Background

In a recent survey by Small Business California, small business owners in the state indicated that education was among their top three concerns—right after workers’ compensation and health care costs. Many businesses, large and small, are finding it harder and harder to find qualified entry-level employees. Many young people coming out of the school system are lacking basic skills, such as reading, writing, and math, at a level sufficient for employment. In addition, many young people, as well as many people of all ages trying to enter the workforce from welfare, disability, or other barriers that have delayed workforce entry, are unprepared to meet basic requirements of the workplace, such as coming to work on time, dressing appropriately, following instructions, and simple problem-solving.

At a time when the largest single generation in history, the Baby Boomers, is beginning to retire, California needs to put a top priority on making sure that qualified workers will be available to keep our businesses and economy going. Educational reform that will ensure that every child in California learns the basic academic skills needed to function in the workforce is a necessary component of a successful workforce development system. In addition, programs to increase workforce readiness for all individuals are very important, both within and outside of the academic setting. Programs promoting specialized and/or advanced skills training (and incumbent worker re-training) in high-growth sectors of the economy are also needed. Finally, programs that provide and promote access to non-traditional pools of qualified workers, such as older workers and veterans, are necessary in order to meet the wide range of needs generated by the huge diversity of businesses in California.

The lack of qualified workers is a particular problem for small businesses, for several reasons. Small businesses may not be able to compete with larger businesses in terms of pay or benefits to entice qualified, in-demand employees. The cost of an unsuccessful hire impacts small businesses more because they have less margin for error—they may not have duplication in a position that allows work to continue while a new hire is sought, and the people who are functioning as hiring managers are probably also key employees in the business and cannot afford to spend more time in the hiring process. In addition, many small businesses function as very close-knit units, and there can be a major impact on morale—and thus on productivity—if a new hire has to be let go, or, conversely, should be let go but isn’t because of all of the above factors.

Our Position

Small Business California is monitoring the progress of the WIA reauthorization discussions in Washington DC, and communicating with legislators and individuals involved in the workforce development system (CalWIB, EDD, etc.) to gauge what changes, if any, WIA reauthorization might require in the California system. Small Business California is also monitoring several bills that have been introduced in the California Assembly this session. These include AB 710 (Houston) which assigns specific tasks to the California Business Investment Services Unit (CalBIS) of the California Labor and Workforce Development Agency, and AB 604 (Houston) which would transfer the task of creating a “report card” to assess California’s workforce preparedness system from the State Job Training Coordinating Council to a subcommittee of the California Workforce Investment Board. Small Business California strongly supports AB 710, and has not yet taken a position on AB 604.