Impact Investments, Economic Mobility, Pay It Forward Funds
The New Jersey Pay it Forward Program uses a sustainable funding strategy that amplifies the impact of every public dollar and brings employers to the table to achieve real, measurable results for workers—that is, good jobs in growing industries with living wages and strong potential for advancement.
It’s happening at the auto mechanic, the doctor’s office, the gate at the airport, and countless other places—service delays and long lines are making the everyday more difficult. Why?
Even with a softening labor market, there are roughly two available job openings for every U.S. jobseeker. So, many businesses, particularly those in the health care, manufacturing, and transportation industries, are barely getting by with skeleton crews, even as customer volumes surge.
At the same time, almost a third of American workers, including 47% of Black workers and 46% of Latinx workers, are also barely getting by in jobs paying less than $15 an hour, without viable opportunities for upskilling that could put them on paths to economic security.
But a coalition of New Jersey business and government leaders have developed an innovative workforce financing initiative that addresses these challenges: the New Jersey Pay it Forward Program.
This cross-sector approach uses a sustainable funding strategy that amplifies the impact of every public dollar and brings employers to the table to achieve real, measurable results for workers—that is, good jobs in growing industries with living wages and strong potential for advancement.
Last year, New Jersey Gov. Phil Murphy’s administration announced the creation of the first-in-the-nation New Jersey Pay It Forward Program. The initiative launched recently and, with the help of Social Finance, offers nursing, HVAC, welding, and cybersecurity job training tracks designed to help New Jerseyans build careers in priority sectors that drive the New Jersey economy.
Eight leading New Jersey-based businesses—BD, Campbell Soup Company, Johnson & Johnson, Merck & Co., Prudential Financial, PSEG, RWJBarnabas Health, and Verizon—helped shape the program through the New Jersey CEO Council, making good on their commitments to support the success of American workers.
The New Jersey Pay It Forward Program provides learner-friendly financing and living stipends to residents enrolled in certificate and degree programs from vetted community colleges and training providers. Enrollees who find well-paying jobs with salaries over a certain amount repay their loans with no interest and no fees, and these repayments help support future students. Those who cannot find jobs with salaries above the income threshold repay nothing.
This approach stands in contrast to the current job training environment. Here, people typically take out loans to enroll in college or sacrifice their savings and pause work, hoping in time they will gain the skills needed to get work with decent pay.
The New Jersey Pay It Forward Program removes risk from the equation altogether for workers, all while diversifying workforces in critical sectors, and creating an industry-focused, outcomes-driven, and sustainable strategy for spending job training dollars.
The New Jersey health care system is still reeling from pandemic-related staffing aftershocks, with an average vacancy rate at hospitals for registered nurses at 64%. And this deficit is likely to compound annually—it’s estimated that U.S. health care providers must hire 200,000 new nurses annually to meet demand.
HVAC businesses face a similar talent shortage, as there are more than 100,000 unfilled HVAC technician roles nationwide. Welders are even more scarce, particularly in New Jersey and New York, where businesses are hiring for 34,000 of these key tradespeople. The same situation is unfolding here for companies with cybersecurity needs, as they stare down 44,000 openings.
One of the many things that we’ve learned over the last three years is that people earning lower wages are disproportionately affected by sudden economic shifts. With high #inflation and a potential recession on the horizon, the time is now for new job training solutions that can help workers transform their livelihoods and help businesses solve existential talent challenges.
Leaders in Colorado, Florida, and Texas are investing in worker-friendly models like New Jersey’s. We hope other states make investments in similar models—for the sake of our communities and our economy.
Lata N. Reddy is senior vice president, Inclusive Solutions, and chair of The Prudential Foundation.
Tracy Palandjian is CEO and Co-Founder of Social Finance, a national nonprofit that builds innovative partnerships and investments to measurably improve lives.
Learn more about our Pay It Forward Funds →
New Jersey Pay It Forward Program Launch Event
Hudson County Community College hosted a launch event for the New Jersey Pay It Forward Program, a joint initiative of Governor Phil Murphy, the State of New Jersey, New Jersey CEO Council, and Social Finance.
WorkingNation Podcast: New Jersey Bets on Zero-Interest, No-Fee Workforce Training Loans
Ramona Schindelheim, editor-in-chief of WorkingNation, sits down with David Socolow and Tracy Palandjian to discuss the New Jersey Pay It Forward Program.