America Is Facing A Talent Mismatch. Congress Can Help.

Forbes

3 days ago

As short-form credentials emerge as a tool for economic mobility, widening the allowable use of Pell ... More dollars to access many of these programs can unlock pathways to economic mobility.
Americans want good jobs. American employers need skilled workers. Yet three out of four employers say they have difficulty filling full-time roles, even as many current job seekers report challenges in finding new employment.
For decades – arguably starting with the end of World War II and passage of the GI Bill – the college degree was seen as the surest path to a good, stable job. Degrees became a frequently used tool for employers to find people with the skills they desired, and the number of jobs that required a degree grew. The unintended consequence is that these degree requirements put many jobs out of reach for tens of millions of Americans who don't have a college degree—and limited the talent pool for employers.
Over the past decade, companies have taken steps to remove degree requirements from many jobs. This shift toward skills-based hiring and other skills-based practices reflects a growing realization: a four-year degree, while valuable, is not the only—or even the best—preparation for many well-paying jobs. Programs that are aligned to workforce needs, often much shorter than a college degree, can play an important role in helping match skilled talent to employers, creating a win/win for workers and companies. And families are taking notice. Today, only about one-third of the American public feels confident in higher education and, in contrast to the college-oriented parents of 10 years ago, almost half now say they'd prefer their children pursue something other than a bachelor's degree upon graduating high school.
Congress has a chance to support this transition to a skills-based labor market by passing the bipartisan JOBS Act, which would expand Pell Grant eligibility to students enrolled in short-term programs that lead to in-demand jobs. A Republican-led version of this bill was included in the budget reconciliation package that passed the House.
For more than 50 years, Pell Grants have been one of the most powerful engines of economic opportunity in the country — providing students from low-income communities with the funding they need to earn a degree and pursue a higher-earning career path. But in those past five-plus decades, the world of work has continued to change, and programs like the Pell Grant haven't always kept up with the needs of learners or employers. Currently, federal Pell Grants—a critical source of financial aid for low-income students—are only available for programs that are at least 600 hours or 15 weeks long. This excludes many short-term, high-quality programs that could quickly prepare workers for good-paying jobs.
The JOBS Act is rooted in the understanding that it's harder than ever to commit to the time and money that a traditional degree pathway requires, especially for adult learners who are balancing work and family commitments in addition to their studies. It's built in standards of quality to ensure that Pell Grants can't just be used for any training program — but only those that lead to industry-recognized credentials that are aligned with the needs of state and local economies.
Perhaps most importantly, it's designed to help meet the needs of today's economy. Republican Senator Roger Marshall called the bill an 'incredible opportunity for students in an ever-changing job market' when introducing it in February. His Democratic counterpart Tina Smith of Minnesota noted that many of today's most in-demand jobs – welders, machine operators, medical technicians – don't require college degrees at all. In her words, 'We need to make it easier to get people into these career fields, and letting students use Pell Grants to make it happen just makes sense.'
States on both sides of the aisle provide a roadmap for what success can look like in these types of programs. A research study found that in Virginia and Louisiana, community college students who completed short-form credential programs experienced immediate annual wage gains of between 19-24%. The same report looked at programs in Colorado to prove that those increases lasted: Colorado students experienced not only that immediate salary bump but saw their earnings compared to high school graduates continue to increase five and ten years after completing their short-term program.
In addition to supporting individual economic mobility, these wage gains are a signal that the skills acquired through shorter-form programs are valuable to employers, who are willing to pay a premium to access talent with those skills.
As short-form credentials—such as certificates, industry certifications, and microcredentials— emerge as a tool for economic mobility, widening the allowable use of Pell dollars to access many of these programs can unlock pathways to economic mobility. In fact, the research on Virginia and Louisiana found that some of the biggest wage gains for short-term programs happened in zip codes with the lowest income.
Helping more Americans find good jobs and provide for themselves and their families is at the core of nearly every policymaker's goal for the country. The JOBS Act is hardly a silver bullet for closing talent gaps or solving political polarization, but it's a powerful way to build on the work employers have already undertaken to shift to a skills-based labor market.