Raising Personal Income through Focused Efforts in Emerging Workforce Areas

In the midst of a national economic downturn, coupled with stagnant to little growth in wages for even college-educated individuals, state efforts to build a qualified workforce and attract industries in emerging fields that pay above-average wages are crucial to ensuring economic growth.
 
A recent report on income trends issued jointly by the Center on Budget and Policy Priorities and the Economic Policy Institute finds that one in five U.S. families has a lower income today than they did at the start of the decade. Analyzing state-by-state income trends over the past 20 years, the report also finds a long-standing trend of growing inequality between families in the wealthiest income bracket and those in the middle- to lower-income brackets. In fact, while incomes have declined by 2.5 percent among the bottom fifth of U.S. families since the late 1990s, the data indicates that incomes have increased by 9.1 percent among the top fifth.

Wage inequality is listed as the top contributing factor to the income disparity. An examination of income trends since the late 1980s through mid 2000s reveals that in 36 states, the income gap has widened significantly between the average middle-income family and the average family in the richest fifth. No state has seen a significant decline in inequality during this period.
 
This can be attributed to several factors, including long periods of high unemployment, globalization, and the shrinkage of manufacturing jobs, along with the expansion of low wage service jobs and lower real value of the minimum wage, the report states.
 
State and Local Efforts to Mitigate the Problem
The trend described above, while detrimental to the American way of life, is also bad news for states that generate revenue through income tax and taxes paid from companies. Recognizing that states are competing against each other for qualified workers and the recruitment of advanced industries, several partnerships have formed within states and local governments to help put into place measures to sustain a workforce reflective of the new economy.
 
Ohio
A $1 million grant from the National Science Foundation awarded to the Ohio Supercomputer Center (OSC), the Ohio State University (OSU), the University of Akron, and the Ohio Learning Network will help prepare a workforce capable of handling the future needs of Ohio’s advanced industries, according to the Ohio Business Development Coalition (OBDC).
 
OBDC recently announced a consortium of Ohio colleges and universities that will develop virtual, undergraduate programs through OSC’s Ralph Regula School of Computational Science and expand industry-driven certificate programs in computational science. The idea is that by linking to an emerging master’s degree program in the College of Engineering at OSU, the certificate programs will directly serve the needs of Ohio’s polymer industries and advanced materials production.
 
The grant also will be used to invest in state-of-the-art computing portals to increase productivity and accelerate product development for Ohio businesses.
 
The polymer industry in Ohio generates $49 billion in annual sales revenue and pays $5.6 billion in wages to more than 140,000 workers, according to OBDC.
 
Oklahoma
Lawmakers passed a bill last week to attract more engineers into the aerospace industry by providing incentives to both individuals and the companies that employ them. HB 3239, the Engineer Work Force Bill, grants a tax credit of up to $5,000 per year to engineers hired after Jan. 1, 2009, for up to five years and allows aerospace companies to claim a tax credit of 10 percent for compensation paid to a qualified graduate during the first five years of employment. The amount is reduced to 5 percent if an engineering employee graduated from an out-of-state college or university.
 
Aerospace companies can also receive a tax credit of 50 percent of the tuition reimbursed to a new engineering graduate for the first four years of employment under the legislation. The tax credit would be based on the average annual tuition at a public college or university in Oklahoma.
 
The average salary for an employee in the aerospace industry is nearly $55,000, compared to the overall state average of $29,000, according to the Oklahoma Aeronautics Commission. The bill is headed to Gov. Brad Henry for final approval.
 
Pennsylvania
A new effort to increase life science workers in order to help fill the needs of the local industries in emerging technology sectors is underway in Philadelphia. The Philadelphia Biotechnology and Life Sciences Institute was launched last week to develop strategies to bolster the supply of workers for the region’s growing number of life science companies. The initiative is a collaborative effort of the Philadelphia School District, area universities, nonprofits and the local life science industry. The institute will promote Philadelphia and its surrounding areas as an important location for bioscience workers and emerging firms, according to the Philadelphia Business Journal.
 
South Dakota
A partnership led by the South Dakota Department of Labor in collaboration with the Department of Tourism and State Development, the Department of Education, and the Board of Regents, Workforce 2025 is a group of initiatives focusing on individual sectors of workforce needs throughout the state.
 
The five programs that make up the Workforce 2025 initiative are a representation of combined best practices from around the state and include:

• Dakota Seeds. This program, which is also part of the Governor’s 2010 Initiative, focuses on creating internships for students with companies in Science, Technology, Engineering, and Mathematics fields. The goal is to implement 1,000 new internships by the 2010-2011 school year with the first internships awarded this year.
• Build Dakota. This program works with local business leaders to identify their current and future workforce needs. Emerging industry needs are being addressed through the Governor’s Office of Economic Development, focusing on high wage jobs in the areas of biotech, renewable energy, medical devices, computer information technology, agri-business, and firearms.
• Dakota Roots. This program is aimed at recruiting former out-of-state residents and companies back to the state. Participation on the website is being tracked and as of May 2008, there are 2,378 registered participants.
• Live Dakota. This program focuses on retaining current residents and identifying the role of the next generation in the future workforce.
• Grow Dakota. This initiative of the Department of Education provides teachers and principals with a vision for the 21st century high school to help make learning relevant to the real world.

A workforce subcabinet, consisting of members of each department involved in the collaboration, has been identified and charged with setting specific goals and strategies of the initiative. More information on Workforce 2025 can be found at: http://workforce2025.com/