[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] PUTTING AMERICA BACK TO WORK: THE ROLE OF WORKFORCE DEVELOPMENT AND SMALL BUSINESS REHIRING ======================================================================= HEARING before the SUBCOMMITTEE ON INNOVATION AND WORKFORCE DEVELOPMENT OF THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION __________ HEARING HELD JULY 16, 2020 __________ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 116-087 Available via the GPO Website: www.govinfo.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 41-298 WASHINGTON : 2021 HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman ABBY FINKENAUER, Iowa JARED GOLDEN, Maine ANDY KIM, New Jersey JASON CROW, Colorado SHARICE DAVIDS, Kansas KWEISI MFUME, Maryland JUDY CHU, California DWIGHT EVANS, Pennsylvania BRAD SCHNEIDER, Illinois ADRIANO ESPAILLAT, New York ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANGIE CRAIG, Minnesota STEVE CHABOT, Ohio, Ranking Member AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member TROY BALDERSON, Ohio KEVIN HERN, Oklahoma JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota TIM BURCHETT, Tennessee ROSS SPANO, Florida JOHN JOYCE, Pennsylvania DAN BISHOP, North Carolina Melissa Jung, Majority Staff Director Justin Pelletier, Majority Deputy Staff Director and Chief Counsel Kevin Fitzpatrick, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Jason Crow.................................................. 1 Hon. Troy Balderson.............................................. 2 WITNESSES Dr. Demetra Smith Nightingale, Institute Fellow, Urban Institute, Washington, DC................................................. 5 Ms. Kelly Folks, Arapahoe/Douglas Workforce Director, Workforce Center, Centennial, CO, testifying on behalf of Workforce Boards and Centers and the Rocky Mountain Workforce Development Association (RMWDA)............................................ 6 Mr. Joe Schaffer, President, Laramie County Community College, Cheyenne, WY, testifying on behalf of the American Association of Community Colleges.......................................... 8 Ms. Kelly Moore, Vice President, GKM Auto Parts Inc., Zanesville, OH............................................................. 10 APPENDIX Prepared Statements: Dr. Demetra Smith Nightingale, Institute Fellow, Urban Institute, Washington, DC.................................. 21 Ms. Kelly Folks, Arapahoe/Douglas Workforce Director, Workforce Center, Centennial, CO, testifying on behalf of Workforce Boards and Centers and the Rocky Mountain Workforce Development Association (RMWDA).................. 26 Mr. Joe Schaffer, President, Laramie County Community College, Cheyenne, WY, testifying on behalf of the American Association of Community Colleges.......................... 33 Ms. Kelly Moore, Vice President, GKM Auto Parts Inc., Zanesville, OH............................................. 40 Questions and Answers for the Record: Questions from Hon. Balderson to Ms. Kelly Folks and Responses from Ms. Kelly Folks............................. 41 Questions from Hon. Balderson to Mr. Joe Schaffer and Responses from Mr. Joe Schaffer............................ 44 Questions from Hon. Balderson to Ms. Kelly Moore and Responses from Ms. Kelly Moore............................. 46 Additional Material for the Record: International Franchise Association (IFA).................... 49 PUTTING AMERICA BACK TO WORK: THE ROLE OF WORKFORCE DEVELOPMENT AND SMALL BUSINESS REHIRING ---------- THURSDAY, JULY 16, 2020 House of Representatives, Committee on Small Business, Subcommittee on Innovation and Workforce Development, Washington, DC. The Subcommittee met, pursuant to call, at 1:00 p.m., via Webex, Rayburn House Office Building, Hon. Jason Crow [chairman of the Subcommittee] presiding. Present: Representatives Crow, Finkenauer, Kim, Davids, Houlahan, Balderson, Hern, and Chabot. Chairman CROW. Good afternoon. I call this meeting to order. I want to thank everyone for joining us this afternoon for our Committee's official remote hearing. I want to make sure to note some important requirements of this hearing according to the House rules. House regulations requires that members be visible through a video connection throughout the proceedings. Please keep your cameras on. Also, if you have to participate in another proceeding, please exit this one and log back in later. Remember to remain muted until you are recognized to minimize background noise. Even before the COVID-19 pandemic, technological advancement and changing trends in the labor market were disrupting jobs and the skills needed to perform them. The coronavirus pandemic has in many ways accelerated these changes and highlighted the urgent need for workers to have the knowledge, skills, and abilities needed in the 21st century economy. Workers and businesses in every industry, especially those hardest hit by COVID-19 must figure out how they can adapt to these changing conditions. In particular, all firms have a harder time finding the employees that fit their needed skillsets. However, as we all know, all businesses will need to play an outside role in getting the country back to work. Before the pandemic, small firms accounted for 99 percent of all private sector employers and created nearly two-thirds of all new private sector jobs. Even when unemployment was low and there were still underlying problems, like a growing skills gap that severely undercuts its public workforce system. The Federal government was failing to prepare our people for the future workforce even as our workforce was evolving. This chronic underfunding of our Nation's workforce development program not only hurt the ability of many workers to get ahead; it neglected the growing needs of our Nation's small businesses as the driver of economic growth and job creation. Since the beginning of the COVID-19 pandemic, more than 45 million workers have filed for unemployment. The unemployment rate stands at 11.1 percent, and experts say that in reality it is higher than that. This unemployment crisis is particularly hurting young people, women, and people of color. Retail clerks, restaurant servers, housekeepers and hospitality workers are now out of job and may not have jobs to go back to. Some experts estimate that upwards of 42 percent of jobs that disappeared during the pandemic may never return. And this is why we are here today, to discuss at length how our Nation's workforce gets the skills needed for the 21st century to help small firms rehire and retain more employees. In the midst of this unprecedented crisis, we must be bold in preparing our people for the future of work and that will only happen if we have ``an all hands on deck'' approach. That includes extending access to new and innovative job training programs like remote apprenticeships. It means we must facilitate intense collaboration between Federal, state, and local government, the private sector, and our Nation's colleges and universities to determine what skills need to be trained and how to help employers find talent. That means we might to rethink incentives we provide employers, especially for small businesses so they are able to invest in the workforce that meet the needs of their particular industry. I look forward to hearing from our expert witnesses who will be able to talk much more about the changing nature of work and the skills necessary to get ahead in the 21st century, as well as the way the local workforce boards, community colleges and Federal policy can help smaller firms find the workers they need to grow and once again become the driver of economic growth and job creation. Again, I want to thank the panelists for joining us here today, and I now yield to the Ranking Member, Mr. Balderson, for his opening statement. Mr. BALDERSON. Thank you, Mr. Chairman, for holding this hearing today. The coronavirus has dealt a devastating blow to our Nation. Neither our people, nor our economy, is immune to its negative impacts. However, Americans are resilient and strong. Our healthcare providers have fought tirelessly to save lives. Our school systems have rapidly evolved to meet remote learning demand. Many of our small businesses from restaurants to manufacturers have adapted to overnight challenges, loss of revenue, and ever-shifting local and Federal guidance. I am inspired by the flexibility, agility, and creativity of small businesses in my district and across this country to demonstrate the confidence we need during the recovery phase. According to the Department of Treasury, the Paycheck Protection Program, also known as the PPP, supported 51 million jobs. This means PPP supported over 80 percent of all small business employees nationwide. I was proud to work with Congresswoman Angie Craig, who also serves on this Committee, to ensure the program would remain available through August 8th. As states continue to move into the next phases of this public health emergency and lift restrictions, Congress must do more to prepare to protect small businesses and their employees. Many are facing atypical expenses such as the purchase of personal protective equipment (PPE) to safeguard employees and customers and on top of recent unexpected declines in revenues. To meet the burden, I introduced H.R. 7216, the Small Business PPE Tax Credit Act with my fellow Small Business Committee Representative Joyce of Pennsylvania and two partners from across the aisle, Representative Brenda Lawrence of Michigan and Representative Mike Quigley of Illinois. Under the Small Business PPE Tax Credit Act, certain small businesses and nonprofit organizations will qualify for a tax credit of up to $25,000 for the purchase and installation of PPE intended to reduce the risk of COVID-19 transmission. In addition to the PPE, new and returning employees will need training on social distance requirements and other coronavirus related changes, procedures and regulations. Both employers and employees will need clear guidance and acceptable resources from the local, state, and Federal government. Here is another opportunity for us to work together. Our workforce has the flexibility, agility, and creativity to meet the demands of our new normal now. It just needs Congress to support them in this effort. Thank you, Mr. Chairman, and I yield back. Chairman CROW. Thank you, Mr. Balderson. I appreciate your comments and all of your hard work and the work you are doing on both sides of the aisle to rep this issue. I would like to take a moment to explain how this hearing will proceed. Each witness will have 5 minutes to provide a statement, and each Committee member will have 5 minutes for questions. Please ensure that your microphone is on when you begin speaking and that you return to mute when you are finished. That might be the most important thing. It happens all the time. With that, I would like to thank our witnesses for taking time out of their busy schedules to join us. Our first witness today is Dr. Demetra Smith Nightingale. Am I pronouncing that right? Is it Demetra or Demetra? Dr. NIGHTINGALE. Demetra. Chairman CROW. Demetra. Dr. Demetra Smith Nightingale, an institute fellow at the Urban Institute where her research focuses on social, economic, and labor policy issues. She was chief evaluation officer at the U.S. Department of Labor from 2011 to 2016 where she developed what is recognized as one of the premier evaluation units in the Federal government. Prior to that she taught graduate courses in social policy and program evaluation at Johns Hopkins and was currently a professorial lecturer at the Trachtenberg School of Public Policy and Public Administration at George Washington University. Thank you, Dr. Nightingale for being here today. Our second witness is Ms. Kelly Folks, the director of Arapahoe Douglas Workforce Center. She has over 20 years of experience working to develop innovative workforce throughout the programming specifically designed to serve both jobseekers and business and industry. She is viewed as a local, regional, state, and national leader in workforce and economic development. Ms. Folks is the president of the Rocky Mountain Workforce Development Association, serves as a board member of Region 8 with the National Association of Workforce Development Professionals, and serves as the Region 4 liaison for the National Association of Workforce Boards. Thank you, Ms. Folks, for being here today. Our third witness is Dr. Joe Schaffer. Dr. Schaffer is currently the president of Laramie County Community College, Wyoming's largest community college. He considers himself a community college evangelist after an associate degree changed his life for the better. Prior to joining LCCC, he spent nearly a decade at Montana State University-Great Falls, serving in a variety of academic and administrative roles. At age 34, he was appointed the dean and CEO, becoming one of the youngest college executives in the Nation at the time. He is currently serving on the Board of Directors of the American Association of Community Colleges and sits on their Commission of Small and Rural Colleges. Thank you, Dr. Schaffer for being here today. I will now yield to the Ranking Member, Mr. Balderson, to introduce our final witness. Mr. BALDERSON. Thank you, Mr. Chairman. It is with great pleasure for me today, a personal friend, to introduce, and we have known each other since they came into our local community since 2004 when her husband and I and her sons have chased each other through the woods on motorcycles. So it is always good. Our final witness today is Kelly Moore. Kelly is the vice president of GKM Auto Parts, which is based on Zanesville, Ohio. In 2004, the opportunity presented itself for Kelly and her husband Greg to purchase their first two Auto Parts locations. They began by employing 16 workers, as well as several family members. In 2006, they bought two additional stores for a total of four with locations in Zanesville, Dresden, Conshohocken, and West Lafayette. Additionally, Ms. Moore currently serves on our 12th Congressional District Small Business Advisory Board, comprised of small businesses from every county in the district and representing many industries. There, she helps me, informing on challenges small businesses face on the ground. Thank you for taking the time out of your busy schedule to join us today, Ms. Moore, Ms. Kelly Moore. I look forward to hearing your testimony and great to see you. Thank you. Chairman CROW. Thank you, Mr. Balderson. And thank you all for being here today. I would like to now begin by recognizing Dr. Nightingale for 5 minutes. Dr. Nightingale, you can see the timer on the screen here. We look forward to your comments. STATEMENTS OF DEMETRA SMITH NIGHTINGALE, INSTITUTE FELLOW, URBAN INSTITUTE; KELLY FOLKS, ARAPAHOE/DOUGLAS WORKFORCE DIRECTOR,WORKFORCE CENTER; JOE SCHAFFER, PRESIDENT, LARAMIE COUNTY COMMUNITY COLLEGE; KELLY MOORE, VICE PRESIDENT, GKM AUTO PARTS INC. STATEMENT OF DEMETRA SMITH NIGHTINGALE Dr. NIGHTINGALE. Thank you, Chairman Crow, Ranking Member Balderson, and members of the Committee. I appreciate the opportunity to testify before you today on the workforce development system and small businesses. The Nation's public workforce development system is a partnership of Federal, state, and local governments charged with providing employment-related services to both workers and businesses and serve over 2,000 local one-stop career centers, also called American job centers, the system which is authorized in the Workforce Innovation Opportunity Act and the Wagner Peyser Act, operates a free labor exchange nationwide. One goal of the system is to help anyone find a job, especially the unemployed and underemployed, and dislocated workers. Another goal is to help businesses by matching skilled job seekers to businesses that are hiring. Most local job centers also make space available to businesses to conduct interviews. They hold workshops for jobseekers and conduct various types of training assessments for workers. So what works in hiring and skills training? Evaluation suggests four points that I would like to make. First, public investment in training fills an important gap. Employers, of course, provide most job training in the United States. Small businesses are less able than large corporations to invest much in training, even in good economic times. The public workforce development system helps fill the training gap by focusing on smaller businesses and low to mid- level workers. The system's very limited funding, though, as the Chairman just mentioned, covers only a small fraction of the hundreds of millions of businesses and workers in the Nation. The second point is that training connected to work has the most positive effect. Not all training is the same, and not all training, whether it is public or private, is effective. But evaluations show that the most effective job training is that which is connected directly to real work, real jobs, rather than standalone training not aligned with jobs that are in demand. This includes integrated training models, such as apprenticeships and on-the-job training with public subsidies. The third point that I would like to make is that individualized staff-assisted coaching and career services are important. Several evaluations are now finding that the types of staff-assisted coaching and services that local one-stop career centers provide and sometimes provide virtually are important. Trainees who receive assistance in selecting their training do better than those who make choices on their own without coaching. The fourth point is that comprehensive and integrated models work equally well for youth and that as with adults, training that is work-based is most effective for youth, especially those who have less than college and those who are just coming out of high school or college. There are at least three ways that small businesses can connect and avail themselves of services in the workforce system. First, it is important for all businesses to stay abreast of the shifts in demand or of skills in the labor market and the state labor market information system which uses the Bureau of Labor Statistics methodology and updates the data regularly. As we have already heard, there have been changes in the demand for technology and virtual skills, accelerated by the COVID crisis in telemedicine, virtual customer service, delivery, transportation, retail, and online support. Training workers now can have longer term payouts and investment in the future. Second, small businesses can partner directly with workforce development systems for training. Many Federal grants require employer partnerships and small businesses can be those partners. And third, businesses should prepare for a long-term period of unemployment, high unemployment and hopefully from additional funding that helps to expand the services that are available. In conclusion, the workforce development system trains workers who might not be otherwise able to receive it and provides support and assistance to businesses that might not have all the resources to do it on their own. Businesses can and do play a critical role, and small businesses can be prepared to expand their role by actively partnering and connecting with the local workforce development system and be aware of new funding as it becomes available. Thank you. Chairman CROW. Thank you, Dr. Nightingale. Perfect timing as well I will add. I appreciate your comments very much. Ms. Folks, you are recognized for 5 minutes. STATEMENT OF KELLY FOLKS Ms. FOLKS. Good afternoon. I want to thank the Subcommittee for the opportunity to discuss the needs of the workforce system. Although WIOA has not been cut at a national level, unfortunately, the current formula utilized for allocating funding to states and then lags with the market and the current demands, therefore it makes it very difficult at a local level to provide the level of service delivery needed, especially during times such as this. The WIOA system has not been funded nationally over the past several years at a level to keep up with the demand or the speed of the market. In order for the workforce system to meet the demands of the jobseekers and business during the pandemic, the system needs resources and funding. During the Great Recession, the workforce system was put to the test, receiving an influx in funding to serve the communities through a variety of mechanisms. The system as a whole rose to that challenge. This type of bold and decisive action is needed even more today with the current economy devastated by the pandemic. Please consider additional resources added to the overall WIOA and Wagner Peyser funding streams, additional resources for youth employment programming, and additional resources for local areas to be able to provide more robust business service delivery which allows for the innovation needed to meet the demands of business; in particular small businesses. Our response to COVID-19 has taken the workforce system nationally and within Colorado to the next level. When the State of Colorado shut down for several weeks during the height of cases in our state, we had less than 48 hours to get all of our services remote and virtual. Many local regions in Colorado developed and implemented local call centers to assist the state with the influx and demand on the unemployment calls to the system by jobseekers and businesses. All services went virtual with absolutely no stop in service delivery to the jobseekers or the businesses. The offices have reopened; however, due to the positive results in offering virtual service delivery, both service models continue to date throughout the state. The current trends that we are seeing nationally, within the State of Colorado and at a local level include people not going back to work with the company that they were furloughed from due to the company either closing, or if the particular job is no longer available. The need for layoff aversion methodologies and incumbent worker training availability to be put in place with more flexibility to ensure that businesses can continue to retool and skill up their current workforce rather than lay off. Although work-based learning is a key factor in being able to put funding into local businesses, right now businesses are having trouble with having the time to look into developing apprenticeship programs or allow for on-the-job trainings. They do not have the bandwidth. Flexibility in being able to pay 100 percent for a period of time of a jobseeker's on-the-job training is needed. A need for more flexibility in the formula funds so that local communities can build the programming needed to put people back to work quickly. And public service employment should be re-examined to be able to place unemployed individuals in opportunities which assist both our local governments with recovery and their families with a paycheck. Some examples of innovative business practices during the pandemic include virtual business roundtables and conferences with topic areas driven by the business community. Another example, the Close the Gap Program, an initiative with the Arapahoe/Douglas Workforce Board and one-stop, Arapahoe County Government and Arapahoe Community College utilizing CARES Act funding. A very significant technology gap was realized in the height of the pandemic. This program closes the technology gap for low-income individuals. Once the individual completes the program successfully, they will receive a laptop in order to be able to accept work-from-home employment opportunities. Some additional innovative best practices that have been in place within the State of Colorado pre-COVID and continue to be very relevant during the pandemic are virtual hiring events through the Connecting Colorado platform utilized statewide, the establishment of the Business Service Alignment Group, which representatives from each local area and the Colorado Department of Labor and Employment. This group works to align business practices to ensure business and industry receive the same services and messaging and the formation of a data expert group with representatives from each local area who work to respond to data requests for business and industry, education, economic development, chambers, nonprofit, and other government agencies, as well as reporting the ROI of the workforce system for Colorado. The Nation's workforce system has the components, partnerships and infrastructure in place which will make certain that the current unemployment crisis from the pandemic can be addressed. In short, the workforce system stands ready to put America back to work. Thank you for your time. Chairman CROW. Thank you for your opening statement, Ms. Folks. Dr. Schaffer, you are recognized for 5 minutes. STATEMENT OF JOE SCHAFFER Mr. SCHAFFER. Good afternoon, Chairman Crow, Ranking Member Balderson, and members of the Committee. It is an honor to be here representing my college, Laramie County Community College (LCCC), about 100 miles straight north of the good Chairman's district. But also to be here on behalf of the American Association of Community Colleges that has more than 1,000 members. As you heard, I have been working with a commission on small and rural colleges for the past few years and that will likely cover my testimony today. Mr. Chairman, there are not many things that are more American than its community colleges for our small businesses. Unfortunately, we work hand-in-hand, whether it is through hunting resources like small business development centers, four chapters or business retention and expansion programs, or it is central for our mission providing customized training and workforce development programs tailored to the needs of our community's businesses. Today, I want to touch on four specific ways community colleges support America's Main Streets. And while we have many examples, I want to be clear that we need to be doing substantially more in these areas. And selfishly, I believe we need a specific focus on helping our rural communities ramp up these efforts. The first is entrepreneurship and small business start. Community colleges have a rich history of developing and delivering programs that prepare jobseekers for real opportunities within their communities, states, and regions, so I believe we need a fundamental shift from focusing on just developing jobseekers, equally emphasizing development of job creators. As you likely know, between the late 1970s and 2012, the share of young businesses, those a year or younger declined by more than 40 percent. Currently, census data paints a pretty scary picture for America, one where more businesses are closing to new ones opening. The business recruitment model has sort of been the holy grail of economic development. We need to shift our focus from business recruitment of the primary economic development strategy to a mindset focused on entrepreneurship and public community colleges are helping drive the shift. The second thing is small business growth and expansion. As you stated, Mr. Chairman, small businesses have accounted for the majority of new private sector jobs. But this growth does not come without intention and support. Community colleges have and continue to play an instrumental role in the growth and expansion of small businesses. One of the reasons we collectively support the Department of Education's Reimaging Workforce Preparation grants that include business incubators as one of the program's two primary priorities. Helping small businesses move from start-up to sustained, stable growth should be a policy priority for us all. The third area is technical assistance. Small businesses, by their very nature, are small. Owners and employers wear multiple hats and they seldom have in-house access to technical assistance, professional development, R&D, or other professional and scientific services. Community colleges have historically stepped up, and stepped in, to help small businesses in this area, either through the direct provision of assistance or through the coordination with community partners. The last area, and probably the one that we are most well- known for is workforce development. Community colleges have perhaps been the most progressive and instrumental in supporting small business in the realm of workforce development. Workforce development has been a hallmark of the community college mission for nearly 100 years. But there are two primary challenges that we face with workforce development. The first is the sheer lack of individuals available for work, especially in rural areas. Aging populations, lower birth rates, and issues with immigration policy have all impacted the availability of workers. And as you said, Mr. Chairman, the other one is the skills gap. You stated numerous times that there are jobs available but not the people with the skills necessary to successfully fill them. I am proud of LCCC's work and really being at the helm tackling this challenge, our partnership with the Department of Labor on expanding community college apprenticeships or tailored short-term certificate programs, one of the things that we believe is essential and why we support short-term Pell or the alignment of our degree certificate programs that support workers and employers directly. And there are policy things that can help us along this way. We know that there is a skills gap, and one of the issues with the skills gap is insufficient support for workforce education at community colleges and other entities, especially so in rural areas. That is why we support establishing a major community college job training program to help the country move beyond and through the pandemic. Mr. Chairman, I want to conclude with just two other real quick thoughts that I think are germane to the conversation and they deal with this increasing divide between rural and urban America. We know that the formula for prosperity in rural areas is simple: economic activity plus economic opportunity equals community prosperity. We now have to start considering policy that helps us redistribute population and redistribute jobs out of our metro areas and back across rural America if we want to see this country and its small businesses continue to thrive. Mr. Chairman, that concludes my remarks. I look forward to and stand ready for questions. Thank you. Chairman CROW. Thank you, Dr. Schaffer. I appreciate your opening remarks. Ms. Moore, you are now recognized for 5 minutes. STATEMENT OF KELLY MOORE Ms. MOORE. Thank you very much, Chairman, and Ranking Member Balderson for inviting me to give testimony. I live the dream. I am a small business owner and operator of a family-run business which Troy earlier described. As a small business, our 19 employees are a valuable asset to our company. Well trained, knowledgeable employees, those are the keys to the success, stability, and growth potential for any business, especially our business. In the past few years, it has been challenging for businesses to fill open positions with quality candidates. There is a shortage, particularly in our region, of qualified candidates for highly skilled positions. The National Federation of Independent Businesses reported results of a member survey in 2019 that 22 percent of small employers who have hired an employee for their most skilled position in the last 2 years lowered the minimum qualifications for applicants that they previously required, and 24 percent lowered them for the most common, less skilled positions. As a leadership member of NFIB, I hear firsthand that hiring and retaining qualified employees, particularly in the technical and mechanical trades in our region, is hindering the operations of small businesses. When a less than qualified candidate is hired, improving that employee's skills puts a strain on the tight margins with which small businesses normally operate and puts a strain on the timeframe of production. Money in the budget which could be spent on expanding the business and hiring additional employees is spent on training the less than qualified new hires. Finding the time to train is also a significant burden to the small business owners. I just have a quick anecdotal account of a conversation with a local garage shop owner that illustrates this issue. I was dropping off parts. He asked me if we knew of any mechanics looking for work. I asked if he had tapped into the recent grads from the local tech program. He said he had worked with a highly recommended grad the year before, but the tech was inadequately trained in the basics. The shop owner said he spent too much time retraining him on basics such as a simple oil change. He was not able to stay on his schedules and it was damaging the customer relationships, so they parted ways. This challenge has become more pronounced post COVID-19 pandemic. Small businesses who furloughed workers in order to stay solvent during work shutdowns and slowdowns are reporting that some workers are slow to return and credit this primarily to the Federal stimulus that has enhanced their unemployment benefits. The investment in time and treasure in these employees' training is a significant loss when they will not return to the workforce. It is creating a strain on the companies when they can least afford this strain. Local education, at all levels, primary, secondary and post-graduate, is focused on developing the skills needed for the jobs available in my area of Ohio. The recent state budget decreases to schools in Ohio due to the pandemic will impact this goal. When schools can achieve this goal of marketable skills of students, the financial burden on an employer is eased and the employee would enter the job with the skill set at a level to be productive and to earn better wages. Training budgets could then be spent on boosting employees' skills or on wages or benefits to retain that employee, which would benefit both the employee and the employer. Also valuable to small businesses is a focused and robust retraining program available to assist the displaced workers and adults with a desire to learn a new trade of which we in the small business community feel there will be a significant number. A larger investment in this arena would reap benefits not just to the employer but to the quality of life for the employee and the community. I believe a consolidated effort between Federal and state agencies related to training and vigorous marketing to those small businesses regarding these programs would be most helpful. Thank you very much for your time. Chairman CROW. Thank you very much. So there is an awful lot to talk about with everything that you all mentioned in your opening statements. There is a lot of content here on a very important topic right now. So I am going to begin by recognizing myself for 5 minutes for a few questions before we go to the other members. So I am going to begin on the issue of the technical skills and trade apprenticeships because I know there are apprenticeships that could be virtualized, that we can make virtual, but it is awfully hard to train somebody to be a pipefitter, an electrician, a plumber, a diesel mechanic in a virtual setting. So I would really love to hear from you, how are we doing that? Are we going to be able to do that in part virtually but also do in-person resident training programs? I would love to hear your experiences with those programs in particular. Maybe we will start in reverse order from order of the statements. So Ms. Moore, I would love to hear your thoughts. Ms. MOORE. What I am hearing from our customers in the diesel mechanic area particularly is that what is being addressed is how to break an engine down, how to refit the complicated processes in diesel mechanics. What the business owners tell me is that they need them to have a good set of basic skills so they can build on that with training. They often do not take somebody, a recent grad, and ask them to tear apart an engine and put it back together. But they do need the employees to have a firm understanding of basic skills. Thank you. Chairman CROW. Thank you. Dr. Schaffer, I mean, you are very much at the front lines of this issue. How are you doing in your college? Mr. SCHAFFER. Thank you, Mr. Chairman. It is a very astute question. Certainly during the pandemic I would say we were challenged in many ways this past spring as we shifted to a virtual delivery of our instructions. Really, to find ways to do that in the technology trades and healthcare areas. I would say I was quite pleased and impressed when I think across the Nation we saw some great innovation come out of our instructors. I have a great story of my automotive tech faculty member strapping a GoPro camera to his head and doing virtual real-time labs with individuals from their home or in their own garages, at their own shops. So there are things we can do, but I will be honest; you simply cannot replace the value of hands- on interactive learning that happens either in the shop, in the lab, or through apprenticeship programs, and we found quickly that we had to do that and create unique ways for us to in a safe way bring our diesel technology students, our welding students back to campus to carry those out. And this is the same with the apprenticeship programs. We had to work closely with our employers and small businesses to find ways for them to be able to see value in having the apprentice in their environment while they were facing shutdowns and all the issues associated with the pandemic. And so it is not idea. There are ways we can do it, but I would say we simply cannot replace the opportunity for that in-person, hands-on interactivity in these areas. And I would say if we do not figure that out, we will further restrict the pipeline of new people coming into these valuable programs and leading to the critical careers that they represent. Chairman CROW. Thank you. Ms. Folks? Ms. FOLKS. Thank you. Yes, I would agree with Joe in the matter that it is very difficult when it is not in person for the trades, but what we have been doing as a workforce system is working hand in hand with our community colleges and our trades, different trades, to look at how do we work through the social distancing, no different than us coming to work ourselves. So how do we work through the different social distancing guidelines? How do we make sure we make it safe so that we get them back into training and get them back into the shop so that they can get that on-the-job training? Lockheed Martin actually uses all technology to train, and we have been able to keep that apprenticeship program going through this through utilizing those methodologies. Chairman CROW. Thank you. Dr. Nightingale? Dr. NIGHTINGALE. There are a number of creative examples. You have heard of some of them through community colleges specifically. And I will just highlight that the Urban Institute has a forthcoming report that will be available shortly, in a couple of weeks. It has some examples of sort of combining virtual and staff-assisted. So they would come from some of the studies done over the past decade. Chairman CROW. Great. Thank you. My time has now expired. I think I will have some additional questions, but I do want to make sure we get to all the other members first. So let's begin with the Ranking Member, Mr. Balderson. You are recognized for 5 minutes. Mr. Balderson, you are recognized for 5 minutes. Mr. BALDERSON. Thank you, Jason. Sorry about that. I lost everybody for a second. My first question is to the full panel, and whoever wants to jump in, jump right in. Every community has felt the ripple effects from the government-mandated closures. Why is workforce development a key aspect to our recovery at the community, state, and national level? And no particular order. If anybody wants to answer that, go right ahead, please. Mr. SCHAFFER. Mr. Chairman, Representative Balderson, Joe Schaffer here. I will take a stab at that. I think we can take and learn some lessons from the Great Recession that is far too close to this. You know, the next thing that is going to impact us is COVID-19. During the Great Recession what we saw were significant numbers of individuals displaced at that time. The jobs they left were not the jobs that were there as we recovered, and we are seeing a very similar trend here. As those jobs disappear, while we will preserve some of them in the service sector, employers are being forced in many ways to innovate and rethink how they meet their business model, their business expectations. That means we will have millions of Americans that will be looking for new opportunities and will require training for the jobs that will be here as we come out of this pandemic. And it is what makes training and workforce development so absolutely essential right now. And as I would say, that is especially important in rural America where there is a substantial need for those folks to find new opportunities for fear that they leave and further exasperate the problem of a shrinking population. Dr. NIGHTINGALE. If I could answer that. In the Great Recession, the recovery funds, the supplemental funds were important for a couple of reasons. One, as the additional funding that went into the local employment services allowed for expanding employment services into remote areas. We saw an increase in use of mobile job centers, libraries, and other community places were outfitted to allow better access in some of the remote areas. But it also was a source for connecting subsidized jobs, workers into subsidized jobs in the private sector and expanded the OJT type of contracts. And third, we know that as we start coming out of the recession, there are going to be more people who are looking for jobs and they transverse to some of the local employment offices that are available. So it is but it is the community for locale or rehiring. Mr. BALDERSON. Thank you. Ms. MOORE. I would just like to add, as a small business owner, the Great Recession and the pandemic have diverted our funds. We have very limited funds. And so they are diverting them away from the requirements of training and more towards the requirements to stay in business with PPE, with decreased revenues, and with the inability to secure funds otherwise right now through banks, just as we had a problem during the Great Recession. Mr. BALDERSON. Thank you. Ms. FOLKS. And if I could just add, this is Kelly with Arapahoe/Douglas Workforce, who runs a true one-stop center, you know, what we saw, the big difference we are seeing now, when we saw at the highest point in the Great Recession, for example, Colorado was at an 8.6 percent overall unemployment rate. We are seeing in May of 2020 during this COVID at a 10.2 percent. We have millions of Americans as was stated already that are underskilled, underemployed. We had that even when our economies were good. We were still getting people coming into our workforce center and we were working with businesses to try to fill their hardest to fill positions because there really, truly was a skill and training gap there. And so that is where workforce development and the boards can, in partnership with the community colleges, can really put that training back into play and be able to help the small businesses and medium businesses to get people back to work. Mr. BALDERSON. Thank you, Ms. Folks. Mr. Chairman, how am I doing? I cannot see my timer. Chairman CROW. Fifteen seconds. Mr. BALDERSON. I yield back, Mr. Chairman. Chairman CROW. The gentleman yields back. Thank you for those comments. The gentleman yields his time back. Now I would like to recognize the gentlelady, Ms. Davids from Kansas for 5 minutes. Ms. DAVIDS. Thank you, Chairman Crow, and to Ranking Member Balderson for having this hearing today focused on the economic recovery that our communities are going to need so badly and that, you know, to recognize the workforce skills gap and really the workers that we are going to need is something that we really need to be thinking about long term. As states and communities are reopening across the country and we learn more about coronavirus and how small businesses are going to be able to at least partially reopen doors, I know that that has been helpful for some folks but things still are far from normal and we are still figuring out how this is going to impact workforce development. Dr. Schaffer, I want to start with you, partly because I, myself, am a community college graduate. I went to Johnson County Community College here in the district that I now get to represent, and I spend a lot of time visiting with folks there and at the Kansas City Kansas Community College here, too. And I know that the education and training opportunity the colleges provide are important, essential, and actually a lot more innovative than I think people usually recognize and kind of mainstream. So I am curious. I know you had mentioned the GoPro technique and some of the other things that folks are trying to do right now for the current students. I am curious what it is looking like for people who are reaching out and might be interested in enrolling. I guess I am wondering, what are folk saying to you? Are they asking you how you are adapting? Are they asking what you see as the biggest needs? I am just curious what folks are asking about. Mr. SCHAFFER. Thank you, Mr. Chairman, Representative Davids. Yes, Johnson County Community College, one of the finest community colleges in the Nation. It is great to hear that you are an alum and support that institution and others. You know, it is one of the challenges we face right now. I think there is a great uncertainty about what fall looks like in education, certainly in K-12. Community colleges are no different. For the high demand programs and high demand careers, many that we are talking about today in health care and the tech and trades areas, those require some type of face- to-face interaction. And I think as the colleges are waiting for perhaps better guidance, perhaps we are all waiting for better guidance on how we safely operate in this environment, so are people. And what we hear mostly from individuals is I know it is an opportunity for me to come back. There may even be money on the table to encourage me to come back to college, but I can only do that if it is truly safe. And so I think a lot of folks are waiting to see what the reopening plans of higher education and community colleges are looking like. To give you a quick number, our applicants are substantially up for fall. Our enrollment is substantially down, which tells us many individuals are waiting to see essentially what happens. The other issue is like our biggest opportunity for retraining is adults in this country at this point, especially adults without a post-secondary credential, using them to find a way to navigate their own personal lives right now and the economic and social pressures on them and come back to college. I tell you, it is a significant list, but it is one we have got to figure out. Ms. DAVIDS. And then, I appreciate that. And you mentioned earlier the idea of supporting job creators, in addition to figuring out ways to help us get to a workforce that meets that skills gap that we keep seeing. Dr. Nightingale, I am curious from your perspective what you are seeing in terms of the entrepreneurial movement and that sort of thing, big picture going into all of this. I do not know if folks are looking at that sort of thing, but I would be curious. Dr. NIGHTINGALE. There are two points that I would make. First, certainly, entrepreneurial, sort of like self-employment and new business development is critical, but it is not necessarily for everybody. And so it has to be very carefully planned so that there is a real business plan and understanding of what it takes. People sometimes think it is easy to start a small business, but I know that the small business owners here, Ms. Moore and others will agree, that it is not easy. You have to have a lot of planning. The second thing is that there are probably more opportunities for entrepreneurial endeavors today because of the technological advances that are available. So there are some opportunities---- Chairman CROW. The gentlewoman's time has expired, so I apologize. I am going to have to move back to that point at a different time. Ms. DAVIDS. Thanks, Chairman. I yield back. Chairman CROW. Thank you. Now I would like to recognize the gentleman from Oklahoma, Mr. Hern. Mr. Hern, you are recognized for 5 minutes. Mr. HERN. Thank you, Mr. Chairman, Ranking Member Balderson. It is great to be here today and great to see the witnesses. I apologize. I had to step away for another simultaneous meeting so I did not catch all the witnesses' testimony but certainly being a small business owner for over 35 years, and this will be the fourth of these type of catastrophic events. Obviously, the ``best,'' and I will put that in quotes, is the last. And so we always learn from these type of events. Or we should be learning, and those who learn come out stronger and those who do not usually do not come out. We talked a lot about what you all are doing, or really kind of put a lot of onus on that. I want to get to that in a second. But we, in Congress, and this is a very bipartisan Committee, and we recognize the importance of small business and those entrepreneurs that create so many jobs in America, and we have put a lot of money into, I will call it ``the system,'' the economy over the last 3 months, 3-1/2 months, particularly money into individuals' pockets. An extra $600 a week that expires in a couple of weeks. Direct stimulus checks. I have conversations on both of those next week. What have you seen from citizens? You can go recruit all day long but if there is not an initiatives by people who are getting this extra money to see something beyond 2 weeks, what are you seeing from folks that are levying one job that says, hey, this is my opportunity. I am no longer working there right now. I am furloughed for an indefinite period. I am going to go get retrained in another area. Are you seeing that kind of intake from your particular educational institutions? We can start wherever. Ms. Nightingale? Dr. NIGHTINGALE. We do not have a lot of hard data on that right now, but we know that the training programs that are out there are having difficulty in two ways. One, recruiting and getting trainees to come in. The other is retaining partnerships with employers for some of the reasons that we have already heard. So it could be that we are in a little bit of a lull right now and as the economy starts improving, we may see more of an uptick on that. But from what I am hearing is that some of the training programs are having difficulty finding trainees and keeping employers engaged. Mr. HERN. Mr. Schaffer, in Oklahoma we have 29 career centers. I left Ohio a number of years ago, 30 years ago, I think. And so one of the best examples is a career center in the upper part of my district where they actually go out and talk to businesses and create programs to match those businesses and then train some of the businesses to produce workers for what they see emerging in certain fields. And that is in Bartlesville, Oklahoma and that is Tri-County Community College or Technical College. But as we go through this process it is going to be really important, and I think, I do not want to put words in your mouth, but I think you mentioned a minute ago you were waiting on CDC guidelines on how to reopen and things like that. People that are entrepeneurs or businesspeople, I would bet you Ms. Moore is not waiting on CDC or somebody else to tell her how to keep her business open. She is figuring out every single day how to make that happen. That is what businesspeople do. If you wait on the government to tell you what to do you will be very ineffective. As the needs arise for small business, I would encourage each of you, and this is not a scolding, this is an encouragement, to not wait on the Federal government to tell you what to do. The best ideas come from out in the communities. Out in the, you know, you all are very, very bright people. You have got great institutions. I assure you no small businessperson worth their salt is waiting on the Federal government to tell them how to survive. And I would just encourage you, you know, I might just ask you that question, you know, what are some of the best bets that you are looking at that you might want to share here in my remaining one minute, to get your schools reopened in a proper way? Because I know whether you are a democrat or republican or do not give two hoots about politics, you know it is important to educate our workforce and our children. Mr. Schaffer, do you want to start that? Mr. SCHAFFER. Thank you, Mr. Chairman, Representative Hern. I would tell you, no disrespect to government or Congress, we are having to act. Our Board of Trustees 2 weeks ago approved our reopening plan. Mr. HERN. That is great. Mr. SCHAFFER. That is an aggressive opportunity for continued education. We are going to focus where the greatest needs are, so our on-campus, in-person instruction is going to be focused in the technology, the trades, healthcare, to make sure that that pipeline of those workers continues even in a pandemic. To your previous point, just quickly, Representative Hern, we go out and we work with employers all the time to customize programs for them. They are oftentimes short-term programs very tailored. It is one of the reasons why we support the concept of short-term Pell. We have to find ways to provide financial assistance for people to quickly get retrained and back to work. Mr. HERN. Thank you. Mr. Chairman, thank you. I yield back. Chairman CROW. The gentleman yields back. And I believe the members present have all asked questions at this point. So if additional members join, we will give them an opportunity, but I do want to go for a quick second round. And I will start by giving myself an additional 5 minutes. This issue of the urban rural divide that Dr. Schaffer and the others referenced earlier is of particular interest to me. And I think one of the issues, we had some hearings on the broader Committee on this in the past and in doing some work with Senator Inhofe and some others on this issue, is the issue of broadband, which is really the long pole in the tent for so much of this in terms of how do we make it as easy to start a business or run an apprenticeship program or a job training program in Wyoming as it is in New York, make it as easy in Oklahoma as it is in California. Leveling the playing field here. I would love thoughts from all of you in terms of the impact of broadband and what you think we need to be doing more of at our level. Maybe we can start with Ms. Folks on this one. Ms. FOLKS. Thank you. Yes. I think that is a serious issue, not being able to have the availability of broadband in the rural areas. It is also a serious issue that we have seen through the pandemic with our lower-income individuals as well. They may have broadband available, but they do not have a way to maybe pay for that and to be able to have Internet services or be able to know how to access when things are shut down. And so some of the areas we are really working on is how to develop, we have sector partnerships that we are building and broadband to work hand in hand with the business and industry to really help tell us how to get it out there, how to build apprenticeships, and how to develop that. And we continue to work with our rural areas. I have some of that, not much in our area, so we continue to work with them and our community colleges on how do we develop those types of apprenticeship opportunities to be able to get that. But also, then working, like I said, with businesses to get the broadband out there. Just quickly, one of the partnerships we do have is working to get that into our customers' hands. So part of not only paying and supporting them and training; it is also supporting them with those support services to get them that as well so that they can be successful. Chairman CROW. Thank you. In my 2 minutes I have remaining I would love to hear maybe 1 minute each from Mr. Schaffer and Dr. Nightingale on that issue, and then Ms. Moore, I move back with you additionally in a moment. Dr. Schaffer? Mr. SCHAFFER. Thank you, Mr. Chairman. Broadband is certainly an issue for us. It is an issue across rural America. And when I talk about Main Street, it is truly an issue on our historical Main Streets in trying to find a way to bring connectivity to our downtowns in smaller communities. The broader issue I think really pertains to infrastructure because population, and as a result, revenues do not follow substantially enough to reinvigorate or install new infrastructure in these communities. They are just hamstrung, and it makes it more and more difficult to learn and to work and really have a life in that environment. So broadband is a big issue, but I would say general infrastructure is also an issue once you move out of metro areas. Chairman CROW. Thank you. Dr. NIGHTINGALE. I was asked that. Certainly, additional funding for infrastructure development that is focused on IT could have a major effect, especially in rural areas just as rural electrification many decades ago did. And with some investment on subsidized employment which we heard a little bit about from Ms. Folks, that there could be a combined investment by Congress that invest in subsidized employment to provide the additional staff for facilitating the use of the technology that the investment in IT infrastructure and broadband could support. So it is a combination of developing the broadband but then also having the technical training for people to use it appropriately. Chairman CROW. Great. Thank you. Ms. Moore, in 20 seconds, do you have any thoughts on that? Ms. MOORE. I do. Not only is it the availability of broadband but it is the quality of the broadband. Particularly, in our area where it is very rural. We have stability issues. We have accessibility issues. So that is another consideration that possibly these companies will have to be incentivized to provide not only broadband but quality broadband. Chairman CROW. Okay. Thank you. Now, I wanted to open it up. I think Mr. Balderson, the Ranking Member, would be up next. I do not know whether Mr. Balderson is still with us or not at this point. Troy, are you still on? Give him a moment. Well, we will see whether he is having some technical issues which he might. I want to give myself another 5 minutes. That is the benefit of being the Chair. I actually would love to maybe give each of you a minute in that 5 minutes to ask a broad open question. If you had a magic wand and you could have Congress focus on one thing to address the biggest challenge you are facing right now, what would that be? So let's maybe start in the reverse order again from which we just ended, and we will start with Ms. Moore. Ms. MOORE. I believe the assistance to the education system in coordinating and advertising these programs and connecting them with the employers who directly need these positions. Overseeing a very coordinated effort. Chairman CROW. Almost like a [inaudible] role. Ms. MOORE. Exactly. Exactly. Chairman CROW. Dr. Nightingale? Dr. NIGHTINGALE. I think that probably to me one of the most important things is to expand the resources for the local job centers and to expand it in a way that allows the centers to have more people there accessing the services, particularly in the nonurban areas or in high unemployment areas because there are resources for training that can be accessed but the people need to know how to access those resources effectively. Chairman CROW. Thank you, Doctor. Dr. Schaffer? Mr. SCHAFFER. Thank you, Mr. Chairman. I have trouble choosing so I will only pick two. The first one of course is the establishment of a major community college job training program. Something similar on the magnitude, it is bigger than the TAACCCT grants that were very successful, something similar to what is being proposed in the Relaunching America's Workforce Act or perhaps the Access to Careers Act or even the Community College Training Program and the Coronavirus Child Care and Education Relief Act. We need to stimulate new training, new opportunities in workforce development funding to community colleges at that scale are critical as Dr. Nightingale said. I would also suggest during the reauthorization of WIOA, we really think about resources, we think about further [inaudible] of partners, and we think about ways to streamline and maybe allow for the authorization of community college applied programs in a more effective and efficient manner. Chairman CROW. Thank you, Dr. Schaffer. And Ms. Folks, as the Coloradoan on the panel you get the distinction of having the final word. Ms. FOLKS. Thank you. You know, I think for us, similar to what was said, it is the resources and the funding but most importantly also with that is the flexibility to be able to meet what the local community needs are and to be able to really listen to our business and industry and what they are telling us. When we have a lot of regulation, and I know it needs to be there but when there is too much it makes it difficult for us to really build those innovative programs which we really need right now especially to get people back. And so being able to have that flexibility is very important for us along with the resources and funding because then we can build programs that are going to meet the needs of the business and industry and our communities, and we can have those more creative ways of making sure we get our people back to work. Chairman CROW. Thank you, Ms. Folks. So with that, our time has run out here. I know we could probably talk for the rest of the day or days on this topic because there is really so much to address, but we do appreciate your time. So again, thank you to all of our witnesses today for your testimony and for offering their views on how to get millions of unemployed Americans back to work. By sharing your experiences and expertise, we, as the policymakers in Washington that are looking at how to guide resources and also coordinate the various efforts going on, really need to hear your perspectives. So you all are where the rubber meets the road here, you are providing the direct resources, the direct training and making it happen in your communities, and it is really your voices that are the most important for us to hear during this crisis. So thank you. I look forward to the opportunity to work with you and your organizations to figure out ways that we can be more helpful and lift up all of your efforts. So I ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the record. Without objection, so ordered. If there is no further business to come before the Committee, we are adjourned today. Thank you. Thank you all. [Whereupon, at 2:06 p.m., the Subcommittee was adjourned.] A P P E N D I X [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]