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4

workforce training program, the Net Impact Study indicates whether employment and earnings gains are due to the workforce program, or if workers could have made this progress on their own. This research also allows for a more detailed analysis as to whether the participant and the public received a return on their investment in the program. Did Participants Get the Skills They Needed? As a measure of whether participants got the skills they needed, this study tracks the credentials and degrees earned by participants. Among those leaving a Worker Retraining program in 2009-10:

15 percent received an associate’s degree. 19 percent received a certificate. 2 percent received another type of credential.

Another 15 percent were defined as completers because they completed 45 or more credits or a unique (non-degree) program. Altogether, 51 percent of participants completed their program. This completion rate is lower than the 54 percent for those who left Worker Retraining programs in the 2011 report. In that year, 13 percent received an associate’s degree, 15 percent received a certificate, and 15 percent were defined as completers because they completed 45 or more credits or a unique (non-degree) program. Did Participants Have a Job and How Much Were They Paid? To find out whether participants had jobs and how much they earned, participant records were matched with Employment Security Department wage files from Washington and neighboring states.4 The study looks at employment and earnings three calendar quarters after the participant left a Worker Retraining program. Record matches found that 61 percent of the participants had reported employment during the third quarter after they left their program, 3 percentage points lower than that reported in the last report. Their median hourly wage was $16.90, and they had median annualized earnings of $27,583.5 Program completers were more likely to be working full time than those who did not complete their training programs (64 percent compared to 57 percent) and had higher annual earnings ($28,073 compared to $27,583).

4 These files contain quarterly earnings and hours worked information on those individuals with employment reported for unemployment insurance (UI) benefits purposes (approximately 90 percent of in-state employment, with self-employment, active duty military, and those working for religious nonprofit organizations being the major groups of employers not included). 5 Annual earnings are calculated as third quarter earnings multiplied by four. Quarterly earnings are the result of hourly wage rates and the number of hours worked in a calendar quarter. All wages and earnings are stated in first quarter 2011 dollars.


5

Employment and Earnings for Worker Retraining Participants, 2012

Performance Measure Results

Employment Rate* (State Records) 61%

Full Time Employment ** 58%

Median Quarterly Hours 442 hours

Median Hourly Wage*** $16.90

Median Annualized Earnings*** $27,583 * These figures apply to those with employment reported to state employment agencies six to nine months after leaving the program. Rate does not include self-employment, employment outside the Northwest or military service and thus understates total employment by approximately 10 percent. **Full-time employment averages 30 or more hours per week. ***Earnings/wages expressed in first quarter 2011 dollars in order to account for inflation. Earnings of Worker Retraining Participants To better gauge the financial effectiveness of Washington’s workforce programs, it helps to frame income levels. One common yardstick is the federal poverty level. In 2011, the federal poverty level for one person was $10,890 per year.6 In 2012, Worker Retraining participants were able to support a median 5.4 people at the poverty level—meaning they could support themselves and nearly four and a half other people. They could support slightly more than themselves (1.8) at 200 percent of poverty level. Number of People Supported at Poverty Level by Participant Income

Performance Measure 2004 2006 2008 2010 2011 2012

Number of people supported at poverty level

5.0 people

5.2 people

5.9 people

6.1 people

5.3 people

5.4 people

Number of people supported at 200 percent poverty

1.6 people

1.7 people

2.0 people

2.1 people

1.7 people

1.8 people

6 Poverty levels from 2011 were used in this edition of Workforce Training Results to measure the results of workforce programs on participants observed in 2010-11. The federal poverty level is determined by the Department of Health and Human Services. The level varies according to family size. The number is adjusted for inflation and reported annually in the form of poverty guidelines. Public assistance programs typically define eligibility income limits as some percentage of the federal poverty level.


6

Worker Retraining Participants Receiving Benefits from Employers Performance Measure 2004 2006 2008 2010* 2011 2012*

Self-Reported Medical Benefits from Employer

67% 72% 68% N/A 64% N/A

Self-Reported Retirement Benefits from Employer

42% 48% 51% N/A 38% N/A

*Due to budget limitations, the Workforce Board’s Participant Survey was not conducted in 2010 or in 2012.

The next table shows employment and earnings information over six study periods, starting with 2004. Wages continue to be widely distributed among Worker Retraining participants. Although the median hourly wage in 2012 was $16.90, one quarter earned more than $23.44 an hour, while another quarter had jobs that paid less than $12.68 an hour. This wide distribution of wages is reflected in the dispersion of employment across higher and lower-wage industries.

Employment and Earnings Trends for All Worker Retraining Participants

Performance Measure 2004 2006 2008 2010 2011 2012

Employment Rate (Self-Reported)

71% 85% 75% N/A 67% N/A

Employment Rate* (State Records)

67% 71% 72% 69% 58% 61%

Full Time Employment**

61% 65% 65% 67% 57% 58%

Median Quarterly Hours

455 467 468 468 429 442

Median Hourly Wage*** $15.31 $15.71 $16.56 $16.69 $16.29 $16.90

Median Annualized Earnings***

$25,995 $27,052 $29,499 $30,358 $27,360 $27,583

*These figures apply to those with employment reported to ESD six to nine months after leaving program. Rate does not include self-employment, employment outside the Northwest or military service and thus understates total employment by approximately 10 percent. **Full-time employment averages 30 or more hours per week. ***Earnings/wages expressed in first quarter 2011 dollars in order to account for inflation.

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8

Worker Retraining Participants Employment by Industry While slightly over half of those employed found jobs in the service industry, 13 percent of those employed were working in manufacturing, 9 percent in retail trade and 8 percent in construction. Within the service industry, jobs were primarily held in health care (16 percent), followed by administrative and support (14 percent).

Source: Matches with Employment Security Department data in third quarter after exiting program. Industry groups based on North American Industry Classification System codes.

Industry Group Percent EmployedServices 53%Manufacturing 13%Retail Trade 9%Construction 8%Public Administration 5%Financial Services 4%Transportation and Warehousing and Utilities 4%Wholesale Trade 3%Information 2%Natural Resources and Mining 1%Breakout of Services 53%

Health Care 16%Administrative and Support 14%Professional, Scientific, and Technical Services 7%Education Services 6%Social Assistance 4%All Other Services 4%Arts, Entertainment, and Recreation 2%Accommodation and Food Services 1%

Breakout of Manufacturing 13%All Other Manufacturing 5%Aerospace 4%Wood & Paper Products 3%Food & Beverage 1%Fabricated Metal Products 1%


9

Wages and Employment Results Vary by Population Employment and earnings can vary by gender, race and ethnicity, and disability status. There was no marked difference between men and women in employment rates, however, men were more likely to be employed full-time than women (60 percent versus 56 percent).

The wage gap between men and women in the Worker Retraining program is notable. Women’s hourly wages were 85 percent of men’s ($15.80 vs. $18.49) and their annual earnings were 81 percent of men’s ($24,957 vs. $30,738).

Source: Community and Technical College Administrative Data (DLOA) Race and Ethnicity Plays Role Variation was also found for employment rates among racial and ethnic groups. Hispanics had the highest rate of employment at 65 percent, followed by Asian/Pacific Islanders (62 percent), whites (61 percent), African Americans (55 percent) and Native Americans (51 percent). Racial and ethnic variation was less significant when looking at full time employment. Asian/Pacific Islanders had the highest median hourly wage at $17.04, followed closely by Native Americans ($17.00) and whites ($16.99). The median hourly wage was lower for African Americans ($15.94) and Hispanics ($14.91) The breakdown for annual earnings among different racial and ethnic groups was distributed slightly differently from that of median hourly wages. Asian/Pacific Islanders had the highest earnings ($31,103), followed by whites ($28,290), Native Americans ($25,474), Hispanics ($23,905), and African Americans ($21,807).

61% 60%61%56%

Employed Full Time (among those employed)

Worker Retraining Employment by GenderMen Women

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16

The most recent net impact analyses examined experiences of participants who left the Worker Retraining program through 2009. The short-term impact (Program Year 2007-08) was observed in 2008-09, while the long-term impact (Program Year 2005-06) was observed from 2006-07 through 2008-09. Impact on Employment and Earnings: Participants vs. Control Group

Worker Retraining Short-term^ Long-term^

Net Employment Impact* 8.80 percentage points 7.50 percentage points

Net Hourly Wage Impacts** No significant positive impacts $1.04

Net Quarterly Hours Impacts 26.6 23.5

Net Annualized Earnings** $1,680 $2,870

^Short-term is 3 quarters after program exit; Long-term is average across 3 years since program exit. *Percentages listed are employment percentage points above those of the control group of non-participants. **Wages and earnings, expressed in first quarter 2011 dollars, represent the average difference between Worker Retraining participants who got jobs and those in the control group who were employed. As can be seen above, the Worker Retraining Program had a positive impact on employment, hours worked and annualized earnings. The long-term net impacts on hourly wages were also positive among Worker Retraining participants versus the control group. Costs and Benefits The cost-benefit analysis estimates the value of the net impact on earnings, employee benefits (estimated at 25 percent of earnings), UI benefits, and certain taxes.8 Program costs include both direct program costs and support payments borne by taxpayers and the tuition and foregone earnings borne by students. Benefits and costs are calculated for both the observed period of time abased upon a statistical model that estimated the benefits and costs out to age 65 in order to compare benefits and costs in terms of net present values, post-program benefits and costs are discounted by 3 percent per year and all figures are stated in 2011 Q1 dollars to control for inflation. The benefits and costs presented here are based on impacts estimated for students leaving programs in 2005-2006 (observed from 2006-07 through 2008-09), because a longer-term follow-up is required for this analysis.

8 Upjohn estimated the impact of the net change in earnings on social security, Medicare, federal income, and state sales taxes.


17

Participant and Public Benefits and Costs per Participant in Community and Technical College Worker Retraining Programs

Note: Benefits and costs are expressed in 2011 first quarter dollars. For each student in the CTC Worker Retraining program, the public (taxpayer) cost is about $7,077 over the length of their enrollment, and the student costs are about $3,638 in tuition and $12,211 in foregone earnings while training. During the course of working life to age 65, the average trainee will gain about $64,514 in net earnings (earnings minus foregone earnings) and $19,182 in employee benefits. These are net gains compared to the earnings of similar individuals who did not receive training. Including program costs and the net impacts on taxes and unemployment insurance benefits, the total net benefit per participant is $65,349. Projected participant net benefits to age 65 outweigh public costs invested in college training by a ratio of 9 to 1, or $65,349 to $7,077. From the time of leaving training to age 65, the public is forecasted to gain $15,843 in net additional Social Security, Medicare, federal income, and state sales taxes. The estimated lifetime net benefit to taxpayers is $5,215 per participant. Projected taxpayer net benefits to age 65 outweigh public costs invested in college training by a ratio of 2 to 1 or $14,708 to $7,077.

Participant Public Participant PublicBenefits

Earnings $9,789 $0 $76,725 $0Fringe Benefits $2,447 $0 $19,182 $0Taxes -$2,021 $2,021 -$15,843 $15,843

TransfersUI -$152 $152 $1,135 -$1,135

CostsForegone net earnings -$12,211 -$2,416 -$12,211 -$2,416Program costs -$3,638 -$7,077 -$3,638 -$7,077

Benefits $10,063 $2,173 $81,198 $14,708Costs -$15,849 -$9,493 -$15,849 -$9,493

Total (Net) -$5,786 -$7,320 $65,349 $5,215 $70,565

Benefit/CostFirst 2.5 years Lifetime (until 65) Sum of Costs and

Benefits

Documents

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