Gov. Kate Brown started pitching her $200 million workforce package to legislators this week, sending staff to committee meetings to sell the idea of using higher-than-expected revenue for grants and subsidies to get more people working.
Her team faced skepticism about the need and who would benefit.
Lawmakers will get an updated look at state finances in early February, but their most recent update from November estimated that the state will receive $700 million more than budgeted in tax revenue during the current two-year budget cycle. Brown wants to use a portion of that money, as well as federal money from the American Rescue Plan Act, to get more people of color working in health care, manufacturing and construction.
Jennifer Purcell, Brown’s workforce policy adviser, told a House committee that Oregon employers desperately need more workers. It’s a problem that predated the Covid pandemic and has only worsened, she said.
After unemployment skyrocketed in the early days of the pandemic, the state added more than 100,000 jobs in 2021 – restoring four out of every five jobs lost in the pandemic. But job vacancies are the highest they’ve been since the state began collecting data in 2013, with roughly 107,000 unfilled jobs, Purcell said.
“The data show that we still have some workers sitting on the sidelines due to Covid-related reasons, but that number is small and growing smaller,” she said. “The real issues existed before Covid: an aging workforce and a lack of skilled and experienced applicants.”
The governor’s solution, crafted last fall by her Racial Justice Council, would pay $95 million in direct stipends to Oregonians participating in apprenticeships, or to subsidize other costs, like child care, housing and transportation, for people learning new skills.
It also would give $35 million to local workforce boards, $17 million for career programs at community colleges and $20 million for apprenticeship programs, and create a new pilot program with $10 million for local community-based organizations to hire employees who can help Oregonians navigate public benefits available to them.
Patsy Richards, who co-chaired the group that developed the plan, told lawmakers they need to be prepared for a complete exodus of Baby Boomers from the workforce. The youngest boomers turn 58 this year, and millennials will make up 75% of the workforce by 2030, she said. But because other generations are smaller than boomers, there aren’t enough workers to fill all the jobs coming open, she said.
Richards, who runs an apprenticeship program for certified nursing assistants, said the state needs to make sure its investments in workforce training actually help the people the state intends to help. For instance, she said, a government subsidy that covers half the cost of child care doesn’t help if the parent can’t afford the other half.
There are also obstacles that people might not recognize at first, Richards said. One member of her apprenticeship program, a retired veteran who wanted to work in health care because of the pandemic, had threadbare scrubs, and it wasn’t until she saw him that she realized the cost of scrubs could be prohibitive.
“We have given a lot of money to help a lot of people, but when it’s all said and done and we go back and we look at it, the same people are struggling,” she said.
Purcell said the group picked health care, construction and manufacturing because those three fields provide decent wages and all three will need more skilled workers. The health care industry faces the twin problems of pandemic-induced burnout and an aging population that needs more care, manufacturing requires constant retraining as technology evolves and many construction workers are aging out of the workforce while the industry is booming, she said.
Lawmakers from both parties responded with skepticism.
Rep. Jami Cate, a Republican farmer from Lebanon, said she wasn’t convinced that the problem facing Oregon was the lack of a skilled workforce. Employers in her district are ready to train employees but aren’t getting applicants, she said.
“In my communities, it seems very prevalent that we have actually over-educated our workforce for the jobs that are available, and saddled them with so much education debt that now it’s making all of the jobs that are available uneconomic for them,” she said. “If we have $200 million available, how do we best make that serve the needs? To me, a lot of what was said is just not what I’m seeing as a need in my community.”
Rep. John Lively, the Springfield Democrat who chairs the House Economic Recovery and Prosperity Committee, said he wasn’t sure the proposal would move forward during the Legislature’s February session. Lawmakers have just 35 days in session, beginning Feb. 1, and the governor’s spending plan is a complex proposal, he said.
Before signing off on the new spending, he said lawmakers will want to know who would receive the money, whether people are going to be available to be retrained quickly enough to meet existing labor shortages and whether the state will end up enticing existing workers to quit their jobs or move, causing new issues.
“There’s complex issues there that I think will be part of this conversation that we need to have in a session, and the unfortunate thing is this is a short session, so I don’t know exactly the path forward,” he said.