California Automotive Business Coalition

The Role of Private Education Institutions in Preparing California's Diverse Workforce

Meeting the Challenges of our Workforce and Job Training Needs

Maintaining California’s competitive edge will depend on the state’s ability to link education and the economy and fill the workforce needs of the jobs of the future. In order for the state to meet growing workforce shortages in a number of industries, the education system must provide sufficient secondary and postsecondary technical training programs in strategic sectors such as health care, green technology, information technology, manufacturing, and others.

The State recognizes the value of skilled labor and through its numerous workforce development and job training programs, demonstrates its commitment to enhancing the skills of California’s workforce and expanding access to training and apprenticeship programs that increase opportunities and income for California workers. At the same time, the State aims to help meet businesses’ rapidly increasing workforce needs as well as to promote job creation.

1. Chair and Vice Chair's Introductory Remarks

2. Economic Stimulus Funds for Job Training and Workforce Development

Virginia Hamilton, Executive Director of The Workforce Alliance

3. An Approach to a Community Workforce Development Partnership

Leslie Rodden, Alliance for Education of San Bernardino County and Mike Gallo, CEO of Kelly Space and Technology and Chair of the Alliance for Education's STEM Advisory Committee

4. Employers' Needs for Skilled Workers & Challenges/Limitations with Public Schools

Mr. Johan Gallo, President of the California Automotive Business Coalition and Human Resources Manager for Bridgestone/Firestone, Inc. Jack Stewart, President of the California Manufacturing and Technology Association Helyn Dahle, BayBio Board Member Healthcare Representative - to be determined Danny Kennedy, Chief of Executive Officer of Sungevity Debra Chaplan, Director of Special Programs for the State Building and Construction Trades Council

5. Types of schools and programs and the challenges/impediments they face:

Degree granting and graduate level programs Brenda Primo, Assistant Vice President of Governmental Affairs for Western University of Health Sciences Jo Hoffmeier, Vice President and Director of the Northern California Oregon Territory for the University of Phoenix Sunil Vethody, Institute for Medical Education

Technical and Vocational schools

Robert Johnson, Executive Director of the California Association of Private Postsecondary Schools Katherine Lee Carry, General Counsel and Vice President of Compliance for American Career College Kristina Lopez, Director of ITT Technical Institute Robert McNamara, Senior Vice President of Compliance Career Education Corporation & Anthony Bondi, President of California School of Culinary Arts Lynelle Lynch, President, Bellus Academy

6. Government Oversight and Regulation of Private Education Institutions Department of Consumer Affairs Director

7. California Postsecondary Education Commission Karen Humph Rey, Executive Director

How do we change this around? We need to truly value the skilled and technical professions. Today’s automotive technicians are brilliant men and women who are essential to our economy. It would be amazing:

• If California were to value the dreams of a future automotive technician as equal to the dreams of a future UC or CSU student;
• If standards-aligned CTE coursework in high school were regarded as equal in importance to college-prep coursework;
• If the state gave the future automotive technician an educational grant to pursue post-secondary technical schools that is equal to the amount given to subsidize students at the UC or CSU.

What seems to be missing is an egalitarian vision that each person plays an equal and important role in our society. Each person deserves equal respect for their dreams along with equal educational resources to attain them.

The members of CalABC can provide excellent paying jobs and rewarding careers to today’s students. Unfortunately, the foundation of our workforce development system in our public schools has disintegrated.

Members of the industry are currently doing everything we can to hire enough technicians to meet the growing demand Private postsecondary colleges have been a great resource for students looking to enter the industry.

• Trade school campuses like WyoTech here in West Sacramento are incredible. They are outfitted with the latest technology have highly skilled teachers and motivated students.
• WyoTech also proactively engages in career fairs and job placement for all of their students. As an employer, we appreciate the skilled workers we receive and the outreach and partnering undertaken by the schools
• We have major workforce development challenges. However, if these private institutions did not exist, the conditions would be much worse.

Community Colleges and private post-secondary vocational schools have a difficult challenge in trying to make-up for the failures of our K-12 system.

• They must take students who have little knowledge of tools, engines and electrical theory and try to interest and train them to become technicians. It may take longer and more resources but they are able to provide the industry with a number of entry level technicians.
• The industry desperately needs mid-level to high-end diagnostic technicians. This requires additional and more sophisticated training that builds upon the entry-level knowledge and experience. Unfortunately, this requires students to take out more loans and spend more tuition dollars to receive this training. Only a fraction is willing to follow this more expensive path and this is a problem.

The fact is, these higher-end positions are more easily developed when our post-secondary schools receive Incoming students who already have an existing base of knowledge, skills and interest. High schools should be providing this foundation and reducing both time and cost to students for career entry later.

It is clear to the members of CalABC that the “real-world” shutdown of CTE in our high schools is having a profound impact on the ability of our post-secondary system to cost effectively produce high-end skilled workers.

California’s K-12 public education system is not helping us (the employers) nor their students (future employees) by continuing to shutdown career and technical education (CTE) programs in grades 7-12.

• In 2009, California has the lowest number of students enrolled in CTE in the state’s history.
• Since 2003-04 when Governor Schwarzenegger was elected, the number of students who enrolled in Transportation-related CTE courses has fallen by 25% and the number of students enrolled in high school automotive-mechanics courses has fallen by 33%.
• California likes to say “we love CTE” -- but CTE is actually being systematically killed off in our public schools.
• As a result, students are no longer exposed to courses like “Metal Shop”, “Machine Shop”, or “Intro to Automotive” that cultivate real interest and awareness of the industry and the available careers.

Most of the men and women employed in today’s industry took auto-shop courses in high school. It is scary to think how we will replace these retiring workers with students who never saw an auto-shop in their high schools. The skilled worker pipeline is broken in grades 7-12. This, in turn, impacts the rest of the system.

Issue

As one of the top ten economies of the world , California has the largest and most diverse economy in the United States and its primary industry clusters include professional business and information businesses (30% of the economy) , diversified manufacturing (17%), wholesale trade and transportation (18%), and high-tech manufacturing (7%). Many of these industries are in the midst of transformation and are adapting to changing technologies, while others are expanding and growing. Emerging industry clusters include life science and services, value-added supply chain manufacturing and logistics, green technologies and renewable energy, and nanotechnology.

Maintaining California’s competitive edge will depend on the state’s ability to link education and the economy and fill the workforce needs of the jobs of the future. In order for the state to meet growing workforce shortages in a number of industries, the education system must provide sufficient secondary and postsecondary technical training programs in strategic sectors such as health care, green technology, information technology, manufacturing, and others. The State recognizes the value of skilled labor and through its numerous workforce development and job training programs, demonstrates its commitment to enhancing the skills of California’s workforce and expanding access to training and apprenticeship programs that increase opportunities and income for California workers. At the same time, the State aims to help meet businesses’ rapidly increasing workforce needs as well as to promote job creation.

While there is much more to do in California to address the current education crisis and prepare for the future, there are existing efforts to address workforce shortage concerns, primarily through additional funding of education programs. The American Recovery and Reinvestment Act (ARRA) of 2009 are believed to have the greatest potential to alleviate the critical shortage in workforce development programs by increasing California’s postsecondary education funding.

However, it has become evident that the State’s primary tools for workforce development, K-12 education, California Community Colleges (CCC), and California State University and University of California (UC) systems, cannot meet the current and projected workforce needs. As a result, California risks falling behind in its ability to produce skilled employees who are required to maintain its competitive economic edge. Private postsecondary institutions provide an alternative for meeting an individual’s career aspirations and employers’ workforce needs.

To date the State has put little emphasis on these independent educational institutions’ role in its overall workforce development strategy. Moreover, there have been no significant studies to compare the efficacy of their training programs to those offered by traditional public universities and colleges, but the general consensus is that lack of access to public secondary schools is one of the biggest barriers to workforce development. Because of acute course shortages, lack of hands-on training materials and instructors, and overcrowding in public education institutions, students are not able to acquire the training they need to obtain the skills necessary for entry into many growing industries. Similarly, the lack of state oversight for private post secondary intuitions can dissuade students from utilizing their services out of concern that their certifications, training programs, or degrees may be in sufficient. These educational barriers to workforce development may be overcome by an increased focus from the State Legislature and executive agencies.

The purpose of this hearing is to examine the ability of private postsecondary institutions to provide the education and job skill needs of California’s workforce and evaluate policy options that allow them to expand their curriculums and career training programs with the requisite amount of oversight required to protect students.

We are challenged as an industry because we need workers with a range of real-world skills.

• Technicians need mechanical aptitude, diagnostic abilities and a good understanding and command of the English language as most of the material they cover only comes in English (Vehicle Owner’s Manuals, Technician Service Bulletins etc).
• In addition to mechanical competencies, technicians are also going to need computer skills and a thorough understanding of electricity given the increase in Electric and hybrid vehicles.
• Sales and management positions will also require solid reading, writing, and arithmetic capabilities. Let’s face it today’s world is becoming more competitive and complex. The student with the greatest number of skills will be the most sought after by employers.

To develop these opportunities we need an education and workforce development system that values these professions.

The automotive service industry provides high-paying middle class jobs. The range of salaries varies with the level of skill and proficiency.

• Entry level technicians can earn from $30,000
• Mid level technicians will earn $40,000 to $60,000
• Master / Lead technicians will earn $55,000 to well over $100,000.

First the need for skilled workers.

• Career opportunities in the automotive service industry continue to grow.
• According to the California Employment Development Department, we need to fill more than 2,700 job openings, each year between 2006 and 2016 with newly trained and skilled technicians.
• There are plenty of jobs, available in the automotive industry.

While car dealers are suffering through this difficult time, the automotive aftermarket repair industry is actually seeing an upsurge in sales. Consumers are keeping their existing cars longer and doing more repairs because they plan to be in their vehicle longer. In current studies, R.J. POLK Research found the average consumer surveyed in 2007 was keeping their vehicle 9.2 years compared to 6.5 years in 1990. This number will only increase in today’s time of economic uncertainty.

Between 2004 and 2014, the demand for automotive service technicians and mechanics will grow as the number of vehicles in operation increases; reflecting continued growth in the number of multi-car families. Employment of automotive service technicians and mechanics is expected to increase by 14% between 2006 and 2016, compared to 10% for all other occupations. It will add a large number of new jobs, about 110,000, over the decade.13 Growth in demand will be offset somewhat by slowing population growth and the continuing increase in the quality and durability of automobiles, which will require less frequent service. Still, additional job openings will increase due to the need to replace a growing number of retiring technicians, who tend to be the most experienced workers.

Automotive service technicians’ and mechanics’ responsibilities have evolved from simple mechanical repairs to high-level technology-related work. The increasing sophistication of automobiles requires workers who can use computerized shop equipment and work with electronic components while maintaining their skills with traditional hand tools. Formal automotive technician training is the best preparation for these challenging technology-based jobs. According to the California Automotive Business Coalition (CaIABC), “the pipeline for new technicians is down to just a trickle and it clearly isn’t enough to keep up with the vast numbers of current technicians who over the next few years are going to retire”. CalABC has been at the forefront of this battle in working for funding for secondary education earmarked for technical training. According to CaIABC, private postsecondary colleges have been a great resource for students looking to enter the industry, but like high school automotive training courses, these programs are under fire from budget constraints. CalABC maintains that “private technical trade training schools are trying to fill the gap and they have made a difference”. The problem remains that there currently exists no feeder system which helps bring new people into the trade.

Green Technology

Green technology, the continuous development of methods and materials used to decrease environmental impacts, is the driving force that leads the movement of twenty-first century energy innovation. Creating the green workforce and “green-collar jobs” is what makes it all happen. Most green-collar jobs pay a living wage, provide healthy and safe working environments, and offer career advancement opportunities. Green jobs are found in traditional employment sectors such as manufacturing, agriculture, forestry, installation, fabrication, and operations. Other occupations exist in urban and rural communities, such as renewable energy, energy-efficient auditing, power plant operations, facilities management, engineering, etc.

From a workforce perspective, green technology spans all levels of education and skill sets including those used for research and development of alternative energies, building new efficient homes and facilities, and operating cleaner and more efficient utilities. According to Nicholas Parker, CEO of Cleantech Network, “For every $100 million of venture capital dollars invested in clean technology, 2,500 jobs are directly created”. Among the factors driving the growth and development of green technology are legislation and government policies which provide incentives and requirements for cleaner development and technology, demand for sustainable energy sources and materials due to advances in technology and increased costs of traditional energy and commodities, and the opportunity for job creation and profit. The solar industry is one of the largest components in energy generation. A recent assessment of solar’s current and future workforce in Silicon Valley revealed that there are currently 1,500 workers in Silicon Valley in Solar Industry and industry growth is currently at about 35% per year. By 2017, Silicon Valley expects another 10,000 to 20,000 solar workers; 60% manufacturing and installation, 20% sales and marketing, and 20% engineering.

It is generally agreed that the development of green technology is an integral aspect in the building of new infrastructure. Moreover this industry has massive potential for the development of impoverished and crime-ridden communities. One example is a new vocational training program in East Los Angeles sponsored by a non-profit Los Angeles organization, Homeboy Industries, in partnership with the East Los Angeles Skills Center, a public vocational school that offers a hands-on program to teach the design, construction, and installation of solar panels.25 By teaching ex-cons to install solar panels this program allows them to improve their skill set and market themselves for the new green economy.

Healthcare

Employment growth in health care is expected to account for about 3.6 million new wage and salary jobs and 19% of all future wage and salary jobs added to the economy over the 2004-14 period. Many of the occupations projected to grow the fastest in the economy are concentrated in the health care industry. For example, from 2004-14, total employment of home health aides, including the self-employed, is projected to increase by 56%, medical assistants by 52%, physician’s assistants by 50%, and physical therapist assistants by 44%. The industry is currently seeking to increase the available labor pool of health care employees. To attract new employees to the health care industry, industry employers are focusing recruitment from non-traditional labor pools. Increasing the diversity of workers and reducing turnover rates is also of concern.

Industry employers are focused on preparing entry-level workers for positions in health care. Efforts also include the expansion of access to training for incumbent workers and fulfilling workforce needs in targeted and specialized skill areas. To meet the training and recruitment needs of health care employees, the industry is seeking to expand the numbers of academic and clinical instructors and facilities and resources to facilitate training. The industry is working to align employer requirements and curriculum to fulfill more adequately the needs of health care employers, but a shortage in health care education programs remains that biggest obstacle to meeting these objectives.

Information Technology

The computer systems design and related services industry is among the economy’s largest and fastest sources of employment growth. Employment increased by 616,000 over the 1994-2004 periods, posting a staggering 8.0% annual growth rate. The projected 2004-14 employment increase of 453,000 translates into 1.6 million jobs, and represents a relatively slower annual growth rate of 3.4% as productivity increases and offshore outsourcing take their toll. However, the main growth catalyst for this industry is expected to be the persistent evolution of technology and businesses’ constant effort to absorb and integrate these resources to enhance their productivity and expand their market opportunities. Employment of computer and information systems managers is expected to grow between 18 to 26% for all occupations through the year 2014.

The education of the workforce in the IT industry ranges from a high school education to some post graduate study and/or specialized certifications, the latter exhibiting much needed demand for an increased role to be played by private postsecondary institutions. For all IT-related occupations, technical and professional certifications are growing more popular and increasingly important. IT workers must continually update and acquire new skills to remain qualified in this dynamic field. Completion of vocational training is also an asset. Management and many professional positions require a minimum of a bachelor’s degree, and there is growing demand for further education with a shortage of programs in public secondary and postsecondary institutions.

Manufacturing

Manufacturing is a broad industry that encompasses several phases of production from making of goods or wares by manual labor or by large scale machinery, to the processes involved in the physical or chemical transformation of materials, substances, or components into new products. The manufacturing sector continues to account for 14% of the U.S. Gross Domestic Product and 11% of total U.S. employment. According to the U. S. Department of Commerce, manufacturing firms fund 60% of the $193 billion that the U. S. private sector invests annually in research and development. Manufacturing salaries and benefits average $65,000, higher than the average for the total private sector. Two factors in particular attract workers to manufacturing; higher pay and benefits, and opportunities for advanced education and training.

The manufacturing industry in the United States is undergoing a dramatic transformation. Popular perceptions of manufacturing jobs as dark, dangerous and dirty are largely outdated as advanced robotics and other “intelligent” systems become pervasive throughout the manufacturing process. To remain globally competitive, U.S. manufacturers are implementing process improvement techniques, incorporating quality management systems, and overhauling their production operations with advanced technology. In this way, the U.S. manufacturing industry has achieved remarkable productivity growth in recent years. The transformation of manufacturing has profound implications for the incumbent manufacturing workforce and for the new workers that employers demand. In order to operate a modern production facility, manufacturers require workers with advanced skills. Comprehensive partnerships among education, employment, and economic development government agencies are needed to effectively address these challenges. In its report, ETA suggests the creation of partnerships between education and industry to model such collaborations.

Overcoming Workforce Development Challenges through the Independent and Private School Sector Types of Private Postsecondary Institutions

The numerous independent or private postsecondary institutions operating in California vary in the type of educational programs they offer, the degrees and/or certificates they grant, and their accreditation status. In addition to the three public systems of higher education, California is also home to 119 independent colleges and universities that are accredited by the Western Association of Schools and Colleges (WASC). The 4-year and 2-year independent colleges and universities accredited by WASC were not manufacturing. Manufacturing is a broad industry that encompasses several phases of production from making of goods or wares by manual labor or by large scale machinery, to the processes involved in the physical or chemical transformation of materials, substances, or components into new products. The manufacturing sector continues to account for 14% of the U.S. Gross Domestic Product and 11% of total U.S. employment.

According to the U. S. Department of Commerce, manufacturing firm s fund 60% of the $193 billion that the U. S. private sector invests annually in research and development. Manufacturing salaries and benefits average $65,000, higher than the average for the total private sector. Two factors in particular attract workers to manufacturing; higher pay and benefits, and opportunities for advanced education and training. The manufacturing industry in the United States is undergoing a dramatic transformation. Popular perceptions of manufacturing jobs as dark, dangerous and dirty are largely outdated as advanced robotics and other “intelligent” systems become pervasive throughout the manufacturing process. To remain globally competitive, U.S. manufacturers are implementing process improvement techniques, incorporating quality management systems, and overhauling their production operations with advanced technology. In this way, the U.S. manufacturing industry has achieved remarkable productivity growth in recent years. The transformation of manufacturing has profound implications for the incumbent manufacturing workforce and for the new workers that employers demand. In order to operate a modern production facility, manufacturers require workers with advanced skills. Comprehensive partnerships among education, employment, and economic development government agencies are needed to effectively address these challenges. In its report, ETA suggests the creation of partnerships between education and industry to model such collaborations. Overcoming Workforce Development Challenges through the Independent and Private School Sector Types of Private Postsecondary Institutions the numerous independent or private postsecondary institutions operating in California vary in the type of educational programs they offer, the degrees and/or certificates they grant, and their accreditation status. In addition to the three public systems of higher education, California is also home to 119 independent colleges and universities that reaccredited by the Western Association of Schools and Colleges (WASC). The 4-yearand 2-year independent colleges and universities accredited by WASC were not Manufacturing. Manufacturing is a broad industry that encompasses several phases of production from making of goods or wares by manual labor or by large scale machinery, to the processes involved in the physical or chemical transformation of materials, substances, or components into new products. The manufacturing sector continues to account for14% of the U.S. Gross Domestic Product and 11% of total U.S. employment.

According to the U. S. Department of Commerce, manufacturing firm s fund 60% of the$193 billion that the U. S. private sector invests annually in research and development. Manufacturing salaries and benefits average $65,000, higher than the average for the total private sector. Two factors in particular attract workers to manufacturing; higher pay and benefits, and opportunities for advanced education and training. The manufacturing industry in the United States is undergoing a dramatic transformation. Popular perceptions of manufacturing jobs as dark, dangerous and dirty are largely outdated as advanced robotics and other “intelligent” systems become pervasive throughout the manufacturing process. To remain globally competitive, U.S. manufacturers are implementing process improvement techniques, incorporating quality management systems, and overhauling their production operations with advanced technology. In this way, the U.S. manufacturing industry has achieved remarkable productivity growth in recent years. The transformation of manufacturing has profound implications for the incumbent manufacturing workforce and for the new workers that employers demand. In order to operate a modern production facility, manufacturers require workers with advanced skills. Comprehensive partnerships among education, employment, and economic development government agencies are needed to effectively address these challenges. In its report, ETA suggests the creation of partnerships between education and industry to model such collaborations33Overcoming Workforce Development Challenges through the Independent and Private School Sector Types of Private Postsecondary Institutions. The numerous independent or private postsecondary institutions operating in California vary in the type of educational programs they offer, the degrees and/or certificates they grant, and their accreditation status. In addition to the three public systems of higher education, California is also home to 119 independent colleges and universities that reaccredited by the Western Association of Schools and Colleges (WASC). The 4-yearand 2-year independent colleges and universities accredited by WASC were not regulated by the BPPVE. Many of the programs offered by independent post secondary institutions include programs that are designed to prepare students for the workforce as soon as they complete their training. Some private 2 and 4-year universities are non WASC accredited and may have accreditation from one of the various recognized national accrediting agencies.

Vocational training schools are privately owned and operated schools that offer a wide variety of training options in areas such as cosmetology, automotive repair, court reporting, paralegal services, technical training, travel services, secretarial, medical assistance, etc. Typical vocational courses are short, lasting from 5 to 12 months. However, some training programs (such as court reporting) can take up to 2 to 3 years to complete. The main appeal of these schools is their concentrated curriculum, job training focus, and short course length. Their accreditation status varies and until legislation creating a successor to BPPVE is adopted, some may currently have no regulation at all.

Can Private Postsecondary Schools Play a Role in Addressing California’s Workforce Development Needs?

In recent years, the number of private postsecondary schools has significantly increased due in large part to employers’ needs for specific skills and educational requirements and students’ inability to access those educational programs in public institutions. In essence, the expansion of private postsecondary schools is a market response to demand for skilled workers. However, there has been very little, if any, independent evaluation of the institutions' ability to effectively deliver job training and workforce development services as most of the state's focus has been on improvements to the public school sector. In light of budgetary and capacity issues in California's public postsecondary schools, students are turning to private institutions as an alternative to help prepare them for entry into the workforce, but what is not clear, is whether those institutions can and should also play an important part in meeting students' needs for career preparation and employers' needs for a skilled workforce. It is our intent with this hearing to examine the role of private postsecondary schools in workforce development and to direct the Legislature's focus to this yet unexplored policy issue.

Regulation of Private Postsecondary Institutions: The Need for a Rational Approach

The Private Postsecondary and Vocational Reform Act of 1989 (Reform Act) created the Bureau for Private Postsecondary and Vocational Education (BPPVE) as the regulator of private educational institutions. This unit of the California Department of Consumer Affairs was charged with protecting students by establishing academic standards for the private institutions of higher education in California. BPPVE approval of schools or programs covered by the Reform Act was required by the state of California to ensure consumer safety from fraudulent or substandard education providers. The Bureau accepted and acted on student complaints and oversaw student Tuition Recovery Fund (STRF) to reimburse tuition money if a school closed unexpectedly. The agency was not a recognized accreditor, nor did its approval serve as a substitute for educational accreditation. BPPVE maintained a directory of schools with information regarding operation and academics. The Bureau regulated approximately 1,800 schools serving an estimated 400,000 students, and provided statutory exemptions from the regulations for schools that teach religion.

The agency acquired a reputation for being ineffectual and due to a Sunset provision in the law, the Private Postsecondary and Vocational Education Reform Act expired on July 1, 2007, and the BPPVE was required to cease operations on that date. Since late2006, the Department and Consumer Services Agency has been working with the State Legislature and various interested parties on a complete overhaul of the Reform Act and that effort continues to this day. In 2007, Governor Schwarzenegger signed urgency legislation enacting temporary measures to establish minimal oversight of private post secondary institutions between July 1, 2007 and February 1, 2008. The bill provided that matters pending before the former BPPVE on June 30, 2007 are considered pending before a successor body. It allowed for the payment of already had approved STRF claims by the Director of the Department, and permitted the Director to enter into voluntary agreements with institutions to comply with the inoperative Reform Act. However, those provisions Sunset on July 1, 2008 and all private post secondary schools operating in California are essentially unregulated and no student tuition claims are currently being reimbursed.