As part of the Investing in America's Workforce initiative, the Cleveland Fed's Drew Pack and Kyle Fee recently wrote Understanding the Disconnect between Economic Development and Workforce Development Systems. The report focuses on the alignment of these two systems and highlights the common barriers and opportunities for improving alignment across several metro areas.

The economic development system is designed to encourage business and job growth, while the workforce development system works to ensure individuals have the education, skills, and training needed to obtain jobs. When the two systems are aligned, job seekers receive training and skill development that employers demand—resulting in higher wages and career advancement—and employers have access to a skilled workforce that enables growth and increased productivity. Beyond benefiting employees and employers, a functional and aligned system has economic benefits to the broader community.

However, in a survey of stakeholders in Cleveland, Ohio; Lexington, Kentucky; Pittsburgh, Pennsylvania; and Youngstown, Ohio, only 24 percent said the two systems were very aligned. Challenges to alignment included:

  • • The lack of a lead entity or backbone organization
  • • Communication, data, and information gaps
  • • Goals and funding
  • • Lack of critical support services

The report explores best practices to address these alignment challenges.

In addition to this report, chapters in the book Investing in America's Workforce: Improving Outcomes for Workers and Employers examine workforce development systems/resources and regional partnerships. Some of these chapters include:

By Whitney Strifler, economic policy analysis specialist in the Atlanta Fed's research department