What is “CTE” and who is Carl D. Perkins?

President Trump signed the fifth re-authorization of the Carl D. Perkins Act into law on July 31st, 2018, enabling over $6 billion in funding for CTE from 2019-2024. (Continue reading and you’ll actually understand this sentence…)

In the World of Work, the acronym CTE stands for “Career and Technical Education”. In broad brush strokes, CTE are classes and training that provide students with specific skills for specific technical jobs. Whether you call it vocational training, vo-tech, or shop class…CTE classes are pursued by over 14 million students in over 1,300 high-schools and 1,700 community colleges every year in the U.S.

In high-school, around 45% of high school students in the U.S. graduate having taken at least one CTE class. Those that take 2 or more CTE classes in high school go on to earn credentials in those subject at higher rates than average high school graduates. Vocational credentials, such as associates degrees or certificates, allow students to access “middle skill” jobs, which require more training than a high-school education (“low skill”) but less than a four-year college education (“high skill”).

This matters because 53% of jobs in the U.S. require the skills provided by vocational education, but only 43% of the workers in the U.S. are trained for these jobs. This is the definition of the term “Skills Gap”, which refers to the chronic mismatch in the U.S. between the low/high abundant skill labor force, and the middle skills jobs waiting to be filled.

Screenshot 2018-08-01 20.56.15
Credit: National Skills Coalition

In addition to preparing workers for employers desperate to hire them, CTE has one further advantage over traditional four year college education: affordability. The average tuition for a technical certificate at a community college was only $3,500 in 2016/2017. In some cases, starting salaries for CTE certificate graduates out-perform those of four-year college graduates.

To summarize: career and technical education (CTE) provides training for students in the jobs where the demand is greatest; training is less expensive than four-year college; filling the Skills Gap in the U.S. is a matter of national economic competitiveness.

As Bi-Partisan as Baseball and Apple Pie

Thankfully, addressing the national Skills Gap is an issue that crosses political boundaries. Support for vocational education has been a staple U.S. politics for nearly 40 years. At the Federal level, the law that has done most of the heavy lifting is the Carl D. Perkins Vocational Education Act of 1984 (called the Perkins Act or Perkins I by policy geeks). Since that time, the Perkins Act has been re-authorized an additional 3 times in 1990, 1998, and 2006. Most recently, President Obama sought its re-authorization in 2017.

On July 31, 2018, the Strengthening Career and Technical Education for the 21st Century Act, re-authorizing the Perkins Act for the 5th time, was passed by both the House and Senate and signed into law by President Trump.

Who the heck was Carl Perkins?

Before we explain what the Perkins Act is and how it works, who the heck was Carl Perkins and why has his name has been enshrined in law for 40 years? His New York Times obituary tells it best:

August 4th, 1984

Representative Carl Dewey Perkins of Kentucky, the driving force behind much of the nation’s social legislation, died early this afternoon in Lexington, Ky., after becoming ill on an airplane trip from Washington.

Mr. Perkins had served in the House since 1949 and was fourth in seniority in the chamber. As chairman of the House Education and Labor Committee since 1967, he had guided and nurtured through Congress such major social legislation as Federal aid to schools, college student assistance, child nutrition, coal mine safety, aid to crippled children and numerous labor measures.

While ascending to one of the highest positions in Congress, Carl Perkins acquired none of the arrogance that often accompanies such a climb. He mixed easily with colleagues in Congress but avoided the Washington cocktail circuit. He went home to his 86-acre farm nearly every weekend to chop wood, tend the livestock, ride his horses and talk to constituents.

Mary Hatwood Futrell, president of the National Education Association, said: ”For over three decades, Representative Perkins stood at the very forefront of the effort to enhance the quality of education in our nation. He was truly Mr. Education.”

The bill that bears his name does so following his untimely death in 1984.

The Perkins Legacy

The Perkins Act, including Perkins V, is fairly straightforward: the Federal Government, via the Department of Education, provides every State with a grant based on population levels. The State then re-grants these funds to high schools and community colleges to provide vocational classes and training. (In our article on the potential merger of the Department of Labor and Education, we noted that the administration of these grants was a core competency of DoE.)

For Perkins V, the funding will begin to flow in July, 2019, when $1.2 billion per year will be granted to the States, increasing slowly to $1.3 billion by 2024. The states are allowed to take up to 5% of these funds to administer the grants, provided they match these dollars with State funds. At the end of the day, roughly $1 billion a year will flow to CTE programs across the country.

Perkins in Action: California

From the 40,000 foot level, the Perkins grants seem like a no-brainer and worth doing. However, when you zoom into the local level, the grants start to feel small and of uncertain value.

Take for example, my State of California, which is the most populous state in the U.S. and therefore receives the largest Perkins grant. California has typically received around $120M per year from the Perkins allocations. By comparison, Wyoming, Washington D.C., Vermont, and other tiny states get only around $5M per year. Of this cash, roughly $50M per year goes to California community colleges and another $60M to California high school districts. (The remaining cash goes to miscellaneous vocational schools and programs.)

This sounds like a good amount of money, however, by comparison, the California Community College system receives over $9.4 billion from State and local governments, and another $5.1 billion from student fees, for a total of $14.5 billion in funding. Factoring in the $50 million Perkins grant, we have a funding stream that amounts to a whopping three tenths of a one percent of the total funding…a “drop in the bucket”.

Momentum

The analysis above isn’t to say that the Perkins grants aren’t valuable or aren’t worth doing. But it does suggest there is a worthy debate to be had about whether the relatively small level of funding is sufficient to move the needle in any substantial way. It also begs the question: what other alternatives exist for $1 billion spent on CTE vs. other jobs related initiatives? We will try and tackle these questions another day. For now, we’ll be happy to see unified, political progress on an important topic.

After all, if we’re trying to get the flywheel of political progress moving, Perkins V does add momentum to the equation in pursuit of a worthy aim.


Pledge to America’s Workers Update

Since our article on July 25th highlighted the Pledge to America’s Workers, many more companies have signed the Pledge to train workers over the next five years, including:

  • United Airlines – 15,875 workers
  • American Trucking Association – 100,000
  • FedEx – 500,000
  • Boeing – 100,000

We are planning to put together a database of these pledges, including an analysis of the number of net new training opportunities and investments they actually represent and will let you know when it’s online. Stay tuned!


 

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Micah

Micah is the author of Rethink the MBA. He works and lives in Silicon Valley.