Ten days ago, Governor Shapiro’s unveiled his proposed state budget for 2023-24. In one priority area for Keystone Research Center (KRC), workforce training and career supports, we’re excited by what we see in the budget. The amounts of money proposed are modest; but the outlined targeted investments hint at an appetite for “systemic reform” for building, over time, a stronger network of Pennsylvania institutions that support career-related learning starting in K-12 education and career advancement for adults while enabling more employers to access the skills they need.
Before diving into the details of the Shapiro budget proposals, here’s a bit of background on workforce and career issues from a 30,000-foot-level and long-term perspective. From those vantage points, U.S. and Pennsylvania institutions that support training and careers have been broken since about the 1970s.
For the three decades prior to 1980, white men benefited from a combination of formal education (K-12 for most hourly workers, college for most managers and professionals) before entering the labor force, followed by job security and advancement within company-specific job ladders in a rapidly growing national economy. In many industries, full-time classroom learning in school until ages 18 or 22, followed by learning and advancement on the job, (sometimes with a few gap years until young men “settled down”) worked reasonably well. It meshed with the skill needs of manufacturing and some other employers (grocery and department stores, AT&T, banks). Together with high unionization rates and a steadily rising minimum wage, school then work brought rising wages and incomes for U.S. workers across the board.
The loss of manufacturing jobs that started in the 1970s brought an end to this period of shared prosperity. For non-college workers — still about two-thirds of the U.S. workforce – the half-century since 1980 has been rough. Part of that harshness has come from the lack of training and job-matching institutions outside of unionized construction. That training and the institutions make it easier for non-college workers to get a good new job when they lose an existing good job and for young non-college workers to get their first good job.
Companies suffer in the absence of industry-level training and career institutions. Because companies rely less now on the “internal labor market” (job ladders within companies) than in the 1970s to develop occupation-specific and/or firm-specific skills not ordinarily learned (and often not learnable) in the classroom, they have to rely more on the external labor market. But with some exceptions (e.g., health care) the external labor market lacks education and training institutions deeply embedded in industries. The widely discussed shortages of workers in good-paying jobs that require “mid-level” skills reflect this reality. These shortages also reflect wages and benefits that are too low and human resource strategies that fail to value and support workers in other ways.
Since KRC began operating in December 1995, we have advocated for institutions that could create the “missing link” between education and training and the economy because such institutions would benefit workers, businesses, and the Pennsylvania economy. For example, we made the case in 2001 and 2002 for industry partnerships – multiple firms in an industry coming together to address common skill needs – in a report for Governor Schweiker that he passed onto incoming Governor Rendell with a complementary letter. That report helped shape a Rendell workforce strategy founded on investment in industry partnerships which would enable publicly funding training to connect to employers with family sustaining jobs.
(For anyone who wants to dive deep into the details of that strategy, here is an academic conference paper that profiles Pennsylvania’s industry partnership strategy five-and-a-half years into Governor Rendell’s two terms. And here is a 2010 op-ed in which ex-Governor Schweiker recalls the origins of the industry partnership approach in his administration, quotes the KRC report he commissioned, and advocates for legislation, which ultimately passed, putting Industry Partnerships into statute.)
In his two terms, Governor Wolf saw registered apprenticeship – the explicit integration of classroom instruction with aligned learning and mentoring for apprentices on the job – as a vehicle for better connecting training to the needs of industry. KRC encouraged Governor Wolf’s support for apprenticeship. We helped persuade him to commit publicly to doubling apprenticeship by 2025 by highlighting the example of England which, over the past two decades, has gone from having low levels of apprenticeship (similar to the United States) to having high levels (more similar to northern Europe). Bipartisan legislative support for apprenticeship led to new funding of $7 million per year to expand apprenticeship through the PAsmart program.
As a candidate, Governor Shapiro promised to build on the workforce initiatives of his predecessors. He pledged to triple funding for apprenticeship; expand Pennsylvania’s industry partnership grants; and drastically increase career and technical training. (His campaign workforce plan also included two elements on which Governor Shapiro has already delivered: an executive order eliminating four-year degree requirements for thousands of state government jobs; and another executive order that, among other things, streamlines occupational licensing and certification procedures.)
This background provides a context for evaluating the workforce and career proposals in the Governor’s proposed budget – and leads us to see that budget as a first step to implementing Governor Shapiro’s campaign workforce and career commitments in strategic ways. First, Governor Shapiro proposes to invest $3 million to cover a portion of the in-classroom instruction for registered apprenticeships and pre-apprenticeships. Every other country with levels of apprenticeship an order of magnitude higher than the United States – England as well as Germany – achieves that through public-private co-investment with the public sector paying for the classroom education. Recognizing this, KRC and Congressman Dwight Evans advanced the idea of co-investment between the public and private sectors to scale apprenticeship and other approaches to combining classroom and work-based learning (e.g., co-ops, internships, summer jobs) in this and other op-eds in the debate about what became the “Inflation Reduction Act.” We think Pennsylvania could, and should, use this $3 million to test drive co-investment, increase funding for this approach in the next few budgets, and then serve as a model for national reform along these lines.
Second, the Governor’s proposed budget includes $3.5 million for the new PA Schools-to-Work program, which supports workforce development partnerships between schools and employers, labor-management partnerships, and industry associations to create robust training and career pathways. This investment is a direct attempt to create more of the missing links between industry and education, including at the critical early stages of young people’s careers. (Keystone Research Center and Children First called for this kind of investment in a white paper on career-related learning released just before Governor Shapiro’s budget address and circulated within the administration starting the end of last year.) Complementing the Schools-to-Work proposal, the Governor also proposed to invest $2 million to establish a state-level Industry in the Schools program that would pay for industry professionals to teach and build interest among students within the classroom.
We should acknowledge that the Governor’s budget does not include sufficient funds for the core career and technical education subsidy. It includes $3.3 million for CTE technology and equipment, $4 million to expand health care, STEM, energy, and infrastructure trade CTE, and $5 million for computer science and STEM CTE programs. Our white paper proposed $200 million for this subsidy, which could be phased in over four years. We encourage the legislature to get started by adding $50 million to the CTE subsidy in the final budget. As the Governor acknowledged, higher education is another area in which more funding than he proposed will be needed to achieve a robust learning and career infrastructure. Critically, our community colleges do not effectively serve a stunning 40% of the state’s population.
Despite the need for more funding, we think the transformative potential of Governor Shapiro’s workforce proposals should not be underestimated. As well as pointing out important limitations, it’s time for stakeholders and advocates to roll up their sleeves and work with the legislature and Governor to achieve some big bipartisan wins on workforce and career issues. In collaboration with the new “Pennsylvania Office of Transformation and Opportunity,” the Pennsylvania Workforce Development Board should help flesh out the Governor’s apprenticeship co-investment and Schools-To-Work partnership budget proposals with input from business, labor, and other workforce stakeholders. The long-term payoff of using these proposals as a launching pad for systematically building a model, 21st-century career and learning infrastructure from K-12 to adulthood would be huge.