Image by Kanan Shah via COURIER
Image by Kanan Shah via COURIER

Employer-sponsored training fell 42% from 1996 to 2008. Two representatives aim to reverse that trend.

Income inequality in the United States is at the highest level it’s ever been since the Census Bureau started tracking it in 1967, and U.S. Rep. Cindy Axne (D-IA) and Rep. Raja Krishnamoorthi (D-IL) are the latest lawmakers to present a plan to help address the issue.

Axne and Krishnamoorthi introduced legislation this week to give small and mid-sized businesses a 20% tax credit for training workers. Axne believes this measure would reduce inequality by incentivizing companies to provide low-skilled workers with training to improve and refine their skills.

The Investing in American Workers Act would encourage businesses to invest in apprenticeship programs, partner with career and technical education schools, and work with community colleges, labor organizations, and industry partnerships. 

“Today’s fast-paced economy requires regular training to elevate and maintain Americans’ competitive skills so they don’t fall behind,” Axne said in a statement. “I know that when companies invest in high-quality workforce training programs, both the worker and the company succeed.”

According to the Council of Economic Advisers, the percentage of workers receiving employer-sponsored training fell 42% from 1996 to 2008. The Investing in American Workers Act aims to reverse that trend by targeting workers earning less than $82,000 annually to receive employer-sponsored training. 

The impact of the legislation, should it pass, could be substantial. There are more than 30 million small businesses employing 58.9 million Americans in the United States, according to data from the Small Business Administration. While the exact number of mid-size businesses is harder to determine, Ohio State University’s National Center for the Middle Market estimated in 2018 that there are 200,000 mid-sized businesses in the United States.

Alastair Fitzpayne, executive director of the Aspen Institute Future of Work Initiative, highlighted the importance of this sort of incentivized worker training program in a statement.

“New technologies are transforming the 21st century economy, changing some jobs and replacing others. To succeed, workers must have access to education and skills training over the course of their careers,” Fitzpayne said.

The Aspen Institute first identified the decline in workforce investment and Fitzpayne believes this tax credit will “will encourage business to increase their investments in their most important asset — their workers — and make a much-needed reform to the tax code that puts human capital investments on par with research investments.”

The Investing in American Workers Act marks just the latest worker-related legislation from Axne. In the past month alone, she’s also introduced legislation to strengthen apprenticeship programs and assist farmers, and her bill to increase transparency and accountability for companies that outsource jobs also passed the House with bipartisan support.

Axne and Krishnamoorthi’s legislation joins its companion legislation in the Senate, which U.S. Sen. Mark Warner (D-VA) introduced in February of 2019.