Government Struggles to Fund Training and Upskilling

According to the 2014 Ready to Work Federal report, the U.S. government’s employment and training programs received only $17 billion that year. The year before that, businesses in the U.S. spent nearly half a trillion USD – more than 25 times the amount the government spent – on training. It’s clear that the government is not devoting nearly enough money to deal with the skills gap challenge – and it may be that it simply does not have the funds needed for the task.

Since businesses are profit-driven, and many would rather simply replace their low-skilled workers with higher-skilled ones, government needs to be a part of the solution.

Just to recap the discussion from the other thread on this topic.

@dianadaniels pointed out that countries like France, Denmark and Singapore have credits for people working that they can spend in upskilling programs. (I would like to hear more about this!)

@Klaus argued the focus should probably be on interpersonal skills, teaching skills, and expertise in STEM. That’s also related to technology changing industry as a rapid pace.

@dughogan questioned the extent to which government should be involved, given that the market is often better at providing solutions. A larger government effort could be justified – as a last resort – if, for example, automation suddenly caused mass unemployment.

I know the Dutch government has several programs under the banner of Life-Long Learning.

Some 1.3 million workers in the Netherlands are entitled, under collective bargaining agreements, to have their employers pay (part of) the cost of retraining or upskilling, but few use it.

So the government is rolling out something new called the STAP budget (which is an abbreviation for “Incentivize Labor Market Position” in Dutch), under which 100,000 to 200,000 workers would qualify for €1,000 to €2,000 in subsidies for retraining and upskilling.

In addition, if an employer has paid for the retraining of a worker and that worker leaves the company, the employer can deduct the cost of that retraining from the worker’s transition allowance. This is designed to help employers overcome the fear that they’ll invest in a worker only to see them leave to company once their retraining is done.

@dtong, @rkadel42, @sternals, you may have thoughts on this topic. How would you convince the U.S. government to spend more on training and upskilling? Or is it not worth the attempt?

There are over 100 government training programs now and I am not sure more or more money really would make a difference.

The issues is not how to do training. The issue is where to find good jobs. College graduates did everything right and … “In 2019, nearly one in seven black, Hispanic, and AAPI graduates are underemployed while one in 11 white graduates are”. EPI. “. The overall employment rate for young college graduates has declined, and the share who are idled—neither employed nor enrolled in further schooling—has increased between 1989 and 2019.“. EPI

This might connect to the housing and relocation issue, with many good-paying jobs clustering in metro areas that are hard to afford.

@sternals -
One of the issues that arose during our recent workshop on the subject was that soft / business skills were the real crux of the issue: how to present yourself, how to create a network that’ll serve you well, etc.

I wonder if governments can invest more in that front, to get better results.

Many of us in workforce development have been talking about the establishment of Life Long Learning Accounts (LiLAs) for many years. here’s a recent report: Lifelong Learning and Training Accounts: Helping Workers Adapt and Succeed in a Changing Economy - The Aspen Institute