By Christopher Gergen
This past year, North Carolina was recognized by two national publications as the best place in the country to do business — topping records with 182 new economic development projects bringing more than $19 billion in capital investment and 28,000 jobs to the state.
Yet, North Carolina has a talent crisis on its hands. In short, there is not enough trained talent to fill a growing number of empty slots in critical industries for our state. Maintaining the status quo is not sustainable. We need bold, innovative workforce development and finance strategies to close this talent gap — especially in the face of steady federal disinvestment in public workforce systems.
Since 1986, the Institute for Emerging Issues has hosted an annual forum on critical issues facing our state. Not coincidentally, this year’s recent Forum focused on “Talent First Economics.” As IEI shared, “by putting talent first—increasing our understanding of what employees are looking for and how employers and systems can respond—we can better energize, equip and unleash North Carolina’s full abundance of talent.”
The challenge is real. NC’s economy continues to show strong growth. However, there are persistent worker shortages in key sectors. At the end of 2022, North Carolina listed 331,000 job postings. However, according to the Bureau for Labor Statistics, only 194,000 people are identified as being unemployed (1.7 jobs for every 1 unemployed person).
Additionally, barriers to entering the workforce — particularly in traditionally under-connected communities of color and rural communities — are persistent. And given the reduction in federal funding, there is increasing pressure for individuals to take on student loans. North Carolina, for example, has the 8th highest average student loan debt and $49.2 billion in total outstanding student loans (educationdata.org). The resulting lack of workforce participation exacerbates our state’s lack of economic mobility (more than twice as low as the national average).
So, how do we foster strategies in North Carolina to strengthen our talent pipeline, fill needed jobs, and accelerate economic mobility for vulnerable communities without burdening them with debt?
Fortunately, there are innovative workforce investment models nationally and locally that we can learn from. In New Jersey, for example, the state and the New Jersey CEO Council partnered with the non-profit Social Finance to launch and administer the nation’s first “Pay It Forward Fund” to prepare New Jersey residents for in-demand, family-sustaining jobs in industries like in health care, clean energy, and IT.
The $12.5 million revolving fund (raised through $7.5 million in state funding and $5 million in philanthropic dollars) provides learners with zero-interest, zero-fee loans to enroll in industry-recognized job training programs offered by high-quality training providers. After completing training, if participants earn above a minimum salary (e.g., $44,940 for those with a household of three), they pay back their interest free loan through monthly repayments for up to five years. If they don’t earn more than this minimum salary, they pay nothing. All loan repayments are recycled back into the fund to support future learners. Participants also receive non-repayable living stipends and wraparound support services such as career coaching and mental health counseling to help them succeed.
In North Carolina, Wilkes Community College and the Herring Family Foundation have partnered up to launch NC Tech Paths. Through the program, participating under-employed workers get a living stipend and free enrollment at Wilkes Community College as well as the training program Per Scholas to get certified for tech jobs that average $47,000 annual salaries. Once they are placed with local employers like Lowes, the companies pay a 20% “finder’s fee” that is reinvested into the program – expanding and extending the impact. Since its launch a year ago, NC Tech Paths have a 90 percent placement rate with a 70% increase in earnings.
In Wilmington, Cape Fear Collective has partnered with LiveOak Bank and other funders to pilot a Career Impact Bond which has a similar financing model to help train and support under connected workers to get into competitive jobs without debt. Based on its early success, they are now looking to scale this model regionally.
The national non-profit organization Social Finance, has worked with more than15 communities and states to develop and implement place-based economic mobility funds that invest in worker upskilling in highly competitive fields with workforce shortages. Specifically, participants enroll in high-quality training programs at no upfront cost and receive wraparound
support services. If they land well-paying jobs, the program costs are repaid by a participating employer or by the participant to support future learners — significantly increasing the long-term impact of the investment.
There are tens of thousands of open jobs in North Carolina that are vacant and pay a competitive wage. In the growing health care sector, for instance, community health workers earn an average of $47,000; occupational health and safety technicians earn an average of $61,000; and medical records specialists earn over $38,000. These same salaries and workforce gaps are also present in other high growth fields such as coding, data management, and advanced manufacturing.
Through MyFutureNC, North Carolina has set a goal of ensuring that 2 million residents have a high-quality credential or a postsecondary degree by 2030. This is going to be critical to fueling our state’s economic growth and filling critical jobs. But we need innovative financing models to realize this potential. Without them, we risk a growing economic divide and squandering our state’s competitive and talent advantages.
Christopher Gergen is on the NCWorks Commission, a founding partner of Raleigh Founded, and is the CEO of Forward Impact, which works to scale systemic solutions to address systemic economic inequities. He is partnering with Social Finance to help build local workforce initiatives.