Hagedorn backs workforce training
FAIRMONT — A recurrent theme about economic life in the United States and Minnesota these days is that while the jobless rate is low, many workers lack the training they need to get jobs that businesses are trying to fill.
This hurts the businesses and the workers, who may be foregoing opportunities to enjoy better careers with more pay. It also is a cloud over the future strength of the U.S. economy.
Congressman Jim Hagedorn of southern Minnesota hopes he has found a way to help. The first-term representative recently announced that he is co-author of a bipartisan bill meant to address the problem.
The American Workforce Empowerment Act is co-sponsored by Rep. Jeff Van Drew, a Democrat from New Jersey. What Hagedorn and Drew propose is allowing people to pursue vocational training by utilizing pre-tax dollars from their 529 savings plans for education, training and apprenticeships, and the purchase of necessary tools and equipment for their vocations.
“For more than a generation, younger Americans have been discouraged from seeking vocational and skill-based training,” Hagedorn says. “Our bill is designed to help reverse that trend and create opportunity. Businesses are begging for machinists, welders, truck drivers and an array of other qualified trades and labor-intensive professions, most of which offer excellent pay and long-term stability. Investing in our workforce to grow our economy is a bipartisan goal.”
Named for Section 529 of the federal tax code, the savings plans were introduced in 1996, during the Clinton presidency. They are college savings plans that are exempt from federal taxes. The plans let people, typically parents, save for college for a designated beneficiary.
Hagedorn says his bill expands 529 eligibility to include educational and training expenses on any training program leading to a “recognized post-secondary credential” as defined in the Workforce Innovation and Opportunity Act. He says that under current law people looking to pursue post-secondary technical training, trade skills or an industry-recognized credential face limits under the Workforce act. Also, many apprenticeship programs are not eligible.
In May, the Star Tribune of Minneapolis reported that factory operators in Minnesota were reporting severe worker shortages, hurting their growth and profits. The newspaper cited a report by Enterprise Minnesota, which found the problem was worse in rural portions of the state. Other states face the same troubles.
“Even with unemployment at record lows, well-paying jobs that require skilled workers remain unfilled,” Van Drew says. “Not everyone wants to pursue a four-year college education, which has led to record-levels of student debt and delayed important milestones in young people’s lives such as marriage and homeownership. We should incentivize and promote training and apprenticeships, which can lead to a ticket to the middle-class for those who like to work with their hands and see the product of their hard work.”
Hagedorn and Van Drew’s bill has found support in the business community.
“By expanding the types of programs eligible for payment by 529 savings plans — and most significantly, by making registered apprenticeship programs eligible — we can more readily close the gap on the more than 21 percent of positions that have gone unfilled in our industry,” said Matt Gruhn, president of the Marine Retailers Association of the Americas.
The bill has just been introduced and will head to committee for initial hearings. No immediate opposition has emerged.