Jason A. Tyszko Sr. Director, Policy - Education and Workforce Closing the Skills Gap: Systemic Change through Transformative Public-Private Partnerships

The Skills Gap Currently there exists a disconnect between what current and future employers need and what prospective employees are prepared to do. About 1.5 million, or 53.6 percent, of bachelor’s degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years. In manufacturing alone nearly 600,000 jobs remain unfilled today. Employers will have 47 million job openings between , 30 million of which will require some form of postsecondary education (14 million will be “middle skill”). The skills gap is most acutely felt in STEM areas, including occupations in manufacturing, healthcare, information technology, R&D, energy, etc... The ramifications for U.S. competitiveness loom large. Source: Georgetown University Center for Education and Workforce; “Beyond Home Ec: Vocational Programs are a Good Investment,” by Andrew P. Kelly (National Review)

Non-farm payroll employment has slowly picked up with positive gains since Oct State of the Economy - Economic Recovery Source: Georgetown University Center on Education and Workforce.

Employment growth has not kept up with GDP, but it is projected to catch up by State of the Economy – Employment Growth Source: Georgetown University Center on Education and Workforce.

7.3 million jobs were lost since the recession began in December '07. State of the Economy – The 2007 Recession Source: Georgetown University Center on Education and Workforce.

Even in declining industries there will be job openings. Job Losers State of the Economy – Projected Job Openings Source: Georgetown University Center on Education and Workforce.

Several key industries will lose most of their postsecondary-educated workers. State of the Economy – Impact of Retirements Source: Georgetown University Center on Education and Workforce.

In 1973, a high school diploma was the passport to the American Dream. 72% of the workforce of 91M had no more than a high school degree. Post-secondary education is necessary to compete in the global economy. Between 1973 and 2007, we added 63 million jobs. Jobs held by those with no more than a high school education fell by 2M. Economic forecasters widely agree that these trends will continue. The U.S. will need to produce 22M more postsecondary degrees by 2018, but we are likely to fall short. The Talent Pipeline – Demand Driven Economy Source: Georgetown University Center on Education and the Workforce; Harvard University Pathways to Prosperity Report.

The current U.S. reality: only 40% of 27-year olds have earned an A.A. degree or higher Note: Represents data collected in surveys between ; GED is approximation based on data from GED Testing Program. Source: Current Population Survey Annual Social and Economic Supplement; Harvard University Pathways to Prosperity Report. The Talent Pipeline – U.S. Degree Attainment

Demand for postsecondary education has increased, and will continue to increase during and after the recovery. Source: March CPS data, various years; Georgetown University Center on Education and the Workforce forecast of educational demand to 2018 The Talent Pipeline – U.S. Degree Attainment

Postsecondary-educated workers now earn almost 80% of the nation’s wages. The Talent Pipeline – Wage Earnings by Degree Source: Georgetown University Center on Education and the Workforce

Unemployment rates look very different based on postsecondary credentials. The Talent Pipeline – Unemployment by Credential Source: Georgetown University Center on Education and Workforce.

Despite two decades of reform, high school graduation rates have not changed much since the 1980s Note: Does not include GED recipients. Unless indicated, does not include recent immigrants. Rates are for age group of or dependant on their age at the time of census Source: Heckman and LaFountaine (2007), U.S. Census data, and other sources; Harvard University Pathways to Prosperity Report. The Talent Pipeline – High School Graduation Stagnation

The Talent Pipeline – Achievement Levels are Dramatically Uneven Source: The Huffington Post. National Assessment of Education Progress, Trends in International Math and Science Linking Study.

The threat to our competitiveness is more apparent when we analyze 12 th graders math proficiency and interest in STEM by race/ethnicity. 15 SOURCE: The Business-Higher Education Forum. (2011). The STEM interest and proficiency challenge: Creating the workforce of the future. The Talent Pipeline – U.S. High School STEM Interest by Race ©BHEF

Once those students enroll in college, undergraduate STEM attrition by major is also substantial. *includes Chemistry, Physics, Earth and Planetary Sciences SOURCE: Koff, R., Molter, L., & Renninger, K.A. (2009). Why Students Leave STEM Fields: Development of a Common Data Template and Survey Tool. A report to the Alfred P. Sloan Foundation. The Talent Pipeline – STEM Attrition in Postsecondary ©BHEF

17 Only about half of STEM college graduates choose to work in STEM careers. SOURCE: Carnevale, T. (2011). The STEM Workforce. Presentation to the PCAST Working Group on STEM Higher Education, April 15, ©BHEF The Talent Pipeline – STEM Transitions to Employment All student who enter college and obtain a Bachelor’s degree Students who graduate with a Bachelor’s degree in a STEM major. STEM Bachelor’s degree-holders working in STEM (immediately after college) STEM Bachelor’s degree-holders working in STEM (after 10 years)

Shrinking employment opportunities: Teens and Young Adults have been hit the hardest by the Great Recession Source: Center for Labor Market Studies, U.S. Bureau of Labor Statistics; Harvard University Pathways to Prosperity Report. The Talent Pipeline – Change in Employment by Age

Source: Andy Sum Key Findings on the Labor Market Experiences of Teens and Young Adults (16-24 Years Old) in the U.S. from 2000 – 2012: Implications for Pathways to Prosperity. The Talent Pipeline – Change in Employment by Age Percent Change in Employment-Population Ratio of 16-to-79 Years Old by Single Age, U.S., 1999/2000 and 2011/2012

The economy is both recovering and changing, which needs to feedback into how we understand our education and training programs. While we are in a recovery, the recovery is slow and we need to understand where the opportunities will become available. State of the Economy The majority of job opportunities will require some level of postsecondary education or training. However, our current talent pipeline is stagnating in terms of high school completion and is facing high attrition rates in postsecondary education. The talent pipeline is compromised further by lack of equity by age, race and region. Access to formative employment opportunities for youth are increasingly limited. Finally, the system is not only failing to produce enough credentials by level, both those credentials attained are not aligned with where economic growth is anticipated to occur. State of our Talent Pipeline

21 U.S. Chamber of Commerce — Supply-Side Approach The challenge… Unemployment remains stubbornly high even while many jobs go unfilled. Reform efforts to date have focused exclusively on how to develop a better “supply- side” with an emphasis on better schools, teachers, standards, assessments, etc… with limited results. However, there is equally a need to review the conditions, supports and capacity for businesses to be more effective partners on the demand-side. Currently each industry is left on its own to address human capital development. A systemic and scalable solution is needed where persistent skills gaps are near crisis levels, including manufacturing, information technology, energy, etc…

22 U.S. Chamber of Commerce — Demand-Side Approach A proposed path forward… The Chamber is exploring a “demand-side” approach that would help close the skills gap by better organizing and supporting industry to be a more effective partners. The result can be a paradigm shift in how industry frames questions and approaches solutions moving from supply-side strategies to talent supply-chain management. When compared to the status quo and fully integrated European dual systems, this is an opportunity to explore a uniquely American “third way.” The Chamber is uniquely qualified to be a convener on behalf of industry given the breadth and depth of its membership across regions and industry sectors.

23 U.S. Chamber of Commerce — Demand-Side Approach Five Core Strategies that frame a demand-side approach… 1.Identifying and communicating skills and credentials; 2.Establishing and sustaining state and regional public-private partnerships; 3.Increasing and improving employer engagement in work-based learning; 4.Improving return on investment through innovative financing methods; and 5.Improving partnership performance through leveraging technology and data.

U.S. Chamber of Commerce — Five Core Strategies Identifying and Communicating Skills and Credentials Question How can employers across all industry sectors identify and more effectively communicate the skills and credentials needed to remain globally competitive through using leading human resource practices in cooperation with their education and training partners to build a better workforce? Example 1 National Association of Manufacturers industry-wide stackable credentialing sequence. Example 2 ANSI Collaborative in partnership with George Washington University.

U.S. Chamber of Commerce — Five Core Strategies Establishing and Sustaining State and Regional Public-Private Partnerships Question How can employers establish and sustain state and regional public-private partnerships to improve performance in building a competitive workforce? Example 1 Illinois Pathways and the launch of eight sector-based STEM Learning Exchanges. Example 2 Collective impact strategies such as Strive in Ohio and Alignment Nashville.

U.S. Chamber of Commerce — Five Core Strategies Increasing and Improving Employer Engagement in Work-Based Learning Question How can employers increase and improve engagement in work-based learning that enhances return on investment while advancing skill development for all workers, including target populations such as youth, veterans, and others? Example 1 Boston Private Industry Council (PIC) implementing youth employment strategies. Example 2 Skills for Chicagoland’s Future, a partnership that provides recruitment, placement and job training services.

U.S. Chamber of Commerce — Five Core Strategies Improving Return on Investment using Innovative Financing Methods Question What innovative financing and investment methods can incent employers, governments and learners to get improved return on their education and workforce development investments? Example 1 Equity-based student financing models with wrap-around supports. Example 2 Innovative social impact bond strategies that target workforce objectives.

U.S. Chamber of Commerce — Five Core Strategies Improving Partnership Performance through Technology and Data Question How can employers better leverage technology and data, including statewide longitudinal data systems, to improve partnership performance? Example 1 CompTIA pilot data integration project linking certification data with state longitudinal data systems. Example 2 Boeing’s use of human resource talent supply chain tools and measures linked to higher education investments.

29 U.S. Chamber of Commerce — Supply-Side Approach Next steps… Solicit input and support of Chamber leadership, members and partners, including national employer organizations. Refine the core strategies and questions based on continued feedback and support. Pursue resources to formally research the issues and identify recommendations both in policy and practice for building and sustaining a demand-side system. Develop demonstration projects that link to systemic efforts.

Jason A. Tyszko Sr. Director, Policy - Education and Workforce Closing the Skills Gap: Systemic Change through Transformative Public-Private Partnerships