If you ask us, one of the most promising things happening in philanthropy right now when it comes to fostering more economic opportunity, is the intensifying focus on closing the big mismatch in America between jobs and skills.
This issue, which has long received attention from labor market analysts, is now squarely on the front burner of many funders, as we report often—and for several very good reasons. If you're a funder that cares about equity, it's heartbreaking to hear again and again about all the well-paying middle-skills jobs that are going unfilled for months on end even as so many young people languish in low-wage, dead-end positions at CVS or give up on the work world altogether.
As we've described in the past, middle-skills jobs require more education or training than a high school diploma, but less than a four-year bachelor's degree. Such jobs account for more than half of the U.S. labor market, and pay a lot better than you'll make at CVS. They're also the jobs so often left unfilled, because the skills they require can be quite specific.
Equity funders aren't the only ones worried about this gap. Businesses are even more alarmed, since they're on the front lines of this problem—unable to find the workers they need to expand, even as they dangle out nice salaries. We all pay the price when economic growth is slowed in this way.
Lately, as if some secret memo went out, numerous corporate funders have jumped all over the mismatch issue—elevating it to the very top of their priority lists, as we often report, with many grants going to STEM education. On the one hand, such funding looks self-interested; on the other, it holds real promise for tackling inequality. To be sure, addressing the skills mismatch doesn't offer any solution to such underlying inequality drivers as globalization or technological change, much less the overall way that power is heavily tilted in favor of capital and against labor. What this approach does offer is a concrete strategy to make progress in finding more people good paying jobs that a variety of stakeholders can get behind—sidestepping familiar ideological differences.
Often, work to address the skills mismatch is quite local. What's happening with funder-backed efforts in Houston and New Orleans, as well as Phoenix, offer good examples.
Two years ago, JP Morgan Chase released a report that detailed the mismatch between the needs of local employers and the skills of local jobseekers in the Houston area (it did similar work in a few other cities as well). At that time, it found that the petrochemical and industrial and commercial construction sectors employed over a half-million workers with an expected annual growth rate of nearly 20,000 jobs through 2017. A construction boom that has spawned over 120 petrochemical facilities worth an estimated $80 billion in investments over the past few years has fueled this surge.
At the heart of the mismatch is the inconvenient fact that 90 percent of middle-skill jobs, such as those in the petrochemical industry, require one to five years of work experience. At the same time, nearly 1 million local residents 25 and older lack a high school diploma. Nearly half of the area’s Latino population—its largest and fastest growing sub-population—lack that key credential. In the report, Chase called for the creation of more career pathways to meet the needs of employers while also developing opportunities for young people to gain the skills necessary to enter the industry. Now, it's putting more dollars behind that issue with a recent investment in a technology platform to train and source workers for careers in the petrochemical industry.
It’s a website, Petrochemworks.com, that helps students and adults take advantage of career opportunities in the industry that are “hidden in plain sight” according to the local manufacturers association in Harris County. The site hosts career maps, educational resources, and job postings that help applicants understand what the industry offers as well as the skills and educational prerequisites needed to find a gig in the industry.
JPMorgan Chase developed the career development platform with the assistance of the local manufacturers association and the Council for Adult Experiential Learning (CAEL). The bank's charitable arm invested a half-million dollars in the project to support the development of an engaging and interactive platform packed with information about career exploration and preparation in the booming local industry. This singular investment is part of Chase’s broader $5 million dollar commitment to support innovative programming to address the education and skills gap in the Houston area.
For Chase and the local workforce development and education efforts it’s supporting, the issue is about line of sight. Building out a website like Petrochemworks.org as a one-stop shop for both employers and jobseekers resolves the mismatch that currently exists between the two groups. One question that remains is how easily jobseekers will be able to access the robust training necessary (noting that experience requirement of one to five years mentioned above) as a result of this new site. The hope is that this central organizing space for the industry will allow thousands of workers to prepare for the jobs available in this in-demand field.
If this all sounds familiar to IP readers, it's because we reported earlier this year on another online match-making and training effort, backed by the Markle Foundation and LinkedIn, that rolled out in Phoenix and Colorado.
Meanwhile, what JPMorgan Chase is up to in New Orleans with Bloomberg Philanthropies is another promising approach to addressing the skils mismatch. These two funders teamed up in May to give $7.5 million (Bloomberg gave $5 million, Chase gave $2.5 million) to a coalition of community and education leaders working to help the New Orleans’ public high schools redesign their career and technical education programming. YouthForce NOLA, as they are called, provides coursework, credentials and work-based learning experiences designed to put students on a path to well-paying jobs in high-demand fields.
The investment will allow the organization to help 1,600 students earn qualifying credentials for jobs in regional industries like health science, technology and skilled crafts. They also hope to place over 1,200 students in paid internships aligned with students’ coursework in order to give them real-world experience in those fields. It should also be noted that Chase has committed $75 million over the next five years for career and technical education as part of its “New Skills for Youth” initiative.
Such philanthropic support could not have come at a better time for youth in New Orleans. Still reeling from the aftermath of Hurricane Katrina, nearly a fifth of young people in that city are neither working nor in school. The region is home to the third-largest population of “disconnected” youth in the United States. Forty percent of children in the region live in poverty. Current projections suggest that nearly 70,000 workers will be needed over the next decade in the fields covered by this grant.
Local leaders have also jumped on the bandwagon to support the effort by Bloomberg and Chase, highlighting the continued appeal of public-private partnerships among top philanthropies nationwide. New Orleans Mayor Mitch Landrieu has promised to marshal the resources of the city government to support the funders’ efforts. John White, Louisiana’s Superintendent of Education, has committed to reshaping the curricula for students across the state. And local business leaders are onboard to develop new career pathways for students into internships and jobs with local employers.
Michael Bloomberg himself pointedly noted, “For too long, business leaders have been missing from the table in discussions about vocational programs, and it shows. Unless they are involved, new program will fail—and the disconnect between career-focused education and the job market will grow even wider.” That’s a strong stand and it underscores how many funders are beginning to look less at individual gifts and more towards delivering resources in ways that build pipelines for the people their contributions are meant to serve, particularly in the career and technical education field.
With this investment, Bloomberg and Chase aren’t just donating; they’re also working with multiple stakeholders to create conditions on the ground to ensure their investment works. It’s a bold strategy that will hopefully bear fruit New Orleans’ youth.
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