March 16, 2017
President Trump pledged in his inaugural address to build an economy that would create an unprecedented 25 million new jobs over the next decade. Assuming online job postings aren’t what he had in mind, he will fall short unless Americans have the right skills to fill those jobs.
The White House budget blueprint released today offers a preview of the Administration’s job creation vision. They propose deep cuts to domestic spending to offset the impact of tax cuts designed to cut loose an American job creation engine.
However, employers already decry a lack of skilled workers to fill the millions of good-paying jobs they have open. Substantial cuts to the key programs at the Departments of Labor and Education - the same programs designed to equip Americans with in-demand skills - could compound that problem and sabotage new efforts to rev up job creation before they have a chance to take hold.
But politics are local, and so are our nation’s skills problems. Members of Congress can expect to hear from local manufacturers about their aging workforce, laid-off workers looking for hope, and mayors hoping to land that next big economic development deal.
Continued recognition of the value of apprenticeship
Among the bright spots in the Department of Labor’s budget outline is a clear statement of continued support for apprenticeship, pledging to help “states expand apprenticeship, an evidence-based approach to preparing workers for jobs.” Last year, apprenticeship received historic bipartisan support when Congress appropriated $90 million in new money to support apprenticeship expansion, particularly within high-demand sectors like advanced manufacturing, IT and healthcare. The lion’s share of that investment went to 47 states in the form of Accelerator and Expansion Grants, to help them design and strengthen their own strategies for expanding apprenticeship and mainstreaming it within state education and workforce systems. The budget blueprint offers little detail on what future support will look like, but standing up a long overdue modern apprenticeship system, on par with leading states like South Carolina and Wisconsin, is not a short-term project. Building off last year’s foundational investments is the right place to start.
Cuts to skills investments when industry (and the President) need them most
A White House looking for non-defense domestic spending cuts clearly found a sacrificial lamb in the Department of Labor. The blueprint calls for a stunning 21 percent cut in the Department’s $12 billion budget, the bulk of which will be absorbed by the Employment and Training Administration (ETA), home to the country’s public workforce development system and a wide variety of targeted job training programs. The proposal outlines unspecified “decreases in federal support for job training and employment services formula grants,” presumably a reference to the programs funded through the Workforce Innovation and Opportunity Act, or WIOA.
The focus on WIOA is surprising for a couple of reasons. First, major cuts to the nation’s premier system for supporting relevant job-training and employment services will be felt the most by the very groups the President vowed to support: employers and jobseekers in communities across the country. Coastal elites and beltway bureaucrats don’t depend much on these programs, but rural states and economically distressed regions do. Assuming that states and local areas will fill in the holes left by cuts to federal funding with their own dollars seems like wishful thinking at best. A more likely outcome is fewer services for the folks who need them most.
Second, workforce development is a rare space of bipartisan cooperation. In 2014, Congress reauthorized WIOA with overwhelming support from both sides of the aisle – less than 10 members total voted against the bipartisan bill. Congress broadly recognizes the importance of the workforce system to help millions of Americans each year get the skills they need to match to a good-paying career.
In addition to making cuts to WIOA formula funding, the budget blueprint proposes additional ETA cuts that seem to oddly strike at the heart of Trump’s constituency. For example, the blueprint calls for the elimination of the Senior Community Service Employment program, a $434 million initiative that helps low-income job seekers over the age of 55 find work. Cuts to the program will have the most adverse impact in rural communities.
If President Trump wants to shake up Congress and build new legislative coalitions, employment and skills training policies provide fertile ground. Cutting these already comparatively small programs, however, makes little sense for an Administration supposedly intent on helping companies compete and connecting Americans with good jobs.
Due but perplexing attention to the unemployed
The budget blueprint is a messaging document, which makes it all the more surprising that the Administration chose to list the Reemployment and Eligibility Assessment as its first priority at the Department of Labor. While no doubt this is an important and proven program for helping the unemployed get back to work, it seems odd to focus here first given overall labor market conditions. Maybe we can chalk this up to the Administration’s faith that unemployment remains at historic highs (BLS data not withstanding). A more likely explanation is that this is yet another effort to address “fraud and abuse,” this time within the unemployment insurance (UI) system, which is historically quite low. Not unlike claims of voter fraud, the conviction among some conservatives that there is widespread gaming in our UI system is both deeply rooted and largely false. An irony here is that the “evidence based” services that this program relies upon to serve unemployed Americans – like job counseling and skills training – are delivered through the very American Job Centers that will be hard hit by the WIOA cuts described above.
Strange silence on foreign worker programs
While candidate Trump spared no opportunity to rail against the use of foreign workers (despite a willingness to use those programs in his own enterprises), this budget makes no reference to the programs that allow U.S. employers to bring in those workers. Those programs – most prominent of which is the H-1B visa program – are a source of both talent and resources. On the talent front, they can help ease skills gaps facing US employers, and on the resource front, the fees that employers are required to pay to secure the visas have supported an array of innovative skills investments like the American Apprenticeship Initiative, Tech Hire, and America’s Promise grants in regions across the U.S.
Employers across industries value and rely on these programs, but it’s critical that American workers not be left behind and that foreign worker programs are designed to help employers import workers only for those jobs where there are critical shortages. Concern for employer abuse of these programs was something candidate Trump embraced, but has the White House had a change of heart? That would be notable especially when there is growing bipartisan interest in Congress to do more to ensure employers’ are giving Americans a fair shot at these jobs first.
The Administration has hinted that the best way to ensure the programs are working well is through executive action focused on enforcement and ending abuse by employers. But to realize the intended benefits, here again the Administration will also need to confront the skills side of the equation and ensure American workers have access to high-quality and accelerated education and training programs that equip them with the skills to land these jobs.
More missed opportunities: Education and Commerce budgets
The budget blueprint fails to strengthen education and workforce development programs at other federal departments. As our colleagues at New America have pointed out, the proposal for Education threatens to shrink programs aimed at helping low-income students access higher education. Perhaps most confounding, it proposes cuts to the Federal Work Study, a program that has been part of the Higher Education Act going back to 1965 and has helped millions of students pay for college. While the program is certainly in need of reform, it’s also an excellent candidate for increased, not decreased, funding.
The blueprint also calls for reductions to popular programs at the Department of Commerce, including eliminating and Economic Development Administration and cutting off federal funding for the Manufacturing Extension Program. These are small programs dollar wise, but they have provided a foundation for bipartisan cooperation and industry engagement for decades to help regions across the country hardest hit by globalization and technological change. Why put them on the chopping block?
Ultimately Congress will have the last word, but coming from a President claiming to be laser-focused on jobs this budget is perplexing. The proposed cuts are aimed squarely at our skills development system, with steep reductions in programs that are helping Americans acquire in-demand skills and find the new jobs President Trump is intent on creating. It’s hard to see the strategy here, but a pattern is become increasingly clear: supports for low-skilled, poor, and rural Americans are on the losing end of this budget. In other words, the very folks who the economy already left behind, and who the candidate Trump promised to help. It’s hard to see how this budget is going to Make America Great Again if it makes it harder for Americans to find good jobs and employers to find skilled workers. Now it’s time for Congress to connect those dots.