WASHINGTON, DC – Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in September.
Summary: The economy added 156,000 jobs in September, as labor force participation rose and wages continued to grow.
The economy added 156,000 jobs in September, as the unemployment rate ticked up amid rising labor force participation. U.S. businesses have now added 15.3 million jobs since early 2010, and the longest streak of total job growth on record continued in September. So far in 2016, hourly earnings for private-sector workers have increased at an annual rate of 2.8 percent, much faster than the pace of inflation. In fact, real wages have grown faster over the current business cycle than in any since the early 1970s. Sustained real wage growth in recent years, combined with continued strength in job creation, has led to increased incomes for middle-class families: last month, the Census Bureau reported that real median household income increased 5.2 percent from 2014 to 2015, the fastest annual growth on record. Still, more work remains to sustain faster wage growth and to ensure that the benefits of the recovery are broadly shared, including increasing investment in infrastructure and implementing the high-standards Trans-Pacific Partnership. Additionally, as discussed in a new White House report, Congress should follow the lead of 18 States and the District of Columbia to give millions of American workers a raise by increasing the Federal minimum wage.
FIVE KEY POINTS ON THE LABOR MARKET IN SEPTEMBER 2016
1. U.S. businesses have now added 15.3 million jobs since private-sector job growth turned positive in early 2010. Today, we learned that private employment rose by 167,000 jobs in September. Total nonfarm employment rose by 156,000 jobs, slightly below the monthly average for 2016 so far but substantially higher than the pace of about 80,000 jobs per month that CEA estimates is necessary to maintain a low and stable unemployment rate given the impact of demographic trends on labor force participation. The unemployment rate ticked up to 5.0 percent in September, while the labor force participation rate rose to 62.9 percent, the same rate as in the fourth quarter of 2013 despite downward pressure on participation from demographic trends. The share of the labor force working part-time for economic reasons (those working part-time but who would prefer full-time employment) ticked down in September to 3.7 percent, though it remains above its pre-recession average (3.0 percent).
2. For more than three and a half years, American workers have seen sustained real wage gains, as hourly earnings have grown faster than inflation. So far in 2016, nominal earnings for private-sector workers have increased at an annual rate of 2.8 percent, well above the pace of inflation (1.4 percent as of August, the latest data available). As the chart below shows, nominal wage growth has trended up over the course of the recovery as the labor market continues to strengthen amid robust job growth. At the same time, consumer price inflation fell sharply in 2014 and 2015 due to steep declines in energy prices. While inflation has picked up slightly in recent months as energy price declines have moderated, nominal earnings growth has continued its pickup, translating into continued real wage gains for American workers—a key component of rising standards of living.
3. Real hourly wages have grown faster over the current business cycle than in any cycle since the early 1970s. The chart below plots the average annual growth of real hourly earnings for private production and nonsupervisory workers over each business cycle, including both recessions and recoveries. (Economists prefer comparing across entire business cycles, as they generally represent economically comparable periods.) Since the beginning of the current business cycle in December 2007, real wages have grown at a rate of 0.9 percent a year, faster than in any other cycle since 1973. In fact, since the end of 2012, real wages for non-managerial workers have grown 5.7 percent in total, exceeding the 2.1-percent total real wage growth from the business cycle peak in 1980 to the business cycle peak in 2007—a sign of the remarkable progress made by American families in the current recovery.
4. Rising real wages, combined with continued strong employment growth, have translated into increased incomes for American families, and data from 2016 so far point to continued gains. In September, the Census Bureau reported that real median household income increased by $2,800, or 5.2 percent, the largest annual increase on record. As shown in the chart below, median household income growth tends to track growth in aggregate weekly earnings, the total amount earned by private-sector workers. (Since both income and aggregate earnings reflect the influence of rising employment as well as rising wages, aggregate earnings are conceptually linked more closely to household income than to wages.) The historically large increase in median household income from 2014 to 2015 was far above what would have been predicted based on its historical relationship with aggregate earnings growth, but even aggregate earnings would have predicted strong gains in median income. In 2014 the situation was reversed, with the Census Bureau reporting income gains that fell short of what would have been predicted based on wage data from the Bureau of Labor Statistics. Growth in both real wages and employment so far in 2016 point to continued gains in real income for the typical American household when the data become available from the Census Bureau next year.
5. The distribution of job growth across industries in September diverged somewhat from the pattern over the past year. Above-average gains relative to the past year were seen in wholesale trade (+10,000) and other services (+15,000), while mining and logging (which includes oil extraction) showed no change in September after a number of months of job losses. On the other hand, several industries, including financial activities (+6,000), health care and social assistance (+22,000), State and local government (-15,000), and transportation and warehousing (-9,000) saw weaker-than-average growth. Slow global growth has continued to weigh on the manufacturing sector, which is more export-oriented than other industries and which posted a loss of 13,000 jobs in September.Across the 17 industries shown below, the correlation between the most recent one-month percent change and the average percent change over the last twelve months was 0.28, well below the average correlation over the last three years.
As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.
WASHINGTON, DC – Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in August. You can view the statement HERE.
The economy added 151,000 jobs in August following robust job growth in both June and July as the unemployment rate held steady at 4.9 percent. U.S. businesses have now added 15.1 million jobs since early 2010, and the longest streak of total job growth on record continued in August. So far in 2016, job growth has averaged a solid 182,000 jobs a month, well above the pace of about 80,000 jobs a month needed to maintain a low and stable unemployment rate, and hourly earnings for private-sector workers have increased at an annual rate of 2.8 percent, much faster than the pace of inflation. Nevertheless, more work remains to sustain faster wage growth and to ensure that the benefits of the recovery are broadly shared, including investing in infrastructure, implementing the high-standards Trans-Pacific Partnership, and raising the minimum wage.
FIVE KEY POINTS ON THE LABOR MARKET IN AUGUST 2016
U.S. businesses have now added 15.1 million jobs since private-sector job growth turned positive in early 2010.Today, we learned that private employment rose by 126,000 jobs in August, following a robust average gain of 232,000 jobs in June and July. Total nonfarm employment rose by 151,000 jobs in August, below the monthly average for 2016 so far but substantially higher than the pace of about 80,000 jobs per month that CEA estimates is necessary to maintain a low and stable unemployment rate given the impact of demographic trends on labor force participation.The unemployment rate held steady at 4.9 percent in August. The labor force participation rate remained at 62.8 percent, the same rate as in October 2013 despite downward pressure from demographic trends. So far in 2016, nominal earnings for private-sector workers have increased at an annual rate of 2.8 percent, well above the pace of inflation (1.3 percent as of July, the latest data available).
As the labor market has strengthened, the share of employees quitting their jobs has recovered to roughly its pre-recession average.The quits rate tends to fall in recessions and rise in recoveries, since workers are generally more likely to choose to leave a job if there are job opportunities available elsewhere. As such, a higher quits rate is a sign of a stronger labor market. The chart below plots data from the Job Openings and Labor Turnover Survey (JOLTS) on both quits (voluntary separations) and layoffs and discharges (involuntary separations). The quits rate plummeted in the Great Recession as the layoffs and discharges rate rose sharply. Since then, as the labor market has recovered, the layoffs and discharges rate has fallen well below its pre-recession average, and the quits rate was near its pre-recession average as of June 2016 (the most recent data available). Nevertheless, the quits rate is still below its level in the early 2000s, part of a broader, decades-long trend ofdeclining labor market fluiditywhose causes and consequences continue to be debated by economists.
Workers in nearly all private industries have seen their unemployment rates recover and fall below their pre-recession averages.The headline unemployment rate recovered to its pre-recession average of 5.3 percent in June 2015 and has since fallen even further, holding steady at 4.9 percent in August 2016. As shown in the chart below, the impact of the Great Recession varied across industries, with mining, quarrying, and oil and gas extraction workers, manufacturing workers, and construction workers in particular seeing large increases in their unemployment rates. As of August, however, unemployment rates for workers in 9 of the 11 major private industries have fallen below their respective pre-recession averages. The two exceptions are education and health services workers, whose unemployment rate has essentially recovered to its pre-recession average of 3.3 percent, and mining, quarrying, and oil and gas extraction workers, whose unemployment rate nearly recovered before increasing since mid-2014 amid falling oil prices and production (see point 4 below).
Employment in the mining and logging industry, which includes oil and gas extraction, has fallen sharply in recent months amid low oil prices.While the decline in oil priceshas benefitted consumers and the economy overall, it has weighed heavily on mining and logging employment, which has fallen by 25 percent since September 2014. Oil and gas workers make up more than half of the mining and logging industry; however, this sector represents just 0.5 percent of total U.S. nonfarm employment. The level of mining and logging employment is closely correlated with the price of oil, with shifts in employment usually following price changes, as the chart below shows. Since 2000, mining and logging employment has been most closely correlated with the price of oil eight months before, suggesting that the recent slight moderation in oil prices since the beginning of 2016 may translate into a slowdown in the pace of employment losses in the months ahead.
The distribution of job growth across industries in August was broadly consistent with the pattern over the past year, though some industries saw below-trend growth.Above-average gains relative to the past year were seen in transportation and warehousing (+15,000) and State and local government (+24,000), while mining and logging (which includes oil extraction) posted a smaller loss (-4,000) than in recent months. On the other hand, several industries, including professional and business services (+25,000, excluding temporary help services), health care and social assistance (+36,000), private educational services (+2,000), and utilities (-1,000) saw weaker-than-average growth. Slow global growth has weighed on the manufacturing sector, which is more export-oriented than other industries and which posted a loss of 14,000 jobs in August.Across the 17 industries shown below, the correlation between the most recent one-month percent change and the average percent change over the last twelve months was 0.82, in line with the average correlation over the last year.
As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.
The Obama Administration has jsut announced winners of $150 million in TechHire Partnership grants, including $126 million for at-risk and disadvantaged young Americans
Vice President Biden and Department of Labor Secretary Perez announced the release of $150 million in Department of Labor grants for 39 partnerships across the country. With these funds, awardees will launch innovative training and placement models to develop tech talent, as a way to keep and create jobs in local economies. In addition to federal funding, grantees are leveraging nearly $50 million in philanthropic, private and other funding to contribute to their own local partnerships.
A Large and Growing Opportunity for Local Economies
Having a pipeline of tech talent can be an important factor in bringing new jobs to local economies, facilitating business growth, and lifting more local residents into the middle class. These grants will enable more communities to expand their own local tech sectors.
Tech jobs are a pathway to the middle class. Tech jobs pay one and a half times the average wage of a private-sector job. Studies have shown that these opportunities are also accessible to those without college degrees– men and women with non-degree certificates in computer or information services earned more than 65 percent of men and women, respectively, with more traditional Associate degrees.
There is a large and growing unmet demand for tech workers.Today, there are over 600,000 open IT jobs across all sectors—more than two-thirds in fields outside the tech sector, such as manufacturing, financial services and healthcare. Across the country, employers are struggling to find skilled talent for these positions. A study from CEB found that in 10 major metropolitan areas (including New York, Atlanta, Seattle, and Houston), there are only five skilled job seekers available for every eight open IT jobs. Compared to 2010, it now takes employers five additional weeks to fill the average vacancy—at a cost to employers of $8.6 million per 1,000 vacancies.
New innovations in training and hiring can help meet the tech job demand. Nearly 40 percent of tech jobs do not require a four-year degree. In recent years, there has been a proliferation of fast-track tech training programs like “coding bootcamps” that prepare people with little technical know-how for tech jobs, often in just a few months. A recent survey from Course Report found that bootcamp graduates saw salary gains of 38 percent (or about $18,000) after completing their programs. At the same time, employers in cities like Albuquerque have been adopting new “skills-based” hiring approaches that enable job seekers to demonstrate their skills to get hired even if they lack traditional qualifications like computer science degrees.
Tech talent can be an important driver of local economic development.Companies report that one of the main factors in deciding where to locate is the availability of skilled talent. Moreover, research from economist Enrico Moretti shows that for each job in the average high-tech firm, five new jobs are indirectly created in local economies.
In response to this opportunity, in March 2015, President Obama launched TechHire, a bold multi-sector effort and call to action for cities, states, and rural areas to work with employers to design and implement new approaches like coding bootcamps to train workers for well-paying tech jobs often in just a few months.
Since then, 50 communities with nearly 1,000 employer partners have begun working together to find new ways to recruit and place applicants based on their skills and to create more fast-track tech training opportunities. These range from programs in New York City that connect low-income young people to tech training and internships to a program in rural Eastern Kentucky that teaches former coalminers to code.
The federal government is doing its part to support communities in this work with a specific focus on making sure that access to these innovations is widely shared, supporting best practice sharing amongst communities, and encouraging engagement of the key stakeholders that fuel a TechHire community — including employers, innovative training providers and local workforce development leadership. As stakeholders help engage more employers and connect more local communities to these opportunities, the TechHire network will continue to grow.
More details on today’s announcements
Today, the Department of Labor is awarding 39 grants—totaling $150 million—for programs in 25 states and Washington, DC to support innovative ways to get workers on the fastest paths to well-paying information technology and high-growth jobs in in-demand sectors like healthcare, advanced manufacturing, and financial services. Of these grants, $126 million will specifically target strategies designed to best support young Americans, ages 17 to 29.
All of the partnerships funded today engage in the following practices:
1) Expand access to accelerated learning options that provide a quick path to good jobs, such as “bootcamp”-style programs, online options, and competency-based programs.
2) Use data and innovative hiring practices to expand openness to non-traditional hiring by working with employers to build robust data on where they have the greatest needs, identify what skills they are looking for, and build willingness to hire from both nontraditional and traditional training programs.
3) Offer specialized training strategies, supportive services, and other participant-focused services that assist targeted populations to overcome barriers, including networking and job search, active job development, transportation, mentoring, and financial counseling.
4) Emphasize inclusion by leveraging the high demand for tech jobs and new training and hiring approaches to improve access to tech jobs for all citizens, including out-of-school and out-of-work young Americans, people with disabilities, people learning English as a second language, and people with criminal records.
$126 Million in Grants to Create Pathways to Careers for At-Risk and Out-of-School, Out-of-Work Young Americans
Examples of selected communities and programs include:
Atlanta, GA. ATL TechHire: Fostering an IT Workforce Ecosystem to Inspire Atlanta’s Under-Represented IT Workforce to Pursue IT Careers ($4 million)
ATL TechHire will train the City of Atlanta’s youth and young adults with barriers to employment and other unemployed and underemployed for open jobs in tech. Led by the Atlanta Workforce Development Agency, in partnership with Iron Yard and TechSquare Labs, ATL TechHire has developed customizable training tracks to serve differing needs. Participants will be enrolled in TechSquare Labs’ innovative Culture Fit and Career Readiness programs, as well as fast-track training with one of the Iron Yard’s coding bootcamps, to train participants for jobs in front- and back-end engineering, mobile engineering, data science, and design; or with the Atlanta Technical College for degrees that lead to in-demand IT jobs.
Albuquerque, NM. New Mexico Tech Connections (NMTC): Expanding Career Pipeline to IT for Youth and Disadvantaged Workers($4 million)
Workforce Connection of Central New Mexico (WCCNM) will use grant funds to expand its NMTC consortium in order to build a career pipeline into IT for around 338 young adults and other workers with barriers to training and employment. Serving the city of Albuquerque, as well as Bernalillo, Sandoval, Torrance and Valencia counties, NMTC consists of training and education partner, College of New Mexico, along with six area employers and promises to address gaps in conventional training for H-1B jobs.
Miami, FL. ACCEL in Tech: Bringing Customized Training in IT, Healthcare and Financial Services to Those with Barriers to Employment ($3.5 million)
Acquiring Credential and Creating Experiential Learning (ACCEL) in Technology will leverage the size and resources of Miami Dade College, along with the expertise of partners including CareerSource South Florida Mount Sinai Medical Center, AHIMA Foundation, and the McKinsey Social Initiative, who will provide guidance on advisory boards, curriculum development, employee mentors, opportunities for paid work experiences, and commitments to hire participants. This program will develop customizable training for the individual. Through this initiative, over 400 young adults with barriers to employment will gain access to training in IT, healthcare, and financial services.
New York, NY. TechIMPACT Program: Training and Placing Youth at Large Tech Companies and Startups ($3.9 million)
LaGuardia Community College will partner with General Assembly, Udacity, Software Guild and others to offer accelerated tech training to young adults in web development, java, and computer network support. Given that young people often struggle to connect to their first job, TechIMPACT is teaming up with partners to make sure that graduates have connections to internships and job placements when they graduate. IBM, Walmart, and other employer partners are committing to interview and hire qualified candidates, and Uncubed will place graduates with a network of high-growth startup companies.
New York; Washington, DC; and Maryland. Pathways to Tech Careers: Providing Multi-Tiered Training Model to Improve Skills of Young, Low-Wage, and Veteran Workers ($5 million)
Jobs for the Future, Inc.’s program will establish and expand accelerated training programs that prepare youth and young adults with barriers to employment for high-wage, high-demand careers in IT in New York City Washington, D.C., Prince George’s County, Anne Arundel County and Howard County, MD. PTC will have three tracks including a bootcamp-style, immersive web development training, a data analytics training for incumbent workers to upskill to better jobs, and a short-term IT security program for veterans. PTC will build on the national presence of JFF, General Assembly, and Per Scholas to demonstrate multiple strategies to move individuals from entry-level jobs into the middle-class with tech training.
Seattle Central College will work with the LaunchCode Foundation, EnergySavvy, Unloop, Floodgate, Ada Developer Academy and other partners to connect young Americans to jobs in database administration and development, mobile product development, network design and administration, programming, web design, and web development training. To increase opportunities for employers to find high-quality, diverse, entry-level talent, and for students to learn on the job, LaunchCode will connect students at no cost to the student with companies that will offer mentorship and training through a paid apprenticeship program, with the option for employers to hire the student at the end of the 3-6 month apprenticeship. Launchcode has successfully launched and grown this model in 4 U.S. cities, achieving 90 percent placement rates and more than doubling salaries of participants. Seattle is leveraging $4.4 million in philanthropic and private contributions to support this initiative.
$24 Million in Grants to Connect People with Criminal Records, People with Limited English Proficiency and People with Disabilities to In-Demand Jobs
Examples of selected communities and programs include:
Indianapolis, IN. GOAL! Program: Expanding Language and Technical Skills for LEP Individuals ($3.2 million)
Led by the Labor Institute for Training (LIFT), in partnership with Jobs for the Future and Indiana Adult Education, Growing Opportunities in America for Latinos! (GOAL!) will enhance and expand services throughout the state of Indiana. The program will enhance and expand English language and advanced manufacturing technical skills for 400 residents with limited English proficiency. Incumbent workers will also have access to upskill opportunities through the Industrial Manufacturing Technician (IMT) registered apprenticeship, leveraging the American Apprenticeship Initiative grant awarded by the Department of Labor to Jobs for the Future.
Kern, Inyo, and Mono Counties, CA. Next Step Program: Offering Skills Training to Individuals with High-Function Autism Spectrum Disorders ($4 million)
The Exceptional Family Center, the Kern County Hispanic Chamber of Commerce and Bakersfield Adult School will collaborate with local employers and partners to train local individuals with high-functioning Autism Spectrum Disorders for open jobs. Geared towards those with documented barriers to training and employment, the Next Step Job Training and Employment Partnership (Next Step) will offer courses at UCLA Extension and Bakersfield Adult School in computer skills, vocational education, and medical coding. The partnership will also offer a bootcamp training on soft skills to improve employability and job performance—including effective communication, workplace behavior, and independent living.
$36 Million of Total Grants will Support Workers in Rural Communities in Retooling and Retraining for New Jobs
Of the $150 million in grants, $36 million have been awarded to programs that will specifically target rural communities that are serving young people and other disadvantaged populations described in the sections above.
Examples of selected communities and programs include:
Midlands Region of SC. Midlands TechHire: Offering Numerous Boot Camps, Scholarships and Internships in Networking and Programming ($4 million)
Midlands Technical College will offer scholarships to 400 individuals for five accelerated learning boot camps that will train students for networking and programming occupations, such as computer technicians and web development, in six to eight weeks. Along with the wide range of technical training programs offered, Midlands TechHire will provide exam preparation for certifications, as well as classes and workshops in soft skills and job readiness. Graduates of these accelerated training programs will qualify for sponsorship of exam fees and paid three-month internships in IT occupations. With assistance from 24 grant partners, Midlands TechHire will be able to provide a comprehensive assessment of barriers and customized support services for each student.
West Virginia. WVTTI: Transforming Local Economy by Training and Upgrading Young Adults for New Tech jobs in Software and Engineering ($4 million)
With its West Virginia Technology Transformation Initiative (WVTTI), Bridge Valley Community and Technical College is helping transform this once coal-dependent regional economy into a technology-based one. WVTTI is specifically focused on helping the young adult population find jobs as software developers, mechanical engineers, and machinists, among other opportunities. By leveraging this grant and facilitating relationships among local training providers, workforce organizations, and employers such as the Appalachian Power Company, the WVTTI will expand efforts to help young West Virginians upgrade their skills and gain the credentials needed to obtain middle- and high-skill jobs.
Building on Progress: President Obama’s Job-Driven Training Agenda
The TechHire Partnership grants build on progress already underway. Since the President and Vice President released their Job-Driven Training review in July 2014, Federal agencies have taken actions to make programs serving approximately 20 million Americans every year more employer-driven. And over the past 7 years, we have taken a number of steps to support the American workforce and prepare it for the 21st century, including:
Training Americans for jobs of the future. Through TechHire and Computer Science for All, the Administration is connecting Americans with the tech skills that employers are increasingly seeking, across many industries and roles.
Launching Computer Science for All. This year, the President unveiled his plan to give all K-12 students across the country the chance to learn computer science (CS) in school. This initiative builds on a growing movement led by parents, teachers, districts, states, and the private sector to expand CS education. To jumpstart this effort, the National Science Foundation (NSF) and the Corporation for National and Community Service (CNCS) have pledged to invest more than $135 million to support and train CS teachers across the country over the next five years. In addition, in his budget, the President has called for $4 billion in funding for states, and $100 million directly for districts, to train teachers, expand access to high-quality instructional materials, and build effective regional partnerships. Since its launch, nine states have taken action to expand access to CS education, the private sector has made more $250 million in philanthropic commitments, and more than 25 Governors have called on Congress to increase K-12 CS funding.
Making sure all Americans have a fair shot. The President has taken steps to expand and improve efforts to connect workers who have been displaced by economic change to the workforce system and into good jobs. Building on models of what works, these efforts have helped not only those affected by trade and globalization, but also by the aftermath of the Great Recession, by long-term changes in the energy industry, by the rapid rate of technological change and the adoption of new methods, and in communities that suffer from economic isolation and decline.
Securing a six-year extension and expansion of Trade Adjustment Assistance (TAA) in June 2015, which provides vital job training, income support and other benefits to American workers displaced by the forces of globalization. The number of estimated workers currently eligible for benefits and services is over 100,000, which is almost double the number of workers eligible for TAA benefits and services in all of fiscal year 2015 under the older program.
Helping the long-term unemployed get back to work and stay in the labor force, including through a $170M Ready to Work grant that supports partnerships with businesses to create a best practices for hiring the long-term unemployed. In addition, DOL is providing robust reemployment services and eligibility assessments through $200 million in grants to all 50 states and territories to help prevent long-term unemployment and connect jobseekers to the labor market. Through FY 2016, an estimated 1.3 million unemployed workers will be served.
Launching the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative, a Department of Commerce led effort bringing together 10 federal agencies to assist communities negatively impacted by changes in the coal industry and power sector with coordinated federal economic and workforce development resources that help communities diversify their economies and provide reemployment services and job training.
Strengthening relationships with businesses to recruit and hire veterans.The Veterans’ Employment and Training Service (VETS) within DOL established an employer outreach team that encourages employment commitments from national and regional employers seeking to hire veterans. VETS expanded the outreach team to connect with over 600 employers ranging from small businesses to Fortune 500 companies.
Scaling Up What Works. The Administration has implemented a job-driven checklist that reorients job training grants to align with the elements that matter most to getting Americans into better jobs.
Implementing the job-driven training checklist that reorients competitive job training grants to align with best practices based on elements that matter most to getting Americans into better jobs. To date, agencies have awarded over 15 competitive job-training grant programs that total more than $1.5 billion.
Signing the bipartisan Workforce Innovation and Opportunity Act (WIOA), the first reform of federal job training programs in nearly 20 years that reaches approximately 20 million Americans annually. WIOA improves business engagement, accountability, access, and alignment across training programs.
Doubling Down on Proven Strategies. The Administration is using evidence-based practices to direct limited Federal resources into results-driven models. For example, a recent study found participants in Registered Apprenticeship programs earned $300,000 more over their lifetimes than a comparison group.
Expanding Registered Apprenticeship programsthrough $265 million in targeted investments. Since the President’s 2014 State of the Union call to action, the United States has added more than 81,000 new Registered Apprenticeship opportunities, the nation’s largest increase in nearly a decade.
Investing in training for dislocated workers that follows employer needs in key sectors. DOL has awarded nearly $300 million in Sector Partnerships and Job-Driven Training grants focusing on training dislocated workers. Sector partnerships are consistently cited as one of the most effective strategies to better align education with employer needs and have been shown through randomized evaluations to lead to higher rates of employment and earnings.
Investing $2 billion in the Trade Adjustment Assistance Community College and Career Training grant program that has created 2,300 in-demand education and training programs at community colleges in all 50 states. To date, nearly 300,000 participants have enrolled in these programs, earning 160,000 credentials.
With the media obsessively focused on the presidential contest, Republicans with a stake in convincing Americans how bad off they are and promising to “bring back jobs”, and the Republican-controlled Congress determined to block any positive initiative President Obama might offer – including blocking the creation of an Infrastructure Bank and the American Jobs Act, and increasing the federal minimum wage, though the President did act to raise the wage to $10.10 for federal jobs and contractors, and passing comprehensive Immigration Reform – most Americans are unaware of what the President has done using his executive powers to create job opportunities. For the past few years, he has worked to ease the pathway between schools and employers, ease access and affordability to college, relieve student debt, and expand job training and apprenticeships.
When President Obama came into office in January, 2009, the United States had plunged into the deepest recession since the Great Recession, shedding over 800,000 jobs a month.
Since the beginning of his Administration, President Obama has focused on creating an economy that works for every American. Under President Obama, our economy has added 14.4 million jobs over 73 straight months, the longest streak of job creation on record.
“That’s more new jobs than all the other industrial nations combined,” Labor Secretary Thomas E. Perez said. Unemployment, which went as high as 10%, is down to 5%, “but the President is not satisfied. Our primary function to restore and maintain the middle class, and the way do that is access to good paying jobs, where can benefit from productivity.”
But the jobs available today, and the jobs of the future, are higher-skill jobs that require more education and advanced skills.
“An apprenticeship has to be one of the most sturdy, fortified on-ramps to the middle class,” Labor Secretary Perez said in a press call announcing $90 million in new funding for ApprenticeshipUSA. “Apprenticeship is the ‘other’ college, but without the debt.”
Job-driven apprenticeships are among the surest pathways to provide American workers from all backgrounds with the skills and knowledge they need to acquire good-paying jobs and grow the economy. In fact, 87 percent of apprentices are employed after completing their programs, with an average starting wage above $50,000. The return on investment for employers is also impressive — international studies suggest that for every dollar spent on apprenticeship, employers may get an average of $1.47 back in increased productivity, reduced waste and greater front-line innovation. As a result, the President has made expanding apprenticeship a priority for his Administration.
Since the President’s 2014 State of the Union call to action, the U.S. has added more than 75,000 new apprenticeships, the largest increase in nearly a decade. And last year, the President signed into law the first-ever annual funding for apprenticeship in the Fiscal Year 2016 spending bill, following a bipartisan agreement based on the President’s budget request.
The Department of Labor just announced the Administration’s latest step to increase access to apprenticeship – using the $90 million provided in that spending bill for new investments through ApprenticeshipUSA to expand apprenticeship in the United States, including:
$60 million to support state strategies to expand apprenticeship, including funding for regional industry partnerships and innovative strategies that diversify apprenticeship locally;
$30 million to catalyze industry partnerships in fast-growing and high-tech industries, to support organizations focused on increasing diversity, and to launch national efforts to make it easier for employers to start and for workers to find apprenticeship opportunities.
Building on the bipartisan support for apprenticeship, the Department of Labor intends to make multi-year grants and contract awards to winning states, non-profits, workforce intermediaries, and industry associations subject to the availability of funding through the appropriations process using the $90 million provided through bipartisan support in the FY2016 spending bill for the first year of the awards.
Investing $60 Million to Support Smart State Strategies to Expand Apprenticeship
Today, the Department of Labor is announcing a first step in investing in state apprenticeship strategies. Recognizing Governors’ unique ability to create smart statewide strategies to expand apprenticeship, the Department is making up to $9.5 million available for ApprenticeshipUSA State Accelerator Grants, for states to develop strategic plans and build partnerships for apprenticeship expansion and diversification. States will also receive support to develop comprehensive game plans for encouraging businesses to launch apprenticeship programs in a variety of industries including advanced manufacturing, health care, IT, construction, and transportation.
These state accelerator grants will be followed this spring by a $50 million ApprenticeshipUSA State Expansion Grants Competition to scale-up state efforts to expand apprenticeship. The expansion grants will help states integrate apprenticeship into their education and workforce systems; engage industry and other partners at scale to expand apprenticeship to new sectors and new populations; support state capacity to conduct outreach and work with employers to start new programs; provide support to promote greater inclusion and diversity in apprenticeship; and implement state innovations, incentives and system reforms. By investing in state strategies for growing apprenticeship opportunities, these funds will help strengthen the foundation for the rapid and sustained expansion of quality apprenticeship nationwide.
The ApprenticeshipUSA state investments build on the demonstrated success several states have already shown in expanding apprenticeship. With the leadership of Governors across the country, 14 states have increased the number of apprentices in their state by over 20 percent – including:
Iowa, which tripled state funds to support apprenticeship across key industries
California, which unlocked additional funds to cover training costs,
Georgia, which brought together its workforce development and community college systems to partner with over thirty major employers on apprenticeship,
Connecticut, which launched a Manufacturing Innovation Fund to support employers engaged in apprenticeship expansion.
Providing $30 Million for Industry Partnerships, Innovations to Enhance Diversity, andAccess to Apprenticeship
Through ApprenticeshipUSA, the Department of Labor will also make investments to help more employers start or grow apprenticeship programs, particularly in high-growth and high-tech industries like health care, IT and advanced manufacturing where apprenticeship has not been as broadly adopted. Through industry-driven partnerships, these investments will focus on leveraging collaborations with workforce development organizations, industry associations, labor groups, and training providers to help multiple employers at a time accelerate the expansion of apprenticeship nationwide.
Industry and training intermediaries can provide support for individual employers and entire industries as they seek to start or expand apprenticeship. For example, through one such partnership, the American Health Information Management Association (AHIMA) and healthcare employers ranging from Pfizer to the Seattle Children’s Hospital joined forces to create an industry-recognized apprenticeship preparing workers for careers in healthcare services and hospital IT, leveraging common industry-approved curriculum and training solutions. The Department of Labor’s investments will help spur similar collaborations across growing, high-skills industries.
Expanding Registered Apprenticeship also means opening up opportunities to traditionally underrepresented populations including women, minorities, and people with disabilities, tapping into the full range of America’s talent. While all of theApprenticeshipUSA investments include a focus on making apprenticeships more inclusive, the Department of Labor, through ApprenticeshipUSA, will invest in strategies specifically focused on building pathways to apprenticeship, expanding recruiting and other strategies for attracting diverse participants, and in national innovations that promote greater access to apprenticeships for traditionally underrepresented groups.
These national investments will complement investments made at the state level, ensuring that state strategies embrace diversity in apprenticeship. They will also support national efforts to engage community-based organizations, workforce intermediaries and other non-profits in the development and implementation of pathways to apprenticeship including pre-apprenticeship, supportive services, and youth apprenticeships. In addition, the Department of Labor will invest in national activities to increase access to apprenticeship including strategic marketing and outreach, technology improvements and innovations that make it easier for employers to start apprenticeships and for job-seekers to connect with apprenticeship opportunities.
For more information on the timeline of additional investments and deadlines for proposals, please visit http://www.dol.gov/apprenticeship
Building on Success in Expanding Apprenticeship and Increase Access to Jobs-Driven Training
Today’s announcement builds on the Obama Administration’s previous efforts to increase access to apprenticeship and jobs-driven training to prepare workers for high-skill jobs available today, including:
Investing an unprecedented $175 million in American Apprenticeship Grants. In September 2015, the Department of Labor announced $175 million in grants to 46 public-private partnerships between employers, organized labor, non-profits, local governments, and educational institutions that are expanding high-quality apprenticeships. The grantees are well on their way to creating and filling more than 34,000 new apprentices in high-growth and high-tech industries including health care, IT and advanced manufacturing over the next five years.
Highlighting the value of apprenticeships through LEADERS. More than 170 employers, colleges, and labor organizations have signed on to be ApprenticeshipUSA LEADERS (Leaders of Excellence in Apprenticeship Development, Education and Research) by starting or expanding their own work-based learning programs and encouraging their peers to follow. Together, employers in the LEADERS program have pledged to create nearly 20,000 new apprenticeship positions.
Expanding opportunities for apprentices to earn college credit towards a degree. More than 200 colleges nationwide have joined the Registered Apprenticeship-College Consortium, which allows graduates of Registered Apprenticeship programs to turn their on-the-job and classroom training into college credits toward an associate or bachelor degree.
Directing training investments into job-driven strategies. Following the Vice President’s Job-Driven Training review, federal agencies have taken actions to make programs serving over 21 million Americans every year more effective and accountable for preparing Americans for good jobs that employers need to fill. These actions include ensuring training investments include essential elements that matter most for getting Americans into better jobs— such as strong employer engagement, work-based learning approaches like apprenticeship, better use of labor market information, and accountability for employment outcomes. More details on the Administration’s progress on Job-Driven Training can be found here.
“We need to do everything we can to make sure America’s young people get the opportunity to earn the skills and a work ethic that come with a job. It’s important for their future, and for America’s.”
– President Barack Obama
“After the worst economic crisis of our lifetimes, the United States is in the midst of the longest streak of private-sector job growth in our history, with more than 14 million new jobs created during the past 70 months. But for too many young people, getting a first job—a crucial step in starting their career—is challenging. One of the main criteria employers screen for in the hiring process is work experience. Previous experience allows potential employers to call references who can vouch for a candidate and assess what someone can do based on past accomplishments. Additionally, many of the skills employers value most can only be learned on the job. Once a young person gets their first job, it is much easier to get the next one,” the White House stated in a Fact Sheet explaining funding for a new program to connect young people with jobs and career training.
“In his State of the Union Address, the President made clear that our goal is a growing economy that works better for everybody. The President’s FY 2017 Budget includes nearly $6 billion in new funding to help more than 1 million young people gain the work experience, skills, and networks that come from having a first job. Today, the White House and the Departments of Labor and Education announced the details of that plan, including nearly doubling last year’s budget request for supporting young people who are out of school and work.”
Republicans are fond of decrying the fact that so many young people have had to live in the parents’ house because they can’t afford to set up their own household (though you hear less of that now that the economy has clearly rebounded). They attack the lack of real increase in wage growth. Yet they do nothing about it – nothing to invest in infrastructure to stimulate jobs and wages, nothing to address student debt by keeping interest rates artificially high, nothing to promote college affordability or jobs creation.
The proposal that President Obama has made would address many of these issues. Let’s see if Republicans support it, or return to their mantra of “curing” every problem by calling for reduced taxes and regulation.
Major investments of Obama’s plan include:
A New $5.5 Billion Proposal to Open Doors to a First Job.The President’s Budget will propose new investments – nearly double last year’s request – to connect more than 1 million young people to first jobs over the summer and year-round. It would also create a new $2 billion competitive grant program designed to re-connect disconnected youth to educational and workforce pathways.
Summer Jobs and BeyondGrant Competition. Today the Administration is also taking a new step to connect more young Americans to work with the release of the application for a $20 million Department of Labor grant competition – using existing funds – that will award approximately 10 grants to communities to implement innovative approaches that connect young people to jobs and career pathways.
New Proposed Investments to Give More Americans Skills for In-Demand Jobs. The President is also proposing in his Budget $3 billion to create an American Talent Compact that would expand talent pipelines in over 50 regions to fill open jobs and attract new jobs from overseas; a $500 million Workforce Data Science and Innovation Fund to create dynamic data sets on jobs, skills, and training to help training providers and workers keep pace with rapidly changing job needs; and a $2 billion Apprenticeship Training Fund to double the number of U.S. apprenticeships.
The President is also calling on businesses to take action to give young Americans with limited resumes a better shot in the hiring process by providing internships, training, mentoring, and job interviews to young people who are not in school or working. With more than five million jobs open today—near the highest levels on record—developing the workforce of the future will be critical for businesses to grow, compete for new markets, and innovate.
Budget Proposals to Help More Young Americans Start Their Careers
When a young person struggles to get their first job, it can have a lasting negative impact on her lifetime income as well as her motivation, pride, and self-esteem. It is also a missed opportunity for the economy as a whole. A 2012 study found that people who endure a spell of unemployment between the ages of 16 and 24 earn $400,000 less over their careers than those who do not. Moreover, they estimate the lifetime cost to taxpayers of the 6.7 million youth who were neither in school nor in work was around $1.6 trillion. The President’s Budget proposals help address these challenges, including with:
A New $5.5 Billion Proposal to Open Doors to a First Job
A Down Payment on a First Job for Every Young American. The President’s proposal would invest $3.5 billion to create new partnerships with companies and communities to get nearly 1 million young people into first jobs over the summer and 150,000 young Americans who have been out of school and work into up to a year of paid work.
o Funds would be distributed to states through the Workforce Innovation and Opportunity Act youth formula program and be disbursed to localities to cover up to half of the cost of wages for a young person.
o They would require a matched investment from either public, private, or philanthropic funding.
o Additionally, the Department of Labor will work with Treasury to ensure that young people participating in these programs have access to safe and appropriate financial products and accounts, so that they can use their earnings to start building savings and gain money management skills which are critical for their future.
Community Partnerships to Connect Young Americans to Opportunity. The President’s proposals would invest $2 billion jointly administered by the Departments of Labor and Education to put youth who have dropped out or are most at risk of dropping out of high school on the path to get a diploma and connect to post-secondary education and jobs. Funding would be competitively awarded to communities, in required partnership with local education, workforce, and community organizations. The Departments would encourage proven approaches, such as work-based learning and internships, and re-engagement centers.
A New $200 Million Proposal to Develop & Expand Youth Apprenticeship Programs
Expanding Apprenticeships for More American Workers and Youth. The President is proposing to dedicate $200 million to support the development and expansion of youth apprenticeships and pre-apprenticeship programs that let young people explore their interests in school through work and classroom-based training before starting a formal apprenticeship. This is part of a broader $2 billion proposal to create an Apprenticeships Training Fund to increase resources for state apprenticeship programs.
New Actions Using Existing Resources
Summer Jobs and Beyond Grant Competition. Today, the Administration is releasing the application for $20 million in existing funds available through DOL that will:
o Fund innovative models to connect young people ages 16 to 24 with limited or no work experience to summer and year-round job opportunities through partnerships between employers, workforce investment boards, local education agencies, and reengagement centers.
o Go to approximately 10 communities, with priority given to those communities facing high rates of youth unemployment, poverty, crime, and dropouts.
o Build on a recent $17 million DOL investment in Youth Demonstration grants to support disconnected young adults in seven cities, including Baltimore, Camden, Detroit, Houston, Long Beach, North Charleston, and North St. Louis.
2016 Summer Opportunity Project. On February 26th, the White House will launch a summer opportunity project and host a workshop that brings together state and local leaders, community-based organizations, private sector and philanthropic leaders, and schools. The project will call on all of these leaders to increase their efforts and investments to bridge the summer opportunity gap for this year and beyond in targeted communities across the country. At the event, we will release a Summer Opportunity Federal Resource Guideto make it easier for local governments and non-profits to identify and navigate Federal programs across agencies.
Broader Proposed Investments in Innovative Training that Lead to In-Demand Jobs
The 21st century American worker faces an increasingly complex and dynamic job market. Globalization, automation, and technological innovation are driving rapid changes in available jobs and demanded skills. The President is proposing a plan to ensure that our education and training systems do more to help workers keep pace as the labor market evolves.
Creating a Talent Compact to Keep and Attract Jobs to the U.S. One of the main assets a business considers when deciding where to locate and growis the availability of talent. The President is proposing in his Budget $3 billion in competitive funding to create more than 50 “Talent Hotspots” across the U.S. These Talent Hotspots would consist of employers, training programs, and workforce and economic development leaders that prioritize one sector and make a commitment to recruit and train the workforce to help local businesses grow and thrive, attract more jobs from overseas, and fuel the talent needs of entrepreneurs. This proposal would produce a pipeline of about half a million skilled workers over the next five years.
Empowering Workers, Training Providers and Employers with Better Information on Jobs, Skills and Training. Supporting a more dynamic workforce requires good data. But today, little information exists about what skills employers are hiring for and what training works best. That is why the President is proposing:
o The creation of a new Workforce Data Science and Innovation Fund. DOL would recruit and deploy a best-in-class team to help states find new ways to use technology and data analytics to improve training programs and consumer choice. And similar to HHS’s Open Health Data Initiative, DOL would partner with the Department of Commerce to develop new open source data on jobs and skills to spur the creation of new products to help match workers to better jobs.
o $40 million in Workforce Data Quality Grants to upgrade state data systems to produce information on the outcomes of training programs for consumers.
o $2.5 million to create a more real-time, dynamic data sets and common language for jobs and skills building upon O*Net (the Occupational Information Network) to fuel the development of new products and services for job seekers.
o Ensuring high-quality customer service for job seekers getting Federal services. Each year, 2,500 American Job Centers (AJCs) help approximately 17 million Americans get back to work and into better jobs. The President’s Budget proposes $2.5 million to develop an easy-to-use tool for workers to quickly view customer satisfaction rating for the job centers in their area and to establish a technology platform that AJCs can use to report on customer service outcomes.
Providing 21st Century Career Navigation. The President’s Budget will propose $1.5 billion in new resources to states for Career Navigators who will proactively reach out to workers most at risk of not being able to reset their careers after spells of joblessness. Each year, Career Navigators will help more than 1 million people find jobs, matching them to appropriate training programs, and connecting them to the support services they need to succeed.
Building on President Obama’s Record of Progress for Young Americans
My Brother’s Keeper (MBK) Initiative.President Obama launched MBK in February 2014 to address persistent opportunity gaps faced by boys and young men of color to ensure that all young people can reach their full potential. Since its launch, more than 200 communities have accepted the MBK Community Challenge; more than $500 million in grants and in-kind resources and $1 billion in financing has been independently committed to advance the mission of MBK.
$100 Million TechHire Grant Competition, Including $50 Million for Young Americans. In November, the Administration released the application for $100 million to expand partnerships that can rapidly train and connect workers with barriers to employment to well-paying, high-growth jobs in information technology and other industries. The Department is accepting applications until March 11th, 2016. Interested applicants can find the application here.
Engaging Local Elected Officials to Connect Young People and Adults to In-Demand Jobs.Over the years, the Administration has worked with local elected leaders and national organizations, including the U.S. Conference of Mayors (USCM) and the National League of Cities (NLC), on efforts such as the TechHire and My Brother’s Keeper Initiatives. Building on this work and new announcement, USCM and NLC will support the growth, adoption, and creation of promising practices for the expansion of summer opportunities and building partnerships to expand and upgrade training for in-demand jobs in communities across the U.S.
