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27
Sun, May

No one cares how much you know, until they know how much you care.

- Theodore Roosevelt

The Reason for the Economic Value of a College Degree

National reports on employment show that achieving college education is one of the most impactful steps that an individual can take toward steady work and increased income. During the darkest moment of the last great recession, employment for bachelor’s degree graduates over age 25 remained at 95 percent.1 Today, employment for bachelor’s degree graduates over age 25 has climbed to 97.9 percent.2 The median lifetime earnings net of educational expenses for college graduates stand at a significant premium -- a more than $400,000 gain -- compared to those of learners who only complete high school.3

Many people assume that the economic benefits of advanced education flow from gains in knowledge and intellectual skills. After all, postsecondary educational programs tend to conceive of their mission in terms of academic progress. Nevertheless, research suggests that college academic programs struggle to deliver practical knowledge and skills attainment required for employment. Most college graduates do not end up working in their specific fields of postsecondary study.4 Moreover, recent evidence suggests that gains in knowledge and specific intellectual skills among college graduates are very limited. The controversial publication of the University of Chicago Press, Academically Adrift: Limited Learning on College Campuses, cites voluminous data from student surveys and analysis of student transcripts to show that many college learners experience minimal classwork expectations. Tracking 2,300 students of traditional college age enrolled at a range of four-year colleges and universities, the authors’ research suggested that 45 percent of students “did not demonstrate any significant improvement in learning” during the first two years of college, while 36 percent of students “did not demonstrate any significant improvement in learning” over four years of college. Academic progress for the remainder of students was anemic at best, with students improving on average only 0.18 standard deviations over the first two years of college and 0.47 over four years. 

This research supports the intuitive assessment by many employers that college graduates require significant on-the-job training to become productive because their studies are not immediately relevant to their job functions.5 Likewise, job seekers tend to understand that employers value experience more than academic knowledge, especially to the extent that they expect new hires to make immediate contributions. Research also suggests that most college graduates enter the workforce suffering from significant deficits in writing, analytical skills, and practical knowledge.6

Against this backdrop, how do we explain the labor market’s significant preference for college graduates and the premium earnings that they enjoy? Is this simply a case of culture or social stereotypes overcoming rational decision-making? Or is there something else at work? Does the market understand something about college graduates that the research on academic gains does not adequately grasp?

Social and Emotional Learning Powering Success

In the words of Dale Carnegie, “Even in such technical lines as engineering, about 15 percent of one’s financial success is due to one’s technical knowledge and about 85 percent is due to skill in human engineering, to personality and the ability to lead people.” Employers understand that education and experience do not merely impact academic knowledge and intellectual skills. College education also provides a foundation for social and emotional development and psychological maturation. 

Since Carnegie’s 1936 manifesto, How to Win Friends and Influence People and, more recently, undergirding Steven Covey’s 7 Habits of Highly Effective People, social and emotional learning (SEL) has been recognized as critical for success in the labor market and in life. The language used to point to SEL varies depending on the discipline of the author or cultural context of the conversation. In business, the phrase “emotional intelligence” dominates, while those in academic circles tend to use the phrase “non-cognitive skills.” Workforce development professionals use the phrases “soft skills,” “employability skills,” or what has become known as “the 21st century skill set.” In the realm of youth development and educational psychology, “grit, resilience, and future orientation” are phrases pointing to the same arena of human capabilities. These diverse areas of study and expertise share focus on emotional and psychosocial mastery. Such mastery involves a broad spectrum of characteristics and abilities: persistence, motivation, and self-discipline; interpersonal skills such as communication, negotiation, the ability to work in teams and team-building itself; and adaptability to changes in the external environment while maintaining self-efficacy.7 

Widespread efforts to incorporate SEL lessons into curriculum at the secondary and, increasingly, postsecondary levels reflect consensus about the importance of SEL for college and career readiness. These efforts manifest as Career and College Readiness standards and standards for interpersonal learning as well as attention placed on experiential learning models in traditional educational settings, including such strategies as problem-based learning, service learning, or education through work experience.8 Educators are coming to see that success in postsecondary environments and in the work place depends as much on noncognitive skills as content knowledge in a particular discipline. Echoing economic studies that demonstrate the positive impact of SEL skills on productivity, wages, and health, education research is forging a connection between SEL skill development and college and life success.9 A high school teacher at a U.S. Senate Committee hearing regarding employability language in the reauthorization of the Perkins Act made the stark observation that, “we are hired for our social emotional skills, we are promoted for our social emotional skills, and we are fired for our lack of social emotional skills.” Findings from a national 2012 employer survey conducted by The Chronicle of Higher Education and American Public Media’s Marketplace reflect a similar assessment. This survey showed that half of employers found recent graduates lacking the noncognitive skills necessary to fulfill job responsibilities. Such findings shed light on why the market continues to value a bachelor’s degree in spite of its insufficient preparation of future workforce leaders. Without clearly articulating the strategy, employers may be using college graduation as a marker of at least some acquisition of the SEL skills necessary for workplace success, such as setting and achieving goals, perseverance, and willingness to learn as compared to high school graduates.10 In the words of Paul E. Harrington, head of Drexel University’s Center for Labor Market and Policy, “It’s a relative bet.”    

Postsecondary Education as an Incubator for Social and Emotional Development

There are compelling reasons to believe that college education has the potential to foment powerful gains in social and emotional learning. Daniel Goleman, a widely recognized thought leader on the subject of emotional intelligence, defines this capacity in terms of self awareness, self regulation, motivation, empathy, and social skills. The nationally renowned Collaborative for Academic, Social and Emotional Learning (CASEL), adopts a similar model, emphasizing five core competencies: self awareness, self management, responsible decision making, relationship skills, and social awareness. Successfully navigating the social matrix presented by most postsecondary programs entails a thorough workout of such skills and competencies. 

Gaining admission to college requires significant self awareness and self management, as students must prepare for and plan to take tests that are not mandatory for high school graduation (for example, nationally recognized standardized tests, advanced placement tests, and other subject matter tests). Students must also show self awareness and initiative in researching and selecting institutions that match their interests, career goals, and qualifications. Students must then write a personal essay and consider how their community service and extracurricular activities reflect personal qualities such as integrity, compassion, and resilience that will impact multifaceted college admissions decisions. 

Attending college often requires students to leave their families and home communities and thus gain exposure to a diversity of interpersonal situations that may be psychosocially unfamiliar or uncomfortable. Through exposure to other cultures and diverse social environments, students may strengthen self awareness, self management, motivation, empathy, and emotional stability. College generally requires students to interact with dozens of diverse faculty members and administrators and to navigate diverse social frameworks requiring students to assess individual approaches to classroom behavior, academic expectations, and collaborative learning. The work of building relationships with socially and economically diverse peers, administrators, and faculty members provides powerful opportunities to develop empathy, relationship skills, social skills, social awareness, and responsible decision making. 

For many students, college also entails rich nonacademic engagements as they become involved in social and cultural activities, sports, clubs, and political organizations and movements. All of these experiences provide fertile ground in which to develop social and emotional skills and competencies. These nonacademic, social settings may also provide rich learning environments for mastering group dynamics, leadership and followership, effective teaming, and the ability to understand the impact of larger social and political dynamics on organizations and individuals.

Graduating from college requires students to develop meaningful self management and motivational skills such as drive and persistence as they balance the competing demands of academic, social, and personal commitments. In this sense, the experience of attending and graduating from college is perhaps understood as an important introduction to similar competing dynamics among the modern workplace, family, and community.

Lack of Strategic Goals and Measures Pertaining to Social and Emotional Development During Secondary and Postsecondary Education

Within postsecondary education, focus on institutional goal setting, measurement, and research regarding social and emotional development has been scant. The Every Student Succeeds Act (ESSA) (successor to the federal No Child Left Behind Act), set forth a compelling vision in which all students in America are taught to high academic standards that will prepare them to succeed in college and careers. Even though ESSA opened the door to goal setting and metrics for social and emotional development, not a single state plan prepared in response to ESSA calls for the inclusion of goals or metrics pertaining to social and emotional learning, though some states have independently created associated standards.11 At the level of college accreditation, while most colleges offer pervasive opportunities for social and emotional learning and leadership development, accrediting bodies have yet to focus discretely on goals and measures for social and emotional learning as a critical element of postsecondary education planning and institutional assessment. 

Consider recent work of the Lumina Foundation. Lumina has established itself as a thought leader in the field of postsecondary access and equity. Lumina’s leadership is visible not only through its philanthropic work, but also through its efforts to convene the policy, institutional, and research players in the field around the development and implementation of innovations. Lumina recently completed the launch of an ambitious project, the Degree Qualifications Profile (DQP), offering a framework for assessing student learning at every postsecondary degree level in all areas of study. Yet, this comprehensive profile includes no social and emotional learning outcomes.12 Lumina is plugged into the labor market demand for SEL type skills with a vision of a postsecondary system that “meets the nation’s need for talent through a broad range of credentials.”13 President and CEO Jamie Merisotis in his introductory letter to the DQP acknowledges employer demand for soft skills. The DQP is a massive, collaborative and iterative undertaking. To its credit, Lumina envisions the DQP as a dynamic tool, reflective of the evolution of higher education in content and delivery and welcomes feedback to improve and make the DQP increasingly useful. Perhaps the feedback process is an appropriate forum in which to explore the inclusion of SEL proficiencies gained through the college experience in the next version. 

It may simply be a question of orientation. The dialog about postsecondary educational achievement in the academic arena is concerned with academic proficiencies stemming from study in the major disciplines. Expanding this dialog to include SEL gained through nonacademic experiences during college is not part of the traditional canon of the academy. Yet an articulation of the full value of a college education to the complete spectrum of stakeholders -- employers, students, and families -- may surface critical gains in SEL competencies deeply valued among developers of human capital: postsecondary institutions, the workforce development system, and employers.  

Emergent Models of Emotional Intelligence and Social and Emotional Learning

In western society, diverse models are emerging in the study of emotional intelligence and the practice of developing social and emotional skills and competencies. The “Ability Model” conceives of emotional intelligence as the ability to perceive, understand, and regulate emotions in order to facilitate personal growth.14 It views emotions as sources of information that help individuals navigate the social landscape. Measurement tools employing the ability model tend to focus on the ability to perceive and understand extant social norms, since individual responses are evaluated based on larger relevant social samples.

Arising from the work of Daniel Goleman and organizations such as CASEL, the “Mixed Model” moves beyond the social awareness dimension at the center of the Ability Model, also embracing self regulation, motivation, empathy, and other social skills.15 These expanded factors are measured through assessment of abilities such as knowing what one is feeling, understanding the impact moods have on others, controlling or redirecting one’s emotions, anticipating consequences before acting on impulse, utilizing emotional factors to achieve goals, sensing the emotions of others, managing relationships, inspiring others, and inducing desired responses from them.

Developed through the efforts of Dr. Konstantinos Vasilis Petrides, The “Trait Model” works through self-assessment of emotion-related perceptions rather than through the measurement of socially-oriented cognitive abilities assessed through performance on psychological tests.16 The Trait model is interested in exploring whether such self-assessments correlate to prosocial or antisocial behaviors, physical or psychological health, educational outcomes or other behaviors or personality factors of interest. The Trait Model criticizes the “Ability Model” and the “Mixed Model” for a lack of objectivity, along with problems in operationalizing performance measures. The Trait Model is concerned about the potential for measures of performance that rely on expert or consensus assessments to reflect conformity to social norms or to be confounded with other factors such as stereotypical judgements.

While there is an emerging consensus about the general importance and relevance of social and emotional development to success in work and life, it is clear from review of the literature that research on social and emotional development currently lacks a consensus vision about the specific attributes of psychosocial health and also lacks consensus about how exactly psychological variables related to social and emotional development should be framed, understood, and measured. Psychosocial constructs (and the observable and latent variables that underlie them) such as social skills, attitudes, prosocial and antisocial conduct, emotional distress, empathy, and academic progress must be specifically defined to avoid taking on disparate meanings influenced by diverse cultures and contexts.  Without such careful definition, social research into social and emotional development is unlikely to be replicable, generalizable, or widely relevant within rapidly evolving organizations and wider social systems.

It is possible to identify many elements of social and emotional development that are not clearly delineated within existing models but that are nevertheless observable as highly relevant to success in the modern family, workplace, and community. For example, building upon self perception and empathy is the ability to understand the congruence (or lack thereof) between one’s view of oneself and the view held by others and to manage the implications of this connection or disconnection. Similarly, the ability to develop strong relationships with others is not exactly the same as the ability to employ those relationships in working toward shared objectives. Along the same lines, understanding how others feel and perceive reality is not the same as being able to influence these factors. 

In another dimension of organizational life, social and emotional development seems to deeply impact an individual’s ability to understand and respond to the needs of a group through a service role. This requires an understanding of social context and systems that arises out of more elemental social skills but is substantially more challenging. Similarly, sustaining motivation within a team or community over a long period grows out of more fundamental skills related to emotional self-regulation. 

Surfacing Social and Emotional Learning and Seizing a Critical Opportunity

Practicing leaders and managers are keenly aware of the impact of social and emotional learning and development on organizational success. They recognize that intellect without social and emotional intelligence often cannot be put to work, and that often the hardest tasks confronting an organization have more to do with social and emotional effectiveness than with traditional academic skills. Yet there is little formal measurement of social and emotional learning in academic institutions -- the primary training ground where new organizational members are prepared. Leaders and managers learn to assess ability in this arena through intuition and also by looking at non-academic and social leadership activities such as engagement in arts, faith based, or community service initiatives.

The blind spot around social and emotional learning offers postsecondary programs a significant opportunity for innovation. In the quest to strengthen their immediate relevance to practical work and employment, colleges and universities should begin to take a comprehensive approach. Some critical questions to consider:

  1. Within Curriculum. What social and emotional skills should our curriculum work to develop? The focus should be on skills related to listening, building relationships, personal and social awareness, emotional insight and stability, grit, resilience, persistence, awareness and mastery of group dynamics, creativity, teamwork, leadership, ethical decision-making, and empathy.
  2. Extracurricular. How will our institution intentionally harness social, faith-based, cultural, and political activities to enhance social and emotional development? How much focus should we place on organizing institutionally sponsored activities so that they are supported with appropriate opportunities for training specifically targeted at social and emotional development, including models that encourage reflection, dialogue, and learning about the psychosocial elements of social experiences?
  3. Assessment. What methods will our institution employ to assess social and emotional learning, both within our curriculum and across the extracurricular activities that our community supports? The focus here should be on developing pre- and post intervention assessments to determine impacts on defined social and emotional skills and abilities. In this regard, it will be important to tease out formative, summative, and participatory-action assessments. From a wider perspective, once an institution has developed a strategic orientation to social and emotional learning, it should work to develop studies and experiments with strong design involving randomized, controlled trials. While predictive research in social sciences remains very challenging due to serious problems with replication within diverse and rapidly evolving human systems, the scientific method can nevertheless help to keep our work grounded. Knowing the limits of our knowledge of human systems is as valuable as discovering widely replicable patterns. Moreover, the conversation about experimental design can help clarify the strategic goals of interventions as we work to measure what matters.

There is little doubt that college education can and does serve to help students achieve not only enhanced knowledge and intellectual skills, but also stronger social and emotional skills vital to learner success in work and life. While social and emotional development in college today is not yet adequately understood and planned, it may be among the most important and valuable dimensions of postsecondary education. Challenge and opportunity await.

Footnotes

web.stanford.edu

www.bls.gov

trends.collegeboard.org

ibertystreeteconomics.newyorkfed.org

www.payscale.com

www.washingtonpost.com

7 Heckman, Stixrud, Urzua “The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior,” National Bureau of Economic Research, Working Paper 2006. Postelwaite and Silverman, “Non-Cognitive Skills, Social Success and Labor Market Outcomes,” 2006; “Improving College and Career Readiness by Incorporating Social and Emotional Learning,” College and Career Readiness and Success Center, American Institutes for Research. 

8  Ibid.

9 Heckman Savitz-Romer, M., Rowan-Kenyon, H., Zhang, X., & Fancsali, C., (2014),“Social-Emotional and Affective Skills Landscape Analysis: An Executive Summary,” www.impaqint.com. Socas, John, “Infusing Social and Emotional Learning (SEL) into the Community College Curriculum,” Community College Journal of Research and Practice Vol. 41, Iss. 12,2017

10 www.chronicle.com

11 See, e.g., www.edweek.org  static.pdesas.org

12 http://degreeprofile.org/

13 www.luminafoundation.org/about

14 Mayer, J.D.; Salovey, P.; Caruso, D.L.; Sitarenios, G. (2001). "Emotional intelligence as a standard intelligence". Emotion. 1: 232–242.

15 Goleman, D. (1998). Working with emotional intelligence. New York: Bantam Books

16  Petrides, K.V.; Pita, R.; Kokkinaki, F. (2007). "The location of trait emotional intelligence in personality factor space". British Journal of Psychology. 98: 273–289. 

Photo Credit: Kenneth Martin Photography

Around 8,000 youth in Boston, aged 16-24, are currently disconnected from both career and educational opportunities along with 5.3 million young people nationwide. Further, 80 percent of low-income minority youth in Massachusetts are unemployed, and national research shows that 43 percent of women and 74 percent of men who age out of the foster care system will be incarcerated at least once in their lifetimes. These are the young adults with whom More Than Words has the privilege to work. 

As society attempts to prepare our most vulnerable system-involved young adults for their critical transition to adulthood, we must move from traditional social service models toward more empowering, effective, and cost-effective social enterprise solutions. Too often, programs for youth who are caught in public systems focus on remediating their problems rather than treating them as part of their own solution. Young people need the “helpers” to move away from doling out services to creating hands-on, real-world opportunities to work and learn that allow for mattering and self-transformation.     

Work, in a supportive social enterprise, creates the critical context for real and measurable positive change. We do not change the lives of our youth; we provide the structure, accountability, trusting relationships, and belief in their potential to allow them to do the hard work of transforming themselves.

Work Works at More Than Words

More Than Words (MTW) is a social enterprise that empowers system-involved youth to take charge of their lives by taking charge of a business. At our locations in Waltham and Boston, Massachusetts, MTW serves our most vulnerable youth from throughout Greater Boston who face compounding risk factors; more than 60 percent are involved with the foster care system and nearly 40 percent are court-involved.   

MTW’s approach to empowering young people is rooted in research, experience, and our well-developed theory of change. There are many powerful effects of work: teens with jobs are more likely to earn a diploma, avoid risky behaviors, and find employment as adults. We believe that the best preparation for the youth’s future success must include an actual paid job, one which provides developmentally appropriate feedback and hands-on, real-world training for the youth to equip themselves with marketable skills and education crucial for the workplace, college, and life.

Over the past 13 years, MTW has grown from a few youth selling books online in a 150-square foot office to a $4.7 million operating budget and demonstrated model that works for youth to achieve measurable outcomes in education, work, and life. Youth earn a job running book businesses -- they are out on a fleet of trucks sourcing books and selling them in their online, retail, wholesale, and pop-up shop businesses, generating more than two million dollars in earned revenue while developing critical skills approximately 20 hours per week. They also have a second job -- their “YOU” job -- where they receive intensive case management to work towards personal goals. Two years of continued support in the Graduate program help youth transition to other jobs and persist in education.

This model works. Youth graduate from MTW and have gained the skills and self-efficacy to take charge of their lives. 80 percent of MTW graduates spend at least 30 hours per week productively moving their lives forward with work and/or school.   

Understanding the Key Levers

MTW describes itself as a holistic work-based, social enterprise, youth development program. Each piece of this description is important -- we do not want to be, and should not be, pigeon-holed as just one of these things. Each component is critical to our model, theory of change, and impact for our youth.  

How do the key levers work?

  • Real revenue and real jobs: Our youth-run business is serious and sophisticated; this is not a side component with “make-work” activities. Youth source more than $2.4 million in book donations annually, ship out 500 to 600 orders every day, list 22,000 books into our online inventory each month, and generate more than $2 million in earned revenue annually, representing 45 percent of our operating budget. The authenticity of the job skills, revenue, and business needs are key to youth empowerment -- they are also critical to the success of the business and MTW. In addition, youth are paid to do the really hard work on their “YOU Job” advancing their education plans and mapping concrete steps for their future education, work, and life. Youth are consistently impressed that at MTW, they are paid to work on both the business and their lives. At MTW, our youth are not passive recipients but part of their own solution, and therefore offer incredible leverage to the philanthropic and public dollars that support our program.   
  • Compassionate accountability: Our youth need and deserve an opportunity to be accountable, to have real responsibility, to be part of something, to shine, and to realize their true potential, creativity, intellect, professionalism, and power. They need to see they are smart and can do things educated and successful people do. MTW provides high expectations and a willingness among adults to hold up a mirror to them, "go there" and have the tough conversation every single time to help them learn how to be accountable for high-bar expectations. It is not uncommon for youth at MTW to receive suspensions, or even to lose their spot in the business and be supported to earn it back.    
  • Long-haul commitment: MTW is accountable for sticking with our youth and providing ongoing support for a minimum of two years to ensure youth persist in achieving measurable outcomes. Unlike many programs which direct youth to a particular career path or education goal, MTW supports youth to direct their own futures. During their time in the core social enterprise, youth are exposed to a wide-range of career choices and paths. Youth attend site visits with established partner employers and post-secondary options and our Education and Employment Managers work with youth to map action plans for furthering their education and securing employment.  
  • Fanatical focus on Continuous Improvement with Data: MTW engaged a national expert, David Hunter, to facilitate a comprehensive Theory of Change process in 2007, and an implementation assessment in 2014 to confirm our model and identify areas to strengthen. We have an Evaluation Advisory Council of experts to support our ongoing analysis of our evaluation systems, model and impact. MTW uses Efforts To Outcomes (ETO) to analyze the data we collect, and we have a director of Evaluation devoted to supporting and deepening our use of data to continuously increase our effectiveness. MTW engages youth in collecting data every day about their performance on the job and progress moving towards personal goals. Youth and staff use this data in performance reviews for promotions, to map plans, and to promote high expectations and clear accountability. MTW is unique in how fanatical it is about data, learning, and in how deeply our youth are engaged in understanding their own outcomes data.

Scale and Impact

MTW is undertaking a game-changing expansion that will propel us to the next level -- growing our Boston site into an innovative two-floor hub of social enterprise, allowing us to empower 60 percent more youth, increase earned revenue by 75 percent, pilot new enterprises to provide new skill building opportunities for youth, and launch a training institute to inform the field.

Through our current expansion project, we will expand our current online and retail operations and test and learn with new enterprises including a youth-run event space and social enterprise marketplace. We are also committed to growing the impact and sustainability of the social enterprise field by developing a training institute. We have piloted training that provides Continuing Education Units (CEUs) for social workers and youth development professionals and are mapping growth of this department to offer a menu of training opportunities to share our model.

Summary -- The Moral Imperative for Models like More Than Words

Our society and social sector are still biased about what our youth can do, especially those who have grown up in our public systems of care. It is time to shift the field and lift up more empowering and effective models that allow the world to see our youth in action, running a legitimate business, hosting events, demonstrating their professionalism and power, and achieving measurable outcomes for their education, work and life. We are committed to growing our model, our impact and our training institute to ensure that more people working directly with and investing in youth are shifting their own perceptions and belief systems. We are committed to helping to create waves of adults who walk out of MTW and into their respective roles with a new understanding of how to approach this work and create positive shifts in how society interacts with our most vulnerable youth and how leaders design systems to support them.

 Photo Credit: Kenneth Martin Photography

Works Cited

1 McLaughlin, Joseph, Van Eaton, Anika “Trends in Education and Workforce Indicators for Boston Youth and Young Adults, 2006 to 2016”

2 Opportunity Nation and Measure of America. (2017). Opportunity Index. Retrieved from Link

3 Sum, Andrew, et al. “The Deteriorating Labor Market Fortunes  of America’s Teens, 2000-2012, the  Decline in Our International Position, and  the Consequences for Future Young Adult  Employment in Our Nation”

4 2015 Teens Leaving Foster Care More Likely to See Jail Than Graduation, Rocky Mountain PBS News. National Statistics cited. 

 

In the Fall of 2016, the board and staff of Episcopal Community Services met to kick off our strategic planning process. On our radar was the data1 on poverty in America and specifically in Philadelphia. The long and the short of it was that poverty in 1960 and 2015 primarily affected the same percentage of the population. Yet, adjusted for inflation the 2015 rate was significantly worse. Poverty in Philadelphia according to data was an intergenerational issue and affected one in four individuals. 

We concluded that as an agency focused on poverty, we were not driving the impact of eliminating poverty on the individuals we served. The language we adopted and the approach we aimed at in our forward-planning was to “get out of the maintenance game and get into the change game.” Yet, to state it plainly, while we had programs that were well regarded, they were not driving the desired results of reducing poverty rates for our clients.” 

Consequently, we looked at our case management models and program approaches and undertook an extensive review. We sought out research to evaluate strategies that would provide the impacts we were seeking. We knew that the current studies in Cognitive Behavior Therapy (CBT) which we had been using in our youth programming, the work with brain science, and the work with reward-based coaching was showing significant results. Our journey brought us to EMPATH in Boston (formally Crittenton Women’s Union) and their economic mobility model. Their experience strongly suggests a successful approach to end maintenance and drive individual change. 

The model’s premise is that individuals that are one hundred percent in crisis and cannot deal with activities that will lead them out of poverty. By intentionally working with individuals in a coaching approach that incorporates rewards and financial incentives to achieve self-identified goals one can move an individual from one hundred percent in crisis to significantly reduced rates. Targets and the associated strategies focus on family stability, health and well-being, financial management, education, training, and employment and career. The end game is to work with an individual to build a bridge to help them arrive at a place where they are at or exceed MIT’s living wage target of $28.20 per hour while having their other life elements in place. The key is the mentoring model of goal setting and working with an individual in an ongoing environment to help them set their own goals and strategies and then implement them. The end game is self-sufficiency. 

ECS is currently adapting a model for Philadelphia and implementing this model into our current programs. Specifically, we are focused on integrqating the model into our Out of School Time, St Barnabas Woman’s Shelter, youth and workforce development programs, and both our housing programs, FASST and rapid rehousing. By 2019, our plan calls for starting a new dedicated program of mentoring for individuals experiencing poverty within the communities we serve. 

The agency has trained every employee in the model and the coaching methodology. As with any significant shift in approach, we will learn what works for our participants and measure the impacts and the strategies we take and then adjust accordingly. Our board is invested in this transformation, and we have established a three-year schedule to implement the changeover fully. One needs to note that the model estimates working with a given individual over a four to five year period. Our early results indicate strong participant interest and engagement. As an agency, we will seek funding to support this growth through foundations, annual funding, endowment growth, and B corp programs. 

We believe that the coaching and mentoring approach for creating economic mobility shows significant promise. The data from other agencies undertaking this approach supports this view. As we track our progress with our transformation, the proof will be in the individual results achieved and the permanency of the results. In addition to this change in approach, we have also undertaken the creation of an advocacy function in the agency to drive public policy changes at both an agency, board, and stakeholder level. 

For additional information, and to stay up to date on our program please visit www.ecsphilly.org or to reach the author directly email This email address is being protected from spambots. You need JavaScript enabled to view it.

Author Bio

Dave Griffith is the Executive Director and Head Coach at Episcopal Community Services of Philadelphia. He is the first non-clergy, nonsocial worker to lead the 147-year-old agency. 

Dave also serves as the Chairman of the Modern Group Ltd, Delaware Valley Floral Group, Hoober Inc., and Verus, and is a director of Mountain Lakes Spirits and The JJ Haiones Company. 

Works Cited

1 www.washingtonpost.com

In Philadelphia, the statistics heard everyday are stark. We are the nation’s poorest large city. We have an unemployment rate of 9.6 percent (about two percentage points higher than the national average), a poverty rate of 25.7 percent, and an astounding deep poverty rate of 12.3 percent.1 With a population of 1.56 million, we are a majority-minority city also experiencing low educational attainment, with 16.2 percent of residents never graduating high school and nearly one-third only attaining a high school diploma or GED2. The confluence of poverty, race, education, and employment underscores the magnitude of the city’s economic challenges.  

Shared Prosperity Philadelphia was launched in 2013 as the City’s response to the crisis of poverty. The charge was to focus efforts across city government to alleviate the immediate effects of poverty, but also to spur systems-level change. Under the Kenney Administration, there is a renewed energy and focus to create more pathways out of poverty. For the first time, the City has pulled together key stakeholders, partners, and private entities to apply their expertise in promoting a business-driven training and employment agenda to create career pathways to family-sustaining employment. The City has worked in collaboration with these public and private sector partners to develop an ambitious and aggressive plan to both connect residents to high-quality employment opportunities and advance economic and workforce equity.

“Collaboration,” “growth,” and “equity” are critical for creating an effective alliance between city government, private sector businesses, and the education and training institutions in Philadelphia. While the workforce, education, and training systems have been disjointed for years, the present moment offers a striking (and troubling) contrast between the visible evidence of poverty and the inequity of access to opportunities and inclusion and prosperity for many residents, which can no longer be ignored. Quality, well-paying, and career-oriented jobs are the key to reversing poverty, however, local employers have expressed a need to grow the talent pool for middle-skill jobs. The driving force bringing stakeholders and partners together is a shared belief that the city’s labor force is ripe to be trained and prepared to meet local employers’ needs.  

Sector Strategies Coming of Age: Implications for State Workforce Policy Makers, National Governors Association

Collaboration is the centerpiece of the City’s strategic process for promoting workforce equity. In July of 2016, a table of public and private stakeholders was convened that included the City’s Commerce Department and Managing Director’s Office, the School District of Philadelphia, Community College of Philadelphia, Philadelphia Works, Peirce College, Job Opportunity Investment Network, and Philadelphia Youth Network, as well as private sector businesses, members of the Philadelphia Chamber of Commerce, and employment training providers. The composition of the table was itself a significant innovation in that these partners had never been assembled in an intentional manner for the task of breaking down the existing silos within the workforce development landscape and constructing a common strategy for the city. Over the past 16 months, these partners have been working together, reviewing existing strategies, bringing new partners to the table, and combining their diverse interests into a cohesive set of recommendations and goals to specifically address the city’s workforce challenges.

Growth

Growth of a world-class workforce requires that skills developed in our academic careers, as well as certification and training programs, match those demanded and anticipated by employers. Employers, education providers, and training providers must work in concert to ensure these skills are formed in educational settings and to increase the scale of opportunities such as apprenticeships, internships, and work-based learning -- specifically, opportunities directly geared to “earning and learning” in an inclusive, fair, and upwardly mobile environment. Efforts captured in the strategy that embody this approach include standout programs like Power Corps PHL and Philadelphia Future Track, amongst others across the city.

Equity

The word equity is not simply a buzzword for partners and stakeholders convened at the table. It goes deep into the root of the issues of poverty and economic opportunity in Philadelphia. People of color, specifically African Americans and Latinos, have the least access to opportunity, and have not seen gains in employment for either entry-level or mid-level skill positions. Demographic trends indicate that Philadelphia’s impoverished residents are increasingly Latino and of working age3. To address issues of equity, the proposed city-wide workforce goals are founded on the principle of building pathways to careers for all individuals in the labor force and ensuring equal access to economic opportunities for all Philadelphians. The equity imperative is embedded in the City’s strategies to meet the needs of our employers by building a world-class workforce, as well as in our plans to align resources, systems, and policy efforts to drive a workforce agenda that is fair, inclusive, and responsive to the needs of marginalized job-seekers. 

Inequity is reflected not only in measures of poverty and economic disparity, but in specific workforce outcomes, such as the historic lack of diversity in the city’s building and construction trades. This lack of diversity means that women and people of color are not gaining access to the opportunities for apprenticeships and union memberships that can open doors to employment on the large-scale, prime construction projects that are on the rise in Philadelphia. Proactive leadership to address barriers that are present in the building trades is being provided by the City’s Deputy Mayor for Labor. Equity can also be achieved by moving away from a framework that simply seeks to connect people to jobs, and instead, provides all residents with opportunities to embark on a career pathway that leads to growth in income, skills, and job quality over time. The career pathway approach has gained significant momentum and support at the federal level, as evidenced by the Workforce Innovation and Opportunity Act (WIOA), which expands the definition of career pathways to align with the skill needs of specific occupations or growth-industries.4 Philadelphia’s sector-based approach to workforce development sees career pathways to viable long-term employment and higher wages as integral to the success of the unemployed and underemployed labor force, regardless of race, ethnicity, or gender. 

City as Model Employer Career Advancement Project (C.A.P.) is the City’s innovative pilot program to grow a world-class workforce by “walking the walk.” In this program, individuals with barriers to employment will work along a pathway to permanent employment within City government or with City employer partners. The goal is to transition 200 City seasonal/temporary low-wage workers to permanent employment in City government or with City employer partners over three years. This project focuses on disconnected youth and young adults aged 16 to 29; formerly incarcerated and justice-involved individuals; and adults lacking the necessary workforce skills and credentials. Seven Philadelphia City departments will participate in the pilot year, offering a continuum of career exposure opportunities, from pre-apprenticeship to apprenticeship, with permanent employment as the end goal. The first cohort of 40 C.A.P participant apprentices began in June 2017. The most significant win to date is the system change that occurred when the Civil Service Commission approved the new job specification which opened the opportunity to provide the C.A.P. apprentices 24 months of paid training that solidifies the pathways created to permanent employment.  

Now is the time to capitalize on this significant win. The City, as an employer, will be authentic and affect change through its workforce strategy and authorize a sub-committee to apply a racial equity lens to the C.A.P. apprentice cohort. The data obtained will be applied to assess and unpack the barriers to seasonal workers gaining access to civil service employment, passing the civil service exam, and being hired within City government departments. Applying a dual demographic and literacy-based approach to analyze race and class disparities within seasonal workers in civil service positions, is a different approach to assess the root cause of any inequities. Further analysis of the data may also reveal additional inequities or disparities in hiring and promotion opportunities in civil service positions. The results will provide remedies that can be applied to positively impact and reduce barriers for seasonal and lower skilled workers, and aid in determining how these remedies can be applied to career pathway programs in other City departments. Philadelphia’s city government as the model employer can lead the way for real change, real solutions, and reform.

This concerted effort to create, develop, and launch the City as Model Employer program, and take a hard look at racial equity, is indicative of the City’s commitment to making an impact for the populations we must up-skill and employ, starting with city government, as the largest employer, to lead the way and implement systemic change through collaboration, growth, and equity.

Author bios

Heloise Jettison is the Senior Director for Talent Development for the City of Philadelphia Department of Commerce. A native Philadelphian, with more than 25 years of experience in the field of health and social services, K-12 education management, administration, law, and policies in alternative education options for students. She transitioned into the field of workforce development in 2013 at Philadelphia Works, Inc.  In 2016 she joined the Department of Commerce as the Senior Director of the newly formed Talent Development unit. Heloise and her team work city-wide with public and private partners, academic institutions, employers, and workforce training agencies to develop and strengthen the labor force and opportunities of pathways to employment for all Philadelphians. With this intention, and by assisting in the development and the design of a city-wide plan to aggressively raise the level of efficiency of our systems and workforce talent, Philadelphia will continue to be competitive and attract and retain businesses that will innovate, thrive, and grow. 

Mitch Little is the Executive Director of the Mayor’s Office of Community Empowerment and Opportunity (CEO). He previously served as Deputy Executive Director for the organization through an appointment by Mayor Michael A. Nutter in 2013. The same year, CEO released “Shared Prosperity Philadelphia, Our Plan to Fight Poverty” and Mitch is charged with its implementation. As the Community Action Agency for the city and county of Philadelphia, CEO seeks to align the city’s efforts to lift individuals and communities out of poverty and increase opportunities for low-income individuals and families using a “collective impact” model. The agency also acts as a convener, funder, and evaluator contracting with a wide-variety of grantees to advance CSBG supported initiatives in benefit access, housing security, learning preparedness, financial security, and workforce development. Mitch serves as a Boards of Director for several organizations including YesPhilly, an alternative school for out-of-school young adults, and as a member of the African-Americans in Government Mentoring Program where he mentors young African-American professionals.

Works Cited

1  U.S. Census Bureau, American Community Survey, 2016 1-year estimates.

2  Ibid.

3  Pew Charitable Trusts, Philadelphia’s Poor (2017). Accessed at: www.pewtrusts.org

4  www.congress.gov

Poverty is not just an income problem. It is also a wealth problem. All people need opportunities to invest in themselves and in their children in order to move their families forward. Yet, anti-poverty programs in the U.S. have, traditionally, done very little to promote wealth-building among the families they serve. The Family Self-Sufficiency (FSS) program, a program of the U.S. Department of Housing and Urban Development (HUD), which serves residents of federally subsidized housing, is one particularly powerful opportunity to change that trend. For the past seven years, Compass Working Capital (“Compass”) -- a national nonprofit financial services organization headquartered in Boston, Massachusetts -- has implemented and expanded an innovative, evidence-based model for the program that is helping to show what this program can really do. 

Tanya Febrillet is a single mother of two teenage children. She lives just north of Boston in the city of Lynn, Massachusetts, works full time, and, until recently, had been receiving housing assistance through her local public housing authority for several years. Like many families in the subsidized housing and welfare systems, Tanya was getting by -- but she very much wanted to get ahead and build a better life for herself and her children. Tanya’s dream had always been to own her own home. But she believed that owning a home was not, in her words, “for families like mine” -- that is, a single, low-income mother who lived in subsidized housing, and grew up in a family where no one had ever been a homeowner. 

Tanya Febrillet, a graduate of the Compass FSS Program operated in partnership with Lynn Housing Authority and Neighborhood Development, with her two children on the front steps of the home that she was able to purchase at the end of this program. 
Photo Credit: Geoff Hargadon

There are so many families like Tanya’s in Massachusetts and across the country who have similar hopes and dreams for the future -- whether that be to own a home, to invest in their own education or that of a child, to save for retirement, to start a small business, or another goal. While our subsidized housing system provides a crucial safety net for many families, there is more we can do to leverage this assistance as a platform for economic mobility. For many families in the subsidized housing and welfare systems, rules actually discourage and penalize savings, creating traps that make it more difficult for families to reach these goals and lift themselves out of poverty.

One such “poverty trap” exists in subsidized housing. Households receiving rental assistance typically pay about 30 percent of their income toward rent -- a policy designed to ensure that assisted households pay a fair, but affordable, share of their income for rent. The unintended consequence of this policy is that it may create a disincentive for families to increase their income, because working more means paying more rent and possibly losing other benefits tied to income, a structure which also makes it more difficult for families to build savings.

In 1990, Congress introduced the FSS program to address this disincentive, with the aim of better promoting employment and savings among households receiving federal housing assistance. As families work more and earn more money, the FSS program allows them to capture the increased portion of their rent payment in a savings account, held in escrow by the housing authority. The program essentially converts increased monthly rent payments into a monthly savings deposit. 

There is no other anti-poverty program like FSS in the country, one that provides a built-in savings account to participating families. It is the federal government’s largest asset building program for low-income families. And yet, despite its potential to help lift families out of poverty, FSS has been underutilized around the country. Only 71,000 families participate each year, even though an estimated two million families are eligible. The reasons for this are varied. Resource strapped housing authorities struggle to market the program and HUD provides limited dollars for FSS program staff. But, most importantly, housing authorities lack the resources and expertise to unpack the program’s true wealth building potential.

And so, in late 2010, Compass became the first non-profit organization in the country to launch a new asset building and financial capability model for the FSS program. While HUD frames the FSS program primarily as an employment and savings program, Compass hypothesized that a wealth building model could drive stronger results for families and expand the program’s scope and impact around the country. The Compass model incorporates client-driven financial coaching and education, along with the strategic use of the FSS escrow account, to advance household economic mobility. Instead of a more traditional case management or referral model, Compass’s highly trained financial coaches work with subsidized housing residents, like Tanya, to set and reach their financial goals, establish budgets, build credit, pay down debt, access high quality financial products and services, and build savings in the program that can then be used toward those financial goals.

These programs are funded through a combination of contractual revenue from the housing partner paid to Compass, and outside philanthropy, which has enabled Compass to more robustly market the program and provide these financial coaching and education services to a larger share of families than would be served in a typical FSS program.

In 2010, Tanya enrolled in a FSS program operated through a partnership between her housing authority and Compass. Over the course of five years in the program, she paid down her debt, increased her annual income by nearly $8,000, improved her credit score by more than 140 points, and built over $3,000 in savings. Tanya graduated from the FSS program in 2015 and achieved her dream of becoming a homeowner -- the first in her family ever to do so.

Tanya’s accomplishments are consistent with the impact of the program model overall. In September 2017, Abt Associates, a global research firm, released the final results of a rigorous, multi-year, and quasi-experimental study of Compass’s FSS programs operated in Lynn and Cambridge, Massachusetts. The study found that after an average of 40 months in the program, participants earned more and received less welfare payments than their matched peers. In fact, participation in a Compass FSS program was associated with an average increase of $6,305 in annual household earnings. Participants also achieved positive credit and debt outcomes that exceeded benchmarks, including an average decrease in derogatory debt of $764. 

Building on the success of these early program sites in Lynn and Cambridge, Compass has expanded this model to ten sites in Massachusetts, Connecticut, and Rhode Island. In September 2016, Compass launched a National FSS Network, with support from national funders, to train partners to implement aspects of the Compass FSS model in their local communities. Network partners currently include public housing authorities, nonprofit and for-profit private housing owners, and nonprofit organizations that partner with housing providers to operate the FSS program. These partners receive training and ongoing technical assistance from Compass to either launch a new asset building FSS program or to integrate financial coaching and other asset building strategies into an existing program. 

The FSS program has also attracted renewed attention in Congress, where it has enjoyed consistent bipartisan support since it was first created. In June of this year, a bipartisan group of Senators introduced legislation to streamline and improve the FSS program. The bill would take steps to promote further uptake of the program among eligible providers and participants, and also foster further innovation to expand the program’s scope and impact. A companion bill is expected to be filed in the House of Representatives, following on a recent hearing about the FSS program in the House Subcommittee on Housing and Insurance. 

What the success of the Compass FSS model ultimately points to is the key role that financial security -- in the form of savings and assets -- plays in breaking the intergenerational cycle of poverty, by supporting families to increase their wealth over time and across generations. The changes that Tanya made to her income, debt, and credit, when combined with the savings she built in the program, put her in a more secure financial situation and positioned her to reach a major financial milestone. 

Early data suggests that a model like this also has a strong return on investment. Again, Tanya’s story provides a compelling example. Before joining the FSS program, she was receiving a monthly housing subsidy of $625. Today, the housing authority is able to redeploy that subsidy to serve another family in need, and Tanya is now contributing to the local tax base as a homeowner. And although it is harder to measure, we also know that Tanya is now teaching and inspiring others around her – her children, extended family, and neighbors -- to manage their finances and save for the future.

Author Bio

Sherry Riva is the Founder and Executive Director of Compass Working Capital. Sherry founded Compass after more than a decade working with various direct service organizations that served low-income women and families, including several years running a transitional shelter for women in Seattle, WA. Sherry is a Draper Richards Kaplan Social Entrepreneur and a GLG Social Impact Fellow. Sherry received an A.B. from Princeton University, an MPP from the Kennedy School of Government at Harvard University, and a Master's in Philosophy (Ecumenics) from Trinity College Dublin.

Abstract

The Employment Opportunity Fund was designed and implemented in 2016 with the aim of serving as a strategy to mitigate the barriers present in the labor market for women, young people, older people, people with disabilities, and victims of the Colombian armed conflict. The Fund is an innovative proposal which allowed the participants to find a job that meets their profile and companies to find suitable personnel, according to their needs; in other words, the Fund generated an effective match between supply and demand in the Colombian labor market.

Introduction

Among the main challenges facing the economy of Colombia today are the high rates of unemployment and non-remunerated labor. According to the International Labor Organization (ILO), in 2015 Colombia had labor participation and unemployment rates higher than average for Latin America and lower overall employment rates. The national unemployment rates were only lower than those of Costa Rica and the countries of the Caribbean.

Unemployment and informal work affect certain population groups due to their finding additional barriers to gaining access to the labor market. A review of the literature and statistics identify women, young people, older people, people with disabilities, and victims of the armed conflict as those encountering greater barriers in gaining access to the labor market, further demonstrated in unemployment rates higher than the national average or more precarious labor conditions associated with the rate of informal labor. The limitations these population groups face to gain access to education for professional development and to obtain employment to allow them to live with dignity are more frequent.

This article covers the experience of the implementation of the program of Barrier Mitigation-Employment Opportunity Fund, that the Special Administrative Unit of the Public Employment Service and the Saldarriaga-Concha Foundation implemented in 2016 to serve as an additional source of information on programs seeking to improve access to the labor market for the most vulnerable in the population.

The first and second parts present a detailed account of the program of Barrier Mitigation-Employment Opportunity Fund and how it works. An approximation of the economic benefits of the Fund is subsequently presented by calculating the social net earnings. The article finishes by presenting the learnings garnered through the implementation of the Fund and some general conclusions.

Employment Opportunity Pools Were the Wager

The Special Administrative Unit on Public Employment Service prioritized the design of a program mitigating the barriers to access to the labor market with a differential focus for population groups that demonstrate difficulty in gaining employment. The program demanded working jointly with the network of authorized providers by the Public Employment Service, who in the end, are those who know the vacancies needing to be filled in the business sector and the profiles of those seeking employment to help achieve their hiring. The program aimed at mitigating the barriers was meant to foster work training and the building of a fluid communication with companies to close the gaps that are impeding access to employment.

In 2016, the Public Employment Service Unit together with Saldarriaga-Concha Foundation designed and implemented the “Employment Opportunity Fund,” a program aimed at mitigating the barriers to gaining access to the labor market for women, young people, older people, persons with disabilities, and victims of the Colombian armed conflict by especially focusing their efforts on mitigating the barriers associated with structural unemployment.

The Employment Opportunity Fund (EOF) was the result of a joint project between a public actor and a private one which turned into the first program of barrier mitigation in Colombia, offering tools to employment centers for solving employment problems in populations traditionally excluded from the labor market.

Even though there have been isolated efforts by organizations to implement models of labor inclusion that respond to a specific group of the population, as has been seen with the persons who are victims of the armed conflict and persons with disabilities; also, specialized educational institutions were created to respond to the demand in specific economic sectors. Despite this, education does not always respond to the needs of the business sector and the transference of knowledge from one model of labor inclusion does not necessarily result in effective gains in employment.

During the first implementation exercise of the Fund, 44 projects were approved in 19 municipalities across national territories which allowed for knowledge transference to 147 employees of 16 employment centers as a means of improving attention to persons with disabilities and women, strengthening the work skills of 1,774 persons and achieving the hiring of 538 people, which is to say, 29 percent of the target population.

In total, the Opportunity Fund released 1,632 million Colombian Pesos (COP) exclusively for the implementation of green-lighted projects. In terms of impact, 78 percent of the participants received training in specific skills, and 55.1 percent in soft skills, a core component in closing the gaps of human capital to gaining access to the labor market.

Running the Fund

The Employment Opportunity Fund was a monetary fund designed under a competitive scheme that channeled resources with the aim of financing projects presented by the providers of the Public Employment Service Network, which has the objective of launching mechanisms that would allow those seeking employment to approach the available labor opportunities in different territories.

The Fund had a general budget of $1.65 billion Colombian Pesos (COP $1,650,000,000) to provide financial support which varies between seven million Colombian Pesos (COP $7,000,000.00) and fifty million Colombian Pesos (COP $50,000,000.00), per project.

The Employment Opportunity Fund had two lines of intervention: Mitigation of Barriers and Strengthening of Capabilities. The first was designed to offer services that reduce or eliminate the barriers associated with existing institutions and the gaps of human capital, while the second is conceived as an instrument for improving efficiency of formal work search channels, a role that employment centers carry out for job seekers.

The Fund operates in two phases. In the first phase, the projects are received and evaluated. In the second phase, the contracting and implementation stage of projects is done with the aim of improving the effectiveness of the program. Upon continuation, you will find the stages and processes that were carried out within these.

First Stage: Evaluation

With the launching of the EOF, the first step was the process of evaluating projects during which the best ones presented by the employment centers of the Public Employment Service network (SPE) to the EOF were given green lights. This stage is divided into three phases:

1) Design and Formulation: The employment centers elaborated the projects that would be placed under the consideration of the EOF. Depending on the line of intervention, the technical team of the Fund provides consulting to the employment centers on the following steps:

a. Barrier mitigation line (strengthening the capabilities of the persons who seek employment)

Step 1:  Identify the employment needs of the businesses in the area and determine the main barriers to finding qualified personnel.

Step 2:  Identify the barriers that persons face who are registered in the employment center. The barriers are understood as the skills or qualifications lacking by those seeking employment.

Step 3:  Select the type of training or type of qualification that is needed and that would help the job seekers to gain access to the identified positions.

For the line of barrier mitigation, it was minimally required to present a letter of intent from a legally constituted company with personnel hiring needs. The letter of intent had to include the name of the vacant position, the requirements desired for said position, and the time for hiring (immediately, in the next three months, or from three to six months of anticipation). In this way, the probability of the beneficiaries being hired upon finishing their training processes was greatly increased.

b. Line of strengthening capabilities in the provision of attention in the employment centers:

Step 1: Do an initial diagnostic, keeping in mind all the phases of the channels of employability and the indicators established in their action plan, all approved by the Employment Service.

Step 2: Identify the barrier presented in the employment center to strengthen the track to employability. These barriers may be technological or of specific knowledge of the employees.

Step 3: Define an adjustment plan indicating the goods or services that are required by the employment center for strengthening the pathway.

2) Presentation: For each line of intervention, specific formats were defined to be presented to the Fund. The formats were designed to include general information of the proposer (name, address, telephone, contact of person in charge), technical information (objective, description of the proposal, identification of the need, target population, proposal of the solution and approach of the follow-up and monitoring strategy), and the budget information where a breakdown of the goods and services to be provided is included as well as the financial participation required by the Fund.

3) Selection and approval: The presentation of the projects is done in cycles which are pre-established times for the presentation, revision, and approval of projects. Each cycle has a total duration of 15 banking days. Once having received the proposal, the technical revision and publication of observations is done by the technical team during the first five banking days. Afterwards, the employment centers have five banking days to adjust their proposals using the feedback provided by the technical team. Finally, the evaluating committee, made up of three members of the Public Employment Service and two members of the Saldarriaga-Concha Foundation, come together to give approval to the projects and publish the results in the following five banking days. Notably, there were six cycles in 2016.

Second Stage: Implementation

Once the cycles are finished and the projects are defined for each line of intervention, the implementation stage begins. In this stage the employment centers carry out the projects. The implementation stage is divided into three phases:

1) Hiring: The Saldarriaga-Concha Foundation, in its role of administrator of the resources of the Fund, realizes the registration of the contracts with the providers in addition to supplying the goods and services that guarantee the correct execution of the approved projects. To guarantee transparency in the hiring process, a minimum of three price quotes are requested from providers of goods or services, and priority is given to local providers where the project is to be carried out. It is important to point out that the resources that are assigned to the winning projects go directly to the providers and not to the employment centers.

2) Carry out and follow up: With the provider’s contract, a green light is given to this phase in which the approved projects that benefit the target populations are carried out. Those directly in charge of doing the follow up on the implantation of the projects are the employment centers and the Foundation will be in charge of guaranteeing and verifying the delivery and quality of the goods and contracted services.

3) Project Closure: With the total completion of all approved projects in the different calls for projects held, the program closure begins. It is made up of three components:  finance, communications, and technical. The financial element corresponds to the final payment of installments to suppliers, the balance of resources transferred from the Fund, and the management of the surplus, in the case there is any. Communication is related to the release and spreading of the results of the projects with the aim of giving maximum visibility to the program, relaying to the business sector the results of the training and the reference of the resumes, and giving recognition to the efforts of the institutional actors that participated in the program. Lastly, the technical element has to do with the exercise of the knowledge management, which consists of examining the processes carried out throughout the stages of the program, with the aim of identifying good practices and lessons learned that should be applied in future practices of this nature.

The implementation of the Fund was successful due in large part to the fact that the Employee Service and the Saldarriaga-Concha Foundation took it upon themselves to work jointly and maintain a fluid communication between the coordination of both parts as well as defining the responsibilities of each of the actors involved.

Analysis of the Economic Benefits of the Fund

Under the premise of a lack of resources, the process of maximizing the welfare of a population implied the realization of assigning efficiencies. Under these conditions, the program must minimally satisfy the condition of net positive social earnings to justify its importance in regards to the other alternative uses for the resources of the Fund. With this perspective in mind, a program can be considered viable to the degree that the net social earnings derived from its implementation be equal or greater than zero. To the contrary, it can be considered unfeasible.

Net social earnings are defined as the difference between the total social benefits and the total social costs. The total social benefits are the sum of the direct and indirect benefits while the total social cost is the sum of the direct and indirect costs.

The direct benefit of the program would be the monetary value derived through remuneration that those hired receive in the time that, having not been supported by the program, they would have used in the process of their job search. In this way, it can be defined by the following formula:

Where n represents the number of participants that enter the labor market, upon finishing the program intervention, Mi is the total of months that the hired person would have been unemployed in the case of not having received the intervention, and Si is the average salary earned by the individual during the period Mi, after being program participation.

Likewise, the indirect benefits are defined as the sum of the variation of future income of the participants, product of the increase of the potential production associated with the acquisition of human and physical capital as a result of the program.

N represents the total number of participants in the program, S the salary, and ti the work time subtracted from the individual i. 

The direct costs are the sum of the payments released by the Fund for the financing of the projects, while the indirect costs correspond to the value assigned to the time that the personnel of the allied institutions used in the design and implementation of the program.

Initially, it is feasible to calculate the total costs based on the value of the installments from the fund and the work of the personnel of the institutional actors of the program, however, the same does not occur in the case of the social benefits, for which assumptions must be made on what would have happened in the case that the participants had not been supported by the program. This component, called counterfactual, corresponds to the exercise of an impact assessment, which is outside the scope of the present article, since we are addressing a program that has been implemented for only one year so far.

The fact that an impact assessment cannot be done does not imply that an approximation to quantifying the benefits cannot be carried out based on available information and the building of a scenario, as shown upon continuation.

During the active period of the Fund, 538 participants were hired for a job. Despite not having official data, it can be assumed that the job seekers have been hired to receive a salary equivalent to, at least a current, legal minimum salary in Colombia, which for the year 2017 corresponds to $737.717 COP, given that the companies that participated with letters of intent in this process were formally constituted.

Furthermore, up to the moment, there is no calculation on the time that the participants in the program would have remained unemployed had they not participated in the program of Barrier Mitigation, a reason for which an approximation is made and two documents are used as references: Duration of unemployment in Colombia:  gender, intensity and search, the announcement of job openings (Arango and Rios, 2015), and how long unemployment lasts in the poorest population of Chile (Montero, 2007). In the first, it is calculated that the duration of unemployment is for 7.4 months in the case of women, while in the second it is maintained that women, persons between 45 and 53 years old, young people, and those that have low levels of schooling (such as the victims of the armed conflict and persons with disabilities), experience longer times of searching. With this information, it could be supposed that the approximate duration of unemployment of our target population is near 7.4 months.

Based on the previous information, a scenario is proposed that assumes a homogenous behavior between the participants in such a way that they share the same salary as a result of being hired and similar job search times in the case that they had not participated in the program. In this way, the 538 who were hired would earn $737.717 COP for having participated in the program while the duration of the search would have been 7.4 months otherwise.

With this scenario, formula 1, corresponds to the direct benefits and would be expressed as:

 

where the upper accent mark means average. Upon replacing the corresponding values, we have that the direct benefits of the program, in its first exercise of implementation, would add up to $2,936 million COP. This value is 152 percent higher than the direct costs, derived from the payment installments of the Fund, which reached $1,632 million COP. If we suppose that the indirect benefits are higher to the indirect costs, given that the former are long term and address a large population group, in comparison with the latter, it could be said that the Barrier Mitigation program, in its first implementation exercise, is economically efficient since its social benefits outweigh its social costs.

An economic benefit not contemplated in the foregoing analysis, associated with getting hired for a job, is the increase in the probability of rising above the poverty level, defined by the National Administrative Department of Statistics-DANE2. Supposing that in no case do the persons that get hired belong to the same nuclear family, we are talking about at least 538 households that are rising above the condition of monetary poverty.

Lastly, it is relevant to point out that, beyond the economic, there are other benefits for the population. During the implementation of the Fund, it was noted that a great number of those searching for work had not had the opportunity to attend training courses on specific skills, some had not finished high school, while others showed weaknesses in soft skills related with their form of living. The Fund allowed the participants not only to acquire knowledge but also to strengthen soft skills which are indispensable for people.

Lessons Learned

The implementation of the Fund generated learning which could be of use to both the institutions participating in the Program as well as those interested in implementing similar projects. Upon continuation, some of this learning is shared:

  1. One of the main characteristics of the Employment Opportunity Fund is that it makes a wager on the territorial capabilities and decentralizes the social impact decisions. The Fund was designed so that the employment centers could present solutions to the particular needs of their territories in terms of the needs of the business sector and the socioeconomic profile of the persons who are seeking employment. In this way, the training given to the participants responded to relevant criteria.
  2. The capabilities of formulating projects in the employment centers were strengthened. Given that the Fund worked under a competitive scheme that required the presentation of projects to gain access to resources, it became indispensable that the employment centers reinforced their knowledge on the formulation of projects. The wager for the allies is that the employment centers can access diverse sources of resources that require the presentation of projects.
  3. The Fund sought to generate territorial connection. The presentation of the project to the Fund required, minimally, the presentation of a letter of intent from a legally constituted company and in some cases allies, represented in the territorial organizations. The active participation of private and public sectors to achieve a common objective, had the result of territorial coordination.
  4. The Fund fostered working in groups with populations traditionally excluded from the labor market. For some employment centers, it was the first time they had worked with persons with disabilities or with victims of the Colombian armed conflict. Working with these population groups raised awareness in the employees of the employment centers and the business owners and allowed for knowing socioeconomic characteristics which are unique to some people.
  5. Given that the maximum amount approved was 50 million COP, it obligated the employment centers to present a cost-effective proposal for mitigating the barriers to labor market access. The employment centers had to prioritize goods and services to be supplied to the beneficiaries.
  6. The Fund allowed for strengthening the mission statement of the employment centers where the companies hire people in accordance with their needs and where the workers are employed in positions that match their profiles.
  7. The Fund was able to reach 19 municipalities of 15 departments during the implementation of projects. Some of the municipalities that are traditionally left behind in economic terms and with greater barriers to overcome the high rates of employment informally participated in the Fund. This was the case in the municipality of Leticia in the Amazon region and in Apartado in Antioquia.

Without a doubt, the most relevant impact from the implementation of the Fund was the contribution to the reduction in the rates of unemployment and the rates of informal labor. Even though it could be deduced that the impact was marginal if taking into account the rates as absolute values, the Fund demonstrated itself to be an effective barrier mitigation tool for gaining access to the labor market if you keep in mind that employment procurement reached a rate of 29 percent among the participants.

Conclusions

The creation and launching of the Employment Opportunity Fund in 2016, was a response to the need to improve the processes of insertion for the populations that are traditionally excluded from the market and that, additionally, shall complement the current offer of services of the network of employment centers of the SPE.

In the first implementation exercise, the program set forth 1,632 million COP destined to financing the projects of the Fund, of which 66.1 percent were used to finance projects for mitigating barriers to gain access to job opportunities and the rest, 33.9 percent for the line of strengthening capabilities. Through these resources, 1,774 people from 15 departments of Colombia benefitted. The results of the program have been satisfactory: 538 people have been effectively hired into the formal job market in dignified positions of employment, 1,388 people have been trained in key skills, and 978 in transversal skills, with the resulting improvement in their productive capacity and the generation of income. Beyond these figures, it was demonstrated that the program offers the possibility of improving life conditions for those persons that, due to their economic and social context, have had few opportunities for personal and professional growth.

Together with the foregoing figures, a scenario was built for carrying out the exercise of identifying the direct benefits and costs of the program. The result of this shows a program in which said benefits compensate more than their cost, which justifies the continuation and strengthening of the program.

This program also allows, through a systematization of the experiences, identification of the good practices and lessons learned that will be taken into account and be applied to the implementation of phase 2 of the program during 2017.


Author Bios

Jesús Cárdenas, Analyst and researcher Employment without Barriers Project, is an Economist from the Universidad del Norte in Barranquilla. As a researcher, he has worked on issues related to economic affairs, poverty and inequality, development, and the labor market. Currently, he is carrying out his postgraduate studies by doing a Master’s in Economic Sciences at the Universidad Nacional de Colombia and works in the Saldarriaga-Concha Foundation as a project analyst and in the construction of knowledge management documents on the program of Barrier Mitigation to gaining access to the labor market.

Zaira Campo Arias, Program Coordinator, Employment without Barriers, is an Economist with a Master’s Degree in International Affairs from the Universidad Externado de Colombia in an agreement with Columbia University and Science Po in Paris. She has coordinated projects on income generation with a focus on populations, especially on persons with disabilities in non-profit organizations. Currently she works at the Saldarriaga-Concha Foundation as a program coordinator for the line of income generation.

Footnotes

  1. Note that this is based on the hypothesis of the life cycle and assumes a discount rate of 1 over the period to simplify the formula.

  2. According to DANE, poverty is considered to be the households whose income is below $983.424 Colombian Pesos monthly if they are located in the main cities of the country; $988.108 if they are heads of households, and $591.008 if they live in the population centers and rural areas.

A City at an Inflection Point; A Nation Facing a Talent Crisis

Philadelphia is at an inflection point. For more than half a century, Philadelphia was a city in decline, losing residents and businesses to the suburbs and suffering from a drain in tax revenues as a result. Today, following a widespread trend of urban regeneration in cities worldwide, Philadelphia is finally experiencing much needed economic growth including a rise in population, revitalization of its downtown and surrounding neighborhoods, and expansion of employment and tax revenue. 

Yet, even as the city experiences growth, Philadelphia -- and the nation -- has a youth unemployment crisis and talent shortage problem. In Philadelphia, one in four youth aged 18-24 are disconnected from either school or work. Nationally, young people aged 16-24 are experiencing unemployment rates at least twice the national average.1 A weak start in the job market is bad for the economy and bad for social mobility. 

Young people in other highly industrialized countries now have a better chance of moving up the economic ladder than children in America. Research shows that it has been a lost decade for young Americans in terms of employment.  In 2000, 45 percent of teens ages 16-19 were employed. By 2011, only 26 percent of teens were employed. Rates for young adults ages 20-24 also plummeted during this time frame, with a decline from 72 percent to 60 percent2. This national talent crisis threatens the economy of our cities and of our nation for generations to come.

As a city, Philadelphia has the opportunity to continue on a trajectory of growth while raising the tide for all, or risk continuing the plaguing cycle of poverty that grips more than one quarter of the city’s population today. Philadelphia must focus on economic development strategies that bring more revenue to the city; but more importantly, it must target initiatives to create wealth in the communities which need it most. The City of Philadelphia Mayor Jim Kenney’s administration and Philadelphia City Council have been steadfast in their commitment to, and focus on, equity for future generations through programs such as PHLPreK, Rebuild, and Community Schools. The Philadelphia School District, under the tenure of Superintendent Dr. William G. Hite, is making steady progress to ensure the success of its students. The private sector has recognized the need to be a partner and a stakeholder in ensuring Philadelphia’s schools are preparing students to be active, prosperous participants in the workforce and in society. The potential for transformation is tremendous.

Philadelphia’s Number One Economic Development Priority: Public Education

Traditionally, economic development refers to efforts which seek to improve the economic well-being and quality of life for a community and its residents. This is often accomplished by creating and retaining jobs, as well as growing income and the tax base. While business attraction and retention, real estate development, and job creation programs are all part of the city’s economic development toolkit and have played a direct role in growing the city’s economy, it seems clear conventional economic development alone may limit the city to modest and fragile growth, with no guarantee of equitable wealth creation. 

While the city certainly benefits from economic growth and its increased prominence as a global destination, economic development alone does not necessarily precipitate a decrease in poverty. Indeed, Philadelphia has found that despite recent momentum, many of its communities continue to suffer the same ills of poverty: blight, low education attainment, lack of living wage jobs, and poor access to services. At 25.8 percent, Philadelphia has the highest poverty rate of the 10 biggest cities in the U.S.3

In order to catapult the city’s economy and make a transformative impact on poverty, it is essential to look beyond traditional economic development methods. There is no better strategy to increase opportunities and promote equitable economic development opportunities than ensuring all Philadelphians have access to an excellent Pre-K through 12 education.

Strong schools produce well-rounded and confident young adults, who grow to become valuable members of the work world and provide for themselves and their families. A talented, prepared workforce means more jobs and increased tax revenue. Great schools would be a game-changer for being able to attract new businesses as well as new residents seeking jobs. 

Model Employers are Essential to Ensuring a Future Talent Pipeline 

While it may seem that the solution should focus on the incorporation of teaching tangible work skills within the classroom, the reality is curricular changes move slower than the innovation and modernization of the workplace. The global economy has changed and its evolution is projected to continue at an accelerated pace. Schools and job-training programs need to continue adjusting to meet the needs of a rapidly transforming, increasingly automated workplace. There is no better way to learn work skills than to have real life experience in a workplace. Whether in an office setting, manufacturing business, service work, or other type of employment, there are certain skills and experiences that can only be gained through real-world practice. 

In February 2018, Mayor Kenney will be announcing a comprehensive workforce strategy. A hallmark of this strategy will be the Model Employer campaign. The Mayor will extend his desire to partner with businesses to create employment opportunities, support District schools, and offer career ladders for entry-level workers. Research shows businesses who espouse corporate responsibility often see a positive return in their bottom line:

  • Companies with a highly-engaged workforce outperform their peers by 147 percent in earning per share.4
  • Sound corporate responsibility has the same effect on retention as a salary increase of $3,700 per year.5
  • 87 percent of global consumers believe business needs to place at least equal weight on society’s interests as on business’s interests.6
  • Companies that invest $1,500 on training per employee can see an average of 24 percent more profit than companies who invest less.7
  • Losing an employee can cost anywhere from 16 percent of the person’s salary for hourly employees to 213 percent of the salary for highly trained position.8

Businesses have the opportunity to be a key part of the solution of reducing poverty in Philadelphia while also furthering the city’s economic growth and improving their bottom line. Not only is this an ambitious prospect, it is also a win-win approach. It is time to seize this opportunity. Philadelphia has one of the longest tenured school superintendents of any urban public school; the local government is resuming local control of the school district after 16 years of state control; the public and private sectors are engaging in a robust workforce development strategy, and the city is ripe for more growth. Improving local schools is the best opportunity Philadelphia has to make a real dent in its stubborn poverty rate. As challenging as poverty-alleviation is, any major disruption in the cycle may have ripple effects in preventing new generations of poverty. Ensuring an excellent education for all young people in Philadelphia is the type of systemic change which can break the cycle of poverty and replace it with a pathway to opportunity for all.

Works Cited

1  Opportunity Nation: opportunitynation.org

2  Ibid.

3  Romero, Melissa. Census: Philly remains the poorest major US city. Curbed Philadelphia, 2017. philly.curbed.com

4 Zurer, Rachel. “Infographic: The Business Case for Conscious Companies.” Conscious Company Media. September, 2017. consciouscompanymedia.com.

5  Ibid.

6  Ibid.

7 Gutierrez, Karla. “The True Cost of Not Providing Employee Training.” Shift Disruptive Learning. May, 2016. www.shiftelearning.com.

8  Boushey, Heather and Glynn, Sarah Jane. There Are Significant Business Costs to Replacing Employees. Center for America Progress, 2012. www.americanprogress.org.