[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.]