On my 36 County Tour, workforce issues and labor shortages are topics of constant and repeated concern when I’m meeting with farmers, small business owners, manufacturers, childcare centers, hospitals, and other enterprises. With so many job openings in Iowa and nationwide, we need to do everything possible to help our businesses, manufacturers, and hospitals hire, train, and retain quality employees. By supporting our business community and investing in our workforce, we can also keep our main streets strong and move our economy forward.
According to a recent survey of small businesses conducted by the National Federation of Independent Business, the highest ranked problem for business owners was finding skilled workers, surpassing even taxes and inflation. That’s a problem, and it’s true across all firm sizes. In a broader McKinsey Global Survey, 87% of companies say they currently have a skills gap within their workforce or expect to have one in the next few years.
Based on my conversations with job creators at home and larger trends in our economy, I introduced the Upward Mobility Enhancement Act to modernize our tax code, lower the cost of education for workers, and help employers recruit and train a skilled workforce. Under current law, employers can provide tax-free assistance up to $5,250 per year to their employees who want to continue to pursue their education while working. In other words, small businesses who want to invest in their workforce and help their employees develop new skills and abilities can deduct up to $5,250.
As it relates to the legislative text, the realm of education that workers can pursue include any type of skill development or associated costs, whether that be a trade school, a university, an online skills course, or books and tools needed for that training. Additionally, the education does not need to be for work-related courses, allowing employees to explore courses and training that enable either an upward advancement in their current career or a new career altogether. By directly paying the costs of the education, this approach provides an important alternative to making higher education affordable without requiring the debt and interest burdening so many young Americans.
Most importantly, my bill would increase the $5,250 amount – which has not been updated since 1978 – to $12,000 per year not only to keep up with inflation, but also to ensure that employees have the tools and resources that they need to succeed and grow in their field of study. While China vigorously invests in its students, businesses, and workforce, we cannot fall behind. We need to allow workers to learn new skills, pursue their passions, and contribute to our economy in powerful and beneficial ways.
To strengthen our workforce and grow our economy, we must connect education with concrete skills that prepare young people for careers in a wide array of industries and support continuing education and skills development for folks who have been in the workforce for decades. We can achieve those goals by making it easier for businesses to invest in their employees’ education through a simpler, more efficient tax code.
