Building the U.S. Workforce of the Future: Key Challenges and Opportunities

Apprentice working with sander

Even before the COVID-19 pandemic put extraordinary pressures on the U.S. economy, a number of disruptive shifts complicated workforce stability and preparation. Technology and automation, for instance, have displaced many workers. At the same time, employers have found it more difficult to hire the workers they need. To respond to these issues effectively, we need to fully understand the situation at hand.

Assessing the Current Economic and Workforce Environment

AIR experts conducted a series of analyses to better understand current economic dynamics, focusing on:

  • The state of knowledge about workforce development and economic mobility and prosperity;
  • The changing nature of work and workforce opportunities now and moving forward; and
  • The needs for further evidence-building and field-building, particularly connections among fragmented players in K-12 and postsecondary education, job training programs, industries, and communities.

Here are two primary takeaways about the current landscape:

1. The U.S. education-to-workforce pipeline is broken.

While the majority of U.S. students graduate from high school, postsecondary education challenges remain. Not enough students are enrolling in higher education programs, and not enough students are graduating with a credential that translates into better employment opportunities and higher earnings. This is concerning because the vast majority of livable-wage jobs today and moving forward are expected to require at least some postsecondary education.

Not enough students are enrolling in higher education programs, and not enough students are graduating with a credential that translates into better employment opportunities and higher earnings.

Sixty-seven percent of Americans who started an associate or certificate degree program in fall 2015 had not earned any type of postsecondary credential three years later. The rate is a little better for individuals who started a bachelor’s degree program: 38 percent of those who enrolled had not earned a bachelor’s degree six years later. Particularly concerning is that enrollment and attainment outcomes are poorer primarily for students of color and those of lower socioeconomic status. These populations represent a large and growing proportion of the U.S. population and future labor force, suggesting that these challenges will only continue to worsen if we fail to act to ensure equitable access to educational opportunity at the postsecondary level.

How can we significantly increase both enrollment and success rates in postsecondary education? Perhaps the time has come for policy and decisionmakers to seriously consider a national, compulsory PreK-to-14 education system. Existing strategies and models—such as dual enrollment and early college high schools, programs of study in career pathways among Perkins V-funded career and technical education programs, and “free community college” demonstrations—point the way forward. We can leverage and continue to build the evidence base on these and promising alternatives to the status quo to build a stronger, coherent system that better serves employers and future workers.

Policy and decisionmakers also would be wise to consider building more and stronger on-ramps back to education, as well as skill-building and upskilling programs for the millions of Americans currently being left behind. These include:

  • Disconnected, or promise, youth;
  • Individuals who have learning, physical, and other disabilities;
  • Homeless individuals;
  • Returning/disabled veterans and military spouses;
  • Individuals who experience mental health or substance use issues; and
  • Justice-involved youth and adults.

It is important to also recognize that these are not mutually exclusive subgroups and that many of these individuals experience multiple barriers to success in education and training, which must be addressed comprehensively.

2. Our education and training system is designed for an era of “once and done”—and will not support a future-ready workforce.

The rapid pace of technology advancements and workforce churn to meet ever-changing employer needs demonstrates the importance of continual skill-building and competencies in new skill sets. We need a system that can potentially support every worker at some point—and very likely at multiple points—in their lives.

We need a system that can potentially support every worker at some point—and very likely at multiple points—in their lives.

The good news is that we have many of the pieces needed to build such a system. But we need to weave them together into the kind of coherent, robust, and enduring system that will support a strong education-to-workforce pipeline and resilient, future-ready labor markets. For instance, the Department of Labor workforce investment and development system could play a critical convening and coordinating role. This includes programs and laws like the Workforce Innovation and Opportunities Act, Unemployment Insurance, Wagner-Peyser Employment Services, and Trade Adjustment Act programs. Together, these programs include many of the elements of the necessary infrastructure.

For decades, the U.S. has underinvested in these programs and, as a result, they do not have the capacity to adequately serve the millions of Americans who can benefit from their services. The 10 million or more Americans permanently displaced and others adversely affected by the COVID-19 pandemic will need structured support and guidance to effectively navigate a fundamentally disrupted economy and identify new paths to good careers and economic mobility for themselves and their families.

Six Guideposts on the Path to a Stronger Workforce System

AIR’s series of analyses surfaced many insights into the broken workforce pipeline. Here are some guideposts to follow as we aim to build a strong, enduring workforce system:

  1. Sectoral programs are a promising approach that should be taken to scale. Sectoral programs are partnerships among employers in critical industries—such as manufacturing, technology, or health care—and education, economic and workforce development, and community organizations in a regional labor market. The existing evidence base suggests that these programs are highly effective at connecting participants to livable-wage jobs in high growth industry sectors. However, the fact that these programs have not been scaled up may be related to the large up-front investment needed to set up these programs. We need to discover efficient strategies to implement and sustain these approaches at scale, so that many more Americans can benefit.
  2. Today’s workers need access to more short-term, affordable, and convenient opportunities for upskilling and reskilling, coupled with counseling support to help them make sense of their best options in a constantly changing economy and wraparound supports to help them succeed in training.
  3. As we develop and support such expanded, efficient options, we must continue to build the knowledge base on effective programs and build on key lessons learned to date, including that successful training and skill-building programs tend to be:
    • Targeted (focused on livable-wage, high-demand industry sectors);
    • Intersectoral and place-based (with strong partnerships among employers, the workforce system, postsecondary institutions, intermediaries, and community organizations and braid resources);
    • Data-driven (anchored in a good understanding of regional labor market needs, skills needed, and skills gaps); and
    • Comprehensive (tying occupational training with authentic work experience, earn and learn opportunities, wraparound supports, and strong career planning and goal coaching).
  4. We need smarter, stronger, real-time systems and strategies to monitor rapidly changing needs in the labor market to support the ongoing alignment of our education, training, and employment, and other support systems.
  5. We need stronger policies and strategies to provide many more employers with the incentives to invest in skill-building and adopt “high-end” business practices, including participating in regional workforce planning efforts, avoiding layoffs, and upskilling their incumbent workers.
  6. We need strategies to address the persistent effects of structural disadvantage on lower-skilled and underserved workers and the emerging and potentially growing effects of algorithmic bias in data systems that influence decisions.

The road to a robust workforce of the future will be challenging, but the good news is that we have many of the necessary elements and evidence-based promising strategies to get there. We will continue to examine best practices to strengthen pathways to stable work and share our findings with decisionmakers.

Members of AIR's Workforce Development and Economic Mobility/Prosperity Group also contributed to this piece.