At the American Family Insurance Institute for Corporate and Social Impact, we’re dedicated to closing equity gaps in the U.S. by investing in early-stage startups. Elevating family incomes is pivotal for improving health and well-being.
Our journey began in 2021, but my passion for enhancing livelihoods took root as I witnessed artisans in India struggling for sustainable jobs while their crafts languished.
This, along with my fascination for stylish Indian handicrafts, led to me founding Karmaara in 2014. Working with traditional shoemaking artisans in India, we aimed to create awareness about in-market designs, marketing avenues, and sales strategies to compete with mass-produced shoes. Challenges such as aligning product-market fit, sustaining continuous training and upskilling efforts, surfaced prominently. Yet, amidst these challenges, the profound impact of augmented, sustainable incomes on individuals’ well-being, mental health, and psychological security became evident.
Karmaara highlighted the impact of technology on jobs and the value of a skilled workforce. Yet, low-income Americans face hurdles accessing education and training for middle-skills. The COVID-19 pandemic worsened this, with the Bureau of Labor Statistics reporting a 9.5% unemployment rate among low-income workers compared to the national average of 4.2%.
Middle-skilled workers, without a four-year degree, are in demand but undersupplied. These jobs, such as medical technicians and IT technicians, remain vacant due to a lack of qualified applicants. The National Skills Coalition reports that despite these jobs constituting 53% of the workforce, only 43% have the required skills. This gap is creating talent shortages in industries like nursing and manufacturing, where middle-skill jobs will represent 48% of new positions between 2014 and 2024, with an average annual income of $50,000.
These jobs often suffer from image problems and misconceptions. The barriers to entry range from unawareness of career paths to negative perceptions about certain jobs and confusion about programs and earning potential. Existing solutions fall short in addressing these challenges and reaching the right audience.
Our Focus: Pathways to Middle-Skill Excellence
Training and Job Placement: Effective training is the gateway to middle-skills. Online platforms, apprenticeships, and immersive experiences can revolutionize learning. Trust-building is crucial, and drawing inspiration from our Karmaara experience, where deep immersion into artisans’ challenges and establishing rapport were paramount, this approach is akin to laying strong foundations. For contemporary startups, the training must be accompanied by robust job placements and continuous support to nurture candidates’ growth. Julius Education connects green job seekers with training, career paths, and placements, aligning aspirations with growth.
Comprehensive Support Ecosystems: Beyond training, people need accessible ways to complete the training and get placed. We believe that everyone inherently wants to improve their living, but low-income Americans have systemic barriers pulling them back. This can include transportation, job interview readiness, networking and sponsorship opportunities, language skills etc. We have invested in MentorSpaces that has created a virtual mentorship platform to connect underrepresented talent with mentors from large organizations. The goal is of the platform is to empower a community of mentors and mentees to advance their growth through conversation and shared experiences.
Upskilling for Professional Progression: Beyond initial skill acquisition, investing in upskilling opportunities is equally vital. As industries evolve, existing workers must adapt to remain relevant and competitive in the job market. Upskilling programs offer continuous learning and professional development, allowing individuals to progress in their careers and improve their income prospects. Our portfolio company, EnGen, provides job-related English-language training to workers and New Americans to enable economic mobility. This aids not just in job success, but also leads to better quality of life and civic participation for workers, immigrants, and refugees. NurseDash, another portfolio company, helps nurses find flexible work and shifts with ease and compatible to their schedules, which in turn leads to more security and income for the nurses.
Collaboration and Business Models: Collaboration between workforce development companies, governments, universities, and employers is also crucial in tailoring training programs to meet industry-specific demands. For startups, it is finding the right balance between working with these stakeholders and finding the right pain point for each. We believe that there is no one perfect model for companies in this sector, except that jobseekers should not be the one to pay for their trainings. At Karmaara, we built an interesting income-share model with our artisans and worked almost like a cooperative in sharing profits earned from sales. Other models are tapping in to government funding and corporate funding. Daivergent, a startup that increases job mobility for the neuro-diverse, is a provider available by states’ Vocational Rehabilitation programs to help with social skills development, job placement, and job training. EnGen is available to existing workers through their employers, and they also work to provide training to jobseekers through government and non-profit funding opportunities.
In Conclusion
Our optimism for the future of work is unwavering, deeply rooted in our commitment to amplifying workforce accessibility, equity, and affordability. In our subsequent installment of this series, we delve into our vertical-specific thesis focusing on skills trades and green jobs.