Back to Home

What is the STEM skills gap?

Part three of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

New York created close to 100,000 jobs between December 2015 and December 2016. Yet in many regions of the state the population is not growing.  (Population increases downstate and in the Capital Region/Hudson Valley, driven by the birth rate and immigration from foreign countries, are offset by upstate outmigration to other states.)  This means that employers who want to fill jobs are increasingly forced to select from the existing pool of potential workers. Nationally, the economy has added 11.6 million jobs since the recession bottomed out in 2010, and 99% of those have gone to workers with at least some college education, according to Anthony P. Carnevale and his team at Georgetown University’s Center on Education and the Workforce.  Since the recession hit in 2008, they found, there has been a net loss of 5.5 million jobs that required only a high school diploma.

STEM jobs, in particular, are growing at a faster rate than overall employment and require higher skill levels than do many jobs in retail, food service, and hospitality. Consistent with these trends, executives responding to a 2017 Public Policy Institute survey reported that health occupations and skilled production—both of which are STEM fields—are the categories in which they had the largest numbers of job openings in 2016.

As technology evolves, the skills that STEM employers seek are changing faster than our education system has traditionally been able to adapt to meet them.  Thus, the skills gap—a divide between the skills employers need and the skills workers possess—is a threat to New York’s competitiveness in the global economy.  Caught in the crunch, New York’s employers have taken the lead in investing in and partnering with education and training providers, in order to maximize the potential of workers in their own communities.

  • What kinds of institutions and programs are employers partnering with?
  • What do these partnerships look like in practice?
  • What are their main goals, and how successful are they?
  • What policy changes could make them even more successful?

Over the coming weeks, this blog series will describe how well-designed collaborative programs can take underperforming students, who might otherwise have dropped out of high school or required remedial classes in college, and get them back on track.  Working together, employers and educators are providing these students with the academic, technical, and professional skills and credentials they need to succeed in a STEM career.

Such programs are being replicated across New York State, but the funding needed to sustain them is not guaranteed, and they still serve only a fraction of the students and communities who could benefit.  If New York wants to maximize the economic future of its students and its businesses, creating model programs is not enough.  Policymakers, education leaders, and employers need to take the next step, using a data-driven approach to rethink and retool our entire education system with the goal of ensuring college- and career-readiness for all P-12 students, and completion of a degree or employer-recognized credential for all postsecondary students.  If it is willing to commit the necessary resources, New York has the opportunity to solidify its position as a leader—not just in designing and creating, but in scaling and sustaining innovative models that bring educators and employers together to meet the workforce needs of the 21st century.

Read part two of the series here.

The “Every Student Succeeds Act” offers New York a critical opportunity to focus K-12 accountability on college and career readiness

Part two of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

The priorities of our K-12 education system are not always in sync with economic opportunities—an insight repeatedly noted by the employers and STEM experts who participated in the Public Policy Institute’s 2017 research on the skills gap.  Not only do our schools sometimes funnel students toward courses and credentials that lack value outside the academy, the education establishment may also (albeit unintentionally) perpetuate the stigma associated with career-oriented courses and programs.

Whereas business people are accustomed to designing products and processes to satisfy the needs and wants of particular customers, and success is measured by the bottom line, our education system is more complex.  It must prepare students not only for academic success, but also to be ready to join the workforce, shoulder the responsibilities of citizenship, and live well-adjusted, fulfilling lives as members of their community.  To help ensure that they are preparing students in all of these areas, schools have to look not only at whether students are getting through their classes.  They also need to look beyond themselves to see how their alumni are doing when they get to the next level, whether it be higher education or the workforce.

Bruce Hamm, Director of Business Engagement at the Manufacturers Association of Central New York, underlines this point: “The metric for high school success is graduation.  They’re not asking are they going to be successful in college, they’re saying, ‘Let’s get them out of high school.’”  The same problem applies to post-secondary institutions. “The colleges are asking, ‘Is our enrollment good enough?” and they’re getting some pressure now to graduate people, but it’s not enough,” says Hamm.  “The question colleges are not asking is, ‘Are these kids getting jobs?’”  In other words, what gets measured gets done.  Currently, Hamm says, “you have a set of metrics that almost ensure that all of this is in silos.  You need people that are able to cross boundaries and start meaningful conversations—people in education that understand industry, educators that are willing to talk to each other as well as to the business community.”

Recent changes in federal law provide the business community with an unprecedented opportunity to ensure that schools are held accountable based on outcomes that are important to student success in today’s economy.  The bipartisan federal law that replaces No Child Left Behind, known as the Every Student Succeeds Act (ESSA), gives states flexibility to craft their own systems to hold schools accountable for student outcomes —most importantly, whether students are graduating college- and career-ready.  Right now, state leaders are making big decisions about what it means to be a successful school, what rate of academic progress is acceptable, and what to do when schools are not meeting our expectations.  By itself, a well-designed school accountability system cannot solve New York’s skills gap, but these decisions have significant implications for our employers, workforce, and economic competitiveness.

So how can employers and the business community make our voices heard? With support from the U.S. Chamber of Commerce Foundation, The Public Policy Institute and The Business Council of New York State have convened an unprecedented coalition of civil rights, education, parent, and business organizations to advocate for a strong accountability system that promotes college and career readiness for all New York students.

To ensure that college and career readiness is the main driver of school performance ratings and improvement strategies, New York State’s accountability system must:

  • Maintain high academic standards;
  • Ensure that schools are rated primarily based on academic outcomes (supplemented by early-warning indicators) that are closely linked with students’ ultimate success in college and the workplace;
  • Include measures of college and career readiness, designed with input from the business community.

Would your business or chamber be willing to host or participate in a regional meeting or testify at a public hearing on ESSA? Click here.

Read part one of the series here.

My views on the skills gap

Guest Author: David William Davis

I became involved in workforce development out of necessity, with a little help from both near (my 80-year-old father) and far (across the Atlantic Ocean).

One night in 2007, shortly after I had joined Simmons as President and COO, I was working late and called my dad looking for a bit of sympathy. Woe is me, skilled employees are retiring right and left, I can’t find any machine tool assemblers, computer numeric controlled (CNC) machinists, on and on. You can picture my Dad if you think of Wilford Brimley—kind of gruff, but a heart of gold. He was a successful manufacturing entrepreneur in Detroit selling CNC machine systems to BMW, Toyota, Fiat, Ford, all the big auto companies. Allowing you to sit back and complain was not his style. He listened for a bit, then simply said, “So, what did you do today about fixing the problem?” Later that night I tried the same sympathy ploy with my wife and got much the same reaction—but she added that I should already know the solution, using lessons learned from her home country, Germany.

Across the USA there is a skills shortage spanning a wide range of industries for such jobs as lab technicians, machinists, industrial maintenance technicians, automotive technicians, plumbers, and electricians. We have reached a point where key manufacturing technologies cannot be deployed, due to a lack of people to program, operate, and maintain computerized industrial equipment. Most of these jobs do not require a four-year degree at an expensive university. A two-year associate degree will do just fine, and it makes an excellent stepping stone to further education at the bachelor’s level if the student so desires.

When I first joined Simmons, the management team performed a SWOT analysis (examining our Strengths, Weaknesses, Opportunities and Threats), and the top weakness we identified was a workforce shortage, accompanied by a high rate of expected retirements. Another top weakness had to do with the company’s bestselling product, a special machine that customers drive their locomotives onto to re-profile the wheels—a process critical to maintaining safe, efficient train operations. The consumable tooling for this machine is analogous to razor blades in that it provides frequent, repeat sales revenue. Rather than control this supply chain, however, our company had long ago subcontracted the consumable tooling work to other suppliers.

Our top opportunities were essentially the flipside of these weaknesses.  Like us, our customers were experiencing the ‘gray tsunami’ and were suffering from bottlenecks caused by a lack of talent to operate and maintain key equipment. The opportunity was to respond to our customers’ dilemma by offering more comprehensive maintenance services utilizing our own labor.  As for the ‘razor blades’ for the re-profiling machine, bringing this work back in house would not only improve profitability but would also restore our company’s control over the design/manufacture process, thereby enabling us to provide a higher quality product more cost-effectively. But manufacturing these cutter bodies and blades required 5-axis computer-controlled machinery that would need to be purchased, programmed, operated, and maintained. We barely had enough machinists to handle the current workload, let alone venture into even more labor-intensive and complex products and services.

How to establish and maintain a continuous supply of talent?  To find the answer, I looked to Simmons’ sister companies in Germany. There, a centuries-old system, sustained by uninterrupted government investment, provides education, vocational skills, and job opportunities for young people. German industrial firms of all sizes and in a variety of precision engineering/manufacturing industries—from automotive to medical devices, aerospace to manufacturing equipment—provide ‘dual track’ apprenticeship slots, whereby students take classes at the local Berufsschule (vocational school) while simultaneously working at the company. This starts in the equivalent of 10th grade and, depending on the program, runs for 3-4 years. Mature, dependable, and well-educated students graduate into a full-time position. This system, combined with a culture driven to produce high-value, high-quality goods, allowed Germany to create the workforce pipeline that we were lacking at our upstate New York facility.

Inspired by this model, we contacted Professor David Larkin at Hudson Valley Community College’s Advanced Manufacturing Technology program and told him about our need for qualified personnel to operate the state-of-the-art 5-axis CNC machinery. Together, we developed a corporate sponsorship program at HVCC that works like this:  Each year, Simmons pays two students’ tuition on a sliding scale from 50 to 100 percent, depending on academic performance.  We provide them with part-time employment during the semester, full-time employment in the summer between their first and second year, and, upon graduation, a full-time job with another two years of on-the-job training. Over the past decade, we have sponsored 20 students with tremendous success, creating a ‘virtuous circle’ where well-skilled employees are always pushing the envelope, making our products better and better.

HVCC is looking to double the size of its Advanced Manufacturing program, and the demand for similar partnerships is growing. New York State and the federal government should jump on this opportunity and do all they can to fund successful employer-education partnerships—not only in the Capital Region, but throughout New York and the entire nation. In America, we talk about how our people are our greatest asset, but great assets require investment and maintenance. Germany walks the talk. Investing in us, our human capital, is the only way we will grow this economy sustainably while ensuring a wider group of our citizens participate in its benefits. Warren Buffett, America’s most famous billionaire investor, once said, “Invest in as much of yourself as you can. You are your own biggest asset by far.” Seems like perfect advice for our policymakers.

David William Davis, today’s guest author, is the President and COO of Simmons Machine Tool Corporation. To learn more about David, and SMT, please visit their website: http://smtgroup.com/.

Bridging the STEM skills gap: Employer/educator collaboration in New York

Part one of an ongoing series based on our recent PPI report: Bridging the STEM skills gap:

Employer/educator collaboration in New York

The term new collar was popularized, if not invented, by IBM CEO Ginni Rometty to refer to the technology “jobs of the future … that can be done without a four-year college degree.” This post launches a blog series that will look at the challenges our state’s employers face in hiring skilled “new collar” workers in science, technology, engineering, and math (STEM) and showcase how some are addressing those challenges through innovative partnerships with education programs and institutions.

As the basis for this project, in December 2016 and January 2017 The Public Policy Institute of New York State conducted a survey of more than 100 executives familiar with their company’s workforce development needs and practices, followed by interviews with STEM thought leaders. Our goal was to gather data on employer skills needs in order to inform the decision-making of businesses and policymakers as they develop strategies to strengthen New York’s workforce.

Much has changed in New York’s economy over the past decade—recession, recovery, demographic and technological shifts, changes in education and tax policies—but The Public Policy Institute’s employer surveys show that talent shortages are an ongoing problem.

stem--quality-workforce
Sources: PPI Manufacturing Report Survey (2010); PPI Workforce Development Survey (2014)

We would like to thank all the executives who have participated in these surveys over the years, whether on the record or anonymously, for their valuable insights. Which regions of the state are experiencing the most difficulty filling jobs? Which STEM jobs are projected to have shortages over the coming decade? What skills and credentials are hardest to find? What are the top reasons cited by employers for investing in education programs?  What steps should New York’s policymakers take to address the skills gap? Join me over the coming weeks as we explore these important questions facing New York’s economy.

Op-Ed on Workers’ Comp

Ten years ago business and labor got together on what was announced as an historic update to our state’s costly and woefully outdated workers’ compensation system. While significant reforms were made then, a decade’s worth of hindsight has shown that our comp system remains expensive, slow, a costly burden on employers and ill-equipped at serving injured workers. In short, comp is in crisis. With costs reaching more than $10 billion per year, and municipalities shouldering an increasing financial burden, the time to reform comp has come again.

Thankfully, earnest and meaningful discussions are occurring among the interested parties and there is a real chance we could see something done as part of this year’s budget. We believe that significant cost savings can be achieved without impacting wage replacement or medical care for injured workers. In fact, our recommendations would ensure that the most severely injured employees receive the compensation they deserve. Our aim is to fix a system that relies on outdated impairment guidelines as the basis for issuing high payments to employees who are missing little or no time from their jobs. Meanwhile, severely injured workers are at the mercy of a system that stretches out hearings for months and final judgement for years.

The facts are clear; ninety percent of upstate business leaders want to see real, meaningful changes to the workers’ comp system, lawmakers from both sides of the aisle and from both houses are pushing for reform, and all sides recognize changes need to be made.

We’re proud to be a part of a growing coalition made up of more than 200 municipal groups, business organizations and other trade associations and businesses calling for commonsense reforms that will put New York more in line with our fellow states and make our state more competitive.

Reforming workers’ compensation and developing a better system that protects injured workers, while eliminating, outdated, and unnecessary cost drivers, will be a boon for New York State and help spur job creation, foster economic development, and lower property taxes. We urge inclusion of these cost-saving measures in this year’s final enacted budget.

Chief Judge retains state’s commitment to Commercial Division

Regular readers of this space will know The Business Council is a big fan of the Commercial Division of the state court system. For a primer on the Commercial Division, please revisit our blog post from February of last year.

At the time of our previous post, the new Chief Judge of New York State, Janet DiFiore, had just been confirmed to the position. Well, we are happy to report that over a year into her tenure, Chief Judge DiFiore has not only retained the state court system’s commitment to the Commercial Division, she has enhanced it.

Just read these quotes from Chief Judge DiFiore in a recent update to the Commercial Division video highlighted in the link above:

  • “New York State is the center of finance and commerce for the entire country, and even much of the globe, and along with that world class status comes a world class court — the Commercial Division of the New York State Supreme Court…The Commercial Division is a model for the way we want all of our courts, civil and criminal, to function.”
  • “The goal and mission throughout our court system is excellence.  It is vitally important for New York to maintain a cost-effective and consistent forum for complex business litigation.”
  • “The Commercial Division is a model for the nation.  A forum comprised of dedicated, informed judges who are provided with the resources to handle complex business disputes efficiently, effectively, consistently, and above all, fairly.  I’m committed to ensuring that the Commercial Division remains a crown jewel in the New York State Court System.”

The video is available on several sites, including the court system’s YouTube channel. A full transcript is available on the court system’s website.

Hammond gets it right

The Empire Center’s Bill Hammond has a terrific OpEd in today’s NY Post that echoes a message we’ve been saying for years: mainly, that New York has a problem with health taxes. From the OpEd:

“The habit hooked the state government 20 years ago this month, when the Health Care Reform Act took effect…

Over the 12 years from 2000 through 2011, lawmakers either hiked the HCRA taxes or created new ones 14 times — causing annual receipts to almost triple. The addiction had taken hold.

Including the nation’s heaviest state tax on cigarettes, HCRA now brings in $5.5 billion per year, making it the third-largest tax in the nation’s highest-taxed state.

Insidiously, the surcharges on health insurance are collected in ways that hide them from public view. Yet they add as much as 6.2 percent to a typical New York City resident’s insurance costs, compounding the pain of high premiums and deductibles.

One of the surcharges, known as the “covered lives assessment,” varies wildly from one part of the state to another. In 2016, it ranged from $10.24 per year in the Utica-Watertown region to $202.82 in New York City, a difference of 1,880 percent.”

The OpEd goes on from there, and we encourage to read it in full: http://nypost.com/2017/01/12/new-york-is-addicted-to-health-taxes/.

The Business Council will release our own legislative agenda next week, and you can be sure we will have more to say on HCRA when we do.

Gordon speaks out on Indian Point closure

Marsha Gordon, president and CEO of The Business Council of Westchester, and member of our board, wrote an excellent OpEd in the Journal News which highlights the impact of the impending closure of Indian Point Energy Center and recognizes the plant’s owner, Entergy, for their significant contributions to the community.

From the OpEd:

“As we have long stated, the power generated at Indian Point has played a direct role in stabilizing electricity costs in Westchester and the State of New York.  We have repeatedly called for the plants to be relicensed, a process that has been unnecessarily dragged out for 15 years and counting.  We are disappointed that this lack of action, coupled with the related massive legal costs, has contributed to the decision to shut down the facility.

We recognize that for some members of the community and a number of elected officials, the announcement is good news. Unfortunately, the shutdown poses an entirely new set of questions with no certain answers, including the loss of nearly 1,000 high-paying private-sector jobs and massive tax losses to the local community and school district.

Gov. Cuomo has repeatedly called for the plant’s closure.  We wait to learn how he intends to deal with the prospect of increased electric rates, the reliability of electric supply for Westchester, the Hudson Valley region and New York City, and the myriad of environmental and other issues the shutdown inevitably will bring.

We thank Entergy for its generosity and support of countless community groups, non-profit organizations and families across the area.  In short, Entergy has consistently displayed the best of corporate citizenship.”

We whole-heartedly agree with the sentiments expressed by Ms. Gordon. Entergy is a longtime and valued member of our own organization, and we look forward to continuing that relationship.

In response to news of the closure, Entergy sent the following message to shareholders, we encourage you to click the link and read it: http://www.bcnys.org/inside/energy/2017/Entergy-Message-to-Stakeholders-Indian-Point.pdf.

The story of Richard Katzman

For those who are unaware, or simply don’t remember, Richard Katzman was the CEO of Kaz Inc., once a major Columbia County employer. Way back in 2005 Richard Katzman–in a fit of extreme anti-development NIMBY-ism that’s become all too common– cheered when a plan to create a $300 million cement plant in Greenport was blocked by New York’s secretary of state, Randy Daniels. At the time, The Albany Business Review quoted Mr. Katzman as saying he was “delighted” by the decision. Mr. Katzman went on to say, “”My feeling and the feeling of other business people in the community is that this project was so out of scale with the existing mix of businesses and industries in the area that it would seriously hurt the quality of life and therefore hurt all our businesses.”

Mr. Katzman’s joy became all the more ironic when just three years later he announced his company was shutting down it’s manufacturing in Hudson, eliminating 300 jobs along the way. In announcing the closure, Mr. Katzman’s “delight” went away, instead he said this was a “hard decision” and “we’re not the bad guys here.”  To add insult to injury, press reports at the time noted that Kaz’ manufacturing activity would be taken over by a Spokane, Washington-based business that “does the majority of its manufacturing in Mexico.”

So, why are we bringing this up now? Well, we couldn’t help but notice that incoming Senate Minority Leader Chuck Schumer held a news conference in Hudson touting a new development plan for the still vacant former Kaz Inc. site. That’s right, nearly a decade later, Mr. Kaz’s property that he was at one time “delighted” to protect, has been left to rot since he moved on to greener pastures. Unfortunately, stories like these are all too common in New York State.

IBM CEO urges focus on “new collar” jobs

Ginni Rommety, the CEO of IBM (a member of The Business Council) is out with a new opinion piece in the USA Today urging U.S. policy makers to focus on policy decisions that will help prepare today’s youth for tomorrow’s jobs. In the piece, which you can read in full here, Ms. Rometty specifically cites the P-TECH model as one to follow. We here at The Business Council have made no secret of our affinity for this program. If you’re unfamiliar, here is Ms. Rommety’s decription:

“But in many other cases, new collar jobs may not require a traditional college degree. In fact, at a number of IBM’s locations spread across the United States, as many as one-third of employees don’t have a four-year degree. What matters most is that these employees – with jobs such as cloud computing technicians and services delivery specialists – have relevant skills, often obtained through vocational training.

Indeed, skills matter for all of these new positions, even if they are not always acquired in traditional ways. That is why IBM designed a new educational model that many other companies have embraced – six-year public high schools combining a relevant traditional curriculum with necessary skills from community colleges, mentoring and real-world job experience. The first of these schools – called Pathways in Technology Early College High School, or P-TECH – opened five years ago in Brooklyn. It has achieved graduation rates and successful job placement that rival elite private schools, with 35% of students from the first class graduating one to two years ahead of schedule with both high school diplomas and two-year college degrees.

There will soon be 100 schools of this kind. Governors and mayors from across the political spectrum have become champions for this new approach, and at IBM, we have committed to work with states to open at least 20 more P-TECH schools in the next year.”

Ms. Rommety closes by saying that the onus should not fall on lawmakers alone. It is incumbent on stakeholders from across the public and private spectrum to work on developing curriculum and strategies that harness the potential of these “new collar” jobs and ensure our children and grandchildren acquire the skills necessary to fill these needs