HB 12-1061 Skills for Jobs Act – Challenges for Meeting Workforce Needs

On April 2, 2012 the Governor signed HB 12-1061, known as the Skills for Jobs Act. In a nutshell, the new legislation mandates an annual report that looks at the relationship between education degrees, awards, and certificates and the needs of the state workforce.

The intent of the legislation is to increase efficiencies within the education system during times of reduced funding for K-12 and higher education. The reports are intended to provide knowledge and motivation to reduce or eliminate redundancies, cut back on degree programs that don’t lead to jobs, expand existing programs, or develop new ones.

In an ideal world, students will graduate from college and will have adequate training to enter a job in their field of study with a company in Colorado. At the same time current workers will be able to find training that would allow them to retain their jobs or advance their careers. In addition, unemployed workers can receive training that allows them to find a job in the ever-changing workplace. The ideal training system eliminates the severe skills mismatch that currently exists between unemployed workers and the needs of the private sector.

There are unintended consequences that might arise from this piece of legislation. The following questions and comments consider some of these consequences as well as other issues related to HB 12-1061. The presentation of these ideas is not intended to support or oppose the new act. The purpose is to stimulate discussion about the issue.

Meeting the needs of our workforce is critical to our national security, competitiveness, innovation capabilities, and our world leadership position. And it makes sense (and cents) to meet these needs in a cost effective manner.

The questions and comments are divided into five areas.

1. Training and education have become a big and lucrative business. Who should determine the classes taught by the public sector and those taught by the private sector? For example, it has been demonstrated and accepted that the private sector is better suited to provide training in computer systems certification programs. Should other disciplines such as business, music, and foreign language also be taught exclusively by the private sector? In another example, partnerships between the public and private sectors have benefitted all parties. A case in point is the Laboratory for Atmospheric and Space Physics at CU-Boulder. As part of their education experience, students can track satellites and secure internships with local aerospace companies. In this case, a degree with an internship virtually guarantees a job. In other words, some degrees are more likely to result in a job than other degrees. What about degrees, such as liberal arts or general studies, which do not directly prepare a student for a particular job? Are they more valuable because they provide students with a broad perspective of ideas and prepare them for many jobs or less valuable because they don’t prepare a person for a targeted position? When measuring the effectiveness of higher education, how do you account for a person who receives four years of education in their area of choice, then after working in that profession for six months decides they don’t like it and seeks employment in another area? And how do you account for the individuals who obtain a degree, but work in occupations that don’t require advanced education? The process of matching supply and demand might be accomplished more efficiently if students were required to take a battery of tests and limited to areas of study where they were the strongest. Would such an approach be too Draconian?

2. This leads to the age-old debate about the role of higher education. Is the purpose of our college and universities to train the workforce or is it to provide a safe haven for students to learn and grow up? Or are there other reasons to have higher education? Are students entitled to have a free or inexpensive college experience? Do college leaders and the public have the same perception about the role of higher education in society? Is higher education obligated to offer classes in areas that are a financial drain to the university, such as ethnic studies or the arts? In a similar light, is higher education obligated to provide courses in areas where there may not be a critical mass of students? This includes subject matters that might lead to future growth of the U.S. economy, such as cutting edge courses in nanotechnology, RFIDs, astrophysics, or molecular biology? Are programs that are cash cows more important than other programs? How do you apply university research to the classroom? How does commercialization of research fit into the education process? Should higher education have two sets of faculty – one to teach and one to conduct research that generates revenue and notoriety for the university? What role does experiential learning have in the education process? How do you ensure that degree and certifications are of the highest quality given the escalation of faculty wages, reduced state funding, increased donor funding, and donors who expect to have input into the development of curriculum? How do you deal with the diminishing perception of higher education? Has higher education been out of control for a long time? Are futurists and former education leaders justified in foretelling of a higher education bubble? Is higher education at fault for massive student debt because they have effectively marketed their services or does that blame lie with students who made poor business decisions? Will this massive debt cause future students to look at professions that do not require college degrees?

3. When developing education and training programs, how do you account for changes in the economy? During the 1990s, the high-tech clusters expanded at an unsustainable rate. Is it realistic to expect higher education to provide a trained workforce during such rampant periods of growth? Over the past decade many of the same clusters experienced a number of layoffs. Why would anyone want to pursue those occupations (engineers, software developers, hardware manufacturers) after experiencing a decade where no net jobs were added? How can companies forecast workforce demand and higher education provide an ever-changing workforce during such boom and bust cycles? How do you develop training programs for jobs that didn’t exist 20 years ago such as web designer, application developer, or games programmer? Should higher education focus more on providing a set of transferable skills or should they focus on training workers for specific occupations? Colorado only has about 2.2 million wage and salary workers, or less than two percent of the U.S. workforce. Those workers are in a wide array of industries spread across 64 counties. How do you provide training programs in topical areas and geographic regions where there is frequently not a critical mass of workers to run a program?

4. Over the last 35 years, the state has adopted fiscal policy that allows local colleges and universities to bolster their coffers by accepting a higher percentage of out-of-state students. Is it appropriate for Colorado’s universities to be training employees for other states and countries? What contributions do out-of-state students make to our higher education system and business community?

5. Will the required reports from HB 12-1061 cause college officials to take steps to adjust their admission requirements so their graduating students will have the degrees to meet the needs of the workforce? Will future college funding be based on the ability of the schools to meet the needs of the local workforce? Will future scholarships be given to those students seeking degrees that will fill occupations most critical to the state’s economy? Will students in “non-essential” areas be prevented from scholarship opportunities? How do you mandate or encourage participation in programs for machinists, lineman, and manufacturing technicians when they are not perceived as sexy occupations by many? What happens if you train 300 people for renewable energy jobs and only 6 of them are able to find jobs (this actually happened in a federally funded program in Colorado)? Colorado colleges graduate approximately 30,000 students a year with four-year degrees. In other words, about 150,000 students were added to the pool of potential workers between 2007 and 2011. Given the dire economic conditions at that time, how many of these graduates found jobs in their degree? Was there a surplus of degreed students? What happened to students who didn’t find degrees in their jobs? Do colleges and universities have an obligation to prevent students from entering degree or training programs where there is an obvious surplus?

There is sufficient evidence that the public and private sectors have collaborated over the years to meet the workforce needs of the private sector. Some of these efforts have been more successful than others.

Hopefully, HB 12-1061 will strengthen the partnerships that have been built in the past, higher education, and the private sector. The challenge of identifying and training workers to meet the demands of the workforce is much more easily debated than achieved.

 

©Copyright 2011 by CBER.

After 8 Months, 7 Sectors Show Job Gains

Through the first 8 months of the year there are 7 sectors of the economy that have added a net total of 34,900 jobs, compared to the same period last year.

  • Tourism                                                +11,600
  • Private Education and Health Care +9,600
  • Professional and Scientific                +4,100
  • Extractive Industries                             +3,000
  • Wholesale Trade                                  +2,300
  • Employment Services                          +2,300
  • Higher Education                                  +1,900

These sectors account for 40.6% of total employment. Average wages for this mix of workers is about $43,600 per worker, compared to average annual wages for all workers of about $47,900 (calculations based on 2010 QCEW data). In other words, the average wages for the sectors that are adding jobs is less than the overall state average.

The 2011 prognosis is that each of these sectors will show job gains for the year (2011) and that average annual wages for the group will be less than the overall state average.  For a more comprehensive review of the Colorado economy visit the CBER website.

 

©Copyright 2011 by CBER.

Cooperation and Sharing… Can You Say CIC?

A member of the 1967 Ohio State University lacrosse team was recently being harassed by friends about the firing/resignation/departure of Jim Tressel, the Buckeye football coach. After a few minutes he politely told his tormenters, “Can you say CIC?”

Say what?

For the benefit of his distracters, the proud Buckeye explained how the CIC is one of the nation’s top economic engines. For the unenlightened, the Committee on Institutional Cooperation is a consortium of the Big Ten member universities plus the University of Chicago.

For five decades the group has worked together to further the missions of their respective universities. They have done this by sharing their knowledge, unique skills, and expertise for the good of the greater cause.

According to the CIC website, 385,000 students attended the universities in the consortium in 2006-2007 (last available data). During that period members received $6 billion in R&D funding. Overall, the institutions awarded 6,532 doctoral degrees, including 20% of U.S. engineering doctoral degrees, and 25% of U.S. agricultural doctoral degrees. While it would be easy to further summarize CIC successes, a greater appreciation of the their programs and impacts can be gained by visiting their website.

Cooperation and sharing expertise – two simple concepts that we were taught in kindergarten.

Looking closer to home… While it is not reasonable to expect Colorado’s higher education system to match the impacts of the CIC, it is fair to hold the system accountable for their cooperative spirit and their willingness to share expertise.

Over the past decade, Colorado’s colleges and universities have been focused on Ward Churchill, Lisa Simpson, 4/20, a lawsuit over toilet paper, which school had the best advertisements at DIA, and a series of PR other gaffes. Colorado higher education has created the impression that it is driven by $$ more than the greater good of the cause.

The system has posted gains in employment during two recessions. Average annual wages have grown at a faster rate than the private sector. Despite tough economic times, Colorado higher education has ramped up its lobbying and fund raising efforts. It has requested and expected double-digit tuition increases to be granted without question.

Cooperation and sharing…the backbone of the CIC. Do they exist in Colorado higher education?

LASP, Maven, EUV, and JILA are great examples of what can happen when people respectfully work together and exchange ideas. Does this collaboration exist beyond engineering and the sciences? What is being done to increase partnerships and eliminate fiefdom building and working in silos? What is being done to make collaboration and the legitimate exchange of ideas a greater part of all disciplines at each of the state’s community colleges, colleges, and universities?

As Colorado legislators ponder ways to improve higher education, the concepts of cooperation and sharing should be part of the discussion. Colorado deserves a higher education system that delivers the goods with the cooperative spirit of the schools in the CIC.

 

©Copyright 2011 by CBER.

Got Jobs? Colorado Economy Stalled

Got jobs?

The Colorado Office of Labor Market Information recently released data that shows that four-month average employment for the state was 12,500 workers above the same period in 2010. The private sector posted a gain of 14,700 employees while total government employment decreased by 2,200.

Over the past four months, a group of industry sectors have increased their payrolls by 32,800 jobs (see chart below). These sectors account for 60% of total employment.

At the top of the list of gainers are tourism (+10,300) and private education  and health services (+9,900). The next three sectors are the extractive industries (+2,800), wholesale trade(+1,900), and higher education (+1,800).

Nationally, the recovery is shaping up differently than in Colorado. The leading U.S. sectors are professional and business services (PBS), tourism, health care, and manufacturing. Job growth in the Colorado PBS and manufacturing sectors seems lackluster compared to the U.S.. Companies in both sectors are part of the state advanced technology cluster, a key driver of the economy.

Meanwhile, the other 40% of the sectors has shed 20,300 jobs. Construction jobs continue to top out the list of industries shedding jobs (-8,800), followed by financial activities and the information sector, both posting losses of 3,600 jobs. Local education, PK-12, has dropped 2,200 workers while the federal government payrolls are down by 1,700. The decrease in federal employment is an anomaly. A number of temporary jobs were added in mid-2010 to complete the decennial census.

Fortunately, the movement of the state economy is different than movement of an airplane, where “stalling out” can have disastrous consequences. At the moment, a recession is unlikely; however, it is frustrating to endure a two-year recovery (jobs and output) that is moving forward at a “stalled pace.”

©Copyright 2011 by CBER.

Is Colorado Higher Education Effectively Delivering the Goods?

Earlier this spring Dan Hawkins was replaced as CU football coach because his teams lost too many games and ticket sales began to wane. There was a perception that investments in the CU football program were not paying dividends. A change was made and public sentiment turned from outrage to support when CU leadership announced a replacement (Yes, athletics are an important part of higher education).

When are the masses that cried for the removal of Hawk going to show a similar sense of concern when investments in academic programs do not pay dividends? It only seems fair that college deans should endure the same scrutiny as Hawk when their faculty cannot conduct research or connect with content in the classroom. Shouldn’t deans be held responsible when they manage programs that are irrelevant or not cost effective?

Colorado has one of the most highly educated workforces in the country. An exceptional higher education system is essential if the state hopes to retain it.

Non-farm wage and salary data shows that there are about 66,000 employees at higher education institutions in metro and rural areas across the state (This number includes some student workers). More importantly, they are a source of training for the world’s current and future workforce. Higher education is an economic driver of the state for both reasons.

During the Lost Decade (2000 – 2010), the state’s higher education sector added 12,300 workers. Meanwhile, the private sector (non-farm wage and salary) declined by 50,100 workers.

In Boulder County, higher education employment increased by 2,700 workers. At the same time, private sector employment shed 10,600 workers.

Current wage data for the period 1999 to 2009 shows that average wages for higher education increased faster than the private sector. In 1999 average annual wages for higher education and the private sector were similar, $34,126 and $34,317 respectively. By 2009, there was a noticeable gap between the two groups, $49,610 for higher education and $46,855 for the private sector.

During this time, many businesses were forced to reduce their staffs, cut expenses, and creatively mange their businesses. In the process, the surviving companies became more efficient and productive. All the while, higher education lobbied hard for increased funding and tuition increases. As well, they embarked on the silent phase of a $1.5 billion fund raising campaign.

The question must be asked, “What dividends did Colorado receive from this increase in the number of higher education workers and their higher than average wage increases?”

Consider the value proposition of the Laboratory of Atmospheric and Space Physics (LASP) at CU-Boulder. LASP’s goal is to train the next generation of space scientists, engineers, and mission operators. LASP is the world’s only research institute to have sent instruments to all eight planets and Pluto.

Recently, they were awarded a $425 million grant to work on the MAVEN (The Mars Atmosphere and Volatile Evolution Mission). MAVEN will be launched in 2013 to learn more about the Mars climate and atmosphere. Both undergraduate and graduate students will be taught the basics in the classroom, integrated into all phases of MAVEN, and provided opportunities for on-the-job training that will be invaluable when they enter the job market.

Historically, LASP has had a strong value proposition for students, faculty, sponsors, and its private sector partners.

Also consider the value proposition of the Leeds School of Business at CU-Boulder.

About a year ago, the Denver Business Journal published the results of national rankings for 111 business schools. The DBJ listed rankings for CU, CSU, and DU.

The Leeds School can point with pride to their ranking in sustainability:
• Sustainability: CU/Leeds, 19th; CSU, 36th; DU/Daniels, 40th

The Leeds ranking in the core areas of a business education make Dan Hawkins look like an All-Star:
• Accounting: DU/Daniels, 27th; CSU, 74th; CU/Leeds, 78th.
• Ethics: DU/Daniels, 3rd; CSU, 85th; CU/Leeds, 91st.
• Financial management: DU/Daniels, 50th; CSU, 84th; CU/Leeds, 89th.
• Strategy: DU/Daniels, 55th; CSU, 82nd; CU/Leeds, 105th.
• Operations management: CSU, 45th; DU/Daniels, 57th; CU/Leeds, 109th.
• Marketing: DU/Daniels, 31st; CSU, 73rd; CU/Leeds, 111th.

If the perception exists that Leeds students are not taught the basics, does it really matter if CU/Leeds has a solid sustainability program?

A more recent ranking of MBA programs shows that Leeds provides a solid MBA experience. However, a look at the average GMAT scores suggests that a Leeds MBA falls in the third or fourth-tier.

Why haven’t previous deans and associate deans who oversaw the MBA program been held responsible for not seeking “flagship status” for a Leeds MBA.

Let’s look at the cost of producing these results for Leeds undergraduates and graduates. The faculty pecking order ranges from senior instructor to full professor (tenured), with annual salaries varying from $100,000ish to $300,000+. The directors of the various centers receive salaries in this same range. Many of the higher paid professors have minimal “real-world” experience and often teach fewer students than the lower paid instructors. The leader of the group is the dean, with at salary of $400,000+ per year.

LASP can send a satellite to Mars and incorporate students in the process and the Leeds School can claim that their marketing program is ranked 111th out of 111. It doesn’t take a rocket scientist to see that there is a difference in programs and the accountability of their leaders.

Will the Leeds dean be held accountable for improving the performance of the business school in exchange for the $1+ million he will receive for his brief layover in Boulder? (The life expectancy of a Leeds dean is about 2.5 years). What steps is he going to take to ensure that a Leeds education includes a strong foundation in the basics (marketing, accounting, strategy, operations, and ethics). What is going to be done to make the Leeds School as meaningful and relevant as LASP?

While these two examples focus on CU-Boulder, this isn’t just about them. Every institution of higher education has a number of programs and value propositions. Some are like LASP, some are like Leeds, and others are in between.

Every dean and faculty member at these institutions must be held accountable for efficiently and effectively training our country’s current future workforce.

During the Lost Decade, higher education employment increased and workers received greater wage increases than the private sector. It is now up to higher education to demonstrate and justify the dividends that have been generated because of that investment. If that dividend cannot be confirmed, then higher education has an obligation to reduce employment, eliminate programs, and seek the efficiencies that were gained by the private sector in the last two recessions.

Just as Hawk was held accountable for his team’s performance, stakeholders (state policy makers, parents, business leaders, alumni, and students) must hold higher education leaders accountable for the performance of their system. Colorado deserves a higher education system that pays greater dividends.


Large advertisement at Denver International Airport for CSU’s business school.

©Copyright 2011 by CBER.