Minnesota econ development chief has a big job-training issue on his hands

Let's see how Steve Grove uses Google for this one.

Grove, who Gov. Tim Walz hired to run the sprawling Minnesota Department of Employment and Economic Development (DEED), is a former journalist and Google manager. Walz wants the Northfield native to make DEED more of an engine of innovation and growth.

Grove, 41, already is confronted with one challenge that stakeholders said is ripe for a redo: a coherent policy on job training.

This fiscal year the agency will invest about $169 million, of which 65% is federal funds, into Minnesota job-training programs run mostly by nonprofits and state colleges. There is a growing demand for simplicity and uniformity in what DEED expects in job-placement and retention metrics. After several interviews with DEED managers and training programs, I'm sure confused.

To be fair to Grove, this issue has festered for years.

DEED is at the messy intersection of policy and politics, Republicans and Democrats, competitive grant programs and legislative appropriations that basically become no-bid contracts. The issue has gone from simmer to boil since 2017 amid varying expectations and outcomes. DEED also needs more coherent expectations.

DEED tends to track money through program titles under which it awards grants. The agencies, such as Twin Cities Rise, PPL, Emerge and Ujamaa Place, track their own performance over a quarter to two years. The outcomes and numbers they present to stakeholders generally don't jibe with DEED performance statistics.

"We only get paid when we perform," said CEO Tom Streitz of Rise. It boasts an 80% retention rate two years after placing trainees, following a monthslong personal empowerment and skills-building curriculum.

"There's clarity around 'pay-for-performance' and taking people making nothing or little and placing them in jobs where they make $20,000 or more with benefits," Streitz said.

The state said Rise retains only about half the people who start in its program. Rise doesn't count dropouts, only graduates. Although some dropouts report they left early because they were hired into jobs. The state seems to count everybody who initially came through Rise's doors. It is confusing.

Some DFL legislators and nonprofits, largely advocating for low-income minorities, were successful in pushing the administration of Gov. Mark Dayton and the Legislature three years ago to allocate $35 million during fiscal 2017-2018 toward job training. These grants were given out without competitive bids, largely to inner-city agencies that work with high school dropouts, former convicts and other second chancers. The logic: Black people long have not gotten a fair shake in education and employment. Extra help is needed to close the long-documented opportunity and income gaps.

"DEED has been doing competitive grants, and it hasn't helped," Sen. Bobby Joe Champion, a DFLer from north Minneapolis, said recently. "If you always do what you've always done, you'll always get what you've always got."

"I think DEED should create standard ranges of outcomes," said Mike Wynne, longtime CEO of Emerge. "We put innovative plans on the table, which is what those 'equity grants' were about. But they didn't fit tightly in [DEED's] box. We were a year into it and they said 'You're going to have to pay us back. That's not the way a partnership should work."

The trainers complain about how much time they spend complying with state and federal paperwork and chasing meaningless statistics.

Grove said last week that change is brewing.

"This whole arena of performance management needs more focus," he said. "We've looked at our grants program and we've got to make the application process speedier, cleaner and more fair. Also we've heard DEED requirements on compliance are onerous. … We need really good benchmarks that help us with decisionmaking."

The growth of the Minnesota economy and workforce is dependent on employing more trained minorities. They also are the growth component in the population. The good news is that minority employment in construction, business services and health care has grown faster than the overall jobs market since the Great Recession. The challenge: We need 125,000-plus more workers today in the Twin Cities area.

PPL has raised nearly $12.4 million in private capital to renovate an expanding job-training center in an abandoned theater on E. Franklin Avenue. It works with private employers and Hennepin County to produce several hundred workers annually. The workers typically triple their incomes to an average of $29,000 plus benefits.