Google invests in job training program for low-income workers

Google said Thursday it was creating a $100 million fund to sponsor an ambitious project to develop effective job training and job placement programs for low-income Americans.

The Google-backed initiative targets a big problem: how to find, train and create pathways to good jobs in the modern economy for the nearly two-thirds of American workers who don’t have a four-year college degree.

“I sincerely think this is one of the important areas for society to understand,” Sundar Pichai, chief executive of Google’s parent company Alphabet, said in an interview. If the project is successful, Pichai said, he hopes it will serve as a “model for other companies to do more” and show policymakers that there are better alternatives to traditional government training efforts. .

The tech giant is working with three nonprofit groups on the effort: Year up towhich focuses on upward mobility programs for disadvantaged people; Merit America, an organization that offers technical training programs for adults without a bachelor’s degree; and Social Financewhich designs financing and repayment plans tailored to students.

Training organizations receive a portion of their costs up front and only receive additional payments if their graduates land and keep better paying jobs. The program will combine Google philanthropy with student loan repayments. The loans will bear no interest and students will only begin to repay if they get a job that pays at least $40,000 a year. Payments will be approximately $100 per month and will continue for up to five years.

The Google fund will pay to start and sustain the program, as not all students will graduate and get higher paying jobs. But loan repayments from successful students will help support the education of others in the future. The Google fund hopes to generate total wage gains of $1 billion for 20,000 graduates of the training program.

The three organizations working with Google are indicative of new trends in job training and hiring. They focus on outcomes – graduates get better paying jobs – rather than the number of people going through their programs. They advocate hiring based on demonstrated skills instead of selection by academic degree. And they are all experimenting with ways to make programs more financially self-sufficient and less reliant on charitable support.

“It’s a really serious effort to put philanthropic money into programs that have the elements that have been shown to work,” said Lawrence Katz, a labor economist at Harvard University.