Workforce & Economic Mobility, Talent Finance

Key Takeaway

In May 2024, Social Finance Co-Founder and CEO Tracy Palandjian was part of the Massachusetts delegation to the Vatican Climate Summit. She addressed the Summit on Friday, May 17. Below, watch the video or read the transcript.


I am Tracy Palandjian of Social Finance and I’m proud to be part of Team Massachusetts.    

The United States stands at a critical juncture as we do our part to accelerate the global transition to a future of net-zero emissions. As discussed throughout this summit, we are working to address systemic challenges that are distinct yet interconnected: climate change, biodiversity loss, and social inequality. In this Venn diagram, we at Social Finance, are particularly focused on the aspect of social inequality, as we work to create win-wins across all stakeholders to ensure that everyone benefits from the clean energy transition. In particular, we are focused on what that means for workers, what that means to make smart investments in the clean energy workforce, as we simultaneously invest in our critical infrastructure and technological advancements. 

I am grateful to Governor Healey, Chief Hoffer and the entire administration for their leadership in positioning Massachusetts at the forefront of the clean energy transition, especially around the climate workforce. As Governor Healey announced, Social Finance is partnering with the Commonwealth on the Massachusetts Climate Careers Fund—an innovative, first-in-the-nation program to prepare workers and equip them with the skills for the clean energy jobs that urgently need to be filled in order to achieve our climate goals.  

Let me explain why the Climate Careers Fund is so important.  

America’s first utility-scale offshore wind farm recently began operating off the coast of Massachusetts. With just five turbines, it is already powering 30,000 homes. Once complete, it will power more than 400,000 homes—reducing carbon emissions by more than 1.6 million metric tons each year. Beyond reducing emissions, this project is also a catalyst for job creation and economic opportunity, with an estimated 3,600 high-quality job years in the pipeline. 

As you appreciate, wind turbine manufacturing and maintenance require specialized skills. A single wind turbine blade is longer than an entire football field. They are built in massive warehouses, shipped out to sea, and assembled hundreds of feet above the ocean floor. Once in place, the turbines need routine upkeep alongside periodic upgrades as improved technology becomes available.  

But here’s the catch: there aren’t enough people in the U.S. trained to do this work. Whether it is wind, water, solar, geothermal, EV, the shortage of skilled workers to build, maintain, and upgrade these clean energy projects is massive. Often, these are high quality, well-paying jobs that do not require a 4-year college degree. Wind turbine technicians earn a median income of about $60,000 per year, which is 1.5x that of individual income in the United States. And the median salary HVAC technicians is around $65,000, similar for electricians and other roles. These are all middle-class jobs with great potential for upward mobility. 

The middle skills gap is not just a challenge in the clean energy economy; the US has been experiencing urgent labor shortages across industries. Indeed, as we continue to have historically low unemployment rate in the U.S., we have also sustained a high job vacancy rate, with more job openings than people looking for work. For example, in health care, we have an existential shortage of nurses. In IT, we have an urgent need to fill cybersecurity and IT support roles. And in the next decade, it is estimated that we will need over 30 million infrastructure workers to meet new demand and to replace retiring workers—including technicians, installers, electricians, and construction workers, many of which are climate jobs.  

This labor market dynamic is unsustainable; it’s bad for business, it’s lost opportunity for workers, and it’s detrimental to our clean energy future. Our workforce development system in the US is well overdue for an upgrade. But how did we get here? There are two main drivers: One, we don’t spend enough as a nation on workforce development, and we don’t necessarily spend it effectively; Two, incentives are misaligned between workers and employers—all the risks currently fall on the learner; with little skin in the game by employers. 

Historically, the U.S. has underinvested in workforce training programs. This stands in stark contrast to other industrialized nations: the U.S. allocates far less to workforce training as a percent of GDP—one-third of the OECD average, a quarter of what Italy spends, and one-sixth of what Germany spends. In comparison, we spend about 20 times more on traditional higher education than we do on skills training. 

While it might have been true historically, a college degree is no longer a sure ticket to the middle class. In part this is because college degrees just aren’t sufficiently preparing many graduates for today’s economy. A college-for-all mentality has contributed to an unprecedented student debt crisis, with 1.7 trillion dollars of debt held by over 40 million Americans. And while only 38% of Americans have college degrees, many more start and do not finish. Around 40% of college students drop out before they earn their degree. And for those who do earn their degrees, many graduate without employable skills. Indeed, it has been reported that half of college graduates are underemployed, meaning they are working a job that doesn’t require a college degree.   

And, tuition costs are rarely the only—or the most significant—hurdle for students. Students need to take time out of paying work to get education and training. And then, real-life challenges like lack of affordable childcare or reliable transportation get in the way. These barriers disproportionately impact women and people of color, further hindering economic mobility for these groups. If we are to create an inclusive workforce system, we need to provide more than tuition support to reduce the overall risk equation for people. 

Finally, while employers are the greatest beneficiaries of a skilled workforce, they have been largely passive recipients of talent produced by the public system. We need employers to invest meaningfully in workforce training, informing curricula, engaging in career support, and actively recruiting from educational institutions. In addition, formal apprenticeships are rare in the United States.

All in all, we can’t achieve our climate goals without a workforce system that is effective, fair and accountable. We need to rewire the system, or we risk moving forward with capital projects—like that wind farm off the coast of Massachusetts—without the people with the skills to do the work.   

In fact, it’s estimated that Massachusetts needs 34,000 workers to realize our climate goals by 2030. As Governor Healey said, the heroes of this clean energy revolution are the climate technology mechanics, installers, and technicians; our task is to ensure that these opportunities are accessible to people.  

That is why we are so excited about the Massachusetts Climate Careers Fund. It will help close the skills gap for critical green jobs, support a diverse climate workforce, and provide equitable access to good jobs.   

We are grateful for this partnership with the Healey administration and the Massachusetts Clean Energy Center. A special shoutout to Chief Hoffer, the country’s first-ever cabinet level Climate Chief, who is orchestrating a whole-of government approach, engaging with a range of agencies across the state from energy to economic development to transportation to education to labor and workforce development. This Fund will help workers gain the skills they need to land these in-demand climate jobs using a talent finance approach.   

What is talent finance? Instead of issuing one-and-done grants and hoping for the best, talent finance models pool resources from government and philanthropy to enable learners to gain skills and land great jobs. Based on outcomes achieved, funding is then recycled to serve more learners.   

Here’s how it will work in Massachusetts:  

Learners access zero-interest, zero-fee, outcomes-based loans to cover the cost of the training. The Fund is also designed to address what I call the social determinants of work—the real-life barriers, like a car breaking down, or losing childcare, that easily derail learners. We are focused on supports to help learners persist and complete their training, whether it is emergency funds, living stipend support, career coaching and job placement services, learners will be well prepared to begin in-demand clean energy jobs. 

Then, if—and only if—learners land a job above a minimum income threshold, they’ll repay just the principal with zero interest OR an employer will repay on their behalf as a way to attract and retain skilled talent. All repayments will recycle back into the Fund to serve more learners into the future, amplifying the impact of each philanthropic and public dollar.  

Ultimately, this framework is designed to develop a robust and diverse pipeline of new workers to fill in-demand positions. I want to underscore four key features that make this model unique:

  1. It removes the financial risk from the individual; you only repay the principal if you land a well-paying job
  2. It addresses the practical barriers that can often get in the way of training
  3. It ensures all parties, including employers, share accountability in the process; and  
  4. It recycles funds to allow dollars to go further and serve more people. 

Over the last decade, Social Finance has been building innovative finance and talent finance models across the U.S.—at the state level from Colorado to New Jersey, and with the Google Career Certificates Fund, a national $100M initiative to help 20,000 low-income Americans embark on tech careers and achieve $1B in income gains.  

This is why we’re so excited about the Massachusetts Climate Careers Fund. We have talked a lot at this summit about innovation, collaboration and accountability. We believe this cross-sector partnership model of shared accountability has transformative potential.  

We are in a pivotal moment in the U.S. and we have a once in a generation opportunity. Thanks to three recently passed pieces of historic legislation—the Inflation Reduction Act, Bipartisan Infrastructure Law, and the CHIPS and Science Act—these landmark bills provide significant opportunities to strengthen communities through investments in a clean energy economy, catalyzing over $1 trillion in public and private investment. 

This is an opportunity we cannot squander. If we are to invest in and redesign our economy for a greener and more sustainable future, it needs to benefit the people who will power it. I am delighted to join our colleagues from Massachusetts in advocating for a new path forward. We hope that the Massachusetts Climate Careers Fund can serve as a blueprint for other communities nationally and globally, seeking to align climate goals while expanding economic opportunities for people, especially those who are the most vulnerable among us.  

Thank you.