Lifelong learning and training accounts: Helping workers adapt and succeed in a changing economy

Despite today’s low unemployment rate, workers today face a range of uncertainties and challenges. In the post-World War II era, many workers could expect a stable career at a single company that would assume responsibility for investing in the workers’ skills over time. This stability has now given way to careers consisting of multiple jobs in potentially different occupations and industries. For many, work is becoming more independent, short-term, and project based. At the same time, new technologies are demonstrating the ability to perform tasks previously done by workers. As these trends continue, workers will need to update their existing skills and acquire new skills throughout their careers. This new environment demands changes to the outdated education model in which Americans could expect the education and skills they obtain when they are young to last their entire career. Updating this model to better serve today’s workers requires a variety of approaches. Employers play a unique and vital role in workforce training, but workers must also be given additional tools to acquire new skills and learning opportunities over the course of their careers. This issue brief proposes the creation of worker-controlled Lifelong Learning and Training Accounts (LLTAs). These accounts would be funded by workers, employers, and government, and could be used by workers to pay for education and training opportunities. The accounts are not designed to be long-term savings vehicles; balance limits and limited investment returns are intended to encourage workers to regularly use their LLTA funds for training throughout their careers. Based on economic modeling conducted by District Economics Group, 23 million Americans would contribute to these accounts to fund training over the next ten years, costing the federal government roughly $25 billion over this same time period. This proposal is designed to provide significant incentives to low-income workers to participate in training, given the financial challenges they face participating in savings-based programs. Consistent with that goal, 79 percent of the cost of the proposal would benefit individuals who make under $30,000.