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For Release — May 25, 1999

COUNCIL: NEW YORK'S BUSINESS CLIMATE NEEDS ANOTHER KEY IMPROVEMENT:
A NEW APPROACH TO WORKER TRAINING

ALBANY—Without a new approach to worker training, New York risks losing the full benefits of its recent efforts to improve its business climate, Ed Reinfurt, vice president of The Business Council, testified at an Assembly hearing today.

(Click here to view the testimony)

"In the last five years, New York has taken important steps to put its economy on the right track," Reinfurt told the Legislative Commission on Skills Development and Career Education. "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."

State-supported workforce training programs, he said, should be employer-driven, locally delivered, easy to access, and well-funded.

While manufacturing jobs are once again increasing in New York State, "it is no longer possible for an uneducated 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," Reinfurt testified.

Employers are concerned about both the number and quality of workers available statewide, he added. He cited a 1998 Business Council survey showed that 44 percent of New York State employers reported a "moderate or severe gap" between newly hired workers' skills and the employer needs.

He also cited a recent survey by the National Association of Manufacturers and Grant Thornton LLP in which 88 percent of respondents reported a shortage of qualified workers in at least one category, 73 percent reported difficulty improving productivity or upgrading technology because of employees' skills deficiencies, and 60 percent reported that their current workers lack basic math skills.

To address the problem, New York's workforce programs should emphasize industry-based training that focuses on the needs of incumbent workers, he said.

"State 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," he said.

Moreover, these programs were not designed or delivered by industry, and the training providers "too often have notions of what skills workers should have and what job-readiness means that do not match the requirements of employers." he said.

The best training programs would be designed by industry and thus focused specifically on its needs, Reinfurt said. These programs would be most efficiently delivered through existing networks of business and industry, including chambers of commerce, business associations, local economic development corporations, and industrial development agencies, he added.

"These entities are employer-supported and employer-driven organizations," he said. "They are the ones that are best suited to work together in any given labor market region and statewide as well."

Reinfurt also praised the state Department of Labor's INVEST program, an experimental effort in Dutchess County to streamline and consolidate multiple funding programs. "Bringing specific employers' job needs together with individuals possessing individual training accounts is the type of flexible but coordinated effort we have long sought," he said.

Today's hearing was chaired by Assemblymen Joseph Robach (D-Monroe) and Robin Schimminger (D-Erie). Also testifying were representatives of the Ford Motor Company, International Paper, IBM, Universal Instruments, and UPS.

The Business Council is New York's largest broad-based business group, representing some 4,000 member companies large and small across the state. Based in Albany, it lobbies for a better business climate, and offers cost-cutting services to its members.

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