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ProfitWise News and Views, 4th, December 2014
From Classroom to Career: An Overview of Current Workforce Development Trends, Issues and Initiatives

Earlier this year, Community Development and Policy Studies (CDPS) staff at the Federal Reserve Bank of Chicago released a report on its Industrial Cities Initiative (ICI).[1] The report features a quantitative assessment of ten Midwestern “industrial cities” that is augmented by more than 175 interviews with city leadership. The report explores whether – and to what extent – these cities have been able to withstand a decline in manufacturing employment since the 1960s. Workforce development was the most common and the most vexing issue identified by leaders in every ICI city profiled in the report.


Challenges faced by Seventh District communities concerning workforce development – an umbrella term that describes coordinated efforts to prepare and match workers with living-wage jobs in a manner consistent with market realities – are especially daunting given the varying underlying issues. A high school graduate deciding which post-secondary credential to pursue, for instance, faces a very different set of circumstances than an ex-offender addressing a criminal history during the employment application process. Likewise, successful efforts must effectively coordinate the resources, responsibilities, and interests of numerous stakeholders, including CDCs, private industry, the educational sphere, and multiple layers of government. To complicate matters even further, local efforts that aim to ground connections between education and employment outcomes invariably take place within the context of a shifting global marketplace.


Fortunately, the dynamism of devoted practitioners, researchers, and policymakers is commensurate with the set of issues they've chosen to confront; accordingly, it's important to survey from time to time the landscape of current approaches. Toward this end, this edition of Profitwise News and Views offers the following collection of articles and insets.


This edition begins by documenting a key labor market shift impacting virtually every facet of modern workforce development. Specifically, Employment Polarization and its Discontents: A Tale of Two Tails describes the steady replacement of middlewage (and presumably middle-skilled) jobs by lowand high-wage jobs. The significance of this single descriptive fact, we argue, is a matter of perspective. On the one hand, employment prospects of high school graduates have become compromised to the point of undermining this group’s attachment to the labor force. On the other hand, the rising cost of skill is a likely culprit behind widespread perception of a ‘skills gap’ among employers.


While the first article focuses mostly on the impact of collapsing demand for middle-skilled workers, Is a College Education Worth the Cost? A Risk/Reward Perspective examines the puzzling trend of slowdowns in educational attainment despite rising demand for high-skilled workers. In the process, the article cites research showing investments in college education generally outperform investments in stocks and bonds by a wide margin. However, as with any investment, there is risk. After touching upon several sources of risk, the article focuses on the most concerning: the high incidence of students enrolling in but not completing college. Using national data, the article concludes with a discussion of how this trend has affected states in the 7th District.


While low educational attainment is certainly disadvantageous, it is not the only barrier to employment and economic mobility. Life challenges such as long-term unemployment, lack of childcare options, and health/healthcare issues also separate potential workers from gainful employment. To provide insight into strategies for addressing obstacles to work, The Cara Program: Workforce development one life at a time, highlights a Chicago-based community organization that provides a persistently challenging – yet highly supportive – environment within which individuals may cultivate the soft skills necessary for navigating the modern workplace.


In addition to their main program, Cara also administers smaller programs that focus on formerly incarcerated individuals. The barriers to employment this group faces are often so high that Cara operates a separate landscaping social enterprise through which those with criminal records may obtain work experience. The lengths through which Cara must go to facilitate re-entry of ex-offenders into the workforce points to a much broader national problem, the key features of which are documented in the inset entitled Second chances in the land of opportunity.


Whether through increasing formal educational attainment or addressing broader life challenges, the task of connecting today's workers with today's jobs is both important and immediate. Accordingly, considerations of workforce development over longer time horizons can lose urgency, though much research has underscored the value of early education in improving employment outcomes decades later. Our section entitled Early childhood education: “Workforce development” for the long run highlights the work of advocates to bring this research to bear on policy. Emerging insights into developmental psychology and brain science, they argue, point to early-childhood as a critical window within which the development of key emotional skills may be set on course at relatively low cost.


We also note the efforts of individual Reserve Banks across 12 districts reflect the Federal Reserve System's commitment to promoting workforce development as a means toward enhancing the economic vitality of communities. While by no means a comprehensive list, we highlight various System initiatives in this vein.

Please download the entire publication to see any charts, tables, sources, or notes included in this article.
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