Strong Guardrails, Wide-Open Door: California’s Workforce Pell List

Workforce Pell programs must lead to high-skill, high-wage, or in-demand jobs, and it is up to states to define those terms and create a list of occupations that conform to them. The occupation lists states produce vary wildly. Some states have long lists of occupations, while others are very targeted. States like Minnesota and Texas include high-wage and in-demand requirements in their bar for these lists, while others like Tennessee took a thoughtful approach of including a high-wage bar in their in-demand criteria.  And now California has released one of the most permissive lists. California’s new list includes:

• Fast food and counter workers
• Waiters 
• Dishwashers
• Dining room and cafeteria attendants
• Housekeeping cleaners
• Locker room, coatroom, and dressing room attendants
• Cashiers
• Retail salespersons
• Telemarketers
• Door-to-door sales workers and street vendors
• Floral designers
• Merchandise displayers and window trimmers

(Also on the list: Legislators. Can’t wait for that 12-week certificate.)

California’s list has 571 occupations, the second-longest published list in the country. For comparison, Pennsylvania’s list has 19 and Texas’ list has 25.

Many of these jobs typically require no formal education credential according to the Bureau of Labor Statistics, and they pay accordingly. Per the state’s own WIOA plan fast-food workers earn a median wage of $18.30 an hour, waiters $17.45 an hour, and dining room attendants $17.70 an hour. (California’s state minimum wage is substantially higher than the federal minimum wage at $16.90 an hour.) MIT’s living wage for a single adult with no kids in California is $30.48 an hour. The in-demand criteria mostly rewards size. Fast food alone employs about 440,000 Californians, so normal churn produces more than enough openings to qualify.

So how did these occupations make the cut? One word: ‘or.’ State law directed the Employment Development Department’s Labor Market Information Division to produce a list of high-skill, high-wage, or in-demand occupations and explicitly authorized it to reuse its WIOA list. 

That said, other states are using the “or” configuration and still creating much shorter, more tailored lists. For instance, South Carolina used the same test, then narrowed the list to its existing workforce scholarship focus occupations, landing on 24 occupations, including EMTs, welders, lineworkers, CNC operators, and truck drivers. Maryland also uses the “or” test without an extra filter. They keep fast-food workers, waiters, cashiers, and retail salespeople off the list by defining “in-demand” more strictly as the top 30 percent of openings and above-average growth. 

California could’ve shortened and refined its list by simply filtering out occupations that required only a high school diploma or less. The state could’ve also set some floors for each definition, as other states have done.

This is especially frustrating because the legislature just set some of the highest consumer protection bars for Workforce Pell in the country in other areas. AB 1534 passed unanimously and was signed by the Governor last month. It caps student costs at the maximum Pell award, bans college-endorsed private loans, and reins in online program managers (OPMs) and other third-party contractors. But these guardrails protecting against some of the worst predatory behaviors won’t help much when the front door is this wide. Under this year’s budget, programs that qualify for Workforce Pell are now Cal Grant C-eligible too, even though Cal Grant C’s own priority list uses a living-wage screen. A weak program that clears this list will be able to draw both state and federal aid.

Simply put, California missed the forest for the trees. While instituting some strong consumer-protection guardrails, the legislature passed a bill that ignored key ways it could have ensured that Workforce Pell went only to targeted occupations that were truly high-wage and offered students a path to economic opportunity.

While many of these occupations would most likely miss the federal earnings floor, don’t count on the federal Workforce Pell backstops to help anytime soon: through 2028–29, the 70 percent job placement test counts any job a graduate gets, and the earnings test doesn’t go into effect until 2030–31. The California Student Aid Commission could strengthen consumer protection through its application process, but I don’t see much of that here. 

California should consider adopting a more rigorous methodology for its list of eligible occupations, one that excludes jobs that don’t even require a high school diploma and focuses on occupations that build the state economy and individuals’ economic prosperity.