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VOICES FROM THE INDUSTRY: Existing work force is our biggest education challenge

November 19, 2007

As Hoosiers, every time we open our wallets and pocketbooks, we should think about going back to school.

For the last three decades, Indiana's per capita income growth has lagged the rest of the country, to the point where the average Hoosier earns less nized for work force development use a combination of state and local dollars and even lottery funds (as in Georgia). Private management of the Hoosier Lottery, as proposed during the last legislative session, could provide the necessary funds.

But regardless of the expense, it's hard to envision a program that would pay greater dividends in higher incomes, new business opportunities and tax revenues, driving the state towards its goal of meeting the national average in per capita income by 2020.

On a smaller scale, the state launched its than 90 cents for every dollar earned by the typical American.

Education is the major predictor of wages-a worker with a bachelor's degree earns nearly twice as much over a lifetime than someone with just a high school diploma. This translates into about $30,000 a year more for the college graduate.

It should come as no surprise that Indiana ranks a dismal 44th in the percentage of college graduates in our adult workforce. An estimated 350,000 working Hoosiers have just a high school diploma.

Improving educational attainment is the path towards rising wages. But for many policymakers, this means focusing on K-12 education, getting more young people into college and keeping them in Indiana once they graduate. These are critical priorities, but they ignore the immediate challenge facing the state: Enhancing our existing work force.

There are about 1.76 million "schoolage" Hoosiers (aged 5 to 25) as opposed to 3.33 million adults of working age (25 to 65). The average Indiana worker is around 45 and will spend another 20 years or so in the work force. If we want to make an impact on per-capita income in the foreseeable future, we have to concentrate on getting these individuals the skills they need to succeed in today's economy.

The needs of these workers vary tremendously. Some may need a few credit hours to complete a degree, while others may pursue an associate's or even a bachelor's degree from scratch. For most, however, it's taking a few classes or enrolling in job-specific vocational training.

Many of these workers are in manufacturing occupations, where computer and other technical skills are more important now than in years past. A recent survey by the National Association of Manufacturers shows that 80 percent of its members rank finding qualified employees as their primary concern.

Here in Indiana, the picture is the same -of the top 11 "skill gaps" identified by our Department of Workforce Development's Strategic Skills Initiative, nine are related to the manufacturing or logistics industries.

There are several ways to start rebuilding this work force. The most ambitious policy proposal would be personal training accounts, providing grants for qualified workers to pay for higher education and training programs. These grants would be available to current workers (or those laid off or otherwise displaced from the workforce) to pursue new skills. Such programs are being used successfully in other states.

This would require a dramatic financial commitment. Other states that are recog- Training Acceleration Grant program that allows businesses to apply for retraining funds for a select group of employees. While conceptually TAG may be a good program, it is limited. Most employers aren't aware it exists, and the application process is cumbersome. Offering employers tax credits might prove more effective.

We should also encourage Ivy Tech to focus efforts on the mission of training the incumbent work force, the original purpose behind its creation in 1963. The community college system must be incentivized differently to meet the needs of adult students.

John Adams once said, "Facts are stubborn things." So are demographics, and the policy choices they force us to make. We can't afford to write off an entire generation of workers: we must take a lifetime approach to education, from pre-school through retirement.



D'Amico is the president of Conexus Indiana, an economic development initiative focused on advanced manufacturing and logistics. She is former executive vicepresident and chancellor of Ivy Tech Community College, and assistant U.S. secretary of education. Views expressed here are the writer's.
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