Human Capital strategy Memo

HUMAN CAPITAL

STRATEGY MEMO

November 2017

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Table of Contents

Introduction ............................................................................................................................................... 3

Research and stakeholder engagement .................................................................................................. 4

Emerging needs in human capital ......................................................................................................... 4

Changing nature of work ...................................................................................................................... 4

Shifting demands on adult education and training systems ................................................................ 6

Deepening need for inclusive strategies that catalyze growth ............................................................ 10

Strategies for ON TO 2050 and beyond .............................................................................................. 14

Pursue a regional approach to workforce development focused on traded clusters ............................ 14

Incorporate job market opportunities and trends into sub-regional planning ................................... 15

Prioritize industries and occupations that offer pathways for upward mobility ................................ 17

Link economically disconnected areas to jobs, training, and education ............................................. 17

Improve workforce and educational data systems ............................................................................... 18

Enhance coordination between industry and the workforce development system .............................. 19

Enhance coordination among community colleges ............................................................................. 20

Next steps.................................................................................................................................................. 20

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Introduction

Human capital remains one of the most important determinates -- if not the most important -- of

regional economic vitality. Access to talent continues to be a top priority for companies looking

to expand, relocate, or reorganize because workers’ knowledge and ingenuity will always be

the primary source of growth. Metropolitan Chicago is home to a well-educated and diverse

workforce of over 5 million workers. Yet, the region struggles to keep pace with the nation

overall and peer regions with similar large, complex, and established economies -- like New

York, Los Angeles, and Boston.

Slowed economic and population growth constrain our

widespread prosperity, and current projections show these trends could continue as shifts in

industry competition, globalization, and technology challenge all regions. To prosper, the

region needs to make strategic investments that will enable it to adapt to rapid changes, sustain

a high quality of life, and build on advances in education and workforce development.

The workforce development and community college systems often serve as the primary

providers of education, training, and some related social services for working-age individuals.

These systems aim to provide individuals with the skills and knowledge needed to succeed in

the labor force. As the rate of economic and technological change accelerates, this complex

system must contend with emerging trends to create a high-quality labor force. Residents

increasingly need to earn additional postsecondary training to enter the workforce and

continuously enhance their skills over time. The region’s workforce is aging and diversifying,

while new analysis shows that high concentrations of economic inequality and inopportunity

limit our region’s ability to grow.

Education and training providers must become more

responsive to the needs and technology of industry, while ensuring all residents have access to

training with regional economic value. Prioritizing new models and geographies -- such as

sector-based career pathways programs and economically disconnected areas

-- can help the

region to navigate these opportunities and challenges.

Acting on the CMAP Board’s guidance for ON TO 2050 -- to refine existing policies, explore

limited new policy areas, and develop more specific implementation strategies -- this strategy

memo on human capital focuses on major shifts in adult education and training since the GO

TO 2040 comprehensive plan was adopted in October 2010. As in the previous plan, ON TO

2050 will emphasize adult education and training but acknowledge the vital role and

importance of primary and secondary education quality. CMAP continues to support the work

of other organizations striving to improve our region’s education system. This memo’s policy

CMAP Regional Economic Indicators website, 2017, http://www.cmap.illinois.gov/economy/regional-economic-

indicators/trends.

CMAP ON TO 2050 strategy paper, “Inclusive Growth,” 2017, http://www.cmap.illinois.gov/onto2050/strategy-

papers/inclusive-growth.

Economically disconnected areas refer to neighborhood tracts that have real median household incomes less than 60

percent of the Chicago regional median by household size, and either high-minority populations or low levels of

English proficiency relative to regional averages.

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direction will inform how ON TO 2050 can help the Chicago region to improve the efficacy of

training and adult education to support the region’s economic development goals. This memo is

one of three that develop strategies to improve the region’s economic resilience; two other

memos discuss regional economic development and innovative capacity.

Research and stakeholder engagement

To develop this strategy, CMAP staff reviewed literature, analyzed data, and identified major

policy developments and consulted partners at organizations that directly impact regional

workforce development goals. These stakeholders included representatives from organizations

across county and sub-regional economic development, traditional and technical education,

workforce service delivery, community development, education and training funding, and

workforce advocacy and research. Stakeholders helped to identify the region’s emerging needs

for enhancing the competitiveness of the region’s workforce, potential opportunities available to

residents, and how such needs can best be addressed in long-range planning.

CMAP staff also solicited feedback on the strategy from the agency’s working committees,

particularly the Economic Development and Human and Community Development working

committees. Both the interviews and presentations to the working committees provided

feedback on the relationship between improved workforce development and growth in the

region’s broader economic and innovative capacities. Such feedback helped shape and refine

recommendations in this report.

Emerging needs in human capital

Human capital recommendations in GO TO 2040 and CMAP’s subsequent analyses --

coordinating workforce and economic development efforts, strengthening the role of workforce

intermediaries, improving education quality and access -- aim to improve the competitiveness

of the region’s workforce. CMAP continues to advocate strongly for these existing

recommendations. Since GO TO 2040 was adopted, opportunities and challenges have

continued to emerge for the regional workforce development system. Key technological

advances and demographic trends are shifting the demands placed on the Chicago region’s

adult education and training programs. Moving forward, workers will face additional training

and education requirements to compete in the job market. Addressing the indirect obstacles to

residents’ long-term employability will require the workforce development system to become

more responsive and employers more engaged in addressing the evolving needs of both

industry and workers. New strategies for greater coordination and planning may be necessary

to ensure all residents have access to affordable, high-quality postsecondary education and

skills training throughout their careers.

Changing nature of work

A growing body of research examining the potential effects of currently available technologies

has begun to shed light on how advancements may change employment, demand for skills, and

economic stratification. This research indicates that such changes are occurring at an accelerated

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scale, scope, and speed from previous economic

transformations.

This acceleration could make it

increasingly difficult for workers to acquire the

education and new skills to adapt to a more

competitive labor market.

While conclusions vary

widely, research generally indicates that computer-

driven technologies will transform the future of work

in sectors ranging from retail and warehousing to

finance and healthcare. Most occupations, at all skill

levels, should anticipate widespread changes as

technology augments work, altering how workers

use their time and conduct tasks.

As new technologies find applications throughout the

economy, workers will need to interact more adeptly

and collaboratively with technology to accomplish a

wide range of problem-solving, creative, or non-

computerized tasks.

Workers will continue to need

higher levels of literacy and numeracy, as well as the

ability to anticipate, identify, and solve problems.

Oral and written communication skills and the ability

to work in teams will also have increased

importance.

With technical competency as a basic

requirement for most occupations, workers will

require a broad range of improved professional skills.

Erik Brynjolfsson and Andrew McAfee, Race against the machine: How the digital revolution is accelerating innovation,

driving productivity, and irreversibly transforming employment and the economy, (Brynjolfsson and McAfee, 2012).

James Manyika, Michael Chui, Mehdi Miremadi, Jacques Bughin, Katy George, Paul Willmott, and Martin

Dewhurst, A future that works: automation, employment, and productivity, (McKinsey Global Institute, 2017).

Melanie Arntz, Terry Gregory, and Ulrich Zierahn, "The risk of automation for jobs in OECD countries: A

comparative analysis." OECD Social, Employment, and Migration Working Papers 189 (2016).

Manyika et al. A future that works.

Carl Benedikt Frey and Michael A. Osborne. "The future of employment: how susceptible are jobs to

computerisation?" Technological Forecasting and Social Change 114 (2017): 254-280.

Era Dabla-Norris, Si Guo, Vikram Haksar, Minsuk Kim, Kalpana Kochhar, Kevin Wiseman, and Aleksandra

Zdzienicka, The new normal: A sector-level perspective on productivity trends in advanced economies, (International

Monetary Fund, 2015).

Frey et al. "The future of employment.”

World Economic Forum. “Skills Stability” The Future of Jobs: Employment, Skills and Workforce Strategies for the Fourth

Industrial Revolution. January 2016.

Closer look: Technology in the workplace

The scope of what technology can do

continues to expand, building on advances in

artificial intelligence, machine learning,

advanced materials, and the automation and

digitalization of services.

A significant share

of tasks -- across almost every occupation and

skill level -- already has the potential to be

undertaken by existing technologies.

However, current research estimates that

technological advancements will replace

relatively few jobs entirely, as many workers

in occupations vulnerable to automation

perform a variety of other interactive tasks

that remain difficult to computerize.

Instead,

advancements could augment jobs where

workers use judgement, problem-solving, and

other skills in unpredictable or creative

environments.

Managerial decision-making may increasingly

use big data and sub-fields of artificial

intelligence. Many jobs will likely refocus on

non-routine, interactive tasks that are less

susceptible to computerization, leveraging

intuition and caring tasks that require social

aptitude and adaptability. For example, real-

time information about individuals’ needs

would enhance teaching, elder and healthcare,

hospitality, and creative industries.

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This trend is already happening: nearly all job growth since 1980 has occurred in occupations

with relatively high requirements for social skills -- e.g., flexibility, judgment, social intelligence,

and teamwork.

The evolving technology and needs of employers has led to shifts in how individuals relate to

the labor market. With a standardization of skills in some sectors like manufacturing and

healthcare, employers increasingly expect to hire new workers with the skills they require,

rather than invest in extensive education and training. National research has found an existing

decline in the percent of workers receiving employer-sponsored or on-the-job training.

Moreover, average U.S. annual wages for those with a high school diploma have not seen

growth since 1970.

Workers must now seek out and pay for more postsecondary training

before entering the workforce.

Individuals tend to move jobs frequently and change occupations over the course of their

careers. These trends present particularly acute challenges for residents in the region’s

economically disconnected areas (EDAs). For many low-income and entry-level workers, these

trends can result in a cycle of temporary or contract work without the job security or training to

pursue better opportunities. With the cost burden of postsecondary training shifted further onto

individuals and households, workers must guide their own preparation for workforce readiness

-- that is, how they plan to pursue, progress through, and complete the education and training

required to attain relevant skills. With more job-to-job moves, physically accessing jobs can

prove challenging. Yet, minority residents, particularly African Americans and workers in

EDAs, have longer commute times in the Chicago region.

Commute options will remain a key

issue for low- and moderate-income workers, many of whom must own cars or take long,

circuitous transit routes to reach employment and education opportunities. Priority should be

given to transportation and land use decisions that better support such connections.

Shifting demands on adult education and training systems

The region’s educational and workforce development systems help bridge the gaps between

adults seeking to build a career and employers looking to build their workforce. The region’s

community colleges provide residents with access to both occupational education and college

transfer programs, as well as non-degree programs like continuing and adult education. The

David J. Deming, The growing importance of social skills in the labor market. No. w21473. (National Bureau of Economic

Research, 2015).

Council of Economic Advisers. Economic Report of the President, 2015. http://www.nber.org/links/cea_2015_erp.pdf.

R. Abel Jaison and Richard Dietz, “Do the benefits of college still outweigh the costs?” Current Issues in Economics

and Finance 20:3 (Federal Reserve Bank of New York, 2014).

CMAP ON TO 2050 snapshot, “Travel Trends: Understanding how our region moves,” 2017,

http://www.cmap.illinois.gov/onto2050/snapshot-reports/transportation-network/travel-trends. See also: Christopher

Ingraham, “The astonishing human potential wasted on commutes,” Washington Post, February 25, 2016,

https://www.washingtonpost.com/news/wonk/wp/2016/02/25/how-much-of-your-life-youre-wasting-on-your-

commute/.

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workforce development system consists of an array of mostly federally funded training

providers, including public, non-profit, and for-profit programs. These institutions may also

provide job-placement assistance, apprenticeships, and related support services like

transportation or childcare. Stakeholder interviews underscored the challenge for these complex

systems to become more nimble and responsive to accelerating change in the needs of both

employers and workers. Since GO TO 2040, the region’s education and training programs have

utilized best practices and federal legislative reform to address the substantial needs among the

low- and middle-skilled workers. Still, persistent administrative challenges and constrained

public resources undermine the resilience of these systems.

As technology augments work, higher levels of postsecondary training -- as well as additional

training throughout a career -- have become necessary to compete for available job openings.

The demand for more education is already evident in the rising number of degrees conferred by

postsecondary institutions in the U.S. All levels of degree and all race/ethnicity groups have

seen significant increases in educational attainment, with the highest growth in sub-

baccalaureate certifications and Associate’s degrees. For example, the number of Associate’s

degrees conferred nationwide to Black and Hispanic students increased by 79.6 percent and

136.9 percent respectively between the 2002-03 and 2012-13 academic years.

Despite this

progress, significant gaps in educational attainment persist across demographic groups.

Moreover, metropolitan Chicago had nearly 150,000 young adults between 16-24 years (12.1

percent) disconnected from both work and school in 2015, including 22.9 percent of young black

residents ages 16-24.

Many of these “opportunity youth” have a high school diploma but

require substantial remedial education for literacy, numeracy, and computer skills.

Although increasingly available, not all sub-baccalaureate programs -- including short-term

credential, licensure, and certification programs -- are uniformly valuable for workers or

employers.

Stakeholders expressed a growing recognition in the Chicago region of the full

breadth of training, in-demand skills, and meaningful work experience required to build long-

term employability. These sub-baccalaureate programs can play an important role in connecting

residents to pathways for upward mobility. However, their topics and structures may need to

Lauren Musu-Gillette, Jennifer Robinson, Joel McFarland, Angelina Kewal Ramani, Anlan Zhang, and Sidney

Wilkinson-Flicker, Status and Trends in the Education of Racial and Ethnic Groups 2016, NCES 2016-007 (National Center

for Education Statistics, 2016).

CMAP ON TO 2050 strategy paper, “Inclusive Growth,” 2017, http://www.cmap.illinois.gov/onto2050/strategy-

papers/inclusive-growth.

Sarah Burd-Sharps, Kristen Lewis, Rupsha Basu, Rebecca Gluskin, Laura Laderman, and Marina Recio, Promising

Gains, Persistent Gaps: Youth Disconnection in America. (Measure of America of the Social Science Research Council,

2017), http://www.measureofamerica.org/youth-disconnection-2017/.

Veronica Minaya and Judith Scott-Clayton, "Labor Market Trajectories for Community College Graduates: New

Evidence Spanning the Great Recession. A CAPSEE Working Paper," (Center for Analysis of Postsecondary

Education and Employment, 2017).

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be further rationalized or enhanced based on a strong understanding of the needs of growing

industries. Many education and training providers are already adjusting their policies and

curricula to reflect best practices for such programs. CMAP and partners should continue to

support strategies for coordinating regional workforce and economic development goals.

In many ways, the Chicago region has been a national leader in the implementation of recent

legislative reform to the public workforce system. Federal legislation enacted in 2014 with

bipartisan support, the Workforce Innovation and Opportunity Act (WIOA), requires workforce

boards to conduct state-level and regional strategic planning, as well as to strengthen and

expand partnerships with the private sector. The law emphasized the central role that data

collection and reporting play in unified planning and partnership development.

Such tools are

especially important given a renewed national focus on serving populations with barriers to

accessing or sustaining employment. Metropolitan Chicago can build off of related local and

state efforts to further improve regional planning and integrated data systems. Ongoing

implementation of WIOA may also provide a setting in which new practices can be tested and

scaled based on demand-driven strategies that leverage industry engagement to guide regional

workforce development.

The regional education and workforce systems have built a range of programs aimed at

improving access to adult education and training opportunities. Community colleges around

the state have taken steps to increase enrollment in career training across district boundaries

and reduce unnecessary duplication. In response to limited public funding, all 39 of Illinois’

community college districts recently signed on to participate in the Comprehensive Agreement

Regarding the Expansion of Educational Resources (CAREER Agreement). The agreement

allows students to enroll in career and technical education programs offered at any other Illinois

community college if the program is not offered in their home district, while paying in-district

resident tuition and fee rates. This cooperation offers a prime example of strategies to improve

the efficiency and responsiveness of the community college system to shifting education and

employment trends.

The State has also made progress in articulating career pathways programs. These programs

provide postsecondary education and training as a series of manageable steps leading to

industry-recognized credentials in growing occupations. This model can drive higher success

rates among participants and helps workforce partners enhance the delivery of career

counseling, job-placement assistance, and support services. Along with nine other states, Illinois

participates in the Center for Law and Social Policy’s Alliance for Quality Career Pathways to

develop a consensus framework with criteria and indicators to help improve, scale, and sustain

a regional career pathways system. Community colleges have also partnered with area

David Bradley, The workforce Innovation and Opportunity Act and the One-Stop Delivery System, Congressional

Research Service Reports No. R44252 (Congressional Research Service, 2015).

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employers to develop some apprenticeship programs and related curricula. Apprenticeships

have been more common in the trades, however, insurance and financial firms have recently

developed programs.

These programs enable students apply academic learning, earn some

income while studying, and potentially enter a career tract.

Looking beyond immediate employment needs, the education and workforce development

systems have begun to more directly target occupations that provide opportunities for

advancement and offer better pay in industries with the potential to grow. Inclusive growth will

be a critical recommendation in ON TO 2050, and this increased focus provides CMAP and

partners additional opportunities to leverage each other’s work. Stakeholder interviews

revealed an increasing emphasis within the workforce development system on connecting

individuals to jobs with pathways for growth in skills and compensation. This shift reflects the

concern that accelerated technological change and other macro issues could exacerbate existing

trends towards labor market polarization -- with employment growth occurring primarily in

high-income and low-income occupations, accompanied by an erosion of those in the middle.

The profile of a middle-income job -- traditionally in middle-skill construction, production, or

clerical roles -- is shifting towards occupations that require more training. Research has shown

that the distribution of jobs by skill level has shifted since 1980 as the number of jobs requiring

medium levels of skill has shrunk and that such polarization has intensified since the 1990s.

The 2001 and 2007-09 recessions in particular drove economic stratification via the relative loss

of middle-skill, middle-income jobs, when the economy failed to recover such jobs in the

following expansions.

As new technologies increasingly refocus jobs towards non-routine and cognitive tasks, jobs

may be increasingly either low-skill (e.g., personal services or food production) or high-skill

(management and professional occupations) with a widening pay gap in-between.

Due to

several long-running structural changes in the economy, real median household income has

declined nationally, down by 4.5 percent in the Chicago metropolitan area between 1989-2015.

Given existing disparities in employment and income outcomes for the region’s economically

Stephanie Jones, “Illinois’ Harper College to Host Zurich’s Apprenticeship Program,” Insurance Journal, June 18,

2015.

David Autor and David Dorn, "The growth of low-skill service jobs and the polarization of the U.S. labor market,"

The American Economic Review 103, no. 5 (2013): 1553-1597.

A. Cheremukhin, "Middle-skill jobs lost in US labor market polarization." See also Nir Jaimovich and Henry E. Siu.

The trend is the cycle: Job polarization and jobless recoveries, No. 18334 (National Bureau of Economic Research, 2012).

Maximiliano Dvorkin and Hannah Shell, “Labor market polarization: How does the district compare with the

nation?” The Regional Economist 2 (The Federal Reserve Bank of St. Louis, 2017).

CMAP Regional Economic Indicators website, 2017, http://www.cmap.illinois.gov/economy/regional-economic-

indicators/trends/trends.

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disconnected areas, local education and training systems will remain critical to helping workers

attain sufficient skills training to secure middle-income, higher-skilled opportunities.

Deepening need for inclusive strategies that catalyze growth

Metropolitan Chicago is home to an estimated 5.6 million working-age residents whose

backgrounds and needs are diverse and whose contributions are essential to the region’s

economic prosperity. The Chicago region’s population growth has slowed recently, gaining just

1.1 percent since 2010 and reflecting the region’s slower economic growth compared to the

nation and our peers.

Accordingly, the metropolitan labor force -- those that are 16 years or

older and either working or actively seeking work -- declined by approximately 65,000 workers

between 2008 and 2015.

Further trends in age, diversity, and labor force participation have

significant implications for planning at both the regional and local levels.

The regional workforce is aging rapidly as people continue to live longer, delay or reduce

childbearing, and retire later in life. Today, residents who are 55 and older make up more than a

quarter of the population and growth in these age groups is increasing nationwide (Figure 1).

Recent Census data points to a simultaneous decline in the population share of children (19

years and under) as millennial residents age into older age groups. An aging population will

affect the region’s productivity. Some industries like healthcare may experience increased

demand, while others experience shrinking pipelines of workers with specialized skills and

knowledge. This problem is not isolated to manufacturing, but will be felt throughout the

region’s economy. For example, within the information technology sector, many large and

established companies that still own and service legacy mainframe computers -- such as airlines

and financial transaction processors -- can expect to replace 20 percent of trained mainframe

developers over the next 5 years.

CMAP ON TO 2050 snapshot, “Population change in the CMAP region,” 2016,

http://www.cmap.illinois.gov/about/updates/policy/-/asset_publisher/U9jFxa68cnNA/content/population-change-in-

the-cmap-region.

CMAP analysis of American Community Survey data, 1-year estimates in 2005-2015 for the Chicago-Naperville-

Elgin metropolitan area.

SHARE and International Business Machines Corporation (IBM), “The pieces are falling into place: mainframe

clients find help from IBM and others to mitigate the effects of a skills shortage,” IBM Systems Magazine (2015).

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Figure 1. Aging in the CMAP region, 1970-2016

Source: Chicago Metropolitan Agency for Planning analysis of U.S. Decennial Census data 1970 and Population

Estimates Program data 2016.

Emerging research highlights the negative influence that persistent economic disparities among

residents exert on regional economic growth. Ongoing shifts in the region’s racial and ethnic

mix will effect human capital development needs and future economic growth in the region.

CMAP projects that metropolitan Chicago’s increasing racial and ethnic diversity will continue

through 2050 -- a trend that is related to changes in economic opportunity. The proportion of

persons of color increased from 34 percent of the region’s population to 49 percent between

1990-2016. The shift is due primarily from growth in the Hispanic population prior to the

recession, and accelerating growth in the Asian population since the recession.

Current

forecasts for 2050 show a continued decline in the white, non-Hispanic share of the population,

with a corresponding increase in the Hispanic and Asian shares. Demographic trends are both a

condition and a consequence of economic prosperity as residents choose where to live based on

their perceptions of quality of life and economic opportunity. For example, among its peer

regions, only metropolitan Chicago has seen declining African American populations due in

large part to the impact of economic and racial inequalities.

Many residents in the Chicago region experience persistent disparities in employment,

educational attainment, and household income based on race and ethnicity (Figure 4),

hindering the region’s ability to realize its residents’ full potential and productivity. Black and

Hispanic residents have lower educational attainment rates and median household income rates

than the regional averages. ACS data for the 2001-14 period revealed that unemployment rates

for black residents were nearly double that of the region’s white residents.

Chicago Metropolitan Agency for Planning analysis of U.S. Decennial Census data, 1990, and Population Estimates

Program data, 2016.

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Figure 2. Disparate outcomes by race and ethnicity

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Moreover, labor force participation rates among black residents between 2005-15 were on

average a full five percentage points below any other group.

Given the regional trend of

increasing diversification, these disparate outcomes have serious implications for regional and

sub-regional planning.

As the population changes, older and more diverse population groups

may hold varying preferences and face different challenges in housing, transportation,

employment opportunities, and other factors that impact quality of life.

The region’s primary asset, its human capital, is being diminished when residents cannot fully

contribute to and benefit from the regional economy. The disparities in educational and

economic outcomes across the region’s diverse residents undermines the economic growth and

resilience of metropolitan Chicago in the face of economic shocks. Between 2006 and 2010,

income inequality was one of the most effective ways of predicting a county’s risk of entering

into recession.

A growing body of research emphasizes the connection between inclusion and

economic growth. Research from the Cleveland Federal Reserve on growth factors for 118 U.S.

regions showed that racial and ethnic diversity, openness to immigrants, low rates of racial

segregation, and low levels of income stratification strongly contribute to regional growth in

employment and output.

If metropolitan Chicago remains less attractive to workers and families relative to our peers,

lackluster population growth could burden the economy with a narrower tax base, fewer job

opportunities, and a smaller labor pool. Strengthening the region’s economic competitiveness

will require developing inclusive strategies to leverage its full human capital and catalyze

economic growth. Key among these strategies are ensuring that low-income and minority

populations have better access to opportunities.

The benefits could foster longer and more

robust periods of growth for the overall economy. Likewise, supporting the region’s traded

clusters – the industries that connect the region to the global economy -- could decrease

inequality by raising the demand for labor,

increase the effects of policies aimed to spread

Chicago Metropolitan Agency for Planning analysis of American Community Survey data, 2005-15.

CMAP ON TO 2050 strategy paper, “Inclusive Growth,” 2017, http://www.cmap.illinois.gov/onto2050/strategy-

papers/inclusive-growth.

Paul Lewin, Philip Watson, and Anna Brown, "Surviving the Great Recession: the influence of income inequality in

US urban counties," Regional Studies (2017): 1-13.

Randall Eberts, George Erickcek, and Jack Kleinhenz, “Dashboard Indicators for the Northeast Ohio Economy:

Prepared for the Fund for Our Economic Future,” Federal Reserve Bank of Cleveland Working Paper (2006):20.

Christ Benner and Manuel Pastor. Equity, Growth, and Community: What the Nation Can Learn from America's

Metro Areas. (California: University of California Press, 2015) DOI: http://dx.doi.org/10.1525/luminos.6.

Manuel Pastor, Peter Dreier, Eugene Grigsby III, and Marta López-Garza, “Growing Together: Linking Regional

and Community Development in a Changing Economy,” Shelterforce (1998): 2.

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opportunity,

and offer pathways to upward mobility. Such cooperative measures will help to

create strong economic growth that creates opportunities accessible to all residents and

ultimately attracts population growth.

Strategies for ON TO 2050 and beyond

ON TO 2050 will provide policy and technical guidance on future CMAP work, with a focus on

the core agency responsibilities of transportation and land use planning. The following section

outlines strategies that CMAP and its partners can undertake to better realize the full potential

of the region’s human capital. Regional workforce development consists of a broad range of

strategies to develop talent and skills, connect employers and workers, and facilitate economic

mobility -- each tailored to specific labor market needs. In light of the highly competitive and

rapidly changing global economy, it is vital that training and skills programs are deployed and

well-integrated with related programs and initiatives. These Human Capital strategies are

assumed to focus on opportunities within traded clusters, to prioritize efforts and promote

regional economic growth that can create additional opportunities for inclusive growth.

Recommended actions focus on continued coordination and rationalization of workforce

development programs, as well as opportunities to incorporate sector-based strategies into sub-

regional planning. Achieving regional human capital goals will require a variety of institutions,

programs, and services. While this strategy paper includes a number of ongoing reforms and

programs, advancing some strategies will require entities other than CMAP to take the lead.

Multiple ON TO 2050 projects articulate recommendations that could improve equitable access

to employment opportunity, adult education and training, and workforce development

services. Complementary strategy papers address topics such as the regional economy,

inclusive growth, housing choice, infill development, municipal capacity, and transportation.

Pursue a regional approach to workforce development focused on traded clusters

The Chicago region’s employment and training goals depend on broadly growing the regional

economy. At the same time, increasing foreign competition indicates that future economic

growth will primarily occur in specialized industry clusters equipped to compete globally.

The

Chicago region maintains a highly diversified economy with significant relative concentrations

Raj Chetty, David Grusky, Maximillian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang, “The

Fading American Dream: Trends in Absolute Income Mobility Since 1940 (Non-Technical Summary)”(2016)

http://www.equality-of-opportunity.org/assets/documents/abs_mobility_summary.pdf

See CMAP ON TO 2050 Strategy Papers: http://www.cmap.illinois.gov/onto2050/strategy-papers.

Michael E Porter. "Location, competition, and economic development: Local clusters in a global economy." Economic

development quarterly 14, no. 1 (2000): 15-34.

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among its industry clusters, particularly those

selling products and services in markets outside

of the region. Such traded industry clusters have

an outsized potential to grow the region’s

economy, pay higher wages than their local-

serving counterparts, and supply employees with

opportunities for career advancement.

Economic

and workforce development efforts achieve the

most when county workforce boards, employers,

trainers, service providers and economic

development agencies work together across

jurisdictional borders. As outlined in GO TO 2040,

a regional approach to improve coordination with

economic development strategies, focusing on the

region’s traded clusters and certain local clusters

that are poised for growth and offer pathways for

upward mobility, is necessary to help create more

employment and training opportunities for the

region’s workers.

CMAP and partners should support regional

workforce strategies by convening coalitions or

developing apprenticeships around traded

industry clusters, such as the Chicago Metro

Metals Consortium or the recently established Chicagoland Food and Beverage Network.

Meeting the clusters’ skilled workforce needs requires coordinated training programs informed

by or in close collaboration with industry. A number of national and local models demonstrate

such partnerships between industry and educators and training providers. Demand-driven

approaches are a core component of WIOA. CMAP in particular should provide data that can

improve the region’s understanding of the major job market dynamics and growing traded and

some local clusters in the region. CMAP research could include occupation trends, industry

shifts, commute time and mode, and training requirements.

Incorporate job market opportunities and trends into sub-regional planning

The benefits and burdens of major shifts in the region’s human capital will affect communities

in different ways based on their ability to foresee and respond to evolving workforce needs.

Negative effects often accrue to places with limited adult education and training opportunities

CMAP ON TO 2050 snapshot, “Regional Economy and Clusters: Building on Our Strengths,” 2017,

http://www.cmap.illinois.gov/onto2050/snapshot-reports/economic-clusters.

CMAP report, “Reorienting State and Regional Economic Development: Challenges and Opportunities for

Metropolitan Chicago,” 2014, http://www.cmap.illinois.gov/economy/innovation/economic-development/.

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or other connections to an increasingly competitive economy. Stakeholders consistently call for

human capital considerations to figure prominently in regional and sub-regional planning.

Human capital should be understood as an essential component to any growth goals, and

planning for land use, transportation, and economic development should adequately address

related issues. Yet, communities vary widely in their knowledge of major job centers within a

reasonable commuting distance, industry and occupation trends, local job market changes, and

the employment outcomes of local training programs. Communities can also vary widely in the

knowledge, staff capacity, and technical expertise required to plan for human capital.

Through the Local Technical Assistance program, CMAP should explore strategies to better

incorporate human capital development in local and sub-regional planning. Such planning

should recognize and leverage economic assets that often extend across jurisdictional

boundaries, such as skilled labor pools or traded industry clusters. For example, local and sub-

regional plans could build off of the region’s Workforce Investment Boards’ (WIBs) strategic

and operational planning already mandated by WIOA. These plans assess trends in the area’s

leading and emerging industries, employment and unemployment data, labor markets trends,

and the workforce’s educational and skill levels.

WIB plans drive workforce development investment decisions. Where relevant, the LTA

program could strengthen local planning efforts by incorporating the findings and

recommendations into local and sub-regional plans or identifying other opportunities for

coordination. However, unique job market opportunities and trends extend well-beyond the

public workforce development system, requiring collaboration with other place-based

education and training partners. These efforts should continue to prioritize new tools and

approaches that address the barriers to economic mobility in disinvested and economically

disconnected areas and emphasize coordination with neighboring communities and key

stakeholders in the workforce and training spheres. However, expanding incorporation of

workforce development within the LTA program may require CMAP to secure additional

revenue sources, including philanthropic and public grants.

The agency should also further enhance its data and research products to incorporate regional

workforce development priorities. For example, future CMAP drill-down reports could analyze

major industry and workforce patterns in economically significant sub-regions and how

outcomes vary within economically disconnected areas. Likewise, ON TO 2050 strategies will

be catered to local partners through a series of “layers” that support spatially specific

recommendations. CMAP has therefore mapped traded industry job centers across the region to

identify concentrated areas of employment in traded goods-producing and traded service

clusters. This geospatial analysis can support local workforce strategies that reflect unique

needs throughout the region and long-term collaboration among communities with common

labor market conditions.

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Prioritize industries and occupations that offer pathways for upward mobility

As training and skills requirements continue to shift, a growing share of low-income and entry-

level workers may face challenges in accessing education and training necessary for remaining

in the workforce. Even for those with industry-recognized credentials, some jobs provide better

opportunities for career advancement and upward mobility. Meeting regional goals in both

economic growth and equity will require a prioritized focus on those opportunities that offer

residents better pathways for upward mobility. This recommendation is also a core component

of CMAP’s Inclusive Growth work and related analysis of economically disconnected areas.

Where appropriate, educational institutions and training providers, as well as funders, should

invest in continued development and implementation of sector-based career pathways

programs. These programs structure stackable credentials, work-based learning and

apprenticeships, and support services to guide participants’ efficient completion of credentials

with regional economic value. Well-articulated guidance on pursuing these education and

employment opportunities is then communicated to individuals and households through

multiple workforce channels. These efforts should focus in particular on occupations and

industries which may offer stronger opportunities for economic advancement and connecting

them to residents in economically disconnected areas. The model can be embedded in sector-

based economic development strategies with strong industry input. This helps ensure that

partners in the adult education and training system provide relevant programs, in-demand

skills, and connections with specific job opportunities. The state and region have made strides

to articulate pathways based on rigorous market analysis. However, the work to ensure an

effective career pathways system is ongoing and requires mechanisms to aggregate conclusions

and adapt programs according to local needs or the capacity of partners.

Where appropriate, CMAP should identify opportunities to support the expansion of career

pathways programs, such as prioritizing connections between economically disconnected areas

and adult education and training programs. CMAP should continue to analyze economic

outcomes for workers in traded industry clusters across demographic groups and communities

in the region. Implementation indicators for ON TO 2050 should also track this information in

order to help gauge the region’s progress on inclusive growth.

Link economically disconnected areas to jobs, training, and education

Minority residents, particularly African Americans, have longer commute times in the Chicago

region.

This trend illustrates the relative challenge of accessing existing job and training

resources in the region, as well as another drag on the productivity of human capital in

economically disconnected areas. For workers to advance economically, these areas need access

to high-quality transportation options that reliably connect them to opportunities for economic

CMAP ON TO 2050 snapshot, “Travel Trends: Understanding how our region moves,” 2017,

http://www.cmap.illinois.gov/onto2050/snapshot-reports/transportation-network/travel-trends

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mobility. For many, improved connections include ready access to career pathways, including

adult education and training programs and the available, attainable jobs to follow. Some trends

undermine this goal, such as job growth primarily at the urban edge and the movement of some

forms of employment to areas with limited transit access.

Transportation and land use

partners should prioritize strategies that connect all residents and particularly those in

economically disconnected areas with high-quality education and employment opportunity.

CMAP should take a leadership role in articulating the individual and regional growth benefits

of making such connections. Related research should identify job centers -- particularly for

traded clusters -- and work to determine their potential contributions to economic mobility.

Improved understanding of the commute options to job centers -- in terms of travel mode, time,

and reliability -- could help to inform continued enhancements to the transit and transportation

systems. CMAP and partners should create guidance for pursuing related local strategies in

zoning, development, and transportation funding. In programming decisions, CMAP should

identify additional criteria that rates investments based on their anticipated benefit to EDAs.

Improve workforce and educational data systems

In a more competitive economy, capturing opportunities for regional economic growth requires

well-informed analysis, diligent forecasting, and timely response to shifts in the labor market. In

a broad universe of education and workforce development programs, demand-driven strategies

depend on having the systems in place to evaluate the economic outcomes of participants and

assess diverse program elements. On a programmatic scale, educators and training providers

often lack the ability to gauge the efficacy or long-term value of their programs because of data

gaps on education and employment outcomes. On a regional scale, workforce funders often

lack necessary information to align the program elements and underutilized capacity of existing

programs. Numerous state and local systems capture data consistent with reporting

requirements under WIOA. However, these data systems remain disconnected, inconsistent

across service providers, and incomplete, often lacking sufficient information to coordinate

regional systems. For example, stakeholders describe particular difficulty maintaining adequate

data on sub-baccalaureate credential and adult basic education programs -- a substantial and

growing share of enrollment at the region’s community colleges.

Metropolitan Chicago should build on lessons learned from the development of the Illinois

Longitudinal Data System and Chicago Cook Workforce Partnership’s Career Connect. Both

systems aim to integrate information across numerous programs to improve services for job

seekers, employers, and public and private workforce funders. By connecting existing datasets,

educators and training providers would enhance their ability to adjust programming and

curricula based on the economic outcomes of participants. Additional metrics that link

Elizabeth Kneebone and Natalie Holmes, “The growing distance between people and jobs in metropolitan

America,” Brookings Institution (2015), https://www.brookings.edu/research/the-growing-distance-between-people-

and-jobs-in-metropolitan-america/.

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programs to business performance could track such indicators as time to job placement, speed

to job promotion, continued employment, income levels, the cost of program recruitment and

training, or employer productivity and quality outcomes. These metrics would help to show

potential employers and trainees alike that their investment in time and effort will pay off with

personal and financial well-being. Likewise, improved information and data systems would

support efforts to better connect regional economic development priorities, sector-based

strategies, and the capacity of programs. Improvements could bolster the resilience and

responsiveness of the education and workforce development systems. The region should

identify appropriate opportunities to address gaps, scale up, and leverage data to inform

decision-making. Robust, comprehensive sources of data and improved evidence on workforce

development programs would enable policymakers to make necessary reforms and investments

to offerings that provide pathways to upward mobility.

Enhance coordination between industry and the workforce development system

For many workers in the Chicago region, an accelerating pace of change could mean higher

training requirements for fewer middle-skill, middle-wage jobs in occupations dramatically

different from those of the past. A high quality talent pool will remain an essential regional

asset for retaining and attracting economic growth. To meet these needs, educational and

training providers will need to develop better means for sharing information and collaborating

with industry regarding both what the labor supply currently offers and where the labor supply

can be enhanced. Broad, meaningful industry engagement helps to provide the workforce

development system with real-time signals on employers’ needs and training opportunities. In

turn, education and training programs can better prepare participants to solve problems

adeptly, adapt to new technologies, and operate in the evolving contexts that employers face.

Educators, workforce development providers, and industry should develop strategies to

enhance coordination. Efforts to partner with industries and design effective solutions could

take numerous forms. For example, cluster initiatives that integrate workforce and economic

development strategies can focus attention on the needs of multiple employers via cluster-

specific action. Regional examples to build on include the Chicago Metro Metals Consortium

and recently established Chicagoland Food and Beverage Network. Effective partnerships can

inform education and training providers, identify or better articulate pathways for career

development, and build recruitment pipelines for employers. Enhanced coordination can also

ensure that workforce partners provide in-demand skills, and where appropriate, adopt

industry-recognized credentials and certifications that provide a clear signal that their students

and trainees are work-ready.

The region’s Workforce Investment Boards (WIBs) have set national best practices and can be

key implementers for engaging industries. With the implementation of WIOA, employers have

multiple specific ways to participate in workforce investments. These include sharing

information with American Job Centers regarding job postings and leads, working with

education and training providers to identify needed skill competencies and qualifications, and

retaining job seekers in employment by articulating career pathways.

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Enhance coordination among community colleges

Today’s economy is increasingly driven by economic connections and information sharing,

requiring community colleges -- the linchpin to building a skilled workforce -- to re-evaluate the

State’s model for static district boundaries. Increasingly, community colleges are working

together to share data, develop programming, and better leverage their limited funding

resources. These efforts have been driven in part by a need to shorten the time to degree, infuse

remedial education with skills training, and provide flexibility for students to balance work and

school.

Community colleges are also working to share strategies and align program elements to smooth

often difficult transitions between education programs, while addressing deepening

remediation needs. Several non-traditional education strategies have already emerged as

community colleges and other institutions explore ways to offer students practical skills and

income today, as well as an understanding of conceptual principles for a longer-term career.

Integrating both practical skills and an understanding of fundamental concepts in work-based

learning provides students with the creativity and flexibility to be more competitive in the job

market. However, serious challenges exist to delivering these non-traditional training models.

Recent research has called the transferability and economic value of many certificate programs

into question.

The region’s community colleges -- in partnership with other education and training providers -

- should identify additional strategies to become more responsive to the region’s changing

workforce needs. These strategies may include opportunities to rationalize and coordinate

specific educational programs across multiple districts. In particular, ongoing regional efforts to

identify or better articulate sector-based career pathways require improved coordination across

community colleges. Ongoing implementation of WIOA may provide a basis for aligning the

community colleges with the broader public workforce system. A primary focus could be how

to best align the region’s many institutions, programs, and services with regional economic

development goals. In support of these efforts, CMAP should continue to provide relevant

research and analysis of occupation trends, industry shifts, commute time and mode, or training

requirements. CMAP or other regional partners could also find opportunities to convene the

region’s community colleges and where appropriate, assist related planning or coordination.

Next steps

The policy framework and strategies presented in this report set the direction for workforce

development in ON TO 2050 and CMAP’s future work. These strategies will help to integrate

human capital considerations into many aspects of CMAP’s policy and planning work, such as

infill development, municipal capacity, transportation, inclusive growth, housing choice,

Minaya et al. "Labor Market Trajectories for Community College Graduates."

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economic development, and innovation. This work most closely aligns with CMAP’s Inclusive

Growth strategy paper, relating to its recommendations to support both broader economic

growth and promote opportunities for upward economic mobility for low income and minority

residents. These recommendations were developed in conjunction with two closely related

strategy memos, Regional Economic Development and Innovative Capacity. Together, CMAP

expects their recommendations to inform the plan as well as future technical assistance projects,

transportation programming, policy updates, research products, and data sharing. ON TO 2050

is expected to likewise synthesize these strategies into a comprehensive vision for the region.

Regional partners are critical to successful implementation of many strategies. Further

discussions on the most effective ways to advance regional collaboration will be essential as the

agency develops and then implements ON TO 2050. The largest unanswered questions from

this paper -- how to address those topics for which CMAP should not take the lead – will

require continued work by staff in partnership with other organizations to hone both the

regional approach and CMAP’s role in that approach.