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BUILDING
A SKILLED
WORKFORCE
FOR A
STRONGER
SOUTHERN
ECONOMY

B

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

TABLE OF CONTENTS
EXECUTIVE SUMMARY................................................................................................................................................3
To effectively compete in today’s economy, the South must help adults build skills..................................................... 4
The roadmap to southern skill building........................................................................................................................... 4
WHY A SKILLS AGENDA FOR THE SOUTH?................................................................................................................5
New rules for a new southern economy.......................................................................................................................... 6
Most southern jobs require more than high school education, not a 4-year degree...................................................... 7
Developing skilled workers can help southern cities and towns compete..................................................................... 7
Southern states must close their skills gaps to grow their economies.......................................................................... 7
The current economic climate requires a skilled workforce........................................................................................... 9
Tackling barriers to work especially important in southern states................................................................................10
Address barriers to work in rural communities to help them prosper........................................................................... 11
A skilled and thriving economy must be an inclusive economy.....................................................................................12
THE STATE OF SKILLS POLICIES IN THE SOUTH.....................................................................................................14
Southern states can better engage industry leaders in job training..............................................................................15
Georgia high-demand career initiative sector partnership grants................................................................................16
Key takeaways.................................................................................................................................................................19
Case study: Apprenticeship Carolina............................................................................................................................. 20
Southern states have room to improve in helping adults secure postsecondary credentials......................................21
Case study: Tennessee reconnect.................................................................................................................................. 22
Key takeaways................................................................................................................................................................ 23
Case study: Arkansas career pathways......................................................................................................................... 24
Southern states can strengthen workforce data systems to promote accountability and transparency................... 25
A ROADMAP FOR SOUTHERN SKILL BUILDING...................................................................................................... 26
A roadmap for state policymakers to close the skills gap and grow the economy....................................................... 27
Vehicles for state policymakers to close the skills gap include goalsetting and a “skills cabinet”.............................. 29
ENDNOTES................................................................................................................................................................ 30

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

1

The authors of this report are Stuart Andreason and Ashley
Bozarth, Federal Reserve Bank of Atlanta, and Brooke DeRenzis,
Melissa Johnson and Rachel Hirsch, National Skills Coalition,
and Andrew Pack who supported this research on behalf of the
Federal Reserve Bank of St. Louis.
This report was developed with input from an advisory group
who we would like to thank for generously sharing their time,
knowledge, and insight:
• Ted Abernathy, Economic Leadership LLC
• Anne Bacon, North Carolina Community College System
• Daniel Davis, Federal Reserve Bank of St. Louis
• Ed Franklin, Winthrop Rockefeller Foundation
• Allan Freyer, North Carolina Justice Center
• Garrett Groves, Austin Community College District
• Cinda Herndon-King, Atlanta CareerRise
• Waymond Jackson, Birmingham Business Alliance
• Mala Thakur, MDC
• Corey Wiggins, Mississippi State Conference NAACP
The views expressed in this report are those of the authors,
and do not necessarily reflect the views of the Federal Reserve
Bank of Atlanta, the Federal Reserve Bank of St. Louis, or the
advisory group.

This research was funded by the Annie E. Casey Foundation and
W.K. Kellogg Foundation. We thank them for their support but
acknowledge that the findings and conclusions presented in this
report are those of the authors alone, and do not necessarily reflect
the opinions of these foundations.

2

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

EXECUTIVE
SUMMARY

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

3

TO EFFECTIVELY COMPETE IN TODAY’S
ECONOMY, THE SOUTH MUST HELP ADULTS
BUILD SKILLS
A new day has dawned in the South. No longer is a high
school education and a willingness to work hard sufficient
to secure a family supporting job. In fact, the majority of
all jobs in the U.S. labor market require some postsecondary education or training. To effectively compete in
today’s marketplace, states must have skilled workforces.

“To create a

skilled and
thriving
southern
economy,
state leaders
must create
an inclusive
workforce.

”

For the southern United States, this new environment
requires a shift. Economies once built on low-skill industries must now compete globally for jobs that require
training beyond high school. Most of these jobs are middle-skill jobs, requiring education or training beyond
high school but not a four-year college degree.

Across the South, there are not enough workers trained
to fill middle-skill jobs. This skills gap hurts businesses
that are not able to fill positions. It hurts states because
the lack of skilled workers makes it challenging to attract
and retain new businesses. And the skills gap hurts lowwage, low-skill workers who are not able to advance their
careers and move into good, middle-skill jobs.
But the middle-skill gap isn’t insurmountable. Southern
states could step up to the challenge of educating more
of the region’s adults to close this gap. Focusing on grade
school students alone won’t be enough to close the skills
gap now. If each and every one of the South’s graduating
high school students were to stay in the region and train
for open jobs that require postsecondary education, there
would still be unfilled positions.

If southern states are going to close their skill gaps, they
must provide opportunities for all adults — including people of color — to increase their education and
training. More than four in ten Southerners are people
of color. And people of color will make up the majority
of the U.S. population by 2044. To create a skilled and
MOST JOBS IN THE SOUTH ARE MIDDLE-SKILL JOBS
JOBS BY SKILL LEVEL, AMERICAN SOUTH, 2015

16%
LOW-SKILL

55%
MIDDLE-SKILL

29%
HIGH-SKILL

Source: NSC analysis of Bureau of Labor Statistics Occupational Employment
Statistics

4

thriving southern economy, state leaders must create an
inclusive workforce.

To close their skills gaps, southern states must also
address people’s barriers to work. The history, geography,
and policy decisions of the South help create obstacles
that prevent people from working, building their skills,
and advancing their careers. These barriers include higher
poverty rates, burdensome transportation costs, onerous
child care costs, high incarceration rates, and restrictive
policies for previously incarcerated people. These obstacles can be even more daunting in rural areas, where there
may be additional challenges like limited job openings
and limited broadband service.

THE ROADMAP FOR SOUTHERN
SKILL BUILDING
To help states realize economic improvement, this report
includes a roadmap of critical steps states may take to
establish policies that could help them close their skills
gaps. State policymakers could:

• Use workforce development strategies, such as sector
partnerships and work-based learning, as economic
development tools capable of meeting industry needs.
• Invest in communities to implement high-quality
workforce development strategies at the local level.
• Establish job-driven financial aid programs that are
available to a wide range of students.
• Form career pathways and include comprehensive supportive services that enable completion.
• Create state data systems that provide accountability
on how training programs are helping residents with
diverse needs get skilled jobs.
State policymakers could also consider easing their path
to implementation of these steps by taking the following
actions, which could help bring a broad set of stakeholders to the table to unite around a common plan for skills
development:

• Set a bold goal for increasing the number of adults
trained for skilled jobs.
• Create a cross-agency “Skills Cabinet,” and task agency
leaders with working together to develop and implement a strategy for meeting the state’s postsecondary
attainment goal for adults.
This report discusses specific policies that states could
adopt to develop skilled workforces and fully realize
the economic potential of local businesses and workers.
Examples of current policies from southern states are
also included, proving that these policy changes may be
implemented in the region’s context.
Residents, businesses, and state economies are counting
on their leaders to create policies that will help them
thrive now and in the future. Southern state leaders
should examine and consider taking the necessary steps
to close their skills gaps.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

WHY A SKILLS AGENDA
FOR THE SOUTH?

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

5

THE SOUTHERN UNITED STATES
WASHINGTON, D.C.

“

In the South,
many jobs that
could be done
with only a high
school degree
—already in
decline before
2007 —were
lost and are not
coming back.

”

Carnevale and Smith, 2012

This definition of the southern states is established by the U.S. Census Bureau.1

NEW RULES FOR A NEW SOUTHERN ECONOMY
The majority of jobs in the U.S. labor market require
some postsecondary education or training.2 To effectively
compete in today’s marketplace, states must have skilled
workforces.

For states in the southern United States, this new environment requires that economies once built on low-skill
industries compete globally for jobs that demand training
beyond high school. Southern states must invest in skills
across all races, genders, and geographies for the region
to succeed.

The south’s economy used to be based on inexpensive
labor and land that drove agriculture and extractive industries. Prior to the Civil War, cotton and other agricultural
staples produced by enslaved people who were not paid
wages were profitable and southern states did little to
diversify their industries as other states did.3 Following
the Civil War, southern state economies expanded beyond
agriculture to include some basic manufacturing and natural resources extraction, but the region principally competed on the basis of low wages, limited unionization, and
tax credits.4 These industries, which tend to be lower skill,
are now declining.5
During the 1960s and 1970s, the United States economy began to shift from centering on producing physical
goods to one focused on technology, innovation, knowledge, and service. Over the past thirty years, American

6

communities became increasingly defined by their residents’ level of education.

Now places with the “right” mix of industries and skilled
workers attract good jobs while those at the other end
of the spectrum are stuck with a disproportionate share
of low-wage, low-skilled jobs that offer workers little
advancement.6 In other words, economic development
and workforce development are inextricably linked in the
modern economy. Southern states can no longer compete
mainly on cheap land, low-wage labor, and lower taxes.

WAGES OF SOUTHERN STATES STILL
TRAIL THE REST OF THE NATION
SOUTHERN STATES V. NON-SOUTHERN STATES
2016 MEDIAN ANNUAL WAGE
$40,000
$35,000
$30,000
$25,000
$20,000

$35,904

Southern
States Average

$37,799

Non-Southern
States Average

Source: NSC analysis of Bureau of Labor Statistics Occupational Employment
Statistics

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

Some southern cities have attempted to respond to the
shift in the economy by attracting and retaining skilled
workers. However, the legacy of low-skill and low-wage
is still present in the South. Even after adjusting for cost
of living, a recent analysis found that average earnings in
southern metro areas lag behind the rest of the country.7

To ensure that workers, families, and businesses prosper,
southern states need to adapt to the new economy and
invest in skill building for adults. Today’s jobs demand
more skills and training than they once did. Stronger
basic proficiency in math, teamwork, problem-solving,
communicating, and complex thinking are now necessary not just in jobs that require advanced degrees
but also in the middle of the labor market — jobs that
require some education or training beyond high school
but not a four-year college degree.8 Moreover, the middle of the labor market now requires additional technical skills and training.9

MOST SOUTHERN JOBS REQUIRE
MORE THAN HIGH SCHOOL EDUCATION,
NOT A 4-YEAR DEGREE

than a four-year degree.10 The proportion of middle-skill
opportunity occupations varies across the South, less
in metro areas with a prevalence of low-wage work
like Miami, and often more in areas with large production or logistics and transportation industries such as
Birmingham and Baton Rouge.

DEVELOPING SKILLED WORKERS CAN HELP
SOUTHERN CITIES AND TOWNS COMPETE
The ability to adapt to the new skills-based economy has
important consequences for the overall growth of the
South. The South’s population and economy has grown
over the past several decades, but the growth hasn’t been
even across the region. Metropolitan areas in the south
vary significantly — some have high concentrations of
skilled workers and booming economies and others are
older industrial cities undergoing significant economic
restructuring.11

Historically industrial cities once reliant on old models
of manufacturing have struggled to develop the skilled
workforce required by today’s economy. The majority of
good jobs in these cities, after all, were attainable with
only a high school education. Now, lower education levels
among residents hampers job creation in these areas.12

Middle-skill jobs, which require some education or training beyond high school but not a four-year college degree,
account for over half of all jobs in the South. Education
and training for middle-skill jobs can vary from shortterm job training programs or two-year degree programs
often offered by community or technical colleges or
other community training providers, to apprenticeship or
on-the-job training with an employer. While key industries vary across southern states, their labor markets have
a common feature: middle-skill jobs hold the plurality of
jobs in each state.

To help reinvigorate older industrialized cities, states
could invest in training that gives low-income workers
the skills they need to compete for jobs that pay family
sustaining wages. These skilled jobs can help attract more
workers and revitalize these regions.13

MOST JOBS IN THE SOUTH ARE MIDDLE-SKILL JOBS

SOUTHERN STATES MUST CLOSE THEIR
SKILLS GAPS TO GROW THEIR ECONOMIES

Many of these middle-skill jobs are “opportunity occupations,” paying at least the national median wage
(roughly $37,000 per year in 2016) and requiring less

JOBS BY SKILL LEVEL, AMERICAN SOUTH, 2015

16%
LOW-SKILL

55%
MIDDLE-SKILL

29%
HIGH-SKILL

Source: NSC analysis of Bureau of Labor Statistics Occupational Employment
Statistics

Many very small cities, towns and rural areas have also
seen significant economic change, driven by new technologies that aided in automating and mechanizing the
agricultural and manufacturing industries. Population
growth has been particularly slow in farming and mining
communities and has declined in rural areas dependent
on manufacturing.14

The desire for growing, thriving communities is strong
motivation for states to support skills training. Across
the South, there are not enough workers trained to the
middle-skill level to fill middle-skill jobs. This creates a
middle-skill gap in each of the Southern states.

The skills gap hurts employers. It keeps local businesses
(which create the vast majority of new jobs in states15)
from filling skilled positions and growing. A lack of
skilled workers may also make it challenging to attract
and retain new businesses who are looking to relocate to
areas that can meet their skill needs.
The skills gap also hurts workers by limiting opportunities
for lower-skilled workers to advance in their careers and
secure family supporting work, and keeps lower-skilled
people without jobs on the sidelines of the labor market.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

7

“

If each and
every one of
the South’s
graduating high
school students
were to stay in
the region and
train for open
jobs that require
postsecondary
education
or training,
there would
still be unfilled
positions.

”

SOUTHERN STATES WITH MORE SKILLED WORKERS HAVE HIGHER POPULATION GROWTH
PERCENT OF POPULATION CHANGE 1990-2007
LESS THAN 5%

36% - 50%

6% - 20%

51% - 70%

21% - 35%

Source: U.S. Census Bureau

Efforts to close the skill gap must be inclusive of all workers. By providing more equitable pathways to good skilled
jobs, Southern states can strengthen their economies.
Adults and out-of-school youth are key to closing the
skills gap
The middle-skill gap isn’t insurmountable. There are
proven, common-sense strategies that southern states
could employ to close it and help businesses and workers succeed. Many states turn to their K-12 education

MOST SOUTHERN JOBS ARE MIDDLE-SKILL JOBS, BUT NOT ENOUGH
WORKERS ARE TRAINED TO THE MIDDLE-SKILL LEVEL

systems as a starting place for closing their skills gaps.
While providing high school students with career education is critical, focusing on K-12 alone won’t be enough
to close the skills gap. For example, even if each and every
one of the South’s graduating high school students were
to stay in the region and train for open jobs that require
postsecondary education or training, there would still be
unfilled positions.16

To close the skills gap, these states must also upskill the
existing adult workforce. Southern states represent eight
of the ten states with the highest proportion of working-age adults with no more than a high school education. Preparing lower-skilled adults for middle-skill jobs
will require action on behalf of state policymakers.
Southern states make up nine of the top twelve states
with the largest share of “opportunity youth” — young
adults between the ages of sixteen and twenty-four who
are not working and not in school. Opportunity youth
are missing a critical opportunity to build skills for their
future careers.17

High-Skill Jobs
High-Skill Workers
Middle-Skill Jobs
Middle-Skill Workers
Low-Skill Jobs
Low-Skill Workers

0%

10%

20%

30%

40%

50%

60%

Source: NSC Analysis of Bureau of Labor Statistics Occupational Employment Statistics by State, May 2015 and
American Community Survey data, 2015.

8

WASHINGTON, D.C.

Efforts that focus on opportunity youth should also
address the unique context and challenges facing young
people of color, since opportunity youth are disproportionately nonwhite. Higher unemployment rates among
young African Americans help drive this disparity, and
are likely due to a combination of factors, including discrimination and a higher likelihood of living in areas of
concentrated poverty.18,19,20 These challenges can also contribute to lower rates of high school completion among

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

SOUTHERN STATES LEAD NATION IN SHARE OF
ADULTS 25 TO 64 YEARS WITHOUT EDUCATION
BEYOND HIGH SCHOOL

SOUTHERN STATES LEAD IN THE SHARE OF YOUTH 16
TO 24 YEARS NOT ATTENDING SCHOOL OR WORKING

unemployment
rates and fewer
skilled people
looking for
jobs, many
employers have
a harder time
finding qualified
employees.

PERCENT OF YOUTH NOT
ATTENDING SCHOOL AND
NOT WORKING,
POPULATION 16-24

PERCENT OF HIGH SCHOOL
DEGREE OR LESS,
POPULATION 25-64 YEARS

26% - 30%

8%

31% - 35%

9% - 11%

36% - 40%

12% - 13%

41% - 45%

”

14% - 17%

46% - 62%

Source: U.S. Census Bureau/American Fact Finder. EDUCATIONAL ATTAINMENT BY
EMPLOYMENT STATUS FOR THE POPULATION 25 TO 64 YEARS. 2012-2016 American
Community Survey

National KIDS COUNT

young people of color.21 Some youth employment programs have been shown to be effective in addressing these
disparities for opportunity youth and efforts to close the
skills gap should include an awareness of the most successful programs.

earn family supporting wages. A recent survey found
that while two out of three adults in the U.S. with limited reading, math, or digital problem-solving skills are
employed, most have low earnings.23

The U.S. labor market is booming and unemployment is
nearing record lows. Lower unemployment rates make
it tougher for employers to find workers with the right
skills. These economic conditions heighten the imperative
for policymakers to evaluate and consider skill-building
strategies for their residents.
Lower unemployment rates create hiring challenges
Unemployment is lower in 2018 than it was before the
recession of 2007-2009. Some metropolitan areas in the
South (Nashville, Austin, and Birmingham) have some of
the lowest unemployment rates in the nation.22

Many economists believe that low unemployment rates
signal an economy that is near “full employment.” Many
people who lost jobs during the recession are now back to
work, making it difficult for some employers to identify
and hire skilled employees.

To meet business needs in an economy with fewer jobseekers, state policymakers could consider policies that
facilitate the upskilling of entry-level workers who
need more training to advance within their careers and

Though overall unemployment rates are lower than
they were pre-recession, unemployment rates for black
and Latino workers in the region continue to be higher
than for their white counterparts. States should work to
ensure that all residents have access to skilled jobs and

U.S. UNEMPLOYMENT LOWER THAN PRE-RECESSION RATES
10.0

Southern States Average

9.0
Percent Unemployment Rate

THE CURRENT ECONOMIC CLIMATE REQUIRES
A SKILLED WORKFORCE

“With low

National Average

8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0

2007 2008 2009 2010 2011 2012 2013 2014 2 015 2016 2017

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

9

that postsecondary education, training and employment
strategies are helping to close these racial disparities in
unemployment.
Tighter labor markets underscore the importance of
skills and addressing barriers
While states have record low unemployment rates for
residents who participate in the labor force, they have also
seen an increase in people who have been sidelined from
the labor market. Many state policymakers in the southern U.S. have expressed concern over their states’ lower
labor force participation rates, which, despite a booming
labor market, are lower now than they were before the
Great Recession.24,25 While there are likely many reasons
for a lower labor force participation rate, it’s likely that at
least some people who want jobs have stopped looking
for work because they don’t have the right skills and supports to find a family-supporting, full-time job.

State policymakers should consider ensuring that workforce development polices work in tandem with other
public policies to address barriers to work, including
transportation, child care, and criminal records. In fact,
the country’s major piece of federal workforce development legislation — the Workforce Innovation and
Opportunity Act (WIOA) of 2014 — enacted with overwhelming bipartisan support, requires states to develop
workforce development strategies for people with significant barriers to employment. In a tight labor market, such
as we have today, many employers are more willing to hire
workers who lack work experience if they have the foundational skills, technical training, and supports necessary
to succeed on the job.

MOST PERSISTENTLY POOR COUNTIES ARE IN THE SOUTH

TACKLING BARRIERS TO WORK ESPECIALLY
IMPORTANT IN SOUTHERN STATES
The South’s history, geography, and policy environment
have combined to prevent many people from working,
building their skills, and advancing their careers.
For example, the legacy of low-skill, low-wage work is
still observable in the region’s high poverty rates. Eight of
the ten states with the highest poverty rates are southern
states. This is particularly troubling given that a family
of three with one child had to earn less than $19,318 in
2016 to officially live in poverty.

Most counties with persistent poverty, where at least one
in five residents has lived in poverty over the last thirty-five years, are also in the South. Though the largest
share of people living in poverty in the South are white,
poverty rates are higher among Native Americans (22%),
African Americans (23.5%), and Latinos (21.7%), in the
region compared to their white counterparts (10.9%).26

Poverty can create barriers to work, including lack of
access to transportation and child care. People living
in poverty also tend to have lower levels of educational
attainment, which in turn constrains a region’s ability to
attract middle-class jobs. However, as southerners are
able to move out of poverty, they can spend more money
at local businesses and contribute more to the economy.
Transportation presents a significant barrier for low-income workers across the South. An analysis shows that
lower-income households who spend over two-thirds of
their incomes on housing and transportation are concentrated in the South. Many areas in the South perform
relatively well on housing costs alone, but when transportation costs are included, it becomes evident that these
two expenses are burdensome for many families in the
region.27 The time it takes to get to work also presents a
particular challenge for workers in rural areas.

In addition to transportation, caretaking responsibilities
keep people from participating in the labor force. Child
care may not be readily available during work hours and
quality care is often expensive and in high-demand.
On average, child care expenses can consume more
than 10 percent of household income for married couples and nearly 36 percent of income for single-parent
households.28

Persistent Poverty Counties
Nonmetro County
Metro County

Source: U.S. Census Bureau, Historical County Level Poverty Estimates Tool (1960-2010); U.S. Census Bureau/
American Fact Finder. Selected Economic Characteristics. 2012-2016 American Community Survey

10

In fact, a recent U.S. Bureau of Labor Statistics study
found that working age women not in the workforce
claim home responsibilities as the main reason they’re not
working.29 Child care can be an especially acute challenge
for single-parent households, which make up a disproportionate share of households in many southern states
and a disproportionate share of those attending community colleges.30 By investing in child care support during
training and after parents find a job, states could help
more people enter the labor force.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

ADDRESS BARRIERS TO WORK IN RURAL COMMUNITIES TO HELP THEM PROSPER

O

ver three-quarters of people in the South live in metropolitan areas. Yet in Arkansas, Kentucky,
Mississippi, and West Virginia, 36 percent or more of the population lives in rural areas. In these
areas, challenges that apply across the southern states can present an even greater burden.

As an example, limited job openings can be a challenge in rural communities where there are neither
a diverse set of industries nor a concentration of businesses. A lack of access to high-speed internet service further constrains job openings and economies in rural areas.33 To grow the economies
in communities with limited labor markets, states should consider developing a skilled workforce
and diversifying their industry base. Tools like broadband internet service could be used to attract
employers and connect prospective employees to education and training.
Rural communities could also deploy strategies for connecting people with nearby metropolitan
economies in a manner that provides mutual benefit, such as connecting metro employers to rural
employees available to work remotely.34 States could closely coordinate economic development and
workforce development strategies to ensure that job creation and talent development go hand-inhand; in doing so, states could diminish brain drain while providing more economic opportunity to
residents and businesses.35
Transportation costs can be especially acute burdens in rural areas. Many rural areas have no public transportation options, while the distance between workers’ homes and their workplaces makes
access to an automobile a necessity. States and localities could expand transportation options to
connect workers with available jobs.

A lack of quality child care options can also be a unique challenge to rural areas. Nearly 60 percent of
rural Census tracts qualify as child care deserts — areas with little or no access to licensed child care.
This compares to 44 percent of suburban areas. In these areas, a lower share of mothers participate
in the workforce.36 States could incentivize the expansion of child care options in rural areas so that
more parents can work.

MOST SOUTHERNERS LIVE IN METRO AREAS, BUT RURAL POPULATION IS SIGNIFICANT

% Nonmetro Population
0% - 10%
11% - 25%
26% - 35%
36% - 50%
51% - 70%

Source: U.S. Census Bureau (Population); 2015 ERS County Typology Codes. USDA Economic Research Service using data from Bureau of Economic Analysis and U.S. Census
Bureau (Metro/Nonmetro).
BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

11

“

The South will
only succeed
in developing
a skilled,
competitive
workforce if
leaders create
equitable
pathways to
postsecondary
credentials and
careers for all
residents.

”

State policies regarding criminal justice also impact people’s ability to work. The South has some of the highest
incarceration rates in the country. Alabama, Arkansas,
Louisiana, Mississippi, and Oklahoma outpace all other
states in the nation in regard to male imprisonment rates,
and Florida and Texas also have relatively high incarceration rates, which is challenging given their large
populations.31

People who have been incarcerated, have a criminal
record, or have otherwise been involved with the criminal justice system face major challenges finding work.
To widen their pool of potential workers and create more
economic opportunity for their residents, states could
take steps to remove barriers to employment for people who were formerly incarcerated. For example, some
states have “ban the box” laws that prohibit work applications from asking as a yes/no question about whether the
applicant has been convicted of a crime. Some states have
also pursued expungement of criminal records for certain
ex-offenders who have maintained a clean record.

Especially low education rates create yet another barrier
for southern states. Four of the five states that have the
highest proportion of working age adults with no formal education beyond high school also have the highest
unemployment rates.32 Declining industries like mining
and extraction, forestry, agriculture, and durable goods
manufacturing are also more prevalent in these states,
meaning that there may be fewer jobs available, especially
for those with limited skills.

A SKILLED AND THRIVING ECONOMY MUST BE
AN INCLUSIVE ECONOMY
Like the U.S. as a whole, the South is becoming more
racially and ethnically diverse. With these changes,
southern states will only succeed in developing a skilled
workforce that positions the region to compete economically if leaders create equitable pathways to postsecondary
credentials and careers for all residents.

Persistent racial and ethnic disparities in
educational attainment and employment hurt the
economy
Despite these changes, stark racial and ethnic disparities persist across the South when it comes to educational attainment and employment. On average, Latinos
and African Americans have lower education levels than
whites, and have faced greater barriers to pursuing postsecondary education and training. Lower incomes and
wealth among these groups impedes access to college
and to training programs. In fact, when families of equal
wealth41 — as opposed to income — are compared, studies show racial disparities in rates of four-year college
graduation disappear.42

Racial disparities in unemployment are even more striking. African Americans face higher rates of unemployment than any other racial or ethnic group, a fact that
cannot be entirely explained by differences in educational attainment.43 Since people who are unemployed
are actively looking for work, higher unemployment rates
suggest that Black Southerners face systemic barriers in
the labor market, including bias and discrimination.44
These disparities stand in the way of realizing the full
potential of a skilled economy.
To ensure the strongest possible workforce, policymakers could evaluate access to job training, financial aid and
other training supports by race and ethnicity. Where gaps
exist, policymakers could review state policies and engage
community leaders to determine the best solutions for
increasing access.

MORE THAN 4 IN 10 SOUTHERNERS
ARE PEOPLE OF COLOR
Two or
Indian and
More Races
Alaska Native Alone
2%
Asian Alone
1%
3%

Southern states are racially and ethnically diverse
While the majority of Southerners are white, African
Americans and Latinos each account for nearly one-fifth
of the South’s total population. In fact, more African
Americans live in the South than in any other region of
the country and the South has the fastest growing Latino
population of any region.37 Estimates indicate that people
of color will make up the majority of the U.S. population
by 2044.38

“Reverse migration” of black people from the north to
the south in the 1990s helped shape this racially diverse
South, with more African Americans moving to the
South than leaving.39 Widespread job growth in the
South during the 1990s and in the early 2000s before the
Great Recession attracted both Latino and Asian people
as well.40

12

Latino
17%

Black or
African
American
Alone
19%

White
Alone
58%

Source: U.S. Census Bureau (Population); 2015 ERS County Typology Codes. USDA
Economic Research Service using data from Bureau of Economic Analysis and U.S.
Census Bureau (Metro/Nonmetro).

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

SHARE OF ADULTS WITH ONLY A HIGH SCHOOL EDUCATION DIFFERS BY RACE/ETHNICITY

ASIAN

BLACK

% High School
Degree or Less by
Race/Ethnicity
Less than 35%
36% - 45%
LATINO

WHITE

46% - 60%
61% - 75%

Source: U.S. Census Bureau/American Fact Finder. Sex by Education Attainment for the Population 25 Years and Over. 2012-2016 American Community Survey

STARK DIFFERENCES IN UNEMPLOYMENT RATES BY RACE/ETHNICITY

ASIAN

BLACK

% Unemployment
Rate by
Race/Ethnicity
Less than 5%
6% - 8%
HISPANIC

WHITE

9% - 11%
12% - 15%

Source: U.S. Census Bureau/American Fact Finder. Employment Status. 2012-2016 American Community Survey

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

13

THE STATE OF SKILLS
POLICIES IN THE SOUTH

14

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

State leaders could adopt policies that develop a skilled
workforce and fully realize the economic potential of
local businesses and workers. Many southern states have
already started to create strategies for closing skills gaps.
These include polices that promote industry engagement
in training, as well as policies that ensure that postsecondary institutions are equipped to train today’s students
— including working adults and people without jobs who
are looking to get back into the workforce — for middle-skill jobs. Federal laws like WIOA, as well as major
federal and philanthropic grants, have driven some of this
innovation.

However, the breadth, depth, and reach of skills policies
varies across the region, with the weakest policy infrastructure in the mid-south states of Alabama, Louisiana,
and Mississippi, as well as the Appalachian states of
Kentucky and West Virginia.45 Overall, a stronger workforce development policy infrastructure could help southern states grow existing businesses, attract new ones, and
provide economic opportunity to more people.

SOUTHERN STATES CAN BETTER ENGAGE
INDUSTRY LEADERS IN JOB TRAINING
Policies that promote industry-driven training ensure
that local businesses, including small- and medium-sized
companies, are partners in a region’s workforce training
strategies. Examples include state policies to support sector partnerships and work-based learning. These policies
are critical for ensuring that workforce training is “industry-driven” — responsive to the changing needs of the
labor market. They are also key for creating a hiring network for workers who are building their skills. By setting
policies that develop and scale industry-driven training in
communities across their state, policymakers can improve
the odds that employers can hire workers with the right
skills and that workers are training for real jobs.
Sector partnership policies help ensure training
matches open jobs
Sector partnerships bring together multiple employers
within an industry to collaborate with community and
technical colleges, schools, workforce agencies, community organizations, and others to align training with the
skills needed for that industry to grow and compete. By
working with training providers to develop or modify
programs that respond to specific industry needs, these
partnerships create a pool of skilled workers for multiple
employers within an industry, and create opportunities
for workers to train for and access skilled jobs. Rigorous
evaluations of sector-based training that offers industry-recognized credentials and engages employers have
demonstrated results: increased training completion, credential attainment, employment, and earnings, including
for unemployed and low-income workers.46

As part of a broader sectoral approach to economic
development, sector partnerships can help states attract
new businesses and retain existing ones. States could use
sectoral economic development strategies to support the
growth of businesses in target industries by providing
supports for a range of activities that make an industry
competitive. These include supports for technology transfer, research and development, industrial processes, and
skills training.

North Carolina’s Biotechnology Center is an example of
a sectoral economic development strategy that includes
skills training. The Center supports the growth of the
state’s biomanufacturing, life sciences, and pharmaceutical businesses by providing services that help those businesses conduct research, develop new products, and train
employees with cutting-edge skills.47 The BioNetwork
sector partnership is an integral part of the Center’s
talent development supports. Through the network, the
North Carolina Community Colleges work closely with
life science businesses and other partners to develop
sector-specific education and training. North Carolina
invests $4 million annually in state funds to support the
BioNetwork. The state’s sectoral approach to developing
the life sciences industry — and the strong emphasis it
places on training the workforce for the sector — have
made North Carolina a leader for commercial bioscience.

Other states have adopted policies to support and scale
sector partnerships, even if they have not yet integrated
sector strategies into their economic development efforts.

MANY SOUTHERN STATES HAVE SECTOR PARTNERSHIP POLICIES, FEW INVEST THEIR OWN DOLLARS

2

Use state
dollars to
support sector
partnerships

8

Provide funding to
develop and operate
local partnerships

9

Southern states with sector
partnership policies

16

Total southern states
(not including DC)

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

15

GEORGIA HIGH-DEMAND
CAREER INITIATIVE SECTOR
PARTNERSHIP GRANTS

I

n 2011, the Georgia Department of Economic Development (GDEcD) met with employers and
economic development stakeholders about what most influences business expansion and relocation decisions. While site selection and tax incentives were important considerations, access to a
skilled and educated workforce was the prevailing factor in the majority of regions.

To better align economic development with workforce development, Governor Deal launched the High
Demand Career Initiative (HDCI) in 2014, which brought together postsecondary educational institutions and private sector employers to discuss workforce challenges. GDEcD, which houses HDCI,
teamed with the Carl Vinson Institute of Government to engage stakeholders from the University
System of Georgia (USG) and the Technical College System of Georgia (TCSG) and more than 120
private sector employers throughout the state. At a total of seventeen public meetings, employers identified current and projected high-demand career sectors in Georgia, as well as associated
high-demand skills and attributes. To expand the reach of this conversation, GDEcD also developed
an online workforce needs assessment with questions similar to those asked during public meetings.
This ongoing, publicly available questionnaire allows any Georgia employer to report and update their
workforce needs.
These meetings and assessments determined specific skills gaps across high-demand sectors and
moved HDCI beyond data collection and into the next two-pronged solution development phase. First,
GDEcD formed five HDCI industry task forces for film, aerospace, logistics, construction, and IT. Working
groups of industry-related stakeholders meet regularly to address ongoing workforce issues, such as
how to expand apprenticeships and other work-based learning opportunities in the construction industry. Second, GDEcD established the HDCI Sector Partnership Grant using $3 million from the Governor’s
WIOA Reserve Funds. This grant program aims to engage communities in workforce solutions by helping
local partners build and maintain regional sector partnerships. Starting in 2016, Georgia’s twelve economic development regions could apply for grants up to $250,000 with a 10 percent local match requirement. The grant is strictly for capacity building (i.e., hiring “regional convener” employees or consultants)
to create a better system of collaboration among regional workforce partners.
Grant applications were required to identify high-demand industry sector(s) using labor market
information and plans to address employer engagement, career pathways, WIOA-defined special
populations, partnership sustainability, and how the partnership will leverage a 10 percent required
local match, and other existing state workforce resources. The applications also needed to designate a leader of the sector partnership and letters of participation from: at least five regional industry employers; local postsecondary institutions; the K-12 school system; the Georgia Department of
Labor office; the Georgia Vocational Rehabilitation Agency; the chamber of commerce or economic
development professionals; and the Department of Economic Development existing industries representative. Additional partners, such as community-based organizations (CBOs) and local social
service agencies, were strongly encouraged.
Grants were available across the state, such that one region’s allocation did not diminish funding to
other regions. To assist local partners with the grant application process, GDEcD hosted sector strategy trainings and follow-up regional workshops, during which staff shared labor market data to help
regions choose an industry sector. A publicly available HDCI Sector Partnership Guide lays out clear
steps to identify high-demand industry sectors and develop partnerships between public and private
sectors. To date, eleven of twelve regions have applied for and received grant funding.

16

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

One particular grant recipient, HDCI Metro
Atlanta (HDCI-MA), is focused on building
employer-led partnerships in three industry sectors: healthcare; information technology; and
transportation, distribution and logistics. Atlanta
CareerRise, a regional workforce funder collaborative, is contracted to serve as the partnership
leader and hired a full-time HDCI program director and part-time industry sector consultants.
Since grant funding began in mid-2017, HDCI-MA
has convened over thirty employers (still expanding), as well as academic institutions, chambers,
economic developers, CBOs, government agencies, and local workforce development agencies.
Sector leads are conducting employer visits to
introduce the initiative and understand current
and future workforce needs. They are also convening sector work groups with key non-employer
stakeholders including chambers of commerce
and economic development, K-12 and postsecondary education, government agencies, community
providers and local workforce development boards. Combined, these activities will create an environmental scan that will lead to sector roadmaps and strategic priorities. The healthcare sector group,
which began before the grant in 2013, already has well established employer and partner councils and
strategic priorities. It has developed workforce development programs for the frontline, mid-career,
and professional levels expected to be implemented in 2018.
HDCI has been successful in collecting data about skills gaps and other workforce issues, organizing
sector task forces and allocating funding for local communities to build and maintain sector partnerships. At the same time, this collaborative effort represents a paradigm shift for many stakeholders
and comes with unique challenges across the twelve regions. Stakeholders may be accustomed to
operating in their own workforce silos, such as K-12 schools, postsecondary institutions, social service agencies, and workforce training centers. In regions that cover larger areas, collaborative efforts
and resources may be centered in the highest-populated city or town with less attention focused on
rural areas. Socioeconomic barriers like limited transportation and geographic barriers like the North
Georgia mountains may affect partners’ ability to participate. Facilitators are tasked with forming an
inclusive strategy that engages all potential partners from across the entire region.
While there are currently no dedicated dollars beyond the initial $3 million, HDCI staff expect to
reevaluate the grant in 2019 and consider extending funding given a variety of factors including program impact, staff bandwidth and general political will. With or without ongoing funding from the
state, identifying other sources of funding is crucial since the grant is limited to capacity building.
As trust and collaboration builds among partners in the chosen high-demand sector, it is up to these
stakeholders to invest in actual program development that will increase economic opportunity for
residents and produce a talent pipeline for regional employers.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

17

“

Over the course
of his or her
career, a person
who participated
in a registered
apprenticeship
earns about
$300,000 more
than someone
working in the
same field who
was not an
apprentice.

18

”

Such policies provide investment, technical assistance,
and guidance to help communities develop and maintain
sector partnerships as a key vehicle for engaging employers in sector-specific training. In fact, nine of the sixteen
southern states have adopted polices to provide ongoing
support to local sector partnerships in multiple industries (Florida, Georgia, Kentucky, Maryland, Mississippi,
North Carolina, Tennessee, Texas, and Virginia).48 It is
not surprising that more than two-thirds of southern
states have adopted sector partnership policies. WIOA
requires states to support the development of such partnerships at the local level. Indeed, under WIOA, states
can use funds available to the governor to support a number of activities, including sector partnerships.
Of the nine southern states with a sector partnership
policy, eight provide funding to support the development and operation of local partnerships.49 However,
only two of these eight use state dollars to support local
sector partnerships in multiple industries. Maryland and

Tennessee have each passed state legislation that provides
a robust framework for sector partnerships, appropriating
$8 million and $10 million respectively in state funds to
provide competitive grants for partnership development
and maintenance.
The remaining six states use federal WIOA funds rather
than state dollars. The amount of WIOA dollars reserved
by these states for sector partnership spending widely
varies, from $3 million in Georgia to just $350,000 in
Kentucky. Meanwhile, Virginia provides technical assistance to local areas who want to create sector partnerships, but does not dedicate federal or state dollars for the
specific purpose of supporting sector partnerships.

Apprenticeship and other work-based learning
policies enable workers to train on the job
Work-based learning gives workers the opportunity
to build new skills while earning a paycheck. Through
learning that happens on the job, workers can gain a new

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

credential and earn higher wages associated with their
new skills. Apprenticeship is the most well known form
of work-based learning, blending classroom learning with
worksite training to get workers the skills they need while
they’re on the job; other forms include incumbent worker
training, on-the-job training, and paid internships for
young adults.
Work-based learning pays off for both businesses and
workers. For businesses, work-based learning programs
reduce recruitment, training, and supervision costs, as
well as employee turnover.50 In fact, registered apprenticeship is a preferred form of training among firms that
use it, with 94 percent of employers reporting they would
recommend it as a strategy to other employers.51

Workers also benefit by gaining skills and credentials
with value in their industry while earning income. Over
the course of his or her career, a person who participated
in a registered apprenticeship earns about $300,000 more
than someone working in the same field who was not
an apprentice.52 Since these programs give workers the
chance to “earn and learn,” without incurring student
debt, they put workers on a path to the middle class without the burden of having to choose between advancing
their careers and supporting their families.

In recent years, work-based learning has received increasing attention as a workforce development strategy.
Specifically, the federal government and some states have
adopted policies to expand the apprenticeship model
both to a range of industries and to a range of workers. In
2016, the U.S. Department of Labor awarded $10.4 million in State Accelerator Grants to fifty-two states, territories, and D.C to develop strategic plans for expanding and diversifying apprenticeship.53 They built on this
investment with $50.5 million in State Expansion Grants
to thirty-six states to continue developing comprehensive
strategies for expanding apprenticeship. Ten southern
states were awarded these state expansion grants, including Arkansas, Delaware Florida, Kentucky, Louisiana,
Maryland, Mississippi, North Carolina, South Carolina,
and Texas.

Among many states, the federal grants are the primary
means for expanding apprenticeship. However, some
states have created their own complementary policies
aimed at expanding apprenticeship for a broad range of
residents, including adults and young adults who are not
in school. Tax credits for employers who hire apprentices
are the most prevalent policy among southern states,
although some states also offer subsidies that cover the
classroom instruction component of apprenticeship programs54 and grants to fund apprenticeship programs in
targeted industries.55

At least six southern states (Alabama, Arkansas, Louisiana,
Maryland, South Carolina, and West Virginia) have created tax credits for employers who hire apprentices.56
These tax credits are supposed to provide an incentive

for employers, particularly those not familiar with the
training practice, to sponsor registered apprenticeship
programs by offsetting costs associated with program
development and administration, instruction, and training materials.

While tax credits are a useful mechanism for starting a
conversation with firms about apprenticeship, they may
not be enough on their own to incent employers, particularly those from small- and medium-sized firms who
create most new jobs, to start an apprenticeship program.
For one, firms do not realize the benefits of a tax credit
until after they’ve paid the costs of registering a program and hosting apprentices, and not all firms have the
capability to pay these costs upfront. Moreover, in many
Southern states, business taxes are so low that such credits
may have limited value.
That’s why some states have taken additional measures to
expand apprenticeship. For example, apprenticeship tax
credits in South Carolina and Maryland are only one part
of larger initiatives to expand apprenticeship. The South
Carolina tax credit is part of Apprenticeship Carolina,
administered by the state technical college system’s
Division of Economic Development. Apprenticeship
Carolina has a staff of consultants who serve as “intermediaries,” guiding companies through all steps of developing and registering an apprenticeship program at no
cost. Moreover, as part of the Economic Development
Division, Apprenticeship Carolina consultants have
access to employers and can broadly market apprenticeship to them — especially those looking to locate to or
expand in the state. South Carolina also subsidizes postsecondary instruction for apprentices so they don’t have
to cover the costs of classroom instruction associated with
their apprenticeship. Furthermore, Maryland recently
passed legislation that in addition to establishing a tax
credit, also provides a scholarship for classroom instruction for apprentices.

“Tax credits

alone may not
be enough to
incent employers,
particularly
small and midsize businesses,
to create
apprenticeship
programs.

”

KEY TAKEAWAYS:
• Over the past few years, the majority of southern states have
taken advantage of federal policies and opportunities to
expand sector partnerships and apprenticeship.
• Nine southern states have sector partnership policies, but only
two southern states invest their own dollars to support local
sector partnerships in multiple industries.
• Five southern states created tax credits to reward employers
who hire apprentices, but these credits by themselves may
not be enough to motivate small and mid-size businesses. To
address the needs of these businesses, states could consider
supporting intermediaries who can broker work-based learning services, providing tuition assistance for apprentices, and
broadly tie apprenticeship and other forms of work-based
learning to overall economic development.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

19

CASE STUDY: APPRENTICESHIP CAROLINA

A

pprenticeship Carolina was launched in 2007 in response to South Carolina’s shortage of
skilled workers. A 2003 report by the South Carolina Chamber of Commerce recommended
that expanding apprenticeship would be an opportune way to solve this problem. The intent
of Apprenticeship Carolina is to assist more industries and businesses in creating registered apprenticeship programs. At its inception in 2007, South Carolina had ninety apprenticeship
programs and just under 800 active apprentices. Today, just over ten years later, the state boasts
over 900 apprenticeship programs and close to 15,000 active apprentices. Apprenticeship Carolina
is now housed under the state’s Technical College System and works with all sixteen of its colleges.
This unparalleled growth serves an example of how states nationwide can use apprenticeship programs to grow their skilled workforce and spur economic development.
Apprenticeship Carolina fulfills its objective of increasing the
number of apprenticeships in South Carolina by educating
companies on the benefits of having an apprenticeship program and helping them with registration and start-up process. Companies regularly approach Apprenticeship Carolina
directly or through a referral from technical college, WIOA, or
other economic development staff.
Although many companies recognize the benefits that
apprenticeships provide, getting a registered apprenticeship
up and running can be an intimidating endeavor. As an intermediary, Apprenticeship Carolina alleviates much of this
burden by walking companies through the process step by
step and taking on many of the administrative duties at no
cost to the employer. In addition, companies can receive a
$1,000 tax credit from the state for each registered apprentice employed for at least seven months during each year of
an apprentice’s program, for up to four years.

Apprenticeship Carolina immediately wanted to expand
beyond the building trades. Though their support is available to employers in any sector, Apprenticeship Carolina targets employers in seven industry clusters that have shown
demand for middle-skill workers: advanced manufacturing,
construction technologies, energy, healthcare, information technology, tourism and service industries, and transportation, distribution, and logistics.
Apprenticeship Carolina is also a major part of the state’s economic development plan. This is because
apprenticeship gives employers a pipeline of skilled workers to grow their businesses. A state that
supports apprenticeship in a robust way is attractive to expanding businesses. The South Carolina
Technical College System recognized this by establishing a Division of Economic Development to
ensure the state’s competitiveness as it relates to workforce, education, and training. Through this
division, the efforts of readySC, which specializes in recruiting businesses and getting them up and
running in the state, and Apprenticeship Carolina are streamlined. Apprenticeship opportunities are
included in any initial conversation with an employer looking to move or expand to South Carolina.

20

Apprenticeship Carolina’s original goal was 20,000 apprentices served by 2020. However, they’ve
already surpassed that goal and are now working towards getting 2,000 companies in South Carolina
to have registered apprenticeship programs. They also see room to grow and momentum around
youth apprenticeship. The organization continues to serve as a model nationwide of the potential for
growth in apprenticeship with strong state investment.
BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

SOUTHERN STATES HAVE ROOM TO
IMPROVE IN HELPING ADULTS SECURE
POSTSECONDARY CREDENTIALS
To close the skills gap, state policymakers could consider
developing strategies to train adults for middle-skill jobs.
Working adults are increasingly turning to community
colleges to earn credentials that can help them advance
their careers. Indeed, half of all community college students are over twenty-one years old, and the vast majority
of students are working while enrolled in school.57

At the same time, employers benefit when community
colleges prepare local workers for skilled jobs. Community
and technical colleges play a significant role in workforce
training in the South, and in rural communities, may be
the only postsecondary institution in close proximity.58

States could adopt policies to better support community
colleges in this role and ensure that they prepare all students — including working learners and unemployed
people looking to get back into the labor market — for
middle-skill jobs. These include policies to promote jobdriven financial aid and policies to support career pathways
so that adults can upgrade their skills while balancing their
training with work, family, and other responsibilities. By
making sure that postsecondary training works for adults,
states could begin to close their middle-skill gap now.
Job-driven financial aid policies allow students to get
credentials that employers value
States could help adults earn postsecondary credentials
by making it more affordable for them to participate in
training programs. On average, community college students have unmet financial need of $4,011 per year.59 To
help meet this need, states could provide “job-driven”
tuition-free assistance for middle-skill training programs
generally (such as free community college) or specific
high-demand industries in the region.
Job-driven financial aid can also make attending school as
a working learner easier by filling gaps in federal financial
aid — providing aid to students attending less than halftime or to those enrolled in short-term training programs
that take less than one year to complete. For example, it is
difficult to use Pell grants, the U.S.’s top source of needbased, debt-free financial aid, for short-term programs
— which can include industry-recognized credentials or
certifications, licenses, and certificates — despite the fact
that these credentials account for 24 percent of all postsecondary awards in the U.S.60.

More than half of southern states have some sort of jobdriven financial aid program in place, though some programs are not funded to their full capacity.61 Southern
states that do not have any significant job-driven financial
aid include Alabama, Delaware, Louisiana, Mississippi,
North Carolina, Oklahoma, and South Carolina.
Of southern states that do have a policy in place, the
amount of funding available and the scope of such

programs varies greatly. As the concept of free community college gains popularity, more and more states are
developing “Promise” programs that provide last-dollar scholarships — scholarships designed to cover the
gap between students’ other financial aid and their total
financial need — to residents attending community and
technical colleges. However, most states have not made
these programs available to adults. Out of the southern
states, only Tennessee provides free community college to
all of its residents, regardless of age.
Georgia and Virginia have established programs to help
residents earn credentials sought by employers in leading
industries. However, they are not funded to capacity and
could be expanded.

Georgia’s Helping Outstanding Pupils Educationally
(HOPE) Grant provides tuition assistance to residents
of any age who are pursuing a technical college certificate
or diploma, with additional funding available to those
pursuing a certificate or diploma in one of seventeen
in-demand fields, including precision manufacturing,
health science, and welding technology. However, due to
a decrease in funding, the HOPE Grant only covers a
percentage of tuition and does not cover books, supplies,
and other essential costs.62

Virginia’s newly-established New Economy Workforce
Grant Program, provides first-come, first-served grant
funding for noncredit workforce training that leads to
a credential in a high-demand field. Students can have
up to two thirds of the program cost covered through
this grant established in 2016. Awards totaling $5 million were given during its first year, providing grants
to roughly half of the state’s 4,200 credential earners.63
Given student demand, Virginia has now expanded the
program to $7.5 million in awards per year. While these
policies in Virginia and Georgia are promising examples,
more needs to be done across the region to adopt and
adequately fund financial aid programs that help people
earn credentials for middle-skill jobs.

“Half of all

community
college students
are over twentyone years old
and the vast
majority of
students are
working while
enrolled in
school.

”

Career pathways policies help students address
barriers to build in-demand skills
For adults who are trying to pursue a postsecondary credential while holding down a job or raising a family — all
on a tight budget — coursework isn’t the only challenge.
Additional barriers — scheduling difficulties, balancing
immediate work opportunities with longer-term education and employment goals, and financial challenges,
such as transportation, housing, and child care costs —
can prevent success.
Additionally, some adults need to improve their literacy
and numeracy skills in order to succeed in postsecondary training. Limited opportunities to build these basic
skills can be a barrier for adults seeking to secure college
credentials.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

21

CASE STUDY: TENNESSEE RECONNECT

G

overnor Bill Haslam of Tennessee signed the
Tennessee Reconnect Act (HB 531/SB 1218)
into law in May 2017, making community college
effectively free to all Tennesseans, regardless of
age. Funded by the state lottery, Tennessee Reconnect is a
last-dollar scholarship for adults to attend community college to gain a credential or degree. The tuition grant is set
to begin disbursement in the Fall of 2018. While the scholarship is critical, Tennessee Reconnect’s strong statewide
recruitment and enrollment effort is also instrumental to
positioning the program for success.
The impetus for Tennessee Reconnect was born out of
Governor Haslam’s Drive to 55: an initiative to increase the
number of Tennesseans with a postsecondary degree or
credential to 55 percent by the year 2025 in order to keep
up with job demand. Governor Haslam started Drive to 55
after an analysis showed that without intervention, only
39 percent of Tennesseans would have a postsecondary
credential by 2025.

After reviewing the numbers, officials realized that the
Drive to 55 goal could not be attained without a significant number of Tennessee adults returning to college to
gain a postsecondary credential. In addition to adults who
may never have started college, data revealed that there
are actually 900,000 Tennesseans who have completed
some college but did not graduate with a credential or
degree. Providing free postsecondary education for these
adults not only helps more Tennesseans move into better paying jobs, but also helps employers fill critical skills
gaps and grow their businesses. Reflecting the skills gap
trend nationwide, middle-skill jobs account for 58 percent of Tennessee’s labor market, but only 45 percent of
the state’s workers are trained to the middle-skill level.
Tennessee Reconnect aims to help close that gap.
The Tennessee Reconnect program has set itself up for
success with distinct marketing and outreach strategies
coming from the state, institutions, and regions. The
Tennessee Higher Education Commission (THEC) engages
in traditional marketing through advertisements and a
user-friendly website. It also runs the Tennessee Reconnect
Ambassador program, where people are trained to identify potential Reconnect students, answer basic questions
about the program, and connect potential applicants to
the right resources depending on their needs. For example, in Middle Tennessee, Urban League staff are trained
as Reconnect Ambassadors, ensuring that people receiving other community services through the organization
also have the opportunity to learn about Reconnect. The

22

postsecondary institutions themselves offer information
sessions as well as pre-enrollment boot camps focused on
topics such as math, technology, or writing.
Regional outreach is also conducted through Tennessee
Reconnect Communities, which offer community-based,
institution-neutral, high-touch advising, navigation, and
support services that often cover a multi-county region.
Regions interested in offering this service apply to THEC,
which gives start-up grants to hire a director and other
staff. Reconnect Communities are led by an organization
that is trusted and respected within that community. For
example, in Nashville this is the Nashville Chamber of
Commerce, but in other regions it may be a community-based organization or a job center. These Reconnect
Communities do one-on-one outreach and meetings to
work with potential students to develop a plan of action
for them to return to school, graduate, and find a good job.
Directors go out into the community — to malls, churches,
and more — to find potential students. Eight Reconnect
Communities have been launched thus far, and they are
already serving 13,000 students without the tuition grant
even being available yet.
Tennessee Reconnect also works with state agencies
and counties to make sure they are using and promoting the program to its full advantage. The Tennessee
Department of Transportation has trained several employees as Ambassadors and is poised to take advantage of
this opportunity to upskill their workers. THEC plans to
replicate this model with other state agencies so that
they can educate their employees and their clients about
Tennessee Reconnect.
Additionally, THEC has trained thirty staff at twenty companies in Rutherford County as Reconnect Ambassadors, with
an additional thirty to be trained in 2018. The Rutherford
County Chamber requested this training from THEC as they
realized how important Tennessee Reconnect could be to
business growth and development, as well as to reaching
the county’s Drive to 55 goal. Several other counties have
seen Rutherford’s example and have reached out to try to
find out how they can replicate this themselves.
The tuition grant will begin disbursement in Fall 2018.
Looking forward, Governor Haslam has pledged to focus
on completion and equity to make sure that working learners of all demographics are not only starting college but
completing and exiting with an industry-recognized credential or degree.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

Some states have introduced career pathways to help
mitigate the many challenges associated with securing a
college credential. These pathways address challenges in
several ways:

• Use career coaches who connect people with the right
training programs and support services to achieve their
career goals, whether those services are provided by the
college itself or a partner such as a community-based
organization.
• Expedite training by helping people brush up on their
basic reading, writing, and math skills (or earn their
high school equivalency diploma) at the same time as
they’re building technical skills.
• Provide in-demand “stackable” credentials that count
toward a higher-level certificate or degree and offer
credit for prior learning. This means that workers
can use their short-term credentials not just to find an
in-demand job, but also to continue their education
without losing credit for the work they’ve already done.
Because career pathways are built to help workers earn
in-demand, industry-recognized credentials, they create a
pool of people with the skills and training that local businesses need. In fact, the best pathways use sector partnerships to engage industry leaders in program design and
make hiring connections for students.

While career pathways are recognized as a best practice,
community colleges may face challenges in adopting them
because they require intensive partnerships with state
agencies and community partners, as well as additional
financial investment. States could support and scale the
adoption of these pathways by providing support directly
to community colleges and their community partners,
and by taking advantage of opportunities to braid federal
and state dollars across workforce, higher education, and
human services programs. In fact, such policies are critical in states that are aiming to prepare low-skilled and
low-income adults for family-supporting careers.
Few southern states have adopted policies to promote
robust postsecondary career pathways. Only four southern states (Arkansas, North Carolina, Texas, and Virginia)
have policies that explicitly support and invest in these
types of pathways despite the South’s relatively high poverty and low educational attainment rates.64

Some southern states have developed critical components
of training pathways using private philanthropic dollars
and grants from more general state sources. However, the
lack of a dedicated state investment for these initiatives
threatens their long-term viability.

For example, the Mississippi Community College Board
implemented the Mississippi Basic Integrated Education
and Training Program at each of its fifteen community
colleges mainly with philanthropic dollars.65 This “integrated education and training program” is modeled after
one in Washington State with proven success.66 Students

have different onramps to the training pathway, including
a SmartStart class which consists of a career assessment,
basic education, career awareness, and soft skills training
for up to three hours of college credit.
The Mississippi Integrated Basic Education and Skills
Training program helps people improve their basic reading, writing, and math skills while training for an occupation so they can earn their high school equivalency
diploma and an industry-recognized credential at the
same time. However, because there are not dedicated state
resources for the program, the future of the Mississippi
program is uncertain.

Similarly, Georgia, Kentucky, North Carolina, and
Louisiana were among five states to participate in
Accelerating Opportunity — a philanthropically funded
initiative to promote integrated education and training approaches at the state level. An impact analysis of
Accelerating Opportunity found that students earned
more credentials while taking fewer credits, accelerating
their postsecondary education goals, and in some states,
program participants saw labor market gains.67 With
grant resources expired, however, and no substantial state
funding, Georgia, Kentucky, and Louisiana may face
challenges to institutionalizing these programs.
KEY TAKEAWAYS:
• Most states in the South have job-driven financial aid
programs, though the funding and the scope of each state’s
program varies widely.
• Only four southern states use policy and resources to promote postsecondary career pathways. Though pathways have
produced results, most southern states have not invested the
funding necessary to secure the future of these programs.
• Southern states could consider ensuring that job-driven financial aid is available to more adult students.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

23

CASE STUDY: ARKANSAS CAREER PATHWAYS

T

he Arkansas Career Pathways Initiative (CPI) was
formed in 2005 in response to Arkansas’ relatively
high poverty rates and low number of residents
with postsecondary credentials. CPI provides tuition and case management support for low-income parents
to earn GEDs, certificates, and associate degrees in community colleges and technical centers across Arkansas. Since
its inception, over 30,000 students have enrolled in one of
more than 400 career pathway options that link education,
training, and support services and lead to employment and
career advancement in high-demand industries.
With initial support from the Governor’s Workforce Cabinet,
the Arkansas Department of Higher Education (ADHE)
worked with twenty-five two-year colleges and technical centers to set up and administer CPI programs. The
state funds the program with existing federal Temporary
Assistance for Needy Families (TANF) block grant dollars,
administered by the Arkansas Department of Workforce
Services (DWS). Eligible candidates are required to be custodial parents or guardians of children living at home. In
addition, they must be current or past recipients of TANF
cash assistance; or be current recipients of Supplemental
Nutritional Assistance Program (SNAP), Medicaid, or
Arkansas’ children’s health insurance program; or earn 250
percent or less of the federal poverty level. To date, close to
90 percent of CPI participants are women and the majority
are single parents. Recipients receive funding each year for
tuition and fees (beyond what is covered by Pell Grants), as
well as wraparound support services such as career planning and employment counseling, and assistance for childcare, transportation, and coursework materials.

According to an external College Count$ impact study
funded by the Winthrop Rockefeller, Ford, and Annie E. Casey
Foundations, around half of CPI participants between 2006
and 2013 received at least one postsecondary certificate or
degree compared to just a quarter of all Arkansas community college students. CPI students of color were three times
as likely to attain an academic credential, compared to their
non-CPI counterparts. In 2011, CPI students earned roughly
$3,000 more in their first twelve months with a job versus
non-CPI TANF recipients. The impact study also evaluated
the initiative’s return on investment measured by increases
in tax payments from wage gains and decreases in public
assistance spending. The state of Arkansas receives a significant return of $1.79 over five years for every dollar spent
on the Career Pathways Initiative.

24

Not only does CPI help Arkansans break the cycle of poverty
and save the state money, it also reduces the skills gap by
connecting participants with jobs in high-demand career
sectors. Each year, CPI college and technical center sites
conduct a gap analysis using DWS data about job openings, job growth, and job loss across industries. Site leaders also speak with employers around the state about labor
demands. CPI advisors use this labor market and anecdotal
data to help students align their career goals with actual
workforce needs. The Allied Health and Education sector for
instance, which includes nursing occupations, is one of the
highest-demand industries and employs almost two-thirds
of CPI certificate or degree recipients.
The Arkansas Career Pathways Initiative has successfully
leveraged existing funding to produce substantial academic
and employment outcomes that benefit both low-income
families and employers. Ongoing coordination across state
agencies and the twenty-five participating colleges and technical centers drives the initiative’s success. The ADHE maps
out career pathways based on current employer demand
and provides staff to assist with program implementation.
Data sharing between ADHE and DWS allows for continuous
program evaluation and improvement. This collaboration
is driven in part by the state legislature’s ongoing bi-partisan support and its policy that CPI maintain data on course
enrollment, degree completion, job placement and retention,
and wages. Tuition assistance and case management are also
essential components of the initiative, a point emphasized in
follow up interviews with CPI participants.
There is much work left to be done, given that Arkansas’ 19
percent poverty rate remains higher than the nation’s average. While there are more state residents age twenty-five
or older with a postsecondary degree than when the program started, numbers still fall short of the national rate.
Unfortunately, decreased funding for CPI in recent years
has narrowed the impact of the program. In addition, federal TANF work participation requirements create a disincentive for investing TANF dollars in education and training
initiatives such as CPI. Limitations on Pell Grant eligibility
also provide challenges for CPI students enrolled part-time
and/or in short-term programs. Looking to the future, state
and federal policies must be aligned with the goals of CPI
so the initiative can be as effective as possible in providing economic opportunities for low-income families across
Arkansas.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

SOUTHERN STATES CAN STRENGTHEN
WORKFORCE DATA SYSTEMS TO PROMOTE
ACCOUNTABILITY AND TRANSPARENCY
Resources invested in sector partnerships, work-based
learning, job-driven financial aid, and career pathways
should go to programs that successfully serve people from
all backgrounds and places, including women, people of
color, and residents from both metropolitan and rural
communities. States need accurate and comprehensive
data systems to help leaders gauge their progress toward
this goal. Data could be used to identify gaps in program
access or performance and direct practitioners and policymakers to solutions for closing those gaps. Businesses
need access to data that will help them assess whether the
regional workforce can meet its current and future needs.

Data systems are crucial to determining where skills gaps
exist in certain industries and where sector partnership
efforts should be channeled. Systems can show both
in-state demand for selected occupations and the number
of students enrolled in programs that prepare people for
those occupations. Only three southern states — Florida,
Mississippi, and South Carolina — report that their systems can conduct skills gap analyses. Most states report
that they are in the process of building this functionality.68
Data systems for higher education and workforce
programs should be able to inform students, workers,
employers, policymakers, and others about whether people are accessing and completing programs and finding
jobs. Most southern states have data systems capable
of providing this information. However, systems in
three southern states — Alabama, Delaware, and South
Carolina — are not fully capable of helping these different stakeholders make informed career decisions.69
Southern states could also use data to produce publicly
available consumer information tools for students and
workers so that they can compare programs and make
informed education and career decisions. Data should
be aggregated to protect privacy. About half of southern states produce these tools. Of the states that do not
have these information tools, most are in the process of
producing them. However, Delaware, Maryland, and
Oklahoma have made minimal progress toward producing these tools.70

In addition to making data available to students and
workers, southern states could also regularly report the
education and employment outcomes for the state’s education and workforce programs to the state legislature.
This prompts policymakers to evaluate the effectiveness
of the state’s programs. Only five southern states regularly report these outcomes to policymakers. Those states
are Louisiana, Mississippi, Oklahoma, Tennessee, and
Texas.71
Finally, states could invest their own resources to supplement the federal resources available to develop and maintain data reporting systems. Fourteen states across the

nation find it necessary to supplement federal resources
for data systems with state resources. Only four southern
states use their own money to help create and maintain
these important data systems. These states are Georgia,
Mississippi, North Carolina, and Tennessee.72

Even states that invest their own funding in systems
are primarily dependent on federal grants. Once federal
grants expire, many states are forced to downsize systems
which stalls the progress they’ve made and jeopardizes
the realization of potential benefits.
KEY TAKEAWAYS:
• Data systems help perform crucial functions that promote
accountability, informing students, workers, employers, policymakers, and others about where industry skills gaps exist and
whether people are accessing and completing programs and
finding jobs.
• Most southern states have data systems capable of providing
information about their states’ education and training programs. While only a few southern states’ systems can determine where skills gaps exist, most states are in the process of
building this functionality.
• The majority of southern states have or are in the process of
developing consumer information tools for students and workers to make informed career decisions. Yet three southern states
have made minimal progress toward producing these tools.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

25

A ROADMAP FOR SOUTHERN
SKILL BUILDING

26

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

of proven skills strategies to scale in communities across
the state.

A ROADMAP FOR STATE POLICYMAKERS
TO CLOSE THE SKILLS GAP AND GROW
THE ECONOMY
This report is filled with examples of how states could
close their skills gaps and strengthen their economies.
This roadmap describes actions policymakers could take
to either begin or continue their work toward building a
stronger economy. State policymakers could:
1. Use workforce development strategies, such as
sector partnerships and work-based learning, as
economic development tools capable of meeting
industry needs.
The availability of skilled workers factors heavily into
businesses’ ability to grow, as well as their decisions to
relocate to a new place and stay there. Policymakers
interested in expanding their states’ business base by
targeting high-growth industries could offer industry-driven training through sector partnerships and
work-based learning. These workforce development
policies could be coordinated with other sectoral economic development policies that support research and
development, technology transfer, industrial process
upgrading assistance, entrepreneurship, and traditional
incentives.

Examples from North Carolina and South Carolina
demonstrate the value of this approach. In North
Carolina, sector-specific training for the biotech industry dramatically influenced firms’ decisions to move to or
stay in the state. In South Carolina, the state’s apprenticeship program is integral to economic development
efforts, ensuring that existing and new companies have
the workforce development support they need to train a
skilled workforce. By using industry-driven training as
a key economic development tool, states can maximize
their job creation efforts.
States could use this strategy to promote industry-specific
economic development in both rural and metropolitan
regions. Aligning economic and workforce development
efforts is critical in rural communities that need more jobs
and more skilled workers to stabilize and grow their local
economies. In metropolitan areas, strategies that promote
industry-driven training as a key economic development
tool can help ensure that job growth is inclusive and provides opportunities for all residents.
2. Invest in communities to implement high-quality
workforce development strategies at the local level.
Over the past several years, a number of Southern states
have adopted key skills policies to support local sector
partnerships, work-based learning, and career pathways
for adults. However, most states are at the initial stage
of this work, using federal or philanthropic funds to test
new strategies. States could do more to bring this suite

Policymakers could consider investing more state resources
into the development and growth of local workforce development strategies. By dedicating state dollars to local
strategies, states could make better use of the infrastructure
they’ve started to build with federal funds. State dollars
could also leverage investments from other sources, such as
philanthropy and business. In fact, state investments in sector partnerships, work-based learning, and career pathways
could complement the training investments that employers
and workers are already making.
States who invest their own dollars into these strategies
could also set requirements around service delivery and
program performance so that local practice is tied to state
policy goals. Maryland and Tennessee offer examples of
states that have invested their own funds in building sector partnerships, giving them more capacity to implement
these partnerships.

While funding is critical, local communities need additional investment beyond dollars to successfully adopt
new workforce development strategies. States could
couple technical assistance with funding to help with
initial implementation, disseminate best practices and
lessons learned, and help local communities develop the
tools necessary to coordinate strategies across employers,
education and training providers, and other stakeholders. Technical assistance may be particularly important
in parts of the state that have a less robust workforce
development system. Through its High Demand Career
Initiative, Georgia is working to provide technical assistance to regional sector partnerships.
3. Establish job-driven financial aid programs that
are available to a wide range of students.
Over half of the states in the South have established
job-driven financial aid policies in recognition of the
fact that many students need assistance to earn postsecondary credentials. Yet, in states that do have policies in
place, programs leave significant funding gaps for students. For example, financial aid policies may not pay
for full tuition, cover costly fees, or apply to short-term
training. To ensure that students can acquire the skills
and certifications needed by employers, states could
offer financial assistance for a wide variety of programs
and needs.
Tennessee offers a strong example of job-driven financial aid. Through the Tennessee Reconnect grant set to
begin disbursement in Fall 2018, attaining a degree or
credential from a community college is effectively free
to all Tennesseans regardless of age. Local chambers of
commerce across the state see Tennessee Reconnect as an
important tool for business growth and development.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

27

4. Form middle-skill career pathways and include
comprehensive supportive services that enable
completion.
Since upskilling the existing adult workforce is essential
to closing state skills gaps, policymakers could introduce
career pathways that help mitigate the many challenges
adults face in securing college credentials. These pathways
use career coaches who connect people with the right
training and support services, expedite training, and provide in-demand “stackable” credentials.

The Arkansas Career Pathways Initiative is a strong
model of such a program. Arkansas assesses gaps in the
state’s key industries and uses federal money to provide
gap tuition funding and wraparound support services for
adults so that they can complete their college credentials.
An independent study of the program has already confirmed that it produces a positive return on investment
for the state, and the initiative’s graduates are helping to
fill needs in the state’s high-demand industries.

28

Support services like child care and transportation are a
key feature of these training pathways for adult students
as they enable them to complete college credentials while
working, raising a family, or both. They are especially
important in the South with its burdensome transportation costs and disproportionately high share of single
parents. Southern states could follow Arkansas’ lead and
use existing federal fund sources to provide career pathways along with strong supportive services and also consider refraining from adding restrictions on supportive
services that would interfere with access to education and
training.
5. Create state data systems that provide
accountability on how training programs are helping
residents with diverse needs get skilled jobs.
When policymakers invest taxpayer dollars into workforce development programs, they want to ensure results
for workers and employers. Since policymakers looking

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

to close their state’s skills gap must develop a diverse and
inclusive workforce, it is imperative that training programs are widely available to all residents, including those
who face systemic barriers to economic opportunity. To
address these issues, states could collect data and create
data tools that show participation, completion, and labor
market outcomes for the full range of state education and
workforce programs, as well as for different racial, gender,
and income groups. These data tools could be accessible to
both policymakers and the public so that students, workers, employers, and others can make informed decisions.
Mississippi illustrates how a southern state can invest in
data systems. Mississippi’s data system can conduct skills
gap analyses and produce information on whether people
are accessing and completing workforce programs.

However, all southern states could make better use of
these data systems to inform students, workers, employers, and policymakers about how workforce programs are
preparing jobseekers with different training needs and
addressing equity gaps. Once data systems are used to
identify gaps in program access or performance, this data
could also be used to close these gaps and for overall program improvement.

VEHICLES FOR STATE POLICYMAKERS TO
CLOSE THE SKILLS GAP INCLUDE GOALSETTING AND A “SKILLS CABINET”
State policymakers could also ease their path to implementation of these steps by taking the actions below.
These actions could bring a broad set of stakeholders
to the table to unite around a common vision for skills
development:
Set a bold goal for increasing the number of adults
trained for skilled jobs.
A common goal could mobilize the public and private
sectors to work together to adopt practical solutions for
closing the skills gap. For example, in 2013, Tennessee’s
Governor Haslam adopted a goal for 55 percent of
Tennesseans to earn a college degree or certificate by the
year 2025. This “Drive to 55” goal created a framework
for key state policies including Tennessee Reconnect,

which specifically targets adults. By adopting a statewide
postsecondary attainment goal for adults that includes
high-quality workforce credentials and degrees, state policymakers could show businesses and residents that they
are committed to meeting their skill needs.
Create a cross-agency “Skills Cabinet” and task
agency leaders with implementing a strategy for
meeting the state’s postsecondary attainment goal
for adults.
Closing the skills gap isn’t a job for a single government
agency. Instead, it requires coordination across a range of
agencies to make sure that workers have the right combination of training, education, and support services to
build skills for good jobs. State policymakers could consider creating a Skills Cabinet so that agency leaders
across workforce development, economic development,
higher education, and human services can develop and
implement a comprehensive and shared skills strategy.
States like Arkansas, Alabama, Kentucky, and North
Carolina have all created multi-agency leadership groups
to guide skills policies.73

The strength and efficacy of a skills cabinet depends on
the actions it takes. So while the creation of the cabinet is
a critical first step, activities must go beyond naming and
convening a set of agency leaders. To be effective, skills
cabinets could:

• Align different agencies’ strategic plans in service of
their common goal.
• Braid federal and state funding streams to support key
strategies and maximize impact.
• Use data systems to measure progress toward goals and
ensure that such progress is equitable and inclusive.
• Identify opportunities for aligning education and
training programs with other critical policies around
issues like childcare, transportation, and criminal justice that are key for removing barriers to work.
• Make joint recommendations to policymakers on new
and innovative strategies that agencies can implement
in partnership with one another to improve opportunities for workers and businesses.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

29

ENDNOTES
1 The authors use the definition of the “South” or the southern states established by the U.S. Census, which includes
the states of Delaware, Florida, Georgia, Maryland,
North Carolina, South Carolina, Virginia, West Virginia,
Alabama, Kentucky, Mississippi, Tennessee, Arkansas,
Louisiana, Oklahoma, Texas, and the District of Columbia.
Definition of “Region,” Glossary, U.S. Census.

12 Jennifer S. Vey, “Restoring Prosperity: The State Role in
Revitalizing America’s Older Industrial Cities,” Brookings,
May 2007. Available at https://www.brookings.edu/
research/restoring-prosperity-the-state-role-in-revitalizing-americas-older-industrial-cities/.

2 “United States’ Forgotten Middle,” National Skills
Coalition, 2017. Available at https://www.nationalskillscoalition.org/resources/publications/2017-middle-skills-fact-sheets/file/United-States-MiddleSkills.pdf.

14 Kenneth M. Johnson, “Rural Demographic Change in the
New Century: Slower Growth, Increased Diversity,” Carsey
Institute, Winter 2012. Available at https://scholars.unh.
edu/cgi/viewcontent.cgi?article=1158&context=carsey.

3 John Steele Gordon, An Empire of Wealth, HarperCollins
Publishers, 2004.
4 James C. Cobb, The Selling of the South, University of Illinois
Press, 1993.

15 Michael Mazerov and Michael Leachman. “State Job
Creation Strategies Often Off Base,” Center on Budget
and Policy Priorities, February 2016. The researchers find
that most jobs are created by businesses that start up or are
already present in a state.

5 Anthony Carnevale and Nicole Smith, “A Decade Behind:
Breaking Out of the Low-Skill Trap in the Southern
Economy,” Center for Education and the Workforce,
Georgetown University, July 2012.

16 NSC analysis of Bureau of Labor Statistics Occupational
Employment Statistics by State, May 2015, and U.S.
Census Bureau American Community Survey, 2011-2015
averages.

6 Enrico Moretti, The New Geography of Jobs, Mariner Books,
2013.

17 “Youth not attending school and not working by age group”
Kids Count Data Center, A Project of the Annie E. Casey
Foundation, 2016 Data. Available at http://datacenter.
kidscount.org/characteristics. The District of Columbia is
considered a state for purposes of this ranking.

7 Mike Maciag, “Where Wages are Lowest and Highest in
America,” Governing, March 13, 2015. Available at http://
www.governing.com/topics/mgmt/gov-metros-where-wages-are-lowest.html.
8 Richard J. Murnane and Frank Levy, Teaching the New
Basic Skills. Principles for Educating Children To Thrive in a
Changing Economy, 1996.
9 Harry J. Holzer, “Job Market Polarization and U.S. Worker
Skills: A Tale of Two Middles,” Brookings, April 2015.
Available at https://www.brookings.edu/research/job-market-polarization-and-u-s-worker-skills-a-tale-of-two-middles/.
10 Education requirements also differ among employers and
may shift over time. For instance, an increasing share of job
openings for registered nurses require a bachelor’s degree
and are no longer considered middle-skill opportunity
occupations. Keith Wardrip, Stuart Andreason, and Mels de
Zeeuw, 2017. “Uneven Opportunity: Exploring Employers’
Educational Preferences for Middle-Skill Jobs.” Federal
Reserve Banks of Philadelphia and Atlanta.
11 Richard M. McGahey and Jennifer S. Vey, Retooling for
Growth: Building a 21st Century Economy in America’s Older
Industrial Areas (Brookings Institution Press, 2008); Alan
Mallach, Rebuilding America’s Legacy Cities: New Directions
for the Industrial Heartland (CreateSpace, 2012); Edward
W. Hill et al., “Forces Affecting City Population Growth or
Decline: The Effects of Interregional and Inter-Municipal
Competition,” in Rebuilding America’s Legacy Cities: New
Directions for the Industrial Heartland, ed. Alan Mallach
(New York: The American Assembly, 2012), 31–80.

30

13 Vey, 2007.

18 Quillian, Lincoln, Devah Pager, Ole Hexel, and Arnfinn
H. Midtbøen (2017). “Meta-Analysis of Field Experiments
Shows No Change in Racial Discrimination in Hiring
over Time.” National Academy of Sciences 114 (41):
10870–10875.
19 Fryer, Roland G., Devah Pager, and Jӧrg L. Spenkuch
(2015). “Racial Disparities in Job Finding and Offered
Wages.” The Journal of Law and Economics 56(3).
20 Pager, Devah, Bruce Western, and Bart Bonikowski (2009).
“Discrimination in a Low-Wage Labor Market: A Field
Experiment.” American Sociological Review 74: 777–779.
21 Martha Ross and Nicole Svaijlenka, “Employment and
disconnection among teens and young adults: The role of
race, place, and education,” Brookings Institution, May
2016. Available at https://www.brookings.edu/research/
employment-and-disconnection-among-teens-and-youngadults-the-role-of-place-race-and-education/.
22 Bureau of Labor Statistics. Local Area Unemployment
Statistics Metropolitan Area Employment and
Unemployment Summary and Tables February 2018. April
4, 2018.
23 OECD, “Time for U.S. to Reskill? What the Survey
of Adult Skills Says,” OECD Skills Studies, OECD
Publishing, 2013.
24 Since the Great Recession, the U.S. has experienced a
decline in the labor force participation rate, which measure
the percentage of the people age sixteen or older who are
employed or looking for work.

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

25 The November 2008 civilian labor force participation rate
was 65.9 percent and the November 2017 rate 62.7 percent.
Current Population Survey, U.S. Bureau of Labor Statistics.
26 Table S1701, South Region, American FactFinder, U.S.
Census.
27 Lower-income households have incomes at or below 80
percent of the area median income. Researchers suggest
that households have affordable housing and transportation
when they spend no more than 45 percent of their incomes
on these combined cost areas. Center for Neighborhood
Technology’s Housing and Transportation Affordability
Index.
28 “Parents and the High Costs of Child Care,” Child Care
Aware of America, 2017. Available at https://usa.childcareaware.org/wp-content/uploads/2017/12/2017_CCA_
High_Cost_Report_FINAL.pdf.
29 Stephen F. Hipple, “People who are not in the labor force:
why aren’t they working?” Beyond the Numbers, U.S.
Department of Labor Bureau of Labor Statistics. Available
at https://www.bls.gov/opub/btn/volume-4/people-whoare-not-in-the-labor-force-why-arent-they-working.htm.
30 Barbara Gault, Elizabeth Noll, and Lindsey Reichlin, “The
Family-Friendly Campus Imperative: Supporting Success
Among Community College Students with Children,”
Association of Community College Trustees Invitational
Symposium, 2016. Available at https://iwpr.org/wp-content/uploads/2017/03/ACCT_Paper-3-8-17-final.pdf.
31 E. Ann Carson and Elizabeth Anderson, Bureau of Justice
Statistics, National Prisoner Statistics, 2015. “Table 4:
Sentenced prisoners under the jurisdiction of state or federal correctional authorities, by sex, December 31, 2014 and
2015.”

38 People of color will make up the majority of the population
in most Southern states by 2060. National Equity Atlas,
Policy Link and “States of Change,” American Enterprise
Institute, Brookings Institution, Center for American
Progress, February 2015.
39 William H. Frey, “The New Great Migration: Black
Americans’ Return to the South, 1965-2000,” Brookings,
2004.
40 Rakesh Kochhar, Roberto Suro, and Sonya Tafoya, “The
New Latino South: The Context and Consequences
of Rapid Population Growth,” Pew Hispanic Center,
July 26, 2005. Available at http://www.pewhispanic.
org/2005/07/26/the-new-latino-south/; Jake Grovum,
“How Asian-American are Changing the South,”
October 2014. Available at http://www.pewtrusts.org/
en/research-and-analysis/blogs/stateline/2014/10/03/
how-asian-americans-are-changing-the-south.
41 The net value of assets minus liabilities.
42 Su Jin Jez, “The Influence of Wealth and Race in College
Attendance,” University of California, Berkeley, November
2008. Available at https://cshe.berkeley.edu/publications/
influence-wealth-and-race-four-year-college-attendance;
Dalton Conley, Being Black, Living in the Red: Race,
Wealth, and Social Policy in America, University of
California Press, 2010.
43 Cajner, Tomaz, Tyler Radler, David Ratner, and Ivan
Vidangos (2017). “Racial Gaps in Labor Market Outcomes
in the Last Four Decades and over the Business Cycle.”
Finance and Economics Discussion Series 2017-071.
Washington, DC: Board of Governors of the Federal
Reserve System.
44 See footnotes 19, 20, and 21.

32 These four states are Kentucky, Louisiana, Mississippi, and
West Virginia.

45 Based on National Skills Coalition’s 50-state scans of skills
policies.

33 “Closing the Digital Divide: A Framework for Meeting
CRA Obligations,” Federal Reserve Bank of Dallas, July
2016. Available at https://www.dallasfed.org/cd/pubs/digitaldivide.aspx; Peter Stenberg, Mitch Moreheart and John
Cromartie, “Broadband Internet Service Helping Create a
Rural Digital Economy,” Amber Waves, U.S. Department of
Agriculture. Available at https://www.ers.usda.gov/amberwaves/2009/september/broadband-internet-service-helping-create-a-rural-digital-economy.

46 Richard Hendra et al. https://www.mdrc.org/publication/
encouraging-evidence-sector-focused-advancement-strategy.

34 “Philanthropy as the South’s Passing Gear: Fulfilling the
Promise,” Southeastern Council of Foundations, MDC,
2017. Available at http://stateofthesouth.org/wp-content/
uploads/2017/11/MDC_SECF-SOS_2017.pdf.
35 Carnevale and Smith, 2012.
36 Rasheed Malik and Katie Hamm, “Mapping America’s
Child Care Deserts,” Center for American Progress, August
30, 2017. Available at https://www.americanprogress.
org/issues/early-childhood/reports/2017/08/30/437988/
mapping-americas-child-care-deserts/.
37 U.S. Census Bureau American Community Survey.

47 For more on North Carolina Biotechnology Center, see
https://www.ncbiotech.org/.
48 NSC defines a state sector partnership policy as a statelevel policy that authorizes ongoing state support for local
sector partnerships through funding, technical assistance,
and/or program initiative(s). Not counted as a state policy
are investments made through one-time federal grants
intended to support sector partnerships, sector strategies that do not include ongoing support for local sector
partnerships, or sector partnership language in WIOA state
plans if there is no other evidence of a program initiative
and implementation of state support. See Bryan Wilson,
“Sector Partnership Policy: 50-State Scan,” National Skills
Coalition, September 2017.
49 Information on funding for sector partnerships from
Wilson, 2017. Additionally, North Carolina funds sector
partnerships through using federal funds to provide
Maximize Carolina Sector Grants.

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31

50 Intuitions Confirmed. The Bottom-Line Return on Schoolto-Work Investment for Students and Employers (1999)
Available at files.eric.ed.gov/fulltext/ED430083.pdf.
51 Robert Lerman, Lauren Eyster, and Kate Chambers, The
Benefits and Challenges of Registered Apprenticeship:
the Sponsors’ Perspective (2009). Available at http://
www.urban.org/sites/default/files/alfresco/publication-pdfs/411907-The-Benefits-and-Challenges-of-Registered-Apprenticeship-The-Sponsors-Perspective.PDF.
52 ApprenticeshipUSA Toolkit, U.S. Department of Labor.
Available at https://www.dol.gov/apprenticeship/toolkit/
toolkitfaq.htm.
53 U.S. Department of Labor Apprenticeship USA
Investments available at https://www.dol.gov/featured/
apprenticeship/grants.
54 Both Florida and Texas subsidize postsecondary instruction
for apprentices. Bryan Wilson and Sapna Mehta. “WorkBased Learning Policy 50-State Scan” National Skills
Coalition, April 2017. Available at https://www.nationalskillscoalition.org/resources/publications/file/WBLLearning-Policy-50-State-Scan.pdf
55 Delaware’s Fiscal Year 2017 budget allocates $700,000 to
the state’s Department of Labor to support work-based
learning, with a focus in the mechanics and manufacturing
fields. In Virginia, an Executive Order provides $400,000
annually for Registered Apprenticeship programs in occupations that have not traditionally provided apprenticeships,
including information technology, cyber security, and
professional and business services. See Wilson and Mehta,
2017.
56 Wilson and Mehta, 2017. Note that Arkansas’ tax credit
is limited to employers who hire youth apprentices.
Maryland’s tax credit was created after the Wilson and
Mehta scan.
57 American Association of Community Colleges Fast Facts.
Available at https://www.aacc.nche.edu/research-trends/
fast-facts/.
58 Dan Broun, “Community Colleges as Change Agents
in the Rural South,” MDC, November 15, 2017.
Available at http://stateofthesouth.org/2017/11/15/
community-colleges-as-change-agents-in-the-rural-south/.
59 “College Students Aren’t Who You Think
They Are,” Center for Law and Social Policy,
2017. Available at https://www.clasp.org/sites/
default/files/publications/2017/08/2017June_
CollegeStudentsArentWhoYouThinkTheyAre.pdf.

32

60 Katie Brown, “Putting Pell Grants to Work for Working
Students” National Skills Coalition, March 2018, available
at https://www.nationalskillscoalition.org/resources/publications/file/Putting-Pell-Grants-to-work-for-workingstudents-1.pdf.
61 Brooke DeRenzis and Rachel Hirsch, “Job-Driven
Financial Aid Policy 50-State Scan,” December 2016. Since
report was published, Maryland has adopted job-driven
financial aid policies.
62 Claire Suggs, “Troubling Gaps in Hope Point to Need
Based Aid,” Georgia Budget and Policy Institute,
September 2016. Available at https://gbpi.org/2016/
gaps-in-hope-point-to-need-based-aid/.
63 See information about the New Economy Workforce
Credential Grant at http://www.schev.edu/index/
institutional/grants/workforce-credential-grant.
64 Bryan Wilson, “Alignment Policy: 50 State Scan,” National
Skills Coalition, December 2016.
65 Individual colleges use additional grants from local funders
or the state’s Workforce Enhancement Training Fund.
66 Davis Jenkins, Matthew Zeidenberg, and Gregory S.
Kienzl, “Building Bridges to Postsecondary Training
for Low-Skill Adults: Outcomes of Washington State’s
I-BEST Program” Community College Research Center,
May 2009.
67 Theresa Anderson et. al., “New Evidence on Integrated
Career Pathways: Final Impact Report for Accelerating
Opportunity” Urban Institute, June 2017. Available
at https://www.urban.org/research/publication/
new-evidence-integrated-career-pathways.
68 “Mastering the Blueprint: State Progress on Workforce
Data,” Workforce Data Quality Campaign, November
2016. Available at https://www.nationalskillscoalition.org/
resources/publications/file/NSCWDBlueprintFINAL.pdf.
69 Workforce Data Quality Campaign, November 2016.
70 Workforce Data Quality Campaign, November 2016.
71 Workforce Data Quality Campaign, November 2016.
72 Workforce Data Quality Campaign, November 2016.
73 E.g., the Alabama Workforce Council, Arkansas Governor’s
Workforce Cabinet, Kentucky’s Education and Workforce
Cabinet, and North Carolina Board of Postsecondary
Credentials.

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BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY