What is government's role to support education and training?

One of the main focuses of the past few years in D.C. has been what government can do to boost employment and start the economy moving. There are many schemes: tax credits to hire people (employers would hire anyway if they had work for them); energy initiatives that get mired in battles with various interest groups; labor regulations in place of failed legislation; stimulus funding for public sector workers; and the list goes on.

While there was much discussion in Washington on how to help with training the future workforce, I think the money was spent on those “attractive” wind turbines that I saw in Indiana and Wisconsin during my recent vacation.

The future workforce, or for that matter the present workforce, faces many challenges, particularly in manufacturing and in the parts and service industries. In manufacturing, the trends in productivity over the past 50 years are quite impressive, unless you were hoping to land an assembly line position.

Automation, lean processes and supply-chain efficiencies have collectively boosted manufacturing output at a rate that is staggering, while labor content has remained relatively flat. Direct labor has been replaced by robotics, new technologies for fastening and highly automated processes.

The new jobs are in the technical disciplines. Factory positions are available mainly in higher tech, highly-skilled labor and supply and logistics management.

Training for all of those positions are no longer OJT (on-the-job training) as in the old days. The training happens in secondary education.

In today’s modern repair shop it is not uncommon to see technicians wearing white shop clothes and carrying laptops and using diagnostic tools.

The old ways of training service technicians are pretty much a thing of the past, replaced by the community colleges and vocational schools, plus the training centers at the OEM level and the hundreds of training sessions conducted by suppliers and consultants for technical updates.

There are still jobs, but they require an educated workforce. Is the government contributing to the solutions needed for this new type of environment? Actually yes, through the federal student loan programs and at the county and state level, with community colleges and state universities.

All of those programs require tax payer support.

Fraud Prevention

Does it make sense to give tax incentives for immediate employment? It is difficult to see how there is any real value to that. A current bill under consideration would reward employers for adding to their workforces, and it amounts to a lot of money. Our big challenge then would be fraud prevention.

The nation’s capital has a pattern of proposing and passing massive bills with huge appropriations of funds, many times with political motives. Once the funding is appropriated, there seems to be little interest in executing a plan to use it effectively, or efficiently. Government either administers and regulates it to death, or leaves it so open-ended that fraudulent use of the funds occur.

Think of some of the fraud cases involving the well-intentioned Medicare program. Scam artists came out of the woodwork to exploit the weaknesses in the administrative end of things.

Is there a role for governments to support education and training? Absolutely. Should it extend beyond the current support with providing public universities and colleges and student loan funding? Most are not too sure who, what, how or where that should take place.

A case could be made for special tax treatment for employers providing continuing education for current and newly hired employees; perhaps even supporting payroll for employees while in training. However, not too many business owners and executives would take well to that type of program, except maybe the scam artists.

A good start would be in the area of removing many of the current barriers to progress, such as reducing corporate income taxes; maintaining the current individual tax rates for small business S-Corps; rethinking some of the government supported unionization activities; and reconsidering some of the environmental regulations enacted lately. That would help to spur more employment.

To help business, the government really needs to understand that less is more.

One of my favorite TV political personalities is former New Jersey Supreme Court Judge Andrew P. Napolitano. In his words: “The government that governs least, governs best.”

Tim Kraus is the president and chief operating officer (COO) of the Heavy Duty Manufacturers Association (HDMA). Prior to joining HDMA, he served in various executive positions with heavy duty industry parts manufacturers. HDMA exclusively serves as the industry voice of the commercial vehicle product manufacturers. It is a market segment affiliate of the Motor & Equipment Manufacturers Association (MEMA). www.hdma.org.