The U.S. economy is in the midst of a historic era of change. Globalization and technological innovation have helped power an unprecedented economic expansion, deliver increased opportunity, and raise real incomes for most working Americans. However, these same dramatic changes have created a constant churn of business enterprises and jobs, posing new risks and uncertainties, especially for less-skilled workers, struggling companies, and communities already left behind.
The sense of insecurity this churn creates has helped drive the backlash against globalization so evident in the debate over granting permanent trade status to China. Indeed, the public's accompanying sense that government isn't doing enough to help workers navigate in this New Economy limits support for further efforts to liberalize trade. Doing right by American workers -- giving them the tools they need to share in the rewards as well as the risks of the new global marketplace -- is not only a moral imperative, it is also a political imperative if we are to rebuild public support for open trade. As Steve Kull, director of the Program on International Policy Attitudes and a leading analyst of public opinion on trade, recently wrote:
So what do Americans want to do for American workers? If there is no alternative, a solid majority is willing to accept trade barriers to protect jobs. But that is not their preferred approach. What they would most like to see is greater efforts by the government to help workers directly.1
The obvious place to start is to foster the skills and knowledge of front-line workers and help companies better utilize this most important asset. This means giving new entrants to the workforce the skills they need to get a good job and incumbent workers the opportunities they need to stay abreast of change and advance; and dislocated workers the assistance they need to prepare for and find new jobs. To this end, PPI has proposed a series of policy initiatives on education and employment training: from using the Workforce Investment Act of 1998 to reinvent state-based labor market programs to the creation of Regional Skills Alliances, industry-led collaborations to train workers specific to their needs.
But while of paramount importance, a lack of skills is often only one barrier blocking workers from getting jobs or moving up the income ladder. Sometimes the barrier is transportation between where workers live and where the jobs are; or inadequate day care; or a community whose major employers are firms based in the Old Economy and struggling to remake themselves for the new one. In other words, many communities confront employment barriers that do not neatly fit into the off-the-shelf solutions advanced by existing government programs.
To address this need, this paper proposes a new a federal initiative, Community Workforce Partnerships (CWPs), to catalyze a holistic approach to a community's employment needs; to give workers access to training, education, and other critical support services; and to help the firms where they work modernize to meet the demands of the New Economy. Uncle Sam's role is important but limited: providing matching funds to jumpstart community-based collaborations of companies, unions, local governments, educational institutions, and non-government organizations that can tailor solutions that meet specific community employment needs. Key to the success of CWPs is that it is in the self-interest of both workers and companies to link worker training with available jobs and with company modernization efforts to succeed in the ever changing and competitive global economy.
Examples of this can already be found in today's fast-moving and highly competitive economy. Most of these alliances focus on joint business arrangements, such as R&D, production, purchasing, or marketing. Yet, business-led community partnerships are successful in upgrading worker skills, helping workers move into new and better jobs, and assisting companies to modernize in order to take advantage of those upgraded worker skills. For example:
Since 1984, the Garment Industry Development Corporation (GIDC) has been assisting apparel workers and companies in New York City. A joint effort of the industry and the Union of Needletrades, Industrial and Textile Employees (UNITE!), GIDC has evolved into a multiservice organization combining worker training, a job referral service (JobNet), company modernization services, and market development activities. GIDC provide both general training at their own state-of-the-art facilities and company-specific on-site training and modernization services.2
The Wisconsin Regional Training Program (WRTP) is a consortium of businesses, labor unions, schools, and government which works to modernize the metalworking industry through training, technical assistance, and inter-firm cooperation. WRTP combines one-stop shopping for regional worker services in the Milwaukee area with sector-specific training programs and support services for companies to modernize and upgrade.3
In North Carolina, the Hosiery Technology Center helps companies and workers compete with lower-wage workers around the world. The Center combines worker education and training programs with extensive process R&D, innovative product development, and marketing tools. This collaborative effort is key in an industry mostly made up of small companies with less than 100 employees. Such small firms would not be able to undertake either the training or the R&D and modernization activities on their own.4
The 13-year-old Berkshire Plastics Network is a consortium of plastics companies in western Massachusetts. The Network provides modernization and technical support services, as well as training and marketing assistance to over 40 companies involved in the design and production of molds, components, and plastic products. As part of their efforts, the Network runs a state-accredited four-year apprenticeship program for moldmakers.5
The Appalachian Center for Economic Networks (ACEnet) works specifically to help low-income individuals in rural southeastern Ohio through worker training and promoting entrepreneurship. Concentrating on two industries -- specialty food products and computer services -- ACEnet provides a variety of support services to help individuals help themselves out of poverty. These services help low-income individuals form their own companies, and include business planning, market studies, workforce training, and access to capital and technology (computer and telecommunications) services. Their training activities include partnerships with other local organizations for both traditional vocational training and on-the-job training, as well as welfare-to-work and school-to-work programs.6
Such examples show that partnerships can help workers, companies, and communities make the transition to the New Economy, in a variety of industries ranging from textiles and apparel to metalworking and plastics. Unfortunately, such partnerships are too few and far between. That is why PPI proposes a new federal role to catalyze the creation of such local Community Workforce Partnerships -- to spread the benefits of these kinds of partnerships to communities across the nation.
PPI proposes a federal investment of $100 million a year, for five years, to support CWPs.
Community Workforce Partnerships are consortia of companies that pool their resources and expertise together with federal, state and local governments; educational institutions; non-government organizations; and labor unions.
As described above, partnerships and alliances among businesses, unions, community groups, and local governments have already proved to be a potent means of addressing workforce and modernization issues. Such alliances are more effective than going it alone because they allow the various partners to pool their resources to lower costs. Joint efforts also overcome the "free-rider" problem, whereby one company benefits from efforts of the others without contributing. For example, joint training programs greatly decrease the likelihood of poaching a partner company's workers after they have completed a training program.
Alliances also help companies engage in joint problem solving. The sharing of experiences and information and the opportunity for joint learning is one of the most powerful benefits of organizational collaborations. One or another of the partners may face the same problem and be willing to share the costs of finding a solution.
CWP legislation should be flexible enough to allow communities to design programs to meet their local needs. This flexability would provide a comprehensive training, modernization, and support network for workers and companies in the new global economy.
These partnerships is to help both displaced and "at-risk" workers and "at-risk" b companies prosper in the New Economy through training, skills development, and company modernization. Partnerships could help upgrade worker skills (both pre-employment and incumbent workers), help workers find new jobs, and/or modernize company operations in order to take advantage of those upgraded worker skills.
Such partnerships should also include other companies that can bring resources and expertise to bear on issues of skill development, worker placement, or company modernization. The involvement of other companies allows a partnership to reach beyond the confines of the specific industry and the set of local resources. For example, companies in one industry might want to take advantage of nationwide certification and training programs and corporate universities run by companies such as Cisco, Microsoft, Sun, Novell, IBM, Oracle, and many others.7 Or a partnership might include a larger company whose goal is to help upgrade and support its local supplier base, as was the case with the Berkshire Plastics Network.
To be effective, CWPs must be designed at the community level to target local needs. Each community should determine what set of activities the local CWP should undertake. Depending on local needs, a partnership could provide a number of services, such as:
pre-employment training, including school-to-work, and welfare to work;
incumbent worker training, such as formal shop-floor training programs, workplace education centers, facility-wide and cross-facility peer advisors, and confidential counseling, assessment, and assistance services;
assistance in moving workers to new jobs through job banks, and placement services; and
limited supportive services to individuals in the program, such as mentoring, transportation assistance, health care, and child-care.
As part of their role in general workforce development, the CWP could conduct community assessment of training and job skills needs. This could include:
an inventory of existing job vacancies and the skills needed to fill those vacancies;
the development of skills goals common to member companies; and
the development of specific curriculum and training methods to match training programs to current needs and skill standards.
A major part of the partnership's activities may also be to assist member firms in their modernization efforts. This assistance could take the form of:
generic needs assessments and benchmarking;
strategic business planning assistance;
assistance in obtaining loans and other financing;
technical assistance; and
organizational development and change assistance, including the development of employee involvement and participation programs.
Finally the CWP could undertake dissemination activities to help workers and companies get the information they need to improve their skills and operations. This might include the establishing information clearinghouses and resource centers, and best practices conferences and workshops.
In keeping with the local orientation, partnerships should make use of in-kind contributions from the local private sector, such as actual training assistance, equipment, child care, and transportation services. The ability to leverage these preexisting local resources will greatly expand the partnership's ability to serve the local community.
Businesses themselves must take the lead in developing such partnerships by bringing together their knowledge of local commercial and labor markets with local resources to best serve the needs of the community. Because the first step in organizing such partnerships is often the most difficult to take, a seed grant program is also needed. Grants of up to $150,000 should be made available in order to help establish partnerships. Such funds would be used for limited administrative costs associated with organizing the partnerships and preparing application materials. Funding should be provided to partnerships that can demonstrate common workforce development and modernization needs, as the above real-world examples illustrate. Importantly, partnerships must include other business (or nonprofit organizations that represent businesses) that can bring resources and expertise to bear on those needs, as mentioned earlier. State and local government, educational institutions, and local non-profit organizations should also be encouraged to join such partnerships.
In terms of federal grants, priority consideration should be given to those partnerships serving dislocated workers and workers threatened with job loss (whether it is due to their own lack of skills, or because their company is struggling to compete). Partnerships should be made up primarily of businesses and organizations with operations located in the same geographic region. However, the partnerships must have the flexibility to include resources from outside the region and the industry. To ensure local commitment, matching funds of $2 from the consortium for each $1 of federal funds should be required (with at least $1 of the match coming from the private sector).
The federal contribution to the start-up of an individual CWP should be limited to $1 million per year, and no partnership should receive a grant for more than three years. The grant program should be authorized for five years at a level of $100 million per year. Partnerships should be required to develop performance measures, and the program be required to report back the Congress on its effectiveness at the end of the third year.
In this era of rapid change, both opportunities and challenges abound -- as do federal and state efforts to address them. Helping American workers and companies take advantage of those opportunities, and to create new ones, requires a new commitment to face these challenges. However, like Dorothy in the Wizard of Oz, we've had the answer all along. Local partnerships between businesses, unions, educational institutions, and governments are proven successes in helping workers and companies get what they need, and prosper in the New Economy. A federal grant program to foster and facilitate Community Workforce Partnership will help more communities share in these successes. By starting here at home, and encouraging local solutions to national problems, we can begin to address the real-world interest of millions of Americans and ensure that global economy works for them.
1. Steven Kull, "Promote Trade and Help Workers Adapt," Blueprint: Ideas for a New Century, Democratic Leadership Council, Washington, DC, Volume 7, Summer 2000, p. 78. Kull notes: Presented with two statements, 66 percent agreed with the one that said, "The federal government should invest more in worker retraining and education to help workers adapt to changes in the economy." Just 31 percent agreed that "such efforts just create big government programs that do not work very well. Particularly striking, if the government does provide such programs, opposition to free trade drops to a very small minority. Asked to choose between three statements, 66 percent chose the one that said, "I favor free trade, and I believe that it is necessary for the government to have programs to help workers who lose their jobs." Another 18 percent said they also favored free trade but opposed the government programs. Thus, 84 percent favored free trade in some form. Only 14 percent chose the option that said, "I do not favor free trade." In another question, 87 percent agreed with the directly statement, "I would favor more free trade, if I was confident that we were making major efforts to educate and retrain Americans to be competitive in the global economy." The article is based on finding presented more fully in Steven Kull's, Americans on Globalization: A Study of US Public Attitudes, Program on International Policy Attitudes, Washington, DC, (March 2000).
2. See Bruce Herman and Linda Dworak, "Boosting Clothing Workers," Blueprint: Ideas for a New Century, Democratic Leadership Council, Washington, DC, Volume 7, Summer 2000, p. 33.
3. Erik Gunn, "Playing Cards Face Up", The New Democrat, Vol. 10, No. 2, March/April 1998, pp. 18-21.
4. John B. Justice, "High Performance for Global Competition," Blueprint: Ideas for a New Century, Democratic Leadership Council, Washington, DC, Volume 7, Summer 2000, p. 71.
5. http://www.berkshireplastics.org/
6. Gordon Kingsley, "Case Study: Appalachian Center for Economic Networks (ACEnet)," Innovative Local Economic Development Programs, Economic Development Administration, U.S. Department of Commerce, Washington, DC, November 1999, pp. 156 - 163.
7. See Clifford Adelman, "A Parallel Universe," Change, Vol. 32 , No. 3 (May/June, 2000), pp. 20-29.
Kenan Patrick Jarboe is the president of the Athena Alliance, a non-profit
organization dedicated to public education and research on the emerging global information economy.
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