This last week I just happened to find an incredible series of articles about workforce investment on the website of one of the Federal Reserve branches, the Federal Reserve Bank of Boston. The Boston website led me to the link of the Kansas City Fed where I found similar articles and webinars. It was on the Kansas City website I learned this is something the Federal Reserve is doing to help with the wage inequality problem. The Federal Reserve has started a project to look at the issue. The website, investinwork.org, tells about this project and the partners they have been working with to look at wage inequality. They recognize the economy is doing good but there are still significant problems out there that both employers and workers face.
What I liked most about what they said is that we need to treat workforce development as an investment instead of a social issue. This sounds very much like what we used to do with economic development. I was very much dismayed this week when I learned most community-funded programs are focusing more on traditional community problems such as food, healthcare and shelter and not so much on helping people achieve better living standards through, or what the Fed calls, good jobs. It’s not that I am against helping with food, shelter and healthcare because we need that safety net but it only perpetuates the problem. We have a huge problem with low wage jobs and we need to focus on ways to have those good jobs.
On the website of the Boston Fed they explain even further as to why it’s necessary to look at this problem as an investment instead of a cost. So many of the people with low-wage jobs are having to rely on public subsidies because their income is below federal poverty guidelines. That can be terribly demoralizing especially if you’ve lost your good-paying job and now have a job that pays significantly less. Plus, by continuously relying on subsidies, it does nothing to help workers or the systems they end up relying on. As the person in the Boston Fed article says we start to use our public safety net programs as the benefit plans for the low-paying jobs because not only do they not pay enough, they provide no benefits. Can we continue to afford doing that? That, the Fed says, is something policymakers have to address.
Income inequality is a big concern of the Fed. They say if we are to be economically stronger as a nation, we need to invest in our workforce and that’s why they have done a number of initiatives to address it. One of the initiatives was to listen to the needs of both the employer and the worker. Listening sessions were held across the country to identify some of the issues that were impacting both workers and employers. These included skills gaps, educational issues, transportation and child care issues, technological changes and other things that were hurting both workers and employers. Some local areas, too, just had a basic problem of low-quality jobs that decreased any upward financial opportunity for workers.
Recommendations to help with this frustrating problem also came out of the listening sessions, too. Some had been tried before but some new ideas were offered to help improve them. Also within the recommendations it was said that many workforce development programs had gone away or federal funding had been reduced by as much as 20%. Many of those in the listening sessions felt those programs or funding should be reinstated or even increased. There were a lot of other recommendations that included bringing the goals of both economic development and workforce development closer together, more apprenticeships, more incumbent working training, making sure adequate trainer funding is available, and change employer behaviors to create good jobs.
One other thing that could help was on the Boston Fed website and they suggested more needs to be done to increase worker voice. That could be updating labor laws or encouraging more union representation or more new worker groups. The Boston Fed also provided a conversation they had with the author of a Massachusetts Institute of Technology report on worker voice. Tom Kochan from MIT Sloan School of Management is a great fan of worker voice and said it represents a democratic process but he also said if workers aren’t able to have a voice at the workplace it not only could hurt workers but our country as well.
Of course we at CALMC agree about worker voice. It may be a democratic process but there’s also some other positives from it that can help both workers and employers. If employers enable worker voice at their workplaces it can help to create those jobs the Fed refers to as good. The Fed identified lots of reasons why worker voice is important and said it can help create a strong economy nationally and locally.
From our perspective, we’re seeing a little bit more movement in the right direction for worker voice. This week we started a project that allows workers to speak out about their workplace and that is a workplace climate assessment. A workplace climate assessment provides workers an opportunity to express their opinions on various items associated with the work environment. We ask workers not to put anything identifiable on their opinion sheets and we also tell them we will keep them completely confidential so we can hopefully get a more accurate picture of the workplace climate.
We also have heard from brand new groups who think training is important to get started on the right foot as they start to work together. There are also other groups who feel they need a refresher because they have new members or new leadership or other things have happened which may caused them to slip backwards. Both of these types of groups are willing to spend their time in training because they’re tired of the traditional adversarial behaviors of the last several years. The other thing, too, and this is important thing, is those wanting a refresher recognize it’s better to work together and they recognize when they’re slipping and need help.
It gives some hope that the Fed is pushing for workforce development and economic development approaches to be aligned and they are encouraging employers to involve workers in every day decisions. They, too, have highlighted the benefits that working together can provide employers. In the coming weeks, we’ll be blogging on these articles from the different branches of the Federal Reserve.