How to Help Workers in a Post-Covid Economy

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This blog was co-authored with the Markle Foundation

We’re now eight months into the pandemic, and its sheer toll continues to be overwhelming. In addition to the hundreds of thousands of Americans who’ve lost their lives and the millions who’ve been infected, the economic devastation rages on. Over 11 million Americans are unemployed, and the country has lost over 10 million jobs. People of color have been particularly impacted. The unemployment rate among whites is 6%, while for Blacks it is 10.8% and for Latinos it is 8.8%.

While some of the jobs that have been lost could come back once the pandemic ends, many won’t. Even the jobs that do come back may look different than before, since the pandemic has led companies to increase their use of technologies like automation and artificial intelligence. Workers may need different skills and credentials to succeed in the post-pandemic job market.

To be clear, workers need immediate support now—from housing assistance, to increased unemployment benefits, to additional food support, and more. But we also have to help people succeed in the post-pandemic job market. And we need to make sure that those who have been hit hardest by the crisis can emerge in a stronger position to access good jobs moving forward.

Employers can play a critical role in promoting an equitable recovery and ensuring workers can regain their footing in the post-pandemic job market. However, the economic and public health crisis pose grave challenges—particularly to small and medium sized businesses—that limit their ability to do so. For example, coming out of this pandemic, small and medium-sized employers may lack the resources to create apprenticeship programs or provide other on-the-job training and upskilling opportunities for their workers and new hires. They may lack the tools to recognize the capabilities workers already have—regardless of where they were built. And small and medium-sized businesses may need help improving the quality of jobs they’re hiring for.

If we want employers to be at the forefront of building an equitable recovery, we have to take deliberate policy steps to encourage this and support them in doing so. To help employers and workers recover from the pandemic, policymakers should take three interconnected steps:

  1. Prevent further layoffs;
  2. Help employers expand training for new hires and incumbent workers; and
  3. Scale organizations that will help employers improve job quality and promote inclusive hiring.

Prevent Further Layoffs

First, we need to prevent further layoffs and preserve the connection between employer and worker wherever possible. The pandemic led to an unprecedented level of job loss, but it didn’t have to be that way. Third Way has proposed an Emergency Payroll Subsidy (EPS) that would help employers keep workers on the payroll during specific times of economic crisis. With the EPS program, the federal government would step in at the onset of a recession and pay a portion of each low- and middle-income worker’s paycheck until the economy stabilizes. It would exist alongside the regular unemployment insurance (UI) system, but fewer people would need to rely on UI benefits because more workers would stay attached to their employer during economic downturns. With an Emergency Payroll Subsidy in place, we can stem further layoffs during the pandemic and reimagine how we support workers during recessions in the future.

Help Employers Expand Training for New Hires and Incumbent Workers

Even with something like an Emergency Payroll Subsidy in place, the pandemic could permanently alter certain industries. Jobs may look different than before the pandemic and employers may need workers to have different skills and credentials. This means many workers would still need access to training to upgrade their skills for their current jobs, switch to different occupations within their company, or even switch to different industries entirely. In all cases, it will be vital for employers to play a role in providing training to incumbent workers and new hires. Training provided or financed by employers—that allows people to earn while they learn—is a proven way to make this type of skill-building affordable and accessible. When employers are engaged in training, it also promotes better employment outcomes because the training is aligned with the skills employers need.

Yet training costs are often among the first expenses cut during economic downturns—particularly for small and medium-sized businesses struggling to stay afloat. If employers step back from training during the current crisis, it makes incumbent workers more vulnerable to a rapidly changing economy and also makes it less likely that employers will hire new workers who need training. Going into this pandemic, low and middle-income workers were less likely to receive employer-provided training that could help them earn more in their current roles or level up to better-paying opportunities.

Unfortunately, current federal workforce policy does little to target limited public resources toward training that leads to good jobs. Many employers receive public dollars to provide training, but often that funding subsidizes training that leads to low-wage jobs or training that employers were already planning to provide. However, public resources could be leveraged to ensure that those who have long been excluded from opportunity have access to training that leads to good jobs. While we need more funding for workforce development, we also need to stretch our finite public resources as far as possible.

During the crisis, policymakers need new approaches to create and expand employer-provided training opportunities that lead to quality jobs for both new hires and incumbent workers. Markle has proposed making changes to the way federal funding supports employer-provided training.

Policymakers should put job quality at the heart of our public workforce development system by prioritizing funds for training that leads to jobs that provide a living wage, standard benefits, paid sick leave, and meaningful worker voice. To do this, the federal government could provide funding to states to award grants to employers that provide training that meets standard criteria. Employers would be awarded funding to cover a portion of an employee’s wages while that person is in a training program. Federal guidelines should require that states only provide funding to employers offering robust on-the-job training that leads to a job with a living wage and other benefits. Funding could also help address the barriers that prevent employers, especially small and medium-sized business, from providing training. For example, funding could help employers partner with local training providers, design and deliver training curricula, purchase equipment, and pay workers’ wages while they participate in training. The federal government can also help states create or expand upskilling programs, such as California’s Employment Training Panel (ETP), which reimburses employers that invest in approved training. The ETP has been found to have positive impacts on sales and jobs, particularly for small and medium-sized employers.

Scale Organizations That Will Help Employers Improve Job Quality and Promote Inclusive Hiring

While expanding high-quality employer-provided training is a critical step, employers can and should go further. Employers can reduce barriers that prevent people of color from accessing good jobs by adopting more equitable and inclusive hiring practices. This means reducing their reliance on proxies like degrees, helping them focus on and understand job applicants’ skills, and taking explicit steps to reduce racial bias in the hiring process. Employers can also improve the quality of existing jobs by raising pay, providing benefits like paid sick leave, and expanding worker voice over the decisions that impact their day-to-day jobs.

Current federal policy does not dedicate sufficient resources to supporting these broader efforts. To help employers—particularly small and medium-sized employers—promote job quality, Markle has proposed funding to scale the impact of intermediary organizations that work directly with groups of businesses across a sector or region. These intermediaries could include local community-based organizations, economic development agencies, workforce boards’ business services teams, chambers of commerce, labor management partnerships, or community colleges. All of these organizations are accustomed to working with employers in some way. If funded sufficiently, they can provide the more comprehensive kind of support needed to help employers expand access to quality jobs. For example, intermediaries could work with employers to structure jobs to improve pay, provide technical assistance to help employers hire more people of color, or help employers launch and deliver training programs that help people move into higher-paying jobs. Their effectiveness would be measured by their ability to help employers create more good jobs and hire from or advance the careers of people from populations that are disproportionately unemployed in the region.

By taking these steps to help people succeed in the post-pandemic job market, promote quality jobs, help employers create good jobs and train their workers, and permanently change how economic shocks affect workers, we can create an economy that is more equitable than before the pandemic and provides more opportunity to all workers.

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  • Workforce & Training84