Senator Kamala Harris proposes Upskill Accounts for American workers

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In June, U.S. Senator Kamala C. Harris introduced a new bill to put workplace development within the financial reach of all American workers. The “21st Century Skills are Key to Individuals’ Life-Long Success (SKILLS) Act” intends to improve access to workplace training and education, and so update individual skillsets and knowledge to keep pace with the unprecedented rate of industrial change within the U.S..

Jobs training has been part of related workforce bill since 1962, most recently updated and codified in the latest Workforce Innovation and Opportunity Act (2013). Whereas legislation previous sanctioned the skill needs of employers, Harris’ new bill aims to create a proactive, employee-first approach to training.

Through the bill, employees will be able to establish accounts to divert pre-tax income to be spent on direct and associated cost for skills training and education. Accounts aren’t meant to provide a new store of cash, but rather an account to be spent regularly. Up to 78 million Americans will be eligible for accounts, set to three limits:

  • $8,000 if they are unemployed, dislocated, or employed and earning under 50% of state median income.

  • $6,000 if they are employed and earning 50-75% of state median income.

  • $4,000 if they are employed and earning 75-100% of state median income

Eligible workers will be able to create an “Upskill Account” at CareerOneStop.org and view relevant courses for their chosen career pathway or cluster.

Training providers are set to benefit from the uptick in spend, but will only qualify if they increase transparency of curriculum and accountability for outcome. Meanwhile accrediting agencies will be joined by employers and local workforce boards to claim grants to to be spent on identifying local needs and aligning upcoming curriculum.

The legislation has been designed with input from a range of industry perspectives covering different sectors with national coverage. These in include Olivia Golden, Executive Director of the Center for Law and Social Policy (CLASP), Katie Spiker, Director of Government Affairs at National Skills Coalition and Leticia Lewis, Policy Director of BSA | The Software Alliance.

Read the full 31-page bill here.

The Resolution Foundation launches Intergenerational Centre

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To address the specific needs of both younger and older generations living in the UK, London-based think tank The Resolution Foundation has established a new Intergenerational Centre. Launched in June to time with the publication of an inaugural “International audit for the UK”, the new organisation promises to meet the growing disconnect between millennials, boomers and their relatives across different regions of the UK. Their mission serves as a challenge to popular sentiments by using trusted data, while also introduce constructive dialogue and useful terming at a time of caustic intergenerational relations.

The 144-page report includes 84 charts that diligently unpack the differences between generations as well as groups within the same generation. Jobs, skills and pay occupies one quarter of the report, positioning a topic which has been at the forefront of The Resolution Foundation's research since the think tank was founded in 2005.

One finding zooms in on the crucial aspect of how an individual's economic position is greatly determined by when they spend their formative employable years. Recession during the 1980s put one in five young workers out of employment, a number which was reduced during the downturn at the beginning of the 1990s, which topped out at 12% unemployment. On the eve of the Millennium, recession was felt less, with 6% of the youth workforce out of work. So while recessions hit the emergent workforce greater than older employers, this disparity is levelling out - less bad bad news.

Recessions also have a scaring effect on those entering working years during higher than average unemployment. The report finds that those who leave full-time education during a downturn are more likely to be paid less and, in the long-term, experience less job mobility during their careers. The pay effect is felt greater by graduates who spend extended periods earning outside of their specialisation until hiring in knowledge jobs returns to stable levels.

The current and unprecedented rates of employment give some cause for optimism, though the benefits are being unevenly distributed across demographics. The squeeze on wages is felt most by 18-29 year olds who saw hourly wages fall 9.2% between 2009 and 2016. During the same period, the average across all age ranges was 7.3%. As well as declines in pay, younger people are also more likely to be enrolled in atypical, precarious employment - Zero Hour Contracts or Involuntary Part-Time.

Topics outside the employment platform of jobs, skills and pay also form part of the report. Household wealth serves as one focal point, surfacing data around the benefits to baby boomers - one sixth of the adult population has received nearly half of gains during peaks in 2006-8 and 2014-15. Gender differences within generations also feature - older female baby boomers (born 1946-50) have half the wealth that their male contemporaries do, reflecting lower lifetime earnings and therefore lower financial and pension asset accumulation.

Yet there are reasons for hopeful next decade. Median wages are increasing for younger people, and hourly pay for 18-29 year olds increased by 2.4% between 2016 and 2018. Imbalances between regions are beginning to balance out. Home ownership among millennials and Gen X has increased most recently. And those that consider millennials to be avocado-smashing materialists should be alerted to the fact today’s young are consuming less than their parents did at an equivalent age.

The report builds on the 2018 report from The Resolution Foundation calling for a new generational contract. Watch the launch event’s announcement by visiting the event page at resolutionfoundation.org.