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1/7/2019 11:13:00 AM
OPINION: Brookings study paints grim picture of Indiana's workforce investment focus

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. His column appears in Indiana newspapers.

The Brookings Institution recently published a study for the Central Indiana Corporate Partnership outlining labor market challenges in the region. It is a good study that I admire because it restates many of the points I have been making over the past years regarding failures of economic development and workforce training policies in Indiana. 

Most of the media coverage of the study has focused on mistakes in business attraction policies. In particular, the finding that a quarter of the jobs attracted to Central Indiana are essentially dead-end jobs. They are right, of course, but anyone who understands job attraction efforts should be surprised that only one quarter of the jobs we subsidize are, in effect, dead-end jobs. The important part of the Brookings study was its broad and scathing assessment of Indiana’s workforce development policies. Space limits prevent me from doing their criticism full justice, but I will try to cover the major points.

The first complaint about Indiana’s workforce development policies is an implicit criticism of the state’s research of workforce issues. The Brookings research team performed an analysis of the skills workers need to see wage growth. That is a study that our workforce development officials could and should have done years ago. That modest piece of analysis should be sufficient to cause a major redeployment of dollars surrounding the ways Indiana educates and trains workers. 

This criticism deserves some background. Over the past few decades Indiana has spent tens of millions of dollars on collecting data to inform workforce development decisions. But, the state has done almost no meaningful analysis with that data. To say it plainly, Indiana is decades behind places like West Virginia and Tennessee when it comes to analyzing workforce training and education needs. 

In fewer than 100 pages, the Brookings study noted how labor markets are changing so that workers in all occupations possess a stronger set of specific skills and outlined specific knowledge, skills and abilities that correlate with better jobs and higher wage growth. The study even analyzed the skills needed by job changers and in the occupations that are upwardly mobile. 

The Brookings study also noted that our workforce development programs and IvyTech fail to focus on these skills. In fact, the study reports that the most lucrative and promising skills across both workforce development and community college offerings aren’t even part of the core offerings of most programs. In plain language, we are focusing our workforce spending towards yesterday’s jobs and doing little to prepare workers for the skills needed to enter the careers of the future. It should surprise no one that we aren’t teaching the right skills, since we aren’t even asked ourselves what the right skills might be. 

The Brookings list of skills are focused on workers who will not pursue a four-year degree, which has long been the focus of our workforce and community college efforts. But, what should surprise many readers is that these skills are mostly taught in the K-12 classroom. Unfortunately, after adjusting for inflation, per student spending on K-12 education in Indiana is lower than it was in 2011. Nearly everyone talks about the importance of K-12 education in preparing citizens for a productive future, but budgets, not rhetoric, reveal priorities. In a better-informed Indiana, resources should be moving from ineffective community college and workforce development programs into K-12 education. Sadly, we appear poised to pursue the opposite course. 

To be fair, I did not find all the Brookings recommendations compelling. For example, the study called for more state-level intervention in labor markets than I believe are appropriate. However, my biggest disagreement was their recommendation that Central Indiana undertake stronger efforts to attract the right kinds of jobs. 

This sounds prudent, but nearly all serious research on the issue finds that efforts to attract jobs are ineffective, and so will do little to improve the employment prospects of Hoosiers. Thus, I believe it is unwise to spend more resources to attract jobs, when the factors that attract new businesses are mostly related to the underlying quality of the workforce and community. 

Still, it is ironic that my major complaint about the Brookings study actually reinforces its broadest critique of Indiana, which is that our workforce and community college systems are focusing on the wrong type of training for the wrong type of jobs. In reality, new employers will come to places in Indiana that have an abundance of well-trained workers who are ready for tomorrow’s jobs. In the words of the Brookings study, we have “a responsibility to equip Indiana’s current and future workforce with the broadly applicable skills that will allow them to navigate a changing world of work.” Today we are failing this responsibility.

Related Links:
• Brookings Institution report: Advancing opportunity in Central Indiana

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Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


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