QuikTrip and Costco show that companies can thrive with better pay, benefits, and schedules for workers. Also, how wage boards can lift up the care economy, Metallica’s expanding scholars’ program for the skilled trades, and essays on how workforce programs can compete with staffing agencies and on why we need better benchmarks in workforce and credentialing tech. (Subscribe here.)

The Hidden Costs of Bad Jobs

Education and job training can only go so far in helping workers without college degrees escape low-wage, dead-end jobs. They would need to be able to land a better one, which is a tall order when 60% of U.S. workers lack a quality job and 42M earn less than $20 an hour.

Maureen Conway has been beating this drum for years. As the executive director of the Aspen Institute’s Economic Opportunities Program, she argues that workforce development policy should focus more on fixing work.

“They need to start reframing what the problem is,” she says.

For example, Conway says, labor market data too often is used just to identify the good jobs in a region. That can lead workforce organizations to compete to place too many people into too few good jobs.

She says a better approach is to measure job quality to create a foundation for coordinated strategies to increase the number of good jobs and to broaden access to those roles. A growing number of local governments and philanthropies are moving in that direction, she says.

Employers themselves also have tools for helping frontline workers, including employee ownership and wealth-sharing, comprehensive benefits, and predictable work schedules.

“It’s not that businesses can’t do things,” says Conway. “There’s nothing to teach them how to do it.”

Raising wages obviously comes with a cost. But it can help the bottom line by reducing high turnover rates among frontline employees. Hiring new workers tends to cost more than paying more to retain them.

Yet investors often freak out when companies spend big on raises. Walmart’s share price famously tanked a decade ago after it announced a $2.7B investment in higher wages, training programs, and clearer scheduling.

“They got pummeled for doing this,” says Conway. But in the long run, customer satisfaction improved, employee turnover dropped, and Walmart’s market value hit record highs.

A big part of the problem is short-term thinking and the investor focus on quarterly profits, a particular challenge for publicly traded companies. Likewise, it can be hard to quantify the revenue drag from not paying and treating workers well.

“The cost of turnover is not an easy number to find in financial statements,” Conway says. “You cannot see the cost of bad jobs.”

QuikTrip is an example of a company that has thrived in part by investing in its frontline workers. Research by Zeynep Ton, a professor at MIT’s Sloan School of Management, has found a virtuous cycle at the convenience store chain, with a low turnover rate among its 30K employees, good training, high productivity, and strong financial returns. And while QuikTrip is privately held, Ton has written about similar results from Costco and other publicly traded companies.

The Higher Ambition Leadership Alliance is an executive peer network that seeks to help more companies follow the lead of businesses like Costco, and to deal with pushback from Wall Street.

Sharing the Burden: Low-paying care jobs pose a major challenge for colleges and workforce development systems. Society needs CNAs, home health aides, early childhood educators, and childcare workers. But those jobs often fail to pay a living wage.

Meanwhile, the feds and state governments increasingly are holding education and job-training programs accountable for graduating students into poverty.

“Colleges are under a lot of pressure to prepare people for those jobs—and there are always big shortages,” says Mary Alice McCarthy, senior director of New America’s Center on Education and Labor. “And now the colleges are under pressure to make sure those are also good-paying jobs. Which is impossible for them.”

McCarthy says community college leaders and workforce pros should take a closer look at wage-setting institutions, including wage boards, which can raise the floor for workers across an entire industry. No union is required, all workers are treated the same, and training providers can focus on what they do best.

For example, she points to a workforce standards board in Minnesota that recently set minimum wages for nursing home workers across the state. Washington State recently created a similar board for its childcare workforce.

Taxpayers typically pay slightly more with this solution, McCarthy says. “But it’s a shared burden,” she says. “As it should be.”

Conway stresses that pushing for economic mobility should be about both job quality and affordable, high-quality training programs. She praises the sectoral training provider Project Quest for its collaboration with businesses and industry associations on family-sustaining careers.

Community colleges should exercise their bargaining power with employers more often, Conway says. That call echoes a recent report from the Aspen Institute College Excellence Program and the Community College Research Center, which described how 10 community colleges have moved more students toward good jobs.

On the employer side of the equation, Conway says, many need a mindset shift to believe that success can be shared. That requires understanding the challenges their frontline employees face.

The Kicker: “You have managers and owners who just don’t understand the precarity of their workers’ lives,” she says.

Opinion

Hardcore Education

In 2019, the heavy metal band Metallica started an unusual workforce training program for the trades. The program initially focused on training the next generation of workers in the touring and concert industry—specifically the people who construct and deconstruct massive sets and stages every night and move the equipment across the country and the world. 

But in time, the band members realized they could do much more. Their nonprofit, All Within My Hands—a hopeful spin on a dark Metallica song of the same name—had already been providing disaster relief worldwide and combating hunger. They decided to add a third branch focusing on educating young people in the trades. 

“The band felt that the trades were being overlooked,” says Peter Delgrosso, the executive director of All Within My Hands. “With a lot of the fan base of Metallica being in the trades, it made a lot of sense.”

Today, the Metallica Scholars Initiative has more than 90 community college and trade school partners and serves thousands of students every year. Funding for first-time recipients is $75K, and the colleges largely choose how they spend the money, whether for equipment, tuition, or student support services. In subsequent years, the funding decreases and bottoms out at $15K.

Working with the American Association of Community Colleges, the initiative funds programs that respond to local demand, which means it’s grown beyond the trades, too, with funding for nursing, firefighting, air traffic control, and more. And the initiative this year launched its first international program with Capital City College Group in the U.K.

An independent study of the Metallica Scholars Initiative from the University of Southern California last year found that students were expected to earn a median wage more than eight times their upfront costs for the programs. 

On the Ground: SUNY Westchester Community College in the Hudson Valley region of New York was one of the first recipients of the Metallica funding and has used it to build out its advanced manufacturing program. Not all students in the program are Metallica Scholars, but the funding, combined with money from the SUNY Future of Work initiative, has made the program completely free for students other than a $25 registration fee. 

Jim Irvine, director of corporate and continuing professional education at the college, says the Metallica branding—complete with swag for the scholars—has helped bring in students.

“It’s become word of mouth, and we’ve had a lot of success,” Irvine says. “Some people have jobs and they want to advance their careers, but a lot of students come into the program without a job and they want to work with their hands. They like building and creating things.” 

Click over to read the full story. — By Colleen Connolly

The Real Deal

Open Tabs

AI-Driven Layoffs
Several states are moving toward requiring that humans be involved in decisions by businesses to use AI to hire and fire employees, Chris Marr reports for Bloomberg Law. Some states have passed laws addressing transparency disclosures, with California requiring human input. Likewise, Connecticut has begun requiring that employers filing an advance notice of layoffs must disclose whether the layoffs relate to AI or another technological change.

Vulnerable Workers
With core job functions of administrative workers potentially replaced by AI, women comprise 86% of 6M across the industry who are at risk and less likely to adapt, reports The New York Times in a video feature that includes interviews with women workers at an administrative professionals’ conference. “These back office administrative roles are the best nondegree roles for women coming out of high school,” researcher Molly Kinder told the newspaper.

Community College Budgets
The Minnesota State Colleges and Universities system is considering a plan to transfer money from its two-year colleges to help two financially unstable four-year universities, Cleo Krejci reports for MinnPost. St. Cloud State University and Bemidji State University are severely cash-strapped. But the proposal has been controversial, with at least one community college president saying it would be extremely challenging to manage the budget cut.

Dual Enrollment
By integrating college coursework into career-focused high school programs, college and K–12 partnerships can strengthen the transition from high school to college and engage more students in postsecondary education and training that prepares them for high-opportunity careers, finds the Community College Research Center. The new report includes case studies on career-connected dual enrollment from Texas, California, and other states.

Backing Solutions
The Workforce Innovation Now (WIN) Challenge announced awards totaling $60M for 18 solutions to help women thrive and build a better workplace for all. The initiative is led by Aspen Digital with support from Pivotal, a group of organizations founded by Melinda French Gates. Awardees include a project led by Coastal Enterprises to expand its rural childcare business lab, and to Break Through Tech, a nonprofit offering work-based learning.

Labor Market Intelligence
Industries of Ideas is seeking proposals for understanding how AI and other emerging technologies are changing jobs, hiring, and earnings in states. The project between three states and universities is funded by the National Science Foundation. It aims to produce forward-looking labor market intelligence and plans to expand to up to eight states. Organizers of the project are hosting a webinar later this month on expectations for the request-for-information responses.

I’m grateful for the reporting and opinion writing from Work Shift, which has kept the newsletter afloat as I’ve been on the road during a busy stretch. I’ll be leaning on it even more in coming weeks. If this newsletter was forwarded to you, subscribe here. —PF