Policies to Close the Southern Skills Gap

Workforce Currents
Stuart Andreason
July 3, 2018

Southern states have a number of economic and demographic characteristics that make them unique from the rest of the country—and increase the need to build skills to advance economic development in the region.

Many state economies in the South were hit especially hard in the Great Recession, which caused some southern legacy manufacturing businesses and other firms to close their doors. Some industries never rebounded and have fundamentally shifted the type and availability of work in the South. Employment is trending toward more technically skilled and knowledge-based positions, just as in the rest of the country. Most jobs across southern states are "middle-skills" positions, requiring training beyond high school but not a four-year degree. As there are not enough workers at the corresponding education level to fill those positions, the South is left with a significant middle-skills gap that could be addressed through effective workforce development programs and policies.

Beyond the challenges of a changing economy, the South has significant demographic changes that heighten the needs for skill-based training and incorporating new workers into the workforce. Southern states have diverse populations of young workers: many are under the age of 35, and more than 40 percent are people of color. The South also has a number of workers who are disadvantaged. With relatively high rates of single-parent households, for example, it is more difficult to balance child care and a job.

Adapting to demographic trends as well as to a new U.S. economy in which most jobs require training beyond high school will challenge states to reconsider their workforce development efforts. The Atlanta Fed's Center for Workforce and Economic Opportunity recently released a special report looking at these challenges and opportunities. The center collaborated with the Federal Reserve Bank of St. Louis and the National Skills Coalition on "Building a Skilled Workforce for a Stronger Southern Economy."

In addition to exploring economic and demographic trends in southern states, the report provides analysis of state workforce development policies and highlights a number of opportunities for policymakers to consider. Recommendations include:

  • States could develop and build sector-based partnerships and work-based learning programs as economic development tools. Programs that align workforce development with economic development strategies are often successful.
  • States could consider additional investment, particularly in local communities, to develop labor market aligned workforce development programs. Sector-based partnerships and other efforts often need funding beyond the philanthropic level to remain sustainable and scalable—additional state investment could support this growth.
  • States could establish more job-driven financial aid programs in community and technical colleges for adults of all ages. Critical to this effort is ensuring that students of diverse backgrounds are able to access the programs.
  • States could also develop middle-skill career pathways that are aligned with comprehensive support services to ensure completion of training and access to work, especially for low-income workers and workers in poverty.
  • Finally, states could start to invest in robust data systems to better track and evaluate the effectiveness of workforce development programs.

Southern states have pursued many of these efforts, but there are opportunities to expand upon successes and adopt more comprehensive skills policy agendas.

The report covers a number of case studies of new programs such as:

  • Georgia High Demand Career Initiative provides grant funding to build regional, employer-centered sector partnerships. The state workforce development board, WorkSource Georgia, developed the program using part of the governor's Workforce and Innovation and Opportunity Act reserve fund to help encourage cross-sector collaboration in workforce development programs. The case provides a road map for how other states could use existing funding and consider creating resources to expand upon current collaborations.
  • Apprenticeship Carolina is a state-funded organization in South Carolina that helps businesses establish registered apprenticeships programs. The organization has helped to expand apprenticeship programs to nontraditional apprenticeship fields. They work in tandem with the economic development arm of the state and have helped to coordinate efforts in economic development with job training, work-based learning, and registered apprenticeships. The organization has been able to help both large and smaller firms establish apprenticeships.
  • Tennessee Reconnect expands the Tennessee Promise program of free community college to adult learners. As a part of the state's longstanding "Drive to 55" effort to have at least 55 percent of the workforce hold a postsecondary credential, the state realized it needed to support adult learners. Many Tennesseans had some postsecondary education, but they had not earned a degree. The Reconnect program created a "last dollar" scholarship to cover any gap in funding and makes it effectively free for adults to earn a degree or credential from a community college.
  • Arkansas Career Pathways Initiative uses discretionary state Temporary Assistance for Needy Families (TANF) funding to connect low-income parents to education and training programs as well as case support and social services. The program helps move program participants toward careers and economic self-sufficiency. Recipients receive child care and transportation assistance and tuition gap funding while they pursue GEDs, certificates, or associate's degrees in high-demand career sectors.

Read the full report.

Stuart Andreason is the director of the Center for Workforce and Economic Opportunity. The views expressed here are the author's and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.