a valuable relationship exists between employers who provide learning benefits and employees who take advantage of these programs. Before this survey, much of the evidence to support that notion was not generalizable because of the success stories' anecdotal nature. Research was consistently lacking data, particularly for midsized and smaller employers, which describe the nature of employer-provided educational benefits, need for those benefits, and affirmation of an employer's return on investment.
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Apprenticeship Benefits and Costs: A Roadmap to Measurement   Jessica Nicholson
Ryan Noonan
(Bureau of Economic Analysis)
Susan Helper
(Case Western Reserve University)
David Langdon
(U.S. Department of Commerce)
 
This chapter presents an initial study of the benefits to and costs incurred by firms with apprenticeship programs. Recent policy focus on skills development and worker training has not been matched by a detailed understanding of the business case for apprenticeship. Based on interactions with 13 organizations, the authors detail major decision points and provide a roadmap to help firms understand how to measure benefits of, costs related to, and return on investment (ROI) for apprenticeship programs. In addition, in-depth data analyses of two firms show a greater ROI for addressing employment needs through apprenticeship instead of filling the positions by other means.
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Engaging Manufacturers to Promote Skills Development   Katherine McClelland
(formerly with The Manufacturing Institute)
 
Employers across the nation face challenges in attracting and retaining high-quality talented workers who possess the skills and competencies needed for roles in modern manufacturing. This chapter highlights research and employer-led strategies for closing the manufacturing skills gap and features manufacturers' efforts to improve their talent pipelines, provide upskilling opportunities for their incumbent workforce, and increase diversity.
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Power Skills for Jobs of the Future   Jeanne C. Meister
(Future Workplace LLC)
 
A survey of U.S. human resources leaders found more than half believe there is a skills gap in their organization, and one-third say filling their companies' open job positions in 2018 was more difficult than in 2017. Companies need to consider following three strategies to address a skills gap in their organizations: (1) identify the specific skills needed for an organization to meet its current and future goals, (2) invest in learning both to develop and recruit new hires, and (3) commit to building corporate–higher education partnerships to upskill the workforce. The survey found nearly 40 percent of companies are not collaborating with institutions of higher education, and more collaboration is needed to match the supply with demand for labor.
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Leadership Development for a Twenty-First Century Workplace   Henry G. "Hank" Jackson
(formerly with Society for Human Resource Management)
 
As businesses search for the keys to successful leadership, the author seeks to identify the strategies of highly successful companies and avoid repeating the mistakes of failed ones. Chief among the successful strategies has been recognizing the high cost of a subpar leadership culture and ensuring effective programs are in place both to identify and develop high-potential leaders and remove poor managers. A strong indicator of a poor leadership culture is voluntary turnover of quality employees. The cost of replacing a quality employee is five times the cost of retaining one. Organizations that get leadership right put the same emphasis on leadership development as they do on other critical functions such as marketing or finance. The focus on leaders who understand the value of an employee and how to translate that into organizational success may be the last frontier in management success.
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Chapter Titles   Authors and Affiliations   Abstracts
Programs to Increase the Supply of Skilled Workers   Alexander Ruder
(Federal Reserve Bank of Atlanta)
  Section introduction
Adult Learners: Activating Prior Knowledge and Acquiring New Skills   E. Wilson Finch
(Council for Adult and Experiential Learning)
 
One solution for addressing the growing demand for skilled workers in a changing economy includes encouraging working-age adults to acquire new skills and to apply the skills they already possess. In this chapter, the author explores this often overlooked resource by discussing the challenges of connecting working-age individuals to higher education and, consequently, to the higher-skill job market. The author examines approaches for making the most of workers' existing knowledge and skills, how to assess knowledge and skills, and barriers to those assessments. Subsequently, the author reviews promising strategies for communities, employers, and institutes of higher education and offers examples of partnerships to better align workforce and education outcomes.
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The Challenges Facing Veteran Workers   R. Jason Faberman
Thomas Haasl
(Federal Reserve Bank of Chicago)
 
Relative to other labor force participants, military veterans face unique challenges to their employment prospects. Transitioning from the military to the civilian labor market entails a significant disruption in one's career path. The transition from military to civilian life may also present veterans with additional challenges such as mental or physical health issues, particularly for those who have experienced long periods of deployment. While some programs are designed specifically to aid veterans with their employment prospects, there is relatively little research on the effectiveness of these programs—or on veterans' employment in general. In this chapter, the authors highlight some of the key findings on trends in veterans' labor market outcomes, including the factors that affect these trends. They also provide a review of existing programs and suggest areas of future focus for policymakers to improve veterans' labor market experiences.
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Narrowing Gaps through Educational Investments for American Indians and Alaska Natives   Patrice H. Kunesh
Richard M. Todd
(Federal Reserve Bank of Minneapolis)
 
Outcomes for American Indian and Alaska Native (AIAN) workers continue to lag significantly behind the outcomes of white workers in the United States, partly due to differences in educational attainment. Census data on education and work outcomes by race imply that for all workers, including AIANs, college graduation is associated with significant gains in employment, occupational skill level, and earnings. The linkages differ by racial group. AIAN college graduates see larger gains in their rates of labor force participation and employment, but smaller gains in earnings, compared to similar non-Hispanic, white college graduates. Minnesota administrative data indicate college major and age at graduation matter, with AIAN students majoring in high-demand fields and completing college before age 30 having smaller gaps in employment status and earnings. Policies promoting higher education are necessary but not sufficient to address the labor market disparities between non-Hispanic whites and American Indians and Alaska Natives.
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The Middle-Skills Gap: Community-Based Solutions to Meet Employer Demands   Maurice A. Jones
(Local Initiatives Support Corporation)
 
This chapter describes how local solutions are key to filling the middle-skills employment gap and catalyzing opportunity across the country. Using an integrated services approach through the Financial Opportunity Center and Bridges to Career Opportunities models, LISC and its partners have worked with residents of underresourced communities to help them on a pathway to living-wage jobs. These local innovations can enhance traditional workforce development strategies and supply underused talent to meet employers' growing demand for workers.
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Manufacturing Connect: Teaching Advanced Manufacturing Skills to Inner-City Students   Rick Mattoon
Susan Longworth
(Federal Reserve Bank of Chicago)
 
This chapter introduces readers to the Manufacturing Connect program, its intended outcomes, and the challenges faced in achieving those outcomes. The chapter addresses important questions raised by the program: does manufacturing—in particular, advanced manufacturing—provide sustainable career opportunities for disadvantaged youth within their communities? And is there potential for replicability in other schools and communities? The authors discuss the critical importance of context and place to the outcomes of a people-focused initiative.
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Chapter Titles   Authors and Affiliations   Abstracts
The Critical Role of Historically Black Colleges and Universities in Workforce Development   Todd Greene
(Atlanta University Center Consortium)
Ashley Bozarth
(Federal Reserve Bank of Atlanta)
  Section introduction
HBCUs as Pipelines for Diversified Intellect, Creativity, and Innovation   Ronald A. Johnson
(Clark Atlanta University)
 
This research discusses the importance of historically black colleges and universities (HBCUs) in helping to sustain and increase competitiveness in the U.S. economy. For more than 180 years, these underfunded institutions have transformed economically disadvantaged, socially disenfranchised students into productive, highly capable employees and entrepreneurs. According to the Thurgood Marshall College Fund, HBCU graduates account for over 12 percent of African American CEOs, 80 percent of African American judges, half of African American lawyers, and half of African American professors at non-HBCU institutions. The importance of HBCUs goes beyond their success in producing baccalaureate and post baccalaureate graduates. They facilitate interest among many black youth in going to college, whether they end up attending an HBCU or a non-HBCU. Broader support of HBCUs will exponentially increase the institutions' capacity to diversify, strengthen, and increase the competitiveness of the U.S. labor force in the global marketplace.
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Assessing Infrastructural Health: Optimizing Return on Investment in HBCUs   John Silvanus Wilson, Jr.
(Harvard University)
 
Because America's underlying demographics indicate a burgeoning minority presence, it makes sense to increase investments in the nation's historically black colleges and universities (HBCUs). These institutions enroll just 11 percent of African American students overall, yet they have recently produced nearly 20 percent of the African American graduates earning science and engineering degrees and 33 percent of the African American graduates with math and statistics degrees. Yet, major philanthropists seem to have found it neither intuitively obvious nor instinctively optimal to target HBCUs for investment. In 2010, the combined amount of private gifts to all 105 HBCUs was less than 1 percent of all philanthropic giving to American higher education. Prospective donors are more likely to optimize their HBCU investment returns by first assessing the institution's infrastructural health, including its cultural infrastructure, capital infrastructure, and governance infrastructure. This new and informed approach will benefit HBCUs, investors, and the nation.
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Promoting the Health of Communities for Long-Term Benefits   Valerie Montgomery Rice
David Hefner
(Morehouse School of Medicine)
 
Morehouse School of Medicine (MSM) recognized years ago that health was a cradle-to-grave continuum heavily framed by one's early physical, social, emotional, and intellectual foundation and success. Reading proficiency, for instance, is a social determinant of health, affecting a wide range of health, functioning, and quality-of-life outcomes and risks. Being a proficient reader by third grade is largely a function of a child's environment before and after birth. Many of these environmental conditions are related to a family's socioeconomic status, and research shows poverty increases the likelihood children will perform poorly in school. In 2014, MSM adopted an inner-city public elementary school in alignment with its vision to advance health equity. Though still an evolving partnership, the medical school believes evidence-based investments in the youth and parents of vulnerable communities provide immediate and downstream benefits to the American labor market and to local, state, and national economies.
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Chapter Titles   Authors and Affiliations   Abstracts
Creating Economic Opportunity through Work and Support   Kathy Krepcio
(John J. Heldrich Center for Workforce Development)
  Section introduction
Empowering Workers with Disabilities: A Philadelphia Story   John Colborn
Stephanie Koch
Laura Welder
(JEVS Human Services)
 
With supports such as job matching, job coaching, and technological innovation, JEVS Human Services is able to dispel widespread misperceptions that individuals with disabilities are not capable of learning new skills and completing tasks. The key to long-term employment retention among individuals with disabilities is to incorporate workforce development practices across all supports that those individuals may receive. Community-integrated employment, which provides opportunities for all individuals to participate fully within the community, works to discover an individual's strengths, weaknesses, and skills, and it matches an individual to a job that fits his or her interests and experience. The overarching goal of the JEVS Philadelphia Independence Network (PIN) program is to enhance participants' autonomy and independence across multiple domains. PIN staff, along with a steering committee of parents, aim to create and sustain a community of young adults with disabilities, providing opportunities for independence, socialization, and group enrichment as well as individual residential habilitation, vocational placement, and coaching services that meet each member's unique needs and skills.
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Philanthropy: Building Best Practices in Disability Inclusion   James Emmett
Meg O'Connell
Judith M. Smith
(Poses Family Foundation)
 
The chapter describes the disability inclusion field's shift in companies' approach to hiring people with disabilities—from regarding it as charity to realizing it is a good business practice—and the role that strategic philanthropy is playing in that shift. The chapter provides the history surrounding the movement and discusses the business case for disability inclusion. The chapter also highlights the emerging trends in disability inclusion.
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Reducing Job Loss among Workers with New Health Problems   Yonatan Ben-Shalom
(Mathemetica Policy Research)
Jennifer Christian
(Webility Corporation)
David Stapleton
(Mathemetica Policy Research)
 
Every year, millions of U.S. workers lose their jobs or leave the workforce because of a medical condition. Many people are ultimately awarded Social Security Disability Insurance and Medicare benefits. The authors examine a growing body of research that indicates many workers could stay in the labor force and retain their livelihoods if their needs for prompt and practical extra support are met. The authors describe how common health conditions can progress to unnecessary work disability; present evidence on how well-designed, timely services can substantially reduce such disability; consider the systemic barriers that impede efficient expansion of evidence-based support; and propose policy changes to address these systemic barriers. The authors conclude by asserting that further development and testing of leading proposals, with eventual progression to systemic changes, could prove effective.
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Chapter Titles   Authors and Affiliations   Abstracts
The Workforce Development Pipeline from Cradle to Career   Rob Grunewald
(Federal Reserve Bank of Minneapolis)
  Section introduction
Early Childhood Investments: Paving the Way for the Future Workforce   Rob Grunewald
(Federal Reserve Bank of Minneapolis)
 
The success of investments in the workforce development pipeline, such as K–12 schools, technical schools, colleges and universities, and other training programs, depends in large part on the experiences students had years earlier. That is because the first years of a child’s life establish the building blocks for skill development in school and the workplace. Research shows investments in early childhood development (ECD) can reduce downstream costs and support workforce productivity decades later. Early health and education programs targeted to disadvantaged children have been shown to improve school readiness, reduce grade retention and special education, and increase high school graduation rates and college enrollment. Not only can ECD programs support early development, but also the presence of high-quality childcare provides important workforce infrastructure that allows parents to enter the workforce and be productive at their jobs.
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Workforce Policies and Programs to End Child Poverty in Puerto Rico   Barbara Rivera-Batista
(Boys and Girls Club of Puerto Rico)
Amanda Rivera-Flores
(Youth Development Institute)
Eduardo Carrera Morales
(Boys and Girls Club of Puerto Rico)
Javier Silva
(Federal Reserve Bank of New York)
 
Child poverty presents a threat to Puerto Rico’s long-term economic sustainability and to its ability to recover from Hurricane Maria. The island’s child poverty rate is almost three times higher than that of the United States. This trend has remained stagnant through periods of economic growth for the island, suggesting that the issue is not just rooted in labor demand. This chapter discusses the dual programmatic and policy strategy of the Boys and Girls Club of Puerto Rico and its sister organization, the Youth Development Institute. The Boys and Girls Club is implementing an innovative two-generation model to reduce child poverty and improve youth outcomes. The Youth Development Institute conducts research and public policy work around the economic security of families. The chapter provides context for child poverty in Puerto Rico, background for how the dual strategy approach was developed, and a description of the different programmatic pillars being piloted. The chapter concludes with findings of the implementation project and implications for public policy.
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Reintegrating the Formerly Incarcerated into the Workforce   Emily Engel
(Federal Reserve Bank of Chicago)
 
The U.S. economy experienced a record 85 straight months of net job creation as of April 2017. Not surprisingly, wages are rising. ADP Research Institute’s Workforce Vitality Report for the first quarter of 2017 estimates 4.3 percent annual wage growth for full-time employees who remain in the same job. The tight labor market has not been as beneficial for the roughly 14 million ex-prisoners of working age. However, as traditional labor pools are absorbed, firms must look for new sources of talent. The current labor shortage provides an incentive for state and local governments to reassess policies that have created barriers to employment for job seekers with a criminal record and for firms that might consider hiring them. This chapter concentrates on organizations operating in the Federal Reserve’s Seventh District that seek to gain employment for the formerly incarcerated.
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VOLUME 2: INVESTING IN WORK

Front Matter and Table of Contents
Introduction: Investing in Work by Prabal Chakrabarti and Jeffrey Fuhrer    

Chapter Titles   Authors and Affiliations   Abstracts
Strategies to Advance Job Quality   Maureen Conway
(Aspen Institute)
  Section introduction
One Fair Wage: Supporting Restaurant Workers and Industry Growth   Teófilo Reyes
(Restaurant Opportunities Centers United)
 
Last year marked the first year that Americans spent more money on food prepared outside the home than on food prepared inside the home. Fueling this new economy is the labor of food-preparation and -service workers, and the fortunes of the restaurant industry have risen on this tide. Over the past decade, the industry has grown to occupy nearly 10 percent of the total private sector workforce and is on a trajectory to supplant manufacturing as the nation’s fourth-largest employer by the end of the decade. Yet that growth has not led to increased prosperity for its workforce. Restaurant workers represent the plurality of minimum wage workers and the vast majority of workers earning below the minimum wage, and they live in poverty at more than two times the rest of the workforce. More than one-third of all workers live in states where the subminimum wage for tipped restaurant workers is just $2.13 an hour, and nearly three-quarters live in a state where the subminimum wage falls below the federal minimum wage of $7.25. In these states, federal law requires that when the hourly wage, subsidized by tips, does not equal the minimum wage, employers must pay workers the difference. Nineteen percent of tipped restaurant workers work in one of the seven states where there is no subminimum wage below the state minimum wage. Yet those 19 percent fare better economically, depend less on government assistance, and work in an industry as vibrant as (or more vibrant than) that of their peers in other states. These seven states demonstrate that One Fair Wage for all workers, a movement that proposes no subminimum wage for tipped employees, is a desirable policy pathway to improve the lives of a sizable and growing economic mainspring.
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Playing for Keeps: Strategies that Benefit Business and Workers   Liddy Romero
(WorkLife Partnership)
 
In this chapter, the author considers three key worker-related challenges that businesses face—turnover, engagement, and productivity—and offers potential solutions for addressing these challenges while also improving the quality of jobs. Providing career growth opportunities and implementing programs that address working conditions of low-wage workers can be particularly beneficial for frontline workers who typically lack affordable health benefits, work in jobs that are physically demanding, or work outside normal business hours.
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National Fund Employer Profiles of Job Quality   Steven L. Dawson
(consultant; founder of Paraprofessional Healthcare Institute)
Karen Kahn
(writer, editor, and communications strategist)
 
As part of its job quality initiatives, the National Fund for Workforce Solutions has profiled several companies that are growing their businesses by investing in their employees. One company outperforms its competitors in the materials manufacturing industry by investing in the skills and careers of its entry-level workers. By providing competitive wages, employee benefits, and training and advancement opportunities—and most importantly, building a culture of trust—the employer maximizes efficiency, develops new products, and maintains its position as a market leader. Another company focuses on empowering its production employers. By offering the essential elements of a good job—respectable pay, the opportunity to contribute, and the chance to grow personally and professionally—this company is able to develop new products at lower costs.
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How CDFIs Promote Job Quality and Reduce Income Inequality   Donna Fabiani
(Opportunity Finance Network)
 
Since the Great Recession of 2007–2009, income inequality has emerged as one of the leading economic development issues in the United States. Community development financial institutions (CDFIs) can help bridge this income gap by working with businesses to create quality jobs that offer fair wages, good benefits, meaningful advancement, and wealth-building opportunities. Based on the experiences of four CDFIs, this chapter explains current approaches to quality job creation, identifies barriers to CDFI involvement in this area, and makes recommendations to expand this work.
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Now or Never: Heeding the Call of Labor Market Demand   Steven L. Dawson
(consultant; founder of Paraprofessional Healthcare Institute)
 
For years, many in the workforce field have hesitated to discuss "quality" jobs for fear of alienating employers. Yet today, the U.S. labor market is the tightest it has been in decades. As a result, the interests of low-income job seekers and employers are now more wholly aligned—a once-in-a-generation convergence. This chapter argues the workforce field and its funders must fundamentally redefine the types of services they offer, the strategies they pursue, and the very nature of how they finance workforce operations. The chapter calls for a new generation of lead workforce intermediaries to help employers invest in, and leverage, their frontline workers—helping businesses not only to create quality jobs but also achieve operational excellence to secure and defend their competitive business advantage. This chapter is adapted from the sixth paper in the Pinkerton Papers series, at http://www.thepinkertonfoundation.org/paper_type/job-quality-series.
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Chapter Titles   Authors and Affiliations   Abstracts
Valuing Workers through Shared Capital Investments   Janet Boguslaw
(Brandeis University)
  Section introduction
Converting Employees to Owners: Deeper Investment for Deeper Impact   Melissa Hoover
(Democracy at Work Institute)
 
Targeted investment in training that prepares workers to become employee-owners could be a strategy to retain middle-skill jobs and increase the quality of low-wage jobs by enabling the survival of businesses at risk of closure. The workforce development field has an opportunity to play a critical role in building the capacity of employees to assume ownership. The impending retirement of a generation of small business owners will lead to business closures and employee layoffs, resulting in the loss of middle-skill jobs and deepening inequality; these impacts are starker for minority-owned and rural businesses. However, owner retirements also present opportunities to transfer ownership of small and midsized enterprises to their employees. The literature on employee-owned firms and their benefits for workers shows higher-than-average investments in their workforces and higher productivity and job satisfaction than conventional workplaces. Employee ownership has a demonstrated ability to increase job quality, skill building, and employee retention. The author argues for an approach to workforce development that reconceives the employment relationship, with a worker-centered dual focus on job quality and retention. A case study of a recently converted business, providing both middle-skill and entry-level jobs, illustrates the potential of cooperative conversions to retain jobs but also the need for systematic supports for low-wage workers to assume ownership responsibilities.
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The Potential of Profit Sharing to Support Undervalued Workers   Susan R. Crandall
(University of Massachusetts, Boston) Catherine Gall
(Economic Mobility Lab, City of Boston)
 
Profit sharing is a pay strategy to increase job quality for hourly employees. This chapter provides an overview of profit sharing. It provides research on its effectiveness for employers and employees and highlights a profit-sharing strategy that emphasizes financial transparency and employee participation. The authors present a case study of implementation in a restaurant that resulted in increased profits and decreased turnover. The chapter includes recommendations for policy changes and scalability, such as increasing access to state job training funds, providing a special tax status, and offering tax credits. As a workforce strategy, profit sharing values employees for their existing skills and provides alternatives to credentialing, favoring earn-and-learn models in which learning occurs on the job, thus mitigating transportation and childcare challenges.
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Employee Ownership and Skill Development for Modest-Income Workers and Women   Daphne Berry
(University of Hartford)
Joy Leopold
(University of Miami)
Anna Mahathey
(Brandeis University)
 
Employee ownership carries a long history as an intervention for wealth distribution, reducing inequality and increasing economic security for lower-wage workers. In some models of employee ownership, employees are granted greater decision-making power within their firms, a situation that often results in increased job satisfaction, organizational commitment, and motivation in the workforce. Because employee-owned companies place a high value on education and skill development, they have become models for developing sustainable, high-quality jobs with incomes and benefits that enable people to move out of poverty and to access relevant career pathways.
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How Workforce Investments Leverage and Create Employee Value   Janet Boguslaw
(Brandeis University)
 
The very people who need structures of opportunity to grow and thrive are concentrated in jobs that do not pay well and that society does not appear to value. The opportunities start where access to jobs occurs—whether brick and mortar or platform based. For low-skilled and low-income workers, the characteristics of their employment—the benefits, flexibility, consistency of work, and opportunities for skill and knowledge advancement—converge to facilitate a pathway to wealth accumulation that income alone does not provide. This chapter examines these collective work-linked, wealth-building characteristics, framing them as employment capital, to understand how they work together and what their relationship is to workforce development. The chapter examines how shared-capital firms in which all employees hold some percentage of ownership in the company produce greater employment capital than more traditionally structured firms, creating opportunities to leverage the value of employees, improve their economic mobility opportunities, and produce more stable businesses and communities.
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Chapter Titles   Authors and Affiliations   Abstracts
The Rural Dimensions of Workforce Development   Brian Dabson
(University of North Carolina at Chapel Hill)
  Section introduction
Skills to Sustain Rural Economies   Stuart A. Rosenfeld
(consultant; founder and former president of Regional Technology Services)
 
Challenges facing rural workforce development include the loss of traditional employment, an aging population with insufficient education or experience to prepare them for the future, limited choices of programs, and the absence of a national education system that can meet workforce development needs. Responsibilities for preparing the rural workforce currently reside with career and technical education in secondary schools, community and technical colleges, and various Department of Labor training programs, including registered apprenticeships. To remain effective in the changing economy, a rural workforce development system will require several components: status as a public good that benefits the region, updated curricula to match the current and anticipated needs of employers and students, and the ability to reach older and nontraditional learners by contextualizing education. To navigate an updated system, rural workers will need improved labor market information, more informed counseling, and increased access to higher education and lifelong learning.
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Igniting Rural Entrepreneurship: Where Do Workforce Development Programs Fit In?   Erik R. Pages
(EntreWorks Consulting)
 
Community leaders in rural America are actively embracing new economic development strategies that seek to promote entrepreneurship and support talent development. To date, there are few effective collaborations among economic developers, entrepreneurship advocates, and the workforce development system. This chapter reviews recent practices and offers suggestions for how to strengthen the partnerships by engaging the workforce system in supporting self-employment training, youth entrepreneurship, and other new approaches.
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Cooperative Extension's Past and Present Investment in Workforce Development   Kenneth M. Sherin
(South Dakota State University Extension) Cheryl Burkhart-Kriesel
(Nebraska extension specialist in community vitality)
 
Cooperative Extension, part of the land-grant university system, has a historical and current stake in workforce development, a persistent societal need that continues to demand investment within the extension system. A recent national pilot project supported by the North Central Regional Center for Rural Development identified an initial sample of workforce development resources and pointed out potential gaps in both research and programming. An additional outcome of the project was a simple typology of current resources that included two areas of focus: a broad systems approach (typically with a community focus) and a more specific and targeted education and training approach (typically with a key audience focus). This chapter highlights Cooperative Extension programs representing these two areas to illustrate the varied approaches in practice today to address this national issue.
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Chapter Titles   Authors and Affiliations   Abstracts
Community and Sectoral Strategies for Vulnerable Workers   Nancey Green Leigh
(Georgia Institute of Technology)
  Section introduction
Workforce Development at the Bottom of the Labor Market   Marc Doussard
(University of Illinois at Urbana-Champaign)
 
Every day, millions of U.S. employees go to work in dismal conditions and at pay levels that often fall below the minimum wage. These degraded working arrangements hinder regional economic development by consigning workers to dead-end jobs in which skill acquisition is prohibitively difficult and by limiting overall economic productivity. Responses to the problem of degraded work typically emerge from organizing, rather than from public programs. Workers, community organizations, labor organizations, and other activist groups have responded to declining pay and working conditions with increasing effectiveness, through the basic tools of building organizations, bargaining, and advocating policy change. Such organizing campaigns contribute directly to the goals of workforce development: they lead to higher pay, greater job security, and upward mobility for workers, and they incentivize employers to seek, train, and develop high-skill, high-productivity workers.
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High School Manufacturing Education: A Path toward Regional Economic Development   Benjamin Kraft
(Georgia Institute of Technology)
 
Despite decades of employment decline, local manufacturing industries remain important economic and cultural assets to communities. Scholars, workforce and economic developers, and advocates are rediscovering the benefits of these traditions of "making," and they are creating initiatives to preserve and nurture them. However, secondary schools—once significant providers of training in industrial arts—have gradually shed the capacity to train future manufacturing workers and may not be in a position to participate in these initiatives. This chapter profiles five innovative high school manufacturing programs from around the United States, classifying them according to their organizational structures and education delivery typologies. It derives lessons for other places that may want to implement their own high-school-level manufacturing training programs and highlights opportunities for community linkages.
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Youth Job Creation and Employer Engagement in U.S. Manufacturing   Nichola Lowe
(University of North Carolina at Chapel Hill)
Julianne Stern
(Jefferson County Housing Authority)
John R. Bryson
(University of Birmingham, United Kingdom)
Rachel Mulhall
(researcher)
 
This chapter offers a solution to a dual labor market challenge facing many urban areas today: high youth unemployment combined with hard-to-fill job openings in urban manufacturing. The chapter presents a case study of Chicago’s Manufacturing Connect program, which provides high school students from high-poverty neighborhoods the foundational skills and tools to embark on successful manufacturing careers after graduation. Manufacturing Connect goes well beyond student education and career preparation; it also uses innovative strategies of employer engagement to shift perceptions of inner-city youth and increase employer appreciation of the role this next-generation manufacturing workforce will play in industry innovation and long-term survival. With that in mind, the program helps employer partners—mostly small and midsized manufacturers—identify and resolve gaps in organizational and human resource management. In this regard, Manufacturing Connect provides a replicable model for helping firms not only recruit and retain recent high school graduates, but also formalize internal mentoring and training systems that benefit incumbent workers more generally.
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VOLUME 3: INVESTING IN SYSTEMS FOR EMPLOYMENT OPPORTUNITY

Front Matter and Table of Contents
Introduction: Investing in Systems for Employment Opportunity by Stuart Andreason and Alexander Ruder

   
Chapter Titles   Authors and Affiliations   Abstracts
Rebalancing the Risk: Innovation in Funding Human Capital Development   Heath Prince
(Ray Marshall Center for the Study of Human Resources)
  Section introduction
Partnering with Banks in Workforce Development   Elizabeth Sobel Blum
(Federal Reserve Bank of Dallas)
Steven Shepelwich
(Federal Reserve Bank of Kansas City)
 
In December 2016, the Federal Reserve Banks of Dallas and Kansas City published Engaging Workforce Development: A Framework for Meeting CRA Obligations to show banks how they can engage in workforce development. As the authors have presented this information across the country, they have noted a recurring question from organizations engaged in workforce development: “How do we approach bankers and engage them in a meaningful way?" This chapter answers that question.
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Nimble Capital for an Agile Workforce   Keith Wardrip
(Federal Reserve Bank of Philadelphia)
Mels de Zeeuw
(Federal Reserve Bank of Atlanta)
 
The philanthropic sector provides a significant amount of capital to support numerous social and economic objectives, but before now, little was known about the sector's support of workforce development initiatives. The authors use a data set of grants made by the largest U.S. foundations from 2008 through 2014 to shed light on this issue. Grants related to workforce development totaled roughly $2.6 billion, or $370 million annually, during the study period. This level of funding represented less than 2 percent of total grantmaking by large foundations to recipients in the United States during this time. More than half of grantmaking activity in this arena was conducted by fewer than 30 foundations, with funds concentrated in just six metro areas. Not surprisingly, the vast majority of funding originated from independent foundations and was destined for nonprofit organizations, but corporate foundations played an outsized role.
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Outcomes-Oriented Contracting: Unlocking Economic Opportunity for Low-Income Communities   Celeste Richie
(public policy professional)
 
Outcomes-oriented contracts emphasize measurable impacts for workers. Instead of promoting specific program models, outcomes-oriented contracts embed data to provide feedback for improving services and rewarding providers that achieve results. Providers are incentivized to draw upon evidence-based interventions and innovate to meet the needs of their specific community. Instead of tying funding to a specific program, outcomes-oriented contracts enable government, the largest funder of social services, to focus resources on measurable outcomes. By changing how and what government pays for, it is possible to unlock innovation by enabling workforce organizations to experiment, scale what works, and deliver sustained results.
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Improving Workforce Outcomes with Pay for Success   Nirav Shah
(Social Finance)
 
Effective workforce development policies, strategies, and initiatives weave together two connected objectives: they help individuals attain the education and skills necessary to enter the workforce and climb the economic ladder, and they improve the productivity and vitality of the economy. Expanding high-impact programs to dramatically improve workforce development objectives requires persistent and sustained collaboration among the education, economic development, nonprofit, and business sectors. Outcomes-focused financing tools such as Pay for Success can align incentives across these sectors to achieve meaningful and measurable results for individuals, businesses, and society. Pay for Success is an innovative public-private partnership that unites investors, nonprofit service providers, and payers (often government) around a powerful common goal: improving outcomes for individuals and communities in need. This chapter explores why Pay for Success is a promising tool to tackle complex social challenges and highlights how the model is being used to improve workforce outcomes for those who need it most.
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Financing Human Capital through Income-Contingent Agreements   Miguel Palacios
(University of Calgary)
 
The traditional method of financing human capital has been for an individual to incur debt. This method is less than ideal because it places all of the risk associated with the results of the investment on the individual, inducing in some cases acute financial hardship. An alternative to incurring debt is to enter into a contract that specifies repayments are calculated based on earned income. Historically, this alternative was unfeasible because observing income was costly or outright impossible. However, improved income tax enforcement coupled with better information technology has increased the observability of income. When educational institutions provide the funding, these contracts provide an additional benefit, as they align the incentives of the institution with those of students. Using income-contingent contracts to finance human capital—specifically, when educational institutions use such contracts to fund their students' schooling—offers a promising opportunity to study the possibilities of implementing more effective ways of financing education.
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Chapter Titles   Authors and Affiliations   Abstracts
Strategy and Capacity of Public Workforce Systems   Richard A. Hobbie
(John J. Heldrich Center for Workforce Development)
  Section introduction
Results and Returns from Public Investments in Employment and Training   Demetra Smith Nightingale
Lauren Eyster
(Urban Institute)
 
This chapter focuses on two facets of job training: its role as part of the public workforce development system and how research and evaluation can inform job training policy and program decisions. Over the past four decades, many evaluations have been conducted to determine the impact of job training and other employment services. The evaluation evidence suggests four job training strategies that work well: job training connected to work, job training in postsecondary institutions, counseling and customer-focused career services as complements to formal training, and comprehensive and integrated training and employment models for youth. Public investment in training fills a services gap, particularly for unemployed and low- and middle-skilled workers. The Workforce Innovation and Opportunity Act provides a framework for using evidence to determine “what works” for improving job training and expanding employment opportunities for workers.
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Research and Evidence-Building Capacity of State Workforce Agencies   Yvette Chocolaad
(National Association of State Workforce Agencies) Stephen Wandner
(Upjohn Institute)
 
To understand current state workforce agency research capacity and to encourage increasing that capacity to fulfill a mandate of the Workforce Innovation and Opportunity Act of 2014, the authors developed and conducted a national scan of state workforce agencies’ research agencies. Based on 42 responses, the authors find states generally have limited research capacity and would benefit from support to increase their ability to conduct research. The authors then visited two states with considerable research capacity: the Washington State agency, which conducts research internally, and the Ohio agency, which works in cooperation with Ohio State University. Case studies of these two agencies illustrate different approaches state workforce agencies could use to increase their research capacity.
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State Sector Strategies for Talent Pipeline Systems   Michael Bartlett
Martin Simon
(National Governors Association)
 
As state economies continue to experience low overall levels of unemployment, the greatest challenge facing many American businesses seeking to grow and remain competitive is finding the talent they need. Although estimates of the size and severity of the skills gap vary, and arguments persist about the existence of a skills gap or mismatch, there is consensus on the need to focus long term on ensuring state systems for education and training meet the needs of their state’s industries and workers can access good careers across their lifetimes. Governors, state legislators, and policy leaders have had a clear focus on a variety of strategies that build these “talent pipeline” systems. Sector strategies are a group of approaches many states are implementing to build their talent pipeline systems by supporting regional industry sector partnerships.
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Improving Outcomes for Workers and Employers through Mayoral Leadership   Kathy Amoroso
(The U.S. Conference of Mayors)
Evan Amoroso
(James Madison University)
 
Economic prosperity will favor cities that support a highly qualified talent pipeline and a robust education and workforce system aligned to meet the needs of employers. A mayor's leadership can make education and training opportunities more productive and successful for all residents. As the chief elected local officials in their cities, mayors can make significant contributions by bringing visibility to the issue, increasing public participation, enhancing funding and resources, supporting existing priorities, and setting new priorities when necessary.
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Employer Engagement Policy: Shifting from Customers to Partnerships   Andy Van Kleunen
(National Skills Coalition)
 
Employer engagement continues to be a priority goal for federal workforce policies, including those in the recently enacted Workforce Innovation and Opportunity Act (WIOA). WIOA requires local areas to measure and report on engagement, using metrics determined by the U.S. Department of Labor. Unfortunately, the type of engagement that employers most value—those multifirm partnerships that seem to lead to the most consistent outcomes for workers and businesses—is not being captured by metrics that rely on traditional measures of worker placement at individual companies. This chapter offers a typology of employer engagement and demonstrates how engaging partnerships with employers can be supported and measured across a range of federal workforce and education policies.
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Chapter Titles   Authors and Affiliations   Abstracts
The Promise and Perils of the Future of Work   Carl E. Van Horn
(John J. Heldrich Center for Workforce Development)
  Section introduction
Navigating the Future of Work: Can We Point Businesses, Workers, and Social Institutions in the Same Direction?   John Hagel
(Deloitte Center for the Edge)
Jeff Schwartz
(Deloitte Consulting LLP)
Josh Bersin
(Bersin by Deloitte)
 
The future of work involves three disparate forces that affect the way people behave in the pursuit of a comfortable living, a reasonable profit, and a stable and just society: advancing technology, shifting demographics, and changing market forces. These three forces are leading to a profound shift in the nature of work. Technology advancements reshape every job, requiring the reengineering of work and an emphasis on enduring human skills. The workforce transforms as alternative work arrangements continue to emerge. Harnessing the opportunities presented in each of these forces requires pointing three broad constituencies—the individual, businesses and other employers, and social and governmental institutions—in the same direction. Unless all three of these constituencies align in their understanding and actions to address emerging opportunities and challenges, the road to the future of work will be bumpy at best. But if our organizational and public policy leaders understand more fully how this complex landscape is evolving, they can target their policies in ways that will help workforces around the world—and societies, in general—anticipate and prepare for the coming challenges.
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From Want Ads to Mobile Apps: Realizing the Promise of Technology in Labor Market Matching   Chauncy Lennon
Sarah Steinberg
(JPMorgan Chase & Co.)
 
Technological change is transforming everything from how individuals learn about career options and job openings to where employers find and assess candidates. Although many new technologies hold promise for job seekers and employers alike, they will need significant improvements to transform labor market matching. This chapter explores how the rapid expansion of technological platforms and applications is changing traditional labor market matching interactions, categorizes the main functionalities of labor market matching technology, and highlights the benefits and limitations of each. Finally, the chapter identifies the biggest challenges facing the field and explains how labor market matching technology can create the most benefit for individuals, employers, and economies.
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Personalized Education: From Curriculum to Career with Cognitive Systems   Michael King
(IBM Education Industry)
Richard Cave
Mike Foden
Matthew Stent
(IBM Market Development and Insights)
 
The authors of this chapter set out to learn how educators are using digital education services and cognitive systems to deliver personalized education. In an attempt to cut through the industry hype and understand how personalized education worked in real life, the authors asked early adopters several questions: What are the challenges? What can we learn from successful implementations? What are the results? What did vendors think was possible? What did students actually experience?
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All Data Big and Small: Using Information to Guide Workforce Development   Rachel Zinn
(City of Baltimore)
Bryan Wilson
(National Skills Coalition)
 
As globalization and automation threaten conventional wisdom about what it takes to have a successful career, U.S. workers are searching for paths that lead to economic stability. Policy leaders and program managers want to help by investing in workforce development, but tight budgets are creating tremendous pressure to demonstrate public resources are funding strategies that get results. Government officials recognize the need for better information, so they are making significant investments in building data capacity. Compelling examples of data making a difference include labor supply/demand reports that help align education with employer needs, college scorecards that assist students with choosing schools and programs, and analytical reports used by programs to target support services and address equity gaps. Additional public investments in data infrastructure could further help our nation build a competitive workforce and provide all individuals an opportunity to succeed.
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Preparing Workers for the Expanding Digital Economy   Jordana Barton
(Federal Reserve Bank of Dallas)
 
To participate in the internet economy, workers must have internet access and digital skills. This chapter documents the changes that have resulted from technological innovation and suggests such changes require a new kind of employment preparation and access to lifelong training for job seekers. New approaches to learning and careers are required of educational institutions and workforce development agencies in order to replace pathways to the middle class once forged by manufacturing and retail jobs. In the expanding digital world, it is imperative that we close the digital divide that keeps low-income individuals and communities from accessing jobs and economic opportunity. The author asserts that digital inclusion is necessary for economic inclusion and upward mobility.
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Chapter Titles   Authors and Affiliations   Abstracts
Creative Solutions to the Credentialing Chaos   Stephen Crawford
(George Washington Institute of Public Policy)
  Section introduction
Fixing the Credentialing Chaos: A National Tool and State Application   Ken Sauer
(Indiana Commission for Higher Education)
Stephen Crawford
(George Washington Institute of Public Policy)
 
This chapter shows how Indiana's state government is promoting credential transparency and literacy by encouraging all credentialing organizations, including colleges and universities, to post comparable information about the credentials they award on Credential Engine's searchable Credential Registry. The chapter begins by discussing the current chaos in the credentialing market, describing the Credential Engine solution, and explaining a state-focused approach to scaling that solution. The chapter then discusses the largely successful efforts of the Indiana Commission on Higher Education to promote the population and use of the Credential Registry. While the commission's efforts have focused on the health care sector and on helping veterans transition to civilian careers, this chapter includes separate examinations of "use cases" for the nursing profession, the behavioral health and human services professions, and selected allied health fields. The chapter concludes with a brief account of lessons learned and recommendations for leaders in other states who may wish to pursue a similar strategy for improving labor markets, closing skill gaps, and increasing economic growth and social mobility.
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Transforming Employer Signaling in the Talent Marketplace   Jason A. Tyszko
(U.S. Chamber of Commerce Foundation)
 
Employer signaling of hiring requirements remains elusive and a major challenge in connecting people to jobs and improving the overall functioning of labor markets. The result is a perpetual misalignment among education, workforce, and credentialing systems and employer hiring practices, a disconnect that has stymied education and workforce reform efforts for decades. The central problem is that existing tools of action are incapable of providing the granular, short-term, dynamic signaling required to keep pace with changing employer needs. However, new organizational models and tools show exciting promise for transforming employer signaling in the talent marketplace in ways that move education and workforce systems from demand-driven to employer-led. This chapter explains these models and tools, and it argues that adoption of them would result in a more efficient talent development system and labor market.
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Building an Expanded Public-Private Data Infrastructure for the Credentialing Marketplace   Robert Sheets
(George Washington Institute of Public Policy)
 
This chapter explores a new role for government in developing a public-private data infrastructure that can support an open applications marketplace that serves employers; students and workers; and education, training, and credentialing service providers in a rapidly changing credentialing marketplace. The author highlights the need for public-private data standards and Web 3.0 technologies in developing and leveraging this expanded data infrastructure for labor market information.
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Credentialing Entrepreneurs: How and Why   Alejandro Crawford
(Acceleration Group)
 
American start-up rates are at 40-year lows. Because start-ups drive net job creation, the wider economy cannot afford this decline. Creating a national entrepreneur's credential that conveys competencies valued by investors and employers could plug the leak in America's job creation engine by making entrepreneurship a reasonable career move for a wider swath of graduates and midcareer professionals who might be facing weaker job markets. Fortuitously, critical building blocks for such a credential exist in the form of established competency frameworks and widespread demonstration opportunities. A common library of entrepreneurs' challenges and scoring criteria could standardize existing demonstrations. Such standardization would enable existing demonstrations to serve as qualifying events for a national credential. This would lay the groundwork for accrediting schools, companies, and other organizations to award entrepreneurs credentials that the market accepts.
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Chapter Titles   Authors and Affiliations   Abstracts
Coordinating Regional Workforce Development Resources   Stuart Andreason
(Federal Reserve Bank of Atlanta)
  Section introduction
Cultivating Healthy Workforce Ecosystems   Tucker Plumlee
(Northern Virginia Community College)
 
The modern U.S. economy is increasingly defined by the rapidly shifting demand for more advanced skills and greater postsecondary education. Just as workers must now be able to adapt quickly to these changing skill needs, our workforce systems must become more flexible and responsive in providing workers with valuable education and training opportunities. Instead of the piecemeal programmatic approaches typical of traditional workforce development, the Council for Adult and Experiential Learning (CAEL) suggests a holistic workforce ecosystems approach is better suited to addressing the complexities of current and future labor markets. Drawing from CAEL's extensive work consulting in communities and regions nationwide, this chapter outlines and provides examples of the components for developing a healthy and well-aligned workforce ecosystem, including aligning regional education and training assets with local industry and workforce demand.
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Examining Spatial Mismatch and Mobility in the Workforce System   Raphael Bostic
Ann Carpenter
(Federal Reserve Bank of Atlanta)
 
The suburbanization of employment introduced the notion of spatial mismatch, a phenomenon in which housing options affordable to lower-income families are physically distant from low- and middle-skill jobs. The existing jobs-housing spatial landscape makes providing accessible workforce development opportunities all the more important. If many lower-income and lower-wage families have limited access to both jobs and the training to make them competitive for higher-paying jobs, then the possibility of economic mobility must be quite small. Understanding the spatial mismatch challenge in the context of workforce development is thus an important element for assessing the economic isolation of lower-income families and the broader health and inclusion of the regional economy. In this chapter, the authors analyze a database of metropolitan Atlanta workforce development providers and intermediaries and find a significant share of training sites are inaccessible using public transit, particularly in suburban counties with limited or no transit service. While many workforce development programs include provisions for transportation and other supportive services, additional policy solutions include better regional coordination, greater investment in transportation and affordable housing near training and employment centers, and investment in place-based workforce development in underserved communities.
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Chapter Title   Author and Affiliation   Abstract
Investing in America's Workforce: Report on Workforce Development Needs and Opportunities   Noelle St.Clair
(Federal Reserve Bank of Philadelphia)
 
The appendix presents information gathered from nearly 1,000 leaders who work at the intersection of workforce training, recruitment, and finance. The data provide a current snapshot of the workforce development sector and its key challenges. The appendix offers strategies for improving the human capital of the U.S. labor force, expanding access to jobs, and devising innovative approaches to workforce development funding.
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Investing in America's Workforce is a Federal Reserve System initiative in collaboration with the John J. Heldrich Center for Workforce Development at Rutgers University, the Ray Marshall Center of the Lyndon B. Johnson School at the University of Texas, and the W.E. Upjohn Institute for Employment Research.


© 2018 Investing in America's Workforce