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WIOA Goes Beyond Partisanship to Address the Skills Gap

Today the Senate is poised to pass a bi-partisan, bi-cameral agreement to replace the Workforce Investment Act with an updated system that is more streamlined and focused on training the American Workforce for jobs that are in-demand in the private sector. The NAM has long advocated for improving the federal workforce development system and we applaud the Senate for taking this important step and urge passage of the Workforce Innovation and Opportunity Act (WIOA). Senators Patty Murray (D-WA), Johnny Isakson (R-GA), Tom Harkin (D-IA), and Lamar Alexander (R-TN), along with their colleagues in the House of Representatives John Kline (R-MN), George Miller (D-CA), Virginia Foxx (R-NC) and Ruben Hinojosa (D-TX), showed true leadership is pursuing this solution.

NAM members are in need of a highly skilled workforce, have identified the skills that are necessary for success in manufacturing, and endorsed the credentials that train to those skills. Recent surveys show over 80 percent of manufacturers report a moderate to severe shortage of qualified applicants, which reduces net earnings by up to 11 percent each year. This problem is so prevalent that the NAM has created its first board of directors-level task force aimed at reducing the skills gap. Industry-recognized credentials are a key component to the solution. They allow individuals to know they are being trained in skills that are valued by the private sector, allow businesses to know they are hiring someone with the skills necessary for advanced manufacturing, and also a streamline the workforce development system by focusing finite resources on the meaningful training. WIOA recognizes these benefits and places a significant priority on this type of training. Senators Kay Hagan (D-NC) and Dean Heller (R-NV), were the primary sponsors of legislation the NAM supported called America Works, which had at its core a goal included in the WIOA, emphasizing the benefits of credentials in federal workforce training programs.

The Senate and the House should be commended for working beyond the standard Washington, D.C. gridlock and coming up with a tangible solution to the lingering skills gap problem. Once the Senate has approved the legislation, it will be sent to the House for consideration. We are hopeful the agreement will remain in-tact and the House will act swiftly to send this important legislation to the President for his signature.

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Workforce Development Makes Bipartisan Breakthrough in Congress

Yesterday Senators Tom Harkin (D-IA), Lamar Alexander(R-TN), Patty Murray (D-WA) and Johnny Isakson (R-GA) along with Representatives John Kline(R-MN), George Miller(D-CA), Virginia Foxx(R-NC) and Ruben Hinojosa (D-TX) introduced the Workforce Innovation and Opportunity Act which replaces the Workforce Investment Act and creates a modified workforce development system.

The legislation is a significant breakthrough based on language from a House bill passed last year and a Senate bill passed out of the HELP committee last summer. WIA was originally passed in 1998 and has been due for reauthorization for over a decade, but it has continually stalled due to political wrangling.  The bipartisan, bicameral legislation works to prioritize funding towards industry-recognized credentials, a top priority for manufacturers in worker training programs. The legislation also eliminates programs, reduces the size of the workforce boards, and streamlines reporting requirements.

The skilled workforce shortage is a significant problem facing American manufacturers.  Over 80 percent of manufacturers report a moderate or serious shortage of qualified applicants for skilled and highly skilled production positions, reducing net earnings by up to 11 percent.  Promoting training that is in-demand and recognized by employers as necessary to success will go a long way towards solving that problem.

The NAM and its members look forward to working with both the House and the Senate as this legislation moves forward.

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H-1B Visa Petition Period Open For a Grand Total of One Week

Yesterday, US Customs and Immigration Service announced that it had received more than enough H-1B petitions to reach the cap for FY 2015. At this point all submitted petitions will be placed in a lottery to determine which are accepted. As the USCIS announcement states, “A computer-generated process will randomly select the number of petitions needed to meet the caps…” Computers, not the employers in need of the workers, are randomly deciding who should design, build and manufacturer tomorrow’s products. Unless we address immigration reform we are driving our innovators to leave the United States.

Every day, foreign-born innovators that are already legally in the United States sit in limbo, waiting up to 10 year for their green card. These valuable employees cannot be promoted or change companies for fear of being forced to start all over again at the back of a 10 year process.  This cycle needs to stop. Manufacturers need access to a skilled workforce and need to know we can hire and promote the right person for the job – not play the job lottery.

Reform of the legal immigration system is necessary for US manufacturing to succeed. The uncertainty associated with a random lottery is counterproductive to economic growth. Manufacturers want to create jobs here in the US, not drive them abroad. Gambling our future on the Federal government drawing the right person is not a sound strategy for our economy.

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Opening Day for H-1B Visa Petitions – Time to Tip the Cap

Today is April 1st, the first day that USCIS is accepting petitions for H-1B visas in Fiscal Year 2015. Today alone, it is expected that enough applications will be submitted to reach the annual cap of 85,000. Thousands of applications will be rejected, not due to qualifications of the applicant or necessity of the position, but because of the arbitrary cap. Today a number, with no real meaning, decides who businesses should hire and how many jobs can be created in the next year.

To highlight this, Compete America, of which the NAM is a founding member, released a jobs calculator highlighting the jobs lost due to inaction on immigration reform in the highly-skilled sector for 2014. The calculator looks at not only at losses due to visa applications that were rejected last year because the cap was reached, but also includes applications that were never made because of the limited cap numbers. Using the conservative estimation that four new jobs are created for each H-1B visa issued, the calculator estimate that in the past year, since April 1, 2013, the US has forgone 500,000 jobs.

In a time when job growth is a priority for our nation and Congress, this is represents a lost opportunity. We should be taking advantage of every opportunity we have to keep the innovators and the job creators in this county, not driving them away with outdated policies. In fact, in a report released last month, CBO estimates H.R. 2131, The SKILLS Visa Act, which takes steps towards updating the system, would “increase revenues by $118 billion over the 2014-2024 period. That increase, largely reflecting additional collections of income and payroll taxes, would result primarily from an expansion in the size of the U.S. labor force.” We are now not only losing jobs, but also costing ourselves additional revenue.

Even more regretful, this only captures one portion of immigration reform. The dysfunctional system is causing workforce problems for all employers, leaving jobs open for months at a time and reducing productivity. Our current system is not working for anyone. It is detracting from American job growth and productivity.

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Administration Backs Down on Harmful Proposal

On Monday, the Administration walked back almost all of a proposed regulation that would have significantly damaged the Medicare Part D Program. The NAM had filed comments three days before asking for withdrawal of the proposed rule. The Administration, responding to significant criticism about the proposal stated, “Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time.”  This is a positive step forward in the ongoing effort to preserve the Part D program – one of the rare government programs that is popular and runs significantly under budget.

This is, however, a short-term victory. The Administration also noted that they may revisit the proposal in the future. The NAM will remain vigilant against the changes outlined in the January 10 Proposed Rule. Many of the issues presented were a clear violation of legislative intent and would have increased costs to manufacturers through cost-shifting and program expansion.

A link to the NAM comment can be found here.

 

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Changes to Medicare Parts C and D will Increase Costs for Manufacturers.

The NAM filed comments today with the Centers for Medicare and Medicaid Services (CMS) on “Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs,” asking for withdrawal of the proposed rule while highlighting serious changes that would alter the programs and ultimately increase costs. Of specific interest is an interpretation of the law that opens the door for government intervention into negotiations of plans – a clear overreach of the legislation that was intended to prevent government interference in these private sector negotiations.

In addition, the rule places mandates on mail order companies, reduces the number of protected classes of drugs provided under Part D, and reduces the ability of plans to negotiate with preferred pharmacies. All of these significant policy changes will increase the costs to Medicare, and in turn, increase the cost to manufacturers who use these programs. These changes are contrary to legislative intent and undermine the stability of successful programs. Instead of tearing down a popular program that is fiscally sound we should be looking to replicate similar solutions elsewhere.

Medicare policy should be based on sound health outcomes combined with robust fiscal management. The current debate looks too much at old politics and not enough a new answers.

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STEP Awards Honor Women in Manufacturing

Our members often tell us there is a significant skills gap in manufacturing. Day after day, thousands of jobs go unfilled, reducing productivity and holding the American economy back. Yet, only 24% of the manufacturing workforce is women. To be sure, this represents a larger share than has historically been the case, but manufacturers know there is an opportunity for growth. We can take an important step toward filling the skills gap in manufacturing by tapping into the potential of women.

In 2012, the Manufacturing Institute began to address this challenge by launching the Science, Technology, Engineering and Production (STEP) Ahead initiative to honor and promote the role of women in the manufacturing industry.  STEP Ahead celebrates the accomplishments of women in manufacturing at all levels –from the production line to the C-suite – by honoring leaders in the field at the annual STEP awards.

Yesterday we celebrated those in the next class of leaders. 160 women from all across the country were in our nation’s Capital to be honored for their hard work and determination. These women have often succeeded without peers to guide them, but press ahead knowing they are inspiring the next generation of women in manufacturing. The NAM celebrates and congratulates these women for their contribution to our nation’s economy.

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Workforce Investment Act Moves Toward Reauthorization

Yesterday the Senate HELP Committee marked up and passed legislation that reauthorizes the Workforce Investment Act (WIA).  WIA is long overdue for reauthorization, having never been reauthorized after passage over 10 years ago. Due to support from America Works sponsor and member of the committee, Senator Hagan (D-NC), the Senate bill includes some strong language on industry-recognized credentials supported by the NAM. In addition the bill puts a strong emphasis on data collection, performance indicators and metrics.

The Bill will now need to be considered by the full Senate before it can be conferenced with a House version that passes last March.  The Bills are starkly different, with the House bill taking a stronger stance on consolidation of programs and state involvement to reduce bureaucracy.

 

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Immigration Reform Will Boost U.S. Economy

Today a letter signed by over 400 employer groups, including the NAM, was sent to House law makers urging them to move forward on immigration reform. The letter, which was preceded earlier in the month by a similar letter specifically from manufacturers, urges the house to take action and address the broken immigration system. It states:

“Though leaders from across the ideological spectrum agree that enacting immigration reform now will accelerate U.S. economic growth at a critical time when it has struggled to recover, and will help to enable sustained growth for decades to come. Done right, reform will also serve to protect and complement our U.S. workforce, generating greater productivity and economic activity that will lead to new innovations, products, businesses, and jobs in communities across the U.S.”

Nothing could be more true. We need House leaders to thoughtfully address the system and construct solutions that will complement and improve our economic needs. The NAM has long been a supporter of broad reform to include high-skilled, lower skilled, verification, earned status for the undocumented and border security. This does not mean that legislative reform needs to come in one bill, but it does mean that there are many facets of the system that are broken and all of them need to be fixed.

 

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Immigration Reform Gains Momentum

This week, the full Senate began to debate comprehensive immigration reform.  It will not be an easy endeavor, but we need to fix our broken immigration system. For too long, manufacturers in all sectors have struggled to hire the talent necessary to remain globally competitive. We have a chance to correct that problem in the form of S. 744, The Border Security, Economic Opportunity, and Immigration Modernization Act, but it is going to take leadership for Senators to vote in favor of a momentous change.

Earlier today, the NAM hosted a dual-city town hall discussion in Washington, D.C., and Minneapolis, Minn. to focus attention on the importance of comprehensive immigration reform for manufacturers and what’s at stake for America in the weeks ahead. “Comprehensive immigration reform will strengthen our economic and national security.  And, it’s the right thing to do,” NAM President and CEO Jay Timmons and Cargill Chairman and CEO Gregory Page said in a joint statement.  “Yet, the success of comprehensive reform is not ensured. If it fails, it may be years before we have another opportunity. As the Senate takes up its bill this week, right now is our best shot to draw attention to the issue.”

Representative Paul Ryan was a panelist at the event stating “immigration reform will help us get the labor force we need for economic growth.” He also said he believes the House can pass immigration reform legislation.

Senator Kelly Ayotte (R-NH) recently announced she will support the comprehensive immigration reform legislation and the NAM would like to commend her for her thoughtful decision. Gerry Letendre, CEO of Diamond Casting, a New Hampshire based small business, agrees and praised Senator Ayotte for recognizing that immigration reform is about innovation and job creation for Americans. “Immigration reform is an important step towards creating the jobs we need to be competitive” said Letendre. “I strongly support Senator Ayotte’s commitment to reform and job creation in New Hampshire.”

The NAM believe immigration reform can happen and manufacturers are determined to make it a reality.

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