Indiana’s manufacturing sector is regrouping after a legislative session they’d hoped would focus on workforce development.
While some advocates applaud the reform that did pass – geared toward using the career and technical education system to fix labor shortages – others say there’s a lot more work to be done.
Indiana is the most manufacturing-dependent state in the country, with an industry worth $100 billion, and it ranks high on a lot of business-friendly metrics – low taxes, a central location, and plans for upgrading roads and infrastructure that just passed the state legislature.
But state Rep. Mike Braun (R-Dubois County), who also owns a logistics company, says this self-styled “state that works” lags in one key area: training enough workers to fill open jobs.
“It’s kind of reached a boiling point where industry may have to consider actually relocating outside the state if, in fact, they can’t get a trained workforce to fill these jobs,” he says.
With a low unemployment rate, the state’s $1 billion in annual spending on programs to solve that problem isn’t making much of a dent for the manufacturing sector. It has thousands of high-paying openings.
“It’s between a billion and a billion-and-a-half dollars’ worth of income that we’re not realizing,” Braun says. “That would actually move the needle a little bit on economic growth.”
So he and his colleagues in the legislature went back to the drawing board, and passed a bill that aims to align all those programs with what employers need.
It asks the Department of Workforce Development to figure out which business sectors have the most openings and the best wages, what kind of training those open jobs require, and what existing training programs will help fill them. They’ll look across high schools, college courses for credit and private certificate programs.
The final touch is a “workforce-ready” grant program to help Hoosiers of all ages and backgrounds enroll in those programs and get hired, says state higher education commissioner Teresa Lubbers.
“If you come back and get a certificate in an area that we know will improve your ability to get a good job and meet the employer needs, we’ll make sure that you can afford to do that,” Lubbers says.
The bill asks state agencies to update their workforce development data every two years, and to keep track of how many good jobs the programs are helping to fill.
Lubbers says their efforts need to keep pace with the economy, and help people build upward in their careers.
“The world of work is changing so dramatically that it is highly likely, with automation and artificial intelligence and robotics, that many of these jobs will change and we’ll have to continue to give people the opportunity to skill up,” she says.
Employers know this too, says Indiana Manufacturers Association lobbyist Andrew Berger. That’s why he says the industry wanted to gain more of a voice through this year’s reforms.
On that front – and on the timeline of these reforms – he says they’re disappointed.
“We had hoped for some steps that would have an immediate effect, or at least start changing the system to more of an employer-driven delivery mechanism,” Berger says. “But that’s not what happened.”
The IMA’s immediate solution was a tax credit for businesses that train new workers, which did not make it into the final version of the bill.
For the long-term, though, Berger says they’re pleased with these education reforms – as long as the state does enough to involve the industry in identifying high-value jobs and training programs.
“We want it to be as nimble as possible, because what an employer in Lafayette needs is going to be different than what an employer in New Albany needs,” he says.
And the longer it takes to funnel money and then trained workers through high school, college and private STEM education programs into open jobs, the worse Berger says things will get.
He says about 20 percent of the average factory’s workforce could retire today if they wanted to. That means Indiana will have 15,000 jobs to fill every year for the next decade in manufacturing alone.
“That’s when it really becomes a crisis, is when the workforce is not just unable to expand, but is actively shrinking,” Berger says.
The state will take a couple of steps to plug the gap by the end of this year, under the new legislation.
In October, the governor’s office will put out a master plan for re-aligning the state’s many workforce development efforts. Then, in December, the DWD will release its first round of data about where open jobs are, and what training programs can fill them.