CLOSUP Student Working Paper Series Number 40 December 2018
Reinvest in Adult Workforce Development
Kelia Washington, University of Michigan
This paper is available online at http://closup.umich.edu Papers in the CLOSUP Student Working Paper Series are written by students at the University of Michigan. This paper was submitted as part of the Fall 2018 course PubPol 475-750 Michigan Politics and Policy, that is part of the CLOSUP in the Classroom Initiative. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the view of the Center for Local, State, and Urban Policy or any sponsoring agency
Center for Local, State, and Urban Policy Gerald R. Ford School of Public Policy University of Michigan
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Michigan Politics & Policy Final Paper Kelia Washington
Reinvest in Adult Workforce Development Executive Summary A decade of major job loss resulted in declining government revenue, wages, and youth population in Michigan, all of which has place economic strain on the state and its residents. Michigan, once the leader in auto industry manufacturing, now struggles to attract large firms due to many factors, including the lack of job talent. Workforce development policies seek to solve this talent gap by increasing the supply of workers with industry-relevant skills. Past and current workforce development policies, such as No Worker Left Behind (NWLB) and the Marshall Plan for Talent, have attempted to accomplish this goal. Both policies offer key insights into how future administrations should face unemployment and underemployment in Michigan. After analyzing the structure, goals, and the actual and projected impact of both policies, it is recommended that the state invest in improving the affordability and accessibility of adult education and training programs. Decades of Job Loss in Michigan The entire country felt the financial pains of the economic downturn, known as The Great Recession, in 2008; however, one could argue that the state of Michigan was hit the hardest due to the state’s already unstable economy experienced decades before.1 Michigan experienced major manufacturing job loss within the auto industry as a result of deindustrialization.1 Major auto manufacturing cities, such as Pontiac, Detroit, and Flint, being hit the hardest in job loss and 1 John Klemanski and David Dulio, eds.Michigan Government, Politics, and Policy (2017)
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economic strain.1 Compounding on top of this came a new era of automation, which made many unskilled jobs in various industries obsolete.1;2 Ten years after the Great Recession and Michigan has yet to fully recover. Major firms, such as General Motors, are leaving the state and thousands of Michigan residents without jobs.3 Other firms, such as Amazon, are hesitant to establish large manufacturing hubs in Michigan for reasons, including lack of a talent pool.4 The declining quality of Michigan primary and secondary schools is also crucial to the discussion of workforce development. For years the academic performance of Michigan students has declined with the majority of students falling behind in literacy compared to other states.5 Students’ inability to be proficient in state and national learning standards will lead to long-term negative impacts on their college and career outcomes. Two governors have come and gone since the Great Recession, and each possessed their own vision of where Michigan should be headed in its recovery. Both pushed workforce development policies that sought to increase the talent pool through different avenues. It is important to review each in detail to understand their successes and failures in the hopes of informing the policies of the next Governor.
2 http://www.michiganfuture.org/cms/assets/uploads/2017/04/MIFUTURE-Policy-Report2017.pdf 3 https://www.usatoday.com/story/money/cars/2018/11/26/gm-general-motors-plantclosures-job-cuts/2113275002/ 4 https://wdet.org/posts/2018/11/14/87552-will-detroit-other-cities-learn-anything-fromamazon-hq2-megaflop/ 5 https://midwest.edtrust.org/wp-content/uploads/sites/2/2017/11/Top-Ten-for-EducationNot-By-Chance_The-Education-Trust-Midwest_March-2016-WEB-FINAL-1.pdf
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Past Workforce Development Policies- No Worker Left Behind Former Governor Granholm held office 2003 through 2011.6 It was during the middle of her second term when the Great Recession hit, although Michigan was experiencing its own economic downturn years before. Previously, Michigan relied mostly on the auto industry to employ a large percentage of workers, and this lack of diversification in industries is cited as one of Michigan’s economic downfalls.1 Granholm intentionally sought to attract a more diverse pool of industries.6 The former Governor not only set out to historically alter the supply of jobs available to Michigan residents, but she also changed how the state thought about workforce development.7;8 In 2004, years before the Great Recession but during Michigan’s steady manufacturing job decline, the Michigan Commission on Higher Education and Economic Growth reported that the number of Michigan residents with a postsecondary degree or credential had to double in order for the state to meet the job demands.7 This became one of Granholm’s state policy goals. At a 2007 State of the State address, Granholm announced the No Worker Left Behind initiative.7 The program offered unemployed, underemployed, and low-wage workers up to two years of free tuition at community colleges or other approved educational institutions.7;8 Eligible participants are allotted up to $5,000 of last dollar grants per year with a maximum of $10,000 over two years.7 By reducing the financial barrier for many adults, more adults were motivated to pursue a credential for an in-demand area.8 The eligibility requirements were that qualified applicants were either unemployed or had aa family income of less than $40,000, were at 18 years old, had not graduated from high school 6 https://www.michigan.gov/formergovernors/0,4584,7-212-57648-57920--,00.html 7 https://www.nationalskillscoalition.org/resources/publications/file/NSC_NWLB_LessonsLearne d_2011-01.pdf 8 http://skilledwork.org/wp-content/uploads/2014/01/PerspectivesInNoWorkerLeftBehind.pdf
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in the past two years, and could not be a full-time college student (NSC report). In 2007, the year of former Governor Granholm’s announcement of the program, the median household income was $47,9509, which was a few thousand dollars away from NWLB’s income requirement threshold. Also during that year, Michigan residents with an Associate’s degree or less were earning a median income of $31,8019. It was clear given the state of Michigan’s economy that many residents would qualify for the program. Also, the process to participate in the program attempted to present as few hurdles as possible for applicants. Eligible applicants were told to just walk into regional Michigan Works! service centers where they would receive career advising and skills assessments.7 Once eligibility was confirmed, case workers had to also coenroll the applicant in appropriate federal workforce support programs, and this was due to how the program was being financed. The NWLB program mostly utilized existing federal funding resources already dedicated to workforce development.8 Although the program is projected to have cost around $300 million dollars, the state only appropriated around $15 million dollars of state funds.8 Federal workforce funds from the Workforce Investment Act, Trade Adjustment Assistance, Temporary Assistance for Needy Families, and Vocational Rehabilitation funding were used to pay for the participants’ qualified educational expenses and other costs related to the program’s operations. Granholm repurposed these federal programs solely to fund NWLB, and as a result, the state did not have to put
additional
strain
on
Michigan’s
already
9 Source: U.S. Census Bureau, 2007 American Community Survey
stressed
economy.
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program completion and employment statistics, and the culture transformation in how Michigan residents viewed education and workforce training. Former Governor Granholm set a goal of 100,000 participants within the first three years of NWLB.8 This goal was met earlier than expected. As of 2010, around 150,000 individuals had signed up for the program8, and within the first weeks of the start of the program, the service centers saw a “300 percent�6 increase in the number of individuals looking for education assistance. The overwhelming response to NWLB shows that adults are willing and able to learn new trades or upgrade their skills in their current trade. Although not all participants completed the program, of those who did, 75 percent were retrained in their current job or obtained a new job, and of that proportion, 82 percent stated that the job was related to the training they had received through the program.7 In granting such widespread access to educational training at zero or low cost, NWLB transformed the culture around education and training. As many older adults, who had spent decades working in the same job, entered the program with much hesitation at returning to a classroom, they completed the program with new confidence and a new view on education.8 NWLB was not perfect, and its failures can be seen in the program’s overreliance in federal funding sources, limited career navigation supports, and program constraints. An attractive aspect of NWLB was its use of already existing funding sources, and even better, the vast majority of those sources were coming from the federal government. However, the largest funding stream, the WIA, began to dry up as the funding formula was altered.10 The major decline in funding paired with the over enrollment in the program led to a waitlist being initiated in late 2009 and the program being phased out in 2010.10 Over enrollment not only led to 10 https://www.michigan.gov/documents/nwlb/NWLB_After_Three_Years_white_paper_FINAL_ 326168_7.pdf
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financial strain within the program but also resulted in large caseloads for case workers in the Michigan Works! Service Centers.8 This strain on human resources led to participants not receiving the supports needed to navigate the program process.8 Another strength that over time became a burden for some participants was the program’s emphasis on longer term education programs at approved institutions. Participants who wanted to enroll into online programs were denied programs funds.8 As a result, participants who were subjected to brick-and-mortar institutions had to balance other responsibilities and a more stringent course schedule, and this had major impacts on the program’s completion rates.8 Having a statewide workforce program with broad eligibility requirements attracted a wide variety of adult workers with varying levels of education. It became apparent as people began signing up for NWLB and attempting to enroll into various education programs that they lacked the necessary basic skills to enter or complete occupational training programs.7 As a result, an adult learning task force was created which attempted to direct participants to educational providers that would improve their basic skills without using the participants’ NWLB grant funds.7 As the first statewide workforce training program of its kind10, there are many lessons gained from the successes and failures of NWLB that can inform workforce development policies within the incoming Governor’s administration. NWLB revealed that removing financial barriers that are present for many adults, especially those of lower socio-economic status, is enough of a motivator for many to obtain more skills and training. However, increasing financial support for adults is not sufficient. Especially in the case of adults who have been out of the education system for years, there needs to more individual career services support. Also, a statewide program with broad eligibility criteria intended to reach a large number should allow
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for more flexibility in how and where the program fund can be used. The funding structure of NWLB should also be critiqued. The extreme reliance on federal funds did not lend to a sustainable program, and there was not a sufficient appropriation of state funds. As funds were depleted for NWLB, adults’ access to other sources of financial aid for training programs also disappeared. In 2010, the Michigan state legislature eliminated several grant funding available to adult learners, including the Adult Part-Time Grant, the Michigan Educational Opportunity Grant, the Michigan Nursing Scholarship, and Work Study.11 In taking on a statewide program, there needs to be a larger and sustained financial commitment taken on by the state.
Current Workforce Development Policies- The Marshall Plan for Talent Governor Snyder announced on February 2018 The Marshall Plan for Talent, a competitive grant program that seeks to train high school students for high-demand, high-wage jobs. Out of the $100 million state appropriation, $59 million will be used to fund collaborative programs where K-12 school districts or intermediate school districts (ISD) form a Talent Consortium with private and not-for-profit stakeholders, including postsecondary institutions or training programs, employers, and community organizations that represent employers.12 The goals of the Marshall Plan for Talent include educating 55,000 people for in-demand, 21st century economy career, providing 16,000 low-income/at-risk student scholarships and stipends for education in high-wage, in-demand careers, and training 5,000 cybersecurity students.12 The majority of funds will be used for the collaborative programs. The school district must present a program that supports career advising, curriculum improvements, financial aid, and job opportunities for students. Through the established Talent 11 https://mlpp.org/economy-issues/state-financial-aid-leaves-adult-learners-behind/ 12 https://www.michigan.gov/documents/ted/Marshall_Plan_101_628007_7.pdf
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Consortiums, the partnership is tasked with submitting a proposal that accomplishes some of the following: promoting student success related to career exploration, embedding flexibility into the Michigan Merit Curriculum, increasing professional trades instructors, supporting career development, developing practical professional trades experiences for students and educators, and promoting career pathways.13 Once submitted the concept summary is submitted, it is scored based on “the level of innovation, the strength of the partnerships, and how well the application embraces the philosophies of competency-based learning for high-demand, high-wage careers”12. Although smaller school districts are only required to partner with one employer or approved organization, more points are awarded to Talent Consortiums with more partnerships.14 A Talent Agreement must then be signed by all partners in the Talent Consortium before access to the competitive grant application is granted. Press coverage of The Marshall Plan for Talent has been mostly positive and has chosen to characterize the Plan as “revolutionary”15. The Plan does incentivize schools and employers to collaborate and create increase students’ awareness and experience in in-demand industries, which is important for students to learn industry-relevant skills. Considering that regions create their own collaborative program, the objectives of each proposed program is responsive to the needs of the locality. Although the impact of each program is mostly contained within the locality, a regionally-designed program could help students connect what they’re learning in class to jobs within their community. As shown in the figures below, localities of varying 13 https://www.michigan.gov/documents/ted/MichiganCareerPathwayAllianceRecommendatio ns_576666_7.pdf 14 https://mdoe.state.mi.us/GEMS/training/4v4wl3yp/story_content/external_files/MPTConcep t%20SummaryInstructions.pdf 15 https://globenewswire.com/news-release/2018/11/13/1650843/0/en/SETDA-Honors-RickSnyder-Governor-and-Brian-Whiston-the-late-Superintendent-of-Public-Instruction-Michiganwith-2018-State-Policy-Maker-of-the-Year-Award.html
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population densities have differing perceptions of how workers with various levels of educational attainment can be successful in their community. This could be driven by the varying employment opportunities available within their areas.
PERCENTAGE
Figure 1: Success of Workers in Local Economies by Educafonal Ahainment- Vocafonal CerfďŹ cate, by Populafon Density 80 70 60 50 40 30 20 10 0 Very Successful
Low <100
Somewhat Not Not At All Don't Know Successful Parfcularly Successful Succ Mid
High >800
Total
Source: Fall 2009 Michigan Public Policy Survey
PERCENTAGE
Figure 2: Success of Workers in Local Economies by Educafonal Ahainment- Associate's Degree, by Populafon Density 80 70 60 50 40 30 20 10 0 Very Successful
Low <100
Somewhat Not At All Don't Know Not Successful Parfcularly Successful Succ Mid
High >800
Source: Fall 2009 Michigan Public Policy Survey
Total
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PERCENTAGE
Figure 3: Success of Workers in Local Economies by Educafonal Ahainment- Bachelor's Degree, by Populafon Density 80 70 60 50 40 30 20 10 0 Very Successful
Low <100
Somewhat Not At All Don't Know Not Successful Parfcularly Successful Succ Mid
High >800
Total
Source: Fall 2009 Michigan Public Policy Survey Looking past the positive press the Plan has received, numerous red flags are apparent months before the initial allocation of grant funds. The effectiveness of the Plan is questionable due to the narrow focus on 2-year or less education programs and the lack of a targeted approach to improve the communities most in need. The Marshall Plan allocates funds to specifically increase job placement in fields that require two years or less of training; however, in the highdemand fields determined by the Plan, the majority of the job openings require a Bachelor’s degree.16 Additionally, considering the declining academic performance of Michigan’s K-12 system and resulting decline in college readiness among high school graduates, the former Governor’s plan is ignoring an even larger issue where a significant proportion of the Michigan population is not able to obtain jobs where there is even higher job growth, higher wage growth, and greater job stability. The Marshall Plan claims to be an inclusive program; however, the inclusivity of the program has overshadowed the disparate workforce needs of rural, low-income, 16 https://www.marketwatch.com/press-release/michigan-government-officials-employersand-school-counselors-to-address-states-talent-shortage-solutions-at-lansing-conference-201810-02
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and communities of color. Even though low-income, African Americans who disproportionately occupy low-wage, vocational jobs17 and areas that are rural or have a high concentration of poverty would arguably benefit the most from The Marshall Plan, Governor Snyder does not detail any type of targeted approach within The Marshall Plan which would provide additional support for these specific populations. There are aspects of The Marshall Plan that could make it difficult for less-resourced areas to benefit from the competitive grant program. The tiered funding structure of the Marshall Plan places rural school districts at a disadvantage compared to larger school districts because they have access to a lower percentage of the grant funds. The Marshall Plan does suggest that smaller school districts collaborate with a larger school district; however, this could present some issues, including both districts having to compromise on the needs of their districts. How rural communities collaborate with postsecondary institutions might differ than how larger communities might utilize postsecondary institutions. These differences could influence if and how smaller communities and larger communities can collaborate. As the initial rollout of grant funds is set for the summer of 2019, it is difficult to assess how effective the program will be at meeting the employment demands of the state. Also, there has not been much detail released about the proposals that have been approved for the grant funding. Thus far, only 22 programs have been approved out of the 59 programs that have submitted a content summary as of December 2018.18 With the overarching goal of filling over 800,000 job openings through 202419, the small take-up of the grant program months before the
17 African American Male Students in PreK-12 Schools : Informing Research, Policy, and Practice. 2014. Bingley: Emerald Publishing Limited. Accessed October 2, 2018. ProQuest Ebook Central 18 https://www.michigan.gov/ted/0,5863,7-336-85008_90316---,00.html 19 https://www.michigan.gov/documents/ted/Marshall_Plan_Summary_617500_7.pdf
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first disbursement of funds gives rise to questions of whether the Plan will reach enough students and fill the talent gap.
Rust Belt State Workforce Development Policy- Indiana Similar to Michigan and other rust belt states, Indiana experienced a decade of job loss within the manufacturing industry.20 Previously, Indiana had the highest proportion of manufacturing jobs; however, due to automation and outsourcing of jobs, the state experienced a 32 percent job loss.20 The entire Great Lakes region experienced decline in government revenue, wages, and the number of young people.20 After the Great Recession, the states in the Great Lakes region have recovered slightly. 22 percent fewer manufacturing jobs remained in the region with Indiana keeping 16 percent of their manufacturing jobs.20 Wages in manufacturing jobs also declined; however, relative to other industries the wages are still higher than average.20 Although Michigan and Indiana experienced similar negative effects from the Great Recession where their reliance on manufacturing jobs led to major job loss, the two states appear to be on different paths to recover. Indiana has experienced historic-low unemployment rates and has been able to attract new businesses.21 This can be attributed to many smart policy decisions, including investing millions of dollars into various job training programs.21 This is in contrast with Michiganâ&#x20AC;&#x2122;s years of disinvestment in adult education programs and adult financial aid programs.22;11 Current Governor Holcomb, since the beginning of his term, has placed adult workforce development as one the central pieces of his agenda. In 2018 and 2019, one of Governor 20 https://www.urban.org/sites/default/files/publication/89087/great_lakes_0.pdf 21 https://www.usnews.com/news/best-states/articles/2018-01-05/indiana-lodged-in-the-rustbelt-positions-itself-as-a-tech-hub 22 http://www.workingpoorfamilies.org/pdfs/MI_GoodIdeasNotEnoughMay2010.pdf
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Holcomb’s goals is to expand adult education and training programs and financial aid support for adults.23;24 Although former Governor Snyder did express increasing the talent pool in Michigan as one of his administration’s issue areas, his major policies, including the Marshall Plan for Talent, focus mostly on K-12 education.25 The progress that Indiana has made in their recovery from the recession is a testament to how state investment in adult workforce development can increase the talent pool.
Policy Recommendations “While efforts to improve early-childhood and K-12 outcomes are vitally important, America’s communities cannot wait a generation to build the talent they need today.”26 In order for Michigan to meet the demand of more than 800,00 job opening over the next five years, the state needs to produce statewide policies which focus on increasing educational attainment among unemployed and underemployed adults. Such policies should focus on increasing the affordability and accessibility of adult postsecondary education and training programs. The state’s disinvestment in adult education by 50 percent in 2010 and even further decline to approximately $20 million dollars in 2015 has led to a drastic decline in program participation, which disproportionately impacted low-resource areas and people of color.27;28 As many of the barriers experienced by predominately low-wage worker that prohibit participation in vocational education include financial inability and skills gap27, Michigan needs to commit 23 https://www.in.gov/gov/files/Final%20Agenda%20Handout.pdf 24 https://www.in.gov/gov/files/2019%20Next%20Level%20Agenda%20Handout%20Final.pdf 25 https://www.michigan.gov/snyder/ 26 http://www.detroitchamber.com/lumina-foundation-and-kresge-foundation-designatedetroit-as-talent-hub/ 27 http://www.workingpoorfamilies.org/pdfs/MI_GoodIdeasNotEnoughMay2010.pdf 28 https://www.purdue.edu/hhs/hdfs/fii/wp-content/uploads/2015/07/s_mifis19c03.pdf
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more state funding to reinstate and expand adult education and financial aid programs. Although the state does receive workforce development funds primarily from the federal government through the WOIA, past experience with NWLB has shown that overreliance of federal funding can be disastrous for program sustainability. Past experience with NWLB also revealed that a substantial number of program participants did not possess the basic skills (literacy and numeracy skills) necessary to enroll into their desired education program.7;27 Considering that a significant number of adults in Michigan are without a high school diplomas or equivalent9, Michigan should also expand efforts to increase Adult Basic Education. Filling the skills gap among a large proportion of the adult population in Michigan will expand job opportunities for many individuals, especially lowincome, minority populations.27 Considering that the last five governors placed increasing educational attainment as one their goals of their administration28, shifting the focus more to non-traditional students is not a major shift in the narrative and would require only a shift in the population being targeted. Michigan has also undertaken a statewide policy of this nature during former Governor Granholmâ&#x20AC;&#x2122;s administration. NWLB, although short-lived, saw significant engagement and participation among unemployed and underemployed adults. The feasibility of major state financial investment is possible under the urgency of filling the talent gap and from tax revenue gains obtained through workers earning better wages.11
Conclusion- Future Policy Considerations with Gov. Whitmer Recently-elected Governor Whitmer has proposed several policy actions to fill the talent gap. Such policies include creating the MI Opportunity Scholarship, the Michigan Reconnect
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Program, Michigan’s Food Assistance Employment & Training (FAE&T) Plus Program.29 The MI Opportunity Scholarship would provide two years of debt free college education for recent high school graduates.29 The Michigan Reconnect Program would “offer a two-year talent investment” in a non-traditional student’s pursuit of a technical certificate.29 The expansion of the FAE&T Plus Program is meant to utilize state and federal funds to provide more skills training and support services for adults.29 These three policies align with the policy recommendations to increase the affordability and accessibility of adult education and training programs.
Appendix Figure 3 Bachelor's Population Density Low High <100 Mid >800
Total
Very Successful 25.94 33.43 43.84 31.92 Somewhat 44.69 49.3 48.91 46.9 29 https://s3-us-west-2.amazonaws.com/gps-public-static/GretchenWhitmer/Whitmer_JobsPolicyDocument_052218.pdf
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Successful Not Particularly Succ Not At All Successful Don't Know Total
14.53
9.19
4.71
10.9
3.91 10.94
2.51 5.57
0.72 1.81
2.82 7.45
100
100
100
100
Figure 2 Associate's Population Density Low High <100 Mid >800 Very Successful Somewhat Successful Not Particularly Succ Not At All Successful Don't Know Total
Total
12.85
15.08
15.22
13.99
59.09
65.36
69.93
63.21
15.83
13.13
13.04
14.47
2.35 9.87
1.68 4.75
0.72 1.09
1.81 6.53
100
100
100
100
Figure 1 Vocational Certificate Population Density Low High <100 Mid >800
Total
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Very Successful Somewhat Successful Not Particularly Succ Not At All Successful Don't Know Total
17.63
18.33
13.41
16.91
59.44
65.83
72.1
63.98
13.73
10.56
12.32
12.53
1.09 8.11
0.83 4.44
0.72 1.45
0.94 5.64
100
100
100
100