Uncertainty Slowing the Economy

Experts representing industry, government and educational communities supplied testimony about what they are doing to remedy the workforce skills gap and improve the country’s educational system during a recent hearing held by the U.S. House Committee on Education and the Workforce.

The witnesses also testified that the federal government could do more to quell economic uncertainty and accelerate job growth and to make it easier for states to align their education systems with labor-market needs.

Jared Bernstein noted that education has often been put forth as a policy solution to the problem of stagnant earnings and inequality, and for good reason. There is a significant wage premium for workers with higher levels of education, one that has grown considerably over time. But he said it would be a mistake to think that higher educational attainment alone would help ameliorate the economic squeeze that so many families face. Bernstein added “the supply of labor, even of so-called skilled labor, is not what’s holding back job growth right now. Inadequate labor demand—not enough jobs to meet the supply of workers—has been, by far, the more pressing factor in recent years.”

Jay Timmons, president and CEO of the National Association of Manufacturers (NAM), said “the current National Labor Relations Board and the Department of Labor continue to churn out troubling regulations and case decisions, often overturning decades of established and accepted labor practice.” Not only government regulations but a serious shortage of skilled laborers is hampering the manufacturing sector, according to Timmons.

States Leading Education-Reform Efforts
Utah Gov. Gary Herbert and Virginia Secretary of Education Laura Fornash discussed how their states align their educational requirements with current labor-market demands and suggested that Congress consider policies that could help more Americans access the training and education necessary to compete in the 21st-century workforce.

Secretary Fornash said that Virginia is working to lower college costs and increase transparency around higher-education outcomes.

“Our goal of 100,000 new degrees over the next 15 years, with a focus on STEM-H degrees, has been supported by more than $350 million of state funding over the last three years.” These degrees include those in the science, technology, engineering, math and health fields.

Virginia is one of only a handful of states to release wage-outcomes data on college graduates, down to the level of individual major and institution, Fornash testified. By August 2013, the Commonwealth will include within these reports associated statistics on education debt, also down to the specifics of major and institution. “For the first time, students and families will be able to use specific information about the full costs, associated debt and early-career wages to make informed choices about postsecondary education.”

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