Democratic U.S. Sen. Mark Warner of Virginia jointly reintroduced a bill to the Senate on Wednesday that would increase the tax credit for employers that increase spending on worker training, according to a press release.
The bill, called the Investing in American Workers Act of 2021, would allow a tax credit of 20% for the total cost of increased training expenses compared to the company’s previous three years’ average of training expenses.
Qualifying small businesses could get up to $250,000 of credit for payroll taxes, according to a press release. Training could be through area technical schools or employer programs, trade associations and labor organizations, among other pathways.
Warner said increasing training opportunities for low- and medium-wage workers will help businesses trying to find new employees, as well as provide more income to communities through the higher wages workers get in higher-productivity positions.
He said funding for workforce training also helps alleviate the issues around workers laid off from low-wage sectors, such as restaurants and hotels, to transition to higher-paying open job positions.
“We have not fully prepared for a lot of the people whose jobs aren’t coming back,” Warner said in a Friday interview.
Warner said the use of a tax credit going through employers instead of a voucher for individuals is a key part of the bill to ensure new jobs are obtained.
An example he cited centered around Southside Virginia as textile factories began to close. Many of the laid-off workers obtained training vouchers, according to Warner.
“But a lot of times, people didn’t train for the right jobs,” Warner said.
One popular path was cosmetology, but there was only so much demand for cosmetologists, he said, citing conversations he’s had with area residents.
Many of those who had used their training voucher for cosmetology courses ended up unable to find work in the sector due to the surplus of skilled cosmetologists in the area, according to Warner.
The bill has also been introduced in the House of Representatives with Republican and Democratic sponsors.