School-to-Work Bill Focuses on Job Skills

Clinton initiative would provide seed money for programs designed to improve career prospects for young people

WHILE international conflicts, the North American Free Trade Agreement, and health care have filled the headlines, a key element of President Clinton's strategy to improve United States competitiveness is likely to pass next year with little media attention.

The School to Work Opportunities Act focuses on two fundamental problems: the low skill levels of most young Americans relative to their counterparts in other industrial nations, and the difficulty that even young people with adequate skills face in locating a stable career.

The act seeks to address these problems by providing seed money for states to build systems that link schools, colleges, and employers.

One reason this act has generated little attention is the high degree of consensus over the need for change. Another is money, or the lack of it. The budget for the initial three years has been cut to less than $1 billion, a tiny amount for this ambitious reform. Fortunately, rather than spread these resources over 435 congressional districts, the act will concentrate money on the few states that win the competition for pilot implementation grants.

These state experiments, however, cannot succeed without the full commitment of employers, and there are a number of reasons for doubting employers' willingness to participate in sufficient numbers to enable the new system to succeed.

First, many employers will find it difficult to take on new trainees when they are already laying off full-time workers.

Second, firms that are expanding have a number of cheaper, more productive alternatives than teenage trainees: women returning to the work force, over-50s, and immigrant labor.

Third, there is widespread employer mistrust of government-sponsored training initiatives, which are perceived as bureaucratic and concerned more with remedying social disadvantage and educational failures than creating a high-skill work force.

Even employers who recognize the national imperative of investing in skills may be reluctant to take part because of the risk that their trainees will leave for a job with a competitor.

If the states are to overcome these obstacles, they will need to create the right incentives for employers and individuals. Luckily, the states have been the leaders in training innovation in the last decade. Among the steps they could take:

* Require minimum entry standards. By insisting that young people who obtain a work-based training slot must first demonstrate their mastery of basic literacy, numerical, and problem-solving skills, states can reduce employers' initial training costs, combat the stigma attached to past training programs, and set clear targets for individual attainment.

* Target high-skill occupations. The implementation of a school-to-work system will inevitably be gradual. States should initially target those technician-level jobs - in health care and advance manufacturing, for example - where the need for higher-level skills is greatest and the supply of alternate sources of labor is most limited.

* Keep employers' wage costs down. This could be accomplished by allowing firms to pay a stipend that is lower than the minimum wage during the first six months of training, when trainees' productivity is lowest (the act prohibits the use of federal funds for trainee wages).

* Encourage agreements to reduce the risk of poaching. Agreements between trainees and employers could be modeled after those used by some banks, which help young graduates earn MBAs, provided that they come back to the firm for a certain number of years or repay the tuition as an interest-free loan. States also could support consortia of employers in a particular sector, who would agree to share the costs and placements of all trainees for the local labor market.

* Link training with other elements of high-skill strategy. Employers will become truly committed to training young people only when they see a highly skilled work force as an integral part of their product strategy. States should link their emerging school-to-work systems with other new initiatives such as Manufacturing Extension Centers and Regional Technology Alliances, targeted at small firms.

The School to Work Act addresses major problems facing the US economy and education system. The resources allocated are small relative to the task. But if initial state experiments can find the right employer incentives, this act could be a positive first step toward building a much-needed school-to-work system. The Opinion/Essay Page welcomes manuscripts. Authors of articles will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.

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