Pathways and Barriers to Economic Mobility

Maximum Employment Matters examines career pathway programs for workers and students. It also discusses why some low-wage workers may be reluctant to train for career advancement and face the so-called benefits cliff.

Webinar Video

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Webinar Transcript

Jean Roark: Hello and welcome to today's Maximum Employment Matters webinar. I'm Jean Roark from the St. Louis Fed, and I'll be facilitating today's call.

Before we get started, I'll cover our call logistics. We're connecting today using WebEx, and as you entered the event, you were provided a few options to connect to your audio. If for any reason you need to reconnect to your audio or make a change to your audio, you can go to Communicate from the menu bar and select the audio connection option. And from there you can make your selection and decide which audio you'd like to choose.

We'd also like to hear from you through questions, and we'll take your questions at any time during our webinar. And to submit them, you can go to the Q&A panel on the right side of your WebEx window and type your question in there. And please address the questions to all panelists. There will be a few polling questions today during our presentation, so stay tuned for those as well.

And let me share our legal disclaimer before turning the call over to our presenters. The views expressed in this presentation do not necessarily reflect official positions of the Federal Reserve Bank of Atlanta or the Federal Reserve System. And now we'll turn our call over to the host of our program, Julie Kornegay, from the Federal Reserve Bank of Atlanta.

Julie Kornegay: Thanks, Jean. I'm excited about our program today and our amazing lineup of speakers. Before we get started, I want to just take a moment to set the stage and look at what's happening in the labor market. So in this slide, the Federal Reserve Education Data or the FRED chart, we see unemployment data from the Bureau of Labor Statistics [BLS]. That data covers the period from January of 1948 through current day, and the gray lines represent periods of recession.

As you can see in the chart, we are close to record low unemployment in April 2019 at 3.6 percent, but in May, we tick back up to 3.7 percent and have stayed there, even though we have consistently added jobs to the economy. In August, the BLS reports, we added 130,000 jobs to the economy. When the economy adds jobs faster than workers are coming in, it takes longer to fill those jobs, creating what is known as a tight labor market. So when the unemployment rate is low and the increasing number of new jobs are being created, where will we find the workers to fill these positions?

For this, we need to look at the labor force participation rate. Surprisingly, although the unemployment rate is low, the labor force participation rate could be higher, and we are currently at 63.2 percent, according to the August data, but the highest recorded national participation rate is 67.3 percent in April of 2000. So the good news is that we are seeing people come back into the labor force. The participation rate is a national average, and if we drill down to the state level, we see that in comparison to the rest of the country, the Southeast tends to have a lower participation rate.

During today's program, we will look at the challenges around entering the workforce for special populations, barriers to economic mobility, and innovative ideas of how to raise awareness of high-demand, high-paying jobs in our area. We have a packed session today, so I want to get right to it.

But first, Jean, we have a poll question, and if you guys want to take just a minute to respond, we'll get those responses in. And I'll get her to close that out in just a moment, but I'm going to go ahead and introduce our first speaker, just in the interest of time.

So I'm excited to introduce our first speaker. Dr. Alex Ruder is a senior adviser in the Community and Economic Development group here at the Federal Reserve Bank of Atlanta. He holds a PhD from Princeton and specializes in workforce and economic development policy. Alex, thank you for joining us today.

And I think—Jean, can you close that out?—it looks like a majority of the respondents chose C, 21 to 50 percent, so I'll let Alex reveal the answer to that. Alex, take it away.

Alex Ruder: Thank you very much. It's a great honor to be here and get to speak to this audience today. In my brief comments today, I want to talk about career pathways' framework and stackable credentials, which is a related concept. And what would I mean by that is—you know, it's a term, I'm sure it's familiar to many in the audience—that for career pathways, often we advise people that the entry-level position itself is not where you want to finish your career. An entry-level position is where you would get started, and a career path would chart out for you where from that entry-level position you can go back to school, get a more advanced credential, and then move onto a higher occupation within a targeted industry or a targeted sector. 

And then the stackable credentials, a related framework to think about, is that you would get a credential but you would also get complementary credentials at the same time. Meaning that, perhaps becoming a certified nursing assistant on its own won't command a very high salary in the labor market, but a certified nursing assistant combined with a patient care technician will allow you to market yourself to health care employers and demand a higher wage. Okay?

So how I want to talk about these frameworks today is thinking about how the financial incentives that we tell people about these career pathways impact their decisions. So oftentimes we like to market career paths as this will lead you as an individual to a higher wage and economic security in your life. But what I want to point out is that often that comes across as more complex than perhaps some common labor market information leads us to believe. And that's because of a mix of how income changes over time, taxes change over time, and then benefits—which low-income families are more likely to rely on—as they phase out, greatly impacts the net resources that a family has. So there's almost, perhaps, a disincentive to advance up a career pathway.

So let me just go through this analysis really quick. What you see on the slide right now is just an example career pathway, very common, and this is the health care pathway. What it means is that you would start out as a certified nursing assistant [CNA], which is an entry-level position. If you move to the right of the screen, this is you're advancing up the health care career pathway to become a licensed practical nurse [LPN] and then a registered nurse [RN]. A licensed practical nurse is about an extra year of education, registered nurse about an extra two years, but of course, you're going to earn much more at that time.

Then on the left side of the screen, you have more of a stackable credential framework. That is, you become a CNA, plus a medication aide, EKG tech, or a phlebotomist, or a dialysis technician, which increases your wages. We're going to focus the analysis today on the right side of the screen. So the question I want to ask you is—this is a framework. Now imagine a low-income population that faces barriers to employment. What percentage of individuals that start out as a CNA actually are able to climb out of that entry-level position and move into LPN and RN?

Well, the statistics are not necessarily encouraging. So this is results from a very large study that was conducted at the national level—about 7,000 certified nursing assistants, mostly women with children. So again, this is a population that does face barriers to employment. So only about 3 percent of these 6,000 or 7,000 CNAs actually moved on to become licensed practical nurses or RNs. That's not, I think, a model of career advancement that we would want to see replicated, but what it does make you wonder is, what are the barriers that prevented so many people from moving up the career pathway?

I've listed some on the screen, but what I want to focus today on is, what is that underlying financial incentive to move up a career pathway? To help explain that, let me just show a graph that illustrates a concept called net financial resources. Now bear with me a second. This is a familiar analysis called the benefits cliff. Many people produce these charts, but let me just illustrate what happens. So on the lower axis of this figure, you have your employment income—how much you take away from your paycheck. On the Y axis, we have "net resources."

Now what this means, in essence—and everyone on the call will know this—is that your net take-home pay does not equal your gross take-home pay. Because you're paying payroll taxes, and you're paying income taxes, sometimes at the state and federal level. But what many people also realize is that their income is also reduced because they lose public benefits, so things like supplemental nutrition assistance, Temporary Assistance for Needy Families [TANF], health care coverage, childcare subsidies, housing subsidies. They all phase out or are eliminated as your income increases. So these kind of individuals are not just facing losses due to taxes. They're also facing losses due to benefits.

So what you end up seeing is a figure like this. Now let me just point out that, of course, as you earn more income, most of the time your net resources go up. But let's just take a quick focus here at about $48,000 a year and about $13,000 a year. So because of the loss of child Medicaid, of childcare subsidies, and your loss of SNAP, which is supplemental nutrition assistance, this particular individual is about as well off making $48,000 a year as they were making about $14,000 a year. So you must ask, what's the underlying financial incentive for someone to work that much harder but actually be no better off than they were making $14,000 a year?

So let's think about this in terms of career pathways. The example is Leia that I'm going to give. We're going to just go through an actual case. Twenty-five-year-old single mother working full-time in a minimum wage job. She receives a lot of public benefits. They're listed here. It's a fairly standard set of assumptions. So Leia walks into a job center or a technical college or any other place that provides job services and says, "I want to move out of my minimum wage job. What should I do?" She gets advice to go onto this health care career pathway. She says, "Okay," talking to a career counselor, "tell me how I will do if I become a CNA, a certified nursing assistant? And should I become an LPN, and should I become an RN?" It's a pretty standard set of questions that I think most of us would enthusiastically say, yes, as long as you have the academic ability and time.

A standard set of labor market information she would receive looks like this, you know, median wage and occupation. She'd make about $11 an hour as a CNA, $18 an hour as an LPN, $28 as an RN. Now I think everyone will agree this is a clear financial incentive to move up a career pathway, so imagine you're making a career decision and this is the information in your mind. You know, $11 an hour, $18 an hour, $28 an hour. There is an incentive for me to make that sacrifice by enrolling in school, taking time away from, perhaps, my family, my full-time job, in order to invest in my own education.

We can take a look at this a slightly different way, accounting for the loss of income when you're in school. So this is that same information but over time. So again, we see a dip in the shaded vertical areas between the ages 26 and 29 when the individual's in different training programs. But over time, the CNA pays more than a minimum wage job, the LPN does better than the CNA, and the RN does better than the LPN or the CNA. Again, clear financial incentive for advancement. Now let's take a look at what we have on this screen here and say, okay... okay, this is, again, not approximate to reality.

Let's look at someone that's on benefits like Leia and see what is the actual situation she's going to face. So we can see that in the next slide. Now we're going to focus on the orange and the green line here. What this shows is once we subtract taxes, once we subtract benefits, the picture is different. So from about the age of 27 to 35, there's a very small incentive to actually go become an LPN over the entry-level CNA. Very small. In addition, because of the loss in benefits, even if you look at that CNA, that orange line is essentially flat for about 10 years. In a sense, there's no wage growth. What that means is the benefits lost is offsetting any gains she would get from just earning more experience as a CNA.

So again, I know we didn't have a lot of time to really go through all the numbers that make up this calculation, but I want you to take away this idea that because of the complexity of how all these different programs actually affect people's incomes, the financial incentive to move up a career is often not as straightforward as we would make it out to be. And what we in the Federal Reserve Bank of Atlanta try to argue is good financial planning and good alignment of supportive services while people are in school and after can help individuals get over this problem and be more certain in their financial future as they make these career decisions.

So in the last couple minutes I have, let me just point out that we are currently developing a Career Explorer tool that will allow individuals to chart out their own career pathways, identify the benefits programs and tax credits they receive, and really chart out their own future educational pathway, while at the same time getting more accurate information about what their future income will look like, net of all these different taxes and benefits. And we actually want to incorporate this tool into financial education and financial literacy training because so many of the benchmarks in financial literacy involve knowing about income, knowing how income relates to career choice, good savings behavior, and then how to manage expenses. So this tool actually allows individuals to visualize all those different components of finances and relates it directly to career choice and expenditure behavior.

We also have a website, the link that's on the bottom of these pages, that goes into some of these issues in more depth. It's called Advancing Careers for Low-Income Families, and you can read a lot about these benefits cliffs and chart it out for at least a few local areas in the Sixth District, which is the district for the Federal Reserve Bank of Atlanta. And you also can see policy briefs on that website that you can download and distribute or read a little bit more about, you know, again, the background research for this initiative, and then just get more background about how benefits programs impact the career pathways that we invest so much time in charting out, researching, developing partnerships to help succeed, and then the importance of supportive services and alignment of services to help people succeed on these career pathways. And that is the conclusion, and I look forward to your questions.

Kornegay: Thanks, Alex. A quick question from me. Do you know when that Career Pathway tool will be ready? And if you don't know, no worries. I just thought I'd ask.

Ruder: No, it's a great question, and thank you for it. We're currently beta testing it, I think, until we have a true production version available for public use, so it'd be more summer 2020 or early summer 2020. But we're going to have a lot of research coming out between now and then that can still be very beneficial, I think, to a lot of our partners on this issue.

Kornegay: Well, we're definitely looking forward to it. Thank you so much. So if you have questions for Alex, please feel free to type them in the Q&A box, and we'll do our best to get to as many questions as possible at the end of the program. Let's see. Alex, thank you for highlighting the benefits cliff challenges for us today.

And Jean has posted a new poll question in the chat area, so hopefully everybody has seen that. You may have to click on the polling icon at the bottom of your screen to reveal that. If you could take a second and go ahead. I'll read it to you. Jobs in what industry are least impacted during the last recession? So jobs in what industry were least impacted in the last recession? And let's see if we can get the responses. All right, Jean, can you close that out for us?  

Roark: Yeah, you got it, Julie. I did close that poll. It's giving people another 10 seconds to respond, just to let you know.

Kornegay: Thank you so much. So we will go ahead and reveal the answer. So the correct answer is C, education and health services. So as you can see in this chart, most of the other sectors saw substantial losses during the last recession. So when you are deciding on a career path, this is definitely something you want to think about, what impact an economic downturn could have on your job.

So our next speaker is here with me today, and Nick, thank you for joining us. Nick Moore holds a bachelor's degree in history and government from Harvard University. He has an extensive background in career and technical education and is currently serving as Alabama's governor's education and workforce policy adviser. Nick, I look forward to hearing all about the exciting things your office is doing.

Nick Moore: Well, thank you, ma'am. It's a pleasure to be with you all today and to share a little bit about governor Ivey and the state of Alabama's vision for implementing many of the policies that Dr. Ruder has described in regard to career pathways and developing a human capital development strategy for a state that can help overcome some of the benefits cliffs that many of Alabamians and certainly many Americans across the country are going to face. So I really appreciate the fact that Dr. Ruder has focused his remarks on the development of career pathways and using career pathways as a strategy to mitigate the benefits cliff, particularly in a period of tight labor markets where we have to have more of a evangelical strategy, as we say here in Alabama, not in the religious sense, but in the sense of having to go out and find folks where they are. Because right now, we're having to focus a lot on folks that are in special populations that currently are on the sidelines or have been on the sidelines because, quite frankly, it's a good problem to have. In the state of Alabama, we have 3.3 percent unemployment, but we do have to dig a little deeper to find folks to fill jobs that are in demand right now.

So we're going to walk you through a little bit about how governor Ivey's vision for developing career pathways for honing human capital development with the goal of ensuring that all of our Alabamians and everybody in this state are self-sufficient and that they are employed in an occupation that provides a family-sustaining wage. So it really starts at the earliest ages. Governor Ivey believes in a P20W strategy of education and workforce and training, which connects pre-K all the way through the workforce. And so what you'll see before you here is the benchmarks or elements of governor Ivey's Strong Start, Strong Finish strategy. She was a public school teacher as her first job, and she's very passionate about education and also very passionate about competency-based education and the notion of breaking down the traditional four-by-four model of education that in some cases—not all cases—but in some cases may stymie an individual's pursuit of their aptitude and interests, particularly in some of our new-era CTE [career and technical education] professions, such as advanced manufacturing, health care, and IT.

So I'm going to just go over with you—and you can read these for yourself—but the reason why governor Ivey thinks that we need to have students pre-K ready is because the first eight years of life are formative. We don't get a do-over. Ninety-five percent of a child's brain capacity—not what you know, but your ability to learn—is developed by age five, and so we just know anecdotally of dealing with our own children or siblings or just in the community that little children's minds are like sponges. They soak up information so rapidly and there's a diminishing marginal return curve on that as we age.

So just anecdotally, we know from working with children, certainly, the body of evidence in early childhood education shows that there is no magic line in the sand, but we do need to do our best to ensure those first eight formative years are as impactful as possible. A lot of that is accomplished by working with parents to become their child's best first teacher. A child's never going to have a teacher that is more important, more indelible to their life than their parents, and parents want to do the best possible for their children. Sometimes they need additional support because they may be coming from an adverse circumstance or just maybe have never experienced some of those skills.

So pre-K readiness is the first, most elemental benchmark and then, secondly, school readiness is important because so much of what we do in K–12 is in regard to making up the deficits the students walk in on day one with. The governor calls that first benchmark of literacy and numeracy the blocking and tackling of education, not just because we're a football state in Alabama, but because she sees that just like a football team that if your players can't block and tackle on the field, your offense or defense is going to fall apart pretty quickly. So numeracy and literacy the governor sees as the blocking and tackling of education. If we get those right, students are numerate and they're literate by the time they enter into the fourth grade, we see longitudinally, many negative outcomes and adverse experiences being prevented.

The fourth benchmark of career exploration and discovery is important because a lot of our students in Alabama in rural areas—even in our urban areas—have an experiential deficit. You don't know what you want to be unless you've seen the things that there are to be. We're not ever going to be able to make up, on a one-to-one basis, this experiential deficit, but with tools such as Dr. Ruder described with the Career Pathways Exploration tool that will be online through the Federal Reserve, and then something called the Alabama College and Career Exploration tool, we're going to be more intentional and targeted so that young people starting as early as fifth grade and all the way through adults have the ability to explore and deeply and richly explore—not just filling out five or six questions and getting an answer but to really explore what occupations they have the greatest interest and aptitude.

And then, finally, the fifth benchmark of college and career readiness is important. In fact, we're starting to call this career pathway readiness. It's important because we, just as many of you in other states—indeed, around the country—are working to destigmatize career and technical education. We have a dark legacy of an era to where students were tracked into what we call vocational education because the adults or people in their life thought they knew better about their interests and aptitude than that student. So what we're showing now is that the academic and technical skills, they're not mutually exclusive. They're very much complementary, and we're not going to see somebody have success in a purely academic or technical pathway with a rounded understanding of both of those.

So taking a look here—and I think this gives you a little bit of a greater understanding of why governor Ivey has decided to focus on our postsecondary education attainment goal that I'm going to describe here in just a second, but taking a look at these two slides, and I think, Julie and Dr. Ruder have gotten into this a little bit, but it shows that Alabama's unemployment rate of 3.3 percent is just very low. And compared to other states in our region, we're very strong, but if you look at that labor force participation rate of 58.2 percent—and again, we're catching up. In fact, we've had 2 percent increase in our labor force participation rate, and those that are in the LMI [low and moderate income] world know that that's a pretty marked increase.

But at the same time, it also signifies that there's 41.8 percent of Alabamians that are not in the labor force. Some of those individuals are caregivers. Some of them are long-term disabled. Some of them are in a position to where they're not able to enter into the workforce, but surely, I think we could all recognize that there are many folks that are actually not in the labor force because they are suffering against the benefits cliff that Dr. Ruder described. So the point of the governor's strategy is to eliminate the benefits cliff and the notion that paid employment might not be paying for all Alabamians in all places.

So the whole strategy that I'm going to describe here on out is about eliminating the situation to where an individual chooses not to go into paid employment because it simply is not paying as much for them as they would by choosing not to enter into paid employment. So the Success Plus postsecondary education attainment goal is very important to governor Ivey because this is all about equity, and we're not just about developing the human capital in one or two areas of the state. What we're organizing around here is recognizing that these are metrics that have never really been moved in an extremely positive way, you could say, ever. For hundreds of years, we've had certain subgroups in the state of Alabama that have been historically marginalized.  

And governor Ivey ran and was elected governor because she feels like the office of governor is designed to attack problems such as these. You know, that's what the office of the governor is for, is to go in and come up with some solutions to problems that other people hadn't been able to crack before. And so we are pleased that we have strong partners like the Federal Reserve Bank of Atlanta and others that are giving us technical assistance.

But setting this postsecondary attainment goal of adding 500,000 highly skilled, credentialed Alabamians through the workforce by 2025 is a large task, but we also are breaking this down so that we know in each of our seven workforce regions in the state and each one of our 16 career clusters among all of our special populations—such as veterans, folks that have been justice involved that are reentering into the civilian world—each of these special populations, we know how many of those need to be credentialed to hit this attainment goal, not just by 2025, but each year until we get there. So it's very important for our accountability that we have this attainment goal so that the buck doesn't just stop at the top but at each layer, from the county level to even down to the individual firm, knows how many folks that they need to be able to train for us to be on track to hit this goal.

So in order to make that happen, it's very important that every state under the leadership of their governor takes advantage of the alignment that the Congress has provided between Perkins V, the Workforce Innovation and Opportunity Act [WIOA], to provide an education-to-workforce pipeline that supports supportive services, career exploration. You know, Perkins, you can use that as low as fifth grade. But aligning your Perkins and your WIOA plan, even your Every Student Succeeds Act plan, Higher Education Act, that helps us to provide braided resources together to get at the benefits cliff. Because as somebody's losing their childcare funding or somebody's losing their TANF or their SNAP, we need to be able to then replace that with another workforce-related benefit to fill that gap, to kind of stand in the breach until we are on a glide path of the paid employment to where there's actually a premium on those wages that is higher than what somebody was making through transfer payments, as Dr. Ruder's slide showed.

And in order for us, as I mentioned earlier, to know who to serve, we have to identify all of those special populations, so the governor has created a unified set of special populations. There are some enumerated in Perkins and there's some enumerated in WIOA. We've come up with a common set that's going to be true for our entire public workforce system. And in order to get away from anecdotal decision making and so that we're funding and supporting programs that are putting folks into in-demand, high-wage, and fast-growing jobs, you have to have a data-driven system and let the data point you in the right direction.

So we are integrating our workforce data system and creating a longitudinal data system called the ATLAS on Career Pathways that is…it's not going to be probably as robust as some other states where independent researchers and third parties are able to access this, but for now, it's going to be a system to where at least all of the agencies in education and government in the state are going to be able to let the left hand know what the right hand's doing for the first time. This is going to provide support to agency heads, to the legislature, to support data-driven decisions.

So as I've alluded to earlier, the College and Career Exploration tool is going to be important not only because it's going to allow our citizens to have access to a digital résumé, a one-stop hub to access the FAFSA [Free Application for Federal Student Aid], to apply for college, to access WIOA training dollars, to access job applications, but on the employers' side, this is also going to help employers save money because rather than having to go through a stack of paper résumés, when somebody posts a job, it's going to auto-populate for them the candidates that have the credentials, that are geographically located—all of the bells and whistles that employer needs in order to be matched up with the right candidates and not have to go through a trial-and-error process of 800 résumés. That's how we think that we're going to get at a credential currency. And as I get onto the next slide and we talk about credentials, we'll keep that in mind.   

So the one thing that if we were going to talk about creating a DNA for in-demand career pathways, we want to link together credentials to value, we want to link together the competencies behind that each credential represents, and then also a work-based learning experience. So if we are talking about the DNA of a career pathway or an occupation, we're looking at how the competencies that underlie the academic and technical skills that employer demands for that competency, the credential that they know mastery of that competency, and the work-based learning experience that helps somebody is the catalyst for somebody being able to learn and master those competencies.

But in order to do that, you have to have a structure, and right now it's kind of the Wild West for nondegree credentials of value. There's over 4,000 nationally and nearly as many providers, so the governor signed into law the Alabama Committee on Credentialing and Career Pathways, ACCCP, which was signed into law just this past June, and it has two mandates. One is to develop our list of in-demand jobs each year, and we use a process called our five-star rubric. So we assign occupations one to five stars. Those with three or more stars get on the list. Happy to follow up and get more in the weeds about how we work out those particular elements, but once we get our list of occupations that are in demand, then we're able to then focus on the second mandate, which is to develop the list of credentials of value that go along with each of those occupations.

But one element that's also related with the first mandate of the ACCCP is to develop competency models. And so the U.S. Department of Labor has developed a competency model clearinghouse that shows these trapezoid-type shapes that honestly is just the tiered levels of competencies that represent all of the skills that somebody would need to know for a particular occupation. So if we look here, the base is looking at personal effectiveness competency. Some people might call those employability or soft skills. We go from there to look at the workplace and academic competencies that are true for nearly all occupations. And then as you go up from there, it's specific to the particular industry and that particular occupation. So we're going to develop a model such as this, either adopting the national competency model or developing an Alabama-specific model for each of our in-demand occupations.

If I were to leave you with anything here, it would be what I'm going to share with you next. So everything that I've talked about prior to this is kind of the staging or prework for us to get to the point of developing the two-pronged career pathway model that allows an in-school youth to be able to progress quickly, to have a compressed program of study so they can potentially graduate high school with an associate degree, industry-recognized credentials, complete an apprenticeship, and then be able to go directly into the workforce. That doesn't work for everybody in all cases. That's just the optimal outcome.

For adults, we have multiple points of entry and exit. And as you'll see on this career pathway slide, on the bottom prong there we see postsecondary CTE and adult basic education working together for adults. We have a more elongated program of study for adults because, if you've got a family, you need to hop in and out of education workforce training. But the important point is that we're awarding credentials of value that then signal to employers to give multiple progressive wage increases along this pathway before somebody gets to their traditional terminal degree.

So I'll leave you with this note and that we believe and the governor believes that establishing a career pathway system that's predicated on human capital development gives us the opportunity, it's necessary but not sufficient, to develop a new social compact between labor and capital that is a fair bargain that says, Alabamians, if you invest in yourselves, you invest in honing your skills, that employers are going to reciprocate and invest in you through progressive wage increases. And in turn, through that system, we're going to be able to continue to make Alabama economically competitive and continue to score large economic development projects, increase our labor force participation rate, and reach that goal of all of our citizens being self-sufficient. Thank you all very much.

Kornegay: Thank you, Nick. It certainly seems like you have a lot going on and thank you for sharing your insight. So if you have questions for Nick, please type them in the chat box and we will do our best to get to as many of those questions in just a few minutes.

Let's we have a new poll question that has come up. And let's see... so if you click on your poll question box, it says, who is the education system's customer? Is it A, students; B, parents; C, employers; or D, the government? All right, so I'll give you a few minutes with that, and I'm going to introduce our next speaker.  

So my final guest today is Ryan Richards. He is the director of workforce development for Southeast AlabamaWorks!, which is one of our seven regional workforce councils under the Alabama Department of Commerce. The organization serves businesses and industry in 10 southeast Alabama counties to identify workforce challenges and deliver results. Ryan earned his bachelor's in education from Troy University and a master's from the University of Alabama. I've invited Ryan today so he can share some of the innovative programs he's working on.

Ryan, thank you for joining us today. And I believe maybe, Jean, can we close out our poll question and I'm going to let Ryan respond.

Ryan Richards: Awesome. Thank you, Julie. I appreciate the opportunity, just as the other two gentlemen have mentioned. I see the results of the poll were 57 percent said students, 7 percent said parents, and 33 percent said employers, and 7 percent said government. You know, that is an interesting topic that we get to talk about quite often.

With my background, I came from a classroom. I was a teacher for almost seven years. Now I've been involved in workforce for almost three, and that is just a continuous debate that we have, that every day that when our kids get up and go to school, they are taught about different things. Whether it's chemistry, whether it's history, whether it's social skills, whether it's life skills, we always kind of come back to the end result is, who is the education system's end result? And what we have come to the conclusion of is that it's employers.

If you think about the education system as a whole, at some point they could be almost considered a manufacturer, if you will. They're producing products, and those products are the students. And so if you go to an employer and you ask, "Hey, would you hire my student?" that is a product-based question, and so I think a lot of times we've got to remember that in our education world that at the end of the day, when our students walk out of our buildings and walk into the workforce, whether it be the day they graduate high school, they leave community college, they leave a four-year institution or beyond, or even the military, that reflects back on our education institutions. And so we want them to have gainful employment at some point in their life, whenever they're finished with their traditional education pathways, if you will. And so it is an interesting question and we hope that more, as time goes on, as employers really become the true answer to that question.

Julie, I think one of the things you have asked me to really speak on—which kind of alludes to a lot of the things that Nick and Dr. Ruder talked about—is the career pathways and the credentials and attainment goals. And what I want to talk about is how are we allowing our students and our young people to know about both of those things? But before I get into the depths of the programs that I want to talk about today, I want to talk a little bit about who we are as an organization.

As Julie mentioned, we are one of the seven regional workforce councils, which started back in 2015, and our vision as an organization—like she said, we're business- and industry-driven—is we want to equip businesses and industry with resources to recruit, train, and retain a highly skilled workforce. And at the end of the day that if we can accomplish our vision, then we've been successful. And that's kind of who we are in a nutshell.

Real quick, what do we do? We want to be a repository, if you will, of all the great things that are going on in the state, so when we sit down with a company, we can talk about what are their challenges and listen. You know, God gave us two ears and one mouth so we can listen to what the challenges are and that we can bring back to the table the things that will fit the best.

The way I like to talk about it is it's really a prescriptive approach, because what works for one organization or company may not be the exact fit for another group. So as long as we can make sure that we're taking care of that specific company and their needs, then we're doing our job. And so that's kind of who we are. And we use the hourglass as a way to talk about that because we've got so many great organizations in the state, and we want to make sure that they're getting to the right places and having a seat at the right table.

Something else that we do—we actually have one of these tomorrow—we have industry clusters, which basically, we bring similar types of groups and we put them in the same room at the same time to talk about similar challenges that they face. And we're trying to create results, we're trying to create solutions, so we don't want to just talk about the problem, but what can we do to really help out in those situations. Our first manufacturing cluster meets tomorrow, actually, and so hopefully, we'll have some good things come out of that. We've had great things come out of our health care. We've had great things come out of our transportation and distribution clusters as well.

Something else we do, which I'm going to talk a lot about more in-depth today, is our education and programs. We really work with our K–12, our community colleges, on making sure that we're connecting industry with education. For so long there was a gap in between those two organizations where they weren't sitting at the same table talking about the different things to help put the solutions on the table. And so that's what we try to do is to bring industry and education together, making sure that they're aligning the proper career pathways and credentials, like we've talked about, to what are the actual workforce demands. So we don't want to create and develop programs that have no end result of a person being successful.

Something else that we talk about is funding. There is a lot of resources when it comes to not only state dollars but federal dollars, and Nick talked about a few of those different things in his part of the presentation. But we can help a company, or even an education entity, be able to find funds to produce something that will, in turn, impact our industry partners as well.

And the last little piece is policy. Fortunately, we get to work with Nick a lot and he works out of the governor's office, and so anything that we hear from our industry partners or education partners, we have the ability to bring that to the table. And so we can hear what is going on, and we can be an advocate for those individuals that may not have the ability to get their voices heard in different settings.

So really quickly, I want to talk about this first event that we do with our education partners. It's called Southeast Worlds of Work [WOW]. We are not the only group in the state that does this. Our other six counterparts have an event extremely similar to this. This Worlds of Work event is specifically for eighth graders. We brought over about 4,100 eighth graders on the grounds of the Peanut Festival last year in Dothan. And it is an exciting, interactive, hands-on career exploration event.

Now these students start in one part of the event. They go through and they get to see utilities and see what it's like to be a line worker. They get to see what it's like to drive a truck. They get to move on to health care and see what it's like to be in that world. So there's 11 different industries' sectors that we work with. These kids get to touch, feel, and see what it's like to work in those industry sectors every day.  

And I always tell this one story when I talk about WOW is that, you know, think about eighth graders that are picking up hammers and touching power tools for the first time in their entire life. And a lot of us think, wow, how is that possible? But that's the situation that some of our students, unfortunately, are in, and if they don't have this exposure, if they're not allowed to see these things firsthand, then we don't know how they're going to progress and be able to find the opportunities to be able to be successful moving into the future.

And it's always interesting when we bring adults through the WOW event. They always say, "Man, this is fantastic. I really wish we would've had something like this when we were the age of these students." So it really is great.

So just a little bit of data and statistics as far as what WOW is. We had 58 schools last year. Like I said, we have over 4,100 eighth graders. It takes over 500 teachers and volunteers and world operators, which are our companies, to actually put this event on. If you're anywhere near the Dothan area or you would like to join us, the event is February 19 and 20. You can go to to get any more information and we would love to have you join us so you can see what it's all about.

We also have investors. We strategically use that term. We don't want people just to sponsor. We actually want people to be there with their time and their effort and their energy because we are changing lives of students.

And Julie, this is interesting. I don't think you have heard this yet, but we found out the other week that a student last year was at the event with her mom, and they got to speaking with someone in the health care world. And because of that conversation, the mother enrolled in a community college rad tech program because she wants to go into radiology. So now we're not only affecting kids, but we're affecting the parents as well. So that was a great success story that we heard.

We are very unique at our event in that we actually have three states attending. We invite schools from Florida and Georgia, simply because we understand that our economy and our workforce cross state lines. And so we want to make sure that those students that are close enough can find out about opportunities that are right here in the state of Alabama.

And so the whole goal of WOW is to make sure that students understand there are so many career opportunities out there and they can find out the specific career pathways they can move into from middle school, high school, and beyond of what it takes to get into those specific careers. They are shown at this event, so WOW is a great two days, full throttle, thousands of kids, and so again, I encourage you to join us. If you're not from around here, again, you can find the other regional workforce councils that are hosting these events in your part of the state or beyond.

The second event that Julie and I actually got an opportunity to meet at was the first event that we've ever had this past year. It was called the Educator Workforce Academy. So shifting gears a little bit from students, now I want to kind of talk about the educators because at some point we've got to, like I said in the beginning, shift the dynamic in the classroom that we're preparing students for careers and not just every kid has to go on to earn a four-year degree because that's been the stigma for so long. And so our goal with the Educator Workforce Academy is to take these superintendents, principals, and career tech directors, and we're putting them in front of industry. We're putting them in front of the leaders that are hiring and firing and producing things every single day to really get them to tell our educators what they're looking for when they're looking for quality employees.

And a lot of the things that we talked about are it's not necessarily all the hard skills or all the technology that our employers are looking for. At the end of the day, they're just looking for people who can show up, show up on time, pass a drug test, be drug-free, and communicate well with others. And that's important for our educators to hear that from employers.

The other piece of that is we actually take them on industry tours. Think about how many buildings you drive by every single day that you think, I wonder what goes on inside of those walls? Well, that's the same challenge the educators face as well, and so we want to make sure that they understand what goes on, actually, behind those walls. So we can do this. If we can close the gap between graduation and workforce and the true skills that it takes, that is necessary to be successful in any type of employee environment, then that's really how we're going to be successful. So the closer and closer and closer we can get that gap together, the more successful our education systems are going to be in the long run.

So the mission is to help local school systems take their career tech programs to the next level to prepare students to meet this as industry need. So we talk about puzzle pieces often, about how there's so many things that sometimes fit and don't necessarily fit, so we want to make sure we're laying everything out on the table.

I'm a science teacher, and so Einstein has a lot of things, and I found this very influential quote that he says, "The only source of knowledge is experience." And if you ask any kid today how they learn, it's by touching and seeing and feeling, and adults are getting that way as well. And that's what the Educator Workforce Academy is about in its simple form is that you can sit and talk about it all day, but until you actually experience it, you're not going to be able to change a whole lot.

We are extremely thankful for the organizations that partnered with us during our four sessions. We had 24 different organizations that our educators got to be a part of, and Julie, with the Federal Reserve Bank of Atlanta, was one part of that. And you can see all the different other groups and companies and colleges and state entities that we partnered with. And so it just takes a lot of connection of resources to really lay everything out on the table to see how the puzzle pieces all fall together.

Like I mentioned earlier, they also got to do industry tours, so we took several of those, all across our 10 counties in southeast Alabama. It was very strategically structured. They got to see manufacturing. They got to see distribution. They got to see poultry, which is a major industry in our area. They got to see aviation, which is a great one as well. And then also we're fortunate enough to have an osteopathic medical school, so health care is a booming industry in our region and we wanted them to see what that looks like in terms of the health care section as well.

One of the last things that our educators had to do in every single session was we had a debrief session. So we didn't want to just sit down and they listen and they leave. We wanted them to think about things, so we proposed two questions at the end of each session. The very first session is, what did you learn and then what are you going to do about it? In each session, we challenged those educators with, how are you going to take this back to your schools and truly make an impact?

The way that we kind of spun that at the very end is that each school system had to come up with what we called an action plan. They had to do a lot of digging into their data and what are they doing to allow students in their school systems to see career pathways that they offered through their programs. How are they recruiting those students into those programs and allowing them to be successful? And so each system had to present this action plan at the very end, and we're going to try to hold them to a little bit of accountability with each other and say, here's what we've been able to do over the next three to four years.

And the other piece of that accountability plan is they understand now that the workforce pipeline is not just for high schools. The workforce pipeline has to start down in your pre-K, just like Nick was talking about. This is a P20 system now. We can't just focus on those 9th through 12th graders, because at that point, they're lost. They're gone if we don't start earlier. If you do have some time, I encourage you all to look up something called WeeCats. It is a program that is in Enterprise City Schools here in our region. They are doing workforce skills and running a business with pre-K, four-year-olds. It's extremely impressive, so if you're jotting notes down, write down WeeCats and look them up.

So we wanted each school system to come up with that workforce pipeline from pre-K all the way to 12th grade and making sure that all of their schools know how important the workforce is. So with that, Julie, I appreciate the opportunity, and I'm going to turn it back over to you.

Kornegay: All right. Well, thanks so much. I'm not sure if other states around us or in the Southeast have a WOW program, but I will tell you, I was pretty darn tempted to climb up that electrical pole. I really wanted to. I didn't, though.

Richards: Well, come back next year and do it.

Kornegay: Okay. Thanks. So we've reached our Q&A segment for today's program, and we have lots of questions rolling in. I think I'm going to kick off with one of my own first, though, and I'm going to ask Alex, what are some of the high-demand, high-paying jobs that can help improve someone's economic mobility?

Ruder: There are many jobs, I think, that would follow them and allow me to answer that question, I mean, the first thing to recall is, of course, it's going to vary a lot by state, by local area, by industry composition of your area. So at first, I just want to say that local strategy should really determine what that list is. Secondly, you can learn a lot about, you know, what jobs are in demand. It could either be in the health care industry, like I talked about, so it would be licensed practical nurses, registered nurse jobs. What are these career pathways, they have an easy entry-level position, and then your sort of state leaders and workforce development organizations, like we heard from today, have talked to local employers and charted out what are the next steps in those pathways and determined that these are paying wages that are sufficient to a local area.

So you know, again, it requires in a sense a very local answer to some extent. I'll add on that the Federal Reserve Bank of Atlanta has additional resources you could look at to learn more about what are in demand and pay a good wage. It's called opportunity occupations. You can find a lot about opportunity occupations at our website, and what these basically are is Federal Reserve Bank of Atlanta analysis has used a variety of different data sources to chart out demand in the metropolitan statistical area of roughly how many jobs are available in occupations that tend not to require a four-year degree but pay above the national median wage. So again, easy access in terms of education, but paying a wage that's above the national medium, which is a step toward self-sufficiency for individuals.

Kornegay: Okay, great. Thank you. That's really helpful, and I would encourage everyone, especially if you're in the Southeast, we have some fantastic posters that you can distribute or use in your classroom that just tells a little bit about or illustrates [these jobs in] your region and what some of these opportunity occupations may be. All right.

Well, I've got another question to ask, and this one's for Nick. Nick, you ready? How do states benefit from a higher labor force participation rate?

Moore: I think in a state like Alabama or in the Southeast where we've sort of suffered through what some economists might call a low-level equilibrium trap to where low levels of educational attainment have created sort of a vicious cycle to where we're more historically in the last few generations have been dependent on generating jobs that are more manual labor, entry-level jobs. And so the biggest way to really have people benefit from increases in labor force participation is not just to increase the labor force participation rate, generally speaking, but to increase the labor force participation rate by getting folks into a career pathway, whether it's an entry-level job like a CNA that Dr. Ruder mentioned, or if it is simply somebody who has been structurally unemployed due to a shift in the economy to make sure that we get them retrained and put into a new occupation.

But I think that the rate of labor force participation rate and the rate of educational attainment tend to run in tandem, so I would say that the social utility of increase in educational attainment rate is going to, in turn, generate in the economic a positive externality of increase in the labor force participation rate.

Kornegay: Very good. All right. Thank you. All right, so my next question is for Ryan. What are some of the high-demand, high-paying credentials in your area that students can acquire while they're still in high school?

Richards: That's a great question, and I think the unique part about the dynamic shift of the high school credentialing that more and more career tech centers and career tech programs are starting to offer these credentials, if you will, just like Dr. Ruder was talking about, especially in health care. As a matter of fact, I spoke with our third largest employer in our region the other day, which is a hospital, and we got to talking about patient care technicians or patient care assistants, and she says they can't hire them fast enough, and those programs are getting more and more embedded into our high school systems. And also our colleges are starting to add them as well.

Along the manufacturing end, there's a new credential coming out called MSSC, which is an organization of manufacturers that has created a credential called certified production technician, or a CPT for short. There are several high schools that are also beginning to embed those into high school curriculums.

The last one, which we don't think about often, is our automotive technicians. A lot of our career tech programs in this region offer the automotive program and so an ASE-certified technician could go to some of these local dealerships and start out at a reasonable wage in the 40s and 50s, but we know of certain dealers around here that are paying their best mechanics six figures. And the old grease shops of what we used to think about in terms of cars are totally not like that anymore. I mean, next time you want to go buy a car, go look in the shop, and it's clean, it's bright, it's air-conditioned. And you're talking about guys that have extremely high skill sets that all they have to have is a high school diploma and the credential, and they could potential be making over $75,000 to six figures a year.

Kornegay: All right. Well, thank you very much. So that's all the time we have today for questions, and I've got 4:29, so I don't want to run over. If you'd like, I'd like to thank my speakers today for joining us and participating. And on behalf of everyone, I'd like to thank you for joining us. You will receive a survey via email, and please take a moment to fill this out and let us know how we're doing. We'd also love to get any feedback you might have on future presentations or ideas, programs we can bring to you. If you know someone that would likely find this interesting or this session valuable, it's recorded and we will archive this on our Maximum Employment Matters web page in the coming weeks. So with that, I'll officially bring this session to a close. Thank you for joining us and have a great rest of your day.