The Critical Challenge: Closing the Education and Skills Gap

The recession, soaring unemployment and underemployment, and the reset of the global economy are throwing longstanding U.S. problems with education and training into high relief. Our low high school graduation rates, poor college completion rates and overall inadequate levels of education will cause us to fall far short of meeting demand for more skilled workers and will place a premium on workers who are willing to keep learning to meet emerging needs.

As we look past the recession, there is another huge problem ahead — it is increasingly apparent that the United States lacks a strategy to help American workers get the skills that they and our businesses need to fill today’s and tomorrow’s jobs.

That is why Business Roundtable convened The Springboard Project, an independent commission comprising 26 of the nation’s best thinkers and doers from different sectors. The members of The Springboard Project worked together to recommend strategies for closing the gap between workers’ current skills and those that employers need now and will need in the future.

The challenge is massive, and the time to act is short. We need to start today.

Gearing Up for Success in a Post-Recession Economy

The global, knowledge-based economy is rapidly evolving. For America to retain its global economic leadership position, U.S. employers and workers also must evolve.

More and more of today’s jobs demand ever-higher levels of education and skills — not only jobs in high-tech or other traditionally white-collar industries, but all jobs. American workers are the most productive in the world,3 but they are losing their education advantage. The United States is now the only developed nation with a younger generation that has a lower level of high school or equivalent education than the older generation.4 Globally, the United States ranks second to last among developed nations in postsecondary completion rates.

The gap between employers’ needs and workers’ skills grows wider every day. Almost three-fourths of the occupations that are expected to grow over the next six years, such as registered nurses, teachers, computer software engineers, accountants and auditors, and business operations specialists, will call for credentials beyond a high school diploma. Meanwhile, demand for lower-skill jobs is falling; by 2016, U.S. employers will need 200,000 fewer stock clerks and cashiers than in 2006.

Clearly, we are not doing enough to help and encourage our workforce to keep up. Improved access, affordability and accountability, as well as broad reinvention of the education delivery system, are essential and urgent.

We need to do a better job communicating the value of education. We need to provide better information and incentives to help workers complete the education and training that enables them to get ahead and stay ahead. Each of us must make a personal commitment to lifelong learning — a continuous renewal of our knowledge and skills.

If we fail to act, we threaten individual and family prosperity, our way of life, and overall U.S. competitiveness — even as the economy recovers.

The Springboard Project recommends policy changes and business-led initiatives that will produce immediate and lasting results. Our six recommendations will foster the cultural shift necessary to keep America’s workforce well prepared and competitive throughout the 21st century.

1. Create incentives to build a better-educated and trained workforce.

American workers know that education is valuable. The Springboard Project’s American Workforce Survey reports that 81 percent of workers are interested in pursuing education or training outside the workplace. Sixty-two percent of workers are interested in taking courses or training to gain a higher degree or credential in the next two years.

But workers’ strong appetite for enhancing their skills and furthering their education is not matched by action. Many Americans do not pursue or complete additional education and training because of obstacles including inconvenience, cost and concerns about whether the training
is customized.

We can no longer accept abysmal completion rates. Incentives can help. Financial rewards can effectively motivate learners to complete their degrees or credentials. Education institutions also need incentives to raise completion rates and improve employment outcomes without lowering standards or restricting admissions to students who are most likely to graduate. Current funding policies reward colleges based on the number of students enrolled, but what really matters are outcomes: how many students actually complete their programs and how prepared they are to meet the demands of the workplace. We must repurpose funding accordingly.

We recommend that:

• Federal and state policymakers repurpose funding and strengthen accountability by providing incentives to increase completion rates of education and training programs that students and workers need for short- and long-term gainful employment.
• Federal and state policymakers revise our system of financial aid to reward students who complete their education and training programs in a timely way.

2. Develop nationally recognized workforce certifications and credentials.

Millions of Americans pursue certifications, apprenticeships and other postsecondary training credentials in addition to, or as an alternative to, a traditional college degree. Workers who complete such programs can earn almost twice the income of those who complete only high school.

To be worth a worker’s investment, a certificate or other credential should reflect national industry standards so that employers can determine its value when making decisions about hiring and promotions. Likewise, to grant academic credit for these credentials, education institutions need to be able to assess the quality of the program.

We recommend that:

• Business take the lead in working with industry associations, unions, educators and nonprofit organizations to develop national standards for credentialing programs that industry employers will be confident accepting.
• Educators provide academic credit and credentials for completing approved career and technical coursework, helping students and workers build career pathways.

3. Communicate timely and consumer-friendly information to workers.

Workers need easily accessible, consolidated and up-to-date information to make smart choices about which careers to pursue, which jobs are available, which skills are needed and how best to prepare for success. As the proportion of independent workers increases, the accessibility of this information is becoming even more critical.

The Internet has helped people to learn about job openings and education and training programs. Although there is an abundance of data online, key information is missing. Two important additions include local occupation trends connected to education and training requirements, as well as the completion rates and employment outcomes of education and training programs.

We recommend that:

• The U.S. Department of Labor use state-of-the-art communications to improve the accessibility and clarity of the information it collects and communicates, including national, regional, state and local industry and occupation trends.
• States operate their job exchanges in a more open, user-friendly manner, linking with neighboring states’ and private-sector sites.
• The government “connect the dots” by linking and streamlining information and programs across the Departments of Education, Labor and Commerce.

4. Bring 21st-century innovation to education and training.

The cost of education and training continues to rise, making it hard for many students and workers to afford to gain the skills that would make them more employable and/or advance their careers. Over the past three decades, tuition and fee increases at U.S. public and private colleges dramatically exceeded the rate of inflation; however, their efficiency decreased.

Community colleges — which are much less expensive than traditional four-year colleges — have been the answer for millions of Americans, providing a gateway to the middle class. However, these institutions also confront challenges in the face of shrinking budgets, growing expenses and competing priorities.

If we are to meet the growing demand for a better educated and trained workforce, our institutions of higher education must find creative ways to do more with less. The growing popularity of online learning is a promising example of how the education market is responding. Between 2002 and 2006, the annual growth rate for online enrollments increased by almost 10 percent, compared with just 1.5 percent for the higher education student population as a whole.19

It is time to develop “Higher Education 2.0” — a variety of options for convenient, cost-effective, flexible education and training models that provide high-quality, employer-recognized programs that better meet students’ and workers’ needs.

To effect real change, we need to pioneer more effective delivery systems. We must challenge the status quo. We must not be afraid to reinvent much of our system to improve access, affordability, accountability and overall value.

5. Unlock the value of community colleges and two-year institutions.

Community colleges and two-year institutions are an underrecognized asset in the American education system. They have enormous potential to play a dominant role in advancing workers’ earning power, strengthening local economies and providing an “on ramp” to higher education.

In the United States, 1,152 two-year public colleges serve 6.3 million students in for-credit programs, plus an estimated 5 million students in noncredit continuing education.21 Their programs meet a broad spectrum of needs, including bolstering basic academic skills, providing associate degree programs, and offering training and certification in areas sought after by local companies. They also offer a “second chance” for people who want to raise their game.

With their distinct ability to respond quickly and nimbly to market needs, community colleges and two-year institutions should be an integral part of cities’ and states’ economic development strategies. These institutions — working in partnership with government and business — can help build a stronger workforce for diverse companies, develop the talent to support emerging small businesses, and re-tool workers whose jobs are obsolete and want to enter fast-growing industries.

6. Foster lifelong learning.

In our fast-moving, knowledge-based economy, education does not end with a degree or certificate. Just as businesses innovate to stay competitive in the global economy, workers must continue to learn and grow professionally to make sure they get ahead and stay ahead.

To make sure that workers — regardless of age, income or education background — succeed in the global economy, we must encourage a commitment to lifelong learning.

Every sector of society has a role to play. Increasingly, as workforce dynamics continue to change, individuals are responsible for learning and keeping their skills relevant. Businesses can help by valuing training and supporting employees who seek to upgrade their skills. Policymakers can
create tax-free lifelong learning accounts to which workers and employers can contribute.

It is a huge challenge, but we need to help Americans better understand what it will take to succeed in tomorrow’s economy. If we do not, we run the risk that other countries will pass us by.

Business Roundtable is committed to the following actions:

• Advocate action by Congress, the Administration and states on The Springboard Project’s recommendations. We will build support for and act on workforce education and training policy changes recommended in this report. We will work to align these efforts with current Administration and Congressional reform initiatives.
• Partner to produce results. We will ask our member companies to partner with at least one state, community college or other two- or four-year college, school district, or nonprofit organization to make a measurable impact on one or more of the following objectives and report on the results:
  • Increase the postsecondary credential completion rate (bachelor’s degree, associate degree, apprenticeships and industry-recognized certifications);
  • Increase the use of industry-recognized certifications;
  • Increase the high school graduation rate; or
  • Increase the number of U.S. graduates with STEM degrees.
• Communicate workplace expectations. We will develop Workforce 101, a Webbased, free interactive course for high school and college students (also appropriate for any new entrant to the workforce) on workplace needs and expectations for today and the future.
• Engage the broader business community. We will reach out to other business organizations and companies to get strong business support for The Springboard Project’s recommendations and encourage all businesses to make improving the U.S. education system a key part of their corporate citizenship agendas.

Endnotes

1. United States Bureau of Labor Statistics, “Current Population Survey (CPS) Labor Force Statistics: Civilian Labor Force 25 and Over,” Not seasonally adjusted data, 4 December 2009 www.bls.gov/cps.
2. Wall Street Journal CEO Council, “The CEOs' Top Priorities,” 23 November 2009 http://blogs.wsj.com/ceo-council/2008/11/23/the-ceos-top-priorities.
3. Bradley S. Klapper, “Study: U.S. Workers Are the World’s Most Productive,” Boston Globe, 3 September 2007, 12 September 2009 ductive/>.
4. “Table A1.2a: Population with at Least Upper Secondary Education (2007),” Education at a Glance 2009: OECD Indicators, 29 September 2009 www.oecd.org/document/24/0,3343,en_2649_39263238_43586328_1_1_1_1,00.html#4.
5. “Tables A3.4: Completion Rates in Tertiary Education (2005),” Education at a Glance 2009: OECD Indicators, 3 September 2009 www.oecd.org/document/24/0,3343,en_2649_39263238_43586328_1_1_1_1,00.html#4.
6. U.S. Department of Education, National Center for Education Statistics, “Spring Compendium Tables: Graduation Rates Among All 4-year Degree Granting Institutions 2007,” 1 June 2009 http://nces.ed.gov/das/library/ipeds_com.asp.
7. United States Bureau of Labor Statistics, Employment Projections: 2006–16, “Table 6: The 30 Fastest- Growing Occupations,” 4 December 2007, 3 September 2009 www.bls.gov/news.release/ecopro.t06.htm.
8. Georgetown University Center on Education and the Workforce, “Jobs and Education Requirements” http://cew.georgetown.edu/research/jobs/79012.html.
9. Keybridge Associates, “Impact of Graduation Rate Increase Model,” 2009.
10. The Springboard Project American Workforce Survey, Benenson Strategy Group, July 2009.
11. The Springboard Project American Workforce Survey, Benenson Strategy Group, July 2009.
12. “Student Pipeline — Transition and Completion Rates from 9th Grade to College 2006,” NCHEMS Information Center, 24 August 2009 www.higheredinfo.org/dbrowser/index.php?measure=72.
13. Georgetown Center for Education and the Workforce, Income Statistics, Mean Nominal 2004 USD Data. Getting Ahead — Staying Ahead Endnotes Business Roundtable The Springboard Project | 2
14. “Tables P79: Number of Undergraduate Credentials Awarded by Title IV Postsecondary Institutions, by Curriculum Area and Credential Level: United States, 1997 to 2006,” National Center for Education Statistics, September 2009 http://nces.ed.gov/surveys/ctes/tables/P79.asp.
15. Sara Horowitz, “The New Labor Force Is Out On Its Own,” Forbes, 20 May 2009, 21 September 2009 www.forbes.com/2009/05/20/freelance-union-benefits-leadership-careers-work.html.
16. The Springboard Project American Workforce Survey, Benenson Strategy Group, July 2009.
17. United States Bureau of Labor Statistics, Job Openings and Labor Turnover Statistics, 9 September 2009, 16 September 2009 http://data.bls.gov/PDQ/outside.jsp?survey=jt.
18. United States National Center for Education Statistics, Digest of Education Statistics, Annual. “Table 282: Institutions of Higher Education — Charges” http://nces.ed.gov/programs/digest/d08/tables/dt08_282.asp.
19. Elaine I. Allen and Jeff Seaman, “Online Nation: Five Years of Growth in Online Learning,” October 2007 http://wiseplus.exp.sis.pitt.edu:8080/dspace/bitstream/123456789/47/1/online_nation.pdf.
20. United States, Department of Education, Integrated Postsecondary Education Data System: Enrollment Survey 2007. American Association of Community Colleges
21. United States, Integrated Postsecondary Education Data System: Directory File, Active 2-Year Public Colleges 2007. United States, Integrated Postsecondary Education Data System: Enrollment Survey 2007. American Association of Community Colleges.
22. United States Bureau of Labor Statistics, National Longitudinal Study 1979, “Number of Jobs Held, Labor Market Activity, and Earnings Growth among the Youngest Baby Boomers: Results From a Longitudinal Survey,” Table 1. Number of jobs held by individuals from age 18 to age 42 in 1978- 2006 by educational attainment, sex, race, Hispanic or Latino ethnicity, and age. 27, June 2008.