Falling behind: Fort Collins Income Gaps Widen

October 9, 2014

By: Pat Ferrier
Via: The Coloradoan

Cindy and Jerry Phillips stand outside their home in Fort Collins with their twin sons, Todd, left and Stephen, on Thursday. (Photo: Erin Hull/The Coloradoan )

Cindy Phillips hadn’t received a raise in nine years. Her employer, Sears, retracted through the recession and struggled afterward to regain a foothold with consumers.

The retailer closed its Fort Collins store Sunday, Sept. 28, as part of the Foothills Mall redevelopment. Later in the week, it laid off its last few employees kept on to wrap things up, including Phillips.

Unemployed for the first time in 17 years, Phillips isn’t sure what’s next. The 48-year-old wife and mother of five, including 13-year-old twins, has been her family’s primary source of income since her husband, Jerry, became disabled.

The family faces a mountain of medical bills from one of the twins’ health issues and now, with the loss of Phillips’ job, has no insurance.

They are used to cobbling together other part-time work to supplement Phillips’ $9.28 hourly wage. Jerry Phillips, a college-educated social worker, receives Social Security Disability since losing most of his sight and now works as a part-time musician. Together, they also do landscaping.

With rising health insurance, gas and food costs, the Phillips family is making difficult choices, but it is hardly alone.

Wages in Fort Collins have failed to keep up with inflation and housing costs. Minimum-wage service and retail jobs have replaced higher-paying jobs lost during the recession, and pay, benefits and hours cut during the downturn have not been restored.

Fort Collins is falling behind.

The city’s median household income dropped for the second straight year this year, widening the gap between the working and middle class, a chasm that will continue to grow unless incomes rebound or housing prices unexpectedly dip.

During the next two years, the city’s major job growth appears weighted toward retail as Alberta Development Partners rebuilds 650,000 square feet of new shops and restaurants at Foothills Mall, and Trader Joe’s, Sierra Trading Post, Conn’s, Costco and other large stores open and create about 1,500 new jobs.

Growth in that sector continues a trend that began in 2010 when hospitality and food service added 1,749 jobs with an average weekly wage of $305 — $7.63 per hour for a 40-hour work week — according to CSU regional economist Martin Shields.

Fort Collins’ primary employers — those that sell most of their products outside the area and bring new money into the community — have added jobs, but not at the same pace.

Avago added 225 jobs with its past two expansions this decade; Woodward Inc. expects to begin adding about 700 new jobs when its manufacturing expansion is complete next year at Lincoln and Lemay avenues; and Banner Health will bring up to 200 employees to its new hospital on Harmony Road in April.

Closing the gap

Inaction is not an option in a city where workers’ expenses are gaining ground on their income.

If Fort Collins fails to act, the economy will push forward on its own and the city will lose control over where it ends up, said Josh Birks, the city’s economic health officer. “The question is what do you do in the up times versus the down times.”

Fort Collins prides itself in being a well-educated community with about 47 percent of residents holding four-year degrees. But a new study indicates only 23 percent of jobs countywide require that level of education, creating a sizable mismatch that exacerbates underemployment.

The report conducted by TIP Strategies Inc., an Austin, Texas-based economic development consulting firm, supports Shields’ assertion that the fastest-growing industries in Larimer County are in retail, restaurants, hospitality and personal services, all of which offer relatively low pay.

“The region has an overqualified workforce to meet the needs of these industries. It also has such a high quality of place that overqualified workers will choose to take these jobs,” the report states.

The city may have to broaden its economic development focus to include creating jobs across all income levels and educational attainment, not just higher-paying, higher-skilled jobs, Birks said.

City Council will hold a Tuesday, Oct. 28, work session on community sustainability and economic health, including housing affordability, skills gaps, job training and wage growth.

Feeling the pain

As the city grows — projections show at 3 percent growth, the Fort Collins population could crest 250,000 people within 23 years — it faces a moral struggle.

What kind of city will it be? Will the chasm between the working class and middle class continue to grow? Will the city price out store clerks, first-year teachers, restaurant workers, health care aides and some of its own employees as housing costs hit new highs and wages fail to keep pace?

There are more questions than answers today, and potential solutions are fraught with economic, social and political implications the city is just beginning to tackle.

Housing that is affordable to lower-income and middle-income renters and buyers is scarce. The average home sale price in May topped $313,000, the highest in the city’s history, and rents continue to average about $1,100 per month.

The only way the Phillipses can afford to live here is because the mortgage on their five-bedroom Habitat for Humanity home is $600. “We’d never be able to afford” anything comparable in Fort Collins, Cindy Phillips said.

Instead of focusing solely on housing products, community efforts should work to increase the financial wherewithal of people who want to live here, developer David Everitt said during the Everitt Real Estate Center’s annual real estate conference Wednesday. “You can make a house only so affordable before it dissolves into nothing.”

What can a city do?

Fort Collins will never be Lake Wobegon where everyone is above average and poverty and homelessness don’t exist. The key for the city will be finding the balance it is willing to accept and creating the road map to get there.

City Council member Bob Overbeck supports one approach.

“If people can’t afford to live here, they’re going to move,” said Overbeck, who asked city staff in May to look at the impact of increasing the city’s minimum wage from $8 an hour to $10, a move that would affect 820 families, including 81 city employees.

Colorado’s minimum wage is tied to inflation and adjusted annually as the cost of living changes. This year, the state upped the minimum from $7.78 an hour to $8. It will likely go up again in January as consumer prices continue to rise. The federal minimum wage remains stagnant at $7.25 per hour.

Even at $8, the state’s minimum wage is nearly $1 per hour short of providing what a single Larimer County worker needs to cover the essentials, according to a “living wage calculator” developed by a professor at the Massachusetts Institute of Technology.

“If we can’t bring the price of housing down, how do we bring wages up?” Overbeck said. “We don’t have the power in the city to drive prices lower, but we may have the ability to help those making minimum wage to get a little more wage to have better choices for housing.

“When you’ve lived here and contributed and supported this community for years and due to economic reasons you have to move … that’s a tragedy,” he said.

A city on its own can only do so much, Overbeck said.

It can’t force private businesses to pay more, but it can lead by example and pay its own minimum-wage workers a little better. It can pressure companies with whom it does business or gives economic incentives to follow suit, and it could attempt to get certified as a living-wage city.

Birks said instituting a living wage treats a symptom but does not cure the disease. “Training and creating the right pathway (to jobs and education) is a better path,” he said. “Our objective is to create jobs so people can afford a reasonable quality of life in the community.”

There’s little data to know exactly how many Fort Collins residents make minimum wage, but statewide, the Bureau of Labor Statistics reports 3.2 percent of all workers were paid at or below the federal minimum wage of $7.25 last year. Extrapolating that to Larimer County’s 180,000-member workforce, it would mean more than 5,000 workers are paid a minimum wage.

Even as Larimer County added nearly 10,500 jobs between 2010 and last year, the average weekly wage has declined, Shields said. In today’s dollars, the 2010 average weekly wage was $844. Today, it’s $835, he said.

Household incomes have dropped 0.3 percent per year since 2000, meaning families have less buying power than they did 14 years ago, according to an analysis by Economic & Planning Systems Inc., which wrote the Housing Affordability Policy Study for the city.

That means they have less money to spend on rent, groceries, at the dry cleaner, restaurants, shops or movie theater. That spending, when spread around the community, helps it survive and thrive.

Household median income in Fort Collins peaked at $66,100 in 2012 and dropped to $62,500 this year.

Fort Collins Area Chamber of Commerce President and CEO David May agrees with Birks that local government should focus on increasing per capita income through the creation of primary jobs, which on average pay about 75 percent more than other jobs.

“To have a diverse, healthy economic base for the community, we need to focus on growing, retaining and attracting primary employers like the breweries, Woodward, Otter Products, Avago and other such companies that bring money into the local economy,” he said.

Fort Collins’ city government has done “pretty well” in those efforts, he said. “Unfortunately, government-mandated pay increases affect very few people — around 2 percent of the American workforce — and have negative economic offsets. Instead of artificially raising wages, it would be better to focus on raising the economy.”

The living wage movement

The so-called living wage movement is sweeping the nation.

President Barack Obama has suggested bumping the minimum wage to $10.10; cities such as Seattle and New York plan to raise their minimums to $15 and $13, respectively, during the next year years.

Seattle is the most extreme example of cities setting an example by raising its minimum wage, and all eyes will be watching, Shields said.

Other cities such as Asheville, North Carolina, raised its minimum wage in 2007 to $10.36 for employees without health benefits; $9.35 if they got health insurance, said Brenda Mills, the city’s economic development specialist. Asheville is not unlike Fort Collins. It houses 85,000 residents and includes the University of North Carolina Asheville, and is considered a haven for niche breweries and mountain tourists.

The living wage affected only 17 of the city’s 900 employees, Mills said.

Today, the city’s minimum wage is $11.85 for employees without insurance; $10.35 with it, Mills said. “It doesn’t hit a lot of people, but it gets us as a city to do better. It got our employees up above minimum wage and made the community sensitive to paying a living wage.”

About 370 employers in Asheville are certified living wage employers, affecting about 3,000 workers.

The move has had its critics. Asheville extended the living wage to most government service contracts, but in August 2013 the state’s general assembly abolished that practice “because it didn’t want to be telling business what to pay their folks,” Mills said.

Increasing the minimum wage doesn’t help create jobs, May said. “It’s a form of moral candy that makes us feel good but has no real lasting benefit.”

Instead of artificially raising wages, which could have some negative effects including lost jobs, reduced hours or increased consumer prices, it would be better to focus on creating new jobs, May said.

Shields disagrees that raising the minimum wage would affect job growth. It would help lower-income families and have little impact on job creation, he said. “If we raised it from $8 to $9, my best guess is that we wouldn’t see a huge impact on unemployment.”

Natural growth in wages won’t come as long as there is slack in the labor market, he said.

While Larimer County’s unemployment rate is less than 4 percent, there have been plenty of applicants to fill most jobs, meaning there’s little pressure on employers to raise wages as an incentive to find workers.

“Anytime wages are stagnant … there is not enough demand where employees have any bargaining power,” he said.

Breaking down minimum wage

Colorado increased its minimum wage to $8 per hour at the start of the year. Here’s what a full-time worker would earn in a year at different minimum wage marks:

$8 = $16,640

$9 = $18,720

$10 = $20,800

$11 = $22,880

Why Can’t Austin Attract International Students?

October 8, 2014

By: Sam Sturgis
Via: Citylab

Flickr/Derek Key

One of America’s rising tech hubs may suffer unless it draws more foreign students to its universities—and welcomes them into the larger culture.

Today marks the kickoff of Austin Startup Week, a dawn-to-dusk boot camp for local tech entrepreneurs. And there’s plenty of varied programming to choose from. Seats for “What Willie Nelson Can Teach You About User Experience” were sold out nearly a week before the event’s scheduled date (maybe some think Willie will make a cameo). Thursday’s discussion “I’ve Got 99 Problems but a Pitch Ain’t One” will showcase entrepreneurial lessons gleaned from hip-hop. Given the city’s exploding startup scene, it’s easy to see why unorthodox innovation events are popular. To stand out in this market, entrepreneurs need an edge.

Not only does the Austin metro region receive significant investment, it’s largely centralized downtown. (Martin Prosperity Institute)

The Texas state capital has nearly doubled its population in the past 20 years, aided by a steady stream of cash from venture capitalists. A March report by the Martin Prosperity Institute found Austin’s $555 million in capital investment to be the eighth highest in the U.S. during 2013—more than Chicago, Seattle, and Los Angeles. Austin also placed in the top 10 for its total number of venture capital deals. Austin is undeniably one America’s newest “nerdistans,” as CityLab’s Richard Florida likes to call them—urban centers that strongly support high-tech industries.

The number of venture capital deals signed in Austin is among the highest in the country. (Martin Prosperity Institute)

Yet despite a robust investment culture, some Austin tech companies are having a difficult time accessing local labor. Shortly after launching Gluu, an Austin-based company that works with internet servers in 2008, Mike Schwartz was eager to hire international students graduating from nearby universities. The University of Texas at Austin’s engineering school, in particular, offered his young company well-trained tech engineers. On two separate occasions, however, international students hired and trained by Schwartz were ultimately poached by larger tech companies, including T-Mobile. They offered entry-level salaries that Gluu simply couldn’t compete with.

“There’s just not enough talent here and there’s too many tech companies chasing it,” Schwartz says. Subsequently, Gluu largely stopped hiring locally. Of the company’s 15 employees, including Schwartz, only two reside in Austin. The rest work remotely in countries like China, India, Bangladesh, and Ukraine.

“We don’t want to have to give people yoga classes and do their laundry in order to get them to work for us,” says Schwartz. “[W]e will pay you and you will be part of our team that loves to work together, but that’s it.”

Gluu’s inability to find young, employable talent is the product of an array of factors. But one glaring issue is that Austin’s universities appear to be limiting their admissions of tech-minded international students, many of whom would certainly see Austin as a great launchpad for employment after graduation.

Austin’s metro area ranks 75th nationally in terms of the number of foreigners per 1,000 students. (Brookings Institution)

While other startup cities like Boston, Seattle, and San Jose boast high numbers of international students, Austin on the whole retains a largely Texas-centric student body. The past 20 years have brought in hundreds of thousands of new Austinites and billions of dollars in tech investment. But foreign students otherwise eager to study in the U.S. have stayed away. What’s the deal?

“Everyone knows New York, it’s a very cosmopolitan city,” says Neil G. Ruiz of the Metropolitan Policy Program at the Brookings Institution. “And Austin, it’s pretty cosmopolitan within the U.S. and a very thriving town. But I think, internationally, people might not know that as much,” he adds.

Austin, according to Ruiz’s August study, “The Geography of Foreign Students in U.S. Higher Education,” is far behind other tech hubs when it comes to enrolling students from around the world.

Between 2008 and 2012, there were just 17 foreign students for every 1,000 students in Austin. Not only is that a lower ratio than other Texas cities like Dallas, Houston, and College Station—whose economies are less innovation-focused—it’s far lower than that of cities with similar rates of venture capital investment. For every 1,000 students that enrolled in Seattle colleges between 2008 and 2012, 50 were international students. That figure is even higher in San Francisco—60 per 1,000—and Boston’s student body was more than three times as global as Austin’s.

This is not to say that Austin has an inherent diversity problem. The share of Austin’s white, non-Hispanic population dipped below 50 percent for the first time in 2005, according to the city government. Census Bureau figures indicate that Latinos accounted for 35 percent of the city’s population in 2012. Moreover, the city boasts more than 10,000 residents who identify as being Chinese and nearly 9,000 who identify as Vietnamese. “Austin, I would say over the last 20 years, has had this technology explosion, so there’s probably, from a corporate perspective, a lot of catching up to do,” says Teri Albrecht, Director of International Student and Scholar Services at the University of Texas, Austin. “But from personal experience, Austin is a really great city to live in due to its cultural diversity,” she adds.

Texas law mandates that high-school graduates in the academic top 10 percent of their class receive automatic admission to public universities, Albrecht notes. This policy, she says, has likely closed many doors for international students applying to Austin’s universities.

UT-Austin is just one of five four-year institutions in the metropolitan region. That’s a small number for a city its size, so it’s really no surprise that Austin has a comparatively low net foreign student population. But with roughly 50,000 students, UT-Austin makes up the lion’s share of the city’s student population. And in order to meet state law requirements, Texans account for about 90 percent of all incoming freshman at Austin’s largest university.

“[W]e have a very small slice at UT that are U.S. students coming from out of state, and then we have very small slice of those who are international undergraduate students,” Albrecht explains, “And so that really drives what our overall student population is.”

The issue is that when cities such as Austin essentially cap the number of international students enrolled in their schools, they miss out on the many benefits of circular migration.

The city a foreign student chooses to study in essentially becomes his or her “home base” in the United States. If they decide to remain in the U.S. after graduation—possibly pursuing a green card—they will most likely consider that city as a permanent residence. If he or she decides to return to their native country, their college city will continue to be a networking source while abroad. If he or she starts a business back home, contacts from their college city will likely be tapped when conducting business in the U.S.

The long-term benefits that Austin is missing out on given its low international student population, says Neil G. Ruiz of Brookings, could ultimately be a major detriment to the city.

“In the long-term, what’s good about [enrolling more foreign students] is that a place like Austin can become more global and cosmopolitan,” Ruiz explains. “These students are mostly coming from fast-growing cities like Seoul and Beijing—huge mega-cities with large markets. So Austin’s employers can benefit from the students because they know the language and they have the networks of their home communities abroad,” he adds.

Venture-capital investors may come to Austin Startup Week for the Willie Nelson-themed idea session, but they might be left wondering why events focused on attracting young, international talent to the city were left off the agenda.

Delivery 2.0

September 15, 2014

By: Eoin Daly & Seelan Singham
Via: McKinsey & Company

Handshake by Mark Hunter via Flickr (CC BY 2.0)

A South American government cut hospital waiting lists by 80 percent. An Asian country reduced street crime by 35 percent in a single year. Another Asian country increased tourism by 70 percent.

These are all real-life examples of governments going beyond what might be called Delivery 1.0 (delivering outcomes) to Delivery 2.0 (delivering better, faster, cheaper outcomes, and being seen to do so). In each case, governments made progress from already well-designed and well-executed delivery programs.

Here are six lessons from our experience of these and other delivery programs.

Define your priorities

The key is to focus on the value actually delivered to the population. The best approach is to choose three to six priorities (no more) and then stick to them for two or three years. Avoid the temptation to add more and more goals; that only divides attention and increases the chance of failure. Choosing a small number of goals also goes a long way toward securing the support of senior civil servants, who often complain, with good reason, about having a never-ending list of priorities.

Next, establish numerical metrics for each priority. These must measure outcomes, not inputs. For example, don’t target higher technology spending or more police officers, but a specific decrease in crime or improvement in education.

These targets should be published, as should progress against them, both in absolute and relative terms (in the form of rankings). The UK government has done this, in the form of public-service agreements.

How ambitious should such targets be? They must be ambitious enough to represent real improvement and to force changes, yet modest enough to be achievable and build momentum. One approach is to create a portfolio of goals, at varying levels of aspiration.

Create ‘delivery labs’

Many outcomes require a number of government agencies to work together toward a common goal. This is notoriously difficult to pull off in a world of silos, disparate agendas, and competition for funding. Governments typically respond by setting up committees or task forces that tend to represent their own interests. Little progress is made in meetings, and even less between them. What can be done?

One proven approach is the “delivery lab,” which brings together 20 or 30 people from all appropriate departments to develop solutions in a full-time, six- to eight-week process. The lab’s task is to define targets, set priorities, develop delivery plans, get stakeholder approval, and figure out funding. It’s important that this be a full-time commitment: the magic of the lab is its intensity. Only then can the participants focus on the problem and work out the answers. Labs also create a link between planning and implementation, because the people involved return to their organizations and take responsibility for bringing the plans to life.

Four elements characterize successful delivery labs—a clear mandate from the top; a successful leader who has great access; good personnel, including members of the private sector, where appropriate; and a connection between policy makers and end users (for example, between ministers of education and classroom teachers).

Increase the pressure to perform

It’s a cliché, but it’s true: what gets measured gets managed. Performance improves when it is managed. Internal performance management should begin by assigning accountability for outcomes to individuals. Once accountability is established, performance dialogues—regular conversations about each goal—are essential. One prime minister reviews the progress of six priorities every week; every six months, he holds a face-to-face performance dialogue with each minister.

These conversations must be based on standardized, clear management data (ideally available online) that can be reviewed and managed in real time. And the dialogues must be reinforced by rigorous evaluation and consequences (good and bad). Many governments are constrained in this regard; they may not be able to reward great performances with bonuses or condemn bad ones by firing the perpetrators. But they can publicly acknowledge outstanding people, promote highfliers faster, and move laggards to lower-profile roles.

Establish small, high-powered delivery units

Many governments are setting up delivery units to work through the relevant public-sector agencies. Some delivery units struggle. Others are very successful. Three things make the difference:

  1. A clear, unwavering mandate from the top echelon of government. This mandate should specify the unit’s role and remit and confirm that it is focused on the government’s top priorities.

  2. A successful, dedicated leader with top-level access. Effective delivery units are generally run by people who have a track record of delivering big results fast. Whether they are from the public or private sector, they need to be familiar with how government works and have peer relationships with ministers and heads of departments.

  3. A few good people. Members can be from either the public or private sectors; the important thing is that they are driven, effective problem solvers able to collaborate with the civil service.

Ensure visible sponsorship from the top

The head of government should play an active, visible role in setting aspirations, making decisions, and removing obstacles to success. That means setting aside a sizable amount of time—at least eight hours a month—to Delivery 2.0 initiatives.

Top-level sponsorship signals the importance of the program to the rest of the government. Ministers and civil-service leaders take notice. And this sponsorship should be sustained so that when the initial excitement of the launch fades, the work continues. One prime minister chaired a two-hour performance review of priority areas, involving all senior officials, every two weeks. This had an enormous effect on the success of the transformation program.

Engage stakeholders

From the outset, a government must make its priorities clear to all stakeholders. It should begin with, and persist in, reinforcing a single narrative that includes the case for change and the projected benefits. This is only the beginning. Stakeholders need to be part of the action from beginning to end.

Soliciting early input can help them get involved and stay involved. One Southeast Asian government invited the media, the opposition, and the public to a series of “open days,” in which the proposed targets were discussed. Twenty thousand people attended.

It’s important to acknowledge stakeholders—for example, by recognizing effective players or by hosting events with groups such as police officers or teachers to thank them for their work. Involving the public can also be effective. Initiatives such as volunteer policing can engage the public in the fight against crime.

Even in the best of times, making government work effectively is difficult. Objectives are not always clear, and they change with new leadership; different departments operate like silos; and it can be difficult to mobilize an entrenched civil service that may be focused more on policy than outcomes. But difficult is not the same thing as impossible. We have seen governments around the world use Delivery 2.0 to meet their challenges—even in times of crisis.

What 8 States Are Doing To Build Better Pathways From High School To Careers

July 8, 2014

By: Katherine Mangan
Via: The Chronicle of Higher Education

Photo Credit: Computer Lab by Jonathan Reyes Via Flickr (CC BY-NC 2.0)

Eight states are tackling a growing disconnect between the nation’s education system and its economy by exposing more middle-school and high-school students to jobs, making education relevant to careers, and beefing up alternatives to the four-year college degree, according to a new report from the Pathways to Prosperity Network.

The network, which began in 2012, works with 10 states to build pathways that connect the final years of high school with the first few years of career training in fields facing worker shortages, including information technology, health care, and advanced manufacturing. Led by the nonprofit group Jobs for the Future and the Harvard Graduate School of Education, the network is trying to increase the number of high-school graduates earning a postsecondary credential that will lead to a decent-paying job.

“There’s a lot of momentum around the idea of providing a much stronger set of career pathways for young people,” said Robert Schwartz, a professor emeritus at the Harvard education school.

Mr. Schwartz, one of several experts on work-force training who discussed the new report in a conference call with reporters on Monday, is a co-author of a 2011 report, “Pathways to Prosperity: Meeting the Challenge of Preparing Young Americans for the 21st Century.”

That report, which he said had galvanized support for a national network, concluded that Americans put too much emphasis on getting a degree from a four-year college, which it said fewer than one-third of young adults accomplish by age 25. It called for more focus on alternative paths that include career-focused education and apprenticeships.

The new report outlines the steps taken so far by California, Georgia, Illinois, Massachusetts, Missouri, New York, Ohio, and Tennessee. (Arizona and Delaware joined the network last month.) Their efforts, which include early-college high schools, technology-focused schools, and mentoring partnerships with local businesses, are a response to “the growing disconnect between our education system and our economy,” said Anthony P. Carnevale, a research professor and director of Georgetown University’s Center on Education and the Workforce. Mr. Carnevale is a national expert on work-force training whose studies about the economic value of various degrees are widely cited.

The landmark 1983 report “A Nation at Risk” was the impetus for providing solid academic offerings to every public-school student, he said, instead of steering underprepared students into vocational education. “We’re at the point where it’s too much of a good thing,” he added. As curricula became more academic and less applied, students were less likely to see the relevance of much of their learning, he said.

Dropping out or opting out of further education has serious consequences for today’s youth, who can’t just head to a factory to get a job the way their parents could have, he said. Automation has eliminated many of those jobs, and the only ones left “are the ones their bosses used to do,” said Mr. Carnevale. By integrating academic and skills training, “we’re providing the missing middle in American higher education.”

Among 2012 high-school graduates who didn’t enroll in college the following year, only 45 percent found work of any kind, the report notes, and only half of those jobs were full time.

Contributing to the problem is the “disengagement of American businesses” from the task of educating the next generation of workers, said Nancy Hoffman, a vice president and senior adviser at Jobs for the Future and the author of the state-progress report.

Early-college high schools, which allow students to start earning college credits while they’re in high school, are one way to provide momentum, she said.

Companies like IBM are struggling to fill jobs when many applicants come straight from high school and are underqualified, or have Ph.D.’s and are overqualified, said Maura Banta, director of citizenship initiatives in education for IBM. Businesses need to be more actively involved in providing mentors and internships to help cultivate more qualified workers, said Ms. Banta, who is also chair of the Massachusetts Board of Elementary and Secondary Education.

Darrell Steinberg, president pro tempore of the California State Senate, said he had helped secure $500-million over two years for a “career-pathways trust” that seeks to re-engineer the state’s high schools to make education more relevant to the needs of regional businesses.

What Are You Going To Do With That Degree?

June 26, 2014

By: Karen Beard (Intro)
Via: benschmidt.org

In recent years, the widespread availability of high speed internet access coupled with a proliferation of new technologies and the growth of transparency movements like the federal Open Government Initiative, have resulted in dramatic growth in data visualizations. In its broadest sense, the term applies to any pictorial representation of data including charts and infographics. But the true power of data visualization is best seen when the tools are applied to enormous data sets to reveal patterns that would otherwise be impossible to discern.

A new interactive data visualization from Ben Schmidt, an assistant professor of history at Northeastern University and core faculty at the NuLab for Texts, Maps, and Networks, is an example of this power. Schmidt’s flow diagram—presented under the heading “What are you going to do with that degree?”—visualizes employment and education data from the American Community Survey. The figure explores the relationships between college majors and professions.

In many cases, the data reflect the common wisdom that many people work in fields unrelated to their degree. For example, less than half of people employed as police officers have degrees in criminal justice. The visualization also highlights differences in employment outcomes between narrowly focused degrees and those that are more academic. As might be expected, career-specific degrees such as nursing and education, have more consistent outcomes while broader fields of study, like mathematics and communications, feed into a more disparate array of professions.
Additional data visualizations created by Mr. Schmidt can be found here.

Closing The Gap Between Manufacturing Employers’ Needs And Workers’ Skills

May 2, 2014

By: Dave Claborn, Director of Development and Community Relations, Ohio State University, Marion (Workforce 2014)
Via: Area Development

Rendering of future Benteler Training Center

Rendering of future Benteler Training Center. (Image source: Benteler Steel/Tube)

A resurgent manufacturing sector, and shifting workplace technology, has government, business, and academic leaders combining to build a modernized system of work and learning capable of equipping the workforce for 21st century careers.

The rates of change for technology, cultural shifts, economic cycles, and educational restructuring are nowhere near the same. It is that asynchrony, as much as any single cause, that has resulted in the “skills gap” that so occupies the conversations of CEOs and corporate hiring managers, particularly at manufacturing firms, says a new Georgetown University study (Failure to Launch: Structural Shift and the New Lost Generation).

It wasn’t long ago that American students were led to understand that manufacturing would, for the most part, occur overseas in countries paying a fraction of the U.S. wage; and if they hoped to have a sustainable career, it would be in finance, healthcare, design, communications — service rather than production. Couple that understanding with Bureau of Labor Statistics (BLS) data on earnings, unemployment, and educational attainment showing a 63 percent premium in median weekly earnings for those with a bachelor’s degree over a high school diploma, and a 4.5 percent unemployment rate for the BA holder vs. 8.3 percent for the high school grad — and it isn’t hard to see why the sons and daughters of well-off baby-boomers choose college over vocational training.

Now, with a resurgent manufacturing sector, the U.S. finds itself in the anomalous position of having four million job openings at the end of 2013 (BLS data), but only one out of three adults in their early 20s and just over half of adults in their late 20s are employed in full-time jobs according to the Failure to Launch study by Georgetown University’s Center on Education and the Workforce.

There’s been a dramatic shift in workplace technology over just four decades. In 1970, only one in four jobs required more than a high school education. Today, close to 70 percent require more training, but that training, in many cases, is more specialized and skills-based than might be found in a traditional liberal arts education. The Georgetown report notes, “As a result of increasing human capital requirements for both young and old, the education and labor market institutions that were the foundations of the 20th century industrial system are out of sync with the 21st century economy. The first step to a modernized system of work and learning is greater transparency in the alignment between post-secondary programs and career pathways. In addition, young adults will need to mix work and learning at earlier stages in the on-ramp to careers, and older adults need a less abrupt transition from working to retirement.”

Where Government, Companies, and Colleges Combine

The good news is we’re beginning to find answers. The answers are coming where government, education, and companies are each putting skin in the game.

Louisiana may be doing it as well as any state. Recognizing the direct connection between workforce training and economic development success, the Louisiana legislature last year authorized more than $250 million in workforce-related projects at community and technical colleges across the state. That’s on top of the $250 million already spent between 2007 and 2012. Called “Facilities with a Purpose,” the plan requires a 12 percent local match for project costs.

The investment is beginning to pay off. In Shreveport, state and local governments are building a $22 million workforce center at Bossier Parish Community College. The commitment to build the training center helped convince German steelmaker Benteler Steel/Tube to invest $975 million in a hot-roll steel tube-making facility that will employ 675 when it is complete. “We are making a long-term commitment, so we need to have certainty about the workforce of the future,” says Matthias Jaeger, president and CEO of Benteler Steel/Tube. “The value of the training facility is almost immeasurable.”

In southwest Louisiana, a new $20 million training center at SOWELA Technical Community College will train welders, process technologists, and other skilled workers, many of whom will land some of the 1,250 jobs in a new $16 billion South African natural gas-to-liquids facility.

In both the steel and gas projects, the companies are playing a direct role in developing curriculum. “What’s being done in Louisiana is exciting,” says Mike Kane, Sasol operations manager for the ethane-cracker project. “It’s a once-in-a-lifetime partnership for Sasol to be able to influence training at a public education institution in this way.”

Tackling the Skills Gap State by State

Louisiana isn’t the only place crafting workforce solutions. In fact, nearly every state that’s serious about business attraction is in the game. Here are some examples:

In Lexington, South Carolina, Michelin has developed a Technical Scholars Program that pays tuition, fees, and books for selected Midlands Technical College students. It’s coupled with a paid co-op position in the Lexington Michelin plant.

  1. Tennessee Governor Bill Haslam is pursuing a $35 million “Tennessee Promise” — a guarantee that every high school graduate in his state can attend a community or technical college free of charge if he or she so chooses.

  2. The Texas Skills Development Fund awards job training grants up to $500,000 to companies that partner with a community or technical college. In 2012, awards totaled over $22 million.

  3. In addition to offering workforce training grants, Ohio is developing a predictive model that overlays federal labor market information with real-time job postings, coupled with company surveys in various industry clusters. The result is data that schools can use to develop curriculum to meet skill requirements in a particular region at a particular time.

  4. Michigan is considering a statewide version of Bekum America Corporation’s apprenticeship program in Williamston, Michigan, where students receive 8,000 hours of hands-on training coupled with 60 hours of academic instruction in a partnering community college. The training is free to the apprentice, with a job promise at the end of the session. Bekum calls it “The Other Four-Year Degree.”

Company Schools

Unsatisfied with the quality or quantity of STEM-competent graduates available for its programming positions, IBM is getting heavily into the education business. Working with colleges in New York and Chicago, the tech giant is creating its own schools, called P-TECH academies. Eight are open and the company has plans for at least 29 more. IBM helps develop curriculum, heavy in STEM courses, for the six-year program. Graduates emerge with an associate’s degree, no debt, and the promise of a $40,000/year job with IBM.

The IBM P-TECH schools are similar to the German-style apprenticeship programs being organized in Michigan, Wisconsin, and several southern states by the German-American Chamber of Commerce. Under the German model, the company partners with an area community college to develop curriculum that coordinates with in-company on-the-job training. Students apply to the company for available apprentice positions. If accepted, they are paid a stipend and their education is paid for. Graduates earn an associate’s degree and a nationally recognized journeyman’s certificate and, in return, promise to work for the company for at least two years. “The first relationship is with the company,” says the German American Chamber’s Mark Tomkins.

Honda of America Manufacturing, Inc., facing the demographic challenge of eventually replacing its Ohio-based workforce, has developed its own in-house technical training program, but Honda is also putting $75,000 toward development of a mobile technology lab that can be parked outside high schools within its labor-draw area. Students visit the lab for a hands-on experience in modern manufacturing technology, and the hope is that they begin to understand that today’s manufacturing environment is quite different from the one their parents or grandparents experienced. The concept of taking the technology to the students “came together through a series of discussions with other businesses and our economic development partners in multiple counties,” says Caroline Ramsey, Honda’s assistant manager for Government and Community Relations. The mobile lab concept is borrowed from similar efforts under way in Michigan and Wisconsin.

Fixing Basic Education

Even before skills training, basic education needs attention says Ohio State Associate Professor Josh Hawley, recently tapped to head the Ohio Education Research Center, a collaboration of six universities and five research centers whose mission is to develop an Ohio preschool-through-workforce agenda. Compared with other developed nations, Hawley says, U.S. high school graduates have relatively low average skills. And that’s graduates — but what about those who don’t get that far? “From a policy perspective, you cannot ignore the fact that 25 to 30 percent of kids drop out anymore. Because there are no jobs for those people,” says Hawley. “No employer is going to routinely hire high school dropouts without training.”

Ohio’s governor, John Kasich, is taking note. He spent 20 minutes of this State of the State speech this year discussing education and workforce issues, proposing, among other things, vocational training for seventh-graders and online career road maps that could be downloaded on cell phones. “Our kids need direction,” said the Governor. “They need to understand where they are going.”