It has been almost four years since the COVID-19 pandemic upended every facet of American society — most notably the way we work. More workers are doing their jobs remotely, at least part of the time. Many have moved to different states or switched careers, and millions have left the workforce entirely. It is no wonder that employers continue to cite workforce shortages as one of their biggest issues — and the slew of regulations, historic inflation, and high interest rates resulting from Biden administration policies is not doing them any favors.
This week, the House Committee on Education and the Workforce cleared two critically important bills that would help address these shortages and empower American workers in the modern economy: the Bipartisan Workforce Pell Act and A Stronger Workforce for America Act.
The first bill would transform the federal Pell Grant program, which provides up to $7,395 per year for low-income students to attend college. Unfortunately, the program currently requires students to enroll in traditional two- or four-year degree programs. The measure passed by the House committee would allow students to use Pell funding for short-term, job-specific training, including programs that lead to occupational licenses and industry certificates. Strong accountability mechanisms would ensure that only programs with high graduation and placement rates — and with a positive return on investment for workers and taxpayers — would be eligible.
These reforms are long overdue. Though many college graduates leave campus with the “right” political opinions and cultural beliefs, little indicates that they are prepared to meet the challenges of joining the modern workforce. Business leaders report high levels of dissatisfaction with today’s college graduates (one study found that only 44 percent of employers judge recent graduates as “very well prepared” to communicate effectively in writing, a number that falls to 39 percent for critical thinking). Students share those concerns and judge themselves at least as ill-prepared for workplace success. When it comes to earnings, a recent analysis of 30,000 bachelor's degree programs nationwide found that 28 percent have a negative return on investment.
Maryland’s bold action in March 2022 to drop the requirement of a baccalaureate degree for thousands of state jobs in information technology, administrative work, and customer service reflects changing attitudes about the value of a college degree. Maryland was the first state to make a push to open new positions — as much as half of the state’s workforce — to non-degree workers “skilled through alternative routes.” At least 10 other states have followed suit, and Walmart recently did the same for its corporate positions. Other innovators in the private sector, including Google, Apple, Accenture, and IBM, now encourage applications from non-degree holders for highly compensated roles, and they have all recently launched new training and apprenticeship programs.
The second bill makes critical reforms to the Workforce Innovation and Opportunity Act, which provides $10 billion annually to states for workforce development programs. Eligible workers can use this funding, in the form of vouchers, to pay for all kinds of services and skills training, including job search assistance, financial literacy classes, apprenticeships, local employer-led training programs, and more. Funding can even be used for childcare or transportation needs to support all kinds of job seekers. Unfortunately, the program is rife with bureaucracy and red tape and trained just 220,000 workers in 2021 — nowhere near enough to alleviate the national workforce shortage or address future industry needs.
The legislation passed by the House committee would make this program — the largest source of workforce funding in the country — more flexible and less bureaucratic. Doing so would empower employers, governors and local leaders to find needed workers and equip them with the necessary skills to fill in-demand jobs right in their own communities. The program particularly emphasizes finding new opportunities for workers who have watched their jobs disappear due to changing economic conditions and ensuring that the modern economy does not leave them behind.
Together, these two bills take important steps to align our nation’s higher education and workforce systems. Both allow students to bypass expensive and unnecessary college degrees in favor of short-term educational programs that are tightly aligned to workforce demand and real-world skills. Both also address the nationwide shortage of skilled workers by redirecting a slice of public funding trapped on college campuses toward training providers who are laser-focused on the priorities of business and industry.
Both policies are also quite popular. A 2023 Scott Rasmussen National Survey of 1,000 registered voters found that 88 percent of respondents favor workforce Pell reforms, and 81 percent favor redirecting federal funding from student loan programs toward apprenticeships and on-the-job training.
Kudos to the Education and the Workforce Committee for crafting legislation that looks beyond the country’s partisan divide to promote real solutions.
Linda McMahon is the chair of the board at the America First Policy Institute (AFPI) and the chair of AFPI’s Center for the American Worker. She is the former Administrator of the Small Business Administration. Jonathan Pidluzny, Ph.D., is director of the Higher Education Reform Initiative at the AFPI and a former Associate Professor of Political Science at Morehead State University.
