Closing the Middle Skills Gap in Postsecondary Education

(Illustration by iStock/elenabs)

In 2023, what education and training do Americans need, beyond high school?

A four-year liberal arts program culminating in a bachelor's degree will likely continue to play a central role. At the same time, to salvage the American middle class, suck toxic resentment out of our politics, and build a more equitable economy, we must reimagine higher education, workforce training, and how taxpayers fund both. The current system saddles too many with debt, delivers good outcomes for too few, and skews opportunity away from people of color. It’s time to build a postsecondary and training system that delivers better outcomes, meets the demands of our economy, and keeps the American dream alive.

Understanding Our Ecosystem Challenges

Two converging crises bring us to this point.

First, spiking student debt has become unsustainable, tripling over the past 20 years and swelling the ranks of Americans paying for college without earning a degree. This, along with the paradigm shifts of the pandemic, has triggered a broader reassessment of higher education. A new poll shows that, for the first time, a clear majority of Americans (56 percent) doubt the value of a college degree, with skepticism especially high among younger respondents.

Second, over half of all US jobs are now “middle skill” positions, requiring more than a high school diploma but less than a four-year college degree. This includes millions of jobs in IT, health, the manufacturing and skilled trade sectors, and the army of electricians needed to fully embrace renewables. These jobs often pay wages sufficient to support a family with a single earner. And yet, just 18 percent of working-age Americans have actually earned credentials beyond a high school diploma but less than a full bachelor’s degree. This astounding misalignment leaves millions of critical jobs unfilled and millions of Americans missing opportunities for meaningful economic mobility. With a huge majority of college freshmen reporting they enrolled to secure a good job with good wages, our postsecondary system is failing at what its consumers have identified to be its most critical function.

In the face of these crises, how do we fill our gaping middle skills gap? Two-year associate degrees are one piece of this puzzle. But while some community colleges have pathways with a strong return on investment (ROI), barely 40 percent of Americans enrolled in a two-year associate program receive a degree in six years, and while more affordable than four-year institutions, community colleges are a significant driver of debt.

The other answer lies in what so many elected officials describe as “job training.” But the Workforce Innovation and Opportunity Act (WIOA), the flagship federal legislation governing job training, badly needs an update. A 2017 randomized evaluation across 28 sites found no detectable wage increases from WIOA-funded training programs. A new report released in March from Harvard’s Project on Workforce found median annual earnings of just $29,388 nine months after completing a WIOA-funded training program, implying America’s most consequential federal job-training apparatus leaves its median participant earning less than the majority of high school dropouts.

Some problems are glaring. Consider Job Corps, a network of 112 full-time vocational training residential centers serving teens and young adults, often disconnected from regional employers. Over six decades, the program has helped many, but the model is out of date. One participant described these 24-hour residential centers as “a little bit like prison.” A large randomized evaluation released in 2020 followed participants for 20 years and found that overall, the program did not improve wages, employment, or other outcomes. The Labor Department’s own inspector general recently concluded, “Job Corps could not demonstrate beneficial job training outcomes.” Yet at a cost of over $15,000 per student, WIOA devotes over $1.7 billion annually to Job Corps, four times what it spends nationally on training for adult and dislocated workers. 

WIOA’s challenges go deeper. For instance, medical assistants and nursing assistants, respectively WIOA’s most common and fourth most common career training pathways, can expect to earn less than $24,000 per year. The Harvard report finds commercial driver’s license programs, another common WIOA pathway, “pay above-average wages for workers without college degrees” but “have limited potential for upward mobility.”

The outcomes are bad, and the system also doesn’t function at scale. WIOA trains 221,000 adults and dislocated workers per year, less than one half of one percent of our approximately 55 million-worker middle skills gap. Based on two separate analyses from 2015 and 2023, less than a quarter of WIOA adult and dislocated worker funding actually goes to training services, while over half goes to workforce center staff and overhead.

Finally, WIOA’s outcomes are markedly worse for women and people of color. Indeed, much of our current postsecondary system consistently perpetuates racial disparities. We award bachelor degrees disproportionately to white students while loading up more students of color with debt. Meanwhile, community colleges are more likely to serve students of color, where they are less likely to attain a degree.

Like many entrenched systems, this one resists meaningful change. Members of Congress from both parties have repeatedly thwarted efforts to redirect Job Corps funding, likely aware of the facilities in their districts. The myriad of workforce centers, incumbent providers, and big-budget incumbent colleges all have strong incentives to protect the existing structure. Reformers, by contrast, are less organized and have a less concentrated stake in change.

Signs of Progress and Reasons for Hope

And yet, we can and must do better. A growing number of job-training pathways in the United States demonstrably do increase wages. Paid internships like Year Up, IT training programs like Per Scholas, vocational supports like Jewish Vocational Services, and skilled trade and health care pathways like Project Quest or the Wisconsin Regional Training Partnership have all been shown, through rigorous randomized evaluations, to significantly and sustainably increase earnings across races, ethnicities, and genders, all via affordable onramps to middle-skill jobs.

These programs differ, but they share common characteristics. Many are “sectoral,” focused on specific high-growth industries. They often combine “hard” skills with “softer” (or “more durable”) skills, like how to apply for a job, manage finances, and communicate well with colleagues. Most partner closely with regional employers and are usually far faster than college. Many sync with paid apprenticeships, so participants learn by doing and earn while they learn.

While many of these programs raise philanthropic capital to offer programming tuition-free, the true cost per learner ranges from about $8,000 to $20,000. This is less expensive than the cost of an associate’s degree, and dramatically less expensive than a four-year diploma, but also far more than the current average of $1,854 per learner training through WIOA’s adult and dislocated worker funding streams.

All told, the federal government spends $14 billion annually across WIOA and other job-training programs. Federal and state governments, combined, spend far more, over $110 billion annually, for higher education. If just a fraction of this amount were redirected toward effective middle skill pathways, we could upskill several million workers each year. Matching philanthropic and employer capital could accelerate that. We could churn out a generation of IT and health professionals, electricians, skilled laborers, and emergency responders, who could in turn confront our pressing cybersecurity, health, affordable housing, public safety, and climate change challenges. We might even blunt some of the rage non-college-educated voters feel about the status quo, which has fueled much that is wrong with contemporary American politics.

Imagine a modernized postsecondary sector in the United States. Every learner—from a high school senior sorting out their life plans, to an overstretched parent seeking flexible options, to a recently laid off employee—could access a user-friendly, easily navigable integrated system. A list of high-quality options, broken out by sector, could be ranked based on program cost, earnings, and a standardized ROI. Many would still pursue a liberal arts education, but greater transparency would mean more options. Some could opt for apprenticeships and short-term certificates at first to build up earnings, then “stack” these credentials to earn a college degree. Pell grants, WIOA, and many other public and private dollars could be commingled to support more seamless enrollment.

A Blueprint for Change

To realize this vision, we need dramatic action.

First, we must unlock wage-outcome data. We should empower learners to choose their own paths, but they cannot reasonably do that without apples-to-apples, user-friendly comparisons across postsecondary options. Our government knows how much Americans earn. Yet many colleges, most training providers, and virtually all learners are in the dark. Imagine, instead, a simple dashboard synced with W-2 wage data, clearly showing the ROI of different options. This is technologically straightforward, but governors, higher education officers, and agency heads must confront the tangle of bureaucratic and political challenges that stand in our way.

Second, as we obtain better data at scale on what works, we must redirect public dollars to follow results. Programs that show strong learner outcomes (while also meeting equity targets, proving they aren’t inflating their outcomes by selectively serving lower-risk clients) should be prioritized and generously funded.

We have templates at every level of government for what this might look like. In the last Congress, for example, Reps. Mikie Sherrill (D-N.J.) and David McKinley (R-W. Va.) introduced the bipartisan Expanding Pathways to Employment Act, legislation that would redirect hundreds of millions of dollars toward workforce programs shown to be effective based on rigorous evaluations while also helping smaller innovative approaches build evidence of effectiveness.

The Opportunity Now program, in my home state of Colorado, enabled by bipartisan state legislation, takes a similar state-level approach. An $85 million competitive grant program explicitly favors programs backed by strong evidence of learner impact, with strong employer partnerships and an equity focus, along with smaller seed grants to test innovation. Opportunity Now, however, is funded by one-time federal stimulus dollars. We need something permanent.

Congress should dramatically reform WIOA and other workforce development funding streams to move toward these goals. We should reallocate the $1.7 billion currently supporting Job Corps toward a new dedicated fund to scale training and postsecondary programs shown to work, along the lines of the above models. States should face consequential deadlines to move in this direction. WIOA training providers with strong externally validated learner outcomes should have fast-tracked funding processes, like a TSA precheck for evidence-based training.

Philanthropies, nonprofits, and businesses that share this vision should help build a strong, durable reform coalition. This means funding proven programs scaling to new communities, helping local models access wage outcomes data to prove their efficacy, and more boldly deploying dollars in support of advocacy and lobbying.

Meanwhile, local government need not wait. San Antonio voters recently approved a sales tax projected to raise over $150 million over four years to scale up evidence-based workforce training programs like Project Quest, a nationally renowned model incubated in that city with 11 years of wage impact data. Just last month, Denver City Council expanded a college affordability sales tax revenue stream to also include apprenticeships and shorter-term middle skills training programs supported by strong evidence. More state and local governments should follow. This in turn will help grow the coalition of local programs invested in a better federal approach.

Finally, we need new definitions for student success. America’s dysfunctional relationship to college and job training has become a driver of economic and racial inequality. A bachelor’s degree is not the promise it has long claimed to be for everyone. It’s time for the public sector to better underwrite a wider array of postsecondary models shown to lead to good jobs.

Read more stories by Roger Low.