Giving Compass' Take:

• This report from the Manhattan Institute provides recommendations for a workforce training program for individuals that do not have a college degree.

• The report maintains that this workforce training program will be sponsored by employers rather than schools, and it is on the onus of businesses to provide opportunities for skill-building. How can donors help advocate for or support a funding shift towards employer-based training? 

• Learn more about workforce development opportunities.

The American education system and labor market are heavily biased toward college graduates. High schools function predominantly as college-prep academies, state and federal governments subsidize higher education by more than $150 billion annually, and those with the academic aptitude to succeed on a college pathway are likely to find their skills in higher demand and applicable to higher-paying jobs.

However, for many Americans—perhaps even the majority, who do not earn even a community-college degree—and for many career paths, positions that combine immediate on-the-job experience with employer-sponsored training offer the best opportunity to enter the workforce and build valuable skills. Such positions receive little to no public support, and employers often have little incentive to create them.

A neutral approach for public policy toward workforce preparation would recognize that employers, not universities, often provide the most socially valuable form of training and would redirect public resources accordingly.

This report proposes how this could be accomplished:

  • Define a “trainee” status, akin to the status of a student enrolled in a college, for any worker whose wage is below an established threshold and whose time is divided evenly between on-the-job experience and formal training.
  • Allow for diverse forms of formal training, including programs operated by an employer; by a consortium of employers, an industry association, or a partnership between employers and organized labor; or by a technical high school or community college when its curriculum is designed in partnership with the employer.
  • Provide a substantial grant to private-sector employers who create trainee positions and provide for their training, on the order of $10,000 per year per trainee. Fund this grant by redirecting subsidies provided to traditional higher education.