Partnering with the Department of Labor to Create a National Skills Currency

By: Nick Moore, Acting Assistant Secretary for the Office of Career, Technical, and Adult Education

A student with a welding certificate from his local vocational school wants to apply for an auto repair sales job. But the job description requires automotive experience or an industry-recognized credential—and the employer isn’t confident that welding skills will translate to auto repair. In fact, the employer isn’t sure how to translate many of his applicants’ skills and qualifications for this position: night classes in engineering, an online sales course, an electrician apprenticeship.

This is America’s workforce challenge in a nutshell. Students and employers face a jigsaw puzzle of classes, trainings, certificates, and postsecondary pathways where pieces rarely fit, leaving talent untapped and opportunities out of reach.

The workforce advocacy group Credential Engine reports that there are over one million unique degree and non-degree credentials available in the United States, awarded by a sundry mix of 60,000 credential providers. It’s no wonder employers struggle to verify their value, and jobseekers lack clear pathways to in-demand jobs. A 2023 UPCEA report shows 65% of employers want more data to validate non-degree credentials. When creating training programs, asking the employers in the industry what their skill needs are should be an obvious way to begin—but a full 44% of employers said they have never been asked to participate in the design of such programs.

To resolve this longstanding problem, the U.S. Departments of Education and Labor have forged a historic Interagency Agreement (IAA), transferring $2.18 billion in FY 2025 from Education’s budget over to Labor. This money is intended to administer Perkins V career and technical education (CTE) and WIOA Title II adult education programs. The partnership, under which Labor leads the effort while Education retains oversight, was authorized under 20 U.S.C. §1231(a) and 31 U.S.C. §1535 and aligns with two Executive Orders from President Trump to streamline federal workforce systems and reduce bureaucracy at the Department of Education.

This IAA will have far-reaching effects. It will reduce state reporting burdens, align WIOA and Perkins plans, and create a single federal point of contact for states who want to drive workforce programs. It will also enable the creation of a national “lingua franca” of skills credentialing, where learning is translated into machine-readable, industry-recognized competency statements via Learning and Employment Records (LERs).

LERs are digital records that capture a learner’s skills—welding, coding, management, construction—as verified competencies. Now, in the AI era, these data points can quickly become part of a platform whose algorithm matches jobseekers to employers’ skills-based job descriptions, creating interoperable talent marketplaces that verify training and streamline hiring.

States have already laid stepping stones to this new system. While serving under Governor Kay Ivey of Alabama in 2023, I helped launch Talent Triad—a statewide registry that matched credentials to skill-based job descriptions through LERs. Indiana developed a similar program, Achievement Wallet, in 2021, through a partnership with Western Governors University. Achievement Wallet translated academic achievement to in-demand job skills that employers look for.

As the IAA with Labor is implemented, we can scale these state-level successes massively by building a cohesive national framework in which credentials—degree or non-degree—operate as bundles of verifiable competencies, stackable into flexible career pathways. We will use funds from Perkins Innovation and Modernization (PIM) grants, WIOA, and Registered Apprenticeships to construct a two-pronged career pathways model for youth and adults.

For youth, the model will accelerate access to postsecondary education and jobs via work-based learning, micro-credentials, and talent marketplaces. Students can earn postsecondary credit while exploring careers in high-demand fields, such as those dealing with new technological innovations that do not yet have educational degrees associated with them. For adults, it offers multiple entry and exit points, enabling unemployed or underemployed learners to earn stackable credentials, reenter the workforce, career pivot, and upskill for wage gains. AI-driven algorithms will map skill taxonomies, creating interoperable talent marketplaces that match jobseekers to employers.

Through this IAA, Education and Labor will revolutionize skills-based education pathways. By unbundling degrees into competency-based micro-credentials, modular programs will become a viable alternative to diplomas that are becoming outdated. This IAA is our first step toward a unified, skills-driven workforce system—maximizing each learner’s potential and building a stronger national workforce.

Nick Moore is Acting Assistant Secretary for OCTAE at the U.S. Department of Education. He previously served as Director of Governor Kay Ivey’s Office of Education and Workforce Transformation, where he helped launch the Alabama Talent Triad initiative.