Donors Can Open Pathways to Prosperity
What kind of education does it take to obtain a middle-class wage in America today? The answer might surprise you.
On the one hand, the days of earning a living with only a high-school diploma are waning. Young adults with just a high-school diploma have a poverty rate of 22 percent today. That compares to 7 percent in 1979.
While offshoring and trade are often blamed for the decline of working-class opportunities, the fact is that U.S. manufacturing is actually increasing its output. Technological advancements, however, are enabling machines to replace low-skilled jobs. This means that working-class life can no longer be solidly built on toil alone—skills are required. A 2012 report by Georgetown University’s Public Policy Institute summarizes: “In the postindustrial economy, the notion of a muscular working class has gone the way of U.S. Steel, displaced by a new class of working families in postindustrial jobs that require at least some college.”
The conventional response to this trend is to push a four-year bachelor’s degree for everyone, more or less assuming job prospects on the other side will take care of themselves. And today’s college infrastructure is largely built to push young people toward a bachelor’s over any other credential.
The unfortunate result is that many youths are prodded onto a traditional college path they are unprepared and unsuited for, leading to high dropout rates and a growing number of Americans with some college experience—and debt—but no completed degree. This approach has also failed adults in low-wage jobs who want to boost their economic prospects but can’t realistically devote four to six years to earning a degree that might or might not improve their earning potential. The result is that for many working adults, college is a failed and financially costly experience that doesn’t lead to useful credentials or improved life outcomes. Even some of those who persist all the way to a bachelor’s degree discover it isn’t a guaranteed path to economic prosperity. And employers find that in an era where four-year college degrees are diluted and pushed on everyone, this traditional proxy for skills and knowledge isn’t as valuable as it once was.
Yet, strikingly, there is a growing pool of jobs today—to the tune of 29 million—that require what academics call “middle skills.” These skills are generally conferred by apprenticeships or organized postsecondary education other than a bachelor’s degree. Persons capable of doing these jobs are in many places sought hungrily by employers, and the positions pay enough to launch any steadily working family head into the middle class.
Despite attractive salaries and benefits, employers in many places are experiencing shortages of workers qualified for middle-skill jobs—particularly in fields like health care, advanced manufacturing, and energy. To keep their labor pipelines filled, employers such as Toyota and ExxonMobil have created their own training and credentialing programs, or have partnered with local community colleges and nonprofits for this purpose. Other smaller businesses have created apprenticeships or worked with nonprofits to pull high-school graduates into programs that will leave them qualified for positions like electrician or stonemason. General appreciation of the breadth of middle-skill opportunities, however, remains low. Businesses and low-skill workers alike need help erecting programs that can bridge this economic gap.
Unfortunately, career and technical education has an image problem. In some circles technical education is associated with blue-collar jobs without much upside, reflecting the old-style vocational education that often relegated “non-college-ready” students to dead-end, low paying jobs. With many K-12 schools defining success simply by the number of students they send to four-year colleges, the bias against career education can be pronounced.
“If all we do is send the message that it’s college or bust, we’re not really giving the right kind of opportunities to everybody,” says Chauncy Lennon, who leads JPMorgan Chase’s philanthropic workforce development initiatives. Nicholas Wyman of the Institute for Workplace Skills and Innovation confirms that even though programs now exist that give students stellar credentials and career prospects, technical training remains anathema to some. “Today, high-schoolers hear barely a whisper about the many doors that the vocational education path can open.”
Enter private philanthropy. For the past year I’ve been researching the best donor-funded efforts throughout the nation focused on connecting workers with opportunities to enter the middle class. These programs make sure workers are job-ready in a basic sense, confirming they have the entry-level skills that were the focus of our previous guidebook Clearing Obstacles to Work: A Wise Giver’s Guide to Fostering Self-Reliance. But the programs included in this book then offer something more: detailed, sometimes complex, technical education that equips workers for a rewarding career and greater upward mobility.
Some of the existing efforts are broad and national. For example, JPMorgan Chase has committed $250 million over five years to further define and disseminate middle-skill career pathways. The Lumina Foundation is using an endowment of over $1 billion to help raise to 60 percent by 2025 the percentage of Americans with a high-quality postsecondary degree. These larger initiatives employ a variety of means—national gatherings where standards are set and needs are identified, collaborations between companies and educators, public campaigns and advocacy—to advance their missions.
The Bill & Melinda Gates Foundation has become involved in ways ranging from providing financial aid to collecting important data. Gates is also trying to strengthen the public image of alternative career pathways by funding research incubators like Jobs for the Future and the ACT Foundation.Today, young adults with only a high-school diploma have a poverty rate of 22 percent. That compares to 7 percent in 1979.
But movement-building is just one way for donors to get involved. Philanthropists are also working hard to raise STEM job awareness in high school, arrange internships with area employers, and pay for the research to understand current job opportunities and the corresponding skills necessary, among many other interventions and incremental improvements.
An example at the local level is the Pinkerton Foundation, which directs $14 million in annual giving to support career-internship opportunities, industry-specific certifications, and rigorous job-training programs that teach both the hard and soft skills needed to advance in the workplace. Focusing on at-risk youth in the New York City region, Pinkerton encourages trainers to work closely with local employers so the skill sets developed are in line with available local jobs.
Many other foundations are making similar investments in young people. The Benedum Foundation is focusing on blue-collar workers in West Virginia and southwestern Pennsylvania, even embedding career academies into high schools. In the City of Brotherly Love, the Lenfest Foundation supports Penn Medicine’s volunteer programs for adults, college students, and teens. Students as young as 14 can volunteer over the summer at the university’s hospital, gaining exposure to well-paid careers in medicine that are currently short of qualified applicants.
Business leaders are also getting involved. In Houston, local businessman Beau Pollock needed more electricians for his enterprise and started a direct relationship with YES Prep and his local KIPP charter schools. Now students showing interest in the electric profession can work directly with his company out of high school. Robert Luddy—a donor, entrepreneur, and founder of CaptiveAire Systems (America’s leading supplier of kitchen ventilation systems)—has woven apprenticeships both into his business and into his network of private schools in North Carolina. “Apprenticeship is the best of all worlds,” says Luddy, stressing the importance of on-the-job experience. As sophomores, students in Luddy’s Thales Academy can obtain a certificate in SolidWorks, which alone would enable them to make between $40,000 and $60,000 in the marketplace.
Recently deceased donor and Intel co-founder Andrew Grove carved his niche in career and technical education by offering scholarships. He typically gave out 100 stipends per year to students in community college who were transitioning directly to the workforce rather than a four-year school. Grove found that improvements in community college curricula and delivery are an excellent mechanism for training the next generation of middle-skill workers.
For example, take Rio Salado College in Tempe, Arizona. Rio Salado educates more than 57,000 students at any given time—30,000 of whom are accessing all of their instruction online. It’s the largest online community college in the U.S., and has classes that start on 48 dates all throughout the year—an especially attractive feature for adult learners. The college offers a vast variety of programs—mobile apps programming, infant and toddler development, dental assisting, quality customer service, small business startup, and paralegal. With the help of the Gates Foundation and other donors, Rio Salado has peer donors, career coaches, and other support for learners to make sure that its programming matches available well-paying jobs needed in the community.
Another promising example with a slightly different twist is Valencia College in Orlando, Florida. Leaders at the college have found that a traditional academic model—here’s a list of classes, take a few over two or so years—isn’t working well for career advancement. So instead, Valencia is doubling down and accelerating many of its programs to take around five weeks. These short bursts of training are ideal for adults who are already working. “If we take them through a series of very short tunnels, where the opportunity cost of lost wages while they’re in school is small, they’re perfectly willing to enroll,” says Valencia president Sandy Shugart. Accelerated tracks are focused on obtaining a “stackable” credential that, in various combinations, leads to progressively higher paying jobs. Valencia’s most popular tracks are in nursing, cardiovascular technology, engineering technologies, entertainment-related technologies, criminal justice, and paralegal work.
In addition to accelerated options, Valencia works with its local Goodwill branches to provide services like child care and transportation for students who need them—eliminating common obstacles that prevent students from persisting all the way to a useful credential. Funding partner organizations that offer these supports and keep students on track, says Shugart, is one of the most valuable roles philanthropy can play. But he stresses that the best way to mitigate some of these barriers is to keep the program short—the longer the program, the more likely that something will come up.
Shugart describes Orlando as a juxtaposition between two economies—high-tech prosperous jobs and low-skilled, low paying ones. “We have the most powerful economy in the world for putting unskilled people into low-paying jobs,” he says. “The problem is that these jobs are hard to move up from. It takes two body lengths to reach the next rung on the ladder. So our strategy has been to add more rungs to the ladder. We have lots of people in our community who need a very short burst of training that will move their value to an employer by $2 an hour or more.”
This concept of putting more rungs on the ladder, or “upskilling,” is gaining traction among workforce nonprofits, community colleges, and employers. The dozens of donors, experts, and nonprofit practitioners I interviewed on this subject coalesced around a number of common practices where philanthropists can clearly help. These will be explored in more detail in Chapter 8, but here are a few broad areas for you to be thinking about as you read the following pages and try to envision where your organization can be most helpful:
- Create clear pathways. Career mapping is essential, because adult workers need a discernible return on investment before they are willing to enroll in a program. Successful programs demonstrate each step a student needs to take to complete the program for a credential and embark on an upward career path.
- Condense timeframes and increase schedule flexibility. Many candidates for “middle-skill” training are already in an entry-level job and helping support a household, so long periods out of the workforce are not practical. Accelerated programs are thus very useful and attractive. In some cases, nine-month classes are being compressed into 16-week bursts. Low-income workers who can’t afford to take a year off for education might be able to swing intensive evening classes for four months.
- Overcome negative perceptions about higher education. Low-income workers might not view themselves as able to successfully swim in the waters of postsecondary education. Effective programs inspire their students and affirm that completing the credential is possible and expected.
- Acknowledge and account for remedial learners. Some adult learners face the basic roadblock of lacking skills in the basics of reading, writing, and arithmetic. Accelerated programs to bring them up to speed are essential to completing higher credentials.
- Offer student services that make class attendance easier. The McKinsey Social Initiative has found that distance to class is the top indicator of whether a new arrival in a training class will persist. Transportation obstacles are serious. Addressing practical hurdles like these can often make or break an adult learner’s success.
Partly thanks to creative help from donors, the field of career and technical education is ready for a renaissance. Students, communities, and philanthropists willing to invest in career and technical education may be pleasantly surprised at how much difference they can make. “This isn’t your grandfather’s vocational education,” says Lucretia Murphy of Jobs for the Future, a national nonprofit expanding workforce opportunities. “These are good jobs. These are well-paying jobs. These are jobs that put people in line for promotions. These are jobs that are fulfilling.”