Editorial: Community colleges good fit for job training
Lawmakers were correct to extend successful program, but they should also remove spending cap
As Michigan seeks to tackle its skills gap, community colleges have been on the ground floor of training workers for specific jobs. More than 90,000 jobs are unfilled in the state, so these programs are critical. The Legislature was right to extend one program that’s gotten results. But it should go further.
The popular Michigan New Jobs Training Program was due to expire at the end of 2018, but now it will run through 2023.
Under the program, community colleges work directly with area employers to provide training for workers who will fill newly created positions. The colleges are paid by diverting state income tax withholdings from the workers into a fund that reimburses the schools. Once the colleges are paid, the money becomes normal state income tax revenue.
Mike Hansen, president of the Michigan Community College Association, says the program has been a welcome answer to employer concerns about finding qualified, skilled workers to fill new job openings. Employers sit down with their local colleges to work out a plan to meet their specific needs. The positions must be new and the workers must be new hires or laid-off employees being trained for new jobs.
“It’s very locally driven,” says Hansen. “It operates outside and separate from any state bureaucracy. It’s strictly a relationship between a community college and local employers.”
The numbers illustrate the success of the program. In 2012, the cost of the training was about $2.9 million but there was an economic impact of $76 million in additional earnings and 2,266 new jobs created. As of this year, 96 businesses had 108 contracts with 18 community colleges. The result has been the creation of 13,036 new jobs since the program started in 2010.
The program is helping fill the gap between available good-paying, skilled jobs and the lack of trained workers. And those in the jobs program are paid 175 percent of the minimum wage.
Lengthening the duration of the program was a good move, but the Legislature didn’t go far enough. Bills in the Senate would remove a $50 million cap on spending for the program.
The cap limits the number of colleges and employers that can participate. When the total number of contracts reaches $50 million, no new agreements can be authorized until an existing contract is paid off or paid down. Consequently, if the limit is reached, it may leave some employers with job openings unable to participate.
Sen. Darwin Booher, R-Evart, a sponsor of the legislation, says the cap is an effort to limit the state’s general fund liability. While statistics show the program is more than paying for itself, some lawmakers feel uncomfortable without a cap. If they must maintain a limit, then that cap should at least be raised.
This program is geared to help businesses find talent and individuals land jobs, and its track record proves its working. It should be allowed to grow larger.