Regulatory Opportunities for U.S. Workforce Development

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In this week’s Saturday Seminar, we collect recent scholarship on U.S. workforce development.

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Currently, job openings outnumber workers in the United States with only 0.76 workers for every opening, the U.S. Chamber of Commerce warns. This is a dramatic decrease compared to the 20 years prior to the COVID-19 pandemic when the United States averaged 2.5 available workers per job opening. Recovery will require orchestrated workforce development efforts.

Experts explain that the labor effects of the COVID-19 pandemic did not end when it disrupted employment such that 22 million jobs were lost in two months. Even when jobs came back, the pandemic shifted industries in ways that resulted in massive misalignment between worker skills and job openings.

Other scholars clarify that the labor market issue does not result from a lack of qualified workers, but from a shortage of good jobs. Due to systemic barriers, such as workers having less ability to affect labor outcomes, many skilled workers do not have access to high-paying jobs. Equity and widening inequality are major concerns because both the shortage of good jobs and the skills gap disproportionately harm low-wage workers.

Automation also threatens to widen the skills gap—leaders estimate approximately seven million U.S. workers will need retraining to maintain employment after automation hits their industry.

The Workforce Innovation and Opportunity Act (WIOA) governs workforce development and state implementation of workforce development efforts. WIOA provides funding for educational and technical training to states whose governors submit a plan influenced by the act’s required Local Workforce Development Boards. Through state implementation of WIOA and related state agency regulations, the United States maintains a patchwork of workforce development efforts.

In this week’s Saturday Seminar, we collect recent scholarship on workforce development rules and strategies to build a thriving U.S. economy with good jobs for all.

  • When striving to design a cohesive workforce development program, public officials face challenges in reconciling the various federal laws that govern K-12 education, higher education, and the workforce. In an article for the Center for American Progress, Laura Jimenez of the U.S. Department of Education and Livia Lam of the Ford Foundation recommend focusing federal programs on job quality. Jimenez and Lam suggest developing a common set of rules for defining quality and holding programs accountable for providing an acceptable quality of education and workforce development opportunities. In addition, they contend, federal agencies should provide guidance to local programs about how to measure and work toward satisfactory job quality outcomes.
  • Well-paying jobs for workers without a bachelor’s degree have mostly disappeared, with COVID-19 exacerbating inequality between workers with and without postsecondary education, according to Harry J. Holzer of Georgetown University in a policy proposal for The Hamilton Project. To help workers develop skills to obtain well-paying jobs, Holzer urges legislators to strengthen “gainful employment” regulations. The Obama Administration developed these rules to ensure that schools receiving federal funding provide meaningful occupational training to students. Holzer recommends updating gainful employment regulations to require programs to measure outcomes, such as subsequent earnings or successful debt repayment, to hold colleges accountable.
  • How can policymakers reimagine approaches to adult and workforce education? In an essay in Adult Literacy Education, Elizabeth A. Roumell of Texas A&M University argues that the move to digital learning, sparked by the  COVID-19 pandemic, invites regulators to make workforce education policies more responsive to the needs of adult learners. Roumell identifies the need for ensuring that learners have adequate and productive learning conditions that promote wellbeing and community participation. To do this, Roumell encourages creative partnerships between local, state, and federal policymakers and workforce organizations to address the “real, on-the-ground, and contextual needs of adult learners.”
  • The federal government must pursue innovative solutions at the postsecondary education level to better adapt to educational challenges brought on by the pandemic, Richard Arum of the University of California, Irvine and Mitchell Stevens of Stanford University argue in a policy proposal for The Hamilton Project. Arum and Stevens propose two initiatives for the federal government to consider. First, they advocate federal authorities issuing Learning Opportunity Credits to unemployed individuals that will work to provide workforce training via a hybrid learning structure. Second, Arum and Stevens suggest that the government establish a knowledge-sharing network between federal agencies and U.S. postsecondary institutions to improve adult learning policies. They recommend that the government enact these initiatives together as a “joint venture,” as they both address the gap in learning opportunities during a global pandemic.
  • In a recent paper, two scholars identify conflicting regulations as a barrier to coordinated workforce development efforts. Jenna E. Myers of the University of Toronto Centre for Industrial Relations and Human Resources and Katherine C. Kellogg of the MIT Sloan School of Management explain that disorderly policy landscapes from years of different attempts to improve workforce development make effective collaboration difficult. They suggest that states with centralized workforce development practices address these conflicting regulations through “guided experimentation,” which involves establishing a framework for action that local partners can implement. In Tennessee, state actors changed state agency regulations to align a mismatched patchwork of rules related to career and technical education. The state succeeded because it could rely on state actors in its centralized structure to explain changes to impacted parties where shifting regulations adjusted jurisdictional lines.
  • If job quality should be a primary focus of workforce development efforts, how can regulators support these efforts? In a recent article, Dani Rodrik and Stefanie Stantcheva of Harvard University advocate a shift in regulators’ strategy from top-down reactions to a collaborative and iterative approach to defining, creating, and measuring “good jobs.” In the traditional model, regulators set rigid standards and react to behaviors, but with the new approach to “good jobs,” the standards would be more flexible and responsive to changing needs. Rodrik and Stantcheva explain that other regulated areas such as food safety, civil aviation, and new technology promotion have already implemented this type of iterative

The Saturday Seminar is a weekly feature that aims to put into written form the kind of content that would be conveyed in a live seminar involving regulatory experts. Each week, The Regulatory Review publishes a brief overview of a selected regulatory topic and then distills recent research and scholarly writing on that topic.