Building an inclusive recovery should be a national priority over the next two years

Half of the economists recently surveyed by the National Association of Business Economics predict that the U.S. economy will not recover to pre-pandemic levels until well into 2022. This is a reminder that the road to a full recovery — despite some early signs — will be long and the journey will be difficult. But our commitment as a nation must be to build an economic recovery that is inclusive and equitable. A recovery that invests in the workers and local businesses who have been disproportionately impacted by the crisis and empowers them to equitably participate in and benefit from a post-Covid economy.

This is a critical “walk and chew gum” moment for policymakers. Washington must continue to provide sustained relief to meet the immediate needs of unemployed workers and shuttered businesses. But they also need to invest in those workers and businesses today so that they can fully benefit from the potential economic expansion and restructuring tomorrow.

So far policymakers have largely failed on both fronts. Of the more than $3 trillion of approved COVID-19 relief packages, only $345 million has been dedicated to training displaced workers for new careers. That amounts to less than $6 in skill-building and re-employment services for each person who has been laid off since late March. There hasn’t been much assistance to help small businesses re-tool for a new economy either.

The failure to make significant workforce investments will be disastrous for workers and businesses. The consequences will be prolonged and possibly generation-defining. And the damage will fundamentally exacerbate the inequities that already exist across the labor market — leaving our most vulnerable populations behind after the recession ends.

Out of the nearly 60 million people who have filed for unemployment since March, more than 40 percent have been workers who earn less than $40,000 a year. Workers with a high school degree or less have been displaced at nearly three times the rate as those with a bachelor’s degree. Workers of color — particularly women of color — have shouldered the greatest job losses due to their concentration in low-wage service industries that have been hardest hit by the economic downturn. Black, Latino, Pacific Islander and Native American workers are also overrepresented in occupations that are likely to take longer to return once the economy bounces back.

For local small businesses — the primary employers in most communities — the economic disruption from the first months of the pandemic alone could cause 1.4 million to 2.1 million of them to close for good, according to a recent study by McKinsey. Minority-owned small businesses, which employ more than 8.7 million workers, are most vulnerable because they are disproportionately represented in sectors that are most likely to see permanent closures, such as storefront retail, bars and restaurants, travel and hospitality.

Then there are the advantages that big national companies have over small companies in the current environment: higher capital reserves, physically distributed workforces, strong corporate infrastructures and fully evolved online presences. Ten years of change associated with a “future of work” of automation and digitized workplaces has suddenly been accelerated. Not only does this put smaller, less tech-ready companies at a disadvantage but it also threatens their employees — many of whom lack access to high-speed broadband and equipment at home, or don’t have the digital skills to harness new technologies.

If we’re going to help displaced workers prepare for a new future in a new industry or occupation that may require new skills, we can’t wait until 2022 to start investing in them. If local companies have to adapt and build a new business model based on a smaller, more agile and tech-ready workforce, we can’t wait until 2022 to help them make that shift.

If policymakers in Washington took this challenge seriously, they would be investing in a massive expansion of our nation’s digital infrastructure and literacy for workers who are most vulnerable to technological shifts in the labor market. They would replace our outmoded and overwhelmed unemployment system with a true 21st century re-employment system that keeps workers whole for as long as they need to re-train and reenter the labor market, preferably in a job that is positioned for expansion and better pay in the new economy.

They would harness our nation’s community college system, re-write its rules, and increase funding so it can respond more quickly to the needs of workers, changing industries, and help train and transition millions of people into new careers. They would ensure that any new infrastructure proposal includes a hard-wired job training component so that local restaurant and retail workers who have been laid off, for example, can get the training needed to access new infrastructure jobs that will be created in their local communities.

Finally, they would require that the country tracks and publicly reports data — disaggregated by race and gender, as well as by community and industry — to determine which workers, businesses, and industries actually benefited from these public investments so that inequities can be addressed.

The simple truth is that our national response to the current crisis must do better. We need to ensure that the millions of workers — particularly workers of color, immigrants, and women — who are in hardest hit industries have access to the training and support services to transition into better jobs and sustainable careers in new industries. Eighty-four percent of unemployed Americans in our recent poll want policymakers to immediately increase investments in training to support their journey back into the workforce.

We need to empower local workforce boards, community colleges, community-based organizations, training providers, and local small businesses to develop strategies to train and reemploy local residents. We need to provide more assistance to local businesses to help them recapture their role as the drivers of economic growth in their local communities. And we need to ensure that these solutions are being implemented in an equitable way that would help us build a truly inclusive economic recovery over the next two years.

Returning to an idealized pre-pandemic economy isn’t good enough — that economy was already inequitable for millions of families. Our goal should be to build a better, fairer, more equitable future for workers and small businesses.

America cannot train its way out of this crisis, nor can workforce policy alone dismantle structural racism, bring economic security to every worker, or ignite sustainable growth for every small business. But workforce policy has to be part of the path forward. It is an indispensable piece of our economic recovery puzzle.

Andy Van Kleunen is the CEO of National Skills Coalition. Follow him on Twitter @AndyVKNSC