Employer Customized Training 2004-2005 Exit Cohorts The Employer Customized Training (ECT) department of the Texas Workforce Commission (TWC) is responsible for managing the Skills Development Fund (SDF) and the Self-Sufficiency Fund (SSF), the primary programs designed to assist employers and job seekers obtain training for new skills or update existing skills. Customized training benefits employers by tailoring programs specific to the needs of the employer. Training may be provided to incumbent employees to upgrade existing knowledge, skills and abilities (KSAs). Participating employers must commit to hiring or retaining trainees after successful completion of a training program. Skills Development Fund The Skills Development Fund program assists businesses and trade unions by financing the design and implementation of customized job training projects. This fund successfully merges business needs and local customized training opportunities into a winning formula to increase the skills level and wages of the Texas workforce. 1 In FY 2005, TWC received 69 proposals and funded 23 grants averaging $372,279. SDF grants were instrumental in adding 3,351 new jobs and upgrading 8,896 current jobs to help Texas employers compete. 2 TWC pays particular attention when awarding grants to ensure that the prevailing wage for the area is met in every instance. Statewide, the average wage paid to workers trained with SDF grants had increased from $10.33 an hour in FY 1996 to $17.01 in FY 2005. In addition, all of the SDF trainees were offered one or more benefit options, such as health insurance, workers’ compensation or 401(k) plans. During Fiscal Year 2006 (September 1, 2005 - August 31, 2006), TWC awarded 31 grants totaling $10,384,566, which served 125 businesses, generated 3,127 new jobs and upgraded the skills of 10,963 workers in existing jobs. For Fiscal Year 2007, TWC has $25 million in Skills Development Funds to support high quality, customized job training projects across the state. Grants for a single business may be limited to $500,000. Businesses and trade unions must partner with an eligible applicant in order to be considered for Skills Development Fund grants. Eligible applicants are public community or technical colleges, the Texas Engineering Extension Service or a community-based organization working in partnership with one of these institutions. Self-Sufficiency Fund The Self-Sufficiency Fund Program, administered by the Texas Workforce Commission (TWC), assists businesses by designing, financing and implementing customized job training programs in partnership with public community and technical colleges, a higher education extension service, & community-based organizations for the creation of new jobs and/or the retraining of existing workforce. The goal of the Self-Sufficiency Fund is
1 2
http://www.twc.state.tx.us/svcs/funds/sdfintro.html Skills Development Fund Annual Report Fiscal Year 2005
Employer Customized Training 2004-2005 Exit Cohorts
1
to assist recipients of Temporary Assistance for Needy Families (TANF), Food Stamps, and Needy Parents to obtain training, get jobs, and become independent of government financial assistance. 3 The program is designed to meet the needs and special requirements of a business or trade union, and training extends beyond standard courses. Programs are developed with customized curriculum including company-specific instruction examples, and the classes are scheduled around the employees’ schedules. Applications are accepted year-round with awards granted on a quarterly basis. Awards may be up to $500,000 for a single business and can cover tuition, curriculum development, instructor fees, training materials, and support services, such as transportation, childcare, and work-related expenses for training participants. Contracts are typically 12 months in length. Methodology When capturing employment and earnings data for program exiters, we match social security numbers (SSNs) against the Texas Workforce Commission’s (TWC) Unemployment Insurance (UI) Wage Records database. Prior to this year, we searched the database the second quarter after a person exited a program. For example, if a program participant exited the ECT program in January 2001, we matched that person’s SSN to the UI Wage Records for the third quarter of 2001. This methodology allowed every person exiting a TWC program a period of at least six months to find gainful employment and begin earning a wage. We chose this methodology in order to be fair to every program participant in the exit cohort. This methodology presented problems for our three-year and five-year longitudinal studies, however. Specifically, linkages have to be done with several quarters in the wage records database in order to allow a full three and five years to every person exiting a program. TWC program years mirror the state fiscal year and therefore actually span different portions of two calendar years. While this does not pose a problem for our exit cohort reports because there is a natural lag in the data, it does create data issues with the longitudinal studies. This report, the 2006 Follow-Up Study, written in 2007, looks at the 2004-2005 exit cohorts. This same report will not look at 1999-2000 program exit cohorts for the five-year longitudinal reports, however. It will examine the five-year labor market results for the 2000-2001 program exiters. There is not the same lag in data, and this means that the five-year longitudinal studies could not be done properly according to the old methodology. Starting with the 2004-2005 exit cohorts, we incorporated a new methodology. Our new methodology consists of linking all exit cohort seed records to the UI Wage Records database for one snapshot quarter. That snapshot quarter is the 4th quarter of the second calendar year of a program year. For example, the 2004-2005 program year spans calendar years 2004 and 2005, so we linked the seed records to the wage records in the 4th quarter of 2005. This new methodology has strengths and weaknesses. The weakness is that it is not exactly fair to every person exiting a program, as it does not provide
3
http://www.twc.state.tx.us/svcs/funds/ssfintro.html
Employer Customized Training 2004-2005 Exit Cohorts
2
everyone the same amount of time to find employment and begin earnings wages. While it gives a person who exits a program earlier in a program year more time to find gainful employment than a person exiting late in the program year, it gives everyone at least one quarter to find work. The new methodology has several strengths. First and foremost, it is an easier way to do follow-up reporting. Any perceived inequalities in the assessment of the exit cohort’s performance in the labor market evens out by the third year, and there are no statistically significant differences between the results of the old and new methodologies. The new methodology allows for better statistical comparison because there are more controls on the data. The Labor Market and Career Information (LMCI) division of TWC received 20,603 duplicate seed records for the ECT program from ECT program personnel, and since the records were received from program personnel, the customary step of having to delete records based on certain parameters did not have to be done. Therefore, we were left with 20,603 usable duplicate seed records. We unduplicating the records by SSN to get an accurate count of the individuals served and we were left with 13,790 records. Individuals found earning more than $25,000 in the snapshot quarter were then removed from analysis to reduce the possibility of skewing statistical measures of central tendency. This left 13,133 usable, unique records for the ECT exit cohorts. The seed records were then linked to the UI Wage Records database for the 4th quarter of 2005 to determine employment and earnings. Earnings were summed across unique SSN and the 4-digit North American Industry Classification System (NAICS) code of the employer that paid the highest wages was retained for analysis. Supplemental employment linkages were performed with the U.S. Department of Defense (DOD), the U.S. Office of Personnel Management (OPM), and the U.S. Postal Service (USPS). In the past, positive matches have only been used in calculating the employment percentage because earnings data received from federal databases were incompatible with Texas’ earnings data. This is no longer the case. The federal earnings data is now compatible with our quarterly earnings figures and has been retained for analysis. Linkages were also conducted with the UI Benefits database to determine if any participants were drawing unemployment insurance benefits. The seed records were also sent to the Texas Higher Education Coordinating Board (THECB) for linkage to the public postsecondary master enrollment records for the fall semester of 2005. This linkage is used to locate any former ECT program participants who are pursuing higher education at a public postsecondary institution in Texas and therefore may not be found working. Finally, the seed records were linked to the Texas Department of Criminal Justice (TDCJ) and the Texas Bureau of Vital Statistics (TBVS) in order to determine if any former
Employer Customized Training 2004-2005 Exit Cohorts
3
program participants were either incarcerated or deceased, respectively. All records with positive matches to either of these two databases have been excluded from further analysis. The results of all of the data linkages can be seen in Table 1. The federal linkages are aggregated with the “Working Only (UI Wage Records and Federal Linkages)” number. The individual totals are indented and listed below. The “Working Only” number has been added with “Both Working and Enrolled” to comprise the “All Working” total. Individuals found enrolled in the fall of 2005 are split into two categories; “Enrolled Only” and “Both Working and Enrolled.” Individuals in the “Both Working and Enrolled” category have already been aggregated into “All Working.” Former participants who are “Enrolled Only” are added together with “All Working,” as well as those found receiving UI benefits and those individuals who could not be located to form a subtotal. It is this subtotal of 13,133 individuals that was analyzed for this report. We see in the table that 34 percent of the cohort was not located. This is not to say that those not located are not working, however. UI coverage does not extend to family farms and ranches, churches and non-profit organizations, or to independent contractors or selfemployed persons. It may also be possible that many of these individuals moved out of Texas for jobs and/or the pursuit of education. Table 1. Summary of Record Linkages % of Cohort
-----84.7 0.7 -0.0 14.3 99.7 0.0 0.3 100.0
Linkages
Working Only (UI Wage Records and Federal Linkages) -DOD -OPM -USPS Both Working and Enrolled All Working (a) Enrolled Only (b) -All Enrolled (THECB Master Enrollment file) UI Benefit (c) Not Located (d) Subtotal (a+b+c+d) TDCJ TX Vital Statistics Total
N
10,593 0 0 0 530 11,123 90 620 0 1,883 13,096 0 37 13,133
Employer Customized Training 2004-2005 Exit Cohorts
4
Results - Skills Development Fund Table 2 shows employment and earnings in the 4th quarter of 2005 (4Q2005) by training provider. Amarillo College (92.1%), South Plains College (91.8%) and Hill College (91.7%) were the top three training providers whose exiters had the highest employment in Q+2, with Southwest Texas Junior College and Vernon College rounding out the top five. Exiters from Lee College had the highest median quarterly earnings at $18,118 followed by Brazosport College at $17,947. Exiters from Brazosport College also had the highest mean quarterly earnings with $17,938. Overall, the cohort had over 86 percent employment with median quarterly earnings of $9,063. The mean quarterly earnings for the group were $10,308. Table 2. Employment and Earnings for All Working in 4Q2005 by Training Provider N % Median Mean Working Working Earnings Earnings
591 244 632 2,332 449 517 297 134 596 1,524 1,835 416 55 9,622 92.1 82.2 90.0 88.5 82.5 91.7 80.1 91.8 87.4 90.7 79.1 78.5 90.2 86.1 $18,118 $5,698 $17,947 $11,738 $7,549 $12,292 $6,380 $12,618 $6,376 $7,429 $5,532 $8,842 $11,845 $9,063 $17,607 $7,214 $17,938 $12,466 $8,279 $12,261 $7,142 $13,115 $6,402 $8,741 $6,044 $9,152 $11,658 $10,308
Training Provider
Amarillo College Angelina College Brazosport College Dallas County Community College District El Paso Community College District Hill College Howard College South Plains College South Texas College Southwest Texas Junior College Temple College Texas Engineering Extension Service Vernon College Total
N
642 297 702 2,635 544 564 371 146 682 1,681 2,319 530 61 11,174
Employer Customized Training 2004-2005 Exit Cohorts
5
Figure 1 shows that SDF participants who were employed in 4Q2005 earned almost three times more than the quarterly federal poverty threshold for a family of two of $3,208 per quarter in 2005. The quarterly federal poverty threshold was computed by dividing the annual poverty guideline for a family of two of $12,830 by four. The federal poverty guidelines can be found at http://aspe.hhs.gov/poverty/05poverty.htm.
Figure 1. Median Quarterly Earnings in 4Q2005
10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0
$9,063
$3,208
SDF
Fed Pov Threshold
Table 3 shows employment and earnings in the 4th quarter of 2005 (4Q2005) by completion status. Participants who completed training successfully had the highest employment percentage in the target quarter with over 86 percent employed. Participants who did not successfully complete training had the highest median quarterly earnings mark at $9,310, but successful participants had the highest mean earnings, averaging $10,276 in 4Q2005. Table 3. Employment and Earnings for All Working in 4Q2005 by Completion Status N % Median Mean Working Working Earnings Earnings
8,156 956 510 9,622 86.3 81.9 92.2 86.1 $8,828 $9,310 $11,184 $9,063 $10,276 $9,770 $11,825 $10,308
Completion Status
Successful Not Successful Unknown Total
N
9,454 1,167 553 11,174
Employer Customized Training 2004-2005 Exit Cohorts
6
Participants who were employed at the beginning of training had better employment after exit than participants who were not employed, according to Table 4. The employed group also had higher median and mean earnings in the target quarter. These statistics are not surprising. Significant portions of SDF grant funds go toward re-training incumbent workers. Table 4. Employment and Earnings for All Working in 4Q2005 by Employment Status Employment Status
Not Employed Employed Total
N
3,954 7,220 11,174
N % Median Mean Working Working Earnings Earnings
3,115 6,507 9,622 78.8 90.1 86.1 $6,255 $10,712 $9,063 $7,526 $11,640 $10,308
General Medical and Surgical Hospitals was the most common industry sector of employment for program exiters in the fourth quarter of 2005, according to Table 5. Executive, Legislative, and Other General Government Support was the second most common sector, followed by Converted Paper Product Manufacturing. Program exiters working in the Aerospace Product and Parts Manufacturing industry sector had the highest median quarterly earnings in the target quarter with $18,272. Participants employed in the Basic Chemical Manufacturing had the second highest median quarterly earnings with $17,838 and the highest mean quarterly earnings with $18,013. Six of the top ten industries of employment for SDF are included in Governor Rick Perry’s Texas Industry Cluster Initiative (Table 5). 4 Industry clusters are a concentration of businesses and industries in a geographic region that are interconnected by the markets they serve, the products they produce, their suppliers, trade associations and the educational institutions from which their employees or prospective employees receive training. Industry clusters are economic in nature and not geographically bounded. 5 The Texas Workforce Commission has identified the following six industry clusters as having unlimited potential for the state’s future: advanced technologies and manufacturing; aerospace and defense; biotechnology and life sciences; information and computer technology; petroleum refining and chemical products; energy. 6
4 5
http://www.governor.state.tx.us/divisions/press/initiatives/Industry_Cluster/Industry_Cluster_SP/view http://www.governor.state.tx.us/divisions/press/initiatives/Industry_Cluster/Industry_Cluster_FAQ 6 http://www.governor.state.tx.us/divisions/press/pressreleases/PressRelease.2004-10-20.2446
Employer Customized Training 2004-2005 Exit Cohorts
7
Industries within clusters fall into one of three categories: core, ancillary, or support. Table 5 shows which industry cluster, as well as which category within each cluster, the six industries falling within the clusters are categorized as. Table 5. Top 10 Industries of Employment for All Employed in 4Q2005 N Median Mean Working Earnings Earnings
1,157 782 680 665 584 $11,573 $8,477 $6,640 $17,838 $18,272 $12,542 $9,923 $7,385 $18,013 $17,746 Petroleum; Advanced Tech (Core) Advanced Tech (Core) Aerospace; Advanced Tech; Energy; Petroleum; Information (Support) Energy (Core) Energy (Core)
Industry Sector
General Medical and Surgical Hospitals Executive, Legislative, and Other General Government Support Converted Paper Product Manufacturing Basic Chemical Manufacturing Aerospace Product and Parts Manufacturing Wireless Telecommunications Carriers (except Satellite) Household Appliance Manufacturing Electric Power Generation, Transmission and Distribution Other Nonmetallic Mineral Product Manufacturing Household and Institutional Furniture and Kitchen Cabinet Manufacturing
Governer's Cluster
Biotechnology (Core)
453 436 342 313
$6,610 $8,246 $12,787 $13,245
$7,089 $9,119 $13,239 $13,145
287
$5,916
$6,646
Employer Customized Training 2004-2005 Exit Cohorts
8
Results - Self –Sufficiency Fund Table 6 shows employment and earnings in the 4th quarter of 2005 (4Q2005) by training provider. Participants trained by Southwestern Meat Packers Foundation, Inc. had the highest employment in the quarter with 83.5 percent. Exiters from Dallas County Community College had the second highest employment (77.4%). Exiters from El Paso Community College District had the highest median quarterly earnings at $9,099 followed by Southwestern Meat Packers Foundation, Inc. at $5,390. That group also had the second highest mean quarterly earnings with $6,392. Overall, the cohort had over 77 percent employment with median quarterly earnings of $4,943. The mean quarterly earnings for the group were $5,651. The cohort’s overall median quarterly earnings surpassed the quarterly federal poverty threshold for a family of two. Table 6. Employment and Earnings for All Working in 4Q2005 by Training Provider N Working
96 n/a 212 141 1,014 45 1,509
Training Provider
Dallas County Community College District El Paso Community College District Houston Community College System Macedonia Outreach Center Inc. Southwestern Meat Packers Foundation Inc. Texas State Technical College Total
N
124 n/a 299 236 1,215 74 1,951
% Working
77.4 33.3 70.9 59.8 83.5 60.8 77.3
Median Earnings
$4,060 $9,099 $3,978 $2,791 $5,390 $5,074 $4,943
Mean Earnings
$4,565 $9,099 $4,485 $3,020 $6,392 $4,939 $5,651
Note: Cells with values less than 5 are marked “n/a” to protect the privacy of cohort members.
Employer Customized Training 2004-2005 Exit Cohorts
9
Table 7 shows employment and earnings in the 4th quarter of 2005 (4Q2005) by completion status. Excluding the Unknown group, participants who dropped out of training had the highest employment percentage in the target quarter with 87.5 percent employed. Participants who successfully completed training had the highest median quarterly earnings mark at $4,999, as well as the highest mean earnings, $5,735. Table 7. Employment and Earnings for All Working in 4Q2005 by Completion Status N % Median Mean Working Working Earnings Earnings
1,448 53 7 n/a 1,509 77.7 68.0 87.5 100.0 77.3 $4,999 $3,742 $3,450 $3,378 $4,943 $5,735 $3,590 $4,321 $3,378 $5,651
Completion Status
Successful Not Successful Dropped out Unknown Total
N
1,864 78 8 n/a 1,951
Note: Cells with values less than 5 are marked “n/a” to protect the privacy of cohort members.
Table 8 shows that participants who were employed at the beginning of training had a higher employment percentage in the target quarter, 88.3 percent. The employed group also had higher median and mean earnings in the target quarter. We would expect to see higher employment in the Employed group, because participants most likely kept working while they were receiving training. The fact that the Employed group had higher median earnings than those who were not employed is evidence that continued employment carries with it a wage premium. Table 8. Employment and Earnings for All Working in 4Q2005 by Employment Status N % Median Mean Working Working Earnings Earnings
739 770 1,509 88.3 69.1 77.3 $5,856 $3,896 $4,943 $6,963 $4,393 $5,651
Employment Status
Employed Not Employed Total
N
837 1,114 1,951
Employer Customized Training 2004-2005 Exit Cohorts
10
Animal Slaughtering and Processing was the most common industry sector of employment for SSF program exiters in the fourth quarter of 2005 (Table 9). Exiters employed in that sector also had the highest mean quarterly earnings, $7,035. Participants employed in the General Medical and Surgical Hospitals sector posted the highest median quarterly earnings with $6,477. Table 9. Top 10 Industries of Employment for All Employed in 4Q2005 N Median Mean Working Earnings Earnings
516 148 87 71 63 45 45 32 30 25 $5,705 $5,635 $3,816 $2,689 $6,477 $5,425 $3,652 $1,246 $3,350 $2,244 $7,035 $6,020 $5,163 $2,978 $6,802 $6,722 $3,492 $1,694 $3,089 $2,380
Industry Sector
Animal Slaughtering and Processing Greenhouse, Nursery, and Floriculture Production Poultry and Egg Production Employment Services General Medical and Surgical Hospitals Other Food Manufacturing Nursing Care Facilities Home Health Care Services Other General Merchandise Stores Limited-Service Eating Places
Employer Customized Training 2004-2005 Exit Cohorts
11
Table 10 displays employment and earnings for all working in the target quarter by course name. These are the names of the actual classes taken by program participants. Course names were unknown for over two-thirds of participants. The largest number of known participants attended ER/AG/CS/ZZ class, and that group had 66.5 percent working in 4Q2005, with median quarterly earnings of $3,609. When just looking at classes with more than five participants enrolled, those in the Phlebotomy PLAB 1060 had total employment, and those in the Nurse Aide NURA 1060 class had the highest median earnings at $7,219. Table 10. Employment and Earnings for All Working in 4Q2005 by Course Name N % Median Working Working Earnings
13 74 143 n/a 67 16 37 7 6 n/a 32 1,110 1,509 59.1 58.3 66.5 100.0 62.0 72.7 82.2 87.5 100.0 33.3 61.5 82.8 77.3 $7,044 $2,890 $3,609 $4,320 $2,569 $7,219 $6,789 $5,459 $4,398 $9,099 $4,436 $5,314 $4,943
Course Name
Commercial Vehicle Operation Customer Service ER/AG/CS/ZZ Job Readiness Training Nurse Aide Nurse Aide NURA 1060 Nurse Aide NURA1001 Phlebotomy PLAB 1023 Phlebotomy PLAB 1060 Professional Truck Driver Training Truck and Bus Driver/Commercial Vehicle Operation Unknown Total
N
22 127 215 n/a 108 22 45 8 6 n/a 52 1,340 1,951
Mean Earnings
$6,287 $2,881 $3,728 $4,644 $3,174 $6,408 $6,222 $6,054 $4,786 $9,099 $4,391 $6,234 $5,651
Note: Cells with values less than 5 are marked “n/a” to protect the privacy of cohort members.
Employer Customized Training 2004-2005 Exit Cohorts
12
Classification of Instructional Program (CIP) codes are arranged in two, four, and sixdigit hierarchical order, with degree credentials awarded at the six-digit level. Several classes that are similar or related can be classified under the same six-digit CIP title, and that is why there are fewer CIP titles in Table 11 than there were classes in Table 10. Table 11 shows employment and earnings for all working by CIP title. Participants grouped under the CIP title Medical/Clinical Assistant had the highest employment at almost 93 percent, as well as the highest median earnings in 4Q2005 at $5,218. The majority of participants with known CIP titles were classified under Business/Commerce, General. That group had 66.5 percent employment with median earnings of $3,609. Table 11. Employment and Earnings for All Working by CIP Title N % Median Mean Working Working Earnings Earnings
143 74 13 123 46 1,110 1,509 66.5 58.3 92.9 68.7 59.7 82.9 77.3 $3,609 $2,890 $5,218 $4,201 $5,102 $5,314 $4,943 $3,728 $2,881 $5,469 $4,548 $5,029 $6,234 $5,651
CIP
Business/Commerce, General Interpersonal and Social Skills. General Medical/Clinical Assistant Nurse/Nursing Assistant/Aide and Patient Care Assistant Truck and Bus Driver/Commercial Vehicle Operation Unknown Total
N
215 127 14 179 77 1,339 1,951
Employer Customized Training 2004-2005 Exit Cohorts
13