New program pays for job training in Michigan

In December, Michigan legislators passed a bill that will allow community colleges to create training programs for companies adding new jobs or for new businesses coming to the state.

Cost to businesses = $0

Cost to community colleges = $0

So how does it work?

Under the New Jobs Training Program, community colleges sell bonds to develop training programs for new companies moving to Michigan or existing companies creating new positions.

Employers can approach a community college with a number of jobs they need training for. The employer then signs a written contract with the community college to provide training at no cost to the trainees. The tuition for the training is primarily paid back through state income tax revenues created by the new jobs.

From the Lansing State Journal:

"This is not a hit to the state, because these are new jobs," said Michael Hansen, president of the Michigan Community College Association. "The state was never going to realize that income tax anyway. The jobs wouldn't exist except for this program."

Modeled on a successful program in Iowa, the initiative "is a win for the community college, because they develop training capacity," he said, adding that several of the state's community colleges, Lansing Community College among them, have already expressed interest.

"It's a win for the company, because they get their workers trained for free," he said.

The only catch is that the jobs must be new, part of an effort to expand business. Trainees can’t be replacement workers for existing positions.

Michigan’s law was modeled after a similar program Iowa began in 1983 where community colleges use bonds to purchase equipment and facilities, develop contracts with special trainers and private vendors and hire instructors for new training programs.

Since its inception, the Iowa program generated $600 million to finance 2,100 projects that created more than 140,000 jobs for the state.

When signing the legislation, Michigan Gov. Jennifer Granholm pointed out that the state “must do everything we can to help our citizens get the training they need for good-paying jobs in this challenging global economy. These bills are another part of our plan to ensure that we have a strong workforce that can compete and win in the 21st century.”

Hopefully, Michigan will find the same success Iowa did in creating the New Jobs Training Program, but only time will tell.

What are your thoughts on Michigan’s New Jobs Training Program? With our current economic situation, do you think more states should develop similar programs?