Barriers that impede residents from fully participating in the regional economy undercut metropolitan Chicago’s primary source of growth -- its human capital. Numerous measures of economic well-being by race and ethnicity show how the region falls short of ensuring equitable opportunity for all residents, and thus falls short of performing to its full potential.^[1] Black and Hispanic residents in particular experience persistent disparities in educational attainment, employment, household income, and other indicators. Over time, these challenges limit the pace and durability of the region’s economic growth, while also impeding efforts to reduce poverty or create opportunity.

[GRAPHIC TO COME: A series of data charts will provide information on persistent disparities in economic outcomes among metropolitan Chicago’s residents by race/ethnicity.]

Racial and economic inclusion is integral to our continued growth and development. Research increasingly demonstrates the connection between reducing racial inequality and achieving stronger and more sustained economic growth. The International Monetary Fund has found that lowering income inequality in a region by 10 percent lengthens periods of growth by 50 percent.^[2] Apart from the need for a skilled workforce, the Federal Reserve Bank of Cleveland has found that growth in regional productivity depends most on ethnic diversity, racial inclusion, minority-owned businesses, and low levels of income inequality.^[3] In contrast, persistent inequality undermines a community’s resilience in the face of uncertain future economic shifts. During 2006-10, income inequality was one of the most effective ways of predicting a county’s risk of entering into recession,^[4] and recent research shows that higher levels of wealth inequality can increase the severity of a recession.^[5]

Rates of labor force participation among the region’s black residents during 2005-16 were at least five percentage points below any other group.^[6] Metropolitan Chicago had nearly 150,000 young adults ages 16-24 years (12.1 percent) disconnected from both work and school in 2015, including 22.9 percent of young black residents.^[7] Many of these young adults have a high school diploma but require substantial remedial education, as well as options to intersperse learning and income. As skills demand evolves, low graduation rates among low-income and entry-level workers undermine training programs that could help them to enter and remain in the workforce.^[8] At the same time, average real U.S. annual wages for those with a high school diploma have not increased since 1970, even as costs to participate in the economy like childcare and post-secondary education have risen.^[9]

As both inequality and global economic shifts play out, how individuals relate to the labor market has become more complicated. Entry-level requirements have increased, and workers must increasingly seek out and pay for more post-secondary training before entering the workforce, in addition to continual training throughout their career to remain competitive.^[10] In 2016, for the first time, workers with a Bachelor’s degree or higher made up a larger proportion of the workforce (36 percent) than workers with a high school diploma or less (34 percent).^[11] Yet the qualifications listed in a job posting do not necessarily reflect the actual skills and education needed to perform the related tasks. Inflated job requirements can contribute to large pools of overlooked talent.^[12] These hurdles can be particularly challenging for people tenuously connected to the workforce like returning citizens and opportunity youth -- or young adults 16-24 years old who are not in school and not working. As the workforce and education systems adapt, a career pathway approach can provide essential resources to mitigate challenges that some individuals face to entering and thriving in the economy.^[13]

Put simply, the game is changing. Many employers seek to hire new workers who already have the required skills, rather than to invest in extensive education and training of staff. Some research has found an ongoing decline in the share of workers receiving employer-sponsored or on-the-job training, and the U.S. has been slow to implement a system of apprenticeship programs on a national scale.^[14] Some sectors like manufacturing and health care have standardized the skills requirements or have gained new efficiencies through technology. Others have seen a rise in typical education requirements for entry-level positions.^[15] For many low-income and entry-level workers, these trends can result in a cycle of temporary or contract work without the job security, benefits, or training to pursue better opportunities. In short, workers with tenuous connections to the economy make increasingly complex decisions about their own workforce readiness -- that is, how they plan to pursue, pay for, progress through, and complete the education and training required to attain relevant skills. Without action, evidence of increasing training requirements and decreasing employer investments in training raises concerns about compounding inequality.

[GRAPHIC TO COME: A graphic will provide information on career pathway programs and coordination in the region’s education and workforce systems.]

The decision to invest in post-secondary education and training can have lifelong economic consequences for individuals and households. Even for workers in high-growth sectors or with industry-recognized credentials, some jobs provide better opportunities for career advancement and upward mobility. Yet many students make costly, self-directed decisions with limited information. In particular, the range of education and credentialing programs has continued to diversify, but sub-baccalaureate credentials are not uniformly valuable for workers and employers.^[16] Looking beyond immediate employment needs, the workforce and education systems have increasingly emphasized strategies for connecting individuals to jobs that have the potential to grow in skills and compensation. Achieving these goals requires regional coordination to target educational supports and training in skill areas and occupations that likewise offer pathways to upward mobility.

A career pathway approach offers one model for coordinating public and private resources around programs that connect target populations with supportive, progressive opportunities in growing occupations. These programs offer a series of manageable steps leading to attainment of industry-recognized credentials and career advancement by balancing classroom and work-based learning. Well-articulated guidance on pursuing opportunities is then communicated to individuals and households through multiple workforce channels. In doing so, career pathways synchronize regional workforce needs with individual training needs and help both employers and workers assess the value of credentials in the regional job market.^[17] Programs have the flexibility and stakeholder input to structure learning and earning opportunities as appropriate for many different occupations and sectors. Examples may include pathways in business information technology, insurance, advanced manufacturing, transportation and logistics, and health care.

Close cooperation with employers ensures that programs provide in-demand skills, a broad set of necessary supports, and connections to specific work-based learning opportunities. For example, regional collaboration in Long Beach, California, has contributed to substantial increases in the share of local students meeting entrance requirements to that state's university systems, as well as graduation rates among students of color that surpass those statewide.^[18] This model can help students balance improved flexibility with assurances of the training’s ongoing value. Likewise, by aligning educational systems with the needs of employers, it can help workforce partners enhance the delivery of career counseling, job-placement assistance, and other support services.

The following describes strategies and associated actions to implement this recommendation.

The promise of a career pathway approach at the regional level depends on decisions and investments made at the program level. Yet programs vary widely in how they implement best practices like a sector focus, support services for participants, career-focused instruction, work-based learning, evidence-based practices, and progression to a recognized post-secondary credential with regional economic value.^[19] For many programs, these steps begin with identifying reliable and flexible funding that supports long-term planning and scaling effective models -- a particular challenge to find in today’s environment of limited public resources.^[20] While additional funding may be necessary, many administrative actions and supportive policies can contribute to improving programs’ capacity, accessibility, quality, and relevance. A core goal should be scaling models that integrate foundational learning with sector-specific workforce preparation and training in occupations that provide opportunities for growth and career advancement. Private sector leadership and investment will be critical to keeping the content and delivery of programs at the forefront of future industry shifts.

Education and training providers -- in partnership with employers -- should develop sector-specific instructional models that reflect evidence-based research, local and regional goals, and skills demand in the labor market.

Education and training providers -- in partnership with workforce funders -- should market and build awareness about career pathways to equip our educators, career counselors, college advisors, and students themselves in strategizing for career and life choices.

Federal and state policy makers should develop funding mechanisms that encourage ongoing development, implementation, and improvement of career pathway programs.

Federal and state policy makers should expand funding models to include greater flexibility for improvements in the quality and delivery of instruction, as well as additional support services that ensure successful program completions and transitions.

Federal and state policy makers should facilitate the integration of planning processes and funding streams in support of career pathway programs.

State and local policy makers -- in partnership with workforce funders -- should   establish integrated data systems that capture comprehensive information on career pathway programs and enable analysis of participant outcomes.

Few, if any, educational institutions or training programs can meet all the demands of a career pathway program on their own.^[21] Instead, goals are achieved through partnerships within a system. In addition to the benefits cited elsewhere in this chapter, career pathways focus on bridging the gaps that can form between a worker’s skills and career opportunities by aligning and leveraging the resources already in place to support their employability. Participants may move between the public workforce system, high schools, their current workplace, post-secondary institutions, or apprenticeships as they build from an industry credential to a certificate or degree to new job opportunities. Along the way, providers incorporate employers’ skill needs and support services to ensure that participants can attain meaningful progression over time. The value of a system approach is that it connects all relevant public resources with private and nonprofit partners.

The success of a career pathway approach depends on collaborative leadership, commitment, and investment from all regional stakeholders -- especially the private sector. Federal legislation enacted in 2014 with bipartisan support, the Workforce Innovation and Opportunity Act of 2014 (WIOA), codifies a robust definition for career pathways and designates local workforce boards as conveners for coordinating these pathways as a system. Regional coordination -- particularly through WIOA state and local plans -- helps to integrate resources, policies, data, and performance measures across various entities to sustain high quality career pathways. Other implementers can demonstrate leadership in developing a shared vision and coordinated efforts when appropriate, including business associations, chambers of commerce, or community colleges.

Establishing a regional career pathway system offers several benefits. Greater coordination can improve program quality and reduce duplication, overlap, and underutilized capacity across existing programs. Consistent data sharing and accountability can clarify the connectivity between programs and support co-enrollment or articulation agreements. Well-organized evaluations and needs assessments help to align programs with both partners and regional economic development priorities.

Illinois is already a national leader in developing systems at the state and regional levels. The state participates in the Center for Law and Social Policy’s national Alliance for Quality Career Pathways, and has launched the Workforce Readiness through Apprenticeships and Pathways and Illinois 60 by 25 Network initiatives. Further coordination is necessary to ensure regional resources and structures can properly support existing and emerging career pathway programs as they tackle needs in their communities.

Government, business and civic leaders, educational institutions, and other regional actors should enhance partnerships for a regional career pathway system and assist partners in its implementation.

Workforce funders should strengthen alignment and service integration across core WIOA agencies and required partners to support development of career pathway programs and provision of support services.

Education and workforce providers should collaborate with state and regional partners to pursue integrated service delivery that can reduce duplication and improve delivery services.

Education and workforce providers -- in partnership with workforce funders and employers -- should establish transition frameworks to enable multiple entry points into post-secondary education and to support students’ progression toward industry-recognized credentials, sustained employment, and career advancement.

Education and workforce providers -- in partnership with workforce funders -- should develop integrated data systems to evaluate career pathway models and to ensure programs are responsive to local and regional goals, labor market needs, employer feedback, and unified plans.

Education and training providers -- in partnership with workforce funders --should identify and scale programs that reduce barriers for adult learners in accessing appropriate educational programs and employment opportunities.

The goals of a career pathway approach and cluster-oriented economic development mutually reinforce each other. With a sector-specific focus, career pathways help workers attain credentials that regional employers recognize and value, while also connecting employers directly to workers with the right skills. In doing so, career pathway programs need to have an understanding of the region’s unique industry mix, emerging trends within an industry cluster, and the human capital needs that make the Chicago region a destination for such business activity. Related information and analysis lie at the heart of coordinating effective cluster-oriented economic development. Cluster initiatives can help to organize industry leadership to support career pathway programs, especially in industries with opportunities for workers’ upward economic mobility that anticipate challenges in filling entry-level positions.

Economic development organizations -- in partnership with cluster organizations -- should fully incorporate strategies to develop and implement high quality career pathways into efforts aimed at supporting the region’s traded industry clusters.

Education and training providers should make the program-related decisions that align curricula with skills demand and broaden students’ career opportunities in the region’s growing and emerging traded clusters.

Career pathway program providers and system administrators should articulate  career pathways where knowledge, skills, abilities, and work values can be transferrable  across  multiple occupations and industries within industry clusters.

The State of Illinois and regional partners have made significant strides in articulating career pathways based on rigorous market analysis. But ongoing analysis and coordination are necessary for continuous improvement toward higher quality education and training. To reap the potential benefits of a career pathway approach, the region should ensure its existing and emerging programs reflect labor market demand in their communities. Doing so requires mechanisms for strong industry engagement in each segment of a career pathway, as education and training providers identify employers’ skills need, work-based learning opportunities, specific job placements, and evidence-based improvements. Such engagement is critical to demonstrating the region’s human capital to industry and the return on investment to regional and state leaders.

Partners in the region’s career pathway system should identify strategies to better capitalize on labor market information, regional economic development goals, and local employer input. Integrated education, workforce, and related data would enable partners to evaluate participation and outcomes with a focus on decreasing inequality. Improved coordination also allows pathways to leverage a broader range of resources, such as collaborating with area employers to develop apprenticeship programs and related curricula. In particular, aggregating conclusions across public and private entities would help spur regional employment and productivity growth.