Testimony of
Ed Reinfurt, Vice President
The Business Council of New York State, Inc.
before
The Legislative Commission on Skills Development and
Career Education regarding :
Preparing for The Transition to the New Workforce Development System
Tuesday, May 25, 1999
Staff
Contact:
Thank you for the opportunity to share our views on workforce development
with you Assemblyman Robach, Schimminger and other members of the
legislature.
As I am sure you know, The Business Council is New York State's largest and
most broad-based employer group, representing about 4,500 member
companies, associations and chambers of commerce. The Council's mission is
to create an economic renaissance for New York State and its people and having
a well-prepared workforce is key to our success in this area.
Few issues are more important to New York employers than the need to
establish an effective program to enhance the skills of existing and new
workers. A survey done last year by The Business Council showed that 44
percent of responding firms said they find a "moderate or severe gap" between
newly hired workers' skills and the employer needs.
A working group of Business Council members met late last summer and fall
and agreed that any workforce development system in New York State, to
succeed for employers, must include the following key components: It should be
employer driven, locally delivered, easy to access, and well funded.
New York State is in an era of intense economic competition driven by
increasingly rapid technological change, competition from other states and the
globalization of markets. We must continue our tax cutting policies to bring us
in line with other states, but there is one area which we have not yet addressed
to a sufficient degree -- and that is upgrade training for the currently employed
and re-training for the dislocated that matches the needs of the employers in
any given region of the state.
State policy and national policy has traditionally focused on the supply side --
trying to improve the skills of the long-term unemployed. It has largely ignored
the demand side, or what it takes for business to thrive, grow and create jobs.
Maximizing the potential of the Workforce Investment Act and creating linkages
with economic development that address the training needs of business and
industry in a systematic widespread way must become a state priority.
Manufacturing has been and continues to be a bedrock industry in New York
State. And the good news is that manufacturing jobs are once again on the
increase. They are a good example of how radically jobs have changed, but are
by no means the only sector that has undergone tremendous technological
transformation. It is no longer possible for an un-educated and unskilled
person to get a job with upward mobility in any sector of New York 's economy.
And manufacturing jobs could be increasing even faster if there were enough
workers to fill them. The new jobs require a much higher set of math and other
technical skills than in the past. For instance, headlines in the Rochester
Democrat and Chronicle in the spring of 1996 proclaimed -- "Millions lost for
lack of workers." A shortage of skilled technology workers on Long Island has
businesses there planning to conduct a national advertising campaign to find
workers.
The National Association of Manufacturers and Grant Thornton LLP recently
released the results of a skills and competitiveness survey of 4,500
manufacturers. The results clearly point to the needed for a concerted effort to
upgrade skills both in the long term through improving K-12 education and
more immediately through providing shorter term technical skills training.
Here are just some of the findings:
- 88% are experiencing a shortage of qualified workers in at least one
category,
- 73% are having difficulty improving productivity or upgrading technology
because of employees' skills deficiencies,
- 60% report that their current workers lack basic math skills,
- 55% find serious deficiencies in workers' basic writing and comprehension
skills.
- 50% have found it difficult to empower employees to take on more line
responsibility.
A factor that adds to the difficulty of delivering training is that the growth in
jobs is often among the smaller and medium-sized companies. They, in
particular, require versatile educated workers and have great difficulty in
accessing the only current employer specific job training program -- JOBS
NOW.
A good way to address this issue of upgrading the skills of the labor pool in any
given region in the state is through industry based training and the
establishment of strategic training alliances that have an incumbent worker
training focus (but should work in concert with the Workforce Investment Act).
Such industry-based training would be most efficiently delivered through the
networks that business and industry has created for itself -- chambers of
commerce, business associations, Local Economic Development Corporations
and Industrial Development agencies.
Theses entities are employer supported and driven organizations, they are the
ones that are best suited to work together in any given labor market region and
state-wide as well. With the training opportunities brought about by
technology, geographic barriers no longer make sense. Any local, regional, or
statewide association of businesses should be eligible to design and provide
training programs. Such groups are the ones best able to identify the
particular skills training needs of employers in their industry. They could take
the lead in working with community organizations, local elected officials and the
whole gamut of education providers to develop on-going short term skills
upgrade training programs.
Any Workforce Investment Act funds that can be used for incumbent worker
training should be maximized for that purpose. Improving the skills of
incumbent workers, if not immediately, at least has the best potential for
helping a company remain productive, remain in New York State, and
ultimately be able to grow and indeed hire more workers.
We applaud what the Department of Labor is doing with its INVEST program.
The department is now implementing an experimental program in Dutchess
County to streamline and consolidate multiple funding programs. This is one of
the most encouraging actions we've seen in recent years. Bringing specific
employers job needs together with individuals possessing individual training
accounts is the type of flexible but coordinated effort we have long sought. Still
the money available for the incumbent worker represents the smallest pot of all
the training funds.
With regard to Workforce Investment Act governance structures state wide and
locally: they should have a majority of for-profit employers, as required by the
federal legislation. No one knows better than the employer, the types of
education, training and skills need for the job he is trying to fill. To make the
workforce investment system work for anyone seeking employment, it must be
employer-driven. It has not worked well in the past, because it wasn't
employer-driven. History shows that providers too often have notions of what
skills workers should have and what job-readiness means that do not match
the requirements of employers. We hope that you will seize this opportunity to
create a system of workforce development for New York State that is truly
responsive to employer and, therefore, worker needs.
The Business Council also supports increasing (by $10 million annually)
funding for community college contract courses. In some instances this type of
employer-specific training is what best meets the needs of an individual
employer. It has been a highly effective program whose funding has been cut
over the years, but it should be brought up to $10 million to enable community
colleges to meet the increased demand for such training.
In the last five years, New York has taken important steps to put its economy
on the right track. Taxes have been cut. Regulations have been streamlined.
And workers compensation and unemployment insurance rates have been
reduced. Yet without a well-trained workforce, the capital investment and job
creation and retention potential of these actions might never be realized.
