Report: Funding workforce development critical for the middle class

Investing in job training creates pathways to the middle class, says an analysis by the Budget & Tax Center

RALEIGH (July 17, 2014) – To create a strong middle class in North Carolina, lawmakers must invest in workforce development, says a new analysis out today from the Budget & Tax Center.

North Carolina’s investment in job training and other workforce development efforts has dwindled since the end of the Great Recession, despite the huge economic challenges facing the state’s workers. The latest Budget & Tax Center report highlights the problems with this foregone investment and offers specific recommendations for fixing the problem.

By 2020, 61 percent of jobs in North Carolina will require some kind of postsecondary training or education. Unless the state puts more resources into creating a skilled, well-educated workforce, it will continue to fall behind the rest of the nation in career opportunities and family income, said Allan Freyer, one of the report’s authors.

The report identifies several specific problems with current funding levels for workforce development, including:

  • Overall state funding for North Carolina’s workforce development programs has declined by 10 percent in the five years since the end of the recent recession.
  • Federal funding has declined by 6 percent over the same period.
  • State funding for community colleges—the primary provider of job training services in the state—remains one percent below pre-recession levels.
  • In terms of targeting problems, federal Workforce Investment Act dollars reach fewer than one percent of adults without a high school diploma, leaving those most in need of training without the resources needed for building job skills.
  • The state of North Carolina spends less than 1 percent of its Temporary Assistance for Needy Families (TANF) on workforce education and training. A highly-skilled workforce is a critical building block for improving North Carolina’s competitiveness in the global economy and ensuring robust economic growth over the long-term.

“A strong workforce development system is essential to unlock opportunities for increased earnings and providing pathways to greater economic security,” said Freyer.  “It does so both by providing skill-oriented pathways to higher earnings within otherwise low-wage industries, and perhaps more importantly, opportunities for climbing out of low-wage work and into higher-skills, higher-wage industries.”

To meet this challenge in the midst of a changing economy, the state must adequately fund its workforce development system. Specific recommendations from the report include:

  • Focusing state investments towards improving the skills of low-income workers and targeting resources at industries that can deliver the greatest return to the state.
  • Maximizing federal dollars, including utilizing employment and training funds for the lowest income workers through the Supplemental Nutrition Assistance Program.
  • Targeting state funding and service delivery to high-need communities and populations, including rural areas and communities of color.
  • Prioritizing investment in industry-recognized credentials to train the workforce of the future.
  • Monitoring return on investment using the new performance measures developed by the Division of Workforce Development.

FOR MORE INFORMATION, CONTACT: Allan Freyer, policy analyst, 919.856.2151, allan@ncjustice.org; Alexandra Forter Sirota, BTC director, 919.861.1468; Jeff Shaw, director of communications, 503.551.3615, jeff@ncjustice.org.
 
FOLLOW US ON FACEBOOK AND TWITTER : To get real-time regular updates from Justice Center staff, you can follow us on Facebook and Twitter. Get news releases, quick observations and be the first to know when a new report is out. Also see the Twitter list of Justice Center and NC Policy Watch staff.
 

Projects: