WASHINGTON – Today U.S. Sens. Mark R. Warner (D-VA) and Chris Coons (D-DE) announced that they will introduce legislation to make lifelong learning more accessible for low- and moderate-income workers. TheLifelong Learning and Training Account Act would establish a tax-preferred savings account with a generous government match to assist workers seeking to retrain or upskill over the course of their careers.
In the coming years, more workers will be required to learn new skills throughout their careers. According to the McKinsey Global Institute, up to one-third of the U.S. workforce will need to learn new skills or find work in new occupations by 2030 due to automation. As a result, American workers are increasingly likely to hold many different jobs over the course of their careers, and in many cases technology will transform the skills they need and even the types of jobs available. The Lifelong Learning and Training Account Act would provide workers with a portable, government-matched savings vehicle for lifelong learning.
“Lifelong learning is quickly becoming a necessity for American workers. We need to make sure Americans are able to retrain and upskill throughout their career, so they can thrive in the modern economy,” said Sen. Warner. “This will not happen on its own. It requires a serious investment to help workers pay for the education and training necessary to modernize their skills—by employees, by employers, and by the government. The Lifelong Learning and Training Account Act represents that serious investment.”
“The digital, fast-changing nature of today’s economy has significant consequences for workers. More than ever before, individuals will need to acquire new skills over the course of their careers,” said Sen. Coons. “TheLifelong Learning and Training Account Act empowers workers, with help from government and employers, to take charge of their future by actively planning, saving for, and completing the training programs they need to thrive in this economy.”
“Although national unemployment is at historic lows, small business owners are still struggling to find the workers they need due to a skills gap,” said John Arensmeyer, Founder & CEO of Small Business Majority. “In fact, Small Business Majority's scientific opinion polling found more than one-third of small employers said it is difficult to find candidates with the right education, skills or training. Since small firms rarely have enough time to dedicate to extensive staff training or sufficient funds to pay for employee education, the Lifelong Learning and Training Account Act would be a huge boost to small businesses by offering them another way to invest in the development of their staff. This legislation would also help solo entrepreneurs invest in their own development and acquire skills without the aid of an employer.”
“In an economy where more than 80 percent of all jobs require some form of education and training beyond high school, it is more important than ever for workers to be able to access the skills and credentials that can help them advance their careers,“ said Kermit Kaleba, Federal Policy Director of the National Skills Coalition.“The Lifelong Learning and Training Account Act would provide workers with a critical tool to take advantage of emerging educational opportunities so they can keep pace with a rapidly changing labor market. We applaud Senator Warner’s continued leadership on this issue, and we look forward to working with the Senator to ensure passage of the Lifetime Learning and Training Account Act.”
“Education and training shouldn’t stop after high school or college. We need to provide workers with new opportunities to add or update skills throughout their careers,“ said Alastair Fitzpayne, Executive Director of the Aspen Institute’s Future of Work Initiative said. “Creating a culture of lifelong learning is critical to building a skilled and resilient workforce. By incentivizing workers, businesses, and government to co-invest in education and skills training, Lifelong Learning & Training Accounts will help workers continue to develop skills and better manage their economic future.”
The Lifelong Learning and Training Account Act creates employee-owned Lifelong Learning and Training Account (LLTA) savings plans. Contributions to an LLTA by low- and moderate-income workers or their employers are eligible for a dollar-for-dollar federal match of up to $1,000. The federal matching funds are directly deposited into the LLTA immediately after the contribution by the worker or employer. The worker then gets to choose how to use the LLTA funds, which can be applied towards any training that leads to a recognized post-secondary credential.
For workers that need to contribute to the cost of updating their job skills, this significant federal investment can make a huge difference in whether or not these workers seek additional training. If employers are willing to match employees’ savings, the returns can be even greater—a $500 contribution by a worker would create $2,000 in training opportunities (a $500 match by the employer, and then a $1,000 match from the federal government.) The accounts are portable from job to job, and always under the workers’ control.
Contributions by workers and employers are after-tax dollars, but face no additional taxes on earnings if the LLTA funds are used for qualified training expenses. Eligibility is for workers age 25 to 60, with incomes of up to $82,000 per worker. States will manage the accounts. Accounts are designed to encourage the worker to use the funds to regularly update their skills, rather than build up large balances over many years. Restrictions are put in place to ensure that the government’s matching dollars go only to qualified training expenses.
The full text of the bill can be found here. The bill will be officially introduced when the Senate returns after Thanksgiving.