Strengthening Training and Advancement of Essential Workers in Low-Wage Jobs: Recommended Action for Funders

A key focus for the Beeck Center (“Beeck”) is combating systemic inequities to enable everyone to achieve their full potential and contribute to the economic and social good. World Education Services’ Mariam Assefa Fund (WES) partners with others to help build economies which are inclusive of immigrants and refugees in the U.S. and Canada. 

In the fall of 2019, WES honed in on the potential of the 17% of the U.S. population that is foreign-born, particularly those in entry-level jobs. Additional training could prepare these individuals for the market, but that requires additional capital. Most needed are funds flexible enough to maximize the chance of placing them into jobs with higher salaries and sustainable career paths into middle-skill employment. With WES’ support, Beeck began to explore ways to finance this workforce training. 

COVID-19’s emergence heightened the importance of this work: immigrants and refugees are over-represented among essential workers particularly vulnerable to the pandemic’s impact (both economic and health); and the situation exacerbated existing structural barriers and challenges they already faced. As the country seeks to build back better, we need the participation of all workers. Catalytic financing tools support this effort.

During this exploration, we collaborated with three key stakeholder groups (workforce training, immigrant integration and finance). Through interviews and interactive workshops, we gained their wisdom, tested our hypotheses and created opportunities for them to engage with each other, some for the first time. Together, we identified promising financing options with potential for scale and key elements of program design of use to funders and investors seeking to support workforce initiatives with maximum impact. Below are some takeaways fleshed out in more detail in the summary “Strengthening Training and Advancement of Essential Workers in Low-Wage Jobs: Recommended Action for Funders.”

The Context:

• The current workforce development field includes multiple players, misaligned incentives, fragmented funding and inadequate information. Employers, critical stakeholders, generally engage only to support their workers, primarily targeting those in higher income roles. Few options exist for entry-level employees seeking to advance.
• Immigrants and refugees face particular challenges, including: limited familiarity with English, distrust of government, low digital literacy, little digital access.

Recommendations for Grantmakers and Impact Investors:

• Finance training to reward and incentivize measurable outcomes. Expand the use of catalytic capital – funds whose presence encourages other funders and investors who might not otherwise join the effort. Capital can be equity or debt, partnered within blended capital vehicles or to catalyze new financial products. Leverage all sources of capital.
• Pilot new partnerships and/or replicate successful models that promote economic mobility, eg., Income Share Agreements, Social Impact Bonds, Community Development Financial Institutions, ESOPs or Co-ops, Lending Circles.
• Support the enabling environment:
  • Increase data on the immigrant and refugee populations, and build tools to help practitioners evaluate the impact of their programs.
  • Conduct research, including determining the fully loaded cost of training, and case studies of successful investments.
  • Build capacity of immigrant-serving organizations, such as digital literacy, and educate workforce boards on needs and opportunities in immigrant communities.
  • Fund support services to enable more immigrants to participate in training.
• Deploy successful program design elements, including:
  • Involve key stakeholders at the outset, including intermediaries who are trusted by the immigrant and refugee communities. Participate in regional collaboratives.
  • Target industries that might tap immigrant experience.
  • Account for all program costs.