Category Archives: Labor & workforce

Shrinking Community Colleges Looking to Pivot

Germanna Community College

Nothing like losing a quarter of your customers to get your attention.

That basically is what has happened to Virginia’s Community College System, with last term’s enrollment down 57,000 (actually only 22 percent) from its peak six years ago during the early days of the economic recovery. That drop exceeds the total enrollment at the 17 smaller campuses and has cost the institutions millions in revenue and forced personnel cuts.

Chancellor Glenn DuBois and two of the community college presidents shared that information and spent about an hour Tuesday with the State Council of Higher Education for Virginia laying out steps underway to attract more students, which will have to happen if Virginia is to meet the goals it has set for degrees and work certifications.

DuBois, who has served as chancellor since 2001, spoke again during the meeting at Richard Bland College of his vision of “a college graduate in every household” and of abolishing the phrase “first-generation student.”

One response has been only modest increases in VCCS tuition and fees for the coming year, at 2.5 percent below the official inflation rate and in stark contrast to the four year institutions. The annual cost for a full semester load is around $5,000, but DuBois noted that is still a great deal of money for many Virginians. Students in the community colleges are older, lower income, working part time. Fifteen of the 23 schools have food banks.

Like many of his predecessors, Governor Ralph Northam has made education and workforce development a high priority and Northam talked during his campaign about lowering or eliminating the cost of attending the public community colleges. About 20 states now have some version of a “promise program” where all or some high school graduates face no tuition bills at community colleges.

DuBois said that remains under discussion, which was confirmed a bit later in the meeting by the Governor’s Chief Workforce Advisor Megan Healy. But with a price tag in the hundreds of millions of dollars, “I don’t think that’s going to happen this year,” Healy said. In 2019 the General Assembly will be considering budget amendments, but the Governor doesn’t do his own full budget until 2020.

Absent a sudden commitment to free or almost free tuition, a VCCS task force responding to the situation focused heavily on marketing and process improvements. They are leaving the comfort zone, DuBois said, using words like “pivot” and “evolve.”

What if students didn’t have to apply to attend? The system is working on an open enrollment approach, but it isn’t there yet. It is making progress on reducing the paperwork and migrating the application process to smart phones. People should enroll in one day, “one and done,” said President Janet Gullickson of Germanna near Fredericksburg. “Believe it or not, that’s radical.”

The task force also said to make scheduling, degree planning, advising and even payment and financial aid compatible with the mobile environment. An early alert system can flag a struggling student, so a counselor reaches out to them rather than the other way around.

Do people understand how an associate degree or even a workforce certificate can boost their income? Better marketing may spread the word about the FastForward program which offers reimbursement grants on completion of a workforce credential. The grants “sold out” in their first two years and the General Assembly boosted the funding for this new budget, which may sell out again.

The target audience is no longer 18 to 24-year-olds. DuBois mentioned a Winchester man who lost his long-time job at a recycling center, came to the community college looking for his GED, but in 12 weeks earned a manufacturing technician certificate. He quickly landed a job with 40 percent more pay and, for the first time in his life, full benefits. He will be highlighted as the 10,000th FastForward graduate.

Another popular certificate program for forklift operations takes just four days. Before any of these programs is approved there is a demonstrated demand for the skills.

Gullickson mentioned a basic marketing problem she found at Germanna when she started – no one able to translate for Spanish students dealing with administrative matters. With the changing demographics in that region, the website needed a Spanish version, at an 8th grade reading level so the parents of potential students could understand it.

Work continues eliminating remaining barriers or duplicate requirements for students seeking to start at a community college and then transfer to a four-year institution. There are state grants for that process, too, which not long ago was getting the most attention as a new role for the community colleges. But based on comments Tuesday, the long-term response to the current challenge may be a system that looks more like its original 1960’s focus on workforce training.

Washington Metro Downsizes Board

Succumbing to political pressure from Virginia, the Washington Metro board has voted to reduce the participation of so-called “alternate” board members. The move, which will enhance the power of the eight “principal” board members, was necessary to comply with the Commonwealth’s demand for board restructuring as a condition for receiving $500 million a year in dedicated funding.

The measure passed Thursday, reports the Washington Post, bars alternates from participating in board or committee proceedings. The change, proponents say, will streamline discussions, reduce parochialism, and increase the level of expertise among board members.

“Over the long term, the jurisdictions will compensate for the supposed loss of access to expertise by putting forward, as members of the board, individuals who possess levels of expertise and experience of complex organizations that few, if any, members of the board today possess,”  said David Horner, a federal representative on the board. “At the end of the day, that is a better model for governance of a complex transit property.”

But not everyone was happy with the change. “I strenuously object to the changes in the bylaws that you are considering, which will basically circumvent the compact that governs this body,” said ­alternate board member Malcolm Augustine, who represents Prince George’s County. “Virginia is holding all of us hostage, and it will disenfranchise Prince George’s County.”

Bacon’s bottom line: I haven’t attended Metro board meetings, so I haven’t seen the board in action, and I don’t have an informed opinion on whether a streamlined board will improve the quality of its decisions. But I am dubious that much will change. Metro’s structural problems run too deep.

First, Metro has set its fares too low, thus depriving the mass transit organization of desperately needed funds. The board is worried about two things: that increasing fares will depress ridership, and that higher fares will punish lower-income riders. Sidelining the alternate board members doesn’t change that calculus.

Second, fundamental reform is subject to a union veto. An unwillingness over the years to confront the Amalgamated Transit Union, which has the power to shut down the Metro and throw the Washington economy into a tailspin, has resulted in excessive pay, featherbedding, favoritism, and unproductive work rules that make the bus and commuter rail systems far more costly than necessary. But clawing back  concessions will be extremely difficult, no matter how many members the board has.

Virginia should have used its financial leverage — no reform, no $500 million — to stiffen the backbone of management and the board to make the tough decisions. The Northam administration settled for governance reform. We’ll find out if eight board members show more courage than sixteen. I’m not counting on it.

Virginia’s Hidden Deficit: the Unemployment Trust Fund

Virginia Trust Fund Solvency. Graphic credit: “Trust Fund Solvency Report 2018.”

There are many measures for gauging a state’s fiscal condition. The most commonly cited is the condition of its General Fund: Is the state balancing its budget? Digging deeper, one can examine the degree to which a state is funding (and falling short of) its pension obligations. And one can track the extent to which a state is neglecting repairs of  highways, transit systems, buildings, water-sewer facilities, and other public infrastructure, thus building up future maintenance obligations.

Then there’s the Unemployment Insurance Trust Fund. This is the fund, financed through employer payments, from which states draw to pay benefits to Virginians laid off from their jobs. State funds are designed to build up reserves during good times so they can maintain benefits during bad times when payments spike. If states run dry, they can borrow money from the federal government, which they then are required to repay. States are not directly on the hook for unemployment insurance. But restoring solvency to a fund by hiking employer contributions is the functional equivalent of a business tax increase. Lower business contributions make for a better business climate; higher contributions do the opposite.

So, it’s worth asking what kind of shape Virginia’s unemployment insurance reserves are in. And the answer is… not very good. Not the worst — we’re not in the same abysmal condition of California, Ohio or Texas, but we fall below the recommended minimum adequate solvency level. We probably could ride out a weak recession, but are ill prepared for a severe one.

The U.S. Department of Labor publishes an annual “State Unemployment Insurance Trust Fund Solvency Report.” Twenty-nine states, including Virginia, are beneath the recommended solvency standards. The Old Dominion’s relative position compared to other states is shown in the chart above. We’re in the middle of the pack. While we’re not far from the recommended level of solvency, we’re still below it — and we certainly haven’t built up large reserves like Wyoming and Oregon.

(For those tracking the 50 states’ progression toward Boomergeddon, note that several states noted for their fiscal profligacy — Illinois, Connecticut, Kentucky and New Jersey — have among the least adequately financed trust funds.)

As of Jan. 1, 2018, Virginia has $1,148,000,000 in its unemployment insurance trust fund. That may seem like a lot, but the number is meaningless without comparing it to the number of workers it is meant to cover. The chart atop this post gets to the adequacy of that number. Unfortunately, it is far from self explanatory.

The key numbers are associated with the four blue arrows.

The reserve ratio is derived by taking the trust fund balance and dividing by the state’s total wages paid for the year.

The 2017 benefit cost rate is calculated by expressing the level of uninsurance benefits as a percentage of yearly wages. A smaller number — Virginia’s is 0.19% — is good. It reflects Virginia’s low unemployment rate and low unemployment insurance payments.

But low unemployment is expected during periods of economic expansion. The acid test is how well the trust fund holds up in a recession. So, the Labor Department benchmarks against two measures: (1) the highest benefit cost rate ever, and (2) the average of the highest three highest years over the past 20 years.

The Labor Department then calculates the Average High Cost Multiple, which is the Reserve Ratio divided by the Average Benefit Cost rate. “Values greater than one,” states the report, “are considered the minimum level for adequate state solvency going into a recession.”

Virginia’s value is 0.92, meaning (as I understand it) that its trust fund has 92% of the reserves deemed adequate to make it through a recession without resort to extraordinary measures.

Virginia’s Housing Shortfall

Underproduction as a % of 2015 housing stock.

Between 2000 and 2015, 23 states fell 7.3 million units short of meeting the housing needs of their growing populations — equivalent to about 7.3% of the housing stock of the United States, according to a new study, “Housing Underproduction in the U.S.,” published by the Up for Growth Coalition.

Although not the worst offender, Virginia was one of the states notable for housing underproduction, falling short of demand by 131,000 units over the 15-year period.

Restrictive zoning and development policies in Virginia and elsewhere have created an imbalance in supply and demand imbalance that has dire economic consequences. States the report:

As people migrate toward cities in search of jobs, education and economic opportunities, the demand for housing in our most populous and economically productive regions has far outstripped the production of new housing units. Due to dramatic shifts in generational preferences and household demographic trends, migration to cities over the past decade are at the highest level since World War II, while housing production has fallen to historic lows. This imbalance has led to rapidly rising housing prices, economic displacement of lower income families and communities of color, and increases in homelessness.

Long-term Bacon’s Rebellion readers familiar our Smart-Growth-for-Conservatives critique of Virginia land use and development policies will be right at home with this study. The report blames “restrictive local development and land use policies that reflect opposition to high-density, multi-family urban growth in favor of low-density, single-family, suburban sprawl.” Offending policies include:

  • Zoning restrictions, which create a shortage of zoned, high-density sites;
  • Escalating and misaligned fee structures, such as impact and linkage fees;
  • Poorly calibrated inclusionary housing requirements; and
  • Lengthy review processes that invite gaming and abuse by growth opponents that can delay projects, create unpredictability, reduce incentives to invest and increase the per-unit cost of development.

Not only do dysfunctional housing markets produce fewer units than would be supported by demand, according to the report, they produce units in the wrong locations. The market for housing in walkable, high-density, high-value urban areas is significantly under-served, while housing continues to be built in lower-density suburban communities with a backlog of land zoned for residential.

Average change in home prices by county, 2000-2016.

The study advocates a loosening of anti-development restrictions to encourage  a “smart growth” model of growth that promotes high-density residential development in major transportation corridors. Benefits will include increasing the housing supply, exploiting existing infrastructure, and increasing tax yields to local governments. Four broad tools would achieve these aims:

  • By-right approval. Establish “by right” high-density residential development in a half-mile radius around a transit station (roughly 5 percent of a metropolitan region’s land area).
  • Impact fee recalibration. Recalibrate impact fees to reflect actual costs of infrastructure service for high-density development.
  • Property tax abatement. Use property tax abatement as a gap financing tool to enable denser and more affordable housing production.
  • Value capture. Establish mechanisms to capture value created through up-zones and tax abatement investments to be used as dedicated funding for a range of housing programs.

Clearly, Virginia has a lot of work to do. We’re not as bad as the West Coast, the Northeast, or even our neighbor to the north, Maryland, but we’re the worst state in the Southeast (excepting Florida). The cost of housing is harming our economic competitiveness and hindering our ability to adapt to economic circumstances.

One of the ways to address rural poverty in Virginia, for instance, would be to encourage unemployed or under-employed workers in small towns and countryside to migrate to metropolitan areas offering better employment opportunities. When local governments in metro areas restrict housing development, they block this migration. Lower-income Americans literally can’t afford to make the move. The result is the worst of both worlds: sub-par employment opportunities in rural areas combined with job shortages in the major metros.

The higher cost of housing also helps explain another phenomenon — the shift of Virginia in recent years from a state from a people-importing state into a people-exporting state.

Finally, as the report alludes to, high housing costs disproportionately impact the poor and minorities. High housing costs, not racism, keep minorities trapped in public housing projects and slums. High housing costs block them from becoming homeowners, building home equity, and accumulating wealth, thus perpetuating income inequality.

Where is the General Assembly on the housing issue? Where was the McAuliffe administration? Where is the Northam administration? AWOL, all of them.

About those Student Loan Default Rates…

The distinction of having the highest student-loan default rate of any higher-education institution in Virginia goes to Everest College in Chesapeake. The default rate at the for-profit college (now doing business as Altierus Career College), which prepares students to be dental assistants, HVAC technicians and the like, is 36%, reports WVTF Radio IQ.

In absolute numbers, non-profit Liberty University took the top spot. A 10% default rate translated into 2,903 students.

The highest default rates tend to be small, for-profit vocational schools. Although the Radio IQ data doesn’t show it, some public colleges have a fairly high default rate as well. Low-income students are disproportionately likely to drop out of college — whatever the institution — and find themselves unable (or unwillling) to repay their loans.

Many progressives purport to be concerned about minorities and the high default rate blame for-profit colleges. The Radio IQ article quotes Diane Standaert with the Center for Responsible Lending (CRL) as noting that many for-profits are converting into non-profits to avoid state and federal regulations aimed at curbing “abusive practices.”

Acccording to CRL’s Virginia state profile, for-profit colleges disproportionately harm: low-income families, communities of color, and women.” Undergraduate enrollment at for-profits is 54% low-income, 45.4% African-American, and 60.9% female. Students at for-profit institutions in Virginia are less likely to graduate, more likely to take out student loans and graduate more indebted, and are more likely to default on their college debt, according to CRL.

What this analysis ignores is that there is considerable variability in the default rate for for-profit, private non-profit, and public non-profit institutions. The best for-profit institutions have lower default rates than the worst non-profits. Public institutions such as Norfolk State and Virginia Union University that cater to lower-income African-Americans have default rates comparable to many for-profits. Conversely, the for-profits cater to adult African-Americans — look at their television ads if you doubt me — who didn’t get a chance to attend college immediately after high school but, as adults, would like to advance their career and obtain a better job.

If mean ol’ fiscal conservatives wanted to shut down for-profit institutions with high default rates on the grounds that they were costing taxpayers, some progressive group would describe the disproportionate impact on upwardly striving African-Americans as racist. But the impetus for shutting down for-profits isn’t coming from the Right. It’s coming from the Left, hostile as always to the idea of someone somewhere making a profit.

The real problem isn’t whether an institution is for-profit or non-profit, it’s the fact that the federal government hands out student loans indiscriminately. Federal loans are not granted on the basis of a student’s likelihood to repay, whether based on SAT scores, class standing, credit score, years in the workforce or any other relevant factor. Why? Because objective lending criteria might impact minorities more than whites, which would constitute a different type of discrimination and invoke the inevitable cries of racism.

So, if you think with a leftist mindset, instead of insisting that the federal government establish standards to reduce the number of students defaulting on their debt, which would be racist, you attack for-profit institutions… even thought, by leftist standards, limiting educational opportunities for minorities by this indirect means also could be construed as racist. But if you think with a leftist mindset, that’s OK because you’re suspicious of for-profit enterprises anyway. Furthermore, you control the commanding heights that shape public opinion formulation — the media, academia, the educational bureaucracy — so you have the power to frame the issue the way you want.

That, folks, is democracy at work in America today.

Here’s an Idea, Let Maryland Have Amazon

Virginia’s friend: Maryland Governor Larry Hogan

Maryland legislators approved Wednesday an $8.5 billion incentive package to lure Amazon’s second headquarters to Montgomery County. Governor Larry Hogan (R), who proposed the plan, is expected to sign the bill.

I love it! This is the best of all worlds for Virginia. Amazon has estimated that the headquarters will invest $5 billion and employ 50,000. If Amazon puts its second headquarters just across the Potomac River in Montgomery County, Md., Northern Virginia will benefit from many of the positive spillover effects without undermining its tax base to bribe the company into locating there.

Nonpartisan analysts with Maryland’s General Assembly said the incentives would cost the state $5.6 billion in tax breaks, $2 billion in transportation spending, and $924 million in local tax credits, for a total of $8.5 billion. While a solid majority of Maryland legislators backed the package, a sizable minority objected to the massive subsidies, reports the Washington Post.

“Amazon is getting the gold mine and we’re getting the shaft,” said Del. Herbert H. McMillan, R-Anne Arundel. He described the package as “corporate welfare.”

(Virginia has offered an incentive package as well, although nothing that has required approval by our General Assembly. The details remain confidential, despite efforts by anti-Amazon groups to obtain them through Freedom of Information Act requests.)

Let’s game this out. Let’s assume that Maryland’s bribery package is so generous that it outweighs anything Virginia can cobble together under existing legislation and appropriations. Let’s assume that Amazon builds an 8-million-square-foot  headquarters campus in Montgomery County, invests $5 billion, and hires 50,000 highly compensated workers, as it says it will. Where does that leave Virginia?

In the cat bird seat.

Maryland and Montgomery County hired the Sage Policy Group, Inc., to study the economic impact of an Amazon relocation to Montgomery County. The study finds that a full build-out would support more than 101,000 jobs in Maryland, generate nearly $7.7 billion in employee compensation, and boost economic activity by more than $17 billion. (Presumably these are annual figures, although the study’s Key Findings does not say so explicitly.) Writes Sage:

Complete development of Amazon’s HQ2 will create approximately $112 million in augmented tax revenue at the County level. The bulk of this will flow to Montgomery County through direct income and property tax effects, though indirect and induced activities will also augment local tax revenues as far north within Maryland as Frederick and Baltimore Counties. This tally includes nearly $64 million in property taxes and nearly $34 million in income taxes.

At the state level, tax receipts will increase by an estimated $190 million over the duration of development, including $84 million in sales tax revenues, $62 million in income tax revenue, and more than $10 million in nontax revenues (e.g., fees, and permits.)

Here’s what the Sage study overlooks: the costs associated with an added workforce of 101,000 in an era of full employment.

Unemployment for the Washington metropolitan area was 3.6% in February. That verges on a labor shortage. Indeed, for IT-related jobs, there is a labor shortage. To fill those jobs, Amazon will either (a) induce skilled employees from other metros to move to the Washington area, or (b) recruit skilled employees from local employers, who in turn will have to induce skilled employees from other metros to move to the Washington area. Those people will have to live somewhere, and they will require state and local government services.

The increased economic activity resulting from the Amazon headquarters will more than offset the drain from $8.5 billion in subsidies. But will it also offset the cost of building new infrastructure and providing state/local government services, including schools, to the tens of thousands of households moving into Maryland?

Let’s assume for purposes of illustration that a third of those 101,000 employees joining the Maryland workforce have children, and let’s assume that they have only one child at home on average, and let’s assume that only 75% of those children are of school age. That means we can expect an enrollment increase of 25,000 students in Maryland schools. The average cost per K-12 student in Maryland is about $15,000. Let’s say a 20% of that is overhead and that the variable cost per child is only $12,000. That pencils out to $300 million in added K-12 school expenditures.

Guess what. The total anticipated increase in state and local tax revenues is…. $300 million. That leaves nothing for public safety, public works, higher education, health care, social services, the environment, or the mandatory bloated bureaucratic overhead. Fiddle with the numbers in my assumptions, if you want, but understand the principle: Sage’s economic impact formula considers only tax benefits, not fiscal costs.

By contrast, Virginia will enjoy economic benefits from Amazon in Maryland without the tax giveaways.

The Sage study does not publish an estimate of the economic impact of an Amazon-in-Montgomery-County scenario on Virginia or Washington, D.C. scenario.  I suspect there’s a reason why Sage didn’t disclose those numbers — because an embarrassing proportion of the benefits of an Amazon move to Maryland will accrue to the entire metropolitan area.

“Entrepreneurship related directly or indirectly to e-commerce, cyber-security, big data analysis, and other segments would accelerate,” states the report. As it happens, cyber-security and big data analysis are industry sectors at which Virginia excels. It is inevitable that Amazon will do business with Virginia companies, and it is likely that Amazon or former Amazon employees will seed new enterprises in Virginia.

No doubt some Amazon employees will live in Virginia and drive across the Potomac. We’ll have to provide schools and other public services to them. Here’s the difference: We won’t have to eviscerate our tax base to do so.

Is Mo’ Money the Solution to the STEM Job Shortage?

Governor Ralph Northam. Photo credit: Daily Progress

Speaking at the Charlottesville Regional Chamber of Commerce yesterday, Governor Ralph Northam enumerated the main challenges he sees for Virginia’s business environment: diversifying regional economies, creating more opportunity in rural communities, providing dedicated funding for the Washington Metropolitan Area Transit Authority, and reforming state taxes and regulatory structures. Reports the Daily Progress:

The Democratic governor tied most of these problems to two solutions — well-funded schools at all levels and Medicaid expansion, arguing the federal Medicaid funding would allow more state money to be spent in other areas.

“We need to diversify our economy by understanding what the jobs of the 21st century are,” Northam said, citing biotechnology, data collection and data analysis.

“We do that through having excellent colleges and universities that are affordable to all Virginians, but also through supporting and marketing community colleges,” he said. “There are thousands of good, high-paying jobs that don’t require a four-year education.”

Medicaid expansion might pay for itself, but let’s just say I’m skeptical that it will actually save the state money. How many other states that have enacted Medicaid expansion make the claim that they have freed up spending for other priorities? But that’s a side issue.

Of greater interest is Northam’s observation that there are “thousands of good high-paying jobs that don’t require a four-year education.” He is absolutely right about that. He seems to be suggesting — although it’s not entirely clear — that Virginia needs to spend more money to help ameliorate the problem.

As Bacon’s Rebellion readers know, I tend to be skeptical that waving the magic money wand fixes many problems. I’d like to see an analysis of why Virginia’s educational/workforce training system has been unable to meet the demand for STEM jobs.

It is widely known, for example, that there are widespread job shortages in the IT sector. One plausible explanation is limited teaching capacity — there just aren’t enough college and university courses in which to enroll, and existing classes are so full to the brim that would-be IT practitioners are being turned away. Is that, in fact, so?

If there is a capacity shortage, why is there a shortage? Are colleges, universities and even for-profit career schools too dim-witted to see the business opportunity and expand the course offerings? Or, alternatively, do they see the opportunities but are having trouble recruiting instructors to staff the courses?

What if the supply of students is the problem? It is widely acknowledged that STEM programs have high drop-out rates because many American students can’t handle the work. What if the problem is that high schools are not preparing students for college-level STEM work? What if American students don’t have the self-discipline to perform demanding work with right-and-wrong answers?

Finally, what kind of workforce credentials are needed to fill these STEM jobs? Do employers crave workers with certifications that can be obtained at community colleges or for-profit career schools? Or do they need employees with B.A.-, M.A.-, or Ph.D.-level degrees obtainable only through advanced programs? Presumably, both are needed. But what is the proper mix? If more funding is the answer, what is the proper distribution between community colleges and four-year institutions?

I’ve not seen any of this analysis. And I have no confidence that we truly understand the nature of the problem or how best to invest public dollars. Virginia doesn’t have the luxury of throwing dollars at problems we don’t understand. We need to act upon hard evidence, not conjecture.

Is Training a Better Investment than Education?

Worker in the control room of the North Anna nuclear power station. Photo credit: Style Weekly

In his book, ‘The Case against Education: Why the Education System is a Waste of Time and Money,” George Mason University professor Bryan Caplan argues, as the title of his book suggests, that much of secondary school and some 80% of time and expense dedicated to earning a college degree is wasted. Most of the facts and theories we absorb in college have little applicability in the “real world,” that is to say, the world of work, and are soon forgotten. The primary value of a college degree, he contends, is to signal to the labor market that someone has the intelligence, diligence and conformity (willingness to play the rules of the game) to make a good employee.

I’m about halfway through the book, so I don’t know if he adds any important qualifiers, but his arguments were in the back of my mind today as I toured the North Anna Power Station. Other than the engineers (most of whom went to Virginia Tech), relatively few of its 950 employees have college degrees. But that’s not to say they aren’t educated. They are well schooled in the highly specific knowledge and skills required to operate and maintain a nuclear power station.

It takes 39 months of training — classroom instruction, working in the power plant, and scenario training — to become a “plant operator” permitted to enter the nuclear inner sanctum. To graduate to a job in the control room requires an additional 18 months, including hundreds of hours undergoing computer-modeled simulations in a training facility mocked up to resemble the control room. Not only must student-employees meet the expectations of their Dominion managers, they must pass muster with Nuclear Regulatory Agency (NRC) evaluators.

Any electric utility wants its employees to perform to high standards. But nuclear power plants are a no-forgiveness environment. There is so much at stake should anything go wrong — another Three Mile Island- or Fukushima-style incident would be calamitous to Virginia, not to mention the company — that Dominion spares no expense with training. As consequence, the power-plant jobs are well paid. According to Recruiter.com, the pay scale for nuclear power-station operators ranges nationally from $56,000 to $84,000 a year, largely based on tenure. Not bad work for a high school education.

Circling back to Caplan’s book… People retain skills that they apply in the workplace. Indeed, they sharpen and refine those skills. By contrast the “fade out” of college knowledge and skills tends to be high. Some fields of study, such as engineering, computer science, and the health professions, are useful because they teach skills that will be employed in the workplace. But others — theology, ethnic/gender studies, and foreign languages, to pick three examples — are largely useless unless the student aspires to pursue a career teaching those topics.

Personally, I believe there is workplace value in learning how to think and communicate clearly in the spoken and written word — skills which, ideally, are taught in college. But I get Caplan’s larger point. Most of the knowledge I accumulated in pursuit of my B.A. and M.A. in history (with a concentration in African studies) has dissipated. I remember little of the content because I have had no occasion in my adult life to reinforce what I learned. I would like to think that intangible skills gained from my honors history program — how to think rigorously and analytically — carried over to my career in journalism. But I will confess that the ability to write in an academic style proved of so little value in newspaper reporting that I nearly got fired from my first full-time job with the Martinsville Bulletin. Most of what facility I have in writing has come from pounding away on typewriters and keyboards, year after year after year, on the job.

After getting a glimpse of Dominion’s training program, I am more inclined to agree with Caplan’s assessment than I was before: Much of the time and money dedicated to higher education probably is wasted. How to encourage more companies to invest more in vocational training, however, remains an open question. The U.S. workforce is highly mobile. Nuclear power-related skills are not readily transferable, so investing in training makes sense for Dominion. But other companies have little incentive to follow its example if its trainees jump to employers. How we solve that dilemma, I do not know.

Northam, Cox Agree to Roll Back State Regs

Do beauty parlor employees really need a state license to shampoo hair?

Governor Ralph Northam and House of Delegates Speaker Kirk Cox announced legislation yesterday that would launch a pilot program to “remove burdensome and unnecessary regulatory requirements facing hard working Virginians.”

“We have a responsibility to constantly evaluate every regulatory requirement and policy to ensure that it is doing its job in the least restrictive way possible,” said Northam in a press release.

Added Cox: “We know that red tape hinders entrepreneurs, innovators, and small and large businesses alike from creating more of the good paying jobs that our people need. This pilot program will significantly reduce regulations in two heavily-regulated areas and lay the foundation for further efforts to reduce regulations across state government, helping our economy and making government more efficient at the same time.”

House Bill 883 creates a three-year pilot program to be administered by the Department of Planning and Budget. The program will focus on the Department of Professional and Occupational Regulation and the Department of Criminal Justice Services, with a goal of reducing or streamlining regulatory requirements, compliance costs and regulatory burdens by 25 percent.

Professional licensure requirements have come under heavy fire in recent years for restricting job opportunities for lower income Virginians, and the Northam-Cox initiative follows a number of bills taking aim at specific regulations. Reports the Richmond Times-Dispatch:

On Monday, the House passed a bill to specify that hair salon workers who only clean, style or blow dry hair do not have to get a state-issued license. It also specifies that shampooing is not among the more sensitive chemical treatments that require extra government oversight.

“We don’t need to be regulating shampoos,” said Del. Mark Keam, D-Fairfax, the bill’s sponsor. “I don’t know about you, but I don’t want big government in my hair.”

Del. Nick Freitas, R-Culpeper, brought his daughter, Ally, onto the House floor Monday as a living argument for why the state should not include hair braiding it its cosmetology regulations.

When her friend provided her with a beautiful hair braid, she decided to compensate her with a dollar,” Freitas said. “And that is when her descent into crime began.”

Bacon’s bottom line: If we can decriminalize petty traffickers in marijuana, surely we can decriminalize shampooers and hair braiders!

Occupational licensing is a good place to start the regulatory rollback. The heavy hand of government isn’t oppressing big businesses here. It’s thwarting ordinary Virginians — typically lower-income Virginians with fewer job opportunities — from entering heavily regulated occupations and earning a living. Reform should appeal to free-marketeers and social justice warriors alike.

The bipartisan backing of this legislation is encouraging. If the pilot project proves successful, perhaps the experiment would provide impetus for deregulation of other sectors of the economy.

Laborers Union Recruits, Trains Pipeline Workers

Pipeline worker in Oklahoma. Photo credit: Daniel Acker/Bloomberg

I’ve been critical of labor unions on many occasions, but I’m not anti-union out of general principle. Unions can play a positive role in the economy. As an example, look at the partnership between the Laborers’ International Union of North American (LIUNA) and the Virginia Community College System.

LIUNA and VCCS have signed a memorandum of understanding to recruit and train Virginians to work on the Atlantic Coast Pipeline.

Pipeline workers will train at six Virginia community colleges near the pipeline route: Dabney S. Lancaster, Blue Ridge, Piedmont, Southside Virginia, Paul D. Camp, and Tidewater. In partnership, LIUNA and the colleges will recruit, screen, and train prospective workers, according to a joint press release issued last week.

Training will provide skills necessary for a range of pipeline work, including installing environmental control devices, clearing ground, coating and installing pipe, and restoring the right of way.

“Through our partnership with Virginia’s community colleges, we intend to hire well over half of the Atlantic Coast Pipeline workforce from those who live in nearby communities,” said Dennis Martire, vice president and regional manager of LIUNA Mid-Atlantic.

“This partnership reinforces LIUNA’s commitment to recruit and train as many Virginia residents as possible to work on the Atlantic Coast Pipeline. This project is going to provide middle class wages and family health benefits to hundreds of our members across Virginia,” Martire added.

Now, I recognize that there are many outstanding issues associated with the pipeline construction — in particular, whether pipeline trenches can be dug without causing significant damage to fragile mountain terrain and water supplies. That issue will not be answered definitively until the project is complete and we can observe, not speculate, how well the job is done.

But everyone should agree about one thing: If the pipeline is to be constructed, which it is 99% certain to be despite last-ditch legal challenges, we want to make sure that the pipeline workers are well trained in their crafts and well versed in the construction plans to minimize environmental harm.

A construction company employing non-union labor would be hard-pressed to pull off the feat of screening, hiring and training thousands of construction workers in remote communities across the state. Fulfilling that critical hiring and training function is a significant value-add. Good for LIUNA.