The U.S. has a two-pronged labor market problem: a labor shortage and a skills gap. If every unemployed individual in the U.S. found a job right now, there would still be 4 million open jobs. Furthermore, a National Federation of Independent Business survey found that 54 percent of business owners struggle to hire qualified workers. As it becomes increasingly evident that schools are not providing students with the requisite skills to succeed in the labor market, the root of the persistent labor shortage and skills gap in the U.S. can be traced back to the K-12 education system.
However, career and technical education (CTE) programs have shown great promise in addressing this issue. The Department of Education (ED) notes that students who focus on CTE courses in high school have higher median annual earnings, graduation rates, and employment rates than non-CTE students. Despite the proven efficacy of CTE programs, inadequate federal investment remains a primary barrier to implementing successful programs nationwide.
It’s essential to adopt new funding methods and policies to mitigate this barrier, expand CTE programs in K-12 schools, and encourage widespread adoption of these programs to bridge the skills gap and foster student success. Like most education programs, CTE programs are primarily funded by state and local resources. Accordingly, increasing the implementation rates will be predicated on encouraging outside funding sources, such as private-sector partnerships and philanthropic organizations, to bridge the gap in federal funding and support the growth of CTE programs.
Additionally, refining the federal funding model to focus on equity grants and improved metrics, such as the number of program completers and certifications issued by a school district, can help incentivize schools to implement and expand CTE programs. Furthermore, reducing the stigma around CTE programs and promoting their value as viable pathways to success will encourage more students to participate and benefit from these opportunities, ultimately contributing to a better-prepared workforce and a more robust economy.
While 77 percent of high school students knowingly or unknowingly participate in a CTE course, only 37 percent are CTE concentrators taking two or more courses in a single program. Yet, evidence shows that CTE concentrators go on to graduate high school, enroll in college, and earn higher salaries on average than non-CTE concentrators.
Perkins V, the primary federal legislation that provides funding for CTE programs, appropriated only $1.38 billion to states for the 2022-2023 school year. However, CTE programs are estimated to be 20-40 percent higher than traditional instructional programs. The one component of Perkins V that incentivizes states to implement innovative CTE programs through equity grants, “Perkins I&M,” disbursed only $1.4 million (0.1 percent of total Perkins V funding) in 2021.
With the goal of modernizing CTE to better prepare students for success in the workforce, Perkins I&M embodies the ideal role of the federal government concerning CTE. To maximize the potential of CTE, the federal government should significantly expand its equity grant approach to ensure states can implement successful programs at scale.
Public-private partnerships are essential to bridging the gap in terms of federal government support for local K-12 districts. In 2016, the Department of Education awarded Social Finance and Jobs for the Future a five-year, $2 million grant to help implement high-quality CTE opportunities for underrepresented youth. The “Pay for Success (PFS) financing model illuminated the importance of integrating public financing with philanthropic dollars.
The nature of public education financing is primarily based on per-public formulas, as opposed to outcome measures. Unfortunately, CTE outcomes (long-term wages and employment rates) are impossible to evaluate in the near term. To address this, Social Finance focused on interim measures, such as CTE completions and credential attainment, to demonstrate program success in an abbreviated time period.
In addition to financing difficulties, the stigma behind how CTE is perceived remains a primary barrier to advancing access. Antiquated stereotypes such as “it’s for kids who can’t get into college” or “it’s only meant for struggling students” dictate how districts prioritize students to enroll and drive budget allocation decisions. In turn, such stereotypes undermine the ability of CTE programs to maximize their inherent potential.
The federal government should introduce financial incentives to encourage public-private partnerships supporting CTE programs. This can be achieved by offering a matching program, where federal funding is provided to schools based on the amount of private-sector investment they secure for their CTE programs. Furthermore, the government can offer tax benefits to companies that contribute to developing and expanding CTE programs, creating a mutually beneficial relationship between schools and industry partners. These incentives will not only facilitate public-private partnerships but also ensure that CTE programs remain relevant and aligned with the needs of the labor market.
Addressing the labor shortage and skills gap in the U.S. starts with transforming our K-12 education system. By expanding access to CTE programs, we can equip students with the skills they need to succeed in the workforce and contribute to a thriving economy. This will require increased federal investment, targeted funding models, and the removal of the stigma surrounding CTE programs. Ultimately, through these efforts, we can empower our youth, strengthen the American workforce, and secure a brighter future for future generations.
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