How Solving the Skills Gap Can Rebuild the Middle Class
Posted on August 17th, 2016

​By David DeWitt, Editor & President Phase65, Inc.

Eric Spiegel grew up in Steel Town. His hometown – Youngstown, Ohio – used to be the second-largest steel producer in the world. Steel mill jobs were tough work, he recalls. But for his grandfathers and many of his friends’ parents, the upside was that the jobs paid well and opened doors into the middle class.

Today, as the President and CEO of Siemens USA, a company with more than 80 U.S. manufacturing sites, Spiegel’s Youngstown roots continually remind him of how a strong U.S. manufacturing presence can positively impact people and communities.

But in a recent keynote address at Manchester Community College, we learned that Spiegel’s thinking was also shaped by experiences in New Hampshire. Spiegel did his graduate work at Dartmouth College’s Tuck School of Business. In college, though, he ventured to Seabrook to witness nuclear power protests while researching his senior thesis. His paper would argue that nuclear power, in economic terms, looked like a “no-brainer,” but that its success would hinge a lot on public opinion. The Three Mile Island incident, which had occurred weeks earlier, made this crystal clear.

“It was a starting point for me getting engaged in the big issues of our time,” he explained. “And the issue I’m really focused on today is economic opportunity and the skills gap.”

In manufacturing alone there are two million job openings that could go unfilleddue to a shortage of qualified applications, all while many young people are struggling in the labor market. As Spiegel and Ross Gittell, Chancellor of the Community College System of New Hampshire, wrote in a recent editorial, youth unemployment over the last year in New Hampshire is almost three times higher than the statewide average.

Siemens is among the companies taking action. As the New Hampshire Union Leader noted, Siemens has been building an apprenticeship program in the U.S. – it’s based on a model used in Germany – that covers apprentices’ tuition fees and also pays for them to learn on the job. Graduates earn an international industry certification and a degree sans debt. Then they get to start a career with Siemens starting at about $55,000 a year.

On Monday June 6, Spiegel spoke of the value of investing in apprenticeships and workforce training at a summit that brought together Governor Hassan and leaders representing government, education, business and nonprofits. All of these leaders came together at a summit to push forward a goal to give every young adult in the state, ages 16 to 29, access to work-based learning by 2020.

“At Siemens,” Spiegel said, “we see this as an investment in human capital and a way to cultivate the next generation of workers we need.”

The summit was supported by the Siemens Foundation and the National Governor’s Association. New Hampshire, in fact, is one of six states the foundation and NGA are working with to scale such efforts.

Spiegel, who is also Chairman of the Siemens Foundation, shared with us his remarks as prepared for delivery.

Below are some highlights.

On closing the training gap to restore America’s middle class:
What if instead of calling the issue we’re confronting a skills gap we called it a training gap? Because that’s what I think it is. When we talk about this we have to be very clear that it’s not the students’ fault. In fact it’s our responsibility to knock down this barrier that is separating millions of young people from the good-paying STEM and manufacturing jobs that are out there.

So I know this summit is about work-based learning. But it’s also about how we can rebuild America’s middle class and restore people’s faith in the American dream.
Close to one third of Americans do not believe hard work will get them ahead. And I think this idea to close the training gap can gain traction as a real solution, because it truly is good for everybody. It’s good for young people, for workers, for communities – and it’s especially good for business.

And as we look at this issue with fresh eyes, here is what I think we’ll find: We are not creating something that is new. We are remaking something our country should never have lost and modernizing it for the 21st century.

On the value of vocational training:

[When I was growing up] if you decided to transition to a vocational program, that wasn’t looked down upon – it was seen as a smart choice!

But then the world opened up and all those jobs started moving overseas. And as industry shrunk, a lot of vocational schools closed their doors too. And I think this is really when our country’s four-year college or bust mentality was born.
Today we have 70 percent of high school graduates going straight to college. But then only 50 percent of this group graduates – and they do so with close to $30,000 in student debt. Then only 50 percent of these graduates have been able to find work in careers that even require a bachelor’s degree.

Meanwhile, the jobs in STEM middle-skills professions require training and different (typically less expensive) credentials. This is where the conversation typically turns to: well, we need to erase the middle skill stigma. We need to get parents, students, and employers to think differently. And that’s true. But a lot of parents and students aren’t even aware that other educational and career pathways exist.

So what we need to do is pretty clear: We need to offer them a better deal.[hope]
Hope Johnson was among the first participants in Siemens’ apprenticeship program in Charlotte, N.C.

On the benefits of workforce training to employers:

It’s an unfortunate perception that the goal of these training programs is to engage young people who are maybe not doing as well in school. That is not true. It’s really about engaging young people and connecting them with the right skills – especially those who are ambitious and have the raw smarts.

This is how we found Hope Johnson. Hope was someone who never saw herself pursuing a career in manufacturing. She was salutatorian of her high school and wanted to go to a four-year college. But when she was in 11th grade, the economic recession hit and she had to go out and work and support her family. She ended up doing a six-week internship with us while she was in 11th grade. And just last summer, she was among the first graduates of our apprenticeship program.

Now she has a machinist job, and her whole career is in front of her. In fact, if one day she becomes our CFO or the president of one of our business divisions, I won’t be surprised. Many of the people we have in those positions currently started out as apprentices too.

On measuring the value of workforce training:

A lot of times creating metrics for success isn’t easy. But in this case it really is easy – because you only need one: Did someone get a good job as a result of the training? That is the ultimate metric. And it’s the outcome we should be focused on offering students.

If we can offer someone an opportunity to gain exposure to how a business is run, if we can offer them on-the-job training during a gap year, if we can expose them to a trade or teach them a new skill, all of this will help students think about what they’re learning in the classroom in a different way. 

They’ll learn what type of careers they like and don’t like early on. They’ll build the skills they need to compete for any job. And this not only becomes a launching pad to limitless opportunities: maybe it inspires someone to continue beyond high school; or maybe it incentivizes a college-bound kid to explore opportunities in New Hampshire first before looking out of state.

Going back to Hope, she still wants to achieve a four-year degree and advance her career. But she’ll also enter into this part of her education on better financial footing, with more work experience, and with a stronger vision for what she wants to get out of it. If you begin as an apprentice or in a technical school, this is the start. It’s not the end. And that applies to both your career and your education.

Before I go, I want to encourage employers, if you aren’t already, to get involved in proactively building your workforce. It doesn’t have to be an apprenticeship program off the bat. It could be a shadowing opportunity. Or it could be an internship. What matters is that you’re engaging talented youth and helping keep them in New Hampshire for the long run.

So take this first step. And together, let’s close the training gap and rebuild America’s middle class.

Original article: ​http://manufacturingstories.com/how-solving-the-skills-gap-can-rebuild-the-middle-class/


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