[Senate Hearing 116-175]
[From the U.S. Government Publishing Office]
S. Hrg. 116-175
BRIDGING THE SKILLS GAP: POLICIES TO HELP
IOWA'S WORKERS AND SMALL BUSINESSES THRIVE
=======================================================================
FIELD HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
AUGUST 16, 2019
__________
Printed for the use of the Committee on Small Business and
Entrepreneurship
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
39-544 PDF WASHINGTON : 2020
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED SIXTEENTH CONGRESS
----------
MARCO RUBIO, Florida, Chairman
BENJAMIN L. CARDIN, Maryland, Ranking Member
JAMES E. RISCH, Idaho MARIA CANTWELL, Washington
RAND PAUL, Kentucky JEANNE SHAHEEN, New Hampshire
TIM SCOTT, South Carolina EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa CORY A. BOOKER, New Jersey
JAMES M. INHOFE, Oklahoma CHRISTOPHER A. COONS, Delaware
TODD YOUNG, Indiana MAZIE K. HIRONO, Hawaii
JOHN KENNEDY, Louisiana TAMMY DUCKWORTH, Illinois
MITT ROMNEY, Utah JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri
Michael A. Needham, Republican Staff Director
Sean Moore, Democratic Staff Director
C O N T E N T S
----------
Opening Statements
Page
Ernst, Hon. Joni, a U.S. Senator from Iowa....................... 1
Witnesses
Panel 1
Reynolds, Hon. Kim, Governor, State of Iowa, Des Moines, IA...... 3
Panel 2
Pol, Ms. Lana K., President and Owner, Geetings, Inc., Pella, IA. 13
Denson, Mr. Rob, President, Des Moines Area Community College,
Ankeny, IA..................................................... 18
Cramer, Mr. Reynolds W., President and CEO, Fareway Stores, Inc.,
Boone, IA...................................................... 27
Alphabetical Listing
Cramer, Mr. Reynolds W.
Testimony.................................................... 27
Prepared statement........................................... 28
Denson, Mr. Rob
Testimony.................................................... 18
Prepared statement........................................... 22
Ernst, Hon. Joni
Opening statement............................................ 1
Pol, Ms. Lana K.
Testimony.................................................... 13
Prepared statement........................................... 16
Reynolds, Hon. Kim
Testimony.................................................... 3
Prepared statement........................................... 6
BRIDGING THE SKILLS GAP: POLICIES
TO HELP IOWA'S WORKERS AND SMALL
BUSINESSES THRIVE
----------
FRIDAY, AUGUST 16, 2019
United States Senate,
Committee on Small Business
and Entrepreneurship,
Des Moines, IA.
The Committee met, pursuant to notice, at 10:28 a.m., in
Rooms 302-303, Iowa Events Center, Hon. Joni Ernst, presiding.
Present: Senator Ernst.
OPENING STATEMENT OF HON. JONI ERNST, A U.S. SENATOR FROM IOWA
Senator Ernst. The Senate Committee on Small Business and
Entrepreneurship will come to order. Thank you all for being
here today, and welcome to all of our wonderful witnesses.
Today's hearing is titled ``Bridging the Skills Gap:
Policies to Help Iowa's Workers and Small Businesses Thrive.''
It will examine some of the innovative ways that Iowa
employers, schools, and policymakers are collaborating to
address Iowa's workforce challenges and how Federal policies
can support these efforts.
Between 2008 and 2016, the U.S. economy consistently
underachieved. Economic growth and wages were stagnant, leaving
many middle-class households struggling to make ends meet. Many
folks stopped looking for work altogether.
Over the past couple of years, both the Federal Government
and the State of Iowa have taken significant steps to help fuel
economic growth and prosperity, from rolling back costly
regulations to providing much-needed tax relief for families
and job creators. Thanks to these pro-growth policies, the
economic recovery has finally reached Main Street, bringing
folks back into the workforce and raising wages.
Since President Trump was elected, the U.S. economy has
added 6.2 million jobs, and we have now seen 12 consecutive
months with year-over-year wage growth of over three percent.
Prior to this stretch, we had not had three percent wage growth
since April of 2009. Iowa's economy has added nearly 50,000
jobs since the 2016 election, including more than 15,300 jobs
in manufacturing. Our unemployment rate is at a record low--2.4
percent, one of the lowest rates in the country.
As I meet with folks on my 99-county tour, one of the most
common concerns I hear is that employers are struggling to
attract and retain qualified employees. Business is booming,
and they want to hire people, but they are struggling to find
folks with the skills they need.
There are roughly 80,000 job openings in Iowa right now and
only 41,400 unemployed Iowans looking for work. Many of these
openings are in high-demand industries, like health care and
manufacturing. This presents a challenge to Iowa's economy, but
it is also a tremendous opportunity to lift folks out of
poverty and into good-paying jobs. To make this happen, we need
to help folks overcome barriers to self-sufficiency, get them
into the workforce, and help them obtain the skills they need
to pursue careers in high-demand fields.
The U.S. spends nearly $1 trillion annually on over 80
programs to help those in need. While these programs are well-
intended, they are often ineffective at lifting folks out of
poverty. Rather than helping recipients get back on their feet
and advance, they have a tendency to trap them in the cycle of
poverty. Sometimes, they even have cliff effects, which
penalize folks when they gain employment or are awarded a
raise.
That is why I recently reintroduced the EMPOWERS Act.
Legislation would allow states to apply for temporary waivers
to reform two or more of these programs. To receive a waiver,
states would submit a proposal for a cost-neutral, pilot
project designed to reduce poverty, while promoting employment,
savings, financial literacy, and family stability. This bill
would empower states to develop and test innovative solutions
to help folks overcome barriers to self-sufficiency and reach
their full potential. In doing so, it would help get more folks
into the workforce.
It is also critical that we help low-income workers obtain
the skills they need to work in good-paying, high-demand jobs.
In Iowa, there is a particularly strong need to fill middle-
skill jobs, which require less than a four-year college degree,
but more than a high school diploma.
In 2015, roughly 55 percent of all jobs in Iowa were
middle-skill jobs, while just 32 percent of Iowa workers were
middle skilled. However, to receive Federal Pell grants,
students must participate in over 600 hours of instruction for
at least 15 weeks. Many training programs for high-demand,
middle-skill jobs do not meet these requirements, which makes
it challenging for folks with low to moderate incomes to afford
these kinds of training. That is why I have co-sponsored the
Jumpstart Our Businesses by Supporting Students, or JOBS Act, a
bipartisan bill that would allow folks to receive Pell grants
for short-term job training programs.
One of the fastest growing middle-skill jobs in our State
is wind turbine technicians. There are over 9,000 wind jobs in
Iowa, and 1,800 of those are in operations and maintenance.
Despite the growth of the industry, little analysis has been
done to catalog the diverse skill set needed for the various
wind tech positions. As a result, there are not minimum
training standards, and when technicians move from one employer
to the next, they often have to be retrained.
Last month, I introduced the Wind Workforce Modernization
and Training Act, bipartisan legislation that would address
this issue by authorizing a report to assess the needs of the
wind technician workforce and establish recommendations for a
credentialing program. By identifying the specific skill sets
required for wind technicians, the industry will be able to
streamline training programs, reduce those training costs, and
provide wind technicians with the competency to move between
different projects without the need for new training. The bill
would also provide resources for schools to purchase large
pieces of wind equipment for use in the training of wind
technician students. These are just a few examples.
To keep our economy moving, we must identify policies to
connect the workforce of tomorrow with high-demand jobs and
industries. No one understands this like Governor Kim Reynolds,
who has been a pioneer in workforce development. As the 43rd
Governor of our great State, she has worked tirelessly to
modernize our workforce and ensure that prosperity reaches
every Iowan.
Through her Future Ready Iowa initiative, the Governor has
implemented an innovative, State-wide strategy to address
Iowa's skills gap, setting a goal for 70 percent of Iowa
workers to attain a level of education or training beyond high
school by 2025. This is critical as the percentage of Iowa jobs
that require some form of post-secondary education is expected
to grow in the coming years, reaching 68 percent by 2025.
Future Ready Iowa is developing Iowa's talent pipeline and
connecting folks to good-paying jobs. This cutting-edge
initiative is the envy of other states. And, as a result of her
leadership, Governor Reynolds was recently appointed to the
American Workforce Policy Advisory Board to help create a
national strategy to address the skilled workforce shortage.
Governor Reynolds, I am so glad you are able to join us
today to discuss some of the great work that you are doing and
how the Federal Government can help support your efforts. With
that, Governor Reynolds, we would love to hear from you with
your opening statement.
STATEMENT OF HON. KIM REYNOLDS, GOVERNOR, STATE OF IOWA, DES
MOINES, IA
Governor Reynolds. Well, thank you, Senator Ernst. It is a
pleasure to be with you today to discuss the important issue of
workforce development and building the talent pipeline of the
future.
When you visit all 99 counties in Iowa each year like
Senator Ernst and I do, you hear a lot of concerns from Iowans.
What struck me from my very first days as a lieutenant governor
is how common and universal the concerns were about workforce
development. Employers across all sectors were struggling to
find workers with the right mix of skills for their open jobs.
Iowa workers of all ages were looking for the right education
and training to help them adapt to a changing world. It was
this range of concerns that convinced me my number one priority
as Governor needed to be doing everything possible to help
Iowans of all ages prepare for the cutting-edge careers of the
21st century economy.
By closing the skills gap, we can help Iowans pursue a
career that they love, that will provide for their future. This
is not just an economic issue. It is also a vital quality-of-
life issue.
Before I outline some of the initiatives underway in Iowa,
I want to express my appreciation to Senator Ernst for the
strong partnership we have with the Federal Government. Rather
than pursuing a new Federal program for every problem, we need
people in Congress who, like Senator Ernst, understand that
more flexibility to the states to effectively and creatively
implement solutions is a good thing.
Specifically, I know Senator Ernst has reintroduced, as you
heard, the EMPOWERS Act, which will provide states with waivers
to integrate and reform multiple Federal means-tested programs.
This would be a significant step forward for states like Iowa,
looking to be innovative in addressing issues of employment,
financial literacy, family stability, and, of course, self-
sufficiency.
In addition, I appreciate the Senator's focus on helping
address the critical and immediate workforce need with the Wind
Workforce Modernization and Training Act. We all know that Iowa
is the tip of the spear in the wind revolution. That has
created enormous demand for skilled workers to maintain the
more than 4,100 wind turbines in Iowa today. This bill would
greatly enhance the wind technician training programs at seven
of our Iowa community colleges, as well as Iowa State and the
University of Iowa.
So, at the State level, our workforce development work has
ramped up considerably over the last couple of years. In 2017,
I am proud to say that the Iowa legislature passed the Future
Ready Iowa Act unanimously. Understanding that a high school
diploma is simply not enough to thrive in the modern economy,
the goal of Future Ready Iowa is for 70 percent of Iowans in
the workforce to achieve education and training beyond high
school by the year 2025. To accomplish this, the legislature
approved more than $16 million this year to support three
innovative new programs.
The $13 million that went to the Last-Dollar Scholar
Program will help pay tuition for designated two-year degree
programs. This will create opportunities for good-paying
careers that meet employers' needs for more skilled workers
while growing our economy. Both new high school graduates, as
well as adults already in the workforce, or unemployed, can
participate in this program.
The $1 million Future Ready Iowa grant program provides
stipends to Iowans who left college after earning at least half
the credits toward a four-year degree in a high-demand field,
and who return to complete their degree. This will be an
important way to address the shortages that exist in a number
of occupations requiring a four-year degree.
And, lastly, the legislature appropriated $1.2 million to
the Future Ready Iowa Employer Innovation Fund, and it is a
matching grant opportunity for employers and other partners to
collaborate and carry out innovative, creative initiatives to
address local workforce issues.
In addition to a degree, there is probably no better way to
prepare someone for a successful career than on-the-job
training. Apprenticeships combine work-based, on-the-job
learning with relevant, technical classroom education. In some
fields, such as nursing, welding, building maintenance,
computer support, culinary, and others, this kind of hands-on
training is the best way to prepare for the job.
The State of Iowa provides grants to support the
development and operation of apprenticeship programs, including
high school apprenticeship programs, employer-driven programs,
and those sponsored by labor and trade associations.
Probably our most unique apprenticeship program is run by
the Iowa Department of Corrections, statewide. In all nine
institutions, registered apprenticeships are available in 25
occupations, with 350 registered apprentices, and 200 who have
earned their national certification. This is a remarkable way
to both help Iowa's workforce needs, and to help ex-offenders
find successful career pathways after prison.
Finally, I would like to discuss an issue that has been
near and dear to my heart since being elected Lieutenant
Governor in 2010, and that is STEM--Science, Technology,
Engineering, and Mathematics. In today's fast-changing,
information-based world, there are enormous opportunities in
these fields. We need to inspire more young people to have a
passion for STEM-related fields and to position themselves to
thrive in a global economy. Iowa's nationally recognized STEM
initiative has a goal of increasing student interest and
achievement in STEM, and promoting STEM economic development,
specifically designated for underrepresented and underserved
students.
This is not a Government-run program but, instead, a
public-private partnership with strong bipartisan support. One
example of the work of the STEM initiative is the STEM BEST
Program. BEST stands for Businesses Engaging Students and
Teachers. It really fosters a learning environment where
students are able to participate in real workplace projects
designed by business professionals and teachers, and apply K-12
STEM skills, knowledge, and behaviors needed for STEM careers.
So, I am proud to say that, to date, there are more than 50
STEM BEST programs in Iowa, involving 54 school districts,
5,000 students, and more than 450 business and community
partners. So, I am grateful for how Iowans have rolled up their
sleeves and came together on the issue of STEM. From educators,
to businesses, to legislators of both political parties, it
really is a model for us to follow in solving workforce
development needs of the future.
So, again, thank you for inviting me today. I want to thank
Senator Ernst for bringing the attention of the U.S. Senate
onto these very important issues for Iowans, and I would be
happy to answer any questions that you may have.
[The prepared statement of Governor Reynolds follows:]
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Senator Ernst. Thank you very much, Governor Reynolds, and
thank you for participating. This is a very important issue for
Iowans, as both of us have heard out on our 99-county tours.
So, Governor, what can other states and the Federal
Government learn from Future Ready Iowa?
Governor Reynolds. Well, I think it is a great example of
how we have been able to come together and really break down
barriers and align opportunities to meet the different needs in
different areas in the State, and it really started by
listening.
With Future Ready Iowa, it is based on a state-wide
conversation. So, we brought in stakeholders, employers,
educators, industry experts, non-profits, workers, everybody
that has a role in really helping Iowans find opportunities to
be successful. So, it was not just something that the
Government cooked up. We spent a lot of time all year,
listening and trying to address the barriers that we were
hearing. It is a bold goal, so I think you always want to set
your sights high and do everything that you can to achieve
that. We are at about 58 percent right now, so I think we are
starting from a pretty good position, and we have an
opportunity to reach that by 2025.
And, as I said in my remarks, it really is a quality-of-
life issue. I think sometimes it is easy when we look at
workforce development issues to only look at maybe the economic
side of the equation. But, this is really an opportunity to
provide prosperity in every single corner of the State.
And, what I have enjoyed from my agencies, when you look at
Department of Education Workforce Development, Department of
Human Services, Department of Health, the Iowa Finance
Authority, and Corrections, we are all sitting at the table
making sure that we are not duplicating our efforts, that we
have a simple way to enter into the programs. And, I think when
you do that, and bring everybody to the table and make sure you
are not duplicating services, it makes it easier to scale and
get the results that we are looking for.
I will point out one more thing. So, it is working. We are
doing the Last-Dollar Scholars right now. With very little
turnaround time, we have had almost 12,000 eligible, recent
high school graduates that will be participating in the Last-
Dollar Scholars, and almost 26,000 eligible adults that are
participating right now. We will get the final numbers later,
and I think President Denson will give you some statistics on
that, too. But, you know, we have to get the word out. But
people are responding, and I am excited about making a
difference for Iowans through this program.
Senator Ernst. Well, that is outstanding. And I do talk a
lot about Future Ready Iowa, not just here in the State of
Iowa, but when we are engaging other leaders from other states,
as well. I do think that you have set a standard that other
states should hope to emulate, so thank you very much for that.
During the recession and in its aftermath, many low-income
Iowans were left behind. The labor force participation rate had
plummeted, and while it has risen quite a bit this year and is
still one of the highest in the country, it remains below pre-
recession highs. What are some of the obstacles that are
preventing able-bodied Iowans from rejoining the workforce, and
how can the EMPOWERS Act help folks overcome some of those
obstacles?
Governor Reynolds. Well, again, I think it is connecting
the State and the Federal opportunities and the programs that
you have available to Iowans in need. So, we have tried to
align and coordinate all of ours, and we want to make sure when
we are trying to access the Federal programs that are a part of
the solution, that that is not driving requirements based on
individual agencies. So, coordinating and aligning more of
those.
And I think, you know, it is really important that we meet
Iowans where they are at. We cannot expect them to come to us.
We need to get out in the communities, meet them where they are
at, make sure that they are aware of the opportunities that
exist. It is also making sure that we are providing the support
system that they need. A lot of times Iowans are facing some
significant challenges, whether it is a single mom trying to
make ends meet or working two or three jobs. We want to make
sure, as we are trying to help them get the skills and
advance--you mentioned that in your comments--that we are not
kind of cutting the legs out from underneath them by taking
that support system away, implementing the cliff effect, that
we are not having that happen.
So, flexibility that we can provide to give states the
opportunity to coordinate with the programs at the Federal
level and the State level, again, streamlining that. I think
the more that we have that single point of entry, based on the
needs in different states, that will allow us to scale and get
the information to more Iowans, to be successful and
participate in the programs, while supporting the support
system that they need.
Senator Ernst. Yes. Thank you. The cliff effect is one
thing that we really do want to overcome. I just remember back
in my time in the State Senate--and you are very familiar with
the area that we represented in Taylor County--a young, single
mom that actually faced that cliff effect with a promotion. She
was going to lose all of her assistance, and she struggled with
taking that promotion, knowing that she would actually take
home less money every month by being promoted at work. And it
was a struggle. To her credit, she did take the promotion. But,
we have to find ways to overcome that so that other young moms
are not facing that, other young families that are struggling
are not facing that cliff effect.
Governor Reynolds. Or, they ask to have their hours reduced
because they are seeing a decrease in their pay and it cannot--
and that is one of the--with the Employer Innovation Fund
through the Future Ready Iowa, we have--some of the
recommendations or the programs that have been submitted deal
with daycare. So, I am excited to see how some of those play
out and how we can maybe scale those, as well.
Senator Ernst. Excellent. Well, thank you.
One of the Federal programs designed to help vulnerable
Americans is Pell grants, which provide need-based financial
assistance for college students. Unfortunately, students are
unable to use the Pell grants to participate in their short-
term job training programs, even though these programs are
usually designed to lead directly to good-paying and high-
demand jobs. How would ending the bias against short-term
training impel or help Iowa accomplish the goals that you have
laid out for Future Ready Iowa?
Governor Reynolds. Well, I think just like flexibility of
the states is a good thing, I think flexibility to students is
a good thing, as well. So, we spend a lot of time talking about
how there are multiple pathways to great careers in the State
of Iowa, and that does not always mean it is a four-year
degree. Many times it is, but there are tremendous
opportunities for Iowans through a certification program, an
apprenticeship program, a two-year Associate's.
And, what I have seen is, it is about providing confidence
and competing, and, so, the more that we can start these young
people and help them find their passion, help them see what
that pathway looks like and those short wins along the way. It
does not mean that they have to stop there, but we want to make
sure that they know what the options are, the many paths that
they have to get there.
And really, what we are trying to develop--and by making
that program more flexible, you are doing that--is to create
lifelong learners. In this technical world in which we live, in
this disruptive economy, you are going to have to--we are going
to have to train and educate Iowans to be adaptable to what the
future holds. And, so, I think any time that you can start and
engage them and help them see that it is attainable by short
wins along the way, that is a really, really good thing.
Senator Ernst. Excellent. And, as you discussed in your
testimony, one of the things you have focused on is developing
more work-based learning opportunities, and that is amazing.
Iowa has really made some great strides here. And, so, research
shows that folks who complete apprenticeships earn an
additional $240,000 over the course of their careers, but
overall, the United States remains behind other developed
countries when it comes to apprenticeships. In your experience,
what are some of the obstacles that prevent businesses from
offering work-based learning?
Governor Reynolds. Well, I think sometimes it is a fear of
the unknown, so they do not know where to start or how to
start. So, we are working really hard to make it as easy as
possible. We have a blueprint that we have put in place that
really streamlines the process, and I think just helping be the
conduit and connecting them with the schools, getting the right
people around the table. A lot of times, it is a school
district, it is an employer, and it is a community college.
That is really all it takes to start to provide these
incredible opportunities for young people.
One of the things that we are doing, I think, that will
help address that is we will be holding 31 employer-driven
Future Ready Iowa summits in communities all across the State,
and that is an opportunity for the community to come together
and for us to walk through, this is how easy is it. Here is a
blueprint. Here is what you need to do to get started.
My experience has been, and I know you have heard this,
too, as you have traveled across the State, our employers are
looking for ways to engage. They want to be a part of the
solution. They are anxious to find out what they need to do to
help capture and retain Iowans and workforce, and so they are a
willing and able partner. We just need to make sure that we are
getting them the information.
And the other real benefit of this, as we talk about
growing and empowering rural Iowa, is the relationships that
they have the opportunity to make when they come into the high
schools, especially, and participate in the certification or
registered apprenticeship programs. They are recognizing the
opportunities that are right there in their communities, and
they are staying. So, it is just such a win-win, I think, for
our young people and our businesses to really engage in these
opportunities. We have started--we are probably in nine schools
right now, and we probably have 60 that are looking for
opportunities to start registered apprenticeship programs in
high schools across the State.
Senator Ernst. Well, that is fantastic, and I want to thank
you for that initiative. So many different programs that we
have discussed this morning, many of them really partnered
quite well with the Federal Government and what we are trying
to achieve in getting more people into our workforce.
And I do want to commend you, as well, for offering those
types of apprenticeships through the Department of Corrections,
as well, because we know that there are many people that will
make mistakes through their lifetime, but that does not mean
they should not have an opportunity to get back into life and
contribute to their communities and to their families.
So, thank you so much for getting involved and making sure
that our high school students are engaged and ready to go to
work, and that we are getting more folks, those middle-skills
workers, trained and into the occupations that they desire to
go into, as well as those that do need those advanced type
degrees. Iowa has really been at the forefront of this effort.
So, again, Governor, I want to thank you for participating
today in our first panel, and for the quality leadership that
you provide, not only to the great State of Iowa, but to the
United States at large, as well. I think many states would just
do exceptionally well if they followed Iowa's lead.
Governor Reynolds. Thank you.
Senator Ernst. So, thank you again, Governor, very much. I
do want to also follow up. Just last Congress, I did also
cosponsor some legislation that would establish a tax credit
for those businesses that are taking those apprenticeships. So
again, thank you for leading the way there, and we know that
that will help stimulate some more of the work-based learning
opportunities.
Governor Reynolds. I appreciate that very much.
Senator Ernst. So, thank you, Governor, very much. Again,
thank you for participating today.
Governor Reynolds. Thank you for your partnership and all
that you are doing.
Senator Ernst. Absolutely.
Governor Reynolds. I appreciate it very much. Thank you.
Senator Ernst. Absolutely. And today, or right now, we will
go ahead and take a quick break, and we will move our second
panel forward. Again, Governor, thank you for participating
today. Thank you.
[Recess.]
We will go ahead and start our second panel at today's
Small Business Committee field hearing, and we will start--I
will first introduce Ms. Lana Pol. Lana Pol is an entrepreneur
who owns four small businesses in and around Pella and Des
Moines: Geetings, Inc.; G.I. Warehouse Corporation; Mowbility
Sales and Service; and Creative Inspirations.
Ms. Pol has also served on numerous boards, including the
Marion County Development Commission and the NFIB Advisory
Group. She is also a member of the National Association of
Women Business Owners. Thank you, Ms. Pol, for being here
today.
Robert Denson is the President of Des Moines Area Community
College, a position he has held since 2003. Mr. Denson grew up
on a farm near Homestead, Iowa, and is the first Iowa-made ever
to serve as President of DMACC.
In addition to his role at DMACC, Mr. Denson serves on
several different boards, including the United Way of Central
Iowa board, the national board of Gateway to College, the
Governor's STEM Advisory Council and Executive Committee, and
the National STEMconnector Innovation Task Force, among many
others. Thank you, President Denson.
Reynolds Cramer is the President and CEO of Fareway Stores.
He has been working for the company for 34 years and has served
as the CEO since 2014. Mr. Cramer is also a board member of the
Iowa Business Council, and active in many charitable
organizations, including MDA, ChildServe, Easterseals, and
Variety, the Children's Charity.
So, thank you very much to our second panel for being here
today.
We will go ahead. Ms. Pol. We will start with you, Lana, if
you would like to make opening comments.
STATEMENT OF MS. LANA K. POL, PRESIDENT AND OWNER, GEETINGS,
INC., PELLA, IA
Ms. Pol. Good morning, Senator. Thank you for allowing me
the opportunity to testify today. My name is Lana Pol. I am the
owner of multiple small businesses in Pella, Knoxville, and Des
Moines, Iowa.
I serve as president/owner of Geetings, Incorporated, a
local and regional trucking company.
G.I. Warehouse specializes in commercial warehousing,
located in Knoxville and Pella.
Mowbility Sales and Service is an outdoor power equipment,
trailer and small tractor dealer in Pella and Ankeny.
Creative Inspiration is an embroidery, promotional and
customer fulfillment service.
Odyssey Spas sells hot tubs, chemicals, and product
services for pools and spas.
All of our businesses are classified as either sub-S
corporations or LLCs. The 2017 Tax Cuts and JOBS Act provided
tax relief that allowed us to invest in our employees and our
businesses. Two of the most significant, direct benefits from
the new tax law for our businesses were the expansions of small
business expensing, section 179, and the creation of the new
business deductions, section 199A.
The new tax law doubled the small business expensing,
section 179, thresholds of the tax code from $500,000 in 2017
to over $1 million in 2018. This expansion incentivized us to
purchase six new semi-trucks, totaling $1 million, and allowed
us to immediately expense the cost of the trucks in 2018
instead of depreciating that amount over several years.
The creation of the new small business deductions, section
199A, provides substantial tax relief for businesses like ours,
allowing pass-throughs to deduct up to 20 percent from business
income. My accountant informed me that the new small business
deduction, section 199A, provided about $40,000 in tax relief
for our business.
This tax relief from the new tax code provided crucial cash
flow that allowed us to provide raises to our employees, the
largest compensation increases we have been able to provide in
recent years. These raises increased employees' take-home pay
and helped us retain employees.
We also invested $2 million in a 40,000 square foot
expansion of G.I. Warehouse Corporation, which was completed in
December of 2018. We now have 460,000 square feet in warehouse
space.
We would love to see the law made permanent. As we expand
into third-generation ownership, it is crucial that we know
what the future for taxes is so we can plan with peace of mind.
As you can tell, we have a very diversified group of
businesses. Each of these businesses poses unique challenges.
One of the hardest challenges for small businesses in Iowa
today is attracting and retaining qualified, skilled workers.
With today's strong economy, we are competing with large
corporations for the same talent. Being a small company, it is
harder for us to attract talent, even though our wages are
comparable to larger companies, and our benefits exceed other
businesses in our area. We strive to take care of our
employees, but it is becoming increasingly difficult to retain
workers, who often see the grass as being greener in a
competitive economy.
In our industries, we need these types of skilled labor:
diesel mechanics, small engine repair mechanics, spa techs,
truck drivers, warehouse workers, etc. Most of our positions do
not require a college education, but skills in certain areas.
These jobs pay very well, and employees can jump into the labor
market quickly with the right training, which we are also able
to provide, or help with financing on that.
We also allow young people starting out to begin working
right away without having to go deep into debt with a four-year
education. We value education and understand the importance of
a four-year degree, but also know that it is not a requirement
for many of our positions. Trade schools are especially
important to our businesses, as they can be a great source of
recruitment for individuals who are specialized in a particular
trade.
We are always looking for creative ways to obtain new
employees with the right skill sets, and have also found it
effective to train ourselves, or pay for training, when we find
the right applicant. Even offering training, competitive wages,
above-average benefits, and treating our employees well, we are
struggling to attract and retain skilled laborers. The need for
skilled employees in our State is quickly reaching critical
levels.
Thank you for the opportunity to testify, and I look
forward to answering any questions you may have.
[The prepared statement of Ms. Pol follows:]
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Senator Ernst. Thank you, Ms. Pol. We certainly appreciate
you being here today. Next, we will go to President Rob Denson.
Thank you.
STATEMENT OF MR. ROB DENSON, PRESIDENT, DES MOINES AREA
COMMUNITY COLLEGE, ANKENY, IA
Mr. Denson. Thank you. It is an honor to appear before you
today on behalf of the many large businesses and the small
businesses, and the communities and the families that we serve
in our service area, and the over 60,000 credit and non-credit
students who come to DMACC every year, seeking one of our 250
degrees, diplomas and certificates. We are proud to have the
lowest tuition and fees in the State, because we understand
fully that the cost of education is a real burden on many
families.
I would like to discuss several issues today that our
businesses, students, parents, and communities face. But, to
sum up, it is workforce, workforce, workforce, as you know.
The first issue is increasing the academic and career
advising in our K-12s, particularly in the middle and high
schools. It is sorely needed. On behalf of Governor Reynolds
and the Governor's STEM Council, I work with the Iowa School
Counselor Association to help better engage school counselors
in helping students get involved in more STEM careers and the
occupations that need them.
With a target of 250 students per counselor nationally, the
average is actually 482; and Iowa is actually more than that--
499 students per counselor is the average. That is by the
national data.
A recent survey that we did of administrators, school board
members, and counselors showed that they all agreed what
counselors should be doing--doing more career and college
counseling. But, they all agreed that the work that counselors
have to do with mental health, disciplinary actions,
registration and others, also often takes them away from the
time they need to give students advice as to real careers. They
need more time, and we need more counselors and navigators to
let families know what is out there.
Students and their parents are inundated with college and
university solicitations, but generally do not have the
information, the background, the support, or the time to sort
out their career goals and the best college for them, and the
best opportunity. So, a lot of time and money is wasted.
America's workforce shortage would decline if parents and
students received more and better information, career
awareness, and professional guidance, and the earlier, the
better. Our school counselors are up to the challenge. We just
need to give them the time to meet with our students so that
our students have a better understanding of what the
opportunities are that are actually out there.
Second is we must provide better skilled training to people
who are incarcerated, while they are still incarcerated, to
improve their chances for success upon release, and to fill
needed jobs. Justice.gov reported that over 10,000 prisoners
are released from America's State and Federal prisons every
week and arrive on the doorsteps of our national communities.
Nationally, this is more than 650,000 ex-offenders every year.
Their studies show that nationally, about two-thirds will be
rearrested within three years of release.
Our work, DMACC's work, in the Newton Men's Prison and the
Mitchellville Women's Prison resulted in the Iowa Department of
Corrections telling us that, if they can come out of either of
these facilities with DMACC certificates or degrees, recidivism
is nine percent. If they come out without our certificates, it
is 29 percent.
At the cost of keeping someone incarcerated annually, I
mean, this is a great loss of money, in addition to all the
human issues that occur. In fact, the Department of Corrections
used to deliver men and women to the DMACC welding facilities
at 10:00 at night and pick them up at 2:00 in the morning. When
they took the national certifications for welding, they passed
at a higher percentage than the general population. As I always
say, yes, they did have time to study, but it helped them get
into jobs that are in great demand.
And, as we have discussed on several occasions, there has
been a waiver program for Pell for incarcerated individuals.
Several community colleges nationally have received that, but
we need to expand it in Iowa. Men in Fort Dodge have the
opportunity to get Pell for education; women in Mitchellville
do not. So, I would like--and we are filing next week, and I
have left with your staff, our application so that DMACC can
qualify in this next round of waivers.
Third, small business training works, and we need to do
more of it. We know that most job growth is occurring through
small businesses nationally, and this is true in Iowa. For the
last year, DMACC has partnered with Goldman Sachs. We have run
two cohorts of their 10,000 Small Businesses program, which
nationally has trained over 8,600 small businesses.
At the State Fair last Friday, we graduated 76 small
businesses from around the State who were in training in
January and April, and they have already seen significant
business growth, increased sales, and increased their
employment just by receiving the kind of training, which we
call a mini MBA, that helps them move their companies forward.
So, we need to continue to do more of that, have the
opportunity. Goldman has done a great job, but we need to find
ways to expand that to even more businesses.
Short-term training, thank you, thank you, thank you for
what you are doing to try to expand Pell to short-term training
opportunities. We just urge you to really make sure that we are
maintaining high quality. These short-term training programs
must be run through businesses that give us the instructions
that we need. These should be accredited programs, so they are
highly regulated, because we see too many opportunities where
individuals are actually taken advantage of and receive
training that is really subpar, will not transfer, cross
businesses, or even to other community colleges. So, those
safeguards need to be there.
DMACC has over 50 short-term credit programs and over 40
short-term non-credit programs. In fact, we just had a
graduation last night at our Southridge facility of 48
individuals who learned CNC, nursing, and welding. Most of them
are now going to move into our credit programs, and we make
sure that their non-credit experience transfers into credit.
This is very timely this morning. The Lumina Foundation
released their latest study on short-term training, which I
will leave with your staff. But, there is kind of a magic date.
They studied 48 community colleges in eight states, and then
tracked back to all of the trained workers and how they were
doing once they got out. It really does show that any short-
term training--and more than half of the population aged 25 to
64 has no post-secondary certificates at all, so half of our
population is really, you know, not ready for work.
Any certification--and I am looking at short-term, less
than 6 months--increases their ability to get a job by four to
seven percent. If they are 6 months or more, their ability to
get a job goes up 14 to 22 percent. So, the 6 months is really
a key area, so that anything we do in short-term training using
Federal dollars through Pell, should be linked to the ability
to get more training because we know the more education you
have, the better that you will do long term.
Work-based learning, the Governor adequately explained what
is going on. The one thing the Department of Labor has done
that we celebrate, they recognize our registered
apprenticeships, but also non-registered apprenticeships. And,
as the Governor said, all you need is a community college, a
student, a school system, and an employer. It can be very
informal, developed with no regulations, lots of speed and
responsiveness, because we need to operate at the speed of
business.
We do need the ability for more and more companies to hire
young people while they are still in high school. The Governor
mentioned our playbook. It is with Vermeer, Pella Schools, and
DMACC. They actually start with high school juniors working at
Vermeer a couple hours a day while they are going to school,
and then they increase their time as they finish up. Go to work
for Vermeer full-time after high school graduation, and in a
year, have their two-year degree from DMACC. I mean, we are
very skilled with Iowa businesses, working with them to make
sure that we can move students through quickly.
My next issue is student debt. It is really a drag on the
economy. There is a restaurant across from my office. I stopped
in there for lunch. I asked the young lady who was waiting on
me, I said, are you a DMACC student? She said no. I said,
should you be? She said, no, I already have a four-year degree.
So I said, well, how much student debt do you have? She is
waiting tables. She said, well, I do have my loans paid down to
$90,000. She works three jobs. I mean, that will never go away.
So, we need to make sure that young people have a better
understanding as to what the opportunities are. That goes back
to my first point where we need more counselors and advisors in
the high schools, talking to these students about the future,
because too often, they just default into a four-year degree,
which I am very supportive of, but they need to be going into
jobs that actually give them work-ready skills and that pay a
sustainable wage.
The Governor mentioned Future Ready Iowa and the Last-
Dollar Scholarship range. We will have over a thousand students
this fall that are taking advantage of the new Last-Dollar
Scholarship legislation. Two-thirds of them are adults coming
back, so this has really been a success. But, one of the main
things that has generated that is the Department of Labor for
the State, Iowa Workforce Development, has identified the 50
high-wage occupations that they will help support. So, we are
really focusing well on students getting into real jobs that
pay well.
Lastly, thank you for what you are doing on wind
technology. It is a great opportunity. There are nine community
colleges in the State of Iowa that have a wind technology
program. Extremely expensive equipment. We have over a half-
million dollars invested in just two rooms, and that does not
count the wind turbine on our campus. You know, we need more
and bigger equipment. And, as the equipment is becoming more
modern, we need the ability to buy more and more. So again, it
is a growing industry nationally and globally, and so we are
going to do our share. But, thank you for the support and
buying that equipment. So, we have a long list of needs, but we
appreciate everything you are doing.
Senator Ernst. Yes. Thank you very much, President Denson.
[The prepared statement of Mr. Denson follows:]
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Senator Ernst. And next, we will hear from Mr. Cramer.
Thank you very much for joining us this morning.
STATEMENT OF MR. REYNOLDS W. CRAMER, PRESIDENT AND CEO, FAREWAY
STORES, INC., BOONE, IA
Mr. Cramer. I appreciate it, Senator. It is a--thank you
for allowing me to be here and represent Fareway.
We are not a small company. We are actually in five states.
We have over 120 stores, almost 12,000 employees, and obviously
mostly in Iowa. But, we know what it is like to hire and retain
employees. We have a great culture. I, myself, was a store
manager in Des Moines many years ago, much like many of our
managers. We have over 60 percent of them that have started
under the age of 18 and worked their way up with Fareway.
So, we understand the importance of retaining employees and
what it takes, but it has definitely gotten tougher over the
last few years. Listening to Governor Reynolds, I drank the
Kool-Aid two years ago with Future Ready Iowa, and basically
have said that, as a company, we are going to do all we can do
to help this State retain people in the State. So, whether or
not they graduate from high school or graduate from a two-year
school or a four-year school, we want to keep them in this
great State, working. And obviously, as you mentioned, there
are many, many opportunities for that.
Along with that, we have been working on some neat projects
ourselves, and one of them happens to be our school loan
repayment plan that we put together, one of the first in the
State to put together such a plan. It was something that even
our own people inside our organization said would be very
difficult to do and administer. I said I do not accept that.
Then we spoke with some of the legislators in the State who
said they thought it would be a great idea, but they did not
know if it even made sense.
We went forward with it, and we are so proud that you are
one of the ones--with Senate Bill 460, how important that is
for getting the tax-free opportunity for our employees to use
the full amount that we are putting toward that. So, we do
appreciate that.
Along with that, we have gotten a chance to take a lot of
time and look at where we need to start when it comes to
retaining employees, and it really starts at the early
education level. So, it is the grade school and it is the high
school.
We have worked with Boone and their EDGE program. We were
one of the first to come up with an apprenticeship. And, along
with that, we have been talking to other schools. I was in
Gilbert High School the other day talking with administrators
about creating a work-based learning kitchen and what we can
do.
The whole idea is to put our students, at a young age, in a
position that they can learn actual jobs and opportunities,
rather than just read a book, and actually have a work-based
learning opportunity, to then make a decision--are they going
to go on to a two-year school and get more training, or are
they going to go right into the work field now that they have
had a chance?
So, we are just really proud to be a part of this, and
anxious for any questions that you have.
[The prepared statement of Mr. Cramer follows:]
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Senator Ernst. Wonderful. Again, thanks so much to our
panel witnesses this morning. We really appreciate your
expertise in this area, and your actual experiences as we have
gone through what has been a turbulent economy in the past.
So, Ms. Pol, I will start with you. Over 99 percent of
businesses in Iowa are small businesses, and I have heard from
a number of these job creators around Iowa that pro-growth
policies, like tax reform, are allowing them to grow and then,
of course, reinvest in their employees. You talked quite a bit
about the benefits of tax reform in your testimony. Can you
talk about the importance of making tax cuts for small
businesses permanent, and what impact would this have on your
ability to recruit and then retain those workers that you do
have in your small businesses?
Ms. Pol. Absolutely. I think making the tax cut permanent
would be a huge boost for small businesses and the economy.
Knowing that we would have that money in our pockets after 2025
is going to allow us to expand, to create jobs. If it does not
become permanent, we have to start thinking about the money
that we are spending now, you know. And, because it will not be
in our pockets at that point in time--so if I am giving raises
and increasing benefits, I have to know that I can still
sustain that at that point in time.
So, I think that affects--starts affecting now, because
what I am looking at, small businesses will be looking at,
too--help retain employees, and also to recruit, you know,
because I do not know that I can keep giving raises and upping,
you know, the starting salaries if I do not know the tax cuts
are going to be permanent.
Senator Ernst. Okay. Very good. Thank you for that input.
Ms. Pol and Mr. Cramer, at 2.4 percent, Iowa has the third
lowest unemployment rate in the United States right now. And,
as you discussed in your testimony, this is a really tight
labor market, and it creates some challenges for businesses.
Can you talk a little more about the steps you have taken to
try to recruit and retain workers in this type of environment?
And, how has the combination of this tight labor market and
some of the pro-growth policies affected the wages that you are
offering employees?
Ms. Pol. Yes. For us, one of the things that we have been
trying to do is really customize our jobs. So, like in the
trucking industry, we have some employees that have childcare--
they could be single parents that need to be home for different
things for childcare. We have some truckers that like to be
long haul, some that like to be short haul. So, we are really
working on customizing that to fit their schedule. It becomes
an issue because of our observance rules that we have to abide
by, but we are working to do that more and more, and trying to
be proactive in that as we recruit.
And wages, it has definitely affected that. You know, what
we see, especially in the trucking industry, is a lot of the
large companies are offering sign-on bonuses. You know, that is
harder for the smaller companies like ourselves to be able to
absorb those kinds of increases.
Senator Ernst. So again, going back to maintaining the tax
advantages for small business beyond 2025 would be very
helpful----
Ms. Pol. Absolutely.
Senator Ernst [continuing]. With that, as well. Okay. Thank
you, Ms. Pol.
Mr. Cramer.
Mr. Cramer. Yes. I think we have just taken a stance now
where we realize we need to give not only just benefits to
employees, but relevant benefits; and what that means is
different based upon the time of the employee's life and where
they are at.
Many employees look at things when they are starting to get
in the workforce as simply an hourly wage and how relevant that
is to them. They need the money right away. They are not
thinking so much about health care benefits and vacation time
and things like that. So, we have been looking at things as a
whole and trying to make sure that, instead of just having a
benefit package, we have something that touches each and every
employee based upon their situations.
So, once again, doing internships within our company, going
to the schools, giving them opportunities to understand what we
are about and telling our story, has been really on the
forefront of where we are at.
When it comes to the overall wages, here is the thing that
is tough in many businesses, especially the grocery business.
We cannot go raise Miracle Whip a dollar a jar to help pay for
a higher wage because we would not be competitive, and we would
not sell any. So, that means that we have to absorb these
higher wages, and make sure that we are out there creating an
overall environment that people make a choice to want to work
with us versus maybe someone else.
And, also, see that the opportunity is there. I think there
are so many opportunities that people do not know, not just
with Fareway, but just in Iowa in general. The amount of
companies with the excellent opportunities to work that--we
just need to tell that story more and more. And once again,
Future Ready Iowa, the clearinghouse, and some of the things
that are available now, are helping us do that.
Senator Ernst. Very good. I appreciate that. Thank you.
President Denson, the middle-skill jobs, we have spent a
lot of time visiting about middle-skill jobs this morning.
Those are the jobs which require less than a four-year degree,
but more than a high school diploma. Those jobs are in
particularly high demand throughout Iowa. Employers throughout
the State, they are finding it challenging to fill these good-
paying jobs in fields like manufacturing and construction,
transportation, as Ms. Pol noted, and in health care, as well.
Iowa has an exceptional community college system, and
schools like DMACC have a number of great programs that are
designed specifically to fill these mid-skill jobs. What are
some of the challenges that schools like DMACC face in
recruiting and retaining students to participate in these
programs? And, then, are there any particular obstacles that
keep Iowans from considering a career in these mid-skill
occupations?
Mr. Denson. You know, as mentioned earlier, I think the
fact that we are not giving our parents and students a fair
shot, let them know what the jobs actually are. This goes back
to my several comments about counselors and advising. And,
again, when I go into a school, I am just another salesman of
an entity. I am there with 20 other schools that are talking to
all these parents and students. So, we need to let them have
better information about what the careers are.
Many of them know what a doctor or a nurse does, or a
teacher, but there are so many other opportunities that they
really never get exposed to. And, it is hard for them to even
get into companies, because many of the schools do not have the
funding to hire the buses and the drivers to do the kind of
tours that I used to do when I was a kid, when I was in the K-
12 system. So, they really do not get exposed to these
opportunities.
Second, you know, we may call them middle-skill jobs, but
there is nothing middle about their compensation. You know, we
have two-year IT workers averaging $90,000 a year; tool and
dye, $100,00 a year; truck drivers, $70,000 a year. So, we need
to kind of get away from that term to say--I mean, these are
high-pay professions, and with a great opportunity to move
forward.
I think that what is going to help us the most, if we could
have better exposure as to what these jobs are to parents and
students, tied in with work-based learning, we will be able to,
again, help companies start their pipeline of employees
starting in that junior/senior year of high school and moving
on.
So, I think we are pretty well poised to do it. I think the
future--to have a Last-Dollar Scholarship is going to be a big
help, because just getting the names out of the 50 careers that
Iowa Workforce Development has identified--when I show that to
parents, many of them thought those would have to be four-year
education, skilled jobs. You do not need to do that. We are
custom-designing now a two-year study to get into a job that
pays what four-year degrees, and often more than most four-year
degrees, actually pay.
Senator Ernst. Fantastic. And as I mentioned earlier,
President Denson, Federal Pell grants cannot be used----
Mr. Denson. Right.
Senator Ernst [continuing]. To pay for many of those short-
term certificate programs, and, as Pell recipients, must
participate in a program that is over 600 hours of instruction
for at least that 15 weeks.
What are some of the short-term programs DMACC offers, and
how does this arbitrary restriction limit your ability to
recruit low- and moderate-income students for these types of
programs?
Mr. Denson. Well, as I mentioned earlier, it is about the
ability to pay for the education. I mean, community colleges
charge the lowest rates for training of anyone. We have the
lowest tuition and fees in the State at DMACC. You know, we
price our short-term training programs to what we hope people
can afford. Actually, the State of Iowa has given the community
colleges several funds of dollars that lets us help low-income
individuals, but we have so many low-income individuals and
just a short amount of money.
Welding, we do a tremendous amount of welding
certification. That is less than the 600 hours just to get
their--to give them the entry-level skills that many companies
would have.
You asked earlier about retention. It is hard for us to
graduate students from our programs. In our auto mechanics
program, very high demand for auto technologists in many of the
auto dealerships. We have a 50 percent graduation rate because,
at the end of the first year of two, they are being hired by
these dealers who need workers right now. By the end of the
first year, they have enough skills to actually be able to do
some of the auto tech work.
So, the companies are coming to us earlier. They are on our
advisory committee, so they are telling us what we need to
train, but they are also waiting at the end of every class
period saying, okay, you have enough training to get into my
slot. They do not have time to wait for two years. So, that is
something we just need to increase throughput. But, again,
there is such a demand now, and it is hard for workers to
find--employers to find employees. But, again, starting them
earlier would be a big help.
Senator Ernst. Yes.
Mr. Denson. And then CNC, welding, CNAs, certified nurse
assistants. We have over a thousand students a year in that
program, beginning in high school. I mean, that is a bright
sign on the horizon because that leads to LPN, RN and BSN, so
that gets them on that pathway to great health care
professionals.
Senator Ernst. Absolutely. In a former life, I did work as
a student advisor in a Federal program, helping long-term
unemployed individuals through training programs at a technical
college, and it was amazing to see folks that had been low
income, that had maybe lost a job, they needed a new skill set,
to come into the certificate programs and be hired immediately
upon graduating from that certificate program. They are in high
demand, yet without certain types of programs, or like the Pell
grant, these folks would not have been able to receive a
certificate and get back to work so quickly.
So, we look forward to working more on this issue, and
hopefully we can do that.
Mr. Denson. One thing that is important--every one of our
non-credit programs can be converted into credit. So, if a
student comes to us and spends 450 hours in a welding training
program, then they decide, well, in order to increase my wage
for that employer, I am going to have to start the degree,
everything they have done in their non-credit program is of a
quality that it can convert to credit, so they do not lose any
time.
So, I think as we roll this out, I would urge that Pell
fund programs that can articulate into a credit program
because, again, the goal is to get these individuals trained to
get into the job. But, in order for them to be really
successful and get better wages, they need to continue their
education through a one- or two-year program eventually.
Senator Ernst. Right. Quality. Quality. Quality.
Mr. Denson. Absolutely. And, it is hard to ask the Federal
Government for more regulations, but this is needed. History
has shown that we need to--and for us, too. We need to be
watched to make sure that we actually do give the quality that
these workers deserve.
Senator Ernst. And, President Denson, while I have you on
the hot seat here, there are over 9,000 wind jobs in Iowa, and
1,800 of those are in operations and maintenance. I recently
introduced the Wind Workforce Modernization and Training Act,
and that, which, among other things, would provide funding for
schools to purchase large pieces of wind equipment for training
wind technician students. DMACC is one of nine schools in Iowa
that offers a wind training program.
You had talked a little bit about how this might help DMACC
prepare folks to operate and maintain modern wind farms. Do you
think this might help encourage people to get into those types
of career fields, as well?
Mr. Denson. Absolutely. We are working harder to get more
and more K-12 students onto our campuses, walking through our
labs. And, when they walk into a wind technology lab and just
even see the trainer we have, which is $200,000. I mean, it is
very, very high tech, you know, computer screens everywhere. I
mean, that gets them excited. They need to learn on modern
equipment. And, if they do not walk into the room and say wow,
we have lost them. I mean, they need to be able to see
themselves in that kind of training, meet some of our students,
who are just rock stars.
But, the good thing about wind is, as they drive up and
down Iowa's highways, they see wind turbines, and so they are
somewhat acquainted with the industry itself. The Governor has
done a great job of talking about how successful it has been.
You have MidAmerican and others that are just building these
farms like crazy. In the DMACC territory, we have a blade
manufacturer and a tower manufacturer, so it is really building
that critical mass.
We need equipment, and then we need the facilities to house
them because you--you buy a new nacelle with $350,000, it needs
to be in a fairly good facility. And, if you visit Iowa Lakes
at Emmetsburg, they have a beautiful facility there--they were
the first one in the State--and, really, the curriculum that we
have is modeled off what they developed several years ago. So,
the 15 community colleges, we work together to make sure that a
quality education is across the board, statewide.
Senator Ernst. It is imperative. Iowa, if we are not the
leader in wind energy, we are very close to one of the top
states. Right now, estimated in percentages of what Iowans
consume in electricity, 40 percent of that is generated by wind
energy. And, after MidAmerican completes their wind field in
western Iowa, the new wind field, it will be estimated 80
percent of the electricity consumed by Iowans will be from wind
energy, so really extraordinary efforts in renewable energies
right here in the State of Iowa.
Mr. Denson. And just to tag onto that second--we need to be
looking at global workforce trends. I mean, we are so short of
skilled workers in the United States. Iowa is right in there.
We should be looking at other countries to help do workforce
supply to Iowa. Kosovo is the sister state to Iowa, probably
the most pro-American country in the world, and you have been
there.
We just received a grant through the Millennium Challenge
Corporation out of Washington, D.C., a million- dollar grant.
There are now 28 women that moved into DMACC Ankeny campus a
week ago this past Monday, funded by the Millennium Challenge.
Room, board, tuition, fully paid scholarships, and they are
here to study wind, solar, some coal technology, welding, and
energy efficiency.
When they graduate, we need to make it easier for them to
be able to come to Iowa and work. Right now, skilled Kosovars
are going to Germany. There is no reason they do not come to
Iowa. So, we need to do everything we can to make sure that our
immigration policies, and all of the department--vetting that
needs to happen, let that happen in Kosovo. Let us train them
in Kosovo. Let them have work in Iowa.
Senator Ernst. Absolutely.
Mr. Denson. Because Reynolds and others need them.
Senator Ernst. Yes. If we can help our Kosovars, we
certainly want to do that, so thank you for being a leader in
that area.
Ms. Pol, let us talk a little bit about the JOBS Act. So,
under the JOBS Act, the bill I have cosponsored to allow for
Pell to be used for those short-term training programs that we
just talked about, one of the programs at DMACC, whose students
would be become eligible for Pell, is a 240-hour, commercial
vehicle operator training certificate program. Can you talk a
little bit about the workforce shortage, specifically in
trucking, and how this would help connect more folks to those
good-paying jobs?
Ms. Pol. Sure. If you have noticed going down the road, you
have probably seen every truck says, you know, looking for
drivers, you know. Every advertisement--I would be very
surprised if you could find a trucking company that did have
enough drivers. It has been an issue; it is a growing issue.
And, when I look at this Pell grant going to something with
this kind of education that low--people that are now in low-
income jobs, young adults graduating from high school, that
could go into this without--as President Denson had said
before, without having to spend a huge amount on a four-year
college, they can get in very high-paying jobs. Like he said,
we have got drivers $70,000, $80,000, plus full benefits. And,
some of our drivers are home every night, so it is not like
they are traveling around the United States. So, there are very
good jobs out there, so I think that would be a great asset.
Senator Ernst. I think so, too. I think so, too.
And Mr. Cramer, since the Great Recession, student loan
debt in our country has doubled to now more than $1.5 trillion,
and while tuition costs and fees at colleges have ballooned,
increasing at three times the rate of inflation since 2007.
As you discussed in your testimony, Fareway recently
launched an initiative to help your employees pay off their
student debt every month. Can you talk about the impact that
this has had on Fareway's ability to recruit and then retain
those workers?
Mr. Cramer. Yes. Fareway's Fast Forward program is fairly
simple. Our employees, each month, as they work and are full-
time with us, can receive $100 from Fareway to go to their
principal. So, they still have to make their own payments, but
at the end of their term, it is going to be shortened up by
quite a bit.
One example is Juan, who is a Luther grad, alumni from
where I went to school. Juan was in computer science, IT and
things, and also working at Fareway in the Decorah store. He
saw the opportunity to work with Fareway, and along with that,
jumped right onboard with this Fairway Fast Forward program. In
fact, CBS ran a story about this nationally, talking about
this, and for once, it was real news, not fake news.
[Laughter.]
But, it immediately got a few hundred employees excited
about this program. And, what we see is--especially those
coming out of college, be it they are after two years, should I
go onto four, or getting done with four--they now see an
opportunity at Fareway, once again, to have another relevant
benefit that--they have a great paying job, they have a great
job they enjoy. Why not continue with it and stay in Iowa, stay
here in the Midwest, and knock down their school debt at the
same time.
Senator Ernst. I love that, and I understand why this would
be a very powerful tool for attracting those young workers that
you are looking for.
But, unlike other benefits offered by employers, such as
health coverage, businesses cannot offer student loan repayment
tax-free. So, I am a proud cosponsor of the Employer
Participation in Repayment Act, a bill that would allow
businesses to offer their employees thousands of dollars
annually, tax-free, to pay down their student loan debt. What
impact would that have on companies like Fareway, and how would
it help more companies offer this benefit to their workers?
Mr. Cramer. The impact on Fareway would mean that we would
continue this program, because honestly--one of the first
things that happened when our first employees received this
benefit was we got a phone call or an email saying, hey, why
were there taxes taken out of this? Why did I not get the full
benefit? We had to try and explain that. And, so, the
legislation that you put forth is excellent not only for us,
but I think for other companies that have not taken this risk
yet.
This is not a financial benefit to Fareway. This is Fareway
saying, we are spending money in a way to, you know, retain
employees, and this is our choice. But I feel like more
employers will get onboard having this bill being passed.
Senator Ernst. And I think so, as well. We have many
employers that would like to engage in that way, but certainly
if it is tax-free, there is just much more benefit for the
individual, and for that employer, as well.
We often hear that the impacts of student loan debt are
astronomical, and just simple things like young men and women
that want to purchase their first home, all of those dreams and
goals are further delayed the more they have that student loan
debt. So, if there is a way that we can enable more employers
to participate in student loan repayment programs, we
certainly--or I certainly would like to see that, as well. So,
thank you for being a leader in that, Mr. Cramer.
And then Ms. Pol, I have heard from so many Iowans, as I am
out on the 99-county tour, that are struggling to balance the
realities of caring for a new child, while also having to put
food on the table and to raise a family. I do think that it is
long overdue that we give hardworking parents an option for
paid family leave, which is why Senator Mike Lee and I have
recently put forward a budget-neutral, paid-leave proposal that
gives parents the flexibility to spend time with their newborn
or newly adopted child in those first few previous weeks of
joining the family.
Our approach, which is completely voluntary, it is a
voluntary program, will give parents the option to benefit from
their own Social Security after childbirth or adoption at a
time in their lives when their dollars can be most beneficial.
Some of my colleagues on the other side of the aisle have
proposed paid-leave plans that raise payroll taxes on
businesses and workers, or mandate that businesses offer paid
leave. How would a paid-leave mandate, based on a new payroll
tax, impact your businesses?
Ms. Pol. I think any kind of mandate is not going to be
helpful to any small business. One of the things I was thinking
about as Mr. Cramer was talking about the--we sometimes set our
benefits to how--our employees and what ages they are at, so we
might not have any employees that would ever benefit from this.
And so, for us, I would rather be putting our money into
something that would be more beneficial to them and not
mandated by that.
Senator Ernst. Very good. And how would the plan Senator
Lee and I have proposed, which does not impose any new burdens
on job creators, help small businesses like yours attract
employees?
Ms. Pol. I heard you mention this earlier in the roundtable
in Pella, and I fell in love with the plan and I thought more
about it. I think it is a great idea because it allows small
businesses to still have that option of having employees off
for the time that they would like to be, without having the
burden of the expense of it.
One of the things that we do is we allow employees to
accrue their vacation pay or sometimes holiday pay to help that
out, but this would just be another step to get them a step
farther into that direction. So, I think it is a great, great
proposal.
Senator Ernst. Wonderful. Thank you. I know in a position,
again, prior to coming into this Federal position, I had a
young woman that worked in my office. She was desperately
trying to save up time off so that she could take time off, a
significant amount of time off, when she had her baby, but to
the point where she was coming to work even sick because she
wanted to save that sick time off so that she would have paid
time off after the baby was there. So, we believe that this is
a great starting point in this discussion for paid family
leave. So, thank you for your input on that.
And then, Mr. Cramer, can you talk a little bit about the
apprenticeship program that you recently established at Boone
High School, home to our Fareway stores, and how has this
initiative been going so far? And, how do you think the model
will help you when you are recruiting those young workers?
Mr. Cramer. Well, Fareway, being approximately the sixth
largest employer in the State of Iowa, we reach virtually
everywhere in almost every county and school system. And, so,
to have Boone High School come up with the EDGE program and
have Fareway partner with them has been amazing. To be one of
the first in the State to start the apprenticeship program with
their meat cutting apprenticeship, and having a student at
Boone working in our stores, earning credit that is, once
again, going back to the classroom-based learning
opportunities, it has been great.
I think the goal is that we want to take this initiative,
and we want to expand this throughout all the schools in the
State and be able to partner in every town that we are in. In
doing so, that is a great recruitment tool because, once again,
it goes back to having these students get a sense to what
opportunities are out there.
It is going to cost some money on our end to do this, and
this has been a little bit of a shock to some to say that we
are not asking the State or someone to give us money to help
us. We want to spend the money to do this.
Our goal at the end of the day, once again, is to keep
students in Iowa after school, working. They might go through
this program, and they might work for Fareway for a short
while, and maybe then will go on because maybe they want to be
a plumber or electrician or something else. And, that is okay
because we believe that our dollars invested in this will be
well worth it because they will come back to us as a customer,
knowing who we are. So, without a doubt, it has been a great
initiative.
Senator Ernst. Absolutely. Well, that concludes my
questions for this morning.
I do want to thank our second panel, as well. Ms. Pol,
thank you so very much for investing in Iowa and our employees
here. President Denson, thank you so much for the great,
quality learning and education opportunities that you are
giving not only to Iowans, but those that travel into our
communities, as well. And Mr. Cramer, thank you for being on
the cutting edge of some of these programs and offering
opportunities for your young employees, as well.
So, great discussion this morning. I am very thankful to be
able to hold this field hearing right here in Des Moines, Iowa,
and talk about the challenges that we have in our workforce,
and preparing workers to advance in the fields that they desire
and receive a good income, as well.
The record will remain open for two weeks, until Friday,
August 30th, at 5:00 p.m. Any statements for the record or
additional comments should be submitted to the Committee's
clerk by, again, that closing time, which is Friday, August
30th at 5:00 p.m.
Again, I want to say thank you very much to our witnesses
for being here today, for participating, for being great
leaders in the great State of Iowa. We would like to thank
Committee staff for assisting with this opportunity. Thank you
very much. And with that, we will go ahead and close today's
Small Business field hearing.
[Whereupon, at 11:48 a.m., the hearing was adjourned.]