Some states train jobless for post-pandemic workforce

Renato Queiroz used to be a catering manager for a hotel in Newport, Rhode Island, a historic town known for its yachts and Gilded Age mansions. “I dealt with a lot of weddings,” he said recently.

Then the coronavirus pandemic hit, and Queiroz, 31, decided to quit the floundering hospitality industry and try something new.

He enrolled in a free community college course that trains people to use chemical processing equipment. Now he’s looking for manufacturing jobs and plans to earn a bachelor’s degree. “Going through this program opened up a different world for me,” he said.

Amid high unemployment, governors and legislatures are spending some federal coronavirus relief dollars on short-term training programs, such as the 10-week program Queiroz completed recently, that they hope can help workers find new jobs quickly.

Leaders in at least nine states, including Rhode Island, are expanding grants for weeks- and months-long training in fields such as health care and information technology; paying employers to provide on-the-job training; and in some cases, paying for trainees’ textbooks and transportation.

“If we embrace this opportunity … Rhode Island’s economy will be stronger, more equal, and more resilient than ever before,” Rhode Island Democratic Gov. Gina Raimondo said in a July statement announcing her plan to spend $45 million on a job training initiative called Back to Work RI.

The over $2 trillion relief package Congress approved in March included money states and localities could use for workforce development. Short-term training has been a popular way to spend the funds.

Governors and legislatures focused on shorter programs partly because of spiking unemployment and partly because of a deadline: The federal money had to be spent by the end of the year or returned to the U.S. Treasury.

“We had both a logistical challenge,” said Teresa Lubbers, the Indiana commissioner for higher education, “and we had a very practical reason to get people immediate training to get them back into the workforce.”

But some economic development experts say short-term training has an uncertain payoff. They argue that to prepare workers for good-paying jobs in today’s economy, policymakers should invest in programs that last six months or even years, such as degree programs. And they say improving workforce training on a grand scale will require significantly more federal money.

“You can make a big difference for people with a six-month or one-year certificate program. But it doesn’t mean a two-month, quickie thing,” said Paul Osterman, a professor of human resources at the MIT Sloan School of Management. “That’s not where we want to go.”

Meanwhile, states ran out of time to spend the federal aid. That happened in Missouri, where Republican Gov. Mike Parson in July set aside $9.7 million for workforce development, including $6.7 million in training grants for laid-off and low-income people.

State officials were told to spend the money by Oct. 31 so that there’d be ample time to report the spending to the federal government, said Mardy Leathers, director of the Missouri Division of Workforce Development.

“Our access to the money expired before we could use it all,” Leathers said. His agency spent less than half the grant money, enrolling just 878 people.

A focus on unemployed people

Training isn’t a guaranteed path to a job in a recession, when many employers are reluctant to hire. But it can prepare people for better-paying work once the economy improves and address chronic shortages of skilled workers in fields such as health care and manufacturing.

Some experts say the current recession—which has concentrated shopping, working and socializing online—likely will lead employers to raise digital skill requirements and even replace some low-skilled workers with robots and computers.

“For decades, the U.S. economy has seen increasing automation in industries spanning manufacturing to food service to office work,” Patrick Harker, president and chief executive officer of the Federal Reserve Bank of Philadelphia, told private equity and venture capital executives at a virtual event last week. “But the COVID-19 pandemic has ensured that those transitions are now occurring at lightning speed.”

Osterman, whose MIT colleagues have found that fears of machines replacing workers are overblown, said he doesn’t think the pandemic will create dramatic shifts in the types of jobs available. “But it is going to have some effect,” he said. For instance, some laid-off retail and hospitality workers will need help moving to new jobs.

That’ll create demand for training. “There’s going to be even more need for an effective system to get people from point A to point B,” he said.

With an eye on the shifting labor market, states have used some federal relief funds to expand and experiment with training grants and programs.

Indiana Republican Gov. Eric Holcomb, for instance, set aside $75 million to expand two grants started before the pandemic and to allow Hoosiers to take some online manufacturing training courses for free. One of the grants covers tuition for certificates in fields such as welding and dental assistance, and the other helps employers pay for on-the-job training.

State officials used federal funds to nearly double the first grant—raising the limit from $5,500 to $10,000—and make Hoosiers with college degrees eligible for the money. They doubled the second grant from $50,000 to $100,000 per employer.

So far, the expanded grants and free online training have served 33,000 people, including 14,600 who used the grants to enroll in programs at community colleges and other training providers, according to the Indiana Commission for Higher Education.

In Mississippi, the state legislature authorized $55 million for short-term training, with $4.7 million set aside to subsidize on-the-job training and most of the rest sent to two-year colleges to let them offer high-demand programs for free through the end of the year.

Colleges received the money in late August, giving them about three months to enroll and train workers using the federal dollars, said Laura Ring, deputy executive director of external relations for the Mississippi Department of Employment Security. Colleges have trained over 2,500 students so far, she said.

In Rhode Island, Raimondo used federal aid to ramp up on-the-job partnerships with employers, fund free training programs, build a new website for jobseekers and help trainees overcome barriers to employment, such as spotty home internet.

The state has used federal funds to help trainees pay utility bills, pay car insurance premiums and even pay for a trainee who lacked safe housing to live for a month in an extended-stay hotel, said Scott Jensen, director of the Rhode Island Department of Labor and Training.

“If we have you line-of-sight into a job, then it’s a very good investment,” he said of such aid.

Skills for Rhode Island’s Future, a nonprofit that helps connect people with jobs and a Back to Work RI partner, has used federal funds to design customized training programs, such as on-the-job training at a Honeywell manufacturing facility for 20 people learning to speak English.

Nina Pande, executive director of the agency, said the length of training depends on the industry, the skills required and whether the training will be paid. “If it’s an unpaid training, we like it to be quick,” she said, so people can get hired and start earning money.

Worth the money?

Some analysts say states should use federal aid to fund community colleges, which are struggling with low enrollments this year, rather than focusing on specific training programs.

“If we’re looking at recovery and reinvestment, then it makes a lot of sense to support the system more broadly,” said Iris Palmer, a senior adviser for higher education and workforce with the Education Policy Program at New America, a left-leaning Washington, D.C., think tank.

And some of the federal funds may be flowing to institutions or programs with an uncertain payoff. In Mississippi, for instance, a Mississippi Today investigation found that colleges were requesting federal aid for programs such as CPR/Basic Life Support, Google Classroom, and OSHA safety training.

Mississippi’s Ring said some of those short-term programs were likely associated with other courses.

In Indiana and Missouri, students can use job training grants to enroll in for-profit college programs. For-profit institutions often saddle students with high amounts of debt and a dubious credential.

Indiana’s Lubbers said that all programs eligible for tuition grants have been vetted to make sure they prepare people for high-demand jobs with high wages—except for the nursing assistant program, a lower-paid job added this year as the need for nurse aides soared.

State officials and training providers also defended the short length of some training programs. Missouri’s Leathers said even a low-paying job can be a game-changer for people living in poverty, and that their education doesn’t have to end there.

“That may not be their final job,” he said. “And we try to connect with them, to help them understand what the career pathway might be like.”

Austin Clement, operations manager for the Clement Truck Driving Academy in Lebanon, Missouri, said that after about a month’s training, graduates with a commercial driving license can earn $48,000-$50,000. “It depends on how much people want to drive,” he said.

About 26 students have enrolled in the academy tuition-free thanks to federal coronavirus relief funds, Clement said.

Heavy and tractor-trailer truck drivers in Missouri last year earned, on average, $43,800-$46,620, according to federal statistics. The median household income in the state is about $53,000.

A learning experience

As state officials race toward the December deadline for spending federal relief funds, they’re worried that they’re going to run out of time before they run out of money.

Rhode Island currently has 1,678 people enrolled in training programs under the Back to Work RI program, Jensen said. If pending contracts with training providers and employers are signed in time, 6,983 more people can be trained using federal funds. That’s a big “if.”

“That deadline is a big problem, and we are very hopeful that the Congress of the United States will do something about it,” Jensen said.

Ring said Mississippi colleges and employers will likely not make the deadline. “All of the money was obligated, but not expended,” she said. “I do not expect that it’ll all be expended.”

Mississippi is among the states with a contingency plan to avoid sending leftover funds to the U.S. Treasury. Under the state law authorizing federal relief aid spending, Ring said, dollars unspent by mid-December will be moved to the state unemployment insurance trust fund.

Despite the brief window for spending the money, state officials say federal aid has given them a rare chance to experiment and to reach students who might not have considered training otherwise.

Federal workforce training dollars typically can’t be used to help trainees upgrade their home internet or take a taxi to class, Jensen said. But for some people, a few hundred dollars’ assistance can be the difference between getting a job and staying unemployed.

“We think this is really an opportunity to show what needs to happen in workforce development when you’re not constrained by unnecessary compliance restrictions,” he said. “Too many funding streams are so narrowly directed that you can’t do the kind of work that is necessary.”

Now state officials and workforce training advocates are hoping Congress and President-elect Joe Biden will make larger, long-term investments in training as the pandemic winds down.

“I think we’re all just hoping and praying … that jobs and education will be a top priority,” said Pande of Skills for Rhode Island’s Future.

This story first appeared Dec. 10, 2020, in Stateline, a publication of the Pew Charitable Trust.