Worker training grants debated

Drew Nash / Times-News From left, in back: Free skier Aaron Blunck, Chobani CEO Hamdi Ulukaya and free skier Brita Sigourney film a mini-documentary with Chobani employees and some of their children Jan. 21 at Chobani near Twin Falls. Drew Nash / Times-News

TWIN FALLS — Idaho’s Workforce Development Training Fund has created more than 3,000 jobs in the Magic Valley since its creation in 1996, but more than one-third of them were with companies that aren’t here anymore.

Recent changes to that program should renew the emphasis on bringing good-paying jobs to Idaho and, through more stringent requirements, reduce the likelihood that employers who get state training money will close shop anytime soon, supporters of the reforms say.

More 200 companies have used that money to expand or move to and get established in Idaho. The completed contracts cost $61.7 million, and $43.1 million was spent on what was supposed to have been 26,608 jobs, say numbers through April 2014 provided by the Department of Labor. The program is funded by a 3 percent set-aside of unemployment insurance taxes that employers pay.

Critics of the fund for years have noted that millions in training grants have gone to companies that moved or closed. In 2012, the Department of Labor reviewed 160 contracts approved from 2000 to 2009 and rated 40 percent of them “effective” and one-third of them “ineffective.”

Over the past few years, a number of businesses received worker training money but later closed, eliminating thousands of jobs. Those include J.R. Simplot’s distribution center in Heyburn, the Heinz plant in Pocatello, and Transform Solar and XL Four Star Beef, both in Nampa.

Last month, Gov. C.L. “Butch” Otter and Labor Department Director Ken Edmunds announced a new system. Applications will be evaluated by a weighted points system based on economic impact and the jobs’ value in terms of pay and skills. Businesses could get more or less money as a result.

Edmunds says he wants to turn the program into a true workforce development fund, not a mere tool to lure businesses.

Forty percent of the new formula is wages, and the rest encompasses education and training, with the economic impact broken into categories.

“The new system that Edmunds and the Department of Labor … set up is going to make it scaled toward businesses that will give a better return to Idaho,” said Ken Weismore, an AFL-CIO leader from Twin Falls who is on the state’s Workforce Development Council.

One criteria is the “transferability” of skills. So even if a person gets laid off, Weismore said, he’ll be better equipped to find another job with the skills learned. “We’re not interested in training somebody to do one thing that cannot be used anywhere else,” he said.

The fund has completed 39 contracts with Magic Valley businesses. This represents $10.3 million approved to underwrite 3,332 jobs, of which $7.8 million was spent.

But more than $2.7 million was spent on 1,215 jobs at companies that aren’t here anymore — 35 percent of the money spent and 36 percent of the jobs. By far the largest chunk, $2.4 million and 689 jobs, was at the Dell Computer Inc. call center in Twin Falls, which laid off hundreds of workers in late 2009 and closed in January 2010. Dell’s worker training contract with the state ran from 2002 to 2005.

A 2011 state report said that of 1,920 jobs in contracts approved for the Magic Valley from 1996 through 2005, 1,515 paid less than $12 an hour. The average pay was $10 an hour.

Weismore said the council lobbied to stop giving training money to companies such as call centers that bring lower-paying jobs.

“As AFL-CIO, we wanted quality jobs,” he said. “So we pushed to set criteria on what these jobs were.”

In 2006, the state started to require companies to, in most cases, pay at least $12 an hour and provide health insurance to workers.

Aaron White, a council member who is with the state AFL-CIO, said he views the latest changes as minor tweaks to reaffirm what already was supposed to have been the training fund’s mission. At its meetings, he said, the council receives input from economists and discusses how to draw more good-paying jobs to Idaho.

“They’re interested in encouraging innovative, forward-thinking companies to come to Idaho … (and) provide jobs with benefits and a career. I think the focus is the same as it’s been.”

Otter’s Democratic challenger, A.J. Balukoff, said he is making jobs with livable wages one of his central campaign issues. He said the state should focus more on helping existing businesses and small businesses.

“What about the guy who has five employees and he adds three? It (the fund) does nothing for him,” Balukoff said.

The state is in the middle of training contracts with eight Magic Valley companies, representing 888 jobs and $5.3 million. This includes Chobani, the Greek yogurt company that opened a factory in Twin Falls in December 2012 and so far has spent more than $3.4 million in state money to train 583 workers.

Shortly before the reforms were announced, 35 Chobani employees who had been trained with state money were laid off. In a guest commentary in the Times-News last week, Edmunds refuted the paper’s editorial criticism and said the Chobani deal was a success. The company hired more employees than had been projected, he said, and it pays an average salary more than double the minimum wage. He also told the Times-News this month that before Chobani gets the rest of the state funds, it must train 35 more people to make up for those laid off.

Twin Falls City Councilman Shawn Barigar, head of the area Chamber of Commerce, said companies that consider moving here often ask about the workforce. The type of workers plays more into their decisions than how much state money they can get, Barigar said.

Training programs at the College of Southern Idaho, for Chobani and others that get state training money, plus a work ethic linked to this region’s agricultural character give the Magic Valley a leg up when competing for businesses, he said.

“There’s a strong work ethic that runs through all of the folks here, that’s typically a selling point for our region, and a willingness for people to learn those skills” that employers want, Barigar said.

The Workforce Development Council is looking at other ways to get a better-trained workforce, too. One idea, White said, is to expand apprenticeships to cover more industries.

White served as an electrician apprentice when he was young, and he likes the idea.

“I think it provides an opportunity for folks to, as I said, get into … a professional career and be able to make a decent income while they’re getting their training.”

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