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Obama Plans $600 Million Job-Training Program Expansion

President Barack Obama said the government will expand job-training and apprenticeship programs with a $600 million effort to equip workers with the skills sought by employers.

Obama said the U.S. risks losing ground to economic competitors such as China and India unless it trains more workers in fields including advanced manufacturing, information technology and health care.

“It’s never been more important to make sure our folks are trained for the jobs that are there and for the jobs of the future,” Obama said today at the Community College of Allegheny County West Hills Center in Oakdale, Pennsylvania, southwest of Pittsburgh.

While the unemployment rate is declining and the economy is rebounding from the recession, “a lot of people don’t feel that progress in their lives yet,” Obama said.

There are signs that the world’s largest economy is accelerating, with Federal Reserve data showing today that industrial production rose more than forecast and other recent data indicating stronger retail sales and employment.

The labor market has been improving in many metropolitan areas across the U.S. The unemployment rate in the Pittsburgh area is 6.3 percent, according to the U.S. Bureau of Labor Statistics, compared with the statewide average of 6.2 percent and the national rate of 6.7 percent.

Community Colleges

The first initiative is a $500 million competitive grant program for community colleges that are linked with businesses to teach the specific skills needed for open jobs.

The second is a $100 million apprenticeship program, in which businesses, unions, community colleges or non-profit organizations would form partnerships to teach skills for hard-to-fill jobs, such as information technology, high-tech services, health-care and advanced manufacturing.

Commerce Secretary Penny Pritzker told reporters traveling with Obama that the training and apprenticeships will be built on cooperation with businesses that “define the skill sets they need.”

The goal is to ensure participants get “portable, stackable credentials” that will be recognized by companies across the country.

The initiative is a follow-up to Obama’s State of the Union address in January, in which he directed Vice President Joe Biden, who joined him today, to review federal programs to make sure they “train Americans with the skills employers need, and match them to good jobs that need to be filled right now.”

Apprentice Training

A White House fact sheet said that 87 percent of apprentices get jobs after finishing their training programs, with an average starting salary of more than $50,000 a year.

For the community college program, the Labor Department is issuing applications now for partnerships between schools and employers. Grants will be awarded based on how the schools propose to train people for skills, as well as the potential of an entry-level job leading to more advanced positions.

The apprenticeship program, to begin in the fall, would be financed by H-1B fees that employers pay to the government to bring in skilled workers because they can’t find Americans with the proper skills.

The administration is encouraging potential partners for apprenticeships to build on successful programs already under way by companies including Ford Motor Co. (F), General Motors Co., Deere & Co. and United Parcel Service Inc. along with the United Auto Workers union.

A spokesman for House Speaker John Boehner said Obama ought to urge the Senate to vote on a House-passed bill. It seeks to “streamline dozens of overlapping federal programs and make them more effective” in training the unemployed for good-paying jobs, said Brendan Buck, press secretary for Boehner, an Ohio Republican.

A General Accountability Office study in 2011 said the federal government has 47 job-training programs “but little is known about the effectiveness of most programs.”

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editors responsible for this story: Steven Komarow at skomarow1@bloomberg.net Joe Sobczyk

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