[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
JOBS AND OPPORTUNITY:
LOCAL PERSPECTIVES ON THE JOBS GAP
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HUMAN RESOURCES
OF THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
APRIL 12, 2018
__________
Serial No. 115-HR05
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
33-809 WASHINGTON : 2019
-----------------------------------------------------------------------------------
COMMITTEE ON WAYS AND MEANS
KEVIN BRADY, Texas, Chairman
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
DEVIN NUNES, California SANDER M. LEVIN, Michigan
DAVID G. REICHERT, Washington JOHN LEWIS, Georgia
PETER J. ROSKAM, Illinois LLOYD DOGGETT, Texas
VERN BUCHANAN, Florida MIKE THOMPSON, California
ADRIAN SMITH, Nebraska JOHN B. LARSON, Connecticut
LYNN JENKINS, Kansas EARL BLUMENAUER, Oregon
ERIK PAULSEN, Minnesota RON KIND, Wisconsin
KENNY MARCHANT, Texas BILL PASCRELL, JR., New Jersey
DIANE BLACK, Tennessee JOSEPH CROWLEY, New York
TOM REED, New York DANNY DAVIS, Illinois
MIKE KELLY, Pennsylvania LINDA SANCHEZ, California
JIM RENACCI, Ohio BRIAN HIGGINS, New York
PAT MEEHAN, Pennsylvania TERRI SEWELL, Alabama
KRISTI NOEM, South Dakota SUZAN DELBENE, Washington
GEORGE HOLDING, North Carolina JUDY CHU, California
JASON SMITH, Missouri
TOM RICE, South Carolina
DAVID SCHWEIKERT, Arizona
JACKIE WALORSKI, Indiana
CARLOS CURBELO, Florida
MIKE BISHOP, Michigan
DARIN LAHOOD, Illinois
Gary Andres, Staff Director
Brandon Casey, Minority Chief Counsel
______
SUBCOMMITTEE ON HUMAN RESOURCES
ADRIAN SMITH, Nebraska, Chairman
JASON SMITH, Missouri DANNY DAVIS, Illinois
JACKIE WALORSKI, Indiana LLOYD DOGGETT, Texas
CARLOS CURBELO, Florida TERRI SEWELL, Alabama
MIKE BISHOP, Michigan JUDY CHU, California
DAVID G. REICHERT, Washington
TOM REED, New York
C O N T E N T S
__________
Page
Advisory of April 12, 2018, announcing the hearing............... 2
WITNESSES
Connie Wilhelm, Chief Executive Officer, Home Builders
Association of Central Arizona................................. 8
Toby Thomas, President, Austin Electric Services, LLC............ 13
Brian Potaczek, Electrician, Austin Electric Services, LLC....... 17
Kelly Tessitore, Vice President of Advancement, Jewish Vocational
Service........................................................ 20
Heather Terenzio, Chief Executive Officer, Techtonic Group, LLC.. 26
Tony Girifalco, Executive Vice President, Delaware Valley
Industrial Resource Center..................................... 50
Justin Welner, Vice President for Human Resources, Spirit
AeroSystems.................................................... 57
Andrew Wells, Director, Workforce Development Center, Chicago
Urban League................................................... 64
Peter Barrett, Senior Vice President, Marketing and Corporate
Development, Smoker Craft, Incorporated........................ 68
JOBS AND OPPORTUNITY:
LOCAL PERSPECTIVES ON THE JOBS GAP
----------
THURSDAY, APRIL 12, 2018
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:02 p.m., in
Room 1100, Longworth House Office Building, Hon. Adrian Smith
[Chairman of the Subcommittee] presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Thursday, April 12, 2018
HR-05
Chairman Smith Announces Human Resources
Subcommittee Hearing on Jobs and Opportunity:
Local Perspectives on the Jobs Gap
House Ways and Means Human Resources Subcommittee Chairman Adrian
Smith (R-NE), announced today that the Subcommittee will hold a hearing
entitled ``Jobs and Opportunity: Local Perspectives on the Jobs Gap''
on Thursday, April 12, at 2:00 p.m. in room 1100 of the Longworth House
Office Building. This hearing will highlight employers' demand for
workers and the need to get more Americans into the labor force.
In view of the limited time to hear witnesses, oral testimony at
this hearing will be from invited witnesses only. However, any
individual or organization may submit a written statement for
consideration by the Committee and for inclusion in the printed record
of the hearing.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit
written comments for the hearing record must follow the appropriate
link on the hearing page of the Committee website and complete the
informational forms. From the Committee homepage, http://
waysandmeans.house.gov, select ``Hearings.'' Select the hearing for
which you would like to make a submission, and click on the link
entitled, ``Click here to provide a submission for the record.'' Once
you have followed the online instructions, submit all requested
information. ATTACH your submission as a Word document, in compliance
with the formatting requirements listed below, by the close of business
on Thursday, April 26, 2018. For questions, or if you encounter
technical problems, please call (202) 225-3625.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the
official hearing record. As always, submissions will be included in the
record according to the discretion of the Committee. The Committee will
not alter the content of your submission, but we reserve the right to
format it according to our guidelines. Any submission provided to the
Committee by a witness, any materials submitted for the printed record,
and any written comments in response to a request for written comments
must conform to the guidelines listed below. Any submission not in
compliance with these guidelines will not be printed, but will be
maintained in the Committee files for review and use by the Committee.
All submissions and supplementary materials must be submitted in a
single document via email, provided in Word format and must not exceed
a total of 10 pages. Witnesses and submitters are advised that the
Committee relies on electronic submissions for printing the official
hearing record.
All submissions must include a list of all clients, persons and/or
organizations on whose behalf the witness appears. The name, company,
address, telephone, and fax numbers of each witness must be included in
the body of the email. Please exclude any personal identifiable
information in the attached submission.
Failure to follow the formatting requirements may result in the
exclusion of a submission. All submissions for the record are final.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four
business days' notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
Note: All Committee advisories and news releases are available at
http://www.waysandmeans.house.gov/
Chairman SMITH. The Subcommittee will come to order. Good
afternoon, and welcome to the first in an important series of
hearings the Human Resources Subcommittee will be holding to
focus on jobs and opportunity.
The purpose of these hearings is to demonstrate how as our
economy continues to strengthen following the enactment of the
Tax Cuts and Jobs Act, employers' demand for workers is growing
and our Human Services programs have a role in supporting the
next wave of workers needed to continue this economic growth.
On Tuesday, the President signed an Executive Order
directing agencies to seek new opportunities to reorient our
welfare system toward economic opportunity. I agree with the
President on this matter and appreciate his bringing the right
tone at the right time to this conversation.
There is a chart here. During these hearings, we are going
to be talking a lot about the jobs gap, the difference between
employers' demand for workers, shown as job openings in the
chart, and the declining number of individuals in the
workforce, shown as the labor force participation rate.
The space in the middle separating these two lines is what
we are calling the jobs gap. Addressing the jobs gap is about
accessing economic growth and opportunity for those on the
sidelines of the American workforce. This is particularly
important given the healthy labor market and low unemployment
rate we are seeing as a result of businesses creating jobs and
expanding after the enactment of the new tax law.
[The submission for the Record of Hon. Adrian Smith
follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Just this week, The Washington Post editorial board
highlighted this issue by saying, ``American employers in an
array of industries, manufacturing, agriculture, trucking, home
building, energy, food service, retail, and others are warning
a long brewing labor shortage is reaching crisis proportions.''
The Wall Street Journal reported if every last jobless
citizen in the 12 Midwestern States filled an open job in the
region, 180,000 positions would still be left unfilled.
What do employers and job openings have to do with the
programs under the Human Resources Subcommittee? A lot,
actually. We know when individuals and parents are working
full-time, the poverty rate drops to just 3 percent.
We know when workers are matched to employers with the
supports provided by programs under the Subcommittee, such as
child care, case management, and transportation, that job
opportunities and the American dream can become a reality for
more Americans.
Last year, the Subcommittee set the stage for this
discussion today. Those hearings were about people on the
sidelines.
We heard from experts who examine the declining
unemployment of working-age men who told us there are more than
7 million men in America not working or looking for work.
We also heard about the troubling trend we are seeing among
our youth and young adults, those 16 to 24 years old. We
learned that there are 5.5 million not in school and also not
working.
This hearing takes the next step to see how this reality is
translating for employers and workers at the local level. Now
we see employers getting more involved by investing in
apprenticeships, training, and helping individuals get
connected to supportive services to address barriers to
employment.
What is different now is a strong economy fueled by the Tax
Cuts and Jobs Act. This isn't about charity or government
programs. We will hear from our witnesses there is a strong
business case, meaning it is in the best interest of their
business to invest in building the workforce.
Today, we will hear from Connie Wilhelm, Chief Executive
Officer at the Home Builders Association of Central Arizona.
Ms. Wilhelm runs a large Home Builders Association representing
employers with growing workforce needs.
As a way to address this, her association has partnered
with Arizona correctional facilities to prepare inmates for
jobs after release by getting them access to training in the
construction trades and addressing needs for transportation,
housing, and soft skills.
She is not running a social services agency either. This is
a mutually beneficial partnership which supplies home builders
with much-needed workers and gives inmates marketable skills
they can use to find employment when they are released. It is
win-win.
We are also very excited to hear from Mr. Potaczek--did I
get that right--okay, sorry about that--the embodiment of the
partnerships we are referencing. He is now working as an
electrician at Austin Electric after participating in training
at the Arizona Department of Corrections' Employment Center. I
am grateful to him for sharing his story and helping our
Subcommittee gain a fuller picture of the issue at hand.
My top priority for this Subcommittee and this Congress
continues to be ensuring greater opportunity for all Americans.
This hearing features two panels of witnesses who are
experiencing real workforce challenges and have stepped up to
show ways we can get individuals back into the labor force.
Today, I am excited to learn from our witnesses about their
experiences and what is working in local communities, so we can
translate these lessons into better public policies which help
families escape poverty and climb the economic ladder.
With that, I recognize Ranking Member Davis for 5 minutes
for his opening statement. Mr. Davis.
Mr. DAVIS. Thank you very much, Mr. Chairman, and I want to
thank you for holding this hearing. And I believe that this
area of work is one of the most important that is needed to be
done in our country.
This month marks the 50th anniversary of the assassination
of Dr. Martin Luther King, Jr. His work remains unfinished. At
the time of his assassination, Dr. King was focusing the civil
rights movement on economic justice and the opportunity gap
that exists in this country. Indeed, I am proud to represent
North Lawndale, the community in which Dr. King lived as he
directed attention to the structure barriers that keep groups
of Americans poor.
If communities lack quality education, economic opportunity
is limited. If communities lack transportation, affordable
housing, and employers offering good jobs, economic opportunity
is limited. If communities lack substance abuse services or job
training programs, economic opportunity is limited.
I hope we can agree that if we have a gap between available
jobs and the Americans searching for opportunities, it is our
obligation to close the gap by knocking down the obstacles
keeping people from work, not by vilifying workers who have
fallen on hard times and who need our help to overcome
barriers.
The Executive Order the President issued yesterday which
instructs agencies to find ways to cut services and basic
necessities for people who are poor or don't have jobs is
exactly the wrong approach.
For our Subcommittee, the right approach must include
addressing structural barriers in the Temporary Assistance for
Needy Families programs or TANF. Otherwise, our policies will
fail our rural, urban, and suburban constituents who hit these
barriers daily and are being left behind.
I work closely with a number of programs in Chicago that
work alongside employers to provide real opportunities for
people who have been left behind by the labor market and are
hitting walls every time they try to get a good job to make a
better life. When I talk to these outstanding workforce
development programs, I am struck by how few of them get any
support from TANF, which is in this Subcommittee's
jurisdiction.
TANF provides $16.5 billion a year in State grants which
are supposed to support work and ensure that low-income
families can access basic necessities like food and housing. If
TANF is not supporting these local education and training
programs that lift work, are open to good jobs, and put them on
a path to better things, that is TANF's failure and Congress
has set TANF up for failure.
TANF includes arbitrary limits on education and training,
even though we know a lack of skills and credentials is a key
reason why many struggling parents cannot find good jobs.
TANF provides States with incentives to reduce the number
of families being helped, but no incentives to knock down
barriers or provide real opportunities for parents to find good
jobs that will lift their children out of poverty.
And TANF's investment in children and families is shrinking
every year, as States divert TANF funds to fill budget gaps,
and the Federal Government funding is not adjusted for
inflation.
Right now, TANF is creating additional roadblocks to good
jobs for people who are already facing barriers. Our
Subcommittee has the chance to make TANF a key to unlocking
economic opportunities and continuing Dr. King's work.
I look forward to hearing from our witnesses about how we
can lift out of poverty and close the economic gap.
Again, Mr. Chairman, I thank you for this hearing and yield
back the balance of my time.
Chairman SMITH. Thank you, Dr. Davis. I appreciate your
comments.
Without objection, other Members' opening statements will
be made a part of the record.
I would like to welcome our first panel of witnesses to the
table and recognize Mr. Schweikert for the purpose of
introducing his constituents from Arizona.
Mr. SCHWEIKERT. Thank you, Mr. Chairman, though you
actually covered part of it.
This is sort of a special occasion for me. Ms. Wilhelm,
Connie, is actually one of my oldest friends. Not a comment
about age, but I have known her probably the majority of my
life. Her brilliant son is actually an intern in our office.
But she is unique in the fact she is running a very large
Home Builders Association and is a true pioneer as a woman
doing that.
But she also had an amazing vision here of could we reach
into parts of our communities that have had a tough time, and
in this case those who have been in correctional facilities,
and bring them into our shortage of labor.
Toby Thomas is the President of Austin Electric. He is one
of the partners with Connie Wilhelm and the Central Arizona
Home Builders Association in bringing this program together and
training.
And Brian--and it is Potaczek--Potaczek is, actually I am
very proud of him coming here because sometimes walking into a
room like this can be somewhat intimidating, but he has a very
important story for us to hear. Because as we are looking at
the most recent U6 crosstabs, we are actually seeing something
amazing happen, and those who have been marginalized,
particularly those with felonies, are actually getting
opportunities to work, and I believe we are about to hear about
a program that is working.
Thank you, Mr. Chairman.
Chairman SMITH. Thank you.
The remaining witnesses on our panel include Ms. Kelly
Tessitore--you are not just saying yes--okay, okay--Vice
President of Advancement at Jewish Vocational Serice in Boston,
Massachusetts; and Ms. Heather Terenzio, Chief Executive
Officer of the Techtonic Group from Boulder, Colorado.
Witnesses are reminded to limit their oral statements to 5
minutes. You will see the indicator there. Once you see that
yellow light, just kind of bring the flight in for a safe
landing and wrap that up by the time the 5 minutes conclude.
So, all your statements will be included in the record.
And so, we will begin with Ms. Wilhelm. You may begin when
you are ready.
STATEMENT OF CONNIE WILHELM, CHIEF EXECUTIVE OFFICER, HOME
BUILDERS ASSOCIATION OF CENTRAL ARIZONA
Ms. WILHELM. Chairman Smith, Ranking Member Davis, and
Members of the Subcommittee, it is an honor to be with you here
today to provide a brief overview of a workforce development
program for ex-offenders during their last couple months of
incarceration.
I represent the Home Builders Association of Central
Arizona. And not unlike other growing markets, the biggest
obstacle that builders face in satisfying the demand for new
homes is the labor to build them. So, in early 2016, the
Association launched a number of initiatives on workforce
development, including a partnership with the Arizona
Department of Corrections.
The key to our partnership with Corrections is that it is
employer-centric. We initially traveled throughout the State
holding hiring fairs at prisons with companies representing
residential plumbing, electrical, masonry, framing, and drywall
trades, seeking inmates releasing into the Phoenix market.
Participating employers were required to have paid training
programs and be willing to work with this population's unique
challenges of parole, drug tests, and transportation.
In March of 2017, as part of a statewide effort to reduce
recidivism, Governor Ducey established three Second Chance
Centers within the correctional facilities for those inmates
releasing in 60 days who had a moderate to high probability of
recidivating.
This collaboration between the Arizona Department of
Corrections and the Department of Economic Security consists of
a 10-week training program to prepare and equip inmates with
the career and life skills they need to succeed after release.
Since studies have shown that employment is the most direct
link to reducing recidivism, job fairs and connecting with
employers is a huge part of this effort.
At our first construction job fair at the Second Chance
Center outside Phoenix, we found that many inmates had
construction experience and others were eager to learn a
construction trade. Shortly thereafter, we piloted training for
two trades, electrical and painting, at the Center.
The Lewis Second Chance Center is currently expanding for
100 to 275 inmates, and we are expanding our career training
offerings from two trades to six trades at this center. We will
now offer training in electrical, drywall, framing, door and
trim, masonry, and plumbing. Our employers provide the
trainers, curriculum, material, and tools for their specific
trade.
Two of the three instructors for the electrical class were
former felons, which provided real-life examples of success for
the inmates.
While 6 to 8 weeks of training is not a lot, it's enough to
familiarize the inmate with the trade, learn how to work
safely, and to establish a relationship with the potential
employer. Additional training is provided once they are
released and employed.
Participating inmates also have the opportunity to earn an
OSHA 10-hour card.
Working with this population, however, has not been without
its challenges. The majority of inmates are released to a
halfway house and are on parole for up to 6 months, so it is a
major challenge to find employers that are willing to take a
chance on an ex-offender. We have had several employers join
our program only to leave after one bad incident with a former
offender.
We have also had employers tell us they don't want the
liability of hiring felons. To address that concern, last week,
Governor Ducey signed a bill we initiated which helps protect
employers from liability solely for hiring an ex-offender.
Without question, the biggest challenge ex-offenders face
in the Phoenix metro area when trying to get a job is
transportation. Many have suspended driver's licenses because
of civil court fines or penalties.
To overcome that obstacle, we worked with the courts to
pursue legislation to allow for a restricted driver's license
that allows them to drive to work, to meet their parole
officers, and to seek medical care. This bill was also signed
into law last week.
Since we started our recruitment and job training programs,
our employers have hired over 300 ex-offenders and we expect
that number to increase significantly with our additional
onsite training.
During the 5 months of piloted training, 80 inmates
completed training and approximately 40 percent of them were
hired by the companies who trained them.
Since last March, over 817 individuals have graduated from
a Second Chance Center and 54 percent of them have successfully
gained employment upon release.
Additionally, Arizona has seen a 10 percent drop in
released inmates going back to prison on a technical violation
and is experiencing the largest drop in the number of inmates
in prisons since 1974.
We are excited about the future of this partnership and the
opportunity to offer careers in construction to ex-offenders.
[The prepared statement of Ms. Wilhelm follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Great timing.
I understand Mr. Thomas and Mr. Potaczek will be splitting
their time, so begin when you are ready.
STATEMENT OF TOBY THOMAS, PRESIDENT,
AUSTIN ELECTRIC SERVICES, LLC
Mr. THOMAS. Mr. Chairman, Ranking Member Davis, Members of
the Subcommittee, thank you for your invitation to speak here
today about the workforce development and our work with the
Home Builders Association of Central Arizona and the Arizona
Department of Corrections.
As the housing market began to recover, we quickly
identified that we had a labor shortage. As production demands
increased, so too did the shortage of qualified workers.
To grow our business and capitalize on the increase in
demand, we began an in-house training program to teach people
who want a new career to wire new homes.
In rolling out our training program, we found the single
biggest challenge was attracting individuals who wanted to
learn a new skill. After an exhausting 6-month recruitment
effort, we simply could not find enough people with an interest
in construction to grow our workforce in the numbers that we
needed.
In early 2016, we contracted with Connie Wilhelm and the
Home Builders Association. Prior to our introduction, Ms.
Wilhelm had been working on several solutions to address the
labor shortage. One of her initiatives was to work with the
Arizona Department of Corrections.
Over the next several months, we participated in job fairs
at prisons across Arizona. Through these job fairs, we were
excited to learn that there's an eager population willing and
ready to learn a new trade.
Through our partnership with the Home Builders Association
and Department of Corrections, for the past 10 months, we have
operated a 60-day training program at the Lewis Prison outside
of Phoenix.
During this training, we teach wiring, blueprint reading,
and other applicable skills. In addition, we teach conflict
resolution lessons to improve character building abilities that
will not only enhance them in the workforce, but in their
personal lives and the community as well.
Today, we have trained and hired 86 former offenders from
our training program and have about an 80 percent retention
rate.
Although we have had immense success with the program, we
have had some challenges. The most glaring are transportation,
housing, and proper attire. These challenges can have a direct
effect on an individual's ability to succeed on the job.
Then there are the psychological aspects. While trainees
are in the program, we have their undivided attention. Once
they are released, there are outside influences that could have
negative impacts both professionally and personally.
Fortunately, this has been the exception to our program and
has led to the workforce expansion that we planned for. More
importantly, the program has exceeded all of my expectations
with the impact it has had on individual lives and the
community at large. We are excited to continue the program and
grow our company.
[The prepared statement of Mr. Thomas follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
STATEMENT OF BRIAN POTACZEK, ELECTRICIAN,
AUSTIN ELECTRIC SERVICES, LLC
Mr. POTACZEK. Thank you, Chairman Smith, and all Members of
this Committee for allowing me to speak to you today about
programs such as Sunrise Employment Center in Arizona
Department of Corrections.
My name is Brian Potaczek and I would like to share the
impact this program has had on my life and how it has made me a
part of society and helped me regain my family and friends back
into my life.
Before completing this program, I can truthfully say that I
had no positive direction in life, along with no sense of hope
that I could make things better. I never was a drug user.
However, when I was 19, I had all four of my wisdom teeth
pulled and was prescribed opioids for pain. The next thing I
knew, I was hooked.
Being an avid drug user of prescription pills for 6 years,
I slowly but surely had seen my life declining before my eyes.
I ended up losing everything I owned and loved and ended up
incarcerated for 6 years due to the desire to do whatever it
took to keep getting high.
After another two prison stints because of my addiction, I
finally came across a program that I desired and wanted more
than anything to complete and that was the Sunrise Employment
Center in Arizona Department of Corrections.
Many companies came to this Employment Center, but one that
truly had me fascinated was Austin Electric. After listening to
the guests speak about the criteria and requirements, I quickly
signed up for the training program and never looked back.
One thing that caught my attention was how they would talk
about the company as a family, and how they would help us out
and do whatever it took to make us successful.
In the training program, I learned the tools and knowledge
of how to be an electrician, which is something I had never
done before and never imagined doing.
Upon my release, I was hired and started work that week. I
was given rides to and from work and maintained a job with this
company. I started with Austin at $13 an hour and now I'm
making $22 an hour after 7 short months.
I can truthfully say from firsthand experience that this
program has made many success stories and only will continue to
make more. It instills a sense of hope in the lost, a family
for those who need one, and the motivation to be a better
person of society.
It is amazing when you can work with others in the program
and slowly but surely see their life changing. That is
something that always encourages me to stay on the right track.
I never really had goals after being released from prison
until I entered the program. Since then, I have rebuilt my
trust with my family and friends and have regained their love
and encouragement.
Not only have I obtained employment with Austin Electric
upon my release, I have also been able to support myself and
not become another statistic by going back to prison. I am
doing things now that I never thought I would, like going to
have coffee with my mom, buying Girl Scout cookies, or just
giving back to the community.
Staying out of prison has been the best success story of my
life. And every day I wake up, it is a success, and I measure
it by that. Every day I am out of prison is something I look
forward to. Thank you.
[The prepared statement of Mr. Potaczek follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you very much. A very compelling
story. Thank you.
Ms. Tessitore.
STATEMENT OF KELLY TESSITORE, VICE PRESIDENT OF ADVANCEMENT,
JEWISH VOCATIONAL SERVICE
Ms. TESSITORE. Good afternoon, Chairman Smith, Ranking
Member Davis, and Members of the Subcommittee. I am Kelly
Tessitore and I am the Vice President of Advancement at Jewish
Vocational Service in Boston, which is a nonprofit, community-
based organization in workforce development.
I began my career at JVS in 1996, the same year as the 1996
welfare reform. And since then, I have designed and operated
dozens of programs for low-income populations. I would like to
talk to you today about my experience helping people strengthen
skills, access jobs, and build careers.
Last year at JVS, we served 15,000 individuals in our
skills training, education, and job placement programs,
including through our one-stop career center.
Our greatest strength is our deep relationships with
employers. We placed job candidates with more than 1,200
employers last year and we worked with 20 more to provide on-
site training to 1,600 incumbent workers.
Our employer partners tell us they can't find enough
workers with the skills they need, and in many cases, they are
facing critical labor shortages. The current low unemployment
rate is encouraging employers to look at hiring populations
they haven't considered previously, which is great, but
employers need skilled workers.
To provide those workers and because we believe that the
best way to lift people out of poverty is to equip them with
in-demand skills, we partner with employers to build training
programs.
Let me walk you through one of our programs. Our pharmacy
technician program includes training on medications and
anatomy, pharmacy law, hospital basics, customer service, and
inventory.
We partner with pharmacy leaders CVS and Walgreens to
provide an externship to each participant. These externships
give students real-world experience that helps them adjust to
work before taking on a full-time job, and they give CVS and
Walgreens access to a pool of trained applicants that can meet
their skill needs.
The 12-week program prepares graduates to take and pass the
national Pharmacy Technician Certification Exam. We cover the
exam fees and our graduates pass the certification exam at
higher rates than the national average.
Pharmacy technicians earn $31,000-$44,000 on average
nationally per year. Last year, 8 out of every 10 students
enrolled in our program were hired. And the pharmacy technician
program is just the first step on a career pathway, including
pharmacy or nursing school, specialized certifications, or even
store management.
Although Pharm Tech and other career pathway programs at
JVS are highly effective at moving people out of poverty, they
don't serve many TANF recipients. On average, fewer than 10
percent of participants in our programs are on TANF.
We have an excellent relationship with our State TANF
authority. We have spent a lot of time thinking together about
why TANF doesn't move people into work and how we could change
it. I think at the end of the day there are three major issues.
First, TANF emphasizes job placement and de-emphasizes
skills, even though we have 20 years of research showing that
``work first'' doesn't work. Although employers can't find
workers with the skills they need to fill their critical labor
shortages, the structure of TANF restricts education and
training activities. TANF hasn't been updated in 20 years and
it hasn't kept up with the way that employers are hiring now,
and we need changes that will allow and support skills
acquisition.
Second, TANF is overly complicated for both clients and
systems to administer. It counts the wrong things and it
doesn't focus on work and skill development. TANF has become a
benefits processing program focused on preventing abuse, rather
than a transitional catalyst to work.
In my 22 years of working with low-income populations, I
can tell you that most of the people I have met do in fact want
to work, desperately want to work, but they don't want their
economic situation to worsen when they leave cash assistance.
Earnings from work affect TANF, which affects childcare, which
affects housing, which affects food stamps, and the interaction
of those things makes work risky, instead of the safer choice
for people on public assistance.
We have to change the paradigm about how the benefit
programs interact so that they can work together to launch
people into economic mobility. I am not talking about growing
TANF, but once people are on the caseload, we need to keep them
engaged and continuing on a path to self-sufficiency.
If we want people to use TANF as a transitional catalyst to
work, we need to change the rules so that we can incentivize
work, allow for training and skill development, and make it
clear to participants how working will affect their future
benefits.
Finally, work requirements. I have operated at least a
dozen programs that feature a work requirement, and in all
cases, the very real struggle is that compliance becomes the
primary deliverable and outcomes take a backseat.
To maximize results, work requirements efforts should one,
focus on outcomes, like increasing self-sufficiency rather than
outputs like participation hours; two, focus on labor market
demand and local employer needs; three, make it easier to align
adult basic education, job training, post-secondary education,
and support services like childcare and transportation
assistance; four, certify programs as compliant with the work
requirement rather than counting individual participation
hours; and five, coordinate and recognize reciprocal compliance
with other programs such as SNAP, WIOA, and Medicaid. Thank
you.
[The prepared statement of Ms. Tessitore follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you.
Ms. Terenzio.
STATEMENT OF HEATHER TERENZIO,
CHIEF EXECUTIVE OFFICER, TECHTONIC GROUP, LLC
Ms. TERENZIO. Thank you for having me here today to speak
about a new way to build talent in high-tech fields. I believe
we have an innovative, low-cost way to get Americans to work in
high-paying technology jobs without a college degree and
without acquiring any debt.
My name is Heather Terenzio. I am the Chief Executive
Officer and founder of Techtonic Group, a software development
company based in Boulder, Colorado.
I have been the Chief Executive Officer of a technology
company for 15 years. Our company works on writing software
code for websites and mobile applications. Our clients have
been everyone from venture-backed start-ups to Fortune 1000
companies. I have an Ivy League degree and was an engineer, but
most of what I learned about writing software I learned on the
job.
Over the years, I have worked with other Ivy Leaguers,
college graduates, and people with all different kinds of
backgrounds. And the one thing that I have learned is that if
you have a desire and an aptitude for software development you
can be a great software developer.
About 4 years ago, I was giving a talk at a vocational
school in Boulder about careers in software development. And at
the end of the talk, a young man approached me.
He said, ``Your company sounds so cool. I have been
teaching myself to code for 10 years, but I only have a GED, so
I can't find a job. But I promise if you hired me and gave me a
chance, you would never regret it.'' And so right then and
there, I said, ``I will see you on Monday.''
And we learned that he had grown up in the foster care
system, that his mother was in jail, and he had bounced around
a lot as a kid. The one thing that gave him solace was playing
computer games, and teaching himself how to write code, and
build his own games.
He absorbed everything we taught him about building
software in a production environment and quickly became a
contributing member of our team.
About 4 months into his job with us, he walked into my
office and said, ``Thank you so much for this job. I am so
grateful to be here. You have changed the course of my life.''
And I thought, in my 15 years in this industry, nobody had
ever said that to me. So right then and there, I said, ``Do you
have any friends? This is a really interesting thing that is
happening here.''
It turns out there were a lot of people out there like him.
We decided to explore further and called our program an
apprenticeship program, and we did this kind of tongue-in-cheek
because we were training people using a paired program just
like a journeyman and his apprentice might in the trades.
We soon realized that apprenticeship had a Federal
designation and decided to make it official. We worked closely
with the Department of Labor to modify the application process
to relevant companies like us and we became an official
apprenticeship with the Department of Labor.
We were the first software apprenticeship in the United
States. We are still the only one in Colorado and we are still
only one of a handful in the whole United States.
For our class now, we have formalized our selection process
and our training. For our last class, we had 500 applications
for 10 spots. We have now had over 50 apprentices come through
our program.
We now offer a service to our clients where they can hire
us to build their software, and at the end of our engagement,
they can hire in those apprentices as their own. It is a win
for everyone. Our clients get their software written with a
senior team while we train apprentices. Our apprentices work on
real-world projects while working toward a career in software
development. Our clients can acquire our team of fully-trained
and diverse talent as their own full-time employees.
We have had apprentices come through our program who are
now working for companies like Lockheed Martin, IBM, Zayo, and
Pivotal Labs.
Our program is able to attract a more diverse talent pool
than a software boot camp or a college because we partner with
our local government and foundations to pay our apprentices a
salary while they are actually in our program. We are currently
75 percent women, minorities, and veterans, and they are paid a
livable wage throughout the entire program.
We recently closed on a Series A round with a likeminded
venture fund and we have plans to grow aggressively this
program in the next couple of years.
Software development developers are in high demand.
Unemployment rates for software developers are under 2 percent.
A college degree is not required to be a great software
developer. We strongly believe that programs like our
apprenticeship are a cost-effective, no debt pathway to a high-
paying, middle-class job in a desirable field with unlimited
career potential.
Thank you for your time and attention here today.
[The prepared statement of Ms. Terenzio follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you. Great perspectives. It is
exciting to hear success stories, inspiring, in fact, from
different perspectives, so I am very grateful.
Mr. Potaczek, again, thank you for being here and sharing
your personal story and being open to providing all of us up
here with a better understanding of the challenges and
opportunities facing individuals transitioning back into the
labor force.
One of our Committee's priorities is to ensure that Federal
programs are providing the right incentives and supportive
services to help folks escape poverty and move up the economic
ladder. Can you speak a little more about the transition back
into the labor force and perhaps even some of the concerns you
had upon or during that return to the workforce?
Mr. POTACZEK. Transitioning back into society and working,
it is a difficult challenge; transportation, you know, boots
for the job, tools. With this program, it has kind of given me
a head start at that. They gave me transportation. They gave us
work clothes like shirts. The tools, they gave us the tools to
get started.
So instead of getting out of incarceration with a lot of
things on my mind, I knew that if I just did the right steps,
by the time I got out, if I called them and asked to get hired,
I would be hired, and I would have a jumpstart on things.
And one of the things that always got me, the times I got
out and went back, was I had so much on my plate I felt like it
was hard for me to stay focused. When you are working, and you
are--they give you the tools and whatever you need to work, it
was a lot easier for me to stay out there and be part of
society with working.
And I noticed that I was working so hard that I didn't have
time to want to do anything else. I would go home, and I would
sleep, and I would get up and go to work.
And then I noticed that my money started going to good
things. It started going to society, it started going to my
family, clothing, tools.
I mean, that is all part of living nowadays. It is not--my
time, assets, it was all going to positive things and I have
never been able to say that my whole life.
Chairman SMITH. Very good. And can you say again, you were
released and then you, the next day, was it, that you reported
for work?
Mr. POTACZEK. I was released, I think, on a Friday and the
weekend was--or maybe it was a Monday. I was released on
Monday, and I called up Austin Electric, and I was employed at
my interview the next Monday and started work.
And that is another thing. I have gotten out before and I
have called, I went and applied to 20, 30 places, I mean, fast
food, every place you can think of. I never got one call back
and it really kind of left me in distraught. It messed with my
mind a little bit.
And I am afraid of failure and I tend to shut down as a
human when I see failure, so this program has given me a sense
of hope. It has given me a family that I didn't have at the
time, friends, motivation, inspiration, and success.
And I am sitting here today, I thought I would never be
here. I mean, you could tell me 8 years ago you are going to be
sitting in that chair and I would tell you absolutely not.
And the thing about it is the knowledge, you have to want
it. That is the thing. An individual has to want to do the
right thing, to be better, to learn more.
It is on both ends. It is not on, you know, just my end or
their end. Working together, and putting something positive
into something, and making it grow has done a lot for me.
Chairman SMITH. Very good.
Mr. Thomas, would you care to add anything in terms of
maybe the training that took place and how you kind of
envisioned being able to use the skills that were required?
Mr. THOMAS. Sure. So, when we started the program when we
actually connected with Connie, you know, the first phase of
the program was we would go to various Arizona prisons. And the
biggest challenge we had in doing that was most of the inmates
that were interested that would come to our table and show
interest in our trade weren't getting released until 2021 or
2022. And, unfortunately, the problem that we have, the
shortage of manpower that we have, it is effective today. It is
not a tomorrow problem, it is a today problem.
So, we looked at it and said, well, you know, what would be
really ideal would be to actually have a training program while
they are incarcerated. So, we started the program and it has
been very successful.
You know, at the end of the day, the only requirement we
have is that they have to have the desire to want to learn and
the ability to show up and put their best foot forward each and
every day.
Chairman SMITH. Very good. Thank you again for your
perspectives.
And in the interest of time, I will now recognize the
Ranking Member, Dr. Davis, for 5 minutes for questions he might
have.
Mr. DAVIS. Thank you very much, Mr. Chairman. And I must
tell you that this is one of the most pleasant hearings that I
have ever participated in, and one of the reasons is that I
have personally spent a great deal of time working with
programs like these and to see the kind of success that you
have experienced just reinforces my belief that there is much
more success to be had.
So, I commend all of you, I thank all of you, and I just
know that if we can put into the programs themselves what is
needed for people to experience the kind of successes that you
have had, and especially when we talk about individuals who
have been incarcerated, who have prison records.
Mr. Potaczek, do you still have what is called a record, or
have you been able to have anything done with that?
Mr. POTACZEK. I am still--I have completed parole and I
still have a record. I think I will for a while until I can, I
guess I don't really know the process to get it dropped. That
has always, I mean, even getting housing or something, it has
always had an effect on me having a record, they can look that
up.
Mr. DAVIS. Ms. Wilhelm, let me ask you, is there much
opportunity that you would expect him to be able to get his
record expunged or get executive clemency or anything where he
will not have a record?
Ms. WILHELM. That is one of the things we are looking at
right now. We keep trying to remove these obstacles for them as
they get out and get released. We have not really looked into
that. I know that there are other people in the social justice
area that have looked at that type of thing and we will
continue to try to work with them. I think that is a major
obstacle that we need to take a serious look at.
Mr. DAVIS. Thank you. Ms. Tessitore, you mentioned that
work requirements make programs focus on compliance sometimes
instead of work. Could you elaborate a little bit on that?
Ms. TESSITORE. Sure. For TANF, we have to complete a
monthly form for each person showing the hours attended on each
day. A better system would be to ask us--``during this month,
was this client active in your program?'' And we could say yes
instead of spending hours and hours combing through all of our
attendance records to compile those.
For ABAWDS who are receiving SNAP, their standard is 80
hours a month and they actually have a restriction on how many
hours they can spend in job search versus an education and
training component, so we have to count up their hours that are
job search and their hours that are education and training.
We pull information from four sources, from our One-Stop
database for workshops they have attended, from our client
database for meetings we have had with them and other
activities, from CRI which is the software they can log into
that has a unique user ID and records their time spent doing
Career Ready 101, and for their self-certification of the small
job search portion.
We compile all of that and then those records must be
transmitted securely to the TANF authority, which is not a
simple matter either. There are multiple steps on how you
safeguard people's personally-identifiable information and
transmit securely.
Mr. DAVIS. Thank you. Ms. Wilhelm, can I ask you, where do
you get your funding? Who funds your program?
Ms. WILHELM. The individual employers provide and pay for
the trainers, the curriculum, the tools for the program, and
our association which is a trade association funded by builders
and trades is paying for all of the equipment that is out
there.
Mr. DAVIS. I will tell you, your stock just went up another
notch.
[Laughter.]
Ms. WILHELM. Thank you. I appreciate that.
Mr. DAVIS. Ms. Terenzio, let me ask you the last question.
The work is technical that you train people for. How is it
received in terms of them being able to get jobs?
Ms. TERENZIO. Well, once they get into our program, as long
as they successfully complete the initial class we put them
through, we will hire them as a full-time employee with us. And
then once they are with us, we will put them on a client
project and the client also has the option to hire them as a
full-time employee from our program. So, it is actually kind of
you get to work with the person before you actually have to
commit to hiring them, so it is almost guaranteed.
Mr. DAVIS. Thank you very much, Mr. Chairman. I yield back.
Chairman SMITH. Thank you.
Ms. Walorski.
Ms. WALORSKI. Thank you, Mr. Chairman.
Mr. Potaczek, thank you so much for coming. You did a great
job.
Ms. Terenzio, you say in your testimony you have been
successful in taking people that don't have degrees and
teaching them to be software developers.
The Subcommittee held a hearing last year examining the 1
in 7 16- to 24-year-olds that are neither in school nor
working. We heard stories from groups that help these young
people train for, find, and keep jobs and we heard firsthand
from one bright young lady who had been through one of these
programs.
One takeaway from that hearing for me was that sometimes we
put too much pressure on kids to go to a 4-year university
right out of high school whether they are ready or not, and
worse, we imply that anything less is failure. This mindset
does more harm than good. The pressure we keep on these kids
can lead to failure because they get discouraged, throw up
their hands, and say, ``I am not smart enough. I am not going
to do this, and it is over.'' Maybe they needed a few years of
community college, maybe they needed a 4-year degree, maybe
apprenticeships and trade schools were a better route. Whatever
the case, the discouragement leads to discouragement.
I also took away from that the power of human connection,
and if someone comes alongside that person, that disengaged
person, coaches them, believes in them, all that doubt washes
away and they can be successful.
So first, I want to applaud you for working to bring people
into an industry that, from the outside looking in, probably
looks like an unclimbable mountain for somebody without a
degree.
I want to ask you, what are the untapped talent pools that
you look at? How do you engage them? For our most disadvantaged
and disengaged people in the shadows, do you think there is
hope to be able to connect them to apprenticeships like yours
and these other talent pipelines to reconnect to the workforce
so they can build a better life for themselves and their
families?
Ms. TERENZIO. Thank you. So, the beauty about software
development is that if you are a great software developer, once
you are in this industry, nobody really cares where you went to
school and what your background is. And our office in Boulder
is actually, was across the parking lot from the Google office.
And we have a theory that people who come to our office
feel supported, see people all around them who came from the
jail system or the foster system, all different kinds of
backgrounds, and they are succeeding with us. And so, it is
very much a culture of if they can make it, so can I. And so, I
think it gives people that kind of motivation to know that
other people with different kinds of backgrounds can also make
it in this kind of career.
And the word in our program has gotten out very quickly. We
work really closely with our workforce centers, with
nonprofits, with foundations all within Colorado. And every
time we even just open up on our social media that we have a
new class starting, we instantly get 500 applications.
Ms. WALORSKI. And pardon me for the interruption, but do
you immediately connect them? So, when they come on your
program and they may come from that shaky kind of a past where
they may not have a whole lot of confidence or feel like they
have failed something for no reason, do you connect them with
the human interaction then? Is there somebody that is
absolutely connected to keep making sure that they are moving
forward?
Ms. TERENZIO. Yeah. We do have a mentor system within our
company so that you are paired up with people. And, actually,
you are paired up with somebody who was just an apprentice a
year before you, so they know where you came from, they have a
really close firsthand knowledge of where they were just about
a year ago and that person is actually responsible for training
them on what they have just learned and getting them integrated
into our company.
And we are a for-profit company, so we are pretty motivated
to get people integrated and productive as fast as possible.
And so, we are putting them on projects, we are exposing them
to clients, we are exposing them to work going on within our
company, we are trying them out on different kinds of projects
because we want them to be working and we want them to be
effective really quickly within our company.
But, again, I think it is more the culture that we have
created of achievement and that everybody from every kind of
background can make it with us.
Ms. WALORSKI. Interesting. Thank you.
Mr. Potaczek, you mentioned something that struck me
because I really believe this, and you are a glowing example.
But can you just speak for a couple seconds on, you talked
about the employer, the electrical company that you work for
was like a family, and what struck you when you--because you
said, you know, you were out for a week, you looked at fast
food and all those other places, but when you engaged with
these folks, what struck you about that? I mean, did you really
see that, ``Oh, my gosh, I am actually going to work for the
person''? Just, do you have any thoughts on that?
Mr. POTACZEK. Absolutely. When they came and visited us,
and they got to talk and speak about what the requirements were
and what they were looking for, they said that they instill a
sense of family in people and I have had nothing but a family
orientation with this company. And I am not saying that all
companies will bring that. I hope they do, you know. I can't
say that.
They have supplied me with the tools, I didn't have to
worry about the tools. I am getting picked up for work. I mean,
I have never had a company that would do that for me.
Ms. WALORSKI. Did you feel like on days that maybe, you
know, you had questions or whatever, there was a person you
could connect to that was not going to give up on you?
Mr. POTACZEK. All the time.
Ms. WALORSKI. That is awesome.
Mr. POTACZEK. I have been able to call anyone for help.
Ms. WALORSKI. That is awesome. Thank you so much. Thanks to
the panel. And I yield back, Mr. Chairman. Thank you.
Chairman SMITH. Thank you.
Ms. Chu.
Ms. CHU. Thank you.
Ms. Tessitore, thank you for joining us to speak about your
successful workforce development program, but I was shocked
when you said that less than 10 percent of your participants
are on TANF. Many of the programs that have been discussed
today provide great opportunities for individuals if they have
stability already in other parts of their lives, but what if
they don't? Individuals need to have support such as childcare,
housing, and transportation in order to come to work and to
carry out their duties and that can be difficult.
Say, for instance, in my home of Los Angeles county, the
average cost annually of childcare for an infant at a family
childcare home is $9,186 and it is $8,579 for preschoolers. The
average single-family household cost to rent is expected to hit
$1,416 a month, which is an 8 percent increase from last year
and could only increase I think. At the same time, TANF has not
been indexed for inflation, making it increasingly more
difficult for low-income people to meet their basic needs.
So how does your program work with others in the community
or utilize government resources to ensure that the basic needs
of your participants are met while they pursue training and how
could TANF be changed to be more effective in this regard?
Ms. TESSITORE. So, thank you for your question. Honestly,
programs don't work well to move people off of TANF, resources
need to be aligned. In order to move off of TANF, and to move
successfully into work, people need some understanding of what
benefits and supports will be affected when, and how those
things interact. They need to be able to pay a reduced cost for
childcare for a period of time, and a reduced cost for housing
for a period of time.
We have spent a lot of time, with the TANF authority and
other agencies, thinking about what those risky points are for
people, what are those points at which multiple things are
falling away from you, and that work actually doesn't make
sense for you, and trying to put in place things that would
help with that.
I think also incentivizing work would help. Changing the
way, and this is something that our TANF authority has proposed
to our State legislature, changing the way, maybe disregarding
income for the first 6 months or a higher disregard rate for
earned income than for other income that you are considering in
the caseload, changing the way assets are considered, looking
at the grant amounts and aligning for different categories so
that there's not--you actually get more money if you are not in
a work participation program, which unfortunately TANF is so
byzantine that that actually is happening to people. A higher
benefit amount if you are not work-required is something that
is happening.
It really needs to be a thoughtful design so that both the
participant and the people trying to help the participant can
predict reasonably what is going to happen to their income and
their supports as they transition into work, and participants
do need support for a period of time.
There have been initiatives like the Secure Jobs Initiative
in Massachusetts, which is a partnership between housing and
the TANF authority and philanthropy. It was actually started by
philanthropy, and then it was picked up by the State
legislature to bring together all of the services that a family
needs in order to transition successfully out of all of those
things and they have done a lot of good work by planning
together what those steps are going to be for participants.
Ms. CHU. And can you say more about the assets? You said
something about an asset should be determined differently.
Ms. TESSITORE. Yeah. I think that in, some of it may be
specific to Massachusetts, but every State is doing it somewhat
differently, the way we, the amount that you disregard for an
asset. I think it is that a car is exempted, your first car up
to a certain value, but the second car is also in there. So,
looking at the asset limits that we allow people to have, they
are quite low, so if you have a car worth more than $2,500 or
$5,000, you are over the asset limit and not eligible. I can't
speak exactly.
Ms. CHU. And what if your client had healthcare needs? I
mean, thank goodness we have the Affordable Care Act, but there
are some of those who are trying to get into the workforce that
could have healthcare needs and mental healthcare needs. And as
a psychologist, I am very cognizant of the fact that there
could be a need for services to treat depression or substance
abuse. What do you do in that regard?
Ms. TESSITORE. So, I will say that we are very, very
fortunate in Massachusetts to have had universal healthcare for
many years now and we do not see this as a major problem
because we have universal healthcare. So, people would be maybe
transitioning from the type of healthcare that they have, but
they would not be threatened with the loss of healthcare in
Massachusetts.
Ms. CHU. And for those who have been addicted? Because I
think TANF bars individuals from receiving assistance if they
have a drug conviction.
Ms. TESSITORE. I can't speak about that. I'm sorry. I don't
know.
Ms. CHU. Well, thank you. I yield back.
Chairman SMITH. Thank you.
Mr. Schweikert.
Mr. SCHWEIKERT. Thank you, Mr. Chairman.
Mr. Thomas, particularly, and maybe this is somewhat unique
to Arizona in our Phoenix market, but we actually have jobs
desperately looking for workers. Can you first, and I want to
walk you around because you will see some of the different
views sometimes on the Committee when you have an environment
that desperately wants to give you a job, but why have you had
such difficulties? Why did you have to move to this level of
creativity? What is your environment like? Tell me about the
jobs that are still looking for someone?
Mr. THOMAS. Well, I think, and I can't remember who alluded
to it earlier, I think it was Ms. Walorski, we have created
this environment with this younger generation, you know, that
without a college degree you have no chance of success in life.
And so, I think that there's this feeling toward construction,
for example, or against the skill trades, that it is, you know,
substandard I guess, if you will.
And when we started our training program in mid-2015, one
of the biggest challenges we had was simply finding people who
were interested in the skill trades. So, for us, you know,
finding a population, you know, that was more than willing and
ready to come learn was a great success, right?
Mr. SCHWEIKERT. If you, tomorrow, could find those willing
to either go through the training or had the skill set, how
many positions do you think you have or are still available in
the Phoenix market?
Mr. THOMAS. Well, in the Phoenix market, I would say it is
thousands. For us personally, I mean, we could probably hire
between another 200 or 300 and still have capacity for more, to
be honest with you.
Mr. SCHWEIKERT. In your top end, I don't know if you would
call them a journeyman or what, but how much can a highly-
skilled, someone that has been in the profession a decade and
learned their craft, make?
Mr. THOMAS. So, our top guy last year, a field guy, made
about $140,000 a year.
Mr. SCHWEIKERT. Okay. So, there is this really interesting
thing, you know, if you are willing to sit down and look at
what we call the U6 data in unemployment, we are still just
hovering at about what we call a 63 percent labor force
participation. We still have, as of today's report, 1.8 million
folks on long-term unemployment and then those who have fallen
off. And yet, I hear story after story after story from, you
know, my community that we have thousands of jobs and just need
people. It is so--this is--I am looking for a solution.
Mr. THOMAS. Aren't we all?
[Laughter.]
Mr. SCHWEIKERT. Yeah. Ms. Wilhelm, Connie, what do you see
happening with the rest of the homebuilding community in the
Phoenix market?
Ms. WILHELM. Well, I am hoping we are going to continue to
expand our program and hire more ex-offenders. It doesn't help
to just solve the electrical situation, you know, because we
are all part of a system and I need framers, you know, I need
everybody along the way so that we are all building our
workforce together so that there are no bumps in the road and
there is nobody that has to be laid off because the other trade
is not there.
So, you know, this is a ready and willing population that I
have seen nowhere else. I have been to a lot of job fairs in a
lot of different environments and I have never seen the hope
and the gratitude that has been expressed by the incarcerated.
And, you know, I tell you, it is an honor to be able to provide
jobs for them.
Mr. SCHWEIKERT. Brian, how do we tell your story to others
that may be in a tough position that there is opportunity and
hope?
Mr. POTACZEK. I think you could take me to them and I could
talk to them and tell them my personal experience.
[Laughter.]
Mr. SCHWEIKERT. You are pretty good at this. Hopefully, one
day you are not planning on running for my job.
[Laughter.]
Mr. POTACZEK. I feel that seeing gives a lot of faith. You
can read a story and not believe it. For others, like I said, I
would like to go into the prisons one day and tell them my
success story. And that is with the two other trainers that
were at the program, they were ex-felons. And to see them and
hear their success stories really made me want to achieve it,
and the hope that they have for me and instilled on me, I mean,
like I said, it is a family-oriented thing.
Mr. SCHWEIKERT. This is a really uncomfortable question,
but I grew up in a household where my mother was a substance
abuse counselor, so you know those sorts of things. What is the
key to staying sober? Is it the fact that there is work and
opportunity and is it that hope? What do you think the key is
for our brothers and sisters out there that have had such a
tough time?
Mr. POTACZEK. I love that question. For me, the key to
staying sober has been working and seeing how much my family
appreciates what I have done for myself. You have to want it
for yourself. You have to want to be sober. But to see people
that I have never met, my family being proud of me and to say
they are proud of me, it brings me to tears. I have never been
like that.
Mr. SCHWEIKERT. Brian, we are all proud of you.
Thank you, Mr. Chairman.
Chairman SMITH. Thank you.
Ms. Sewell.
Ms. SEWELL. Thank you, Mr. Chairman. And I want to thank
all of our panelists. This has truly been a very inspirational,
uplifting panel. When I first became a Member of Congress, my
top priority was job creation. I grew up in my district and my
district is in Alabama. It includes Birmingham, and Montgomery,
and Selma, my hometown, so it is an old civil rights district.
But the reality is a family of four in my district only
makes $32,000 and the highest unemployment in the State of
Alabama is in my district. So being able to figure out ways
that I can close the skills gap and get people opportunity is
really, really important. In fact, we have made a commitment to
do a job fair annually and to move it around my district
because Birmingham's needs may be different than the rural
parts of my district's needs. And I have to tell you, every
time we have had a job fair, it has grown bigger and bigger.
More jobseekers and more employers are willing to come.
But so often, the jobs go unfilled, so you get a lot of
folks who feel a little frustrated because the skills that are
being looked for these days are more, you know, technical and
are computer-related. And for someone who has been a displaced
steel worker, to tell them to go back and learn something new,
it is hard. It really is hard.
So, I guess my question--I have two questions. Ms. Wilhelm,
I actually have a really great homebuilders association in
Alabama. They are awesome. They have an apprenticeship program.
But how do I encourage them to branch out and actually take a
risk and hire felons?
Ms. WILHELM. Tell them to call me.
[Laughter.]
I would be happy to share our experiences with them. And
that is one of the reasons we wanted to come today because, you
know, hopefully we can be a model for other areas, and you do
have to take a chance, and it is worth it.
Ms. SEWELL. So how did you convince the homebuilders in
Arizona to do it? I mean, did you guys purposely decide to do a
second chance?
Ms. WILHELM. I have been there for a number of years
working with them. And every board meeting, I would hear, ``We
need workers, we need workers, we need workers,'' and I was
running out of options. I had been to refugee relocation
agencies. I had been to a lot of high schools and everything.
We were moving, and I ran across a binder where I had
participated in a task force with corrections. And I remember
that I had gone and seen some of their construction programs,
so I just called them up.
Ms. SEWELL. Did you?
Ms. WILHELM. And said, ``I would like to see what you are
doing in the prisons. I would like to bring some of my trades
out and look at what you are teaching them.''
Ms. SEWELL. Was there resistance from your trades?
Ms. WILHELM. I had to talk to them about the opportunity. I
don't know that I would say there was--there was hesitation,
certainly. I mean, we are going into a correctional facility,
you know.
Ms. SEWELL. But success breeds success, obviously.
Ms. WILHELM. Yes, yes. But it was definitely worth it. And,
you know, what is really important is that you have a really
strong commitment by the employer, and they were all in. I
mean, they had to have a paid training program, they had to
understand how it is to work with this population and that the
challenges are a little different. They had to be able to work
with us to try to overcome those challenges.
Ms. SEWELL. What do you think is the biggest barrier as a--
so I am sure you had strict requirements of who can come into
your program, were some of the requirements barriers in and of
themselves?
Ms. WILHELM. From the employers' standpoint?
Ms. SEWELL. Yes.
Ms. WILHELM. They had to have a paid training program
because we were going in and trying to give these women and men
hope, and a lot of them didn't have the skills but we still
wanted them in. It was very interesting because as we did our
hiring fairs, we heard from a lot of them telling me, ``Oh, I
used to work for so-and-so. Are they still in business?'' So,
it was very enlightening for us to see that there was a lot of
skill there that we wanted to capture.
Ms. SEWELL. Mr. Thomas, so how did your company decide to
participate in a program and what are the requirements of that
program? I really want to try to encourage the employers that I
represent back home to take a risk.
Mr. THOMAS. Well, and that is what it is. I mean, it
definitely is an investment.
Ms. SEWELL. Not a risk but an investment.
Mr. THOMAS. I mean, and that is the way we--that is the
approach we took is that it is an investment, you know. We are
either going to pay today or we are really going to pay
tomorrow. So, for us, it was really, it was an easy sell. I
mean, it was, look, it is a great population. They are healthy
and willing to try this, you know, to try our trade.
Ms. SEWELL. What is your success rate? I mean, not everyone
is going to be brought in.
Mr. THOMAS. We have had about an 80 percent retainage rate,
which is, by all standards, a fantastic rate.
Ms. SEWELL. Eighty percent? That is great. Absolutely.
Well, Brian, you are truly an inspiration and I just want
to encourage you to tell your story because no one can tell
your story better than you, but your story speaks to so many
people's, you know, barriers and their own roadblocks. So best
of luck in everything.
Mr. POTACZEK. Thank you, thank you.
Chairman SMITH. Thank you.
Mr. LaHood.
Mr. LAHOOD. Thank you, Mr. Chairman. And I want to thank
the witnesses for being here today for this important hearing
and for your testimony.
In a prior life, I spent 10 years as a State and Federal
prosecutor. And I am not proud of it, but I sent a lot of
people to prison and jail, and I know that system very well.
And I also served in our State legislature in Illinois and was
very involved with criminal justice reform.
We have talked a lot about how we find that balance between
safety of our community, letting people out of prison early,
getting them back into our communities, but also protecting
society, and that political balance has been difficult. And,
frankly, we haven't had much success in doing that at the
Federal level with criminal justice reform.
And, you know, in the State of Illinois, our goal with our
criminal justice reform was to get 25 percent of our current
State prison population out and figure out how to do that,
particularly the nonviolent offenders. And, again, everybody
wants to be tough on crime when you run for office, and so
finding that balance is important. And so, I am listening to
your testimony today, and particularly, Brian, your testimony,
and trying to find that right balance.
And, Mr. Thomas, I read that I think you have 86 former
offenders working for you and you have had, as you just
mentioned to Ms. Sewell, an 80 percent retention rate. And I
wonder if you have suggestions on that balance between
protecting our citizenry and safety, but also giving people a
chance.
Mr. THOMAS. Sure. So, you know, you had mentioned the
safety factor. You know, I mean, obviously, we want to protect
our communities. The best way to protect them is to give them
purpose. And so many of these inmates that I have had
interaction with over the last, you know, 18 to 24 months, the
biggest thing was just the fact that they wanted somebody who
believed in them.
Most of the inmates that we have hired, they are not bad
people. Let me rephrase that. All of them are not bad people.
They have made some poor choices in life. I think the best way
to serve them is to give them that belief that they can do it.
We have also made it a point that, you know, all of our
managers get in touch with them at least every day to some
degree.
So, I think, to answer your question, it is really about
just giving them purpose. I think, ultimately, it is going to
create the safety for our communities.
Mr. LAHOOD. Well, I tend to agree with you. Being wanted or
having a purpose is a big part of that. I am curious, you
mentioned that your managers interact with them. Obviously, we
have a parole system as Brian mentioned earlier. We have lots
of integration systems. I am curious, do you feel that your
managers are much more involved in aspects of their life or is
it just related to what they do workwise?
Mr. THOMAS. Oh, no, it is absolutely, if they have any
issue that they are dealing with, whether it is personally or
professionally, they are there to mentor them really, in
essence, that is what they are there for.
I do think it is more effective, just from an employer's
perspective, in the sense that it is more personable. You know,
the parole board or the probation officers that they see, you
know, those are just individuals that are there to do their
job, to make sure that they are staying in line, whereas our
managers are more, are there to support them, you know, in
their personal life as well so there is a significant
difference.
And I think that has really, truly been one of the
successes of this whole program is that it is not just teaching
them a trade. It is, you know, they are mentoring them. And I
can tell you, I have had a number of managers come to us and
just tell us how it has impacted their lives personally as
well. You know, they feel like they are really doing something
beyond just for themselves or just for the company.
Mr. LAHOOD. And it sounds like, from what you are saying,
in some ways, they are kind of a life coach, right, on some of
those core decisions that are being made.
Mr. THOMAS. Exactly made.
Mr. LAHOOD. So, I am curious on that. I mean, do you give
them training, your managers, or how do they acquire those
skills to engage in that?
Mr. THOMAS. No, I don't give them the skills personally. I
mean, you know, obviously, it is something that we meet once a
month and have a discussion around. Some of the managers will
bring to us, you know, maybe some of the problems that some of
the particular inmates are having and we kind of all work
together to come up with a viable solution for them. We have
had individuals that couldn't find housing, so we stepped up
and we basically paid for their housing to get them over the
hump. So, it is a combination of, I think, a lot of different
things.
A lot of it is just learning on the fly, you know. A lot of
these guys are just learning it as they are--because everybody
is a different case, right? I mean, everybody is an individual,
so all the problems are individually different too, so----
Mr. LAHOOD. Well, thank you for what you do, and for trying
to help your community, and for sharing here today. I
appreciate it very much.
Mr. THOMAS. You bet.
Chairman SMITH. Thank you. That is an amazing background.
Oh, sorry, one more. My apologies.
Mr. BISHOP. Wow.
Chairman SMITH. Mr. Bishop is recognized.
[Laughter.]
Mr. BISHOP. I am a low man on the totem pole. I won't be
long.
First of all, thank you all for being here today. I am
grateful, and we are all benefitted by your testimony. In my
previous life, I was a prosecutor. I have been in and out of
courts and had some time to spend in the prison system with
folks, not personally, but in my role as a prosecutor.
I don't know that there are any services within the prison
system that will prepare folks, inmates, for leaving. And I am
wondering, Brian, what would it have been like if you had left
without this, this transition into this beautiful opportunity
that you have had?
Mr. POTACZEK. I had already had results with being released
and being reincarcerated because I didn't have job stability. I
mean, for me, that is what it comes down to is job stability
and everything else comes past that, paying your fines with
work, clothing, dental, health insurance, not using access, or
I mean, it is just, it is better. For me with the job
stability, everything else just kind of fell in place after
that.
Mr. BISHOP. That hits close to home for me because I have
an 18-year-old at home too and he just had wisdom teeth out,
and he came home with a prescription for an opioid. And I
didn't, I purposely did not fill it because I just thought it
was incredibly, let us just say, negligent on the part of the
doctor for having prescribed it. It was way over prescription,
as far as I was concerned. But I know what happens all the time
and this is a message that we need to get out to a lot of
parents who are in the same situation.
But I wondered if I might ask the panel, there is a study
by a Princeton economist, Alan Krueger, and he found that the
increase in prescribing rates can account for between 20 and 25
percent of the approximately 5-point drop in labor force
participation between 1999 and 2015. Is that real?
This is where the opioid crisis and the job issue interact.
It is amazing to me that that is indeed an issue and it is that
big of an issue. So, I don't know, does anybody feel inspired
to answer that question?
Ms. WILHELM. I would be happy to talk a little bit about
our experience. I would say probably 90 plus percentage of the
people we interact with are incarcerated for some drugs or
drug-related offenses and it is a huge problem.
And I think one of the reasons that sometimes they are not
successful, even after they know they have a job getting out,
just actually showing up and whatever, is that intervention
into them going out and starting to use again, so it is a huge
crisis. And then sometimes they will work for a week, get their
first paycheck, and they are gone, and they are out buying
drugs again. So, no, we see it every day, not just in this
population, but in the workforce certainly.
Mr. POTACZEK. My experience with it, you know, I got my
wisdom teeth pulled and I just started doing the pills. I was
coming from a good family, my mom is supportive, not on drugs,
came from a good community, and that spiraled me down and I
lost everything just from that. I lost my job, so I believe in
it. I believe there is others out there and I believe it is
affecting our communities really, really bad. And I have seen
it from firsthand experience and I have had experiences with
talking to other inmates about the same stories, how it just
gets out of control.
Mr. BISHOP. That is incredible testimony. And I have heard
the same thing, I just didn't know it was at this level, that
it had had that kind of impact.
Ms. Terenzio, you have a program that you participate in
called Skillful. And the Skillful, I think it is the Skillful
State Network?
Ms. TERENZIO. Mm-hmm.
Mr. BISHOP. Can you share with us what that is about? It
sounds like a very interesting program for States.
Ms. TERENZIO. Yeah. Skillful's mission is to have employers
consider employees based on their skills, not necessarily their
background and degrees. And so, we work with them pretty
closely as a model of basically what a company can look like if
you consider people just based on what they can do and not
necessarily what their pedigree looks like.
And so, we helped them kind of get the word out. We are a
case study for them. We support each other, you know, through
literature and speaking engagements, and so we have worked
pretty closely with them just in kind of getting the word out
to other employers about what you can do if you don't just
consider degrees on every job application.
Mr. BISHOP. So how many States are you in and how is this
funded?
Ms. TERENZIO. Our particular program or Skillful?
Mr. BISHOP. Skillful.
Ms. TERENZIO. Skillful is an offshoot of the Markle
Foundation based out of New York City and they are just
expanding. But we just, we partner with them. We are not a
part, we are not actually Skillful, so we are just an
apprenticeship program through the Department of Labor.
And we are currently in Colorado, but we are looking, we
are looking at rural-sourcing kind of jobs, so we are also
looking at creating opportunity in rural areas where we can use
our apprenticeship program to train people and maybe instead of
Silicon Valley or going to India for software development, they
actually go to rural parts of America to write their software.
Mr. BISHOP. That's fascinating. Thank you very much.
Chairman SMITH. Thank you. So, you are saying someone could
show up with a Nebraska Huskers attire on and still get a job
in Boulder, Colorado?
Ms. TERENZIO. Correct.
[Laughter.]
Chairman SMITH. Very good, very good. Thank you so much.
Really, your insight, your perspectives, and these are great
stories. Thank you again, Brian, for sharing your story and
thanks to all of you.
It involves everyone here, the complexities of the system
that we need to look at, and I think this hearing is
particularly instructive for us as we try to work together to
move forward for the betterment of our country through the
betterment of individuals and some second chances, or third, or
fourth from time to time as well. So, thank you very much for
your participation here today. Thanks.
We will now focus on the second panel of witnesses.
So, as we are shifting positions here, I will say that,
unfortunately, one of our witnesses was unable to attend today,
a Mr. Tony Girifalco, and he is the Executive Vice President of
the Delaware Valley Industrial Resource Center in Philadelphia,
Pennsylvania.
I do ask for unanimous consent that his written statement
be made a part of the record.
Without objection, we will do that.
[The prepared statement of Mr. Girifalco follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. I now recognize Ms. Jenkins for the purpose
of introducing her constituent from Kansas.
Ms. JENKINS. Thank you, Mr. Chairman.
It is my pleasure to introduce Justin Welner from Spirit
AeroSystems based out of Wichita, Kansas. Spirit AeroSystems
designs and builds aero structures for both commercial and
defense customers and is the largest private employer in my
home State of Kansas.
Mr. Welner serves as Spirit's Vice President for Human
Resources and the Environmental Health and Safety Department.
He has worked for his entire career in the aerospace industry,
having previously worked for Bomabardier Learjet, where he
served as Director of Human Resources in addition to holding
numerous other leadership roles during his nearly 20 years with
the company.
Mr. Welner, thank you for being here today. We are looking
forward to hearing your expertise in this subject area.
Welcome.
I yield back, Mr. Chairman.
Chairman SMITH. Thank you, Ms. Jenkins.
Dr. Davis for the introduction of your constituent.
Mr. DAVIS. Thank you very much. And it is my pleasure to
introduce Mr. Andrew Wells.
Not only am I pleased to do so because of his expertise and
knowledge, but he also grew up in the community where I live,
which is on the west side of Chicago which is known as one of
the most poverty-stricken areas in the country, an area where
the riots occurred after the assassination of Dr. King and an
area that has been called a microcosm of what is wrong with
urban America, and that has been for many years.
The Chicago Urban League has been around since the early
1900s and then intimately engaged in program development that
is designed to lift the country out of its position of need to
a position of productivity.
So, Mr. Wells, thank you so much for being here, and I am
delighted that the Urban League is doing the work that you do.
Chairman SMITH. Thank you.
I would like to recognize Ms. Walorski for the purpose of
introducing her constituent from Indiana.
Ms. WALORSKI. Thank you, Mr. Chairman. I have the pleasure
of introducing Peter Barrett. Peter is the Senior Vice
President of Marketing and Corporate Development at Smoker
Craft in New Paris, Indiana.
Smoker Craft is a multigeneration, family-owned boat
manufacturer located in my district. Peter has been with the
company since 1996 and is carrying on the family tradition as
the fourth-generation owner/employee.
I love visiting Peter at his company, Smoker Craft, and
hearing from Peter and his employees, and I am delighted that
he is with us today to share his insights on the jobs gap.
Thank you, Mr. Chairman.
Ms. WILHELM. Thank you.
Chairman SMITH. And witnesses are reminded to limit their
oral statements to 5 minutes. All of your written statements
will be included in the record.
We will begin with Mr. Welner. You may begin when you are
ready.
STATEMENT OF JUSTIN WELNER, VICE PRESIDENT FOR HUMAN RESOURCES,
SPIRIT AEROSYSTEMS
Mr. WELNER. Chairman Smith, Ranking Member Davis, and
Members of the Ways and Means Committee, thank you for allowing
me to testify today about the workforce pipeline challenges
facing our company along with other advanced manufacturing
businesses across our country.
Spirit AeroSystems designs and builds large, complex
aerostructures for both commercial and defense customers. Our
largest customers include Boeing and Airbus, and in 2016 we
were named as one of seven suppliers on the B-21 Raider program
for the Air Force.
With headquarters in Wichita, Kansas, Spirit operates
manufacturing sites in Oklahoma, North Carolina, Europe, and
Asia. Our core products include fuselages, pylons, nacelles,
and wing components.
Spirit is the largest private-sector employer in the State
of Kansas with more than 11,500 employees. Last December, our
company announced we would be expanding our Wichita operations
by adding 1,000 new jobs over 2 years and investing $1 billion
over 5 years in capital projects. This was driven by production
rate increases on existing programs as well as new programs in
the areas of defense and fabrication.
Building a talented workforce from today's labor pool is
one of the largest challenges our company faces as we hire to
keep up with natural attrition rates and seek to expand our
base employment to meet production requirements of our
customers.
Before I explain our experience with workforce constraints,
I want to provide additional context for what we are up
against.
At our Wichita site, we employ about 7,500 line-workers.
These include sheet metal mechanics, assembly mechanics, CNC
operators, and composite tech who fabricate, build, and
assemble large metallic and composite aircraft structures.
At our four U.S. sites, we have hired more than 4,000
front-line employees since 2015, about 1,000 of those in the
last 3 months.
But like many other advanced manufacturers, we are faced
with an aging workforce. And what keeps me up at night is the
fact that within 5 years, 40 percent of my entire workforce
will be retirement-eligible. The enormity of this reality and
the challenge it poses for us, along with thousands of other
advanced manufacturers, cannot be overstated. Spirit has been
hiring as quickly as possible to fill open positions, but we
are struggling to find qualified workers with the skillsets
needed in today's aerospace manufacturing environment.
Three years ago, it was customary for us to hire someone
and put them through 2 to 3 weeks of training depending on the
experience level of that new employee. Today, we have retooled
and expanded our in-house training programs that now last up to
7 weeks, so when we recruit and hire somebody, it is 7 weeks
before they hit the shop floor and actually produce any real
work and it is several additional weeks before they become
fully productive.
The challenge we are experiencing is not isolated to a
State or regional problem. It is a national problem, and we are
nearing the verge of what could become a watershed moment for
our country as we determine what we want the future of
manufacturing to look like in the United States. How we respond
and our ability to proactively pursue collaborative solutions
will define our success.
While I've described some of our industry's obstacles to
filling open jobs, I want to pivot for a moment and share with
you some of the solutions we have deployed to help to try to
overcome those barriers.
We are investing millions of dollars into an expanded in-
house training program that includes growing our training
department by 30 people. Their focus is on improving the
skillsets of the new hires and getting them better prepared to
be successful on the shop floor.
We have expanded our recruitment efforts to reach well
beyond the State border and we are now offering very generous
relocation packages for experienced hourly employees. While we
have had some isolated examples of success with this, most
hourly workers come from two-income families and are well-
rooted in the communities in which they reside.
In the last few months, we have launched a retiree and
alumni program where former employees are now hired to come
back to work as a workplace coach to mentor and guide less
experienced mechanics as they begin to navigate the
complexities of the manufacturing environment.
For several years, Spirit has had an apprenticeship program
with the International Brotherhood of Electrical Workers, and
this year, we are launching several additional apprenticeship
programs with the International Association of Machinists and
Aerospace Workers.
In addition, for many years, we have worked cooperatively
with the technical colleges located near our manufacturing
facilities to guide and shape curriculum programs that meet the
needs of our industry. We have intensified that engagement
based on the tightening of the labor market.
Last year for the first time, we started a high school
intern program to bring high school students into the factory
and introduce them to careers in manufacturing. Based on the
success of that program, we will be doubling the size of that
program this year.
One other strategy that was targeted toward high school
students that has helped is the Excel in Career Technical
Education initiative, which is more commonly referred to as
Kansas Senate Bill 155. That law took effect in 2012 and pays
for students to obtain technical certifications and credentials
before they graduate high school. We have hired many students
through this program.
But while all of these initiatives are helping address the
challenge faced by our industry, unfortunately they are not
yielding nearly enough potential workers. So, I would like to
conclude by highlighting a few additional opportunities that
this Committee and Congress could consider to further assist
aerospace and advanced manufacturing.
The first thing is for leaders to understand that if our
country cannot solve the workforce problem and talent pipeline
issues, our U.S. industrial base will erode because businesses
will be forced to move work to countries that can satisfy
production demand. This is not a threat targeted at our elected
leaders. It is a threat we all face together, given the
realities of operating in a global economy.
A second thing for us all to address is the need to better
promote the dignity of career paths in technical fields such as
advanced manufacturing. All too often, parents and our
education system encourage students to seek post-secondary
education through a 4-year degree, and we ignore career paths
that require vocational training.
And finally, I would encourage this Committee and Congress
to consider options that allow Pell Grants to be used for
students seeking certifications and credentials in technical
programs that are less than 16 weeks long. By limiting
qualifying students from receiving Pell Grants for credentialed
technical training programs that are under 16 weeks, we create
an unnecessary barrier for lower-income students to achieve
success through a career in manufacturing.
I appreciate being invited to testify on behalf of Spirit
AeroSystems. This Committee is faced with many challenges of
national significance. We are grateful for the work you did on
tax reform and we are grateful you are spending time to further
explore ways to help the private sector address these workforce
challenges.
Thank you for your leadership on these matters. I look
forward to answering your questions.
[The prepared statement of Mr. Welner follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you, Mr. Welner.
Mr. Wells, you are recognized.
STATEMENT OF ANDREW WELLS, DIRECTOR, WORKFORCE DEVELOPMENT
CENTER, CHICAGO URBAN LEAGUE
Mr. WELLS. Thank you, Chairman Smith, Ranking Member Davis,
and Members of the Subcommittee for the opportunity to offer
testimony here today. My name is Andrew Wells and I am the
Director of Workforce Development at the Chicago Urban League.
In my role at the Chicago Urban League, I am tasked with
the very important job of connecting people to employment
opportunities, training, and career pathways to high-growth
sectors. In the 100 years our organization has been in service
to the African American community, this has been a staple of
our work.
Employment is the most essential building block in
individual and community economic growth. A good job helps to
alleviate household poverty and a strong job market gets more
people in a community working and more dollars circulating
locally and nationally.
The Chicago Urban League focuses specifically on assisting
individuals in the highest areas of need, in racially
concentrated areas of poverty, the areas that have the highest
unemployment rates in the city, located primarily on the South
and West sides of Chicago.
Youth and adults living in racially concentrated areas of
poverty, however, have a significant number of barriers to
accessing jobs.
One, there is a significant employment spatial mismatch.
Strong central business districts and suburban employment cores
house many of the best opportunities for workers. In places
like Chicago, where jobs are located are not where African
Americans most in need of jobs live.
Someone who doesn't live near transportation or who lacks a
car might have a very difficult time getting to work. The
distance might be too considerable to manage working, child,
and household obligations.
The pay may not be adequate to overcome increased costs
related to commute and child care. All of these barriers
conspire to reduce a person's ability to both find and keep a
good job.
The collateral consequences of criminal records
significantly impede employment opportunities. We know that
employment is a critical part of the re-entry process, and yet
there are barriers at all levels of hiring and promotion
throughout all industries and sectors.
Skills, job readiness and training programs need to be more
abundant. These skills need to be targeted in areas of growth,
like green and emerging industries.
The Chicago Urban League strongly encourages more training
opportunities for youth and adults from the most disadvantaged
neighborhoods to build on their employability skills. But that
is not the only answer. We also need to do the following.
Enact an employment subsidies program that would place
unemployed individuals in the private sectors, private and
public sectors, including those with criminal records.
Expand apprenticeships, summer and employment opportunity
programs for youth.
Increase workforce training opportunities for African
American adults and match them with employment through public
and private partnerships.
Reduce the collateral consequences of a criminal record and
barriers to employment through sound criminal justice reforms.
Create or expand transportation subsidies to ensure that
workers can get to their places of employment.
Create small business incubators in racially concentrated
areas of poverty to bring local, accessible jobs to these
disinvested communities.
Last, but not least, ensure equity in public education.
Illinois has the worst disparities for funding in the Nation
when it comes to equity for low-income minority students.
Providing youth with good quality education will go a long way
toward improving access to jobs, to quality jobs by preparing
youth to get jobs.
I know that this will not be easy. I know this takes
political and community will to accomplish. But we all know how
critical increasing employment opportunities are to our
neighborhoods and to cities across the country.
Expanding these opportunities will not only increase
employment in our most under-resourced communities, but also
reduce crime, decrease household poverty, increase home
ownership, and build community wealth.
We cannot continue to accept that, in great cities like
Chicago, the highest unemployment rate for people of color in
the Nation is the norm. We must do what is right to ensure
equal access to opportunity for all American citizens. Thank
you.
I would like to just share this one thing. We operated a
transportation construction apprenticeship highway program for
about 3 years. We trained 598 individuals in this, in this
program, most of whom were ex-offenders or came from
disadvantaged neighborhoods. I want to share this one success
story because this is why I keep doing the work that I do.
There was a young lady, and I will call her Ms. Dewberry,
who was a single mother with three children. Literally, she was
making decisions at the gas pump on whether to put gas in her
car or to put food on the table. At the time that she applied
to the Chicago Urban League, she worked at Monterrey Security
making $11.54 an hour. Now, mind you, she has three kids.
So, I did her interview when she enrolled in the program
and I asked her, I said, ``Well, you already have a job.'' I
said, ``Why are you enrolling in a program?'' She said, ``Well,
Mr. Wells,'' she said, ``I can't continue.'' She said, ``I
don't know what to do.'' She said, ``Every night, I am crying.
I can't take care of my kids off of $11.54 an hour.''
Well, I enrolled her in the program and she ended up
becoming the best laborer, the best apprentice at the Chicago
Urban League. And right now, this young lady is making $37.50
an hour and it changed her life.
Not only did it change her life, but it changed the lives
of so many other people who came through our doors. If you have
quality training programs that can provide real skills that
employers can use, it works. So, I just want to leave you with
that.
[The prepared statement of Mr. Wells follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you. Thank you, Mr. Wells.
Mr. Barrett.
STATEMENT OF PETER BARRETT, SENIOR VICE PRESIDENT, MARKETING
AND CORPORATE DEVELOPMENT, SMOKER CRAFT, INCORPORATED
Mr. BARRETT. Good afternoon. Thank you, Chairman Smith,
Ranking Member Davis, and Members of the Subcommittee, for the
opportunity to appear before you today to discuss an issue
important to my business and the recreational boating industry,
workforce development. My name is Peter Barrett. I am proud to
represent Smoker Craft, Incorporated, a boat manufacturer
located in New Paris, Indiana.
Founded in 1903, we are a fourth-generation family-owned
and operated business that builds pontoon boats, fiberglass
boats, aluminum fishing boats under the brand names Smoker
Craft, Starcraft, Sunchaser, and Sylvan. Last year, Smoker
Craft built and distributed over 11,000 boats to our worldwide
dealer network. Our company employs over 690 people at our two
manufacturing and transportation locations.
The recreational boating industry is an important driver of
the U.S. economy, with an annual economic impact of more than
$121.5 billion. Our industry is uniquely American. Our industry
is a uniquely American-made product. Ninety-five percent of
boats sold in the United States are made in the United States.
Behind a fun day on the water with family and friends are
American businesses and manufacturing jobs.
Our manufacturing is unique to the boat business and
employees must have a broad range of skills. Our highly-skilled
employees must weld, rivet, and fiberglass laminate. Less-
skilled workers need the skills to read a tape measure, utilize
simple power tools, and follow basic instructions. Our jobs do
not require a 4-year degree. They pay well and have great
benefits. A solid employee can quickly move up and establish a
career in our organization.
The boating industry is strong and many of our 300-plus
dealers report that 2017 was their best year ever. Many dealers
have indicated that they could sell more product if we could
meet the demand. We have plenty of work. Today, our backlog is
20 percent larger than last year. Unfortunately, we will be
challenged to meet this demand and will struggle to continue to
grow if we cannot find skilled employees.
Our current employment situation is troubling, and the
future looks even worse. We are located in a region with lower
unemployment and higher job opening rates than the rest of the
country. With an aging workforce and a small pool of qualified
workers to recruit from, we are concerned with the future
prospect of finding skilled workers, a critical component for
our growth as a business.
Last month, we thanked an employee named Frank Perales for
50 years of service on our aluminum riveted line. Frank is
dedicated to our company and an excellent boat builder. His
ability to quickly solve problems, coupled with a strong work
ethic, have made him a model employee. As we presented his
gift, he said he would like to retire in a year or two.
Unfortunately, replacing someone like Frank might require
two people to achieve the same level of production. If we could
find the right person, Frank should be mentoring his
replacement right now.
Beyond the production line, a similar issue impacts our
transportation division. Our drivers haul boats around the
country and into Canada. The long days and nights on the road
coupled with unloading boats upon arrival is exhausting for our
older drivers. Many of our senior drivers face further
challenges in adapting to the use of electronic log books and
have changed jobs or retired simply to avoid learning new
technical skills. Replacing these drivers is difficult as
younger people show little interest in this career path and we
need our boats delivered.
The future challenge we see is attracting and training the
younger employee for our workplace. Our area, once known for
its strong family farm work ethic, is struggling to find young
people with the grit and desire to participate in American
manufacturing.
Very well-designed skills training programs have been tried
through our local community college but have failed as
employers can't wait for live bodies, trained or untrained. As
participation in these programs dwindled, funding was frozen.
The concept of workforce training programs is vital to
bridging the jobs gap we are facing today and in the future.
Simply put, we need skilled workers. Our industry needs
welders, riveters, assembly people, and truck drivers. Shop
classes need to return, and exposure to careers in
manufacturing through internships and apprenticeships should be
encouraged. Careers in the trades need to be recognized and
glorified. Our workforce is the backbone of this country. We
need to support the expansion of career and technical education
or CTE, just as we support 4-year and graduate education.
I am pleased to see Congress taking steps in the recently
passed Appropriations legislation to support the Department of
Labor and Department of Education programs that promote access,
completion, and affordability of workforce training efforts.
The funding and support is crucial to States and localities
trying to meet the needs of employers such as Smoker Craft,
Incorporated.
Thank you again for the opportunity to appear before you
today. I look forward to answering your questions.
[The prepared statement of Mr. Barrett follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you, Mr. Barrett, and thank you to
our entire panel. It is, again, great to hear your perspective,
your expertise as well.
We know that there is oftentimes the challenge of, you
know, we know that folks need a job and want to work, there are
openings out there, and bringing everyone together is
oftentimes more difficult than one would think.
America is a big country, too. And geographically, there
can be some distances that are problematic or a challenge, even
in the city. And transportation can be a challenge with a
worker getting to a job site.
I am proud to say Nebraska, I think, has done fairly well
in terms of advancing these causes. I am glad that Forbes
recently has ranked Nebraska the fourth best place to do
business, but I know that I still hear from many employers who
face the challenge of job openings that remain unfilled.
And so, we know, as Mr. Wells already indicated, that some
community partnerships can really deliver positive results,
positive outcomes, increasing wages. I mean, not only getting
someone perhaps into a job, and you know, that might just be
checking a box, but when you really look at raising oneself up
out of poverty, it means increasing wages and that drive to see
higher wages with time, with time and effort.
So, I was wondering if others on the panel, and certainly,
Mr. Wells, if you want to add emphasis as well to the community
partnerships that have been formed that bring folks in need,
whether it is the job opening, whether it is the unemployed
individual, or the underemployed individual as was mentioned
before, can you point to some specific community partnerships
that have been particularly successful?
Mr. WELLS. Sure. So right now, at the Chicago Urban League,
we have two projects running with ComEd. ComEd is one of the
largest electric suppliers in the Midwest, specifically in
Illinois.
And one of the projects is called Construct. It is an 11-
week training program to equip individuals with the skills to
go into the electrical construction industry. So, we partner
with about seven other agencies and 47 companies are a part of
this project.
The 47 companies pay into the program to create that
pipeline of individuals. The 47 companies are subcontractors
with ComEd, so we are essentially building that pipeline for
those companies who claim that, hey, we don't have talented
workers, we need skilled workers, so we are creating it for
them.
Another project that I am running with ComEd is the solar
PV installation jobs training program. We currently have a
cohort of 15. It just started April 6th and this is a project
that we received $1 million for to train one hundred people
over the course of 4 years.
We have other partnerships with corporations such as AT&T,
in which we do digital literacy training to eliminate the
digital divide and then to also provide individuals to their
call center jobs and other technical jobs.
We work with Comcast. We have a relationship with them. We
train people for jobs at Comcast. We just renewed our contract
with them.
And I recently received a contract with the Chicago Transit
Authority, in which we are training individuals similar to a
project that we are running with Construct where it is, this
one is 8 weeks and it is training people to become bus
operators and also call center representatives.
Chairman SMITH. Very good.
Mr. Welner.
Mr. WELNER. Yes. So, we work with the Kansas Workforce
Alliance to bring in the underemployed and put them through a
training program. In fact, we have a Camp Grant to help do
that.
We have been fairly successful with it. The challenge that
we face is that the manufacturing environment isn't necessarily
appealing to some people. It is a 5-day, sometimes 6-days a
week job. We are a heavily-unionized company, so you start on
second shift based on seniority and that brings some challenges
with it as well.
But, nonetheless, we are absolutely exploring every avenue
we can to find workers including looking for community
partnerships to get to everybody we possibly can.
Chairman SMITH. Very good.
Mr. Barrett.
Mr. BARRETT. We have explored several different avenues
over the years. But, unfortunately, we have found that being
where we are in the pecking order in Elkhart County makes it
more difficult in our line of work. As you may have seen in the
Wall Street Journal article, the focal hub of manufacturing is
the RV industry in Elkhart County. And the boat business, we
are a little bit different. We are classified with RV, but we
are a different animal. We tend to work at a slower pace. Our
boats tend to be a little bit more customized than an RV. Our
pace attracts entry level employees that can work a little bit
slower, but at the same time, we tend to pay a little bit less.
So being in that place in the employment pecking order, the
more valuable or the more skilled employees tend to go to RV
first and then they filter down to us. So, what happens is
typically the vocational schools will feed RV before us. We
have tried several programs to capitalize on job placement, but
we just have not had much luck.
Chairman SMITH. Okay. Thank you.
I now recognize Dr. Davis for 5 minutes of questions.
Mr. DAVIS. Thank you, Mr. Chairman.
Mr. Welner, do the high schools and community colleges in
the area where your plants and facilities are located, are they
preparing individuals for work in the manufacturing areas?
Mr. WELNER. So certainly, the community colleges and the
vocational schools are trying. The challenge is getting the
students into them, right? We do have some high school programs
that are starting to take positive effect in terms of
partnering with a technical school and allowing students to get
their technical certifications or credentials while they are in
high school.
The big challenge seems to be the lack of interest in that
generation in this type of work. We are starting to push all
the way down into the middle schools and elementary schools,
starting to talk to kids about the positive benefits of careers
in manufacturing. And we don't think of it as just a job, we
think of it as a career.
When I started 25 years ago at Learjet, I started as a
payroll clerk at $8.50 an hour, coming out of a 4-year school
with a degree in finance. That wasn't my aiming point, but it
was a way in the door, and that is the promise we are trying to
talk to these kids about. And if you look at most of our
leaders in the manufacturing world, they started on the shop
floor, so it can absolutely be a career and not just a job, but
we have to get the kids interested in it.
Mr. DAVIS. So, if there was perhaps more focus put on
recruitment, because many of the individuals who end up in need
of TANF are individuals who have gone past or didn't complete
or did not follow the high school curriculum to the point, so I
am just thinking that some additional recruitment of this
population group, especially young adults who have no skill but
fit the category and the requirements for TANF assistance, I
think would probably be----
Mr. WELNER. I think that would be great. I think we have
lost a lot of the shop classes in the school system. When I
came through the school system, you could take a mechanical
shop class, you could take a woodworking class. All of that is
gone. So, the kids that maybe the regular curriculum isn't
right for, they don't have anywhere to go.
Mr. DAVIS. Mr. Wells, I know that the Urban League does not
officially have a training program that is directly related to
TANF recipients, but you do get them, right?
Mr. WELLS. That is correct.
Mr. DAVIS. I understand people do come who meet the
criteria to be a TANF recipient. Are you able to connect them
in any way with TANF or to pursue resources through TANF that
could benefit them?
Mr. WELLS. I'm sorry. Are you saying, are you talking
specifically about TANF participants that come through Chicago
Urban League's doors and connecting them to different
resources?
Mr. DAVIS. Right.
Mr. WELLS. Yes. So, we do an assessment to figure out what
the need is, if they come through our doors and they are
interested in some type of training. Right now, we run several
of them. We have the Ready to Work Grant in which we provide
technology training. We have training in supply chain
management. We have construction training to increase minority
participation in the trades. So, it depends on what, it depends
on what they want to do and if they qualify for that, for those
programs and then we will enroll them in the programs.
Mr. DAVIS. Well, let me just, I have been particularly
warmed with the coming with that as an activity relative to
helping individuals get into the electrical area, so let me
just commend the Urban League for that affiliation. Thank you
very much, and I yield back to the Chairman the balance of my
time.
Mr. WELLS. Thank you.
Chairman SMITH. Thank you.
Ms. Walorski.
Ms. WALORSKI. Thank you, Mr. Chairman. And to Peter's
point, there was an article that he referenced in the Wall
Street Journal last week, and the headline is ``The Future of
America's Economy Looks a Lot Like Elkhart, Indiana,'' and
Peter is right down the road from Elkhart in my district.
The article says, ``High school students skip college for
factory jobs that offer great pay and benefits. Workers are so
flush that car dealers can't keep new pickups on the lot. At
the same time, employers can't hold onto employees.'' It points
out that the unemployment rate is essentially zero because
there are 9,500 jobs available in this place in Elkhart.
So, Peter, to your point, as we talk about that, there are
challenges between this article and your testimony. Which is
the hardest to do, find workers, teach them skills, or retain
them? What is the toughest part of those three for you?
Mr. BARRETT. That is a really tough choice because all
three are exceptionally difficult. Retaining employees has been
very difficult. I will give you an example that happened on
Monday. I walked into my office and an employee who had been
with us for 20 years came to me, with tears in his eyes to tell
me he was leaving. Our employees are family, and so when a 20-
year employee comes to us and he is saying that he is going to
leave, that is a big deal.
Martin has worked for us for 20 years. He drives a
forklift. He found a job across town for $10 more an hour. Our
industry and our company doesn't have the means to be able to
raise rates that abruptly, to get into a wage war and to chase
employees. So we just lost a really good employee who I would
love to still have, and as I said, he is part of the family.
This is one of many heartbreaking stories where we are losing
good employees with longevity. They are leaving good benefits
and stability in a short-term wage war.
Ms. WALORSKI. And let me ask you this. With 2017 being a
record year you talked about, and with tax cuts, with more
money in folks' pockets, looking at things they want to be
involved in, do you need to hire more workers? And what if you
found enough workers, what would that do for your company?
Mr. BARRETT. If we found more workers we would certainly
bring our factory up to full capacity. We have three different
product lines, pontoons, aluminum fishing boats, as well as
fiberglass. Our aluminum fishing boat's welded line could use
several more employees. Right now, we have 44 openings which
need to be filled. Also, if we could get more employees in the
Elkhart area it would help relieve the supply chain. It is not
just our business, but it is the supply chain underneath us
that is suffering, too. So, if our console supplier can't build
consoles due to an employee shortage, we can't build those
boats that day.
Ms. WALORSKI. I appreciate it. I yield back, Mr. Chairman.
Chairman SMITH. Thank you.
Mr. Curbelo.
Mr. CURBELO. Thank you so much, Mr. Chairman. And thank you
all for being here to discuss this very important topic with
us. We are focused on how we can help some of the most
vulnerable, needy people in our country.
And I have been fortunate to team up with Dr. Davis, this
Congress, to figure out how we can perhaps modify or leverage
our existing social welfare programs such as TANF to open new
doors, provide new opportunities to those who are on the
sidelines as Chairman Brady tends to say.
Do you all have any ideas as to how we might be able to use
those programs, not just to help people get by, but to help get
them into the workforce, to help them get up on their feet, and
hopefully eventually become independent of all these programs?
Anyone who wants to take it.
Mr. WELLS. I think one of the things that needs to happen
is an exception needs to be made for those who are interested
in enrolling in a skills training program. So, if they are
interested in it, the 20-hour stipulation each week, that needs
to come down because most of the training programs go past 20
hours, so I think an exception needs to be made in order for
them to get an industry-recognized credential and go into some
type of good-paying job.
Mr. CURBELO. Does anyone else want to add to that?
Do you have any thoughts on wage support for employers who
contract higher, TANF beneficiaries for example?
Mr. WELNER. We are not really involved with that. Most of
the people we hire have to have some credentials from a skills
standpoint because we are building very complex aerostructures
that require precision and training, so my company is not very
involved in that, so I can't add much to it.
Mr. CURBELO. Thank you, Mr. Chairman.
Chairman SMITH. Thank you. Thank you to everyone here for
your participation. It means a lot that you would share your
perspective.
And please be advised that Members will have 2 weeks to
submit written questions to be answered later in writing. Those
questions and your answers will be made part of the formal
hearing record.
With that, the Subcommittee stands adjourned.
[Whereupon, at 3:58 p.m., the Subcommittee was adjourned.]
[all]