December 18, 2023
Our nation’s economy is at an inflection point. Employers are struggling to find qualified workers to fill critical job openings. Meanwhile, despite positive job growth and wage gain trends, recent polling and labor strikes suggest that many people in this country feel unsupported by the job market and overall economy, a sentiment reflected in a Jobs for the Future (JFF) analysis showing that 92 million U.S. workers are currently shut out of quality jobs and face systemic barriers to advancement.
We believe policymakers must act to address this workforce conundrum and put quality jobs within reach of millions more U.S. workers.
In this blog, we shine a light on what states are doing to break down structural barriers to opportunity. Specifically, we look at innovative policy measures that embrace skills-first and fair chance hiring practices. We also consider ways states are better positioning workers to thrive in a labor market transformed by the emergence of artificial intelligence and the imperative for transitioning to a green economy. Additionally, we explore how states are offering education providers incentives to focus on talent development needs.
Artificial intelligence (AI) is changing the way people learn, the way they work, their future employment opportunities, and the technical and uniquely human skills they’ll need to thrive in the jobs of the future. AI and other automated technologies will bring a mix of significant opportunities and profound challenges, especially for people who already face barriers to quality jobs, such as call center workers. But generative AI systems capable of creating new content could also impact white-collar professions in content-driven industries—a segment of the workforce that once seemed insulated from job losses caused by advances in automation.
In October, President Joe Biden issued a sweeping executive order to manage risks associated with the use of AI, while ensuring that all people reap the benefits of the transformative technology. In signing the order, Biden acknowledged that “we still need Congress to act” to establish enforceable AI regulations.
In the absence of federal legislation, several states are taking proactive steps to harness AI and ensure that it’s used in ways that lead to opportunities for workers.
For example, in September, Pennsylvania Governor Josh Shapiro signed an executive order instructing the state’s Office of Administration to create training materials and develop certification programs to help state employees understand how to use generative AI. The Shapiro administration also created a governing board to oversee the use of AI and established a two-year fellowship in which graduate students in science and technology will explore how generative AI impacts the work of state agencies. Elsewhere, state lawmakers in North Carolina are considering plans to study AI’s potential impacts on private-sector workers, and in Texas a legislative proposal would lead to the development of job training programs for AI-related skills.
States are also taking action to protect people from potentially negative consequences of automating eligibility determinations, including decisions about whether a worker receives a bonus, a student gets into college, or people receive public benefits. In 2021, Illinois lawmakers passed a bill (H.B.0053) requiring employers to report demographic data on job candidates if they rely solely on AI to determine whether applicants qualify for interviews. The bill also requires the state’s commerce department to analyze the data and report any findings suggesting that racial bias played a role in AI’s decision-making.
A key strategy for closing equity gaps on who gets access to quality jobs in the U.S. comes down to employers making hiring and advancement decisions based primarily on people’s skills and experiences, rather than their academic credentials or their backgrounds. Degree requirements on job descriptions can discourage and even prevent otherwise qualified candidates from applying for jobs.
Employers appear to be embracing this skills-first hiring ethos. According to researchers, a growing share of job postings don’t carry requirements for professional degrees, including in such fields as engineering, accounting, and administration, where such expectations have been commonplace. Yet, hiring patterns have not shifted—for instance, in the technology, information, and media industries, major spikes in job posts without degree requirements have translated into few new hires.
State policymakers are seeking to rectify this entrenched bias, at least for government jobs. This fall, Minnesota became the 17th state to promote skills-first hiring practices for state jobs when Governor Tim Walz signed Executive Order 23-14, which directs state agencies, where appropriate, to disregard college degree requirements when making employment decisions and instead evaluate people based on their demonstrated competencies and work experiences. Walz’s office says the rule will significantly expand employment opportunities for people without college degrees and estimates that it applies to more than 75% of state jobs.
Early evidence of state policies for skills-first hiring suggests that qualified workers who would otherwise not be considered for a job are now getting hired. In Maryland, which was the first state to commit to skills-first hiring for state government jobs, former Governor Larry Hogan told JFF that in the first year after the change, hires of workers without a college degree increased 41%.
In Minnesota, policymakers took a significant step toward normalizing employment opportunities for people with criminal records when the state legislature passed a bill (SF 2909) that made Minnesota the 11th state to join the Clean Slate Initiative and adopt a policy model that uses technology to automatically expunge an array of criminal records for people who complete their sentences and have no further arrests or convictions. Under the new law, Minnesota will automatically clear the records of people who haven’t engaged in criminal activities for one year after their release from incarceration or have had no arrests or convictions for one year immediately prior to a review of their records.
Excluding people with records from the workforce hurts the country’s economy at a time when employers in several industries are struggling to fill jobs, and it limits people’s ability to put their pasts behind them and pursue opportunities for economic advancement: It’s estimated that limitations on employment opportunities cost people with records in the United States $372.3 billion in lost in wages each year.
JFF’s Big Blur initiative calls for a radical reimagination of high school and college curricula to include work-based learning and other training and educational experiences focused on helping students build career skills with the greatest value in the labor market and enabling them to make seamless transitions into the workforce and advance economically. Recent policy moves in Texas and Indiana hold the promise of advancing that agenda by offering students and educational institutions incentives to focus on career pathways.
In Texas, House Bill 8 (HB-8) establishes a new funding formula for community colleges that’s focused on rewarding institutions for producing graduates who are prepared for jobs aligned with regional and state educational and workforce needs. While JFF supports outcomes-based funding, poorly designed incentives run the risk of encouraging education and training providers to focus on serving learners and workers that they deem mostly like to succeed in their programs while restricting access to populations facing structural barriers. In contrast, HB-8 stands out because it emphasizes equity by providing more funding for community colleges that serve adult learners and students from communities that are economically and academically disadvantaged. The law also establishes a financial aid program that enables students from high schools in such communities to participate in dual enrollment courses at no cost, and it includes provisions that foster greater collaboration between community colleges and K-12 systems, universities, and workforce systems to smooth students’ transitions to jobs and/or further postsecondary education.
Meanwhile, Indiana’s new Academic Performance Grant (APG) program (established in House Bill 1001) rewards high schools for every student who earns college credit and a postsecondary credential toward college completion. The state has set an ambitious goal for all high school students to earn a credential of value before graduating; to date, only 5% of students have achieved that goal. In addition to the APG program, Indiana has launched the Career Savings Accounts program (established in House Bill 1002), which gives students access to up to $5,000 per year to pay for college or career readiness opportunities, including dual credit programs, apprenticeships, and credentialing exams. Students are eligible to access these accounts in their sophomore year and may use the funds in ways that best enable them to meet their postsecondary education and career goals.
Read JFF’s recent Big Blur policy brief to learn more about state financing models that are moving the needle toward our vision for the Big Blur.
Many states are evaluating ways to ensure that making a transition to a carbon-neutral economy will lead to the creation of green jobs that are high quality and accessible to people of all backgrounds.
In Wisconsin, Governor Tony Evers proposed the creation of a green jobs training program in the budget bill (AB 43) he sent to the state assembly. The legislation calls for the state’s Department of Workforce Development to award grants to public and private organizations to develop and implement training programs in clean energy sectors. Through the grant-making mechanism of Wisconsin’s Fast Forward framework, proposed training projects would be scrutinized based on their ability to improve career and economic advancement. And in California, the state assembly is considering a bill (AB 1224) that would enable workforce development leaders to agree on what qualifies as a quality green job. The bill calls for a survey of the strengths of green job industries across the state. The findings would be used to create a standard operating definition of “green jobs” that would be incorporated into educational and outreach materials about job opportunities in the green economy.
To learn more about JFF’s commitment to driving economic advancement in the emerging green economy, read about the work underway in the JFFLabs Climate Innovation practice, including efforts to help build a skilled and diverse green workforce through the Climate-Resilient Employees for a Sustainable Tomorrow (CREST) initiative.
Each of these policy measures offers examples of ways in which states can expand access to quality jobs, especially for workers and learners who face systemic barriers to employment.
At JFF, we encourage policymakers to engage in continued experimentation to find bold and innovative approaches to broaden access to economic advancement opportunities. Voters and workers are calling for change. The 2024 legislative session provides an immediate opportunity for action.
We are advancing evidence-based policy to enact changes in the education system and the workforce. Nearly half of U.S. workers are in low-paying jobs. Systemic issues in education, employment, and workforce development prevent millions of…
