Why workforce training money is a 'game-changer'

This seemingly fantastical scheme is laid out in an otherwise rather prosaic report that the chancellor of the Virginia Community College System presented recently to the General Assembly’s money committees.

The report — entitled “Workforce Credentials: The Pathway to Virginia’s New Middle Class” — was one that the General Assembly commissioned earlier this year when it directed the state’s community colleges to “develop a specific plan to expand the number of workforce training credentials and certifications to a level needed to meet the demands of Virginia’s workforce.”

Some definitions and translations are in order: Community colleges award associate degrees, of course, for their usual two-year programs. But they also issue “credentials” and “certifications” for shorter programs for various technical skills, such as welding or dental hygiene. A “credential” is essentially an industry-approved verification that the student can really do what he or she has studied to do.

Some more lingo you’ll need to know: “middle skills.” This refers to jobs that require more than a high school diploma — but don’t require a college degree. These are jobs where applicants need, well, credentials.

Now, back to the report: Last year, Virginia had openings for more than 175,000 of those “middle skills” jobs. “Each job, on average, took 26 days to fill. That nearly month-long gap stripped businesses of more than 36 million hours of productivity, families of more than $1 billion in wages, and Virginia’s General Fund of an estimated $54 million in state income taxes.”

Now, in the business world, there’s often a delay between when the job comes open and when it actually gets filled, so reducing that turnaround time from 26 days to 0 days isn’t always practical. Still, the larger point is this: Virginia needs more workers with credentials for those “middle skills” jobs. The report says the economy is really aligned in a 1:2:7 fashion, meaning:

“In general, for every one job that requires an advanced degree, there are two jobs that require a bachelor’s degree and seven jobs that require postsecondary training that leads to an associate’s degree or industry-recognized credential beyond a high school diploma but not a four-year degree. Those 175,000 unfilled jobs belong to the sevens.”

The report goes on to say: “Those missing sevens are felt throughout our entire economy, including the missing mechanics that require the Deltaville Boat yard to turn away potential clients; the missing truck drivers who are holding back production at Tyson’s Food on the Eastern Shore; the missing machinists who are costing a shop near Lynchburg business; and the missing electricians who are slowing down Northern Virginia’s fast-paced technology firms.”

But wait, there’s more: “Businesses can attract the ones and the twos from across the state or around the world, but it hires locally for the sevens. Economic developers say that at a macro level, businesses not only hire locally for the talent of sevens, but also make choices to locate new facilities and expand their existing footprint based on the availability of middle-skills talent.”

We see that very specifically in this part of Virginia. The Virginia Employment Commission says the Roanoke metro area has nearly twice as many job openings as it does people looking for work. That’s because there’s a mismatch between what those jobs require — and the skills of the applicants.

There’s also a mismatch between the way Virginia funds community college programs and the demand for those programs.

First, many of the students who would most benefit from those credentials programs can’t afford them — because student aid programs don’t cover them. Virginia has made a modest step toward fixing this: It’s set up pilot programs to provide $1,075,000 in financial aid in trades programs at six locations across the state. Three of those schools are in our part of the state: Virginia Western in Roanoke, Patrick Henry in Martinsville and Blue Ridge in Weyers Cave.

At the federal level, Sen. Tim Kaine, D-Virginia, has introduced a bill to amend the federal Pell Grant program to allow grants for students enrolled in short-term job training programs.

However, those programs are often expensive to run — it costs more to teach welding than, say, literature — so schools can’t offer as many openings as they have applicants. Virginia Western had 34 welding students in the past academic year — and welding students invariably get hired when they complete their training and earn that certificate. Employers would love to see that number tripled, says Leah Coffman, who recently retired from running the workforce programs there, “but funding holds us back.”

So creating enough “middle skills” training to fill all those jobs, and create all that income, and the income taxes they generate may not require a tax increase, but it does require at least a shift in some spending priorities. For every $1 million “invested” in workforce training programs at community colleges, the report says, the state would get “at least 420 credentialed workers for high-demand and in-demand occupations.” And perhaps as many as 569, depending on which economic model you want to work from.

Put another way, that $1 million would generate anywhere from $2 million to $2.8 million in new income tax revenues once students move into their new, higher-paying jobs in the workforce.

In his proposed budget that the legislature will vote on this session, Gov. Terry McAuliffe ramps up spending on workforce development programs from $5 million to $24.6 million — a figure state community college officials have called “a game-changer.”

When political candidates talk about the need for more education funding, this isn’t what they usually have in mind. Workforce training also isn’t particularly ideological, so therefore it becomes a lot less interesting to some. But if you really want to talk about fixing the economy, here’s one good place to start.