[Senate Hearing 108-324]
[From the U.S. Government Publishing Office]
S. Hrg. 108-324
REAUTHORIZATION OF THE WORKFORCE INVESTMENT ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON EMPLOYMENT, SAFETY, AND TRAINING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
ON
EXAMINING PROPOSED LEGISLATION AUTHORIZING FUNDS FOR PROGRAMS OF THE
WORKFORCE INVESTMENT ACT
__________
JUNE 18, 2003
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
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WASHINGTON : 2003
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
JUDD GREGG, New Hampshire, Chairman
BILL FRIST, Tennessee EDWARD M. KENNEDY, Massachusetts
MICHAEL B. ENZI, Wyoming CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee TOM HARKIN, Iowa
CHRISTOPHER S. BOND, Missouri BARBARA A. MIKULSKI, Maryland
MIKE DeWINE, Ohio JAMES M. JEFFORDS (I), Vermont
PAT ROBERTS, Kansas JEFF BINGAMAN, New Mexico
JEFF SESSIONS, Alabama PATTY MURRAY, Washington
JOHN ENSIGN, Nevada JACK REED, Rhode Island
LINDSEY O. GRAHAM, South Carolina JOHN EDWARDS, North Carolina
JOHN W. WARNER, Virginia HILLARY RODHAM CLINTON, New York
Sharon R. Soderstrom, Staff Director
J. Michael Myers, Minority Staff Director and Chief Counsel
------
Subcommittee on Employment, Safety, and Training
MICHAEL B. ENZI, Wyoming, Chairman
LAMAR ALEXANDER, Tennessee PATTY MURRAY, Washington
CHRISTOPHER S. BOND, Missouri CHRISTOPHER J. DODD, Connecticut
PAT ROBERTS, Kansas TOM HARKIN, Iowa
JEFF SESSIONS, Alabama JAMES M. JEFFORDS (I), Vermont
Ilyse W. Schuman, Staff Director
William Kamela, Minority Staff Director
(ii)
C O N T E N T S
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STATEMENTS
WEDNESDAY, JUNE 18, 2003
Page
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming,
opening statement.............................................. 1
Murray, Hon. Patty, a U.S. Senator from the State of Washington,
opening statement.............................................. 3
Kennedy, Hon. Edward M., a U.S. Senator from the State of
Massachusetts, opening statement............................... 6
Prepared statement........................................... 7
Dodd, Hon. Christopher J., a U.S. Senator from the State of
Connecticut, opening statement................................. 8
Prepared statment............................................ 9
Harkin, Hon. Tom, a U.S. Senator from the State of Iowa, prepared
statement...................................................... 11
Nilsen, Sigurd R., Director, Education, Workforce, and Income
Security Issues, Accompained by Dianne Blank, Assistant
Director, U.S. General Accounting Office....................... 12
Prepared statement of:
Sigurd Nilsen............................................ 22
Austin, Curtis C., President, Workforce Florida, Inc.,
Tallahassee, FL; James N. Ellenberger, Deputy Commissioner,
Virginia Employment Commission, Richmond, VA; Michael H.
Kennedy, Executive Director, Pacific Mountain Workforce
Development Council, Lacey, WA; Michael E. Smeltzer, Executive
Director, Manufacturers' Association of South Central
Pennsylvania, York, PA; and Charles Ware, Chairman, Wyoming
Workforce Development Council, Cheyenne, WY.................... 37
Prepared statements of:
Curtis C. Austin......................................... 39
James N. Ellenberger..................................... 47
Michael H. Kennedy....................................... 52
Michael E. Smeltzer...................................... 59
Charles Ware............................................. 64
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Questions of Senator Kennedy for Curtis C. Austin, James N.
Ellenberger, Michael H. Kennedy, and Sigurd Nilsen......... 75
Questions of Senator Kennedy for Michael E. Smeltzer and
Charles Ware............................................... 76
Questions of Senator Harkin for Sigurd Nilsen................ 76
Questions of Senator Murray for Panel I...................... 77
Questions of Senator Murray for Panel II..................... 78
Coalition of service providers, advocacy groups, and
individuals................................................ 79
(iii)
International Association of Jewish Vocational Services...... 81
National Hire Network........................................ 82
Deborah Lincoln.............................................. 83
Greg Nickels, Mayor of Seattle............................... 85
Shoreline Community College.................................. 86
Wade Delk.................................................... 88
Sory Hinton Jordan........................................... 93
Steve H. Perdue.............................................. 95
Diane D. Rath................................................ 100
C.W. Van Valkenburgh......................................... 103
Indian and Native American Employment and Training Coalition. 106
National Community Provider Coalition (NCPC)................. 107
Society of the Plastics Industry, Inc........................ 114
Toward a National Workforce Education and Training Policy.... 119
North Carolina Plastics Incumbent Worker Demonstration
Project.................................................... 158
Wider Opportunities for Women (WOW).......................... 160
REAUTHORIZATION OF THE WORKFORCE INVESTMENT ACT
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WEDNESDAY, JUNE 18, 2003
U.S. Senate,
Subcommittee on Employment, Safety and Training, Committee
on Health, Education, Labor, and Pensions,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:04 a.m., in
room SD-430, Dirksen Senate Office Building, Hon. Michael B.
Enzi (chairman of the subcommittee) presiding.
Present: Senators Enzi, Murray, Kennedy, and Dodd.
Opening Statement of Senator Enzi
Senator Enzi. I call the subcommittee hearing to order, and
I would like to begin by thanking Senator Murray and our
distinguished panelists for joining me today to answer some
important questions like: How can we help American workers find
new or better jobs? How do Americans get the training to be
skilled employees? How can we help American businesses find the
skilled employees they need to compete in a changing global
economy?
We can do all three things by creating a more demand-driven
and flexible workforce development system, a system that works
for both large and small businesses and in urban and rural
areas. Workforce development can be a powerful economic
development tool.
In these challenging times, reauthorization of the
Workforce Investment Act gives us an opportunity to improve the
lives of millions of our workers and increase the strength of
our businesses and thereby our communities.
In 1998, the Workforce Investment Act, WIA, was enacted to
create a streamlined job training and employment system that
would be responsive to the needs of employers and workers. WIA
may be a fairly new system, but we have already learned a great
deal about its strengths and weaknesses. These lessons
reinforce what I learned as a small business owner in Wyoming,
that is, rural areas face unique workforce development
challenges. The real opportunity in America comes from the
small business sector in all States, where the American dream
can still happen. Economic development and workforce
development go hand in hand. Washington cannot and should not
determine State, local, and individual workforce needs. And
overly burdensome administrative requirements divert resources
from serving customers. I will give a little more detail.
First, rural areas face unique workforce development
challenges. One-stop career centers are the focal point of
WIA's job training and employment system, yet distance can
create a barrier to a one-stop access in many rural and
frontier areas, like Wyoming. A job seeker or employer or
employer in, for instance, Dubois, WY, has to travel 150 miles
round trip to go to the nearest one-stop center in Lander, WY.
It is hard to understand the impact of distance here where in
Washington, there is the nearby Judiciary Square satellite one-
stop or a South Capitol Street one-stop to visit. Technology
can effectively remove the barrier created by distance. Wyoming
has created a virtual one-stop to make WIA services available
in every community in the State, and I am so pleased that
Charlie Ware, the chairman of Wyoming's Workforce Development
Council, is here to tell us about this and other steps that
Wyoming has taken to improve service in the rural areas. And,
in fact, we have a number of Wyoming folks that have come out
today to observe this and to talk to other people. As you meet
them, you may think that most of Wyoming is here. It is true.
[Laughter.]
But when you are from a State that has three Senators--we
count the Vice President in that--we really do have a
significant number of people here.
Through the reauthorization, we should leverage technology
to improve access to WIA services in all rural areas. Remember,
one-stop centers are not just bricks and mortar.
Second, the real opportunity in America comes from the
small business sector where the American dream can still
happen. However, WIA currently fails to tap into this
opportunity effectively. The system needs to be more responsive
to the needs of small business. The small employers with
limited personnel and limited resources are in the most need of
WIA services to find and develop skilled workers. Yet small
businesses are the least likely to know about the system, let
alone to navigate it. They do not have the extra person to
specialize in some of these things.
Third, the workforce development and economic development
go hand in hand. You need businesses to provide skilled jobs.
You also need a skilled workforce to attract business to an
area. The new Lowe's Home Improvement distribution center in
Cheyenne, WY, proves that workforce development is a powerful
economic development tool. Lowe's was looking at a number of
sites to open a regional distribution center. The Wyoming
Department of Workforce Services, the State and local economic
development agencies, and the local community college partnered
to provide job training to meet Lowe's needs. This was the
primary reason they selected Cheyenne. The distribution center
will bring 700 new jobs to Cheyenne, which is a large number
for Wyoming.
Fourth, Washington cannot and should not determine the
State, local, and individual workforce development needs. An
important goal of WIA was to allow State and local flexibility
to implement innovative workforce programs tailored to meet the
needs of local, regional, and State labor markets. States and
localities, not the Federal Government, are best positioned to
recognize and respond to workforce needs. However, current law
has restricted the ability of States and localities to
implement job training and employment services best suited for
their needs. Current law has also restricted the ability of
participants to receive the services that meet their needs. By
building more flexibility into the system, the full promise of
the Workforce Investment Act can be achieved.
Finally, overly burdensome administrative requirements
divert resources from serving customers. The system must have
accountability. However, the 17 current performance measures
must be simplified to more accurately and easily show the
impact WIA is having. We need the sales pitch. We do not need
mounds of data. The current excessive data collection and
reporting requirements have deterred some training providers
from even participating. Difficulty of documenting low-income
eligibility for youth has left at-risk youth out of the system.
By reducing administrative complexity, more resources can be
devoted to helping people get new or better jobs.
With these lessons in mind, reauthorization of the
Workforce Investment Act should focus on improving job training
and employment services in rural areas, particularly with the
use of technology, increasing the participation of small
business, linking workforce development with economic
development, and building more flexibility into the system.
Some States and localities have found creative ways to overcome
challenges imposed by current law. Wyoming has done a
magnificent job with the resources they have been allotted
under the current law. And I do commend their ingenuity.
What we have to do now is structure the reauthorization so
our States have built-in flexibility they need to help the
unemployed and the underemployed. States and localities should
be able to target efforts more directly toward people rather
than toward paperwork.
Deputy Secretary of Labor Cameron Findlay has already
testified before this committee about the administration's
innovative proposal for improving the Workforce Investment Act
through reauthorization. Today we will hear from the General
Accounting Office and leaders from the business community and
workforce development community. Reauthorizing the Workforce
Investment Act this year is a priority for the President, for
the Department of Labor, and for me. I look forward to working
with the administration, with my colleagues and the committee,
and with the stakeholders on a bipartisan bill--and we have
been working toward that already--that builds on the lessons we
have learned about this vital legislation.
I will now recognize the distinguished ranking member from
Washington, Senator Murray, for any statement she might want to
make.
Opening Statement of Senator Murray
Senator Murray. Well, thank you, Mr. Chairman. Let me
commend you for calling this second hearing of the Employment,
Safety and Training Subcommittee to update the Workforce
Investment Act to meet the needs of workers and employers. I am
happy to join in welcoming our two distinguished panels of
witnesses. They bring unique perspectives on how we can
strengthen and improve services to employers and job seekers,
and I welcome all of their expertise.
I especially want to thank this morning Mike Kennedy from
Pacific Mountain Workforce Development Council in Lacey, WA,
for making the long journey across our country to share his
insights with the subcommittee this morning.
Mr. Chairman, as we talk about WIA and performance measures
and personal re-employment accounts, it is easy to get caught
up in the jargon. But behind each one of these programs are
real people who have lost their jobs through no fault of their
own. They want to work. They want to pay their mortgage. They
want to put food on the table. And we have got an obligation to
help them succeed. These families are balanced on the leading
edge of our economy. Outward job opportunities and skills are
constantly shifting. We need to give them a strong, solid
foundation to a good-paying job.
I see the challenges in my home State of Washington. Our
unemployment rate is 7.3 percent. That is the second highest
unemployment in the Nation. Tens of thousands of workers in my
State have lost their jobs over the last 2\1/2\ years, and they
desperately need retraining services.
We have also seen that the number of people using one-stop
centers has increased dramatically. What we do with this act
may make the difference between someone who is trapped outside
the workforce without the skills they need and someone who can
compete and win in today's economy. So I hope we do not lose
sight of the families that are affected by every change we
make.
Let's also remember that unemployment is not a partisan
issue. It is an American challenge and one that we must face
together. I hope that under the leadership of our chairman we
will continue the strong tradition of bipartisanship around
workforce development issues.
Of course, WIA has only been operational for 3 years, which
is not enough time to fully analyze the success and the
failures of the current system. I do not believe we have the
kind of empirical evidence to suggest wholesale changes to the
act. I have been encouraged to see new partnerships developing
in my State with the business community, organized labor,
community colleges, and the provider community. We must build
on these successes and not throw the workforce system into
chaos by implementing sweeping changes.
As we begin to update our workforce programs, let's keep in
mind that we do not want to push people into dead-end jobs just
to get them off the rolls. Our goal is to empower people to
find jobs that will last and will truly improve their lives. To
meet that goal, I am focusing on three priorities.
First, we must empower WIA's two customers--business and
workers--to use their firsthand knowledge to meet local
employment needs while providing the appropriate incentives and
flexibility to bring people and businesses into one-stop
centers. This flexibility, however, should not mean using block
grants to consolidate services. For example, we should not
eliminate Wagner-Peyser funding for the critical labor exchange
function carried out by the U.S. Employment Service. I will
work hard during the appropriations process to seek renewed
Federal infrastructure funding for one-stops. My goal for this
funding is to help reduce the financial burdens facing one-stop
partners and to encourage greater cooperation and increase
leveraging of resources at the State and local level.
Second, we should make WIA's services more efficient at
every level by streamlining the performance, reporting, and
eligibility criteria, and knocking down barriers to job
training. We must strike an appropriate balance between State
and local control. For example, Washington State has done an
excellent job of governance through its tripartite board
structure. Any reauthorization bill must continue to allow
Governors to retain this type of flexibility in deciding how
best to structure its State board.
And, finally, we should provide more appropriate
performance measures to reflect the type of work and labor
market being served. I would also note that we have got to stop
the funding cuts that are undermining our workers. We have got
to fund workforce development programs adequately to meet the
growing needs of millions of unemployed and underemployed
Americans who have worked hard and played by the rules.
Before I close, I want to raise some concerns about the
personal re-employment accounts that the administration has
proposed. To me, that proposal is inadequate and unfair. First
of all, the accounts do not provide enough money to really help
a dislocated worker. The average training program costs $5,000.
The President only offers $3,000. So workers will simply not be
able to afford the training that they need.
In addition, if you take the $3,000, then you are cut off
from getting any other support from Workforce Investment Act
programs for a full year. And these accounts are not open to
everyone. They are only available to people who are collecting
unemployment benefits. That leaves out people whose benefits
have expired, new entrants, many women and minorities, and low-
wage workers.
Someone who has lost his or her job might not even be
eligible for re-employment accounts. And even if they are,
there is not enough money for even the average training
program, and they are cut off from receiving any other WIA
support for an entire year. That is not the type of solid and
reliable framework to help dislocated workers. We are trying to
build a springboard that dislocated workers can use to find a
good job.
I am concerned there are many holes in the administration's
approach, and I am afraid that many people are going to fall
through the cracks instead of getting the support that they
need.
Mr. Chairman, in closing, I believe that a strengthened
Workforce Investment Act can help provide the skills training
employers need to remain competitive in our global economy, and
I look forward to working with you, Mr. Chairman, and all the
members of the HELP Committee in fashioning a bipartisan
reauthorization bill that will be responsive to the needs of
all working Americans.
Thank you, Mr. Chairman.
Senator Enzi. Thank you.
Senator Kennedy?
Opening Statement of Senator Kennedy
Senator Kennedy. Well, thank you, Mr. Chairman, and I will
be very brief, and I appreciate your courtesy in letting me say
just a word.
First of all, I want to thank you for your great interest
in the whole issue of training for workers in this country and
for your willingness to keep an open mind in developing what we
all hope will be a strong, bipartisan bill to meet the very
critical need.
I thank Senator Murray, who gave an excellent outline of
both the challenges in developing the legislation and also, I
thought, a very keen observation about the personal re-
employment accounts.
Mr. Chairman, I remember very well, I go back to the time
that we had the CEDA program, when we had all of the challenges
that were out there in the CEDA program, and then we had the
JTPA, which was primarily the work of a Republican Senator from
Indiana, Senator Quayle. It was the only social program that
was passed in the first 4 years of the President Reagan period.
But he spent a lot of time on this. I had my differences with
Dan Quayle, but I respected the work that he placed on this and
the priority that he placed on it. And the JTPA was a very
creative way to try and be responsible to the business and
local needs. And in a number of places in my State, it worked
extraordinarily well. In other places it was weak. But what was
recognized by Senator Kassebaum and us on this committee later
was that we had six different agencies, 26 different training
programs, and we ought to bring them all together. And that is
what WIA was really all about. And I believe that we ought to
give it a chance.
I think the excellent GAO report in reviewing places where
it has been very successful would indicate that that is the
best way to move it. We cannot constantly every 4 years try and
find a new way of trying to restructure and reorganize
something which is of such fundamental and basic need in terms
of working Americans. When I came to the Senate, if you worked
down at the Falls River Shipyard, your grandfather worked
there, your father worked there, you had one job. Now you have
seven jobs once you enter the job market. You need continuing
training, training, education, training, training, training,
training. And I think the genius of this proposal is that it
has the different streams in terms of the youth with all the
complexity, the fact we have close to 500,000 youths that drop
out every year, working with the children in school, out of
school. The youth councils, we could talk about that. You have
the dislocated. You have the adult worker. You have the new
kinds of pressures with migrant workers and immigrant workers
that are coming in here, working with the business community,
the employment services and the value that they have.
I agree with you, Mr. Chairman, this is not particularly an
item for our committee because it talks about using the FUTA
programs and contributions in terms of the training programs,
and that really is not quite in our jurisdiction. And if it is
going to be altered and changed, I think we will have to give
it a good deal more thought. I think that employment service is
working.
Sure, we need to bring some--take a number of the
recommendations that have been made in the GAO and from a
number of the WIA Boards. I have spent time in my own State
recently in traveling the State and listening to both the
boards, the business community, and others. And they make a lot
of good suggestions. My hope is that we could find common
ground, we could build on what we have tried to do in the past,
and really make a difference.
What we are facing in this country now is a skill shortage.
We have got workers that are out there that want to work, as
Senator Murray said. It is just the skill shortage. And we need
to have a good, effective, committed program, and I want you to
know that we want to work with you and the committee to try and
achieve that.
I thank you for letting me say a word.
[The prepared statement of Senator Kennedy follows:]
Prepared Statement of Senator Kennedy
I commend our Chairman, Senator Enzi for calling this
important hearing and for his leadership on these workforce
issues over the years. This hearing will provide important
information as we prepare legislation to reauthorize the
Workforce Investment Act.
The 1998 Act accomplished a major reshaping of Federal job
training programs, moving to the concept of One-Stop service to
help workers acquire the skills that were in demand by area
businesses. That bipartisan legislation was a significant step
in simplifying the Federal programs to meet the needs of
workers and employers more effectively, and the reauthorization
gives us an opportunity to build on that achievement.
Today's struggling economy puts this system to a difficult
test. Since January 2001, millions of jobs have been lost. Over
eight million Americans are out of work, including two million
who are classified as long term unemployed because they have
been out of work for more than 6 months.
The new system of One-Stop Centers is helping these workers
and their families make it through these hard times. The
Centers are helping unemployed workers to identify available
jobs and obtain the training they need to qualify for good
jobs.
This year's reauthorization bill will enable us to
strengthen this system and make it more effective in meeting
the needs of businesses and workers, and establish key links
between economic development and workforce development.
In recent weeks, I have had the opportunity to meet with
constituents who serve on local Workforce Investment Boards in
Massachusetts. They have had good ideas for improving the law,
but they emphasized that the law is in the early stages of
implementation, and the last thing they want is sweeping
changes for political reasons.
I look forward to working with my colleagues to improve the
formulas in the current system, but now is not the time to
eliminate the Employment Service by blending its support with
other funding streams. To avoid duplication, there are many
other ways to meet that goal. Dislocating State workers will
only add to the growing numbers of the unemployed and force
States to design a new system during the current fiscal crisis.
We must continue to target resources on teenagers and young
adults. Last summer was the worst summer for young people 16-19
trying to get ahead in the job market--only 39 percent of
teenagers were employed, the lowest rate since 1965. Clearly,
we need a job creation program for these young people, to give
them the incentive they need to pay for college or to get a
firm footing in the workforce. Unfortunately, this summer may
well set new records for teenage unemployment.
We need to look closely at low-wage workers as well--hard-
working Americans who lack the skills to move into better-
paying jobs. We must work with employers to provide skills
training for these workers long before they are unemployed.
Improving the skills of low-skilled workers adds to the
productivity of businesses and makes our country stronger.
We must also strengthen the safety net for workers who are
most at risk in the current economy. Migrant and seasonal
farmworkers deserve specific programs to meet their unique
needs. Offenders returning to society have special needs to
become productive citizens, and they deserve assistance in
making a successful transition back into their communities.
We also plan to focus on standards for accountability, so
that we can assess how well workers are obtaining training and
services, and how well businesses are using the system.
I look forward to the testimony today, and I especially
thank Sigurd Nilsen and GAO for all of their work on the Act's
implementation.
Senator Enzi. Thank you. I appreciate those comments. You
mentioned the two earlier programs, CEDA and JTPA. My wife was
on State Advisory Councils for those, so I have a little
background in that. Now she is on the National Advisory Council
for Apprenticeships, so I still get excellent advice.
[Laughter.]
Senator Dodd?
Opening Statement of Senator Dodd
Senator Dodd. Well, thank you, Mr. Chairman. I will ask
unanimous consent that my opening statement be included in the
record. And let me echo the comments of Senator Kennedy with
regard to both you and Senator Murray. Senator Enzi, in your
tenure here, you have not wandered around and gotten involved
in a lot of different issues. You have focused in your tenure
here on workplace issues, and I want to commend you for it.
From the very beginning you have had a consistent message,
looking for different ways to focus on these issues. And we are
fortunate to have you chairing this committee; someone who
cares so much about these particular issues. Senator Murray as
well has been a champion on these questions over the years.
Just to echo what has been said, I guess, by others
already--I am concerned as well that we not try and make
sweeping changes here. A lot of places did not really get to
implement the Workforce Investment Act until the year 2000, so
it is just beginning, and the idea of not giving this a chance
to really show what it can do would worry me. We do that too
often here. We reinvent the wheel all the time, and if we do so
now, we can do it at our peril, particularly for the workers
and the businesses. I think it is very important when we talk
about this, while the emphasis obviously and to a large extent
is on seeing to it that people can have work, it is a
critically important issue for businesses to be able to have a
trained workforce that can compete and do the jobs in a 21st
century economy.
And so while this will do an awful lot for individual
workers, it does a great deal for businesses out there that
need to have the talented people to do the job.
I would be remiss if I did not express my concerns about
the budget areas with regard to WIA. While we are all talking
about the importance of WIA, we must lay the groundwork--and
obviously the questions will have to focus on this to some
extent. The budget request for 2004 consolidates adult,
dislocated workers and employment service allotments to States
into a single formula grant. Consolidation will likely cut job
training spending by $144 million and serve 100,000 fewer
youths. At least, those are the predictions here. And that is
at a time when we are seeing 9 million Americans out of work.
The unemployment rates, while they have not climbed as
dramatically in the last month or so, but certainly at 6.1
percent the rate is high and there is every indication that
those numbers are probably going to continue to climb before
this bottoms out. We are estimating in my State we will lose an
additional 10,000 workers before we get a bottoming-out of this
problem.
So at a time when the economy is worsening to some extent,
unemployment rates are rising and there are pressures on
businesses and industries to compete in the global marketplace,
the Workforce Investment Act has done an awful lot, and we
ought to continue to give it a chance to do what many people
felt it would do when we enacted it.
So I am very interested in observations this morning from
our witnesses who I am sure have a lot to suggest to us. But my
hope would be we do not go and redo WIA all over again at a
time when it is going to be very important that we put some
resources behind it and let this program work as well as those
who spent the hours putting it together envisioned it might
work back in 1998.
Thank you.
[The prepared statement of Senator Dodd follows:]
Prepared Statement of Senator Dodd
I would like to thank Chairman Enzi and Senator Murray for
scheduling today's hearing on re-authorizing Title I of the
Workforce Investment Act (WIA). In 1998, Congress
overwhelmingly endorsed WIA, bipartisan legislation to
streamline the way we deliver and fund job training programs.
I hope this subcommittee can work together, Democrats and
Republicans, to craft a bill that provides targeted
improvements to the WIA system. Such a revamping of the system
in 1998 could only have happened because of bipartisan work and
I hope we remember that bipartisan spirit as we move forward
with the reauthorization of such an important bill. I think it
is appropriate to discuss prudent ways to strengthen and
improve the system to meet the needs of workers and businesses
but I will say at the outset that I have concerns with efforts
to make large programmatic and funding allocation changes to
the WIA system so soon. After all, most States did not begin
implementing WIA until July 2000.
When Congress enacted WIA, we understood that it would
withstand an economic boom or bust. However, none of us knew
just how quickly the economy would be turned on its head.
Budget surpluses have been replaced with staggering deficits at
the Federal and State level. The May unemployment rate is at 6
percent, with nearly 9 million people out of work. The poverty
rate is escalating and foreclosures and personal bankruptcies
are skyrocketing. Rising natural gas prices impact consumer and
business spending. The economy is hurting.
Few issues are as important to the future of this country
as the lifelong education and training of our workforce. Now
more than ever, businesses must have access to workers who have
the skills to compete in a global economy with emerging
technologies and company downsizing. It is imperative that our
delivery of services meet the employment needs of the new
century.
At a time when 9 million people are unemployed and the
unemployment rate at 6.1 percent, I do question the
Administration's call for steep tax cuts and deep cuts to job
training and education funding. The President's budget request
for fiscal year 2004 consolidates Adult, Dislocated Workers and
Employment Service allotments to States into a single formula
grant. Consolidation will likely cut job training spending by
$144 million and serve 100,000 fewer youths. I contend that
without an educated and sufficiently trained workforce, our
country cannot prosper.
States are facing funding shortfalls of dramatic
proportions. In Connecticut, the shortfall is projected at
several hundred million dollars and there is no budget
agreement yet. Department and agency closures are proposed
which will translate into a decline in services for the poor,
elderly and unemployed. Already in 2003, the State has reduced
Customized Job Training and Apprenticeship programs and closed
four One-Stop centers. The remaining centers will have to
further dip into valuable service resources to pick up the
slack. I am pleased that several of our witnesses, including
the GAO, have raised concerns about one-stop infrastructure
funding and whether equitable cost-sharing agreements among
partners has been successful.
I am concerned that targeting $3.6 billion toward the
President's new program entitled Personal Re-employment
Accounts (PRA) may reach only 1.2 million unemployed workers
nationwide and may reduce flexibility for workers and
businesses. Funding for PRAs will come at the expense of other
training services.
WIA has been successful. One-Stop centers provide critical
services to workers, but the workforce boards have also been
able to work with local areas to ensure that businesses use the
One-Stop system to find workers. Leaders of the workforce
boards and mayors in Connecticut have alerted me to the
challenges they will face if consolidation and cuts to WIA
become a reality.
The elimination of Youth Opportunity Grants (YOG) will be
devastating to the country, to the State of Connecticut, and
most importantly to our youth. In 1999, Hartford was awarded a
Youth Opportunity Grant of $28 million over 5 years to
establish ``one-stop'' youth centers in local communities to
serve 1,400 youths to increase high-school completion rates,
increase employment and entry into post-secondary training.
Connecticut's unemployment rate for April is 5.3 percent
and in the month of April alone, the State lost 1,200 jobs. In
just under 3 years, the State has lost 44,000 jobs. More than
2,800 State employees lost their jobs in early 2003. In early
June, a Fairfield University economist stated that Connecticut
may lose an additional 10,000 jobs before the economy bottoms
out.
The Capital Region Workforce Development Board's One-Stop
system serves 17,000 individuals in the Hartford area and WIA
cuts will translate into decreased services to job seekers;
further One-Stop closures; fewer skilled training programs to
meet local business needs; and fewer services to the growing
dislocated worker population. Finally, there is a real concern
that businesses will relocate or choose not to come to the area
if there is a shortage of skilled workers.
I look forward to hearing from our witnesses today and
moving forward with a bipartisan Senate bill to reauthorize the
Workforce Investment Act.
Senator Enzi. Thank you. I thank all my colleagues for
their comments and I submit a prepared statement from Senator
Harkin for the record.
[The prepared statement of Senator Harkin follows:]
Prepared Statement of Senator Harkin
Thank you, Mr. Chairman for holding this hearing today on
the future of the Workforce Investment Act. This program is
especially critical as it applies to our struggling economy.
WIA is still a young job training program. It replaced the
Job Training Partnership Act with the mission to consolidate,
coordinate, and improve employment, training, literacy, and
vocational rehabilitation programs. Simply, it was supposed to
make job search and training assistance more user-friendly to
quickly get people back into the workforce with good-paying
jobs as well as provide opportunities for at-risk youth.
We passed WIA into law in 1998 and gave States until July
2000 to fully implement the job training program. In that time,
I have a general idea of how WIA seems to be working in my
State of Iowa and nationwide. Unfortunately, that's pretty much
all we have at this point. A general idea. WIA is too new and
we have too little data to justify overhauling the whole
program.
Unfortunately, that's exactly what the House did earlier
this year. They block-granted the program--which will do
nothing to help get people back to work.
Instead, we need to fill the gaps and fix the problems
we've identified to improve WIA. Let me list a few:
Tweak the funding formula. My State has difficulty planning
in the long term when the annual amount it receives from the
Department of Labor radically changes from year to year. Other
States have experienced this as well.
We need faster turnaround time on emergency grant funding
for job training. I've mentioned this before at a previous
hearing on the Labor HHS appropriations subcommittee where I
serve as ranking member. In some cases, Iowa had to wait more
than a year before it received an ``emergency grant'' to
provide training to laid off workers. That is simply
unacceptable. This is not a user-friendly job assistance
program if people have to wait a year for training.
The performance measurement system is flawed. As the GAO
concluded, the need to meet certain performance measures may be
causing one-stop centers to deny services to some clients who
may need them the most. Also, there is no measure that assesses
overall one-stop center performance and the limited data we do
receive is often too outdated to be of any real use.
Our one-stop centers and workforce boards need more
guidance from the Federal Government on priorities as well as
more flexibility.
And I keep hearing that disability access to one-stop
centers is a serious problem.
If we correct these problems in the reauthorization bill,
we will have made significant progress in providing people the
kind of job assistance they need to find a good-paying job. But
if we block grant WIA, it sends the message that we really
don't care and we don't want to deal with it. In this
struggling economy, we owe America's workforce more than that.
I thank the Chair.
Senator Enzi. We will move right away to panel number one.
Today we have Sigurd Nilsen, who is the Director of Education,
Workforce, and Income Security at the U.S. General Accounting
Office in Washington, DC., and we look forward to your report.
Thank you.
STATEMENT OF SIGURD R. NILSEN, DIRECTOR, EDUCATION, WORKFORCE,
AND INCOME SECURITY ISSUES, ACCOMPANIED BY DIANNE BLANK,
ASSISTANT DIRECTOR, U.S. GENERAL ACCOUNTING OFFICE
Mr. Nilsen. Mr. Chairman, Members of the Subcommittee,
thank you for inviting me here today to present the findings
from our report on promising one-stop practices we are
releasing today that was requested by Senator Kennedy and by
House Chairmen Boehner and McKeon. With me today is Dianne
Blank, the Assistant Director, who was responsible for the day-
to-day operations of the study and so much of our other work on
the Workforce Investment Act.
In the barely 3 years since the full implementation of WIA,
States and localities have found ways to use the flexibility in
WIA to develop creative ways, new ways to improve their one-
stop system. From the more than 51 stops identified and
nominated to us as exemplary nationwide, we visited 14 that had
developed promising strategies to streamline services for job
seekers, engage and serve employers, and build a solid one-stop
infrastructure. I want to share some of the examples of
promising strategies from the 14 sites we visited.
As you know, one of the primary objectives of WIA was to
streamline the provision of services from the myriad employment
training programs. What we found was that at all of the 14
sites we visited, there was a focus on streamlining services
for job seekers that included actions to ensure that job
seekers could readily access needed services, educate program
staff about all the one-stop services available to job seekers,
and consolidate case management and intake procedures. Some of
the one-stops found ways to serve job seekers who may have been
unable to come into the one-stop center due to transportation
barriers or other issues. For example, in Boston, the one-stop
placed staff in off-site locations, including family courts,
correction facilities, and welfare offices, to give job seekers
ready access to employment and program information. Other one-
stops had staff placed at the entrance to the one-stop to guide
job seekers to the right service.
Next, another major innovation of WIA was to focus on
engaging the employer community. All 14 one-stops did an
exceptional job of engaging and serving the needs of their
local employers by dedicating specialized staff to establish
relationships with employers, by establishing links with
employers through intermediaries such as local chambers of
commerce and economic development agencies, and by providing
tailored services to meet employers' specific workforce needs.
Staff at some of the one-stops we visited worked with
industry clusters to more efficiently meet local labor market
demands, particularly for industries with labor shortages. For
example, the one-stop in Aurora, CO, dedicated staff to address
the 1,600-nurse shortage in the Denver metro area. The Aurora
one-stop assisted in the creation of a health care recruitment
center designed to provide job seekers with placement
assistance and health care-related training.
Another example is from Clarksville, TN, where the one-stop
staff worked with chamber of commerce members to help banks in
the community that were having difficulty finding entry-level
employees with the necessary math skills. The one-stop
developed job training for job seekers that focused on the
specific skills needed in the banking industry locally.
Also, all of the one-stops we visited tailored their
services to meet employers' specific workforce needs by
offering an array of job placement and training assistance
designed for each employer. These services included specialized
recruiting, pre-screening, and customized training programs.
For example, one of the Nation's largest cabinet manufacturers
was considering several locations for a new production
facility. The one-stop in Pikeville, KY, drew the plant to
eastern Kentucky by offering a tailored set of services that
included holding a 3-day job fair, providing support for
training, and that resulted in the hiring of 105 people
immediately and the promise of another 350 workers in the
coming year.
Now I would like to quickly mention some of the issues
raised in our work over the past 3 years that should be
addressed during WIA reauthorization.
First, WIA's current performance measurement system is
flawed. The need to meet certain performance measures may be
causing one-stops to deny services to some clients who may be
most in need of services. In addition, the data used to measure
outcomes are outdated by the time they are available and are
not useful for day-to-day program management.
Another issue concerns WIA's allocation formulas. The
formulas do not reflect current program design and have caused
wide, unwarranted fluctuations in funding levels from year to
year, especially for the dislocated working program.
Another funding-related issue is the fact that we have
provided no separate funding source to support one-stop
infrastructure, and developing equitable cost-sharing
agreements has not always been successful, largely because of
limitations in the way funds for some of the mandatory partner
programs can be spent.
Another ongoing issue for WIA is that the provision for
certifying training providers as eligible is considered overly
burdensome by many providers and may reduce training options
for job seekers as providers have withdrawn from the WIA
system.
Finally, we have recommended that labor develop a research
agenda that better assesses the impact of integrated strategies
on services to job seekers and employers.
In conclusion, WIA represented a fundamental shift in the
way federally funded employment and training services are
delivered to job seekers and employers. It was a far more
radical change than it initially appeared, but in just under 3
years, States and localities have learned to embrace its
flexibility and develop systems that meet local needs. They are
doing what we envisioned: bringing on new partnerships and
forging new relationships at all levels. They are actively
working to engage the employer community and involve
intermediaries and others to address the economic development
needs of local communities. Some aspects of the law that have
caused difficulties deserve attention during reauthorization.
But given the significance changes brought about by WIA, more
time is needed to allow a better assessment of what is working
and what is not before making major changes in WIA's structure.
Mr. Chairman, this concludes my prepared statement, and I
will be happy to answer any questions you or other members of
the subcommittee may have at this time.
Senator Enzi. Thank you very much. We appreciate the
conciseness but also the specificity of what you had in your
remarks, and it was extremely helpful.
Now, you visited 14 one-stops across the country.
Mr. Nilsen. Yes.
Senator Enzi. I appreciate that. I like it when people
actually take a look at what is happening on the ground. Did
you look at the unique challenges that are faced by rural one-
stops? And what are some of the innovative ways that the rural
one-stops are overcoming some of those challenges?
Mr. Nilsen. The one-stops we visited were across the
country, North, South, East, West, urban, rural. We had seven
sites out of the 14 that served rural populations. Some, like
in Killeen, TX, were focused almost exclusively on serving
rural populations as well as Pikeville, KY. Others, like the
St. Louis one-stop, served a mixture of both suburban, urban,
and rural populations, covering a broad area.
Some of the issues for rural populations, it is surprising,
sometimes are not that much different from some of the
challenges facing urban. Transportation in rural areas is a big
issue, and getting to the one-stop, as you mentioned in your
opening remarks, people have to cover broad distances to get to
the one-stops.
So what one-stops have done is devise transportation
strategies to bring folks into the one-stop. Some particularly
pick locations that are on interstates or if there are bus
lines for easy access. Bus lines certainly are more an issue
that is useful in urban areas.
The other thing is using technology to better allow access
to services. In Killeen, TX, for example, the local libraries
all had active computers that were hard-wired into the one-stop
system so people could work on their resumes there. They
provided some training remotely through the computer systems.
So these are ways they are using technology to help serve
populations that may not find it convenient to get to the one-
stop readily.
Senator Enzi. Thank you. And if you think of some other
ways that transportation or technology or things solve some of
those rural problems----
Mr. Nilsen. Many of the sites have gone after
transportation grants to try to facilitate getting loaner cars
even that they have and having special van transportation to
bring people in, help them get to interviews.
Senator Enzi. Workforce development must be driven by
demand, the job at the end of the pipeline, and it is my firm
belief that we should be training people for skills that
employers need. All of the one-stop centers that you have cited
as exemplary have developed strategies to engage and provide
services to the employers.
I am particularly concerned about engaging the small
businesses who do not have the resources to reach out or to
work the system themselves. It is my understanding there have
been some specialized--some of the places have done some
specialized one-stop staff to outreach to those employers.
Could you give me a little more information on that?
Mr. Nilsen. That is correct. It seems like one of the
biggest targets of the one-stops in the employer community
often is the small employers because they can provide the kinds
of services that small employers often cannot afford to provide
for themselves because they do not have huge human resource
departments.
We saw one-stops that had tax assistance on-site at the
one-stop. They provided information for how to start a
business, how to develop new businesses. They also provided
space to do interviewing on-site to small businesses. They
linked with the chambers of commerce, which is a place where
many small businesses meet to have support. And they also
linked with the economic development agencies that looked at
growing local businesses or attracting new businesses to the
area.
Serving businesses they understand is how you get the jobs
that you need to place your job seekers into. They did many
things. They held job fairs to bring more employers into the
one-stop, having on-site referrals and providing space on a
regular, ongoing basis that any employer can come in and use.
Senator Enzi. I am almost out of time, but I have to ask
one more question, and that is, if you can describe some of
WIA's reporting requirements for training providers that impact
the quality and quantity of the training options. You mentioned
those words.
Mr. Nilsen. Right now many of the training providers that
were providing training under JTPA are saying that the new
reporting system is burdensome. We have somebody, even as few
as one person enrolled in a particular class, and now I have to
provide placement and wage information on everybody in that
class, whether they were supported by WIA or not. And they are
just finding that burdensome.
About half the States have requested and received a waiver
from the Labor Department to continue providing services
without providing the outcome information. But there are other
issues related to privacy. That was a concern for many of the
training providers. But they were just feeling that this is not
worth the effort.
So what has happened is that many of the providers have
limited the number of courses they offer to WIA participants,
so the range of courses available has shrunk somewhat. And this
is even from community colleges who say we do not have the
time, we do not have the money to do this, this is too
burdensome.
Senator Enzi. It seems to be one of the consistent comments
that we get. Thank you very much. My time is up.
Senator Murray?
Senator Murray. Thank you, Mr. Chairman.
First of all, it was really heartening to read in your
testimony of the successful programs and strategies that one-
stops across the country have implemented. I have a couple of
follow-up questions to the implementation challenges that you
talked about in your testimony.
Based on your evaluation of the implementation of WIA, you
believe that incremental changes are necessary, not wholesale
changes, and I wondered if you could talk a little bit about
why you came to this conclusion, why you think that incremental
changes are more appropriate than some of the wholesale
revisions that we have heard others suggest.
Mr. Nilsen. At this point, this July 1 is the third
anniversary of the full implementation of the Workforce
Investment Act. What we saw when we were out looking at the
system when it was first being implemented is that these were
major dramatic changes that were being made. People had to
figure out how to build new relationships, how to bring
everybody together at one-stops, negotiating agreements. It
took a year, sometimes a year and a half, as much as 2 years,
really to get up and running.
People are just now starting to understand what the
flexibility that WIA now provides for them has allowed them to
do. So, in a sense, they are just--this is just the end of
first-phase implementation. Now they are able to build on that
knowledge and continue to bring in partnerships.
The TANF program in many places increasingly is being
collocated, particularly the employment training assistance for
TANF recipients is being provided increasingly through the one-
stops. TANF is not a required partner. But they are realizing
that they have the benefit of sharing information. So they are
continuing to build other relationships.
At this point, the performance measures, as I said, are a
big impediment to serving a broad range of populations. But our
view is that the system is maturing. Three years is not enough
time for the system to mature. Incremental change--because
right now, when we found 50 nominations and we went to 14,
there are a lot of other one-stops out there that have not
quite figured it out yet. And one of the consistent
recommendations that we have made in our series of reports is
that the Department of Labor be much more proactive in
providing information to the one-stops across the country about
the flexibility, how to use it, how far can they go. And the
Department of Labor, in response to our most recent report, has
said they are trying to do more with their website and outreach
and provide the information, providing the information sharing.
But there are 1,972, almost 2,000 one-stops out there that
still have a lot to learn. Many of them still have not figured
it out yet. That is why we suggest incremental change at this
time.
Senator Murray. OK. The administration has proposed folding
the WIA adult programs into one adult block grant, which I
would assume is a radical change. Can you make some suggestions
about how we can make WIA and Wagner-Peyser more fully
integrated so we can maximize some of the resources?
Mr. Nilsen. I think bringing the resources of Wagner-Peyser
together to the one-stop is critical to the system. How that is
done and how you merge adult, dislocated, and the Wagner-Peyser
services, we do not know exactly the best way to do that. But
what we have seen is that a universal system--one-stops should
be universal. Anybody who needs assistance should know that
this is the one place they go regardless of whether they are a
youth, an adult, a dislocated worker, whether they are looking
for just a placement or whether they are looking for career
changes. This needs to be a universal system.
The other concern about how the system comes together
relates to the performance measures. Our work in the last year
looked at older workers and training for incumbent workers,
that is, skill upgrading for people who have a job. And one of
the things we consistently heard is that there are
disincentives in the WIA system for providing training for
these populations, particularly when you look at the wage gain,
earnings gain measures. Because if you compare somebody who is
out of work coming into the system getting a job, their wage
gain is huge. When you compare that with someone who already
has a job, they are getting some skill upgrading to enable them
to either keep the job or perhaps over the next year move into
a higher series, the wage gains in the short run are relatively
small. So there is a built-in disincentive in the system for
providing training to incumbent workers.
The same thing for dislocated workers. Many of them come
from higher-wage jobs. Coming into the system and getting
assistance is a career change often resulting in a wage loss.
If you look at the national statistics on earnings gain
comparing the adults and dislocated, right now the average
nationwide earnings gain for adults is over $3,000. The average
for dislocated workers is about $103.
So without controls in the system to make sure that if you
are providing job training assistance, intensive assistance to
a high number of incumbent workers, dislocated workers, older
workers, the performance measures need to be corrected to
adjust for that.
Senator Murray. Well, I share that concern, and I know in
Washington State we have a lot of disproportionately large
number of high-skilled Boeing workers who are unemployed. And I
am concerned that we need to figure out how to allow some of
our performance measures to be more tailored to unique demands
of States and local communities, and maybe you could share with
us real quickly what changes in the performance measures you
would recommend so that we can better serve some of our harder-
to-train or harder-to-re-employ workers.
Mr. Nilsen. One concern I have right now with the
performance measurement system is that it is a small subset of
the people getting services at the one-stops that are
registered and counted in the system. Anyone who comes in for
self-service or just placement assistance does not get entered
into the system. It is only those who get intensive services or
training.
So right off the bat, you have people--you have a system
operating and you have no idea how many people you are
providing assistance to and what is happening to the vast
majority of people coming into the system for services. So that
would be the first thing. You need to know who is coming into
the system, what are they getting, what is happening to them.
Second, you need to look at how you correct for differences
in the population that you serve. If you are serving a high
proportion of people who have very intensive needs, that needs
to be recognized as compared with folks where you have low
unemployment, people with skills coming in, and you are just
transitioning them into a new job.
Senator Murray. My time is up, Mr. Chairman. Thank you very
much.
Senator Enzi. Senator Dodd?
Senator Dodd. Thank you, Mr. Chairman and I thank you, Mr.
Nilsen, for your testimony, very concise and informative, which
is always appreciated in the committee.
A couple of questions, maybe a little bit redundant, but I
was struck by one of the things you said, and that is the
problems we are facing in terms of having dedicated funds for
operational purposes. I think there is maybe one State of all
50 that is not going through a budget deficit problem in the
country. I think New Mexico is maybe the only one because the
previous Governor just vetoed everything during his tenure.
Senator Enzi. And Wyoming.
Senator Dodd. And Wyoming.
The deficits are pretty staggering, and we are seeing the
pressures. You noted this in your study, that there were many
superbly run centers, and I concur with that, by the way.
Budget shortfalls in some States have led to reduced customized
job training in the apprenticeship programs and closed four
one-stop centers in my State. So the remaining centers are
forced now to pick up the slack. Workers have to travel greater
distances to get the kind of assistance and support, and a lot
of it is because of not having a dedicated operational fund to
support that.
I wonder if you might just comment on that. That is my
State. Is that unique? Is this going on across the country?
Mr. Nilsen. It is my sense it is likely going on throughout
the country. This has been--when we went out and did our first
look at how WIA was being implemented, this was the issue we
heard over and over again, paying for the one-stop. Because you
have 17 mandatory partners, the Labor Department programs, the
WIA programs, are the only ones--they are footing most of the
bill often for operating the one-stops.
The other partners, some of them, voc rehab, for example,
says we cannot spend money to pay you rent to collocate at the
one-stop. What they do is work on providing in-kind services so
they have staff that work in the one-stop. But other programs
already were set up, so bringing them into the one-stop saying,
you know, I have already got--you know, I am spending all the
money I have; I cannot give you more money.
Over time, I think they have figured out ways to work on
that, but right now, as they are facing budget shortfalls, it
is very likely that that is going to get tougher and tougher to
fund those one-stops.
Senator Dodd. The irony in a sense, as the economy worsens,
the need for this grows. The deficits mount, we cut back the
centers at the very time when you would be insisting that we
have more activity here, expanding it in order to give people a
chance to get work and help employers and so forth that are
facing the problems the chairman and Senator Murray have talked
about. We are going in the opposite direction, it seems to me.
If this is a trend line across the country where, as a result
of State shortfalls you are closing these centers, making it
more difficult for people to get assistance, making it more
difficult for employers to find people to work, it just seems
to me to be counterproductive.
Mr. Nilsen. One of the things we have found in a recent
study is a thing called the Reed Act which distributed excess
funds from the unemployment insurance system from the Federal
Government down to the States last year. There was $8 billion a
year ago March distributed down to the States. I think it was
about something like 22 States reported to us last year that
they are using some of that money to help fund their one-stops.
So this was, you know, new money introduced to them, but they
are having to do it. This money is also available to pay
unemployment insurance benefits, extended benefits, things like
that, expand coverage of other populations. But apparently
because of shortfalls in funding from other sources, they were
using these funds to partially fund the one-stops in their
States.
Senator Dodd. Let me jump to another area if I can, again,
on youth and youth training and youth employment. This is a
growing problem. We are looking at numbers already this year
with summer jobs--I do not know what the headlines are like in
every other State, but in mine I am seeing headlines about the
number of young people who will not be able to find work, not
getting work, and that poses some specific problems over these
coming few weeks of summer.
But in my State, we have also been recognized as having one
of the most successful youth opportunity programs called YO
Hartford. It received a grant of $28 million over 5 years to
provide some 1,400 youths ages 14 to 21 with help they need to
become productive and responsible adults. Again, I think all
agree that these kinds of efforts, if they are done right,
really can be very, very helpful.
Hartford, CT, I might point out, despite the fact that my
State is always listed as one of the most affluent States in
the country, if not the most affluent State on a per capita
income basis, Hartford, CT, my capital city, is one of the
poorest cities in America. I have around 6 percent or 9 percent
of people who own their own homes. I will not bore you with all
the details, but the fact of the matter is, despite this
reputation of being a State of great affluence, I have a lot of
poverty in my State, living cheek to jowl with wealth--in an
area not much bigger than Yellowstone National Park. And it is
not just Hartford. It is my other cities as well.
But a real effort has been made here to do something about
our young people. It is a result of a coordinated effort
between inclusion of the Hartford Public Schools, City of
Hartford, Capital Region Workforce Development Board, United
Way, Progress Collaborative, it is called, which is made up of
the Hartford Puerto Rican Forums, the Hartford Areas Rally
Together, and several other organizations. This program has
succeeded in showing--a lot of these kids have been very
successful--what a community effort can really do to improve
their lives.
However, under the proposal that has been outlined by the
Bush administration, the youth opportunity grants would be
eliminated, and places that have made a difference in areas
like Hartford would lack or be denied these funds.
What is your assessment of that?
Mr. Nilsen. We have not specifically looked at the youth
opportunity grants at this point, but we did take a look at the
WIA youth program early on to look at how it is getting up and
running. Things people told us was the youth councils were
something they supported. They liked having youth councils.
Even getting them together was hard, but they liked having
them.
Bringing in out-of-school youth was one of the biggest
challenges they faced. But, in general, having the targeted
program was something that they supported, and it was the only
program left in WIA that was income-tested so that it is
focused on an economically disadvantaged population.
I know that the youth opportunity grants are separate from
that but similarly targeted, so I would guess that there is
something that people at the local level have found very
useful.
Senator Dodd. Very, very helpful. One last question if I
can, and that is these performance standards, performance
measures. I am always concerned when we set up a new program,
new agencies, that we may not set up the best performance
measures. I am concerned that some of the hardest-to-serve
individuals are not being registered by local providers,
therefore, denying them services because it may adversely
impact their performance evaluations. And so I get nervous that
when you set up these standards in such a way that people want
to show that they are doing well, the hardest-to-serve people
get left behind because they do not necessarily make the great
statistics along the way.
Would you comment on that for me, please, and give me some
sense of how the performance evaluation or measures are being
used in this program?
Mr. Nilsen. You make a good point. Number one, these job
training systems focus on the outcomes measures they are given.
In JTPA and in WIA, the system follows the measures. So if you
give a system measures to follow, they focus on these measures.
So we have job placement, retention, earnings gains, and
customer satisfaction.
These are the right kinds of things to measure from a
program, but as I noted in my testimony and our past reports
have shown, the way these things are constructed right now
provide some disincentives for providing services to perhaps
the hardest-to-serve. And we have found--people tell us in the
one-stops that they go through a screening to make sure that
people they enroll, people who are going to go into intensive
services and training, they want to feel fairly confident that
they are going to be successful. Otherwise, they figure out
other less intensive ways to serve them. And as you point out,
these could be the people who you think need the most intensive
services.
Senator Dodd. Who might make it anyway. The ones you take
may make it anyway.
Mr. Nilsen. The ones you take may have made it anyway.
Senator Dodd. So the justification for the program becomes
suspect in some ways.
Mr. Nilsen. That is why, as I said before, I think having a
universal count of everybody who comes in the system is an
important way to start and work against a kind of creaming
mentality where you can take and shift people off. But also you
need to acknowledge the different characteristics of the
population you are serving and give folks credit for providing
services to the hardest-to-serve.
Senator Dodd. Absolutely. That is why we do this.
Mr. Chairman, we might take a look at that as we get it to
the reauthorization.
Senator Murray. Well, Mr. Chairman, if I could just
comment, Washington State is going to a swipe card system as of
July 1st this year, and they will be keeping track of everyone.
Senator Dodd. Great. Good. We might want to write something
into the bill. I thank you very much. I took a little more
time, and I apologize.
Senator Enzi. We would be happy to make those cards in
Wyoming.
[Laughter.]
I want to thank you for your testimony, both the oral
testimony and the written testimony, and the answers to the
questions. You have been a wealth of information, and I
appreciate the way that you have said it so that even I could
understand it.
[Laughter.]
We would also like to be able to submit some questions to
you, other ones that we may not have had time for in our
presentations here.
Mr. Nilsen. Certainly, Senator Enzi, we would be happy to
answer those. Thank you very much.
Senator Enzi. We really appreciate the help. Thank you for
coming today.
[The prepared statement of Mr. Nilsen follows:]
Prepared Statement of Sigurd R. Nilsen
workforce investment act
Exemplary One-Stops Devised Strategies to Strengthen Services, but
Challenges Remain for Reauthorization
Why GAO Did This Study
This testimony highlights findings from today's report on
strategies that exemplary one-stop centers have implemented to
strengthen and integrate services for customers and to build a solid
one-stop infrastructure. It also shares findings and recommendations
from GAO's past work on challenges that States and localities have
experienced as they implement the Workforce Investment Act (WIA), which
may be helpful as WIA is reauthorized.
What GAO Recommends
Because little is known about whether promising one-stop service
delivery approaches are meeting customers' needs, GAO has recommended
that the Secretary of Labor collaborate with other Federal agencies to
develop a research agenda that examines the impacts of these promising
approaches on one-stop customer satisfaction and outcomes. In addition,
GAO has recommended that the Secretary take steps to alleviate problems
pertaining to the WIA performance measurement system, WIA allocation
formulas and one-stop infrastructure finding, and the process for
certifying eligible training providers. Finally, GAO has suggested that
Labor provide clearer guidance and greater opportunities for one-stop
administrators to share promising practices in one-stop service
delivery and management.
What GAO Found
The workforce development system envisioned under WIA represents a
fundamental shift from prior systems, and barely 3 years have passed
since it was fully implemented. States and localities have found ways
to use the flexibility in WIA to develop creative new approaches to
providing services through their one-stop systems. In particular, a
group of 14 one-stops, identified as exemplary by government officials
and workforce development experts, developed promising strategies in
several key areas. To streamline services for job seekers, they ensured
that job seekers could readily access needed services, made sure that
staff were knowledgeable about all of the one-stop services available,
or consolidated case management and intake procedures. To engage and
serve employers, the centers dedicated specialized staff to work with
employers or industries, tailored services to meet specific employers'
needs, or worked with employers through intermediaries. To build a
solid one-stop infrastructure, the centers found innovative ways to
develop and strengthen program partnerships and to raise additional
funds beyond those provided under WIA.
GAO's work on WIA implementation over the past 3 years has
identified a number of issues that should be considered during WIA
reauthorization. First, the performance measurement system is flawed--
the need to meet certain performance measures may be causing one-stops
to deny services to some clients who may most need them; there is no
measure that assesses overall one-stop performance; and the outcome
data are outdated by the time they are available and are not useful in
day-to-day program management. Second, funding issues continue to
plague officials. The funding formula used to allocate funds to States
and local areas does not reflect current program design and often
causes unwarranted fluctuations in funding levels from year to year. In
addition, WIA provided no separate funding source to support one-stop
infrastructure, and developing equitable cost sharing agreements has
not always been successful. Third, many training providers consider the
current process for certifying their eligibility to be overly
burdensome, resulting in reduced training options for job seekers as
providers have declined to serve WIA-funded clients. Finally, State
officials have told GAO that they need more help from the U.S.
Department of Labor in the form of clearer guidance and greater
opportunities to share promising practices in managing and providing
services through their one-stop centers.
Mr. Chairman and Members of the Subcommittee: Thank you for
inviting me here today to present the findings from our recent work on
the Workforce Investment Act (WIA). As you know, WIA represented a
significant departure from earlier job training programs. Passed in
1998 and implemented by most States in July 2000, it was designed to
unify a fragmented employment and training system and create a single,
universal system--a one-stop system that could serve the needs of all
job seekers and employers. WIA sought to streamline the delivery of
federally funded employment and training services, enabling job seekers
to make informed choices among training providers and course offerings,
and enhancing the private-sector role in the workforce system. WIA gave
States and localities flexibility in deciding how to implement the one-
stop system, allowing local one-stops to tailor their systems to local
needs. Four separate Federal agencies--the Departments of Labor, Health
and Human Services (HHS), Education, and Housing and Urban Development
(HUD)--fund about 17 categories of programs that are required to
provide services through the one-stop system. In addition to programs
that are required to take part in the new system, Labor encourages
States and localities to include optional partners, such as Temporary
Assistance for Needy Families (TANF), in order to better meet the
specific workforce development needs of their local area. Labor takes a
lead role in this new system and is responsible for assessing the
effectiveness of Labor-funded programs and for providing guidance to
States and localities as programs deliver their services through the
one-stop system.
Since WIA was enacted, we have issued numerous reports that
addressed State and local efforts related to WIA, including challenges
in implementing the new training provider system, new partnership
requirements, and the new performance measurement system, as well as
issues related to funding. While much of our past work has focused on
challenges pertaining to WIA implementation, today we are releasing a
report that examines how States and localities have used the
flexibility in WIA to develop promising approaches to streamline
jobseeker services, engage employers, and strengthen one-stop
infrastructure.\1\ My testimony today will discuss (1) promising
strategies to improve one-stop services and operations being
implemented by a group of 14 one-stop centers that were identified as
exemplary and (2) challenges identified in our previous work that
States and localities have faced in implementing WIA.
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\1\ Workforce Investment Act: One-Stop Centers Implemented
Strategies to Strengthen Services and Partnerships, but More Research
and Information Sharing is Needed, GAO-03-725 (Washington, D.C.: June
18, 2003).
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In summary, in the barely 3 years since the full implementation of
WIA, States and localities have found ways to use the flexibility in
WIA to develop creative new ways to improve their one-stop systems. In
particular, a group of 14 one-stops, identified as exemplary by
government officials and workforce development experts, developed
promising strategies in the key areas of streamlining services for job
seekers, engaging and serving employers, and building a solid one-stop
infrastructure. However, despite the successes State and local
officials are having as they implement WIA and continue to build
relationships among the myriad partners in this new, and dramatically
different system, challenges remain. First, the performance measurement
system is flawed, causing some one-stops to deny services to some
clients who may be most in need of them. Moreover, outcome data are
outdated and are, therefore, not useful for day-to-day program
management. Second, funding issues also continue to plaque the system.
The funding formulas used to allocate funds to States and local areas
do not reflect current program design and has caused wide and
unwarranted fluctuations in funding levels from year to year. In
addition, WIA provided no separate funding source to support one-stop
infrastructure, and developing equitable cost sharing agreements has
not always been successful. Third, many training providers consider the
current provisions for certifying their eligibility to be overly
burdensome, which may reduce training options for job seekers as
providers have withdrawn from the WIA system. Finally, State officials
have told us that they need more help from Labor in the form of clearer
guidance and instructions and greater opportunities to share promising
practices in managing and providing services through their one-stop
centers.
BACKGROUND
The Workforce Investment Act created a new, comprehensive workforce
investment system designed to change the way employment and training
services are delivered. When WIA was enacted in 1998, it replaced the
Job Training Partnership Act (JTPA) with three new programs--Adult,
Dislocated Worker, and Youth--that allow for a broader range of
services, including job search assistance, assessment, and training for
eligible individuals.\2\ In addition to establishing three new
programs, WIA requires that a number of other employment-related
services be provided through a one-stop system, designed to make
employment and training services easier for job seeker customers to
access. WIA also requires that the one-stop system engage the employer
customer by helping employers identify and recruit skilled workers.
While WIA gives States and localities flexibility in implementing these
requirements, the law emphasizes that the one-stop system should be a
customer-focused and comprehensive system. Such a system gives job
seekers the job search and support services they need and provides
services that better meet employers' needs. (See fig. 1.)
---------------------------------------------------------------------------
\2\ While WIA was enacted in 1998, States were not required to
implement major provisions of WIA until July 1, 2000, when JTPA's
repeal was effective.
The major hallmark of WIA is the consolidation of services through
the one-stop center system. Seventeen categories of programs--termed
``mandatory partners''--with appropriations totaling over $15 billion
from four separate Federal agencies, are required to provide services
through the system. (See table 1.)
WIA allows flexibility in the way these mandatory partners provide
services through the one-stop system, allowing co-location in one
building, electronic linkages, or referrals to off-site partner
programs. While WIA requires these mandatory partners to participate,
WIA did not provide additional funds to operate one-stop systems and
support one-stop partnerships. As a result, mandatory partners are
expected to share the costs of developing and operating one-stop
centers.
Beyond the mandatory partners, one-stop centers have the
flexibility to include other partners in the one-stop system. Labor
suggests that these additional, or optional partners, may help one-stop
systems better meet specific State and local workforce development
needs. These optional partners may include TANF \3\ or local private
organizations. States have the option of mandating particular optional
partners to participate in their one-stop systems. For example, in
2001, 28 States had formal agreements between TANF and WIA to involve
TANF in the one-stop system.\4\ In addition, localities may adopt other
partners to meet the specific needs of the community.
---------------------------------------------------------------------------
\3\ TANF provides low-income families with income support and
employment-related assistance.
\4\ For more information on TANF participation in one-stop centers,
see GAO-02-739T.
---------------------------------------------------------------------------
About $3.3 billion was appropriated in fiscal year 2003 for the
three WIA programs--Adult, Dislocated Worker, and Youth. The formulas
for distributing these funds to the States were left largely unchanged
from those used to distribute funds under JTPA and are based on such
factors as unemployment rates, including the number of long-term
unemployed, and the relative number of low-income adults and youth in
the population. In order to receive their full funding allocation,
States must demonstrate the effectiveness of their three WIA programs
by tracking and reporting a variety of performance measures. These
performance measures gauge program results in the areas of job
placement and retention, earnings change, skill attainment and customer
satisfaction. WIA requires States to use Unemployment Insurance (UI)
wage records to gather this information about WIA participants.\5\
States are held accountable by Labor for their performance in these
areas and may suffer financial sanctions if they fail to meet their
expected performance standards. WIA did not establish any comprehensive
measures to assess the overall performance of the one-stop system.
---------------------------------------------------------------------------
\5\ In some cases, supplemental data sources may be used when UI
data are not available.
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WIA also requires that training providers wishing to serve
individuals' training needs through WIA's Adult and Dislocated Worker
Programs meet key data reporting requirements, including completion
rates, job placement rates, and wages at placement for all students
they serve, including those not funded under WIA. WIA requires the
collection of these outcome data so that job seekers receiving training
can use them to make more informed choices about training providers.
Unlike prior systems, WIA requires that individuals eligible for
training under the Adult and Dislocated Worker Programs receive
vouchers--called Individual Training Accounts--which they can use for
the training provider and course offering of their choice, within
certain limitations. WIA also requires these data so that States and
localities can assess training providers' performance. For example, a
State might only allow training providers' courses with an 80-percent
completion rate to remain on the training provider list. If a course
fails to meet that level, it would no longer be allowed to serve WIA-
funded individuals.
Finally, WIA called for the development of workforce investment
boards to oversee WIA implementation at the State and local levels. At
the State level, WIA requires, among other things, that the workforce
investment board assist the governor in helping to set up the system,
establish procedures and processes for ensuring accountability, and
designate local workforce investment areas. WIA also requires that
boards be established within each of the local workforce investment
areas to carry out the formal agreements developed between the boards
and each partner and oversee one-stop operations. WIA requires that
private-sector representatives chair the boards and make up the
majority of board members. This is to help ensure that the private
sector is able to provide information on the available employment
opportunities and expanding career fields and help develop ways to
close the gap between job seekers and labor market needs.
STATES AND LOCALITIES HAVE EMBRACED WIA'S FLEXIBILITY TO DEVELOP
PROMISING APPROACHES TO SERVING JOB SEEKERS AND EMPLOYERS
States and localities have found ways to use the flexibility in WIA
to develop creative new ways to serve job seekers and employers. In
particular, a group of 14 one-stops, identified as exemplary by
government officials and workforce development experts for our study of
promising one-stop approaches, has developed strategies for
streamlining services for job seekers, engaging and serving employers,
and building a solid one-stop infrastructure.\6\ All of the 14 centers
in the study streamlined services for job seekers by ensuring that they
can readily access needed services, by educating program staff about
all of the one-stop services available to job seekers, or by
consolidating case management and intake procedures. In addition, to
engage employers and provide them needed services, all of the centers
used strategies that included dedicating specialized staff to work with
employers or industries, tailoring services to meet specific employers'
needs, or working with employers through intermediaries, such as
Chambers of Commerce or economic development entities. Finally, to
provide the infrastructure needed to support better services for job
seekers and employers, many of the one-stops we visited found
innovative ways to develop and strengthen program partnerships and to
raise additional funds beyond those provided under WIA. (Figure 2 shows
the locations of the 14 one-stop centers we visited.)
---------------------------------------------------------------------------
\6\ The centers in our study represented a geographic and
demographic mix, ranged from rural to urban, and served from 500 to
42,500 customers each month. Some of the sites, such as Kansas City,
Missouri, represented a mix of urban, suburban, and rural customers.
They also represented a mix of one-stop operators--those responsible
for administering the one-stop centers--including nonprofit
organizations, a consortium of one-stop partners, and local government
entities.
SELECTED ONE-STOPS USED STRATEGIES TO STREAMLINE SERVICES FOR JOB
SEEKERS
All of the one-stop centers in our recent study focused their
efforts on streamlining services for job seekers by ensuring that job
seekers could readily access needed services, educating program staff
about all of the one-stop services available to job seekers, or
consolidating case management and intake procedures. To ensure that job
seekers could readily access needed services, one-stops we visited
allocated staff to help them navigate the one-stop system, provided
support to customers with transportation barriers, and expanded
services for one-stop customers. For example, managers in Erie,
Pennsylvania, positioned a staff person at the entrance to the one-stop
to help job seekers entering the center find needed services and to
assist exiting job seekers if they did not receive the services they
sought. In addition to improving access to one-stop center services on-
site, some of the one-stops we visited found ways to serve job seekers
who may have been unable to come into the one-stop center due to
transportation barriers or other issues. For example, in Boston,
Massachusetts, the one-stop placed staff in off-site locations,
including family courts, correctional facilities, and welfare offices,
to give job seekers ready access to employment and program information.
Finally, one-stops also improved job seeker access to services by
expanding partnerships to include optional service providers--those
beyond the program partners mandated by WIA. These optional partners
ranged from federally funded programs, such as TANF, to community-based
organizations providing services tailored to meet the needs of local
job seekers. The one-stop in Dayton, Ohio, was particularly proactive
in forming optional partnerships to meet job seekers' service needs. At
the time of our visit, the Dayton one-stop had over 30 optional
partners onsite.
To educate program staff about one-stop services, centers used
cross-training sessions in order to inform staff about the range of
services available at the one-stop. Cross-training activities ranged
from conducting monthly educational workshops to a shadow program to
help staff become familiar with other programs' rules and operations.
Officials in Salt Lake City, Utah, reported that cross-training
improved staff understanding of programs outside their area of
expertise and enhanced their ability to make referrals. The Pikeville,
Kentucky, one-stop supported cross-training workshops in which one-stop
staff from different partner programs educated each other about the
range of services they could provide. After learning about the other
programs, Pikeville staff collaboratively designed a service delivery
flow chart that effectively routed job seekers to the appropriate
service providers, providing a clear entry point and a clear path from
one program to another. In addition, the Vocational Rehabilitation
staff at the Pikeville one-stop told us that cross training other
program staff about the needs of special populations enabled them to
more accurately identify hidden disabilities and to better refer
disabled customers to the appropriate services.
Centers also sought to reduce the duplication of effort across
programs and the burden on job seekers navigating multiple programs by
consolidating case management and intake procedures across programs
through the use of shared service plans for customers and shared
computer networks. Ten of the 14 one-stops we visited consolidated
their intake processes or case management systems. This consolidation
took many forms, including having case workers from different programs
work as a team developing service plans for customers to having a
shared computer network across programs. For example, in Blaine,
Minnesota, caseworkers from the various one-stop programs met regularly
to collaborate in developing and implementing joint service plans for
customers who were co-enrolled in multiple programs. To efficiently
coordinate multiple services for one-stop customers in Erie,
Pennsylvania, one-stop staff used a networked computer system with a
shared case management program, so that all relevant one-stop program
staff could share access to a customer's service plan and case file. In
Kansas City, Missouri, the Youth Opportunity Program and the WIA Youth
Program staff shared intake and used a combined enrollment form to
alleviate the burden of multiple intake and assessment forms when
registering participants.
SELECTED ONE-STOPS DEVELOPED STRATEGIES TO ENGAGE AND PROVIDE SERVICES
TO EMPLOYERS
All of the one-stops we visited engaged and served employers by
dedicating specialized staff to establish relationships with employers
or industries, by working with employers through intermediaries, or by
providing specially tailored services to meet employers' specific
workforce needs. One-stop officials told us that engaging employers was
critical to successfully connecting job seekers with available jobs. In
order to encourage employers' participation in the one-stop system,
specialized staff outreached to individual employers and served as
employers' primary point of contact for accessing one-stop services.
For example, the one-stop in Killeen, Texas, dedicated specialized
staff to serve not only as the central point of contact for receiving
calls and requests from employers but also to identify job openings
available through employers in the community. In addition to working
with individual employers, staff at some of the one-stops we visited
also worked with industry clusters, or groups of related employers, to
more efficiently meet local labor demands--particularly for industries
with labor shortages. For instance, the one-stop in Aurora, Colorado,
dedicated staff to work with specific industries, particularly the
healthcare industry. In response to a shortage of 1,600 nurses in the
Denver metro area, the Aurora one-stop assisted in the creation of a
healthcare recruitment center designed to provide job seekers with job
placement assistance and healthcare-related training.
In addition to dedicating specialized staff, all of the one-stops
we visited worked with intermediaries to engage and serve employers.
Intermediaries, such as a local Chamber of Commerce or an economic
development entity, served as liaisons between employers and the one-
stop system, helping one-stops to assess the workforce needs of
employers while connecting employers with one-stop services. For
example, the one-stop staff in Clarksville, Tennessee, worked with
Chamber of Commerce members to help banks in the community that were
having difficulty finding entry-level employees with the necessary math
skills. To help connect job seekers with available job openings at
local banks, the one-stop developed a training opportunity for job
seekers that was funded by Chamber members and was targeted to the
specific skills needed for employment in the banking community.
Specialized staff at many of the one-stops we visited also worked with
local economic development entities to recruit new businesses to the
area. For example, the staff at the Erie, Pennsylvania, one-stop worked
with a range of local economic development organizations to establish
an employer outreach program that developed incentive packages to
attract new businesses to the community.
Finally, all of the one-stops we visited tailored their services to
meet employers' specific workforce needs by offering an array of job
placement and training assistance designed for each employer. These
services included specialized recruiting, pre-screening, and customized
training programs. For example, when one of the nation's largest
cabinet manufacturers was considering opening a new facility in the
eastern Kentucky area, the one-stop in Pikeville, Kentucky, offered a
tailored set of services to attract the employer to the area. The
services included assisting the company with pre-screening and
interviewing applicants and establishing an on-the-job training package
that could use WIA funding to offset up to 50 percent of each new
hire's wages during the 90-day training period. The Pikeville one-stop
had responsibility for administering the application and assessment
process for job applicants, including holding a 3-day job fair that
resulted in the company hiring 105 people through the one-stop and a
commitment to hire 350 more in the upcoming year. According to a
company representative, the incentive package offered by the one-stop
was the primary reason the company chose to build a new facility in
eastern Kentucky instead of another location.
one-stop centers built a solid infrastructure by strengthening program
PARTNERSHIPS AND RAISING ADDITIONAL FUNDS
To build the solid infrastructure needed to support better services
for job seekers and employers, many of the one-stops we visited
developed and strengthened program partnerships and raised funds beyond
those provided under WIA. Operators at 9 of the 14 one-stops we visited
fostered the development of strong program partnerships by encouraging
communication and collaboration among partners through functional teams
and joint projects. Collaboration through teams and joint projects
allowed partners to better integrate their respective programs and
services, as well as pursue common one-stop goals and share in one-stop
decision-making. For example, partners at the Erie, Pennsylvania, one-
stop center were organized into four functional teams--a career
resource center team, a job seeker services team, an employer services
team, and an operations team--which together operated the one-stop
center. As a result of the functional team meetings, partners reported
that they worked together to solve problems and develop innovative
strategies to improve services in their respective functional area.
One-stop managers at several of the sites in our study told us that
the co-location of partner programs in one building facilitated the
development of strong partnerships. For this reason, one-stop managers
at several of the centers reported that they fostered co-location by
offering attractive physical space and flexible rental agreements. For
example, in Pikeville, Kentucky, the local community college donated
free space to the one-stop on its conveniently located campus, making
it easier to convince partners to relocate there. Partners were also
eager to relocate to the Pikeville one-stop because they recognized the
benefits of co-location for their customers. For instance, staff from
the Vocational Rehabilitation Program said that co-location at the one-
stop increased their customers' access to employers and employment-
related services. Several one-stops that did not co-locate found ways
to create strong linkages with off-site partners. For example, in
addition to regular meetings between on-site and off-site staff, the
one-stop in Aurora, Colorado, had a staff person designated to act as a
liaison and facilitate communication between on-site and off-site
partners. Nationwide, co-location of partner services has been
increasing since WIA was enacted. For example, in 2000, 21 States
reported that Education's Vocational Rehabilitation Program was co-
located at the majority of their one-stops; this number increased to 35
States by 2001. Similarly, TANF work services were co-located in at
least some one-stops in 32 States in 2000, increasing to 39 States by
2001.
Managers at all but 2 of the 14 one-stops we visited said that they
were finding ways to creatively increase one-stop funds through fee-
based services, grants, or contributions from partner programs and
State or local governments. Managers said these additional funds
allowed them to cover operational costs and expand services despite
limited WIA funding to support one-stop infrastructure and restrictions
on the use of program funds. For example, one-stop operators in
Clarksville, Tennessee, reported that they raised $750,000 in fiscal
year 2002 through a combination of fee-based business consulting, drug
testing, and drivers' education services. Using this money, the center
was able to purchase a new voice mail and computer network system,
which facilitated communication among staff and streamlined center
operations.\7\ Centers have also been proactive about applying for
grants from public and private sources. For example, the one-stop
center in Kansas City, Missouri, had a full-time staff person dedicated
to researching and applying for grants. The one-stop generated two-
thirds of its entire program year 2002 operating budget of $21 million
through competitive grants available from the Federal Government as
well as from private foundations. This money allowed the center to
expand its services, such as through an internship program in high-tech
industries for at-risk youth. One-stop centers also raised additional
funds by soliciting contributions from local or State Government and
from partner agencies. For instance, the Dayton, Ohio, one-stop
received $1 million annually from the county to pay for shared one-stop
staff salaries and to provide services to job seekers who do not
qualify for services under any other funding stream. Dayton one-stop
partners also contributed financial and in-kind resources to the center
on an as-needed basis.
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\7\ While several centers had enthusiastically adopted fee-based
services as a method of raising funds, it is important to note that
managers of at least one center said they chose not to charge for
services because they believed this might deter some employers or job
seekers from accessing the services they need.
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DESPITE SUCCESSES, SOME ASPECTS OF WIA HAVE STYMIED OFFICIALS' EFFORTS
TO IMPLEMENT WIA AS INTENDED
Despite the successes State and local officials are having as they
implement WIA, some key aspects of the law, as well as Labor's lack of
clear guidance in some areas, have stymied their efforts. First, the
performance measurement system is flawed--the need to meet certain
performance measures may be causing one-stops to deny services to some
clients who may be most in need of them; there is no measure that
assesses overall one-stop performance; and the data used to measure
outcomes are outdated by the time they are available and are,
therefore, not useful in day-to-day program management. Second, funding
issues continue to plague the system. The funding formulas used to
allocate funds to States and local areas do not reflect current program
design and has caused wide fluctuations in funding levels from year to
year. In addition, WIA provided no separate funding source to support
one-stop infrastructure and developing equitable cost sharing
agreements has not always been successful, largely because of the
limitations in the way funds for some of the mandatory programs can be
spent. Third, the current provision for certifying training providers
as eligible is considered overly burdensome by many providers and may
reduce training options for job seekers as providers have withdrawn
from the WIA system. Finally, State officials have told us that they
need more help from Labor in the form of clearer guidance and
instructions and greater opportunities to share promising practices in
managing and providing services through their one-stop centers.
WIA'S PERFORMANCE MEASUREMENT SYSTEM MAY BE CAUSING SOME CLIENTS TO BE
DENIED SERVICES AND DOES NOT PROVIDE AN ACCURATE PICTURE OF WIA'S
EFFECTIVENESS
The performance measurement system developed under WIA may be
causing some clients to be denied services and does not allow for an
accurate understanding of WIA's effectiveness. First, the need to meet
performance levels may be the driving factor in deciding who receives
WIA-funded services at the local level. Officials in all five States we
visited for one study told us that local areas are not registering many
WIA participants, largely because local staff are reluctant to provide
WIA-funded services to job seekers who may be less likely to find
employment or experience earnings increases when they are placed in a
job.\8\ For example, one State official described how local areas were
carefully screening potential participants and holding meetings to
decide whether to register them. As a result, individuals who are
eligible for and may benefit from WIA-funded services may not be
receiving services that are tracked under WIA. We found similar results
in our studies of older workers and incumbent workers.\9\
---------------------------------------------------------------------------
\8\ See, Workforce Investment Act: Improvements Needed in
Performance Measures to Provide a More Accurate Picture of WIA's
Effectiveness, GAO-02-275 (Washington, D.C.: Feb. 1, 2002).
\9\ See, for example, Workforce Training: Employed Worker Programs
Focus on Business Needs, but Revised Performance Measures Could Improve
Access for Some Workers, GAO-03-353 (Washington, D.C.: Feb. 14, 2003);
Older Workers: Employment Assistance Focuses on Subsidized Job and Job
Search, but Revised Performance Measures Could Improve Access to Other
Services, GAO-03-350 (Washington, D.C.: Jan. 24, 2003).
---------------------------------------------------------------------------
Performance levels for the measures that track earnings change for
adults and earnings replacement for dislocated workers may be
especially problematic. Several State officials reported that local
staff were reluctant to register already employed adults or dislocated
workers. State and local officials explained that it would be hard to
increase the earnings of adults who are already employed or replace the
wages of dislocated workers, who are often laid off from high-paying,
low-skilled jobs or from jobs that required skills that are now
obsolete. In addition, for dislocated workers, employers may provide
severance pay or workers might work overtime prior to a plant closure,
increasing these workers' earnings before they are dislocated. Many
dislocated workers who come to the one-stop center, therefore, have
earned high wages just prior to being dislocated, making it hard to
replace--let alone increase--their earnings. If high wages are earned
before dislocation and lower wages are earned after job placement
through WIA, the wage change will be negative, depressing the wage
replacement level. As a result, a local area may not meet its
performance level for this measure, discouraging service to those who
may need it.
Second, outcomes are measured largely using unemployment insurance
(UI) wage data, but these data suffer from time delays of up to as much
as 14 months, making the data outdated by the time they are available.
For example, we asked States in a survey we conducted in 2001, how
quickly job placement outcome data would be available to them from UI
wage records. We found that for 30 States, the earliest time period
that job placement data would be available was 6 months after an
individual entered employment, with 15 States reporting that it may
take 9 months or longer. Similarly, over half of States reported that
obtaining the necessary information on employment retention could take
a year or longer. In fact, current available data on the wage-related
measures reflects performance from the previous program year. While UI
wage records are the best data source currently available for
documenting employment, the lack of timely data makes it difficult for
State and local officials to use the performance measures for short-
term program management, including improving one-stop services. Some
States and localities have developed other means, sometimes adding
additional performance measures, to fill this information gap.
Finally, there are no measures to gauge the performance of the one-
stop system as a whole. At least 17 programs provide services through
the one-stop system and most have their own performance measures.
Although these performance measures may be used for assessing outcomes
for individual programs, they cannot be used to measure the success of
the overall system. For example, no program has a measure to track job
seekers who use only self-service or informational activities offered
through the one-stop, which may constitute a large proportion of job
seekers. Not knowing how many job seekers use the one-stop's services
limits the one-stop's ability to assess its impact. Furthermore, State
and local officials told us that having multiple performance measures
has impeded coordination among programs. There has been limited
progress in developing overall performance measures for the one-stop
system. Labor convened a working group in September 2001 to develop
indicators of the one-stop system's performance, but they have not yet
issued them.
FUNDING THE SYSTEM ENVISIONED UNDER WIA IS HAMPERED BY FLAWED FUNDING
FORMULAS AND THE LACK OF A SPECIFIC FUNDING SOURCE FOR THE ONE-STOP
INFRASTRUCTURE
As States and localities have implemented WIA, they have been
hampered by funding issues, including flawed funding formulas and the
lack of a funding source dedicated specifically to the one-stop
infrastructure. We identified several issues associated with the
current formulas. Formula factors used to allocate funds are not
aligned with the target populations for these programs, there are time
lags in the data used to determine these allocations, and there is
excessive funding volatility associated with the Dislocated Worker
Program that is unrelated to fluctuations in the target populations. As
a result, States' funding levels may not always be consistent with
their actual need for services. In addition, no funding source exists
with which to fund the one-stop infrastructure, and the volatile
funding levels that States have experienced in the past 3 years have
limited their ability to plan and develop their one-stop systems under
WIA.
FORMULAS USED TO ALLOCATE FUNDS HAVE LIMITATIONS
Some of the factors used in the formulas to allocate funds are not
clearly aligned with the programs' target populations.\10\ For example,
the Youth program targets a specific group of low-income youth with
certain barriers to employment. However, two-thirds of its funds are
distributed based on two factors that measure general unemployment
rather than youth unemployment. The remaining third is distributed
according to the number of low-income youth in States, but even this
factor does not measure low-income youth who face barriers to
employment. The target population and formula for the WIA Adult program
also are misaligned. Basic services provided through the Adult program
are open to all adults regardless of income, while low-income adults
and public assistance recipients have priority for training and other
more intensive services. However, the WIA Adult allocation formula is
more narrowly focused on States' relative shares of excess
unemployment, unemployment in Areas of Substantial Unemployment (ASUs),
and low-income adults. Finally, the Dislocated Worker Program is
targeted to several specific categories of individuals, including those
eligible for unemployment insurance and workers affected by mass
layoffs. The factors used to distribute Dislocated Worker funds are
not, however, specifically related to these populations. Two-thirds of
program funds are distributed according to factors that measure general
unemployment. One-third is distributed according to the number of long-
term unemployed, a group that is no longer automatically eligible for
the program.
---------------------------------------------------------------------------
\10\ The formulas for distributing these funds to the States were
left largely unchanged from those used to distribute funds under JTPA.
---------------------------------------------------------------------------
In addition to formula misalignment, allocations may not reflect
current labor market conditions because there are time lags between
when the data are collected and when the allocations are available to
States. The oldest data are those used in the Youth and Adult program
formulas to measure the relative numbers of low-income individuals in
the States. The decennial Census is the source for these data, and
allocations under this factor through 2002 are based on data from the
1990 Census. The data used to measure two of three factors for both the
Youth and Adult programs are more recent, but are still as much as 12
months out of date. The time lags for the data used to calculate
Dislocated Worker allocations range from 9 months to 18 months.
Finally, funding for the Dislocated Worker Program suffers from
excessive and unwarranted volatility--significantly more volatile, as
much as 3 times more so, than funding for either the Youth or Adult
program. Some States have reported that this volatility makes program
planning difficult. While some degree of change in funding is to be
expected due to changing dislocations in the workforce, changes in
funding do not necessarily correspond to these changes. For example,
changes in the numbers of workers affected by mass layoffs from year to
year--one measure of dislocation activity--ran counter to changes in
Dislocated Worker allocations in several States we examined. In New
York, for example, dislocations due to mass layoffs increased by 138
percent in 2001, but funding allocations that year decreased by 26
percent. Conversely, in 1999, New York's dislocations decreased by 34
percent, while funding allocations actually increased by 24 percent.
Several aspects of the Dislocated Worker formula contribute to
funding volatility and to the seeming lack of consistency between
dislocation and funding. The excess unemployment factor has a
``threshold'' effect--States may or may not qualify for the one-third
of funds allocated under this factor in a given year, based on whether
or not they meet the threshold condition of having at least 4.5 percent
unemployment statewide. As a result, small changes in unemployment can
cause large changes in funding, and when the economy is strong and few
States have unemployment over 4.5 percent, the States that do qualify
for this pot of funds may experience large funding increases even if
their unemployment falls. In addition, the Dislocated Worker formula is
not subject to the additional statutory provisions that mitigate
volatility in Youth and Adult program funding. These provisions include
``hold harmless'' and ``stop gain'' constraints that limit changes in
funding to within 90 and 130 percent of each State's prior year
allocation and also ``small State minimums'' that ensure that each
State receives at least 0.25 percent of the total national allocation.
While these provisions prevent dramatic shifts in funding from year to
year, they also result in allocations that may not as closely track
changes in the program target populations.
Developing alternative funding formulas to address the issues we
have identified is an important but challenging task. This task is
complicated by the need to strike an appropriate balance among various
objectives, such as using formula factors that are best aligned with
program target populations and reducing time lags in data sources,
while also using available data sources to measure these factors as
accurately as possible. In addition, there have been proposals for
reauthorizing WIA that would substantially modify the program target
populations and funding streams, which in turn would have consequences
for revising the funding formulas.
FUNDING ONE-STOP INFRASTRUCTURE HAS BEEN CHALLENGING
Many of WIA's mandatory partners have identified resource
constraints as a major factor in their ability to participate in the
one-stops. In fact, the participants in a GAO-sponsored symposium \11\
identified insufficient funding levels as one of the top three WIA
implementation problems. Labor also found that in many States, the
agencies that administer the Employment Service program had not yet
been able to co-locate within the one-stops. We were told by Employment
Service officials and one-stop administrators we spoke with that this
was often because they still had leases on existing facilities and
could not afford to incur the costs of breaking those leases. Limited
funding made it even more difficult to assign additional personnel to
the one-stop or to devote resources to developing electronic linkages
with the one-stop. In the States we visited, mandatory partners told us
that limited funding was a primary reason that, even when they co-
located staff at the one-stop, they did so on a limited basis. As a
result, mandatory partners had to employ a wide range of methods to
provide the required support for the operation of the one-stops. Across
all the sites we visited for an early implementation study, WIA's Adult
and Dislocated Worker programs and, across most sites, Employment
Service, were the only partners consistently making monetary
contributions to pay for the one-stops' operational costs. Other
mandatory partners tended to make in-kind contributions--for example,
Perkins and Adult Education and Literacy partners provided computer or
GED training.
---------------------------------------------------------------------------
\11\ The symposium included officials from the key associations
representing State and local implementers, such as the National
Association of Workforce Boards and the American Association of
Community Colleges.
---------------------------------------------------------------------------
Mandatory partners also noted that restrictions on the use of their
funds can serve as another constraint affecting their ability to
contribute resources to the one-stops. Some programs have caps on
administrative spending that affect their ability to contribute to the
support of the one-stop's operations. For example, WIA's Adult and
Dislocated Worker programs have a 10-percent administrative cap that
supports both the one-stops' operation and board staff at the local
level. In addition, as we have reported in the past, regulations often
prohibit States from using Federal program funds for acquisition of
real property or for construction.\12\ This means partners, such as
those carrying out Perkins, cannot provide funds to buy or refurbish a
one-stop building. Moreover, Adult Education and Literacy and Perkins
officials noted that under WIA they can only use Federal funds for the
purpose of supporting the one-stop, though only a small portion of
their funds come from Federal sources.
---------------------------------------------------------------------------
\12\ See Workforce Investment Act. Better Guidance Needed to
Address Concerns Over New Requirements, GAO-02-72, (Washington, D.C.:
Oct. 4, 2001).
---------------------------------------------------------------------------
WIA'S SYSTEM FOR CERTIFYING TRAINING PROVIDERS MAY REDUCE TRAINING
OPTIONS FOR JOB SEEKERS
Training options for job seekers may be diminishing rather than
improving, as training providers reduce the number of course offerings
they make available to WIA job seekers. \13\ According to training
providers, the data collection burden resulting from participation in
WIA can be significant and may discourage them from participating. For
example, the requirement that training providers collect outcome data
on all students in a class may mean calling hundreds of students to
obtain placement and wage information, even if there is only one WIA-
funded student in that class. Even if they used other methods that may
be less resource-intensive, training providers said privacy
restrictions might limit their ability to collect or report student
outcome data. Training providers also highlighted the burden associated
with the lack of consistency between the States use for WIA and for
other mandatory partners. For example, the definition a State
establishes for ``program completer'' for students enrolled in WIA can
be different from the definition a State establishes for students
enrolled in Education's Carl D. Perkins Vocational Education Program
(Perkins). Training providers find the reporting requirements
particularly burdensome given the relatively small number of
individuals who have been sent for training. Guidance from Labor and
Education has failed to address how training providers can provide this
information cost-effectively.
---------------------------------------------------------------------------
\13\ The most recently available data on the proportion of WIA job
seekers who receive training shows an overall decline from JTPA
figures. During program year 2001, 43 percent of participants who
exited the adult and dislocated worker programs had received training
under WIA. By comparison, during program year 1998, 73 percent of JTPA
exiters (including adults, dislocated workers, and older workers) had
received training. This decline may result from a variety of factors,
one of which may be fewer training opportunities.
---------------------------------------------------------------------------
STATES AND LOCALITIES SEEK MORE HELP FROM LABOR
In addition to challenges arising from implementing portions of the
law, State and local officials often cite the need for more help from
Labor in terms of clearer guidance and definitions and greater
opportunities for information sharing. Although Labor has provided
broad guidance and technical assistance to aid the transition from JTPA
to WIA, some workforce officials have told us that the guidance has not
addressed specific implementation concerns. Efforts to design flexible
programs that meet local needs could be enhanced if Labor addressed the
concerns of workforce officials with specific guidance and disseminated
information on best practices in a timely manner. A number of our
studies have recommended that Labor be more proactive and provide
better guidance and clearer definitions
on participant registration policies and on performance
measure definitions to allow for accurate outcome tracking and better
program accountability \14\
---------------------------------------------------------------------------
\14\ See Workforce Investment Act: Improvements Needed in
Performance Measures to Provide a More Accurate Picture of WIA's
Effectiveness, GAO-02-275 (Washington, D.C.: Feb. 1, 2002).
---------------------------------------------------------------------------
on how to better administer the WIA dislocated worker
program, including how to provide additional assistance to local areas
using rapid response funds \15\
---------------------------------------------------------------------------
\15\ See Workforce Investment Act: Better Guidance and Revised
Funding Formula Would Enhance Dislocated Worker Program, GAO-02-274
(Washington, D.C.: Feb. 11, 2002).
---------------------------------------------------------------------------
on how to more effectively administer the WIA youth
program, including how to recruit and engage parents, youth, and the
business community; improve competition in contracts for services to
youth; determine eligibility; and retain out-of-school youth \16\
---------------------------------------------------------------------------
\16\ See Workforce Investment Act: Youth Provisions Promote New
Service Strategies, but Additional Guidance Would Enhance Program
Development, GAO-02-413 (Washington, D.C.: Apr. 5, 2002).
---------------------------------------------------------------------------
on a definition of unliquidated obligations so that it
includes funds committed at the point of service delivery, specifies
what constitutes an obligation and the timeframe for recording an
obligation in order to improve financial reporting. \17\
---------------------------------------------------------------------------
\17\ See Workforce Investment Act: States' Spending Is on Track,
but Better Guidance Would Improve Financial Reporting, GAO-03-239
(Washington, D.C.: Nov. 22, 2002).
---------------------------------------------------------------------------
Labor has taken limited steps to respond to these recommendations.
It has released revised guidance on the performance measurement system
and has allowed States to revise their negotiated performance levels,
which may address possible disincentives to serving certain job
seekers. Labor is also currently finalizing guidance for State and
local areas on services for dislocated workers. In response to our
recommendations pertaining to the WIA Youth Program, Labor agreed to
issue a toolkit on effective youth councils; reach out to new providers
to enhance competition; simplify eligibility documentation; and develop
a best practices Web site on serving out-of-school youth. In addition,
Labor agreed with our findings and recommendations related to providing
clearer definitions of unliquidated obligations; however, it declined
to consider obligations in assessing WIA's financial position. Finally,
Labor has convened a one-stop readiness workgroup that included
representatives from Education, HHS, and HUD. This group has developed
a set of suggested strategies for addressing major WIA implementation
issues and plans to disseminate a national issuance, signed by the
heads of all the Federal partner agencies, that would emphasize the
commitment of these Federal partners to the one-stop system.
We have also recommended that Labor be more proactive in sharing
various promising practices to help States and localities still
struggling with implementation challenges. Our reports have recommended
that Labor share promising practices in areas that include cost-
effective methods of collecting training provider information,
addressing the difficulties of using UI data in measuring outcomes,
better ways to coordinate services for TANF clients through the one-
stop, and better spending management strategies.
While Labor has developed several mechanisms for providing guidance
and allowing local one-stop administrators to share best practice
information, these efforts have been limited. Labor is establishing a
new unit within ETA--the Office of Performance and Results--whose
function will be to coordinate efforts to identify and share promising
approaches in areas such as the use of supplemental data sources to
close gaps in UI data. In addition, Labor's primary mechanisms for
distributing information about promising practices at one-stop centers
are a Web site, forums, and conferences. The promising practices Web
site, in particular, represents a good step toward building a mechanism
to support information sharing among one-stop administrators. However,
neither Labor nor the Web site's administrators have conducted a
customer satisfaction survey or user evaluation of the site, so little
is known about how well the site currently meets its objective to
promote information sharing about promising practices at one-stop
centers. In addition to the Web site, Labor cosponsors several national
conferences to promote information sharing and networking opportunities
for State and local grantees and stakeholders. Labor also hosted
several forums during WIA implementation to allow information exchanges
to occur between the department and State and local one-stop
administrators. While these conferences and forums provide a venue for
one-stop managers to talk with one another about what is and is not
working at their centers, participation is limited to those who can
physically take part.
CONCLUDING OBSERVATIONS
WIA represents a fundamental shift in the way federally funded
employment and training services are delivered to job seekers and
employers. It was, perhaps, a far more radical change than it initially
appeared. But, in just under 3 years, States and localities have
learned to embrace its flexibility, developing systems that meet local
needs. They are doing what WIA envisioned--bringing on new partnerships
and forging new relationships at all levels. They are actively working
to engage the employer community and involve intermediaries and others
to address the economic development needs of local communities. The
process of implementation has not been perfect, but it is moving
forward. Some aspects of the law that have caused difficulties may
deserve attention during reauthorization. But, given the significant
changes brought about by WIA, more time may be needed to allow a better
assessment of what is working and what is not before making major
changes in WIA's structure.
Mr. Chairman, this concludes my prepared statement. I will be happy
to answer any questions you or other Members of the Subcommittee may
have.
GAO CONTACT AND ACKNOWLEDGEMENTS
For future contacts regarding this testimony, please contact Sigurd
R. Nilsen at (202) 512-7215. Individuals making key contributions to
this testimony included Dianne Blank, Elisabeth Anderson, Katrina Ryan,
and Tamara Harris.
RELATED GAO PRODUCTS
Workforce Investment Act: One-Stop Centers Implemented Strategies
to Strengthen Services and Partnerships, but More Research and
Information Sharing is Needed. GAO-03-725. Washington, D.C.: June 18,
2003.
Workforce Investment Act: Issues Related to Allocation Formulas for
Youth, Adults, and Dislocated Workers. GAO-03-636. Washington, D.C.:
April 25, 2003.
Multiple Employment and Training Programs: Funding and Performance
Measures for Major Programs. GAO-03-589. Washington, D.C.: April 18,
2003.
Food Stamp Employment and Training Program: Better Data Needed to
Understand Who Is Served and What the Program Achieves. GAO-03-388.
Washington, D.C.: March 12, 2003.
Workforce Training: Employed Worker Programs Focus on Business
Needs, but Revised Performance Measures Could Improve Access for Some
Workers. GAO-03-353. Washington, D.C.: February 14, 2003.
Older Workers: Employment Assistance Focuses on Subsidized Jobs and
Job Search, but Revised Performance Measures Could Improve Access to
Other Services. GAO-03-350. Washington, D.C.: January 24, 2003.
Workforce Investment Act: States' Spending Is on Track, but Better
Guidance Would Improve Financial Reporting. GAO-03-239. Washington,
D.C.: November 22, 2002.
Workforce Investment Act: States and Localities Increasingly
Coordinate Services for TANF Clients, but Better Information Needed on
Effective Approaches. GAO-02-696. Washington, D.C.: July 3, 2002.
Workforce Investment Act: Youth Provisions Promote New Service
Strategies, but Additional Guidance Would Enhance Program Development.
GAO-02-413. Washington, D.C.: April 5, 2002.
Workforce Investment Act: Better Guidance and Revised Funding
Formula Would Enhance Dislocated Worker Program. GAO-02-274.
Washington, D.C.: February 11, 2002.
Workforce Investment Act. Improvements Needed in Performance
Measures to Provide a More Accurate Picture of WIA's Effectiveness.
GAO-02-275. Washington, D.C.: February 1, 2002.
Workforce Investment Act. Better Guidance Needed to Address
Concerns Over New Requirements. GAO-02-72. Washington, D.C.: Oct. 4,
2001.
Workforce Investment Act. Implementation Status and the Integration
of TANF Services. GAO/T-HEHS-00-145. Washington, D.C.: June 29, 2000.
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PUBLIC AFFAIRS
Jeff Nelligan, Managing Director, [email protected] (202) 512-4800
U.S. General Accounting Office, 441 G Street NW, Room 7149, Washington,
D.C. 20548.
Senator Enzi. If we could have our next panel move up to
the table?
Senator Murray. Mr. Chairman, while our panel is convening,
I understand you are going to keep the record open for 2 weeks
in order for us to submit additional testimony and questions.
Is that correct?
Senator Enzi. That is right.
Senator Murray. Thank you very much. I appreciate that.
Senator Enzi. That will be for both those of us who showed
up and those who did not.
I appreciate this panel of involved experts, and I look
forward to the testimony. The first person then is Curtis
Austin, who is the executive director of Workforce Florida,
Inc., from Tallahassee, FL. Welcome, Mr. Austin.
STATEMENTS OF CURTIS C. AUSTIN, PRESIDENT, WORKFORCE FLORIDA,
INC., TALLAHASSEE, FL; JAMES N. ELLENBERGER, DEPUTY
COMMISSIONER, VIRGINIA EMPLOYMENT COMMISSION, RICHMOND, VA;
MICHAEL H. KENNEDY, EXECUTIVE DIRECTOR, PACIFIC MOUNTAIN
WORKFORCE DEVELOPMENT COUNCIL, LACEY, WA; MICHAEL E. SMELTZER,
EXECUTIVE DIRECTOR, MANUFACTURERS' ASSOCIATION OF SOUTH CENTRAL
PENNSYLVANIA, YORK, PA; AND CHARLES WARE, CHAIRMAN, WYOMING
WORKFORCE DEVELOPMENT COUNCIL, CHEYENNE, WY
Mr. Austin. Thank you, Mr. Chairman, members of the
committee. I am the president of the State board, and that
means that I come to you looking at having dealt with an early
implementation State for the past several years. In the 1990s,
Florida policymakers got together, and they decided the public
workforce system was broken. I provided the committee material
that showed that less than 9 percent of employees ever
interfaced with the system back in the year 2000 and less than
12 percent of the businesses in the State ever interfaced with
the system.
They began a series of bipartisan reforms that anticipated
the Workforce Investment Act being adopted. Florida passed laws
in 1996, 1998, and the year 2000. That reform, which was
supported and sponsored by Governors Lawton Chiles, Buddy
McKay, and Jeb Bush, transformed the system that today serves
at least 20 percent of the people who come in who get a new job
every year and at least 25 percent of the businesses that
interface with the system.
They found out that even in a difficult economy, we can be
able to transition and be able to make significant
improvements. If you will notice in the data that I provided
you, there have been wage rate gains for those individuals
placed in increased placements, even in years when the economy
has not been particularly successful. Last year, more than
100,000 people interfaced with the system than did the year
before successfully to obtain jobs.
Now, Florida has been very thankful for the Workforce
Investment Act because it gave greater freedom than existed
under JTPA. In my prepared testimony, which I have provided you
already, I focused on four things, and I want to talk about
those only briefly.
The first is the consolidation of the workforce funding
streams. We do not believe in Florida that that is a major
change. When funding comes down from Wagner-Peyser, from
dislocated worker and adult, it is based upon the economy, of
where the economy was 12 months, 24 months, or even longer ago.
It does not tell us how to be able to react.
Senator Enzi, I am originally from Pocatello, ID. I travel
every 2 years through Cheyenne, WY, and no one would have known
when they appropriated the money to the regional area that
affected Cheyenne about 700 jobs to come into an area. And
putting 700 additional jobs in Cheyenne does something
dramatically different in a community. And all at once, we
found--9/11 was a big eye-opener in Florida because we found
out--we went from a position where we had less than 3 percent
unemployment in some of our regions to all of a sudden where we
had tens of thousands of people unemployed.
When we can shift the resources which Washington has given
us from labor market exchange functions in Wagner-Peyser to
training, as the economy directs, or if I can move it from
adult to dislocated worker or back and forth, I have less need
to come to Washington and ask for resources.
We have found out in much of our State--and Florida is a
very rural State. It has some huge cities in it, but the rest
of it is all rural. And we have found out that one major
employer coming into the State or leaving the State means that
we have less ability to be able to function.
The Congress took money back from the entire workforce
systems, dislocated workers, that was sitting there not being
appropriately used after the war in Afghanistan. And it was
done partially because the funding streams come down and tell
you can only use it in certain areas. If the Governor was
allowed to be able to move those funding streams where the need
exists, we believe that the system would be even more
effective.
Second, I want to echo Senator Murray's discussion when she
says that there has got to be some degree where the Governor
has some control over State boards and the system. Much of what
you hear up here from local workforce systems and State Wagner-
Peyser agencies I believe is really warfare among State
agencies and has less to do with serving customers than it does
to be able to preserve infrastructures that already exist.
How things are done in Connecticut, how they are done in
Wyoming, how they are done in Washington State, how they are
done in Florida is going to depend upon what is going to be
successful in that area. And we believe there should be great
latitude given on how Governors can be able to structure a
system and be able to force these people to work together. Too
often, my frustration has been that I am always in somebody
else's fight. I am always trying to be able to get two people
to come back to the table and say, all right, will you two guys
work this out one way? Vocational rehabilitation one time got
kicked out of one of our one-stops, and we told them you cannot
do that.
Sometimes the biggest thing you can do is say, ``I am going
to go tell the Governor.'' The last thing they want is somebody
to go telling on them. But we believe there should be great
latitude in that area.
We must also realize that workforce development is economic
development. All these infrastructure pieces are put together.
Now, I do not want to get into partisan fights or I do not
want to get into philosophies about the money issues, but I
have heard several of the members talk about the fact that we
do not have enough money in the system. And we quit 3 years ago
relying upon appropriations from the State and the Government
to be able to fund all these operations. Twenty-seven million
dollars taken by Workforce Florida at the State level was
matched with $130 million--private sector, public sector, other
operations--to be able to bring some stability into the system.
We have found that the public sector is not the only place
to be able to fund all of these issues. But that only happens
if you have the appropriate partnership with your private
sector. I have given you specific examples inside the testimony
of some of the things that we have done in Florida.
Finally, we welcome the simplified measures. We really ask
you to do one thing for us. Do not give us a bunch of
processes. Tell us what you want. We will perform. Hold our
feet to the fire. Take money away from us if we do not perform.
Give us bonuses if we do. Florida went to a performance-based
system. We decided that if at McDonald's you purchase a
hamburger and it is all there, we do not care about all the
process. That is what we are doing with our workforce system.
We want to have someone who is a skilled worker who meets
the needs of business, and that is where we are at today. Thank
you.
Senator Enzi. I appreciate those comments. I would not have
guessed Idaho. I would have guessed Texas by your name.
[Laughter.]
Mr. Austin. Same family.
[The prepared statement of Mr. Austin follows:]
Prepared Statement of Curtis C. Austin
I would like to thank you for the opportunity to share my thoughts
on reauthorization of the Workforce Investment Act. In Florida, we have
used the flexibility provided by the Federal Government to dramatically
improve service to job-seekers, incumbent workers and employers in
Florida. With bi-partisan leadership, the evolution of Florida's
workforce system has enjoyed the support of Governors Lawton Chiles,
Buddy McKay and Jeb Bush. Governor Bush has encouraged us to do
everything possible to create new jobs and help Floridians keep their
jobs. The reauthorization of the Workforce Investment Act is an
additional opportunity to fine-tune the workforce system.
Without reconstructing the history of workforce development in
Florida, it would suffice to say that the business community in large
measure had lost confidence in the public workforce system to deliver
relevant services. Just 3 years ago, less than 12 percent of the
businesses in Florida that hired new workers, interfaced with the
publicly-funded Wagner-Peyser services. Worse, less than 9 percent of
workers took time to register with the system for employment. With WIA
fully implemented in Florida, more than 25 percent of businesses are
using the system for some, if not all, of their hiring and nearly 20
percent of those hired have registered with the local one-stops for
one-stop services. Development of a one-stop employment system,
integrating labor market exchange and training functions with resources
to support both, has been one key to changing attitudes in the State
towards the public employment system.
Florida has recorded positive job growth for the last 13 months-the
only State in the nation that can make that claim--creating 92,800 new
jobs over the last year (April 2002--April 2003). However, many of
those jobs are entry level jobs. The public workforce system is
designed to direct entry level employees not only to new jobs, but to
increased skills to insure that each worker who obtains employment can
become self-sufficient. The passage of the Workforce Investment Act has
assisted Florida to make great headway in delivering appropriate
services to workers and employers. As the Senate addresses
reauthorization, I would hope the following issues are considered, so
the workforce system may evolve to the next level.
GIVING STATES GREATER FLEXIBILITY
The first priority is the consolidation of workforce funding
streams. September 11, 2001 demonstrated how conditions can quickly
change from a situation in some localities of near full-employment,
with a desperate need for additional workers, to one of significant
lay-offs. Priority services and priority programs may change over-
night. The ability to invest public resources in labor market exchange,
training dislocated workers, retraining incumbent workers, or assisting
disadvantaged adults to the next career level should be only one factor
to influence workforce activities. Labor market conditions in a given
area should be the other. Today, changes occur quickly and must be
responded to quickly. The frustration the Congress seemed to have with
the workforce system's failure to quickly utilize Workforce Investment
Act funds and invest them in local communities, as evidenced by the de-
authorization of appropriated dislocated worker funds, is--in part--a
function of appropriating funding based on where the labor markets
were, not where they are or where they may be. Funds are currently
allocated on a ``needs based formula'' that reflect where the economy
was. The introduction of a major employer or the loss of the same can
dramatically change the economic situation.
In response to September 11th, the State, using WIA funding and two
national emergency grants, initiated Operation Paycheck. Operation
Paycheck was a partnership between Workforce Florida (the State
workforce investment board), the Agency for Workforce Innovation (State
agency for Wagner-Peyser, WIA, TANF, FSET, Vets, etc. funds), private
training providers, and the Department of Education, Division of
Community Colleges. The program was designed to build quickly upon the
work and educational experience of dislocated workers by identifying
existing skills, transferable from declining occupations to those in
expanding sectors of the economy. More than 8,800 dislocated workers
were trained for new employment. Seventy percent (70.0 percent) of
Operation Paycheck customers enrolled in high tech training. Completion
rates for the program and wages earned were well above traditional
training programs. The need for Federal funding would have been
mitigated, had Florida been able to shift funds from Wagner-Peyser
activities to those training activities that became the areas of
greatest need. Providing such combined funding in the form of block
grants or authorizing States to do the equivalent would greatly assist
in making what was a responsive system, a better system.
In addition, the integration of these funding streams will help put
an end to ``turf'' battles that exist in many States between competing
agencies. Too often such agencies view the federally provided funds as
``our money'' or ``your money,'' instead of ``the people's money sent
from Washington to do ``the people's business.'' A one-stop system
should have integrated services, that focus on the customers (job
seekers, incumbent workers, and businesses). Integration would help
bring an end to turf battles that do little to address customer needs.
The second flexibility issue is gubernatorial leadership in program
administration. The administration's proposal identified several areas
of focus that deal with ``doing government better.'' These include the
streamlining of the State board, strengthening the State's authority to
change local area designations, and the proposals for funding one-stop
infrastructure by all mandated partners. All of these changes are
designed to make the system a system (not feuding State and local
administrations) and refocus the efforts of the system to service
delivery and performance from current process. While Florida would
prefer that all boards, State and local, are majority-business lead, we
recognize that giving the Governor flexibility to tailor the system to
the needs and capacities of a given State is one key to the success of
the system.
The proposals to give added flexibility regarding the composition
of the State board and to give the governor authority over the
designation of local service delivery areas are necessary to build a
workforce system. While service delivery is best provided through a
one-stop system attuned to local concerns, all need to know that the
public workforce system is a national system designed to meet the needs
of workers and businesses. Too much time has been spent in the public
workforce system arguing over process and ``turf'' and not enough on
business and worker needs. While some progress has been made under WIA
to decrease the time spent on ``administrivia'' and increase efforts at
providing services, the administration's proposals recognize problems
in getting the system to ``work.'' The increased flexibility provided
in the administration's proposal recognized that much of the solution
cannot be legislated from Washington, but must be ``worked out' at the
State or local level.
WORKFORCE INVESTMENT IS ECONOMIC DEVELOPMENT
Third, invest workforce funds for the economic betterment of
communities. Governor Bush sent an important signal to the workforce
system when his first appointment to chair the State board, Toni
Jennings, was not only a private sector businesswoman and former State
Senate President, but the incoming head of the Florida Chamber of
Commerce. The second person he asked to chair the State board, Ray
Gilley, is the private sector CEO of the Mid-Florida Economic
Development Council. Likewise, the Governor selected the former CEO of
a south Florida economic development agency, Susan Pareigis, to head
the Agency for Workforce Innovation, the State steward of Federal WIA
funding.
Florida has taken the increased freedom granted under the Workforce
Investment Act to begin an outreach to business. The State has focused
on dispelling the misperception that our workforce system is for the
poor, underprivileged only. That misperception made businesses hesitant
to participate and branded the workers as less than capable. Focusing
on providing credentialed, skilled workers--no matter what funding
streams were used in obtaining that preparation--has been essential to
Florida's success.
Building a skilled workforce is one of the most urgent challenges
to ensuring Florida's economic competitiveness, particularly for our
value-added targeted industries statewide. Engaging the business
community not only insures jobs for job-seekers, but assists in the
State's aggressive pursuit of other sources of funds for existing
training programs and potential expansion of services. For example,
Workforce Florida, the State workforce investment board, has committed
over $27.5 million to special training initiatives in key targeted
industries and critical shortage areas. This investment will result in
over 31,000 trained workers (or $884 per trainee from the resources of
the State board). More importantly, this investment has been met with
an additional $137 million leveraged from matching sources (private and
public sector).
While Florida understands that Federal money should not be used to
entice movement of industry or business from one State to another (cash
for the move), much can be done to grow industry within a State, assist
new businesses, assist in the creation of businesses and to assist
local businesses to upgrade the skills of their employees. When
possible, the workforce system should assist in preventing layoffs
(dislocations) if the skills of existing workers can be upgraded and
business productivity improved. For too long the system has waited for
business downturns or failures to interface with business. In one
success story, Florida used different ``pots of funds''--transparent to
a Florida panhandle employer located in Walton County--to provide local
WIA funds for skills upgrade training of existing workers and State
general revenue funds to train new workers.
We have used several different sources of funds to build an
alliance with the economic development community and the chambers of
commerce in the State to address business needs. The transition of
welfare recipients from welfare to work was assisted by chambers of
commerce throughout the State (lead by the Greater Orlando Chamber)
educating employers how to benefit from employing first time workers at
higher wages and with greater benefits. As employers understood the
cost of failing to retain entry level workers, attitudes began to
shift.
Likewise, regional workforce boards have come to understand the
needs of businesses and a great partnership is being formed that is in
the interest of both the private and public sector. If businesses do
not stay and grow in a community, training for jobs does not matter.
Florida has stopped training for just any job, and has limited its
scarce training dollars to be used for targeted occupations,
occupations growing in demand in Florida with wages that enable one to
be self-sufficient. At the State level, money is provided through
competitive processes to assist local regions in the continued
diversification of Florida's economy.
FOCUS ON OUTCOMES
Finally, focusing on outcomes instead of the processes leads to
progress. The proposed consolidated measures ask critical questions:
After all we have done, did the person get a job?; How valuable are the
skills that person has acquired in the market place? (or How much did
he or she make?); Have they been able to retain their employment?; and
How much is this costing us? Florida has now tracked these same
measures for 3 years. I have attached a copy of the last 3 years
results for your consideration. Combining effectiveness measures and
efficiency measures allows assessment of a system and allows comparison
with other service delivery systems. These questions are reasonable and
should allow the Federal Government to assess whether the funds are
being properly invested in communities or not. They allow individual
States to add additional measures to ensure that the needs of a
particular State are addressed.
While I have heard concern that measuring efficiency can divert
attention from the hardest to serve, that has not been our experience
in Florida. Florida's look at ``efficiency'' has revealed the
duplicative administration of the public workforce system. It is not
unusual for administrators in one part of the system, to be frustrated
and purchase duplicative services elsewhere, rather than fix what seems
to be broken. For example, when labor market information is provided in
less than friendly format to businesses, purchasing the same type of
data a second time--rather than fix the service already being provided
by the system--should not be the first solution. Measures of efficiency
are important because service costs are driven lower--not with
decreased services for those who need them, but by forcing the
bureaucracy to work for economies of scale in purchasing and
partnership in procuring services.
Florida strongly encourages the model of demanding high performance
and providing flexibility in obtaining the performance goals. If
processes are dictated, the resources any given State can use to
maximize performance are dramatically decreased. We have used an
incentive award system in Florida for 4 years, (much like the WIA
incentive awards), rewarding local regions with additional resources
for a job well done. It has been one of the great drivers for system-
wide performance improvement.
Florida welcomes the narrowed scope that allows comparison between
all workforce programs (including those funded by education and other
public sector activities). When public resources are being used for
public ends, it is critical that policy makers and administrators can
compare program successes. I worked for the Florida Legislature for
more than 9 years and found that the ability to compare programs rarely
resulted in decreased performance. Likewise, tracking too many
measures, provided too little attention to drive any meaningful
improvement.
Trying to control both process and outcome leads to difficult if
not impossible situations. For example, the administration sought to
bring greater clarity to the mission of WIA youth funds by asking that
such funds be focused on out-of-school youth. In the legislative
process, those who want in-school youth served have amended the law in
part, to allow service to this group. However the House bill would
preclude such services to take place in in-school settings. The policy
could mean that you let the kids back on the street and try to
``collect them'' again for an after-school program, or that you fail to
give services to young people bussed over great distances in rural
areas. I would urge you to make clear your desired outcomes, and then
let the States and local areas find a way to accomplish those goals
taking advantage of local conditions.
Senator Enzi. The next presenter is James Ellenberger, who
is the deputy commissioner of the Virginia Employment
Commission. Thank you for coming.
Mr. Ellenberger. Thank you very much, Mr. Chairman and
members of the subcommittee. I am delighted to be here on
behalf of Virginia Governor Mark Warner and the Commonwealth of
Virginia to share our views on this important issue involving
the Workforce Investment Act.
There are really three key issues that I am going to focus
on. I would like, Mr. Chairman, for my testimony to be entered
into the record. I am going to be summarizing most of it.
Senator Enzi. All testimony will be put in in its entirety,
so we appreciate the consolidation.
Mr. Ellenberger. The three issues that I really want to
focus on are the importance of moderation. It is drastically
important for those of us who are in the pits trying to make
the workforce investment system work that any changes that are
instituted and put in place are changes that are moderate. We
do not need to overturn the system and to make things more
difficult.
I want to talk about the importance of maintaining separate
funding streams for adult education in WIA, for dislocated
workers, and, in particular, for Wagner-Peyser. It has critical
importance for agencies and States like Virginia.
I also want to talk about personal re-employment accounts,
particularly in view of the fact that the President visited the
Commonwealth yesterday to make a renewed pitch to Congress to
revisit the issue of personal re-employment accounts. The
position of the Commonwealth is quite different than that
expressed by the President in the Commonwealth yesterday.
Both the administration proposal and the House bill that
was passed, H.R. 1261, would consolidate the funding streams
for adult ed., dislocated workers, and Wagner-Peyser. And we
believe, as we believe the majority of the States would concur
with us, that this is the wrong approach. We see this as a
direct attack on the 60-year-old public employment service and
an effort to end appropriate focus through separate funding
streams on segments of the population with very different
problems.
It is hard to believe, as we look at it, that there is
serious support for a proposal to fold a program with 60 years
of proven and effective service to employers and to workers
into a program that does not yet have 4 years of practical
experience.
Governors are being asked to forego one of the most useful
and flexible block grants to States, that of the Wagner-Peyser
system, in favor of a single and largely prescribed and locally
controlled funding system.
Workers are being asked to give up a publicly operated,
free, and nondiscriminatory job service in return for a myriad
of disconnected programs that could be privately operated,
charge for services, and require certain conditions in order to
obtain employment.
Employers are being asked to give up valuable statewide
services, including listings, screenings, placement services
that are currently provided by the employment service in favor
of a system that will not be able to offer comparable services
nor guarantee that they could be provided without
discrimination or charges.
As in many States, our workforce development system is
constructed around and dependent upon a Wagner-Peyser system.
The employment service is the anchor for 70 percent of the
comprehensive one-stops in the Commonwealth of Virginia. It is
also the anchor for our work search requirements under our
unemployment insurance law. And as our law requires, claimants
have to register with the employment service in order to retain
eligibility.
Additionally, our employment service is staffed by a merit-
based staff of State employees who administer the employment
service. They have a level of professionalism, competence, and
skill that is possessed that we feel would be lost by repealing
the Wagner-Peyser Act.
The Wagner-Peyser Act provides important services to
workers across the spectrum. In addition to the employment
service, we administer the veterans program, the migrant
seasonal farm worker program, the worker opportunity tax credit
program, the Trade Act. We provide alien labor certifications
and disseminate labor market information, among other tasks.
Repeal of the Wagner-Peyser will severely diminish, if not
destroy, our ability to provide these valuable services to
citizens of our Commonwealth. Proposals to devolve and block
grant the employment service will threaten the very foundation
of the national labor exchange and a consistent service
delivery method that is provided around the country.
Virginia has one of the most active employer advisory
committee networks in the entire country. We have 33 local
committees representing over 1,800 employers in the
Commonwealth, and I am pleased to have with me today--and I
would like, Mr. Chairman, if I could, to introduce the Chair of
our State Employer Advisory Committee, Ms. Patricia Moore, and
the Chair of our Northern Virginia Employer Advisory Committee,
Ms. Judy Lawrence.
Ms. Moore and Ms. Lawrence, along with many employers
throughout Virginia, have written to Members of Congress about
the impact of H.R. 1261 in the House on the employment service.
In her letter to Senator John Warner, who is a member of the
Senate HELP Committee, Ms. Moore asked why the Congress would
``want to fix something that is not broken.'' She pointed out
that the employment service is open to all job seekers, not
just hard-to-serve populations, and that employers value the
recruitment and placement services--matching the right people
with the right opportunities and the right companies--that is
the hallmark of the employment service program. She noted that
the stability and continuity of the employment service stands
in stark contrast to the continual changes, transition, and
difficulties faced by those who would be asked to assume the
duties that are now provided by Wagner-Peyser.
Mr. Austin mentioned the importance of flexibility, and we
would concur that we need flexibility in our program. But if we
look at what happened after 9/11, Virginia was impacted
severely, particularly in Northern Virginia, National Airport
and many, many employers who service Pentagon-related
operations.
We established a special satellite office at National
Airport using Wagner-Peyser funds. As I said earlier, it is the
most flexible grant program in existence. We did this without
having to go to the Department of Labor and seek additional
funds. We brought in the local WIBs. We had our employees from
40 offices around the State come and volunteer to work
Saturdays and Sundays. We had employers from our employer
advisory committees come and man tables and give advice to
workers who were seeking jobs on how to get employment, how to
get into training programs.
Now, we did apply for a national employment grant from the
Department of Labor to help us absorb the costs of that
operation. Unfortunately, we had to absorb it out of our
existing Wagner-Peyser funds and other funds. But, nonetheless,
we had the flexibility to act immediately, and we did so, in
the first week following 9/11.
I want to talk just briefly about personal re-employment
accounts. Since the President was in Annandale yesterday and
there were some workers that he introduced, two of those
workers--Ms. Mitchell and Mr. Orlandella--were introduced as
perhaps examples of how PRAs could aid workers who were
struggling to gain new skills and new jobs.
Well, the fact of the matter is that both Ms. Mitchell and
Mr. Orlandella were recipients of significant assistance
through our dislocated worker program and national emergency
grant funds. And the fact of the matter is that the PRA program
would have a limit of $3,000 that those workers would be able
to spend on the training that they received, far less than they
got under the dislocated program that they did get. And on top
of that, if they were unsuccessful in getting a job after
spending their PRA money on training, they would be blocked, as
Senator Murray pointed out, for a year from getting services
from Workforce Investment Boards.
The last issue I want to touch on, Senator--and this will
be very quick--1261 in the House has a provision which would
permit for the first time public funds to be used to allow
recipients of those funds to discriminate against applicants,
employers, job seekers, even providers, on the basis of
religion. And I would suggest--Virginia is opposed to that. I
would suggest that that is a surrogate for discrimination on
many other bases as well. It could be race, could be age, could
be gender, could be disability, could be sexual orientation,
and it is something that I would hope the Senate would
absolutely say no to.
Thank you.
Senator Enzi. If we could just get you to have a little
passion.
[Laughter.]
Thank you very much for your comments.
[The prepared statement of Mr. Ellenberger follows:]
Prepared Statement of James N. Ellenberger
Mr. Chairman and Members of the Committee: Thank you for the
opportunity to testify on behalf of the Virginia Employment Commission
(VEC) regarding the reauthorization of the Workforce Investment Act. I
am pleased to represent Virginia Governor Mark Warner and the
Commonwealth of Virginia on this important issue. The VEC is the lead
agency charged with administering the Workforce Investment Act in the
Commonwealth.
Virginia was not among the States implementing the Workforce
Investment Act early. As a result of a State level reorganization of
the predecessor agency, and because we needed to build a statewide
network to administer the program, Virginia did not implement WIA until
July 2000. Consequently we have approximately 3 years experience in
administering the program, during which time the guidance we received
from the U.S. Department of Labor was evolving and changing. Frankly,
Virginia feels that the program has only been operational long enough
to just now allow us to begin evaluating its successes and
shortcomings. Until we have more experience, more data and more
consensus among partners, clients and participants, we, along with many
of our sister States, feel that it would be most prudent to make modest
and gradual changes rather than impose large-scale changes and
revisions.
While there are some issues that the VEC would like to see
addressed during the reauthorization of the Workforce Investment Act,
we are compelled to address the following issues as the most salient
for our State:
Consolidation of Funding
Both the Administration proposal and the bill passed by the House
of Representatives (H.R. 1261) would consolidate Adult, Dislocated
Worker and Wagner-Peyser funding streams into a single block grant.
Virginia, as we believe the vast majority of States, opposes this
approach. We see this proposal as both a direct attack on the 60-year-
old public employment service and an effort to end an appropriate
focus, through separate funding streams, on segments of the population
with very different problems.
Wagner-Peyser
It is hard to believe that there is serious support for the
proposal to fold a program with 60 years of proven and effective
service to employers and workers into a program that does not yet have
4 years of practical experience. Governors are being asked to forego
one of the most useful and flexible block grants to States, the Wagner-
Peyser system, in favor of a single and largely prescribed, locally
controlled funding stream. Workers are being asked to give up a
publicly operated, free and non-discriminatory job service in return
for a myriad of disconnected programs that could be privately operated,
charge for services and require certain conditions for employment.
Employers are being asked to give up valuable statewide listings,
screening and placement services currently provided through the
employment service in favor of a system that will not be able to offer
comparable services nor guarantee that they could be provided without
discrimination or charges.
As in many States, Virginia's workforce development system is
constructed around and dependent upon our Wagner-Peyser infrastructure.
The employment service is the anchor for 70 percent of the
comprehensive One-Stop Centers in our State. The employment service is
also the ``anchor'' for the work search requirements under Virginia's
Unemployment Insurance statute. Our law requires claimants, as a
condition of eligibility, to register for work with our employment
service and to report to the employment service as required by the
Commission.
Additionally, a merit-based staff of State employees administers
the employment service. The level of professionalism, competence and
skill that is possessed by these public servants would be lost through
the repeal of Wagner-Peyser.
Abolition of the Wagner-Peyser Act could jeopardize the integrity
of both the employment service as well as unemployment insurance
procedures in Virginia. As others have pointed out, the employment
service is financed by statutorily dedicated Federal employer payroll
tax funds that, under the Administration's plan as well as under H.R.
1261, could be used in the future to fund private or contract job
placement services. Such a change would fundamentally alter the
principle of providing an unbiased and nonpartisan agency to make job
placements and even pay Ul benefits. Coupled with companion proposals
from the Administration, including Personal Reemployment Accounts and
Unemployment Insurance Reform, some have concluded that the long-term
goal is to privatize or abolish unemployment insurance in the United
States.
Services to Workers
Virginia has a network of 39 full-service local offices
strategically located throughout the State. Services provided are
available to all citizens regardless of income status, residence,
employment status, or any other restrictive criteria. In the past year
over 475,000 new employment applications were received from customers
including 60,000 veterans and 300,000 claimants for unemployment
insurance benefits. Our employment service enforces the work test and
ensures that all claimants are registered and, when possible, matched
with suitable job openings. Additionally, the employment service in
Virginia administers the veterans program, the migrant and seasonal
farmworker program, the work opportunity tax credit program, the trade
act program, provides alien labor certifications, and disseminates
extensive labor market information among other tasks. Repeal of the
Wagner-Peyser Act will severely diminish, if not destroy, our ability
to continue to provide these valuable services to the citizens of our
Commonwealth. The repeal will undermine the principle of an unbiased,
nonpartisan agency to administer job referrals and assist in the
payment of Ul benefits. Proposals to devolve and block grant the
Employment Service will threaten the very foundation of a national
labor exchange and a consistent service delivery method currently
provided throughout the nation.
Services to Employers
The employment service in Virginia has a long history of providing
valuable services and resources to employers and businesses. We have
one of the Nations most active and influential Employer Advisory
Committees comprised of 33 local committees representing over 1800
Virginia employers. With me today are representatives of Virginia's
employer community who are strong supporters of the present employment
service and who have been in active opposition to the Administration's
proposal to repeal the Wagner-Peyser Act. Patricia Moore, Senior
Business Development Manager for ALEX or Alternative Experts, is the
Chair of our statewide Employer Advisory Committee. Judy Lawrence,
Manager of NAI or National Associates, Incorporated, is the Chair of
the VEC's Northern Virginia Employer Advisory Committee.
Ms. Moore and Ms. Lawrence, along with many employers throughout
Virginia, have written to Members of Congress about the impact of H.R.
1261 on the employment service in Virginia. In her letter to Virginia
Senator John Warner, a member of the Senate HELP Committee, Ms. Moore
asked why the Congress would ``want to fix something that is not
broken.'' She pointed out that the employment service is open to all
jobseekers, not just the hard-to-serve populations, and that employers
value the recruitment and placement services--matching the right people
with the right companies--that is the hallmark of employment service
programs. She noted that the stability and continuity of the employment
service stands in stark contrast to the continual changes, transition,
and difficulties faced by those who would be asked to assume the duties
that are now provided under the Wagner-Peyser Act.
The VEC has also partnered with the ``National Business Partnership
Group,'' a group of major national employers who wish to recruit
nationwide and receive a consistent level of service from State to
State. Employers the VEC is currently working with include: Venzon,
Manpower, Jiffy Lube, K-Mart, Toys R Us, Home Depot, Swift
Transportation, and HCA Hospitals Inc. These partnerships could be
severely weakened, if not eliminated, by the proposal to repeal the
Wagner-Peyser Act.
All of our 39 local offices throughout Virginia have dedicated
staff who routinely work with their local employer and business
community in providing labor market information, job listing services,
job matching, mass recruitment services, testing, reemployment
services, and a host of other valuable benefits. Over the past year the
employment service in Virginia received over 125,000 job listings from
employers resulting in 502,000 referrals of interested candidates. We
have also just recently implemented ``Business Resource Units'' into
our local offices to further enhance our ability to provide high
caliber recruitment assistance, and other business services to our
employers. The repeal of Wagner-Peyser will severely diminish if not
destroy our ability to maintain this high quality level of service to
our State's employers.
Adult and Dislocated Worker Funding
While Virginia would welcome more flexibility in the allocation of
WIA funding that would enable the Governor to be more responsive to
critical needs, our great fear is that block grants will ultimately
lead to ever shrinking and inadequate funding for vital programs.
When Congress established separate funding streams for Adult
Education and Dislocated Worker Programs they did so in response to
specific needs in identifiable and discrete communities. To the extent
that those funding streams are commingled with others the end result is
to diffuse the rationale and dilute the support for these programs. WIA
adult education is targeted primarily at poor people and those without
a connection to the labor force. Dislocated worker programs are
targeted at communities of workers with long and strong attachment to
the labor force that are suffering high unemployment due to plant
closings, downsizing or relocations.
A direct result of the proposal to block grant these programs will
be to have different but equally worthy groups competing over shrinking
resources. The Government Accounting Office concluded in its report 8
years ago that block grants not only led to programming and
administrative difficulties but that, once established, overall funding
is greatly reduced from levels in existence prior to consolidation.
Personal Reemployment Accounts
Although the current versions of reauthorization do not establish
Personal Reemployment Accounts (PRAs), the concept of PRAs and the
Workforce Investment Accounts have consistently been linked in the
Administration's proposal. Among the many problems with this concept,
PRAs appear to restrict rather than expand services and benefits for
unemployed workers. Not only would the value of PRAs be less than what
is currently available under WIA Individual Training Grants, workers
who use PRAs would be precluded from using WIA resources for 1 year
after exhausting their PRA accounts. Given that PRAs would be targeted
to those individuals profiled as most likely to exhaust their
unemployment benefits, it seems shortsighted to deny these individuals
the training and retraining tools that the VEC and its One-Stop
partners have to assist in their re-employment.
Rather than establish a new, administratively cumbersome program,
Virginia would welcome additional funding for extended benefits for the
long-term unemployed and for training those who need to upgrade their
skills.
Infrastructure Funding
In Virginia most of the funding for space and equipment for the
One-Stop system has come from WIA and Wagner-Peyser funds. Although we
have found that WIA partners are willing to establish a presence in
One-Stop Centers, they are less willing to bring resources to the table
to meet infrastructure and operating expenses.
Part of the issue with infrastructure funding is that while partner
agencies do provide some employment services and training, this
function is usually but a portion of their overall mission. So, for
example, while various offices of the Department of Social Services may
offer training programs under Welfare-to-Work, the agency also deals
with child-protection, child support collection, foster children, and
myriad other programs. The current One-Stop system does not offer
enough space for the partner agencies to have all of their functions
co-located, nor is it clear that it would be appropriate to do so.
In order to establish the type of One-Stop system envisioned by the
WIA, and one that most benefits the users of the system, long-term
reengineering of infrastructure funding across multiple categorical
programs is necessary. Such a venture will take a long-term commitment
and certainly cannot be expected after only the initial 5-year sunset
of the existing legislation. In most cases, each partner has long-term
financial and contractual commitments to their individual facilities
and offices throughout the State. Building a system focused on the
universal customer is a major change in delivery and it must be viewed
in terms of ``investment return''. Without the capital costs placed
into the system building, the service outcomes cannot be expected.
Virginia recognizes that there is valid concern that funding pooled
by the Governor to cover infrastructure related costs has the potential
to diminish program service funding. However, if the proper and
adequate infrastructure is not in place to support the new system, it
is unlikely that the seamless, one-stop delivery of services will ever
be achieved. Congress needs to address infrastructure funding, perhaps
with dedicated funding, that will not diminish the ability of the
partners in the One-Stop system to provide program support for their
constituents.
Waiver of Non-Discrimination, Worker Protections, and Non-Displacement
Requirements
It is our understanding that both the House version and the
Administration proposal would broaden the Secretary's ability to grant
waiver authority. While the WIA program in Virginia would benefit from
increased flexibility in some aspects, we would oppose the waiver of
important worker protections and support preserving the civil rights of
all participants. In particular, we oppose the provision in H.R. 1261
that would permit some recipients of WIA funding to discriminate
against a participant, employee or partner on the basis of religion.
Changes in Governance Structure
We support measures to reduce the size of State and local workforce
boards. While we recognize that it is important to have good
representation on the boards, it is also important the size of the
boards be kept to a manageable level. In recent legislation approved by
the 2003 Virginia General Assembly, the Governor Warner reduced the
size of the State Workforce Council from 43 to 29 and instituted
certain statewide planning and performance standards. This structure
maintains local administrative authority for the program, but ensures
that local programs meet minimum standards for quality and
accountability.
The VEC supports active business and labor representation on both
the State and the local boards. However, it has been our experience
that cumbersome governance structures and overly large boards inhibit
such participation. Virginia supports providing Governors with
sufficient flexibility to tailor the program to their States and
sufficient authority to enforce accountability.
The current reauthorization also highlights questions about who
should be responsible for certifying One-Stop Centers. Currently local
workforce boards are charged with this duty. Since the inception of the
WIA, the VEC has been careful not to impose on local prerogatives.
However, as our own legislative branch study has found, the quality of
local programs varies significantly. Therefore, under recent
legislation approved by the Virginia General Assembly, the statewide
workforce council is required to create procedures, guidelines,
performance measures, and directives applicable to local workforce
investment boards and the operation of One-Stop Centers required by the
WIA. The bill also requires each local workforce investment board to
develop and submit to the Council an annual workforce demand plan for
its area based on a survey of local and regional businesses that
reflects local employer needs and the availability of trained workers
to meet those needs.
Sequence of Services
Virginia's service delivery under the WIA system was initially
established as a ``work first'' system. Under this sequence of
services, all applicants were required to search for work before
training was made available. This was appropriate at that time and in
that economy--unemployment rates were at historic lows and locating a
job was not difficult in most areas of the State. By using a work first
approach, we ensured that training funds were concentrated on those
most in need of assistance.
But what was appropriate in the economy of 2000 may no longer be
appropriate in 2003. Unemployment has approximately doubled, and plant
closures and the shifting of production abroad have devastated certain
areas of the State. For many of the individuals affected by these
structural changes in our economy, their job no longer exists and their
skills are no longer marketable. For those who are ready to work, work
first is still a valid approach. Virginia needs the flexibility, based
on careful assessment of individual clients, to offer training or other
services based on individual needs rather than to require participants
to first look for jobs in fields that no longer exist.
Conclusion
Again, the Workforce Investment Act has been operational in
Virginia for only 3 years, hardly long enough for a comprehensive
evaluation. We have put so much time and effort into getting the
program up and running--designating areas, establishing One-Stops,
developing memoranda of understanding--that we have not been able to
put the time and attention we would like to devote to system building.
We urge the Senate not to engage in wholesale revisions at this time.
In particular, we ask that you not roll Wagner-Peyser's 60 years of
experience into 5 years of experimentation. Instead, Virginia asks that
reauthorization focus on those areas where there is a demonstrated need
for tweaking, and that you allow us, and all States, time to build the
delivery system under WIA that the Congress originally intended. Thank
you.
Senator Enzi. The next person, of course, is from Lacey,
WA, and has had an introduction, but I will mention that he is
Michael Kennedy, the executive director of the Pacific Mountain
Workforce Development Council. Thank you for being here. Your
testimony?
Mr. Kennedy. Good morning. Chairman Enzi and Senator
Murray, our senior Senator from the great State of Washington,
I feel privileged to offer testimony as you deliberate on the
reauthorization of the Workforce Investment Act.
I am approaching my 30th year as a workforce professional.
Since 1986, I have been the executive director of the Pacific
Mountain workforce area, and currently I am also the chairman
of the Washington Workforce Association, which is a
professional organization of the 12 workforce investment
directors from the State of Washington.
The Pacific Mountain area stretches 7,000 square miles,
beginning at the southern tip of the beautiful Puget Sound. Our
counties--there are five--begin with Thurston, home to our
State capital, Olympia; Grays Harbor, Pacific, Mason, and Lewis
Counties.
While the Nation struggles with an unemployment rate at 6.1
percent, two of our counties are above 9 percent; two are above
8 percent; and our State battles a 7.3 percent unemployment
rate, the second in the Nation. These are tough times in our
area.
The Workforce Investment Act has been a valuable resource
as we look for local and State solutions to our current
economic conditions. You have an opportunity to make that
resource even better.
The Workforce Investment Act is about to celebrate its
fifth anniversary in August. In Washington State, however, the
Act was not implemented until the 1st of July 2000. We are just
approaching the completion of our third year.
The Act, while not perfect, goes a long way to acknowledge
the value and importance of employers as our customers, to
create a vision of a skilled workforce, to ensure
competitiveness in the global economy, and recognizes the
importance of local workforce boards, led by business, to seek
solutions to the unique workforce issues in our communities
through collaboration. The Act, however, does not fully support
this vision.
As you craft new legislation, I would like to urge you to
consider a few improvements. The one-stop delivery system model
is an effective resource in serving business and job-seeker
customers. It is, however, an unfunded mandate. Currently, it
is like passing a tin cup among partners, and even if the
Governor holds the cup, it is not the solution to funding the
system. Unless legislation creates infrastructure funding,
precious direct service dollars will continue to be diverted.
We cannot continue to do this and maintain our ability to meet
the demands of business and job seekers.
The Workforce Investment Act is over-regulated. If
Assistant Secretary of Labor Emily DeRocco is correct that the
Workforce Investment Act is an economic development program
with social benefits, not a social program with economic
benefits, empower the workforce system to respond to the needs
of local businesses by granting authority to train incumbent
workers with local funds; untie our hands so we can be a true
partner with economic development organizations battling to
attract or retain high-skill, high-wage jobs.
The Workforce Investment Act creates a workforce system.
This system must be held accountable by common measures that
are standardized across programs. The administration's proposal
is a beginning, but remains complex and burdensome.
Additionally, it attempts to measure efficiency through a
cost-per-participant model. I believe we are making an
investment in our participants. So a return on investment
performance model would be preferable to just measuring the
costs.
I am also concerned that educational attainment will not be
a performance measure. How can we ignore this measure in a
workforce system that includes education programs?
The Workforce Investment Act values customer choice and
establishes individual training accounts, a voucher system to
pay for tuition and fees. The system does not cover the full
cost of training at a public provider such as a community or
technical college. At a time when most schools are at capacity,
a customer with a voucher may not get choice because the
program is full and they will be placed on a waiting list.
Colleges are not in a position to expand high-demand training
programs unless the full cost of the program is covered. Local
boards need the authority to contract with eligible providers
to expand the capacity to train.
In May of this year, Washington State was notified that it
would receive a $3 million national incentive award based on
exceeding and meeting all Federal performance standards under
the Workforce Act. We celebrate our achievements, informing
partnerships and responding to the needs of our businesses and
job seekers, and working toward the enviable goal of a skilled
workforce.
I ask you to continue to support our efforts by improving
the current legislation and empowering the system to continue
to respond to the needs of our employers and workers.
Thank you.
Senator Enzi. Thank you, and thank you for all the travel
that you had to do to get here. I recognize that, being from
Wyoming.
[The prepared statement of Mr. Kennedy follows:]
Prepared Statement of Michael H. Kennedy
America's strength as a nation and as a leader of the global
community of nations depends on our continuing economic vitality. And
our economy depends, first and foremost, on the skills of the workers
who create and produce American products, services, technology and
innovations.
American business cannot be competitive in the global market
without highly skilled workers. More than any time in history, American
economic competitiveness depends on our ability to provide U.S.
businesses with a highly skilled, highly adaptable workforce.
The Workforce Investment Act, however, is over-regulated and under-
funded. The workforce system deserves the authority and resources
necessary for a flexible, effective and immediate response to the
economic challenges in our communities. We need to increase the
influence of local business and labor over the local systems.
The current act, by omission or commission, creates barriers that
have limited our ability to provide training to support retention,
expansion and retooling of growth industries, and our ability to obtain
effective data for improving performance and measuring our
effectiveness.
Funding
While the U.S. economy's demand for highly skilled workers has
increased exponentially over the last 20 years, Federal funding to meet
that need has decreased by 25 percent.
The workforce development system includes many organizations and
funding streams working together to serve businesses and workers.
Broadly defined, it includes Workforce Investment Act, Unemployment
Insurance, Pell grants, secondary and postsecondary career and
technical education, higher education, and Temporary Assistance for
Needy Families, among others. The one-stop system created by WIA
attempts to create coordinated customer service among these multiple
programs. While this section primarily addresses potential improvements
in WIA funding, all workforce development funding streams are inter-
related and need comprehensive support from the Federal level.
Specifically, funding for the Workforce Investment Act (WIA) is
totally inadequate. This funding breaks down into four major
activities, all of which need significant improvement.
1. Dislocated Worker funding is stretched thin throughout
Washington State and the flood of laid off workers coming through the
doors of our one-stop centers has doubled and continues to grow.
Washington State has lost nearly 80,000 jobs since 9/11 and the effects
of the recession remain entrenched.
If Federal dislocated worker formula funding does not increase, our
efforts to retrain laid off workers will be hamstrung. Our economic
recovery will languish, sending new jobs overseas or the other States
because we have not been able to prepare our workforce to meet the
demands of business.
2. The Workforce Investment Act (WIA) requires the creation of one-
stop centers to provide access to and coordination among workforce
development services, but provides no Federal appropriation to support
these centers. This unfunded mandate means the infrastructure costs of
the one-stop system are paid by diverting resources from direct
customer service and skills training under WIA and other funding
streams. One-stop centers are an effective resource in serving job
seekers and businesses. For example, WorkSource centers in Washington
exceeded all Federal performance measures while serving 321,000 people
last year--50,000 more than the previous year--all with no dedicated
Federal funding. These results were achieved by pooling WIA, Wagner-
Peyser, and many other funding streams, and paying the infrastructure
costs with funding that would otherwise have provided additional direct
services to businesses and workers. We cannot continue to do this. If
Federal funding does not materialize, we will need to downsize the one-
stop system or divert additional funding away from career training in
order to keep the doors open at one-stop centers.
3. WIA adult funding is a critical tool for helping working people
move up and helping businesses increase productivity, but funding
levels have been declining for years. The need for businesses to update
their workers' skills and remain ahead of their competition has
increased dramatically as the pace of change in the marketplace has
increased. Likewise, the need for low-wage workers to increase their
skills and move up has increased due to TANF reforms. The funding for
the system that trains and places low-wage adults must also increase to
keep pace with these demands.
4. WIA youth funding is sufficient to serve only 10 percent of
eligible, at-risk youth, according to the U.S. Department of Labor.
This is inadequate for an issue of such magnitude. According to
research funded by the Gates Foundation, ``Only 67 percent of all
Washington State public school students from the class of 2001
graduated from high school. . . . Graduation rates are significantly
lower for African-American students (53 percent), Latinos (47 percent)
and Native Americans (47 percent).'' Additional WIA funding would mean
additional resources to serve our students.
The WIA system has successfully addressed the needs of youth who
are either struggling, on the verge of dropping out of school, or who
have left the school system still in need of work related skill and
academic skill development. In Washington, these programs produce a
return on investment greater than 3 to 1 based on increased tax
receipts due to increased employment. The $2,300 cost per participant
yields $34,300 in increased lifetime earnings, which in turn yields
$7,300 in increased tax revenues. Additionally, the average investment
in youth in the WIA system is very small compared to the cost of
juvenile incarceration, lost future productivity and the cost of
training in the future. We cannot afford to gamble on the future of our
non-college bound youth and it is necessary that we make that
investment now.
Development of a highly skilled highly adaptable workforce is a
national priority that is absolutely vital for economic recovery and
growth. For example, WIA funding should be increased to $7 billion,
from the current level of $3.5 billion, over 4 years, as shown in
Attachment A.
This should not be accomplished at the cost of other programs that
impact the competitiveness of the American workforce. Rather we should
build a stronger workforce system through coordinated investments in
all programs with relevant workforce components, including WIA,
Unemployment Insurance, Pell grants, secondary and post-secondary
career and technical education, higher education, and Temporary
Assistance for Needy Families.
As the economy has changed over time, the importance of a skilled
workforce has increased dramatically. It is time for Federal funding
for workforce development, in the Workforce Investment Act and all
related funding streams, to reflect this.
Our Customers--Business and Workers
Workforce Investment Boards are focused primarily on serving the
workforce needs of local businesses. This, in turn, enhances our
ability to move local workers into good local jobs. It also enhances
our ability to ensure that the local labor force can be rapidly
trained, retrained and redeployed as demand for workers changes.
Workforce Investment Boards work in partnership with their States'
Governors in tackling the economic recovery, student achievement, and
competitiveness challenges facing their States. They support their
Governor's initiatives at the local level, since they are the ``front
line'' of service to our citizens and employers. They strengthen their
States' competitiveness by bringing together key leaders in strategic
industries and creating public/private partnerships to attack skill
shortages in these industries; and they initiate business/education
partnerships to enable all students to succeed in their futures.
As Assistant Secretary of Labor Emily DeRocco expresses it, ``WIA
is an economic development program with social benefits, not a social
program with economic development benefits.''
Therefore, it is critical that local, State, and Federal decisions
be focused primarily on increasing responsiveness to the workforce
needs of local businesses. This can be accomplished as outlined below:
1. Maintain local leadership. The personnel needs of businesses are
extremely localized. In the Northwest and across the nation, each local
economy demands a customized strategy for developing the local
workforce. This strategy can only come from the local business leaders,
who know, better than anyone else, what their industries need to
increase productivity, remain competitive and profitable and create
more jobs for local workers. Now, and into the future, the system must
be more responsive to the needs of local business and economic
development, and more able to close local skills gaps and move local
workers into good, highly skilled careers.
2. Enhance the stature of business and labor to strengthen the
ability of business and labor to customize the local system to meet
their needs. The workforce system has two clearly defined customers:
businesses and workers. The business and labor representatives on local
boards are the voice of the customer, and should therefore have
particularly strong influence over how workforce development are
provided in their communities. WIA took a step in the right direction,
which we can build upon by enhancing business and labor leadership of
local boards, and in turn giving local boards greater influence over
the local system. This could be accomplished by addressing the
following three needs:
a. Waiver authority should allow boards to change their composition
to increase manageability and responsiveness to the needs of business
and workers. If business and labor in a local community are not fully
satisfied with the board structure prescribed by WIA section 117(b)(2),
they and their local elected officials should be empowered to change
the structure to make the board more responsive to their needs. As with
current waiver authority, local waiver applications would be approved
by the Governor and Federal level.
b. Make WIA funding more flexible, allowing boards and local
elected officials to direct funding where it will do the most good
locally. Currently, the funding silos are very rigid, and boards do not
have much flexibility to address local needs. This ties the hands of
these private-sector boards, as well as the local elected officials in
the community.
Therefore, WIA reauthorization should create greater authority to
transfer and combine funds in order to strengthen service to local
businesses and promote economic development. Greater flexibility within
the WIA adult, youth, and dislocated worker (including rapid response)
funding streams would create greater local capacity to tailor funding
to local circumstances. It must be recognized that each funding stream
has a constituency that places high value on maintaining a distinct
funding source for their programs, and a compromise should be reached
that reflects these concerns while increasing flexibility among funding
streams.
c. Increase local boards' waiver authority. At times, the
regulations of WIA work counter to the unique needs of a local
community. To address this, local boards should be given greater
authority to initiate waivers. All waiver authority should be used to
demonstrably improve service to the system's customers: local
businesses and workers. This will ensure a strong voice for local
business and labor representatives in the waiver process and keep the
system customer-driven. As with current waiver authority, local waiver
applications would be approved by the Governor and Federal level.
These reforms create a workforce development system that is more
directly driven by the needs of local businesses and workers. Business
and labor are given a stronger voice on local boards, and greater
flexibility to use those local boards to meet their needs. As a result,
these boards will be able to better guide the system to support
economic development needs in their communities.
These are not minor changes. They are critical to America's ongoing
economic success. American businesses compete in the global marketplace
by providing high quality products using the most modern high-tech
production methods. This simply cannot be done without highly skilled
workers. American economic competitiveness, and job creation for
workers, depends on our ability to provide companies with the skilled
workers they need, exactly when they need them. Putting business and
labor in the driver's seat of local workforce development is
fundamental to the success of the American economy.
Barriers
WIA is over-regulated. This creates inefficiencies that reduce our
ability to create the greatest value per dollar for our local
businesses and workers. The changes outlined below would create a more
streamlined and powerful workforce development system, one that can
work in partnership with local economic development entities to
attract, retain and expand businesses, and monitor progress to make
continual improvements.
1. Increase access to sectoral and incumbent worker training. Local
boards are working closely with colleges and other training providers
to create sectoral and incumbent worker training, and to tailor it to
address the precise skills needed by local industry sectors. However,
demand still far exceeds supply, and WIA formula funding often does not
allow for creation of such programs. Instead, they are usually created
through use of scarce Governor's discretionary funds.
The WIA formula funds should be increased and made more flexible,
to allow them to be used for intensive sectoral training programs,
particularly for incumbent workers, layoff prevention, and out-
placement. Such programs should include a commitment from local
employers to interview trainees both at program entrance and
completion. These intensive courses, tied directly to local businesses'
skills needs, are critical for making our workforce highly adaptable,
so workers can be rapidly retrained and redeployed to meet the changing
demands of the fast-moving global economy.
2. Increase access to in-demand training courses. Many of the most
effective training courses are not available to all who could benefit
from them, simply because the classes are full and there is little
capacity to expand them. WIA funding could be used to help solve this
problem, if the regulations more clearly allowed local boards to fully
fund high skill, high wage training courses at community colleges and
other training institutions, via a contract for service rather than
through ITAs. This would allow local boards to pay for all costs to
expand capacity so that WIA trainees may access demand courses that
would otherwise be closed to them due to excess demand.
3. The 100 percent match requirement for customized training should
be reformed. The 100 percent requirement leads to tracking multiple in-
kind employer contributions, making the system overly complicated to
employers. This requirement is a disincentive and a major barrier to
small and medium sized employers who simply cannot afford to
participate in the program. Employer match is an important indication
of employer commitment and demonstrates that the training is of value
to the employer, but it need not be so complicated for the employer to
track. If the goal of customized training is to provide businesses with
a trained and work ready workforce in a user-friendly manner, then the
match requirement should be reduced and/or simplified.
4. The performance accountability system should offer timely
management information and adopt common measures.
Currently, the accountability system produces annual reports using
data that are over 1-year-old when published. This is not useful to
local board members who want to continually make adjustments and
evaluate their impact on improving outcomes. The current reporting
system is not useful for continuous quality improvement.
Therefore, the performance measurement system should include real
time indicators for local management purposes, designed in close
cooperation with the local Workforce Development Councils, to
complement the longer-term Unemployment Insurance data that is
currently used for longer-term accountability. For the purpose of
continuous quality improvement and local board oversight, a performance
improvement system requires a rapid feedback loop, not year old data.
The Administration's proposal for common measures is a beginning.
In present form, they are complex and burdensome. Of particular concern
is the inclusion of an efficiency measure through a ``cost per'' mode.
Presumably, less cost is best? This is an ``investment'' and presumably
more is better! Educational attainment is not a proposed measure. How
can we ignore this outcome in a workforce system that includes
education programs?
Over 90 percent of individuals receiving services through the one-
stop system are receiving core services only (such as labor market
information) for which they don't have to register. Currently, there is
no national system for collecting data on core services to non-
registrants. This lack of data understates the major undertaking of
universal access and the results of the one-stop system.
5. State and local board membership should be flexible. The
Workforce Investment Act specifies the membership required for newly
created State or local boards. In order to have all the required
members, a board must have over 40 members. Instead of creating a new
board, States and local areas may choose to use a qualifying entity
that was in existence on December 31, 1997. U.S. Department of Labor
rules prohibit any significant change in the organization of the pre-
existing entity or in the categories of members represented on the
entity that requires a change in the entity's charter. A significant
change includes the addition of a single voting member representing a
category that was not included on December 31, 1997. The Act itself is
silent on the ability of pre-existing entities to change membership
structure over time.
Many find that the membership required for new boards is too large.
The size makes it likely that at any given meeting the private sector
members will be outnumbered by members representing the public sector
and vendors, defeating the intent of WIA to have a private sector
driven system. In addition, less populous workforce development areas
have a difficult time recruiting a sufficient number of private sector
representatives to fulfill the membership required for a new local
board.
Department of Labor rules that virtually prevent any change in the
membership structure of pre-existing boards forever freeze in place the
old structure. This rigidity prevents boards from evolving to meet
changing economic or social conditions or changes in State or local
government structures.
Any amendment should remove these rigid requirements and allow the
State and local boards to require memberships that meet the unique
needs of the State or local area.
The originally proposed technical amendments to WIA should be
enacted. Soon after WIA became law, technical amendments were offered
that would have allowed youth who are eligible for free school lunches
to automatically meet the income requirements for WIA eligibility;
increased local flexibility to define out of school youth; and
clarified the relationship between Pell grants and WIA funding. These
were never enacted, and would further reduce bureaucratic barriers that
make the system difficult to navigate, and sometimes counterproductive,
for the workers, job seekers, and youths we serve.
To lead the global economy of the 21st Century, America must have
the most skilled workforce in the global economy. We have a system that
has proven its ability to deliver just that. To use Washington State as
an example, all Federal standards are surpassed by Washington's
Workforce Development Councils. Washington's statewide results were 105
percent of target for customer satisfaction, 106 percent for youth
outcomes, 103 percent for dislocated worker outcomes, and 101 percent
for low-income adults.
More importantly, the system rapidly adapts to changing economic
need. In Washington, when the shortage of skilled health care personnel
became evident, workforce development councils rapidly invested over
$7.5 million to address this need for the health care industry. They
worked with the State Workforce Investment Board and the Employment
Security Department to create industry skill panels to identify local
businesses' needs, and a new customized training program, Industries of
the Future, to address those specific needs. This means that local
industries in Washington like biotechnology, information technology,
food processing, industrial construction, health care, and
manufacturing now have a pipeline of skilled workers feeding their
industry, and a feedback mechanism to adjust that pipeline when their
personnel needs change.
This system is creating an American workforce whose skills and
productivity will be without rival. But the system is badly under-
funded and over-regulated. Perhaps most troubling, it does not give its
business and worker customers a sufficient leadership role. With the
adjustments described above, however, the American workforce
development system can build on its past successes and become a more
efficient, more powerful engine of economic growth for our nation. This
opportunity should not be missed.
Senator Enzi. Our next presenter is Michael Smeltzer, who
is the executive director of the Manufacturers' Association of
South Central Pennsylvania, from York, Pennsylvania. Welcome.
Mr. Smeltzer. Thank you. Chairman Enzi, Senator Murray,
good morning to you. Thank you for inviting me to speak this
morning.
My association is fortunate to be affiliated with the
National Association of Manufacturers and Center for Workforce
Success, where I am provided the opportunity to share ideas and
best practice workforce recruitment, retention, and advancement
models with business organizations around the country. My
testimony today represents the views of the Manufacturers'
Association of South Central Pennsylvania and primarily from a
small business perspective, where approximately 70 percent of
our member companies employ 50 or fewer workers.
The challenge for the small employer is one of resources.
The typical small business does not have a dedicated human
resource person, does not have the time to seek the one-stop
center, and does not have the time to commit to the WIB, the
Workforce Investment Board. At the same time, I think we can
all agree that the small employer offers the greatest
opportunity for employment and broad skill development.
The Workforce Investment Act of 1998 represented a great
turning point in improvements to the delivery of services
through the public workforce system, especially to those in the
employer community, who were encouraged to partner with the
system to meet their workforce needs.
The proposed framework for reauthorization of the Workforce
Investment Act, which was largely accepted in H.R. 1261, builds
upon the strengths and weaknesses of the 1998 law, and we
firmly believe this framework will move the system forward in a
way that is beneficial for all relevant parties and, in
particular, the small business community.
In 1998, we viewed WIA as a new law that would open the
door for employers to forge new and innovative partnerships
with the system, key decisionmakers, and policymakers. Our
association members who are represented on the WIBs soon grew
frustrated with the bureaucracy and encouraged the association
to lead the way to change. But change did not come through the
board. So we were essentially left to create a parallel
infrastructure that is aimed at demonstrating how the system
could be more responsive to meeting the workforce needs of
employers.
Despite our frustration with opportunities not fully
achieved under the 1998 law, we are committed to maintaining
our connection to the workforce investment system, and we
believe in the one-stop system for the delivery of services.
The balance of my comments will focus on the challenges
that I observe in the current system and recommendations for
improvement.
We support streamlined membership and responsibilities of
both State and local boards. At the State level, we support a
State Workforce Investment Board that is majority business and
chaired by business. Membership should also include the State
agencies responsible for administering the one-stop partner
programs, the State economic development agency, labor union,
and State legislators.
At the local level, the appointed WIB must be given both
the responsibility and authority to adopt the Workforce
Investment Act requirements. A system that allows local elected
officials to control policy, funding, and service agencies is
not conducive to a functional WIB.
Flexibility of funding. The current silo model of funding
streams to States prevents funding from being diverted to the
areas of greatest need. We support the proposed consolidation
of funding streams to State and local areas.
My next point deals with incumbent worker training. WIA
reauthorization provides an opportunity to simplify the
requirements for customized training, on-the-job training, and
incumbent worker training. In addition to these key reforms, we
support proposals to reduce the planning cycle from 5 to 2
years. We also support the need to support our Nation's youth,
the future workforce of America. To that end, we support
recommendations to target the majority of funds allocated for
youth activities under WIA to youth who are most in need.
Finally, we support modifications to the performance
indicators as contained in H.R. 1261. We encourage the
committee to maintain a customer satisfaction indicator for
both employers and individuals. In short, one-stop center
performance must be measured toward customer satisfaction.
In closing, I would like to thank you for providing me the
opportunity to share with you my association's experience with
the current system and recommendations for reauthorization. I
want to reiterate that the system is not broken, but does need
to be fine-tuned in order to continue the advances that were
envisioned by you and your colleagues in Congress 5 years ago.
I would now be happy to answer any questions. Thank you.
Senator Enzi. Thank you, and we will have questions for the
panel as a whole when we finish the other member here.
[The prepared statement of Mr. Smeltzer follows:]
Prepared Statement of Michael E. Smeltzer
My name is Michael E. Smeltzer and I am the Executive Director of
the Manufacturers' Association of South Central Pennsylvania. The
Association is a non-profit business membership organization,
representing more than 350 manufacturing and related companies in south
central Pennsylvania. Approximately 70 percent of the member companies
of my Association employ 50 or fewer workers. My Association is
fortunate to be affiliated with the National Association of
Manufacturers and the Center for Workforce Success, where I'm provided
the opportunity to share ideas and best practice workforce recruitment,
retention and advancement models with business organizations from
around the country. My testimony today represents the views of the
Manufacturers' Association of South Central Pennsylvania.
I would also like to extend my appreciation to Chairman Enzi and
members of the Subcommittee for inviting me to testify on
reauthorization of the Workforce Investment Act. The opportunity to
share insights and provide recommendations on behalf of the Association
on such a key piece of legislation is extremely gratifying. My views
this morning will be primarily from the small business perspective. I
will also be speaking from over 25 years of experience in managing
human and capital resources for manufacturing companies in the
Commonwealth of Pennsylvania.
The challenge for the small employer is one of resources. The
typical small business does not have a dedicated human resource person,
does not have the time to seek the One-Stop Center, and does not have
the time to commit to the WIB. At the same time, I think we can all
agree that the small employer offers the greatest opportunity for
employment and broad skill development.
The Workforce Investment Act of 1998 represented a great turning
point in improvements to the delivery of services through the public
workforce system. Especially to those in the employer community, who
were encouraged to partner with the system to meet their workforce
needs.
But Mr. Chairman, just as the tide turned in 1998, many of the
Pennsylvania employers who dove in, ready and willing to get involved,
are encountering challenges that are blocking effective implementation
of the law and they are no closer today than they were 5 years ago to a
public system that is responsive to their workforce needs.
The Bush Administration's proposed framework for reauthorization of
the Workforce Investment Act, which was largely accepted by the House
of Representatives in H.R. 1261, builds upon the strengths and
weaknesses of the 1998 law, and we firmly believe this framework will
move the system forward in a way that is beneficial for all relevant
parties, and in particular, the small business community. I want to
publicly thank Secretary Chao and Assistant Secretary DeRocco for their
great leadership in the transformation and integration of the One-Stop
system into a cohesive and demand driven workforce investment system.
Simply stated, the engine that drives the system is not broken. But
it needs to be fine-tuned in order to ensure that the Workforce
Investment System is demand driven, flexible, balanced and responsive
to employers and their current and future workforce.
I would like to briefly share with you our introduction to and
experience with the workforce investment system. Approximately 5 years
ago, the Association's employers could not find enough workers to
satisfy the demand. There was an insufficient supply of welders,
machinists, and qualified entry-level workers. We found that schools
(teachers and students) had little interest in manufacturing careers.
We found that our employers had little knowledge of the public
workforce development system. We also found people being trained in
areas where few jobs existed.
At that time, we viewed the Workforce Investment Act of 1998 as a
pew law that would open the door for employers to forge new and
innovative partnerships with the system, key decision makers and policy
makers. In fact, I am pleased to share with you that several
Association members were appointed to seats on the newly established
local workforce investment boards, and they brought with them the
following message:
``A SUCCESSFUL WORKFORCE DEVELOPMENT SYSTEM MUST BE BROAD AND TALL.
BROAD TO SERVICE THE ECONOMIC DIVERSITY OF THE COMMUNITY, TODAY AND
TOMORROW. TALL TO HELP WORKERS ADVANCE THEMSELVES. BUT MOST IMPORTANT
TO ALL, A SUCCESSFUL WORKFORCE DEVELOPMENT SYSTEM MUST RESPOND TO THE
NEEDS OF EMPLOYERS; THE DEMAND SIDE OF ANY SUCCESSFUL ECONOMY.''
But they quickly realized that there was little connection among
employers, educators and the one-stop infrastructure. Such a connection
is necessary to meet the manufacturing industry's needs.
Despite these initial challenges, we continued to try to maintain
involvement in the system. In 2001, the Association developed programs
to inform students, parents, and teachers at schools on manufacturing
career opportunities in technical careers and strengthening the
training programs provided by the Association, we began to share that
information with the one-stop system.
Our Association members who were represented on the WIBs soon grew
frustrated with the bureaucracy and encouraged the Association to lead
the way to change. But change did not come through the Board. So, we
were essentially left to create a parallel infrastructure that is aimed
at demonstrating how the system could be more responsive to meeting the
workforce needs of employers.
We developed and funded two pilot programs to achieve this
objective.
One program is focused on soliciting input from employers on
workforce development needs in targeted industry groups. Multiple
consortiums of companies are now in place and providing feedback and
direction on specific sector needs. We are moving towards having a
``Skills Specialist'' in place to access employers, determine needs,
and educate the employer on the public system. Small business owners do
not have the time or the resources to learn and take advantage of the
services provided by a One-Stop. These are the very businesses that
have the greatest need to develop their workforce.
The second program is focused on informing the supply side
(potential employees) of the job and training opportunities available.
This program, which is being funded by the Association and a local
private foundation, will involve several Chamber of Commerce groups,
faith based organizations and other community based groups. This
program is intended to inform the general public of specific job
opportunities, but more importantly, information on One-Stop services.
It is our intention to share the pilot programs with the One-Stop
centers. However, it is very unfortunate that we had to develop this
parallel track when the infrastructure is ideally in place through WIA.
Despite our frustration with opportunities not fully achieved under
the 1998 law, we are committed to maintaining our connection to the
workforce investment system, and we believe in the one-stop system for
the delivery of services. We do not want to walk away, we want to make
improvements. But this can only occur with changes to the underlying
statute.
The balance of my comments will focus on the challenges that I
observe in the current system and recommendations for improvement.
making demand driven vision a reality: recommendations for reform
We support reforms to the Workforce Investment Act that will focus
on the demand of employers in order to be flexible to adjust to an
ever-changing economy. With an understanding of the demand, the system
can then work with individuals to provide the necessary tools to
achieve a positive outcome for both the individual and the employer.
This is not possible without the expertise and access to business
partners.
This can be accomplished through reauthorization on three fronts.
Clarify the membership and function of State and local workforce
investment boards. We support streamlined membership and
responsibilities of both State and local boards. At the State level, we
support a State workforce investment board that is majority business
and chaired by business. Membership should also include the State
agencies responsible for administering the One-Stop partner programs,
the State economic development agency, labor union and State
legislators. We also support the proposed role of the State board to
set policies and priorities for the One-Stop Career Center system.
At the local level, the appointed WEB most be given both the
responsibility and authority to adopt the workforce investment act
requirements. A system that allows local elected officials to control
policy, funding and service agencies is not conducive to a functional
WIB.
Flexibility of Funding
The current ``silo'' model of funding streams to States prevents
funding from being diverted to the areas of greatest need. We support
the proposed consolidation of three funding streams for WIA Adult,
Dislocated Worker and Wagner-Peyser into one funding stream to States
and local areas. This will increase and improve services to adult
workers and strengthen opportunities for unemployed workers to be more
strongly connected and employment matched to their skill level or
training that will lead to employment.
Simplify access to WIA dollars for incumbent worker training and
customized training. My next point deals with incumbent worker
training. With the advancing levels of technology in today's economy,
more workers are classified as underemployed. WIA reauthorization
provides an opportunity to simplify the requirements for customized
training, on the job training and incumbent worker training.
Pennsylvania employers are committed to strengthening our workforce,
especially during these times, when the manufacturing workforce of
today may look much different tomorrow. We want to provide every
opportunity possible to not only train new entrants into the industry,
but help current workers maintain and improve their skills in order to
stay flexible with the demands of the industry.
Other Reforms
In addition to these key reforms, we support the Administration's
proposals to reduce the planning cycle from 5 to 2 years. We believe
that State and local workforce strategies must be tied to local
economic indicators.
The workforce development and economic development stakeholders in
each community (town, county, region or State) need to be rewarded for
collaboration efforts that realize true system change and improvement.
Local and State WIB groups that work together to serve a common need by
adopting innovative ideas that focus more on outcome than process need
financial support.
We also recognize the need to support our nation's youth, the
future workforce of America. To that end, we support recommendations to
the Department of Labor to target the majority of funds allocated for
youth activities under WIA to youth who are most in need. Youth who are
out of school, ages 16-21.
Finally, we support modifications to the Performance Indicators as
contained in House passed bill (H.R. 1261). We encourage the committee
to maintain a customer satisfaction indicator for both employers and
individuals. In short, One-Stop Center performance must be measured
towards customer satisfaction.
In closing, I would like to thank you for providing me the
opportunity to share with you my Association's experience with the
current system and recommendations for reauthorization. I want to
reiterate that the system is not broken, but does need to be fine tuned
in order to continue the advances that were envisioned by you and your
colleagues in Congress 5 years ago. On behalf of the Manufacturers'
Association of South Central Pennsylvania, I would like to urge the
committee to recognize and accommodate the importance of small business
in workforce investment. The changes being suggested by the Bush
Administration, and those I offered today; will enable the system to
better meet the country's workforce needs in the 21st Century. I would
now be happy to answer any questions.
Senator Enzi. This panel was done in alphabetical order,
which brings us to Mr. Ware, and being from Wyoming, I am aware
of this penalty of being the last in the alphabet.
[Laughter.]
Senator Murray. Washington understands that as well.
Senator Enzi. We do appreciate Mr. Ware, who is the
chairman of the Wyoming Workforce Development Council from
Cheyenne, WY, for coming today. He is also the vice president
of Wyoming's Contractors Association. And before I have you do
your testimony, though, I do want to introduce briefly the
other folks who are here from Wyoming: Ray Wolf, who is the
president of the Wyoming Contractors Association; Kathy Emmons,
who is our director of the Wyoming Development Workforce
Services; her administrator of quality assurance, Chris
Corliss; and their communications manager, Rachel Gurt; and
Jonathan Downing, who is Wyoming's Workforce Investment Board
policy analyst and used to be my scheduler.
We also have Charlie's son, Chris Ware, who is an agent
with the FBI who came up from North Carolina to hear his Dad
testify. So we will be looking forward to having him move back
to Wyoming.
[Laughter.]
Mr. Ware, thank you.
Mr. Ware. Thank you, Chairman Enzi, and good morning,
Senator Murray. That introduction was great. I appreciate that.
I was appointed to the council by our previous Governor,
just a little background, and was moved up to the Chair of the
State Workforce Investment Board, and our current Governor has
continued to keep me in that position. And I will speak from
that point of view.
My comments today will focus on the perspective of the
Workforce Investment Board Chairperson representing small
businesses in a rural State. I will cover: one, the impact of
WIA reauthorization in rural States; second, using WIA programs
to link workforce, economic, and community development efforts;
three, the value of improving the user-friendliness of WIA to
small businesses; and, four, building flexibility into the new
WIA program.
I will first talk about the impact of the WIA
reauthorization to rural States. In rural States, it is
critical to have flexible methods to ensure rural access to the
one-stop systems. Senator Enzi made a comment about the example
of Dubois, WY. Maybe some of the people in the room want to
know where Dubois is. It is 70 miles east of Jackson Hole. I
think most people know where Jackson Hole is. So a point there.
That is a challenge, and what Wyoming has done in this case
is to make one-stops more accessible, we have developed the
Wyoming Job Network, an Internet-based program which supports
Wyoming's virtual one-stop. One out of two Wyoming workers are
registered on this network. This means that 65,000 job seekers
and 17,000 employers used this network over last year, which is
one way to shrink our distances in a rural State.
On the youth issue, we believe the change in focus to out-
of-school youth from in-school youth is positive but, again,
should be flexible to meet the needs of a rural State. The
ability to conduct outreach and intake services to youth during
school hours is critical to serving our youth. If we want until
after school hours, our ability to reach youth is impaired. For
example, in Sundance, WY, which is on the South Dakota-Wyoming
border, our intake workers travel 70 miles one way from the
local one-stop to conduct outreach activities. It could be
difficult to access students after school traveling these
distances.
Second, on WIA's link to rural workforce and economic
community development, again, Senator Enzi made a comment about
the ability to attract Lowe's distribution center. In Wyoming,
we developed the Wyoming Workforce Development Training Fund to
flexibly meet training needs for Wyoming workers and employers.
The fund offers grants up to $2,000 per worker to increase
workers' skills. The result has been increased skills and wages
for over 8,000 workers in Wyoming.
When Lowe's came to town, the location was ideal because
Cheyenne is at the crossroads of two large interstates that go
north and south and east and west. They met with workforce
service officials and economic development people to determine
the needs that they needed in the workforce to build this
facility there.
The flexibility and cooperation between all the entities
were able to offer a special warehouse training program through
the community college where we trained 300 workers, and Lowe's
hired 90 percent of those people, and they are still working,
and they were all employed at a very competitive wage. For that
reason, we were able to secure Lowe's as an employer and a new
business where otherwise we have lost it to a different region
in the country.
Third, in improving the user-friendliness of WIA to small
businesses, a scenario that I am personally involved in, we
have learned in Wyoming when we embark on new construction
projects, we often find ourselves searching for qualified
workers to meet new construction demands. Seeing this need, the
Wyoming Contractors Association invested $1 million in building
the McMurry Regional Training Center in Casper, WY, to offer
construction craft training. As the center grew, it discovered
a previously untapped pool of workers in WIA and TANF customers
that, with training, could fill part of this need.
We ran a fairly large TANF project. We had 60 people
trained through a TANF program. Thirty people graduated from
the class. Six of these were female graduates, and I am pretty
sure the number--we had at least three or four of those who
were single moms. They tripled their income in 8 months after
graduating from the class, and they basically went from $6.50
an hour to $18.50 plus $4 in benefits, $22.50 an hour, running
heavy equipment.
The class provided them with benefit to the industry but,
more importantly, it provided low-skilled workers with personal
success and an income that they thought they would never be
able to reach. That is really what this whole bill is about, I
believe the reauthorization is. We want to get people to have
personal success and be able to earn money and contribute to
the country.
On Workforce Investment Boards, as a rural State we support
the proposed flexibility for Governors to have discretion over
the size and membership of the board, while ensuring a majority
of the board membership is from the private sector.
Finally, on building additional flexibility into WIA, we
strongly support the administration's proposal to combine the
WIA adult, dislocated worker, and Wagner-Peyser funding streams
into a single formula. This challenge will streamline program
administration and reduce the current complexity of parallel
management across separate States. As a rural State, we are
also well aware that this is rocking the boat in some respects,
but it works for rural States.
We also support the small-State provision of 0.3 of 1
percent for all funding sources rather than multiple levels of
different sources. This amount will provide critical funding
for the small rural States. As Wyoming moves forward with
developing its workforce and workforce development system, we
are pleased to see the new and innovative changes within the
administration's proposed WIA reauthorization. Wyoming, of
course, is eager to be an early implementer of the new
proposals because of the ability to work closely amongst the
cross-sections of the different departments.
Thank you.
[The prepared statement of Mr. Ware follows:]
Prepared Statement of Charles Ware
Good morning. Chairman Enzi and Members of the Subcommittee, I
thank you for inviting me to testify on reauthorization of the
Workforce Investment Act (WIA).
I am Charles Ware, the private sector State Chairperson of the
Wyoming Workforce Development Council. I am the Executive Vice
President of the Wyoming Contractors Association and manage all
legislative and training needs for a construction membership of 249
members.
My comments today will focus on the perspective of a Workforce
Investment Board Chairman representing small businesses in a rural
State. I will cover: (1) the impact of WIA Reauthorization in rural
States; (2) using WIA programs to link workforce, economic, and
community development efforts; (3) the value of improving the ``user-
friendliness'' of WIA to small business; and (4) building flexibility
into the ``new WIA.'' These are the critical issues for a rural State
like Wyoming.
Impact of WIA Reauthorization in Rural States
Overview
WIA has had a profound positive effect on workforce development in
Wyoming. WIA has changed the way we operate and how we invest in
workforce development. Like several other States, Wyoming recently
retooled its workforce development programs and governance, to be more
demand driven and responsive to the changes of a fluid economy. We are
quite literally in our first year of operation under a new structure.
The new structure delivers comprehensive workforce developmental
services in partnership with State and local small businesses, economic
and community development groups, health and family services,
employment, and education related State agencies. These partnerships
``fit'' very well with the Administration's efforts to address the
challenges of globalization, technological advances, and the
demographic changes that the American workforce is currently facing.
Rural States rely predominantly on WIA and related Federal funding
sources to deliver workforce investment services. As WIA
Reauthorization moves forward, these changes will have a profound
impact on the futures of rural States.
For Wyoming, a diversified workforce will lead to a diversified
economy. The commodities and tourism industries primarily drive
Wyoming's economy. We tend to act ``counter-cyclical'' to the national
economy. While the rest of the nation has experienced an economic
downturn over the past year, Wyoming has remained virtually untouched.
If the national economy experiences growth, Wyoming's economy will
likely slow. If the national economy slows, Wyoming tends to grow.
Wyoming is seeking new strategies to diversify its economy; a
critical component of those strategies is a well-trained, highly
skilled workforce responsive to the changing demands of the State,
regional, and national economy. Workforce development in Wyoming is a
partnership between the public and private sector. Wyoming's Governor
Dave Freudenthal and Department of Workforce Services Director, Kathy
Emmons have demonstrated leadership in continuing to build partnerships
at State and local levels to focus workforce and economic development
strategies to support our workforce and business partners.
As WIA Reauthorization moves forward it is critical to have
flexible methods to continue to ensure rural access to One-Stop
Systems. To physically access our services, customers in Dubois,
Wyoming travel 150 miles roundtrip to access our One-Stop Office in
Lander. Though, they can access Wyoming's ``Virtual'' One-Stop, which
provides rural access in every Wyoming community, 24 hours a day, seven
days a week. The Wyoming Job Network (an internet based program)
supports Wyoming's ``Virtual'' One-Stop. Approximately 135,000 of
Wyoming's 275,000 workers are registered on the Wyoming Job Network.
Approximately 65,000 job seekers and 17,000 Wyoming employers have used
the Wyoming Job Network to access services over the past year. This is
a critical tool to workforce development for a workforce system that
covers 97,818 square miles. While our employees and contractors log
thousands of miles a year, we have the equivalent of one full service
physical One-Stop for every 5,100 square miles. Flexible outreach
efforts to rural communities continue to be a critical component of
ensuring effective workforce development practices in Wyoming as we
have 5.1 persons per square mile.
As Wyoming moves into its fourth year of WIA implementation we look
to new technologies like our State's video conferencing system and
Internet based programs as a means to provide rural access to workforce
services. Our goal would be that these technologies improve service,
efficiency, and reduce the thousands of miles our employees and
contractors travel each year to provide quality services. In the
future, we would look for the opportunity for eligible training
providers to provide services through the Internet or video
conferencing technologies. The reporting requirements placed upon
Wyoming's eligible training providers (56 percent of which are out of
State) have on occasion acted as a deterrent to providing services
rurally, whether the provider is a publicly funded community college or
private sector. Building flexibility for rural States into the
provision of eligible training services and reporting is a critical
component to utilizing new technologies.
Youth Services
We believe the change in focus to out-of-school youth from in-
school youth is positive, but should be flexible to meet the needs of a
rural State. With this change there will come a total rethinking of how
services will be delivered. The ability to conduct outreach and intake
services to youth during school hours is critical to being able to
serve this population. If we wait until after school hours our ability
to reach this population is impaired. In Sundance, Wyoming, population
1,139 people, our intake workers travel 70 miles (one-way) from the
``local'' One-Stop to conduct these outreach activities. Reaching these
youth while they are in school is important. As students of Sundance
High School may travel as much as 90 miles roundtrip to school each
day. Students traveling these distances to school each day can be
difficult to access in a non-school environment and work readiness
opportunities are limited because of a limited employment base in a
community like Sundance, Wyoming.
We support improving performance accountability; in fact Wyoming's
WIA Title I-B, ABE/GED, and Perkins programs became eligible this past
year for incentive funds due to improved performance, even though the
existing system of seventeen statutory performance indicators is a
cumbersome bureaucratic challenge. Reducing the number of indicators
allow for more focus on achieving desirable outcomes. The elimination
of the requirement to competitively contract for youth services will be
a positive step in WIA reauthorization. This requirement would offer
flexibility to rural State Workforce Investment Boards, as there is
limited availability of qualified service providers to make a
competitive process viable and meaningful.
We support Governors establishing Youth Councils as they see fit. I
personally support all States continuing with Youth Councils. The
bottom line, to our country, is that our youth will continue to be the
strength of this country and take it to the next level of leadership
and success. We need to invest more time and money in our youth to make
this happen.
Rural Workforce Economic and Community Development Strategies
Wyoming's workforce development system in partnership with WIA and
other Federal and State programs, seeks to develop a truly diversified
economy and workforce. It should be responsive and flexible to the
changing demands of a regional and global economy. Our focus is on
developing our rural economies and communities by developing a highly
skilled local and homegrown workforce.
In Wyoming, we have developed the Wyoming Workforce Development
Training Fund designed to flexibly meet the changing training needs of
Wyoming workers and employers. The training fund application is
designed to be simple as it is two pages in length, easily accessible,
and responsive to employer needs. The fund offers grants up to $2,000
per year per worker to increase a worker's skills. In order to access
funds for approved training, employers commit to increase worker wages
as a result of successful training. The result has been increased skill
levels, training, and wages for over 8,000 Wyoming workers. It has also
significantly improved our workforce, our economic development efforts,
and made our workers more competitive, regionally and globally.
This training fund also has pre-employment grants available to
businesses seeking to grow, expand, or relocate to Wyoming. These
grants are powerful economic development tools as they serve to train
what would have been a previously untrained workforce specific to a
relocating business's needs. Recently Lowes Home Improvement Stores
chose Cheyenne, Wyoming as the location for a regional distribution
center.
Lowes met with local and State economic development, community
college, and Wyoming Department of Workforce Services officials, the
purpose, to determine its business needs. Approximately 300 workers
received warehouse training through the local community college in
coordination with economic development and supported by the Wyoming
Workforce Development Training Fund. Lowes or another business hired 90
percent of those workers at a competitive salary. The center will
employ approximately 700 new workers when at full capacity. Without the
ability to flexibly respond to a business need, Wyoming may have lost
this new business to another State in the region. The return on
investment for Wyoming taxpayers was earned even before Lowes received
its first delivery for regional distribution.
Under the existing WIA, Wyoming has difficulty accessing incumbent
worker training funds considering the reporting requirements and
restrictions placed on the funds. The Workforce Development Training
Fund helped us rapidly respond to Lowes unique training needs. As a
result of Lowes success, we continue to see more warehousing operations
consider Wyoming as a regional warehousing cluster. We are pleased with
the potential opportunity to flexibly leverage WIA incumbent worker
funds in the future to meet training needs of Wyoming workers and
business, just as we have with the Wyoming Workforce Development
Training Fund.
Allowing funds to be used for economic development activities will
enhance workforce and economic development initiatives. In the past
Wyoming has been limited in these efforts due to current WIA
requirements. Such a provision would allow a stronger partnership with
economic development agencies and allow the workforce system to further
develop partnerships with existing and new businesses in a local area.
This provision would also enhance new opportunities with organizations
such as the local Chambers of Commerce, economic developers and rural
business associations.
Improving the ``User-Friendliness'' of WIA to Small Business
In Wyoming, the private sector built its own workforce development
flexibility, when out of necessity, we developed the McMurry Regional
Training Center. As a rural State with less then 500,000 in population,
we have learned when we embark on new construction projects, we often
find ourselves looking to out-of-state workers to meet new construction
demands. The Wyoming Contractors Association under the leadership of
such members as Neil McMurry of Casper and Ray Wulf of Gillette,
recently built the McMurry Regional Training Center in Casper, Wyoming
with the goal of training a local workforce in the construction trades
responsive to Wyoming's needs.
As the McMurry Regional Training Center has grown, we have
discovered a previously untapped pool of workers in WIA and TANF
customers that, with training, can become a part of the highly skilled
portion of the Wyoming workforce. We saw the need to recruit and train
new workers in the State. A $1 million training center was built to
offer construction craft classes. We linked with the State to train
some folks through a TANF grant, which provided more flexibility then
WIA. The initial class had 38 participants and 14 graduates. After
graduation, the graduates essentially tripled their income in eight
months. The class provided job skills from which they were able to find
personal success and create an income they thought was unattainable.
This is what motivates all of us. When we as employers and policymakers
develop legislative strategies and businesses that fulfill our basic
needs, we have a success that is sustainable. The additional result is
a vibrant economy and growth in GDP.
In reviewing additional aspects of WIA, continued consideration
should be given to making the system flexible for small businesses.
Wyoming supports the provision of reducing the number of performance
standards from 17 to 8. Though, primarily using unemployment insurance
data for measures such as the entered employment rate and employment
retention rate may not give an accurate reflection of the customer's
ultimate employment outcome. The workforce system serves many
customers. We would urge that in reauthorizing WIA, the WIA system be
designed to be more flexible. The seventeen performance indicators
(though well intentioned) have in the past been a distraction from
WIA'S overall goal of investing in and developing a workforce
responsive to the changing needs of ever changing economies.
The largest groups of customers are job seekers and employers, yet
many of the performance measures are on job seekers only. If the intent
of WIA Reauthorization is to improve services to employers,
consideration should be given to performance measures designed to gauge
the services to employers, because what is measured, is accomplished.
Focusing on measuring services to employers would also result in
focusing improving user-friendliness to small business.
In order to further improve the ``user-friendliness'' of WIA to
small business, Governors should have the authority to determine what
standards, information, and data should be required for eligible
training providers in their State. In rural areas, the critical mass of
training providers is limited. In addition, enrollment in various
training programs is cost-prohibitive for providers to invest in a data
collection system, which essentially eliminates them as an eligible
provider and lessens the number of providers from which customers may
choose services.
One of the largest potential impacts of WIA reauthorization would
be a new provision for incumbent workers. Under H.R. 1261 local funds
can be used for incumbent worker training. Businesses with fewer than
50 employees will only be required to match 10 percent of the costs of
the training. This provision will allow a larger pool of funds for
incumbent worker programs. This will allow small businesses with
limited training budgets to truly benefit from WIA funds.
Workforce Investment Boards
In Wyoming we have streamlined our governance structure as a State
board by working to ensure flexibility in implementing WIA programs and
collaboration in bringing private sector solutions to public sector
challenges. It is critical to have the ability to communicate the
private sector's needs to our public sector partners. Our workforce
investment board offers small businesses a forum by which they may
communicate the constantly changing private sector needs for a well-
trained and highly skilled workforce with the public sector. Our goal
in Wyoming is simple, to develop a demand driven workforce responsive
to private sector worker and employer needs.
A challenge for single workforce area States, like Wyoming, is that
one board carries out the duties for both local and State boards. As a
rural State, we support the proposed flexibility for Governors to have
discretion over the size and membership of the board while ensuring a
majority of the board is from the private sector. We strongly support
continued connections between the private sector and post-secondary
education, training, social services, and economic development systems
to prepare our emerging and second-career workforce for career
opportunities and skills in new job sectors. Having these partners ``at
the table'' is a critical link to communicating the private sector's
challenges to the systems that ultimately may provide public sector
solutions. It is crucial to future efforts, to maintain a majority
private sector representation on State level Workforce Investment
Boards. To divert from a private sector majority would be detrimental
to true comprehensive workforce development.
I have found that our public sector partners often coordinate their
efforts to ensure they are meeting their customer's needs. A strong
private sector membership on a State workforce board leads to a more
global approach of addressing true workforce development. One of the
critical components in meeting those needs is the partnership developed
on a board that is not dominated by the government sectors.
Building Additional Flexibility Into WIA
Consolidated Adult Funding Streams
We strongly support the Administration's proposal to combine the
WIA Adult, WIA Dislocated Worker and Wagner-Peyser funding streams into
a single formula program. This change will streamline program
administration at the State and local level and reduce the current
complexities of duplicative management across separate programs. In
reality, unless core services were to dramatically change, our current
coordination of services would continue, though we would expect the
flexibility to strategically allocate our resources to be more
responsive to a changing environment.
At the program level Wagner-Peyser and WIA services, funds, and
personnel are currently coordinated in our State between the core
services being primarily funded by Wagner-Peyser, and the intensive and
training services being provided by WIA. This consolidation will
encourage this system to be further integrated versus running two
separate and duplicative, related services. From a flexibility
perspective, its safe to say, we would much rather have our Governor
making the call on what services to offer as he/she would have the
flexibility to focus them in areas that would be in Wyoming's best
interest, and would help meet our unique rural workforce needs.
Flexible Funding
We support the small State provision of 0.3 of one percent for all
funding sources rather than multiple levels for different funding
sources. This amount may seem of little significance to larger States,
however, it helps provide the necessary funding for small States.
The discretionary One-Stop delivery activities for low wageworkers
are a positive aspect of the Administration's WIA Reauthorization
Proposal. In Wyoming, one of the largest challenges workers face are
day care and transportation. This provision would allow funding to help
meet these challenges.
The provision changing the planning cycle from 5 years to 2 years
is positive because today's economy can shift dramatically in 2 years.
If the planning cycle for State and local plans is reduced from 5 to 2
years, the plan must be made simple and meaningful. As it is now, the
development of a plan is incredibly time consuming and small States
have small staff to carry out such activities. This cycle should be
consistent throughout the entire Act.
One-Stop Certification
The provision of One-Stop Center certification will further enhance
the One-Stop system. This provision offers the opportunity for a formal
process of communication. The Workforce Investment Board will have the
opportunity to clearly communicate the acceptable standards of service
to One-Stop Centers expected by the Workforce Investment Board. This
will give private sector led boards the ability to set guidelines on
services provided by One-Stops in rural areas.
Native Americans in Wyoming have unique rural workforce and
economic development challenges. Like Wyoming, they need the
flexibility to meet their unique needs.
Conclusion
As Wyoming moves forward with developing its workforce and its
workforce development system, we are pleased to see the new and
innovative changes within the Administration's proposed WIA
Reauthorization. We would seek to be an early implementer of many of
the new proposals. These changes will complement our efforts to
diversify our workforce, improve connections with small business, and
have a trained workforce available and responsive to a rapidly changing
global economy.
This concludes my remarks. I would be glad to respond to any
questions you may have. Thank you.
Senator Enzi. Thank you very much. When I was mentioning
the people from Wyoming, I left out the contingent of 4-H
people that have been listening from out there, just outside.
So out of 493,000 people, we have had pretty good attendance
today.
[Laughter.]
I thank all of you for your testimony, both the full
version and what you were able to emphasize while you were
speaking. And I will mention that this session will be open yet
for 2 weeks so that people can submit additional questions,
both those of us who are here and those who are involved in
Medicare and prescription drugs, which is keeping a lot of
people away from the committee today, but another very
important thing for the United States. But we do have some
questions now as well, but we will not be able to get to all of
them because of time constraints.
Mr. Ware, you noted in your written testimony that rural
areas rely predominantly on the Workforce Investment Act and
related Federal funding to deliver the job training and
services. You also mentioned the need for flexibility. Could
you tell me a little bit more about how building more
flexibility in the system would improve the workforce
development services in Wyoming and other rural States?
Mr. Ware. Yes, Senator. In my written statement, I think
there was a key point, and that was that in Wyoming as well as
the rest of the rural States, we have two issues to deal with
in every aspect, and that is distance and demographics. And
related to your question specifically, by having more
flexibility in the rural States, it allows, for example, the
Lowe's instance, the success we had there, to have the leaders
in the areas that we make those decisions to be able to be
flexible. We actually moved some funds around to create the
money to do that training, and by moving quickly and being
flexible, we were able to bring a new business, a fairly
substantial new business into Wyoming.
Senator Enzi. Thank you.
Wyoming has done a remarkable job of leveraging the
technology to improve access to the one-stop centers in the
rural areas, as you mentioned in your testimony.
Mr. Ware. Yes.
Senator Enzi. Yet the employees and contractors still
travel thousands of miles a year to provide services. What
could the workforce development system do to encourage and
enable use of these new technologies to deliver the quality
services.
Mr. Ware. The State of Wyoming in the last 2 years through
its legislature has actually created the Department of
Workforce Services and carved it out of the Department of
Employment, and that is one to deliver better services and more
services across the State, and key to that, Director Emmons,
who is here today, has created six regional areas with the
regional directors having full power to make decisions on local
issues, whether it is economic development, workforce
development, etc. And that I think is a good example of how we
can be more responsive and provide more services.
The one-stops are a great idea, but the one-stops only
become a library unless they can actually place people. And
that is real critical.
Senator Enzi. Thank you, and I do appreciate all of the
Wyoming input that we have had as we have been working the bill
and as we will have.
Mr. Austin, the workforce development needs of Florida and
Washington are different from Wyoming. Mr. Ware cited the need
for flexibility to improve services in rural States like
Wyoming. You and Mr. Kennedy both noted in your written
testimonies the need to make the Workforce Investment Act more
flexible.
How would more flexibility improve the investment system in
your respective States?
Mr. Austin. I think as Mr. Kennedy said, there is a great
need for incumbent worker training. We have some places in
Florida that we actually have--when I went to college, they
said 4 percent was full employment. We have regions that have
got 2.3 percent. And if we can--when we are given a dislocated
worker fund--this current year, based upon what was happening
last year and the year before on our funding, we have $27
million more coming into Florida this year than last year under
the Workforce Investment Act, many more dislocated worker
dollars, but we actually have put most of those people back to
work.
If we can use those dollars to be able to train adults and
incumbent workers, we strengthen our economy in a different
kind of way. And it is part of the flexibility issue that we
talk about. When Wyoming has got this large unemployment rate
and Florida is actually below the national average, something
is amiss when we are appropriating dollars based upon where the
economy was, not where it is. And when we tie the hands of the
Governor to say you will use it for where the economy was and
not be able to use it where it is, if we can money back and
forth between Wagner-Peyser and adult and dislocated worker, we
can deal with the economy as it is today. And so we can invest
all those funds.
You look at how much of the WIA money sits out there, and,
I mean, it has been a concern about the expenditure rates. The
Congress has a legitimate reason to ask why isn't the money
being invested into the system, but part of it is because it
comes down in these funding streams and says, I am sorry, you
cannot use it.
If we want to use money at the local level for incumbent
worker training, we have to enroll people as though they are
coming into a welfare system. Your labor unions, your
businesses go absolutely berserk when you take an employee off
of their floor and ask them, tell me, are you receiving food
stamps right now. Neither the employer nor the labor union want
me to be able to ask that question.
I do not have to do that with State-level income and worker
training funds. But at the local level, because of the fact
that I cannot be able to use those funds, and I cannot use any
of the dislocated worker funds to train incumbent workers. So
those flexibilities simply say that we can be able to react to
the situation as it exists.
And, Senator, I know there were concerns expressed by Mr.
Ellenberger about those places where you do not have--you know,
everybody is a State employee. Florida is one of those States
where we do not have everybody who is a merit retention staff
employee or a State employee. They are the same people who
deliver the services, whether a private employer person is the
individual or if it is a local worker, the same people get the
jobs because they have the skill sets. They are just as
professional, those local WIBs, as they are at the State merit
retention agencies. But the flexibility says let's design the
system so it works wherever it is at, and that is what it would
allow us. It would allow us to actually invest those dollars in
a timely manner so we do not have money sitting around.
Senator Enzi. Thank you.
Mr. Kennedy, did you want to comment on that?
Mr. Kennedy. Well, my comment would be that at the local
level the funds that we receive on an annual basis cannot be
used to train incumbent workers. That is a prohibition in the
Act. And we then are bound to ask the State to be able to
assist an employer either who wants to train for upgrade for
higher skills or attempt to retain an employer who may be at
risk of moving because there are funds available elsewhere. And
it just ties our hands. It is not the way that we should be
doing business. We are a system that for years and years has
been based on a model of supply side that is being allowed to
move to a demand side to respond to the needs of employers. And
the direct beneficiary of that is the worker, because we are
being able to train in high-skill, high-wage jobs. That is an
area where we cannot do it.
Senator Enzi. Thank you.
I will take just a minute more for one more question,
because Mr. Smeltzer has a different situation than anybody
else on the panel, and I do not want to pass up the opportunity
to get that.
My question is: How can the workforce development system be
made more responsive to the needs of small businesses? And,
most importantly, how can the business intermediaries like your
association help?
Mr. Smeltzer. First of all, I think many headlines today
tell you that our manufacturing industry in this country is
under attack and is struggling to establish a way to compete in
this global economy.
From the small business perspective, our small business
owners would like to invest in the future. They are able to
reach out for funds to purchase capital equipment, to improve
the technology capabilities within their companies that will
allow them to compete. The small business owner is having
trouble finding funds to train their workers to complement that
technology.
We have a desire to move our workers to a greater level,
but the expense of training today, as we are looking at
advanced technology, is really preventing us from moving in
that direction.
To respond to your question, how can an organization like
mine provide assistance, as I mentioned in my testimony, the
small business does not have the resources, does not have the
time to devote to the one-stop center, to devote to the WIB
board, and that is what they look for me to do. They look for
me to represent them and their views on the WIB board. They
look to me to organize them to pursue funding programs, be it
State or Federal programs, to provide incumbent worker training
that is affordable, again, to allow them to compete in the
global economy. So I am a resource to the small business owner.
Senator Enzi. Thank you. Very important point.
Thank you for indulging me for that last question.
Senator Murray. Sure. Thank you very much, Mr. Chairman.
Mr. Austin, you have talked a lot about the need for
flexibility. I am sure you are aware that States do have
transfer authority for up to 30 percent, and I am curious if
Florida has used any of their transfer authority in their adult
and dislocated worker funds?
Mr. Austin. We do that regularly, but we do not have
authority to be able to move workforce labor market exchange
pieces in Wagner-Peyser to WIA. But you are right; we have used
the 30 percent extensively to be able to put those funds as
best we can into areas.
What we have found out is that gives us some greater
flexibility. It does not give us all the things that we would
like.
Senator Murray. Mr. Ellenberger, you have listened to
everybody else comment about flexibility. Do you have any
comments to add to that?
Mr. Ellenberger. Yes, I do, Senator Murray. Governor Warner
is a strong supporter of increased flexibility. He has
identified workforce development as one of the key issues in
his administration, and shortly after he took office, he
establish in the Commonwealth three centers that we call
Coordinated Economic Relief Centers, or CERCs, and they have
taken the concept of one-stop centers and expanded that to
offer other State services, including assistance to small
businesses and health assistance and all the resources at the
State's disposal being put in a single location. And we are in
the process now of trying to expand that concept to all of our
one-stops. Initially, the CERCs were focused primarily in areas
hardest hit by trade and high levels of unemployment,
structural unemployment, very serious problems, and mostly
rural areas. And we are now taking that concept and expanding
it throughout the State with our other one-stops. We need that
flexibility to do that, and we think that the current Wagner-
Peyser system certainly gives the Governor a lot more
flexibility than it would under a block grant approach.
Senator Murray. Mr. Austin, Florida has a policy that
requires local areas to spend 50 percent of adult and
dislocated worker training funds on their ITAs. Have any of
your local areas reported any difficulty in meeting that 50-
percent requirement?
Mr. Austin. Yes, ma'am. When we began, that number was
literally picked out of the air by a State legislator who said,
okay, we are going to make sure that the money actually gets
into training, and they kind of picked it out of the air. The
first year was a nightmare trying to be able to determine. We
do not use the exact same definitions as the Federal Government
does on what constitutes an ITA, but they are close.
In the first year, we ended up having 48 percent of the
money going in that direction. After the second year, we put
monetary--we do sticks and carrots all over the Florida system.
It is designed to try to be able to introduce the marketplaces,
so we give bonuses for people who perform well, and we decided
that you could not--there were three mandates that the
legislature placed in the law, that being one of them, in
addition to Federal regulations. And so we said you cannot
qualify for a bonus if you do not meet it. And since that
point, we have only had one of the 24 regions not meet it.
Senator Murray. Thank you.
According to statistics that have been provided by the
Center for Law and Social Policy, significantly fewer workers
have received training under WIA over the last several years.
The sequencing of services language contained in the law
appears to be a significant barrier to training. I do not know
if you can do it today, but can each of you provide us the
information on the percentage and amount of adult and
dislocated worker funds that are spent on training in your
particular State or local area and submit that back to this
committee. I do not know if anybody has got that today.
Probably not. OK. Well, if you could get it back to the
committee, I would appreciate it.
Mr. Chairman, I know we are running out of time, and I have
a number of questions that I will submit for the record. But I
did want to ask the panel specifically about performance issues
because we have talked quite a bit about that. The current
performance measures in WIA have been criticized for being
overly burdensome and for not measuring the right kind of
outcomes, and I am curious what each of the panelists would
give us as recommendations for the committee on performance
measures. And if we could just go down and start with Mr. Ware.
Mr. Ware. Thank you, Senator. Wyoming and most of the rural
States support going down from that 17 to 8, and, more
specifically, on the employer side we would like to see some
performance measures that address the satisfaction and
interaction between the service and the employer, to use that
as a criteria.
Senator Murray. Mr. Smeltzer?
Mr. Smeltzer. Yes, Senator, we as well support the movement
from 17 to 8 performance measures. We would also suggest that
the customer satisfaction indicators for both employers and
individuals be included, so 17 to 8 plus 2. I was a math major.
[Laughter.]
Senator Murray. Mr. Kennedy?
Mr. Kennedy. Senator, I support going down to eight, and I
would like to see the performance measure proposed for cost per
participant changed to a return on investment model, and I
would also like to see a performance measure in one of those
eight that would recognize educational attainment having been
achieved inasmuch as education is our partner in the training
program.
Senator Murray. Mr. Ellenberger?
Mr. Ellenberger. Senator Murray, we also support reducing
the number of performance measures, and Governor Warner had
legislation that was adopted by the recent session of the
General Assembly in Virginia which gives more authority to our
State Workforce Board in the establishment of State standards
of performance that will apply to local WIBs.
Senator Murray. Mr. Austin?
Mr. Austin. We think also that a simplification is there.
We are not like where most States are because this has not been
a burden on our educational institutions. We collect this data
from public and private institutions. As it is right now, we
download all of their--the people who have graduated or come
out of those institutions, and as a fact if they receive any
State funding, that data. So WIA was not a burden to Florida,
but simplifying what you are focusing on always simplifies what
you are going to be able to improve upon. And we already
calculate all the measures that are under WIA right now. You
will see in the 3-year report that I gave to you that the cost
per service is something we have been tracking for 5 years.
Senator Murray. Well, the administration proposal is to
eliminate the customer satisfaction and skills measures and add
what is called an efficiency measure. Senator Dodd spoke a
little bit when he was here about the concern about creaming
some of the top people and losing a lot of the folks who really
need help. Are any of you concerned about that?
Mr. Austin. Yes. I can tell you, it is not--there are
effectiveness measures and efficiency measures, and it is
looking at those two together. We have never penalized people
for spending more than a minimum amount on areas. But what we
have found out is we have local WIBs when we began this process
that were spending as much as $23,000 a job and something that
is critically wrong. And being able to measure that and ask
what was happening and using our business sector people as a
board of directors at the local level quickly cleared up that
problem. Penalizing if you do not have a certain level is one
issue because cheapest is not always best. But there is a major
problem involved if you are spending way too much in terms of
infrastructure and not delivering a service.
Senator Murray. Mr. Kennedy?
Mr. Kennedy. I believe that when you look at a cost per
model you are basically putting out there that less is better,
and every research paper that I have read indicates that the
more we are willing to invest in our customers, the better
return we have in terms of better jobs and retention and wage
gain, and that is a step backwards. That is back to JTPA days
in the 1980s.
Senator Murray. Anybody else care to comment on that? Mr.
Ware?
Mr. Ware. Senator, I would just say that even on the
broader points of doing some of these block grant things, there
can be some problems involved with actually doing that. If the
State boards and the local boards are watching and monitoring
it, they become a check and balance in that system.
Senator Murray. Well, thank you. I know my time is up, Mr.
Chairman, but I think we have to be really careful that we do
not set up a system that does that, and that we really
encourage participants getting better skills, which should be
the focus of this legislation.
I realize my time is up. I do have questions that I do want
to submit for the record as well.
Senator Enzi. We will be doing that, and I want to thank
you for your help at this hearing today. You are one of the
most efficient questioners that I have ever run into.
And for the panel, I do not know of a panel that I have sat
in front of before that had as many ideas that I could write
down or as many quotable quotes.
[Laughter.]
So we will be using both of those, and I will try and
attribute them. But it has been an extremely helpful day, and
we will have some more questions for you, which, again, will be
helpful for us to get the things done that you have been
mentioning today.
Thanks to everybody. The hearing is adjourned.
ADDITIONAL MATERIAL
Questions of Senator Kennedy for Curtis C. Austin
Question 1. You were very enthusiastic about WIA in your testimony-
you gave statistics, for instance, about the number of businesses using
the system and the number of employees registered with local one-stops.
Could you elaborate on why you think the Act has been so successful in
Florida?
Question 2.If the Act is changed so that funds can be easily
transferred among agencies or given in block grants, how would the
state determine when the funds should be transferred or determine which
agencies would receive which percentage of the block grant? Could you
give us a hypothetical example (or an example from the Operation
Paycheck program you highlighted) of how the state would determine the
distribution of funds or decide when a situation would warrant
spreading funds differently among agencies?
Question 3. Could you elaborate a bit on the efforts that Florida
has made to create a partnership between the state workforce system and
business?
Question 4. Did Florida use the current waiver authority to
transfer funds from adult to dislocated this year? If so, what percent?
Could you describe some other initiatives that Florida applied for
waiver authority to implement?
Questions of Senator Kennedy for James N. Ellenberger
Question 1. Could you elaborate a bit on the impact that WIA has
had on Virginia during the time that it has been implemented?
Question 2. In your testimony, you say that Virginia opposes
folding Wagner-Peyser into WIA. One of my specific concerns is the
Trade Adjustment Assistance (TAA) program. Currently, TAA is operated
through the employment service--have you had experience with these
programs, and would you care to comment?
Question 3. In your testimony, you say that incorporating the
Wagner-Peyser and Adult, Dislocated Worker funding streams into a
single block grant would have a detrimental affect on workers who now
fall under the Adult Dislocated Worker funding. Could you elaborate a
bit on the real effects that the block grant would have on those
workers?
Question 4. Could you elaborate on how the state would determine
which people should be accepted into the program without having looked
for a job first?
Questions of Senator Kennedy for Michael H. Kennedy
Question 1. In your testimony, you discuss the inadequacy of the
funding for one-stop centers, dislocated worker, adult, and youth
programs under WIA. What are some of the consequences of the inadequate
funding in human terms? How have the services provided been affected?
How have real workers and businesses been impacted?
Question 2. Why, in your opinion, has the dislocated worker funding
stream failed to keep up with the flood of laid off workers,
particularly in the wake of 9/11? How would you suggest the funding
formula be adjusted to meet these demands?
Question 3. You contend that the workforce development system needs
to be more directly driven by the needs of local businesses and
workers. Can you provide specific examples of some of the needs of
local Washington businesses and workers that are not currently being
met and describe how the increases in local authority you suggest would
alleviate these problems?
Question 4. How would you suggest we balance improvements in data
collection without overburdening training providers?
Questions of Senator Kennedy for Sigurd Nilsen
Question 1. First, Mr. Nilsen, I want to thank you for all of the
work that you have done on the Implementation of the Workforce
Investment Act. Your work has informed all of us of the early successes
and some of the challenges.
One of the areas that will certainly come up during the
reauthorization is the performance measures. You bring up some things
in your report that I would like you to comment on further; the first
is this idea of assessing the system's performance -could we get some
of your ideas on how we could better look at systemic results?
You also mention that some of the performance measures may be
causing some operators to deny training to some people ---could you
expand on that?
Question 2. One of the areas that we will have great discussion on
is the formula. I know that GAO is taking an in-depth look at the
formula issue, but could I ask you to make some brief comments on some
of the issues with the current formula?
Question 3. One of the things that I have heard in my meetings on
the Workforce Investment Act is the need to have a funding stream for
the operation of the One-Stops. In your study, how have local areas
dealt with paying for the operational costs and what has been the
impact on dollars spent on actual training?
Question 4. Your best practice work has been both informative and
helpful to us as we try to get a clear picture of what are some of the
innovative strategies that have helped businesses and workers. What
kinds of assistance could the Department of Labor provide to make sure
that local areas could learn from each other's experiences?
Questions of Senator Kennedy for Michael E. Smeltzer
Question 1. In your testimony you mentioned that Pennsylvania
employers encountered challenges that blocked effective implementation
of the law in 1998 and that those challenges still exist today. What do
you think was the major cause of the law not being properly
implemented?
Question 2. What do you think was the major cause of the WEB not
being responsive to the concerns of employers?
Question 3. What type of a program do you suggest should be set up
to make incumbent worker training more accessible? Also will this
training be separate from the training opportunities given to those
just beginning to enter the workforce?
Questions of Senator Kennedy for Charles Ware
Question 1. First of all, I just want to say that I appreciate the
perspective you bring on the needs of rural states and workers. I was
intrigued by your discussion of the Wyoming's ``Virtual'' One-Stop--
it's wonderful that you've been able to reach so many people on-line.
Can you talk a little bit more about how you've managed your virtual
outreach efforts?
Question 2. It sounds as though the Wyoming Workforce Development
Training Fund has been quite a success. As the rest of us begin looking
at incumbent worker training programs, can you provide any insights
into how we might enjoy the same success?
Question 3. Thank you for bringing attention to the unique
situation of small businesses. In terms of performance indicators, how
do you think we should measure effectiveness for small businesses--
where one additional employee might mark a significant increase?
Question 4. Should we be concerned that adults who are entering the
job market may have to compete with workers who have been employed and
lost their jobs if adult funding streams are consolidated?
Question 5. Has Wyoming used the current authority to transfer
money between adult and dislocated funding streams?
Questions of Senator Harkin for Sigurd Nilsen
Question 1. My office has received numerous complaints by people
with disabilities and organizations representing individuals with
disabilities that the one-stop centers are not accessible to and
useable by individuals with disabilities. In GAO's work on evaluating
WIA and the one-stop centers, did you gather any information on whether
individuals with disabilities have been able to gain access to the one-
stop centers and effectively use the services provided by the one-stops
nationally? If so, what have you found?
Question 2. Your report notes that the Department of Labor has not
conducted any customer satisfaction or user evaluation of the sites for
the general population. Is the same true for people with disabilities
and their ability to access and use the one-stop centers? If such
information is not gathered by DOL, are you aware of any other reports
or investigation into the accessibility and useability of the one-stop
centers for people with disabilities conducted through on site visits
or interviews/surveys of people with disabilities who have sought
services from the one-stop centers?
Question 3. Your report notes that the Pikeville one-stop told GAO
that cross-training staff about the needs of special populations has
helped its staff to accurately identify hidden disabilities and better
refer customers with disabilities to the appropriate services. That is
a laudable result if the one-stop center is not only referring
individuals, but also providing services itself for those individuals
with disabilities who prefer to use the one-stop center's resources and
not use vocational rehabilitation. We have been told that some of the
one-stop centers are automatically referring all individuals with
disabilities to vocational rehabilitation and are not able to or
willing to provide services to individuals with disabilities who prefer
to access the services at the one-stop center. Has GAO gathered any
information on this problem and if so, what have you found?
Questions of Senator Murray for Panel I
INTRODUCTION
First of all, it was heartening to read in your testimony of the
successful programs and strategies one-stops across the country have
implemented. I have several follow-up questions to the implementation
challenges you outlined in your testimony.
WIA System Change--Based on your evaluation of the implementation
of WIA, you believe that incremental changes are necessary, but not
wholesale revisions.
Question 1. Can you speak to how and why you have come to this
conclusion, and why incremental changes are more appropriate than the
wholesale revisions others suggest?
Question 2. Instead of radically overhauling the newly implemented
WIA system by folding in WIA Adult programs into one Adult block grant
as proposed by the Administration, what changes can you suggest to make
to WIA and Wagner-Peyser more fully integrated to maximize the use of
available resources?
Performance measures--high skilled but hard to place workers--I
find it troubling that the performance measures are not only based on
outdated data, but also on inconsistent incentives. They do not take
into account the unique employment placement challenges faced by
certain States; for example, Washington State has a disproportionately
large number of high skilled workers like Boeing machinists who are out
of a job.
Question 3. From your research, how can the Federal Government be
flexible in allowing performance measures to be tailored to the unique
demands of State and local communities?
Question 4. Additionally, what changes in the performance measures
would you recommend for one-stops to have an incentive to serve the
hard to train or hard to reemploy worker?
Data collection requirements for training providers--The burdensome
requirements for data collection have resulted in a decline in the
availability of training options for WIA job seekers.
Question 5. What suggestions do you have for cost-effective data
collection, or would you instead recommend eliminating the requirement
for training provider data collection as the House bill has done?
Guidance from Labor--In the barely 3 years WIA has been fully
operational, the DOL has made strides in developing mechanisms to
provide broad guidance and in establishing the Office of Performance
and Results within ETA. You mention in your testimony that Labor needs
to provide more guidance addressing specific implementation concerns,
and that there is a need for Labor to disseminate more information on
best practices.
Question 6. Based on your research and experience, what are the
most effective tools and types of information for Labor to share with
one-stops?
Question 7. What other measures would you recommend for Labor to
augment their technical assistance?
Expenditure of WIA formula dollars--In a previous report you
discussed the issue of expenditure versus obligation of WIA funds at
the State level.
Question 8. Do you have a policy recommendation on the best way to
calculate how quickly States are expending their WIA formula dollars?
Infrastructure funding--Currently, WIA does not provide funding for
one-stop infrastructure, which has hampered the ability of one-stops to
co-locate mandatory partners and provide effective services.
Question 9. What recommendations do you have on providing system
infrastructure funding that is so vitally needed? How should we require
contributions from partner programs?
Superwaiver proposed by the Administration--The Administration
proposes that Governors should be provided with broad superwaiver
authority, giving them an unfettered ability to waive program
requirements across the board for a variety of domestic programs,
including WIA.
Question 10. Can you describe for the Committee specifically how
the current waiver authority, which allows Governors to already waive
almost every provision of WIA, is so onerous that it would require the
radical transfer of authority to the States that a superwaiver would
provide?
Questions of Senator Murray for Panel II
Specifically for Curtis Austin--Florida has a policy that requires
local areas to spend 50 percent of adult and dislocated worker training
funds on ITAs.
Question 1. Does Workforce Florida believe this policy has resulted
in more individuals gaining access to training?
Question 2. Have local areas reported any difficulty in meeting the
50 percent requirement and having adequate funds to pay for other
required core and intensive services?
The rest of the questions can be addressed to all Panel II
witnesses.
Adult and Dislocated Worker Funds--According to statistics provided
by the Center for Law and Social Policy, significantly fewer workers
have received training under WIA over the last 2 years. The sequencing
of services language contained in the law appears to be a significant
barrier to training.
Question 3. Can you provide information on the percentage and
amount of adult and dislocated worker funds spent on training in your
particular State or local area?
Who is Being Served?--Over 90 percent of individuals receiving
services through the one-stop system are getting only core services for
which they do not have to register for--job search, labor market
information, and general information.
Currently there is no system for collecting data on core services
to non-registrants. Without this information we don't know the real
number of people looking for work or retraining. With this information
we could more accurately tailor the one-stop experience to suit all of
the needs of a particular population, and help people better move into
intensive and training services.
These non-registrants can also have a financial impact on one-stop
centers. They often drain resources but aren't accurately counted for
in the budgetary purposes.
Question 4. Should the Administration require collaboration with
State and local stakeholders to identify a very limited number of basic
measures to determine who is really being served by one-stops?
Question 5. Should we use technology like swipe cards to track
those using core services so that usage and repeat usage can be
included in any cost measures we adopt?
Business Partnerships--The involvement of the business community in
WIA at the local one-stop level remains an important necessity for the
ongoing success of workforce programs. Earlier during this hearing we
heard from the GAO about a number of positive examples of business
partnerships with local one-stops.
Question 6. How can we make the WIA system more relevant to
business and how do we create stronger ties to economic development?
Additional Funds--Many States and local workforce boards have found
creative solutions to increasing their workforce budgets by leveraging
dollars from a variety of governmental and non-governmental sources.
Question 7. How can we encourage the WIA system to enhance its
focus on training and leverage other partner resources for training?
Performance Measures--The current performance measures in WIA have
been criticized for being overly burdensome and for not measuring the
right kind of outcomes.
Question 8. What recommendations do you have for the committee on
performance measures?
The Administration's proposal would eliminate the customer
satisfaction and skills attainment measures and add an efficiency
measure.
Question 9. Do you believe the efficiency measure would lead to
``creaming'' and is it the right approach to eliminate the measures
most relevant in assessing our assistance to business?
Question 10. Should we continue to encourage participants'
attainment of better skills?
Access to Training--WIA authorizes local boards to issue Individual
Training Accounts vouchers to pay for tuition and fees for training
programs at local colleges. But because they only cover tuition and
fees, ITAs do not cover the full cost of training at a public provider
such as a community or technical college.
Colleges are not in the current financial position to expand
enrollment unless the full costs of the enrollment is covered.
Especially in the programs that are in the greatest demand in the labor
market--such as health care providers.
Question 11. Should local boards have the ability to contract to
expand capacity in a training program on a state's training provider
list that would otherwise be unavailable to WIA participants with ITAs,
due to student demand that exceeds capacity?
Question 12. Should we clarify the relationship between Pell Grants
and ITAs, so that Pell can be used to support the cost of this
training?
High Skilled but Hard to Place Workers--Washington State has a
disproportionately number of high skilled workers who are out of a job.
They need access to comprehensive training and new skills to get a job
so they can provide for their families.
Currently, performance measures are not consistent from area to
area and State to State. They too often reward for factors like wage
increase, comparable job placement, etc. In the case of the laid-off
Boeing Machinists, these are difficult measures to meet.
With some WIA funding tied to these performance criteria, boards
have a strong disincentive to serve the hard to train or hard to
reemploy worker. Putting a high skilled worker in a new job with a
comparable wage can be far more difficult than finding a job for a
laid-off low skilled worker.
Question 13. How can we provide incentives for local boards to
serve these more difficult cases?
Question 14. Currently we reward States on how successful their
system is, so how can we reward States like Washington that are
successful at placing higher skilled workers in good jobs?
Personal Reemployment Accounts--Will These Really Help?--As you all
know, the President has proposed to create a program that would provide
up to $3,000 for unemployed individuals who are about to exhaust their
UI benefits to help them quickly find work or train for a new job. The
total cost of the program is purported to be $3.6 billion, and it will
be administered by our State one-stop system.
Question 15. How will we pay for both WIA services--$3-plus
billion--and PRAs--$3.6 billion--with the larger fiscal problems facing
our nation?
Question 16. If the most meaningful training averages $5,000, is
$3,000 really enough for a worker to get the training they need to get
a good job?
Question 17. With the employment bonus option, aren't PRAs just an
incentive to get a low skilled/low paid job as soon as possible rather
than finding meaningful training?
July 2, 2003
Hon. Michael B. Enzi,
Hon. Patty Murray,
U.S. Senate,
Washington, D.C. 20510-6300
Dear Chairman Enzi and Senator Murray, we are writing to express
our strong belief that the reauthorized Workforce Investment Act (WIA)
must ensure service for individuals with significant barriers to work
and increase their access to skills training.
We believe that we must improve the integration of one-stop
partners and continue building a high quality, universally accessible
system of one-stop career centers to meet the needs of business and
workers.
Together we comprise a diverse coalition of service providers,
advocacy groups, and individuals committed to ensuring that all
Americans have access to training opportunities for jobs that will
allow them to support themselves and their families. We represent
individuals with disabilities and those with limited English
proficiency (LEP). We represent welfare recipients, entering the
workforce for the first time; single parents, who have significant
child care responsibilities or who are caring for aging parents,
children with disabilities, or other relatives; displaced homemakers,
who may or may not have work experience, but need skill upgrades to be
competitive after an absence from the labor market; and women seeking
decent wages via jobs that have historically been nontraditional, such
as those in the trades or technology.
We have worked to implement the WIA legislation and analyze its
effects, and have worked to identify and remedy problems that have
emerged in the initial years of the Act's implementation. We are
especially concerned about the Department of Labor data showing that
the number of individuals receiving training under WIA declined
dramatically compared to the prior system. Training matters for all
workers, but is critical for those with barriers to employment.
Employers increasingly demand high skilled labor and better-educated
workers, yet the nation's workforce development system has made it more
difficult for job seekers to access training.
The importance of training and education is born out by a number of
studies and Census reports. Education and training gives job seekers
the skills necessary to succeed in jobs with career potential and
upward mobility. Moreover, the U.S. Bureau of Labor Statistics has
found that jobs requiring the least education will experience the
lowest growth over the next 10 years, while the jobs requiring at least
an associate's degree will grow at a rate of 31 percent. As a result,
we believe that increased access to training is essential and that WIA
should be revised during reauthorization to better meet the dual needs
of job seekers and employers for higher skills.
As you know, current law requires that state plans detail how
states will serve low-income individuals, persons seeking
nontraditional employment, and others with multiple barriers to
employment (including individuals with disabilities and those with
limited English proficiency). The 1998 Act also required local areas
with limited allocated ``adult stream'' funds to give public assistance
recipients and low-income individuals priority for intensive and
training services. This is a vitally important component of the law
that must be maintained, and as such, we support efforts in the Senate
to use the current law as the starting point. Individuals with barriers
to work should not be relegated to a ``second tier'' priority.
Reauthorization of WIA presents Congress with an opportunity to
substantially improve access to training for individuals with barriers
to work and help build bridges to self-sufficiency. In keeping with
this goal, the legislation should include the following:
Incumbent worker training opportunities that prioritize
the retention and advancement of low-wage workers up career ladders
leading to higher-wage job opportunities;
Strong incentives for targeting ``harder-to-serve
populations'' through demonstration, research and other discretionary
projects;
Adjusted outcome measures that recognize the higher costs
and societal benefits of moving harder-to-serve individuals toward
self-sufficiency;
Reporting requirements that look at outcomes in relation
to the local cost of living, local labor market conditions, and for
different populations;
Dedicated general fund resources for the operation of one-
stop centers, ensuring that critical program funds are not diverted
from mandatory partner appropriations or siphoned away from individual
training accounts for program participants;
Incentives for business partnerships, such as employer
driven on-the-job training programs targeted to training low-wage
earners for jobs in emerging sectors and non-traditional work
opportunities;
Ensuring accessibility to all one-stop programs and
services for all individuals seeking assistance, particularly those
with disabilities and/or limited English proficiency;
Substantially increased authorization of resources for
training, supportive services, and retention efforts.
Additionally, eligibility for services under current WIA law
includes language suggesting that an individual must be found to be
``unable'' to obtain employment through the core services in order to
access intensive services, and likewise unable to obtain employment
through intensive services in order to access training. This has led
many to interpret the law as requiring a rigid ``sequence of services''
for WIA participants rather than offering an array of services that
best fits their demonstrated needs. It has, therefore, often been
implemented in a manner that limited access to training services for
WIA clients, thereby forcing some individuals to be immediately placed
in low-paying jobs rather than allowing them to train for more skilled
positions that may better meet the needs of local employers.
We support the Administration's intent to eliminate this
unnecessary sequential eligibility process and believe reauthorization
legislation should clarify that participants may receive intensive and
training services in any sequence that will assist them in addressing
barriers to work and obtaining family supporting jobs.
Providing a level playing field for all Americans to develop their
skills is not just a matter of their economic survival but a necessity
for our nation's growth. As a nation, we will be losing a number of
skilled workers upon the retirement of baby boomers. It is imperative
to address the skills and training needed to meet the demands of the
economy, and to ensure all skills shortages are met in the U.S.
workforce. We cannot let our nation's education and training policies
fail the population we most need to develop to maintain our economic
vitality.
We appreciate your commitment to assisting unemployed and low-wage
workers and those with significant barriers to work. Job training and
employment needs are of common importance to the economies of all
regions of this nation, regardless of geographic location or party
representation. Thus, we hope that the reauthorization of this
legislation can be accomplished in a bipartisan manner and look forward
to working with you and members of the Senate Health, Education, Labor
and Pensions Committee on this year's reauthorization effort.
Sincerely, American Congress of Community Support & Employment
Services (ACCSES); American Network of Community Options & Resources
(ANCOR); American Psychological Association; Association of Farmworker
Opportunity Programs; Carlos Rosario International Career Center;
Center for Community Change; Coalition on Human Needs; Council for
State and Vocational Rehabilitation Administrators; Easter Seals;
Evangelical Lutheran Church in America; Goodwill Industries
International; Immigration and Refugee Services of America/U.S.
Committee for Refugees; International Association of Jewish Vocational
Services; Latino Community Development Center; Legal Action Center;
Lutheran Services in America; MALDEF (the Mexican American Legal
Defense and Educational Fund); National Advocacy Center of the Sisters
of the Good Shepherd; National Alliance For Partnerships in Equity;
National Alliance to End Homelessness; National Asian Pacific American
Legal Consortium; National Association for Bilingual Education;
National Coalition for the Homeless; National Council of La Raza;
National Employment Law Project; National Immigration Forum; National
Immigration Law Center; National Puerto Rican Coalition; NISH; SER--
Jobs for Progress National, Inc; The Arc of the United States; The
Workforce Alliance; UCP Public Policy Collaboration; United Jewish
Communities--Washington Action Office; Wider Opportunities for Women;
STATE AND LOCAL ORGANIZATIONS COSPONSORING LETTER: Albuquerque Hispano
Chamber of Commerce (NM); Asian Law Caucus (CA); Asian Pacific American
Legal Center (CA); Arizona Women's Education & Employment, Inc. (AZ);
Calexico Community Action Council (CA); California Association for
Bilingual Education (CA); Cambodian Community Development Inc. (CA);
Center for Training & Careers/WorkNET (CA); Centro Campesino (FL);
Centro de Accion Latino (NC); CHARO Community Development Corporation
(CA); Coalition of Florida Farmworker Organizations, Inc (FL);
Connecticut Women's Education and Legal Fund (CT); El Centro Del Pueblo
(CA); El Concilio--Stockton (CA); Hacienda Community Development
Corporation (OR); Hard Hatted Women (OH); Hispanic Committee of
Virginia (VA); Hispanic Office of Planning and Evaluation, Inc. (MA);
Housing Development Corp. of Northwest Oregon (OR); Illinois Coalition
for Immigrant and Refugee Rights (IL); Indiana Coalition on Housing and
Homeless Issues, Inc. (IN); Instituto del Progreso Latino (IL);
Literacy Volunteers of Southeast Connecticut (CT); MAAC Project (CA);
Mattie Rhodes Center (MO); Maui Economic Opportunity, Inc. (HI); Oregon
Council for Hispanic Advancement (OR); San Diego County SER/Jobs for
Progress, Inc. (CA); Siete del Norte (NM); Spanish Action League (NY);
Sunflower Community Action--Hispanos Unidos Chapter (KS); Sweatshop
Watch (CA); Texas Council on Family Violence (TX); Texas Fragile
Families Initiative (TX); The Unity Council (CA); United Laotian
Community Development (CA); Washington State Migrant Council (WA);
Watts/Century Latino Organization (CA); Women at Work (CA); Women's
Association for Women's Alternatives (PA).
______
International Association of Jewish Vocational
Services,
Philadelphia, P.A. 19103,
June 18, 2003.
Hon. Michael B. Enzi,
Hon. Patty Murray,
U.S. Senate,
Washington, D.C. 20510-6350
Dear Senators Enzi and Murray: On behalf of the International
Association of Jewish Vocational Services (IAJVS), I am writing to
convey my deep conviction that the reauthorized Workforce Investment
Act (WIA) must focus on expanding the resources and options available
for skills training that will allow Americans to support themselves and
their families.
IAJVS is a not-for-profit association that links 30 non-sectarian
health and human service agencies in the United States, Canada, Israel
and Argentina. With combined annual budgets of $390 million, our
premier network of employment and training service providers assists
over 320,000 individuals annually from across the social strata to
improve their lives through access to a wide range of educational,
vocational and rehabilitation services. Each year, more than 40, 000
employer organizations partner with our service agencies in providing
training and employment opportunities to dislocated workers, welfare
recipients, refugees, persons with disabilities, the elderly, and youth
transitioning to work, from both the Jewish and non-Jewish communities.
The network of IAJVS affiliates believes that the reauthorization
of WIA affords Congress with the occasion to improve access to training
and to help build bridges to self-sufficiency. To meet this goal, IAJVS
suggests that the following could strengthen WIA:
Increase Resources Available for Training. In order to adequately
address the serious skills development needs of both workers and
employers, resources must be increased. As the demand for a highly
skilled labor force continues to rise, it is critical that our nation's
workforce acquire the skills necessary for our country to compete in
the global economy.
Expand Training Options. To expedite training services for those
who have a demonstrated need, allow flexibility for individuals to
access an array, rather than sequential, series of core, intensive and
training services. According to a recent study by the Center for Law
and Social Policy, there was a 66 percent decline in the number of
individuals receiving training between the final year of the Job
Training Partnership Act (JTPA) and the first program year of WIA. Our
network of provider agencies continue to report on individuals who show
the capacity to benefit from skills training yet are being denied the
opportunity and forced into unskilled, low-paying jobs. These
individuals remain ill equipped to support their families.
Maximize State and Local Flexibility. Local Workforce Investment
Boards are in a better position to assess worker and business needs
than State agencies. With many States facing massive budget deficits,
governors and State legislatures will be tempted to use WIA block grant
funds to offset cuts to other State-funded programs.
Create New Opportunities for Business Engagement in the WIA System.
It is imperative that employers have an increased stake in WIA. The
system should invest in industry-specific intermediaries that allow
multiple employers in a single sector to collaborate with local
trainers and worker representatives to develop workforce strategies for
that industry.
A skilled American workforce is critical to the economic survival
and growth of our nation. We share in your commitment and look forward
to working with you and the members of the Senate Health, Education,
Labor and Pensions Committee on this year's reauthorization.
Sincerely,
Genie Cohen,
Executive Director.
______
National Hire Network,
Washington, D.C. 20002,
July 1, 2003.
Hon. Michael B. Enzi,
Hon. Patty Murray,
U.S. Senate,
Washington, D.C. 20510.
Dear Senators Enzi and Murray, we are writing to share our concerns
with you regarding reauthorization of the Workforce Investment Act
(WIA). The reauthorization of WIA presents a great opportunity for
meeting the challenges faced by hard to employ job seekers. As
advocates for sound public policies affecting the employment of
individuals with criminal records we believe that the WIA
reauthorization is an invaluable tool capable of being modified to
address the specialized needs of individuals with multiple barriers to
work.
Over 600,000 individuals return to communities every year from U.S.
State and Federal prisons. In order to obtain a job, many of these men
and women need access to training and supportive services if they are
to find a job and keep it. Recent evidence has shown that workforce
development innovations when planned well can connect people with
criminal records to the labor market and reduce recidivism.
Unfortunately, there tends to be a dearth of workforce development
resources dedicated to serve this particular hard-to-employ population
during their incarceration and after they are released. Individuals
with criminal records encounter specific difficulties when trying to
obtain employment including the stigma associated with having a
criminal record held by employers and potential co-workers, lack of
education and training limiting the number of jobs they might be
qualified to perform, and licensing restrictions and other bans that
limit the pool of jobs to which people with criminal records might have
access. Access to services before and after release is a crucial
component of success for those at high risk of re-arrest and re-
incarceration. When an individual with a criminal record is able to
find and keep a job he or she becomes a productive and respected tax-
paying member of the larger community.
The National H.I.R.E. (Helping Individuals with criminal records
Reenter through Employment) Network, a Legal Action Center innovation,
is dedicated to identifying and addressing the barriers to employment
that people with criminal records confront. The H.I.R.E. Network works
as a rigorous analyzer of national and State government policy and
serves as a clearinghouse of information dedicated to influencing
public policy discussions and facilitating changes in workforce
development and criminal justice settings in an effort to increase the
number and quality of employment opportunities for people with criminal
records.
The Workforce Investment Act is an untapped resource for assisting
people with criminal records, as they attempt to reconnect with their
families and enter the workforce. One of the articulated goals of WIA
is to lead its consumers to self-sufficiency. WIA reauthorization will
be enhanced if it incorporates methods and strategies designed to
improve job training, employment and supportive services for hard-to-
serve individuals with one or more barriers to employment, including
people with criminal records. More specifically, we are interested in
the adoption of language that acknowledges the increasing number of
labor force participants who begin their job searches facing multiple
barriers to labor market success and that encourages policy and
programmatic innovations designed to alleviate those barriers and
increase employment opportunities for ``hard-to-employ'' job seekers.
In addition, we would like to see specific references to the efficacy
of transitional jobs as an integral part of a hard-to-employ person's
job search and post employment services made available to the harder-
to-employ immediately following their attachment to a job. In order to
assist the hard-to-employ and people returning to their communities
following a period of incarceration in their efforts to lead healthy,
productive lives we encourage you to consider the following
recommendations:
Require States to reserve a percentage of the funds
dedicated to statewide activities to create innovative programs that
provide services to hard-to-serve populations with particular barriers
to long-term employment.
Require States to include in their plans specific
statements and strategies addressing how employment, training and
supportive services will be provided to individuals with criminal
records, individuals in treatment or recovery for alcohol and other
drug addictions, homeless individuals, or other identified hard-to-
employ populations.
Require State and local Workforce Investment Boards to
include representatives who serve a cross-section of hard-to-serve
individuals, including people with criminal records, in their board
membership.
Maintain and increase funds for Programs for Corrections
Education and Other Institutionalized Individuals (Section 225 Title
2).
Provide financial rewards to States that employ a certain
number of people with more serious barriers to employment, such as
individuals with criminal records and alcohol and drug addictions.
Commit additional funding to develop specific workforce
development programs, such as transitional jobs programs, for
individuals with criminal records.
Improve reporting requirements to include all WIA
participants who attempt to access services at the One Stop Service
Delivery Centers, especially those with one or more barriers to
employment.
The use of the Workforce Investment Act to create educational, job
training and employment opportunities for hard-to-serve individuals
with one or more barriers to employment, such as people with criminal
records, is necessary to ensure the success of WIA. Thank you for your
time and thoughtful consideration of our concerns. If you have
questions or would like to discuss anything in this letter further,
please feel free to call Alexa Eggleston, JD, Policy Associate at the
Legal Action Center's National H.I.R.E. Network, (202) 544-5478, x11.
Sincerely, National Organizations--Center for Community Change;
Correctional Education Association; Legal Action Center's National
H.I.R.E. Network; National Advocacy Center of the Sisters of the Good
Shepherd; National Alliance to End Homelessness; National CURE
(Citizens United for Rehabilitation of Errants); Open Society Policy
Center; Rebecca Project for Human Rights; Volunteers of America (VOA);
State and Local Organizations--Center for Community Alternatives (NY);
Centerforce, Inc. (CA); D.C. Employment Justice Center (DC); Greater
Hartford Legal Aid, Inc. (CT); Offender Aid & Restoration of Richmond,
Inc. (VA); STEPS to End Family Violence (NY); The Bronx Defenders (NY);
The New York Urban League (NY); The Safer Foundation (IL); Women in
Prison Project/Coalition for Women Prisoners (NY); Individual
Supporters--Kelly McGowan, Upstream (NY, NY); Marc A. Rogers, Ph.D.
(NY, NY); Robert M.A. Johnson, Anoka County Attorney (MN); Tony L.
Hodges (Meridian, MS).
______
July 2, 2003.
Hon. Michael B. Enzi,
Hon. Patty Murray,
U.S. Senate,
Washington, D.C. 20510.
Dear Senators Enzi and Murray, the purpose of this letter is to
submit comments to the Subcommittee on Employment, Safety and Training
on the reauthorization of the Workforce Investment Act (WIA). As you
are aware, the House of Representatives acted on H.R. 1261, and a
number of the provisions in that legislation are of concern to us. I
encourage the Senate to revise the legislation as it comes before you
and work toward a compromise that supports a strong partnership between
the State and local entities in providing workforce services.
I support the recommendations made by the General Accounting Office
(GAO) that whole-scale, major changes to WIA should not be considered
at this time. The dramatic changes envisioned by the WIA are just
beginning to take hold in most States and it is premature to consider
several provisions contained in H.R. 1261.
Proposal to Repeal the Wagner-Peyser Act
I strongly urge you to reject repeal of the Wagner-Peyser Act,
which would eliminate the 60-year-old U.S. Employment Service (ES), and
undermine the principle of an unbiased, nonpartisan agency to
administer job referrals and assist in the payment of UI benefits. For
over 60 years, the Act has served as the foundation of public labor
exchange activities. Oregon's workforce system is built primarily upon
our Wagner-Peyser and State supplemental funds, thus a repeal of the
Wagner-Peyser Act would have a devastating impact on the comprehensive
statewide system.
The ES system is a Federal-State partnership that provides
assistance in matching job seekers with employers. The ES program also
enforces the work test for unemployment insurance, ensuring that UI
claimants are registered for and matched with suitable job openings.
The program also assists veterans, migrant and seasonal farm workers
and other groups, performs alien labor certification and provides labor
market information research.
Unlike private vendors, the ES places no restrictions on the
employers or workers it serves. It is often the last resort for workers
turned away from private placement agencies, and it occupies a unique
position in the WIA One-Stop system, serving as the ideal entryway to
One-Stop centers. The strong ES infrastructure in Oregon must be kept
in place for the benefit of employers and job seekers. WIA envisions a
universal system for businesses and job seekers. Wagner-Peyser could be
supported by consolidated funding, but the Wagner-Peyser Act should not
be repealed.
Funding Split Between the State and Local Levels for Adult Programs
I would like to express our support for the National Association of
State Workforce Agencies' (NASWA) statement on Reauthorization of the
Workforce Investment Act of 1998, dated June 18, 2003. Throughout the
statement, the need for additional flexibility to Governors is
emphasized. The Governor must have maximum flexibility and authority to
direct funds to the local level in a manner that best responds to the
needs of the State.
I urge the Senate to support a provision that provides a 50-50
split with no strings attached to the State share. Governor
Kulongoski's strategy around economic and workforce development is to
consolidate funding to shift the workforce system to a more demand-
driven system. To do this, the Governor needs the authority to decide
how much of the State's 50 percent share is sent to the local
organizations.
It is important for the Governor and the State workforce board to
have substantial latitude and flexibility in allocating resources to
the local level and to deliver appropriate services throughout the
State. The Governor needs this flexibility to develop strategies that
would consolidate funding and increase strategic reserves that will
shift the workforce system to a more demand-driven system meeting the
business needs of the employer community.
Additionally, without dedicated Federal funding for infrastructure,
the ``one-stop'' service delivery system is compromised. Partner
contributions are critical to the realization of a true one-stop
environment where all pertinent services are offered to workers and
business. Requiring partner contributions will increase their level of
involvement in the one-stop environment, help ensure that each
partner's customers are accessing and benefiting from one-stop
services, and improve the umbrella of services provided customers and
the rewards shared by all.
Provisions for Designation and Re-Designation of Local Workforce Areas
States, in partnership with local representatives, should be given
maximum flexibility to structure a State workforce development system,
as originally proposed by the Administration, to best respond to State
and local conditions and workforce needs. Agreements on local area
designations should be made as a result of discussions at the State and
local level, without Federal involvement.
Increased Waiver Authority of USDOL and Ability To Apply for a State
Block Grant Option
The language in the House bill does not provide sufficient waiver
authority for the States, nor does it contain an option for the State
to apply for a block grant, as proposed by the Administration. As was
the case under TANF, many States are way ahead of the Federal statute
and have developed partnerships with other Federal and State programs
in a truly seamless system. Statutory limitations to increased waiver
authority should be removed. In addition, the legislation should allow
Governors to apply for block grant authority. Under this authority,
Governors would have discretion in administering WIA.
The downturn in the economy, and the Northwest's high unemployment
rate, are key reasons why Congress needs to strengthen the Nation's
publicly-funded workforce system and allow flexibility for the State to
design and operate a system that meets its unique needs.
I look forward to working with you as this legislation moves
through the Senate and into discussions with the House. If I can
provide any additional information, do not hesitate to contact me at
(503) 947-1477.
Sincerely,
Deborah Lincoln,
Director.
______
City of Seattle,
Seattle, Washington 98104,
June 27, 2003.
Hon. Patty Murray,
U.S. Senate,
Washington, D.C. 20510.
Dear Senator Murray: I want to thank you for your leadership
regarding the need to create more effective and comprehensive national
workforce development policies that will help ensure that our nation's
workers have the skills they need to find and retain family wage jobs.
Well trained adaptable workers are a key element in ensuring that our
business community can successfully compete in increasingly competitive
world markets. These policies are particularly important as our
national, State and local economies continue to suffer from slow growth
and very high levels of long-term unemployment.
The reauthorization of the Workforce Investment Act provides an
important opportunity to advance policies that will benefit workers and
strengthen our economic competitiveness. The debate surrounding the
passage of H.R. 1261 identified a number of issues that the City of
Seattle believes needs to be addressed by the Senate. I want to submit
the following comments as part of the deliberations of the subcommittee
and full committee.
The reauthorization of the Workforce Investment Act should address
the following key issues:
Oppose block grants. The new legislation should not include a block
grant that would include the Dislocated Worker and Adult programs in
the Workforce Investment Act and/or the U.S. Employment Service
authorized under the Wagner-Peyser Act. The creation of a new block
grant will undercut support for these important programs and may make
them more vulnerable to further cuts.
Maintain and adequately fund the Employment Service. It is
important that Congress continue to authorize and adequately fund U.S.
Employment Service. The elimination of the Employment Service would end
a decades-old, clearly defined, Federally funded national commitment to
employment services for all U.S. citizens and residents. Abandoning
this commitment through a block grant or elimination of funding is
unacceptable.
Increase funding to meet the needs of workers and businesses. The
Senate should insist on a major expansion of funding for the Workforce
Investment Act to help our dislocated workers as well as other workers
who lack the skills and education needed to find family wage jobs. The
past 2 years has seen three million jobs disappear nationally while the
Puget Sound region has been very hard hit by long-term layoffs. The
administration's proposals to keep funding below fiscal year 2002
levels are unacceptable. The Federal Government needs to strengthen and
expand our national commitment to helping our struggling unemployed
workers and our businesses that need skilled workers.
Create a dedicated fund source for ``One-Stop'' system. The
Workforce Investment Act's support for the creation of State and local
``One-Stop'' systems was a major positive step in system reform and
integration. The congressional failure to adequately fund these systems
have left them unable to adequately serve the needs of unemployed and
employed workers and our businesses. H.R. 1261's solution of providing
``One-Stop'' funding by taking moneys from the system's mandatory
partners is the wrong approach. Congress should create a separate
dedicated funding stream for the ``One-Stop'' systems that will ensure
that these systems can effectively meet the demand for services in our
city and across the country.
Oppose Personal Reemployment Account. The Senate should ensure that
the new legislation does not include Personal Reemployment Accounts for
dislocated workers that had been proposed by the administration. This
type of policy will undercut the long-term viability of the dislocated
worker program and make it more difficult for hard-pressed dislocated
workers to find new family wage jobs.
Increase training opportunities by changing sequence of service
requirements. The passage of the Workforce Investment Act included a
rigid ``sequencing of services'' prior to participants becoming
eligible for more intensive services and training. This policy has had
the effect of substantially reducing the numbers of system clients that
receive training. This short-sighted policy needs to be changed. The
new legislation should make substantial changes in program design that
will allow more workers to receive the training they need to find
family wage jobs.
Maintain current relationships between State and local funding and
decision-making. The City believes that the current funding splits and
decision-making authority contained in current law should be
maintained. Local elected officials and our business, labor, and
community partners have the primary responsibility in making the ``One-
Stop'' system work as well as implementing the local WIA programs.
Reducing local authority or the percentage of funds flowing to local
communities will undercut our efforts to make the system work well.
Support better performance measures. The City supports better
performance measures across programs that will focus on short- and
long-term economic progress for participants. It is important to
recognize that participants may have different immediate goals. If
their goals are educational in nature, the performance measures should
be focused on increased basic skills, training completions, and receipt
of certificates and post secondary credentials and transitions to
employment. If the goal is employment, the performance measures should
be focused on employment indicators such as entry in employment,
promotions, short- and long-term earning gains, job retention and
lifting participants and their families substantially above the poverty
line.
Maintain employer payments for H1-B program. It is important for
Congress to continue the mandatory employer payments for using the Hl-B
program that allows foreign nationals to enter the country and fill
skilled jobs that cannot be filled by Americans due to a lack of
skilled workers. This program needs funding to help train Americans who
want to compete for these family wage jobs. The elimination of the
mandatory employer payments will cut off another important opportunity
for unemployed and underemployed Americans wanting to start new careers
that will adequately support their families.
Thanks for your hard work in promoting national workforce
development policies that will well serve the needs of workers and
employers in our city, State, and nation.
Sincerely,
Greg Nickels,
Mayor of Seattle.
______
Shoreline Community College,
Seattle, Washington,
June 23, 2003.
Hon. Patty Murray,
U.S. Senate,
Washington, D.C. 20510.
Dear Senator Murray: We appreciate the opportunity to submit these
written comments and add them to the public record for the Subcommittee
on Employment, Safety, and Training's recent hearing on the
reauthorization of the Workforce Investment Act (WIA).
WIA is a critical component of the nation's workforce development
strategy and an essential resource for widening access to career
education, training, and economic opportunity. Community and technical
colleges have a vital role to play in the delivery of WIA-funded
services, but unfortunately, since the program was first enacted in
1998, that role has diminished substantially and the Act has failed to
live up, so far, to its promise. The transition from JTPA to WIA has
made access to core employment services easier and more effective by
enhancing program coordination at the local level, but this has come at
the substantial cost of reduced funding for training and employer
services. Furthermore, some of the ``reforms'' proposed by the House of
Representatives (H.R. 1261) will actually exacerbate this and other
problems. A discussion of recommended changes to WIA (and items that
should not be changed) follows.
Program Funding
After 5 years of WIA implementation and declining appropriations,
it is clear that WIA has been asked to do more than it can possibly
handle with the resources it has been given. The mandate to establish
locally-responsive and integrated one-stop career center systems came
with no additional funding. Scarce WIA dollars that should have gone to
the direct provision of employment and training services, have instead
been used across the country to pay the rent and operating expenses of
large, integrated career centers--an expense that did not exist prior
to WIA's enactment.
The mandate to provide core and intensive services to all workers
who come in the door has left virtually nothing for more expensive
services like training. A recent report from the Center for Law and
Policy Studies estimated that the number of dislocated workers
receiving training between 1998 (under JTPA) and 2000 (under WIA)
declined from 149,000 to 42,000. The decline in training is even worse
for the low-income adult program (see CLASP, Program Update: Workforce
Investment Act, March 2003, Update No. 1).
To ensure that sufficient resources are in place to fund the
service delivery infrastructure and training, WIA appropriations should
be increased and separate funding streams should be established for
infrastructure and training.
Finally, the proposed integration of Wagner-Peyser funding into WIA
will only set the stage for the ``block and cut'' defunding scenarios
we have seen before. It will give State employees previously funded
through the Wagner-Peyser program a claim on local WIA resources for
the provision of core services that will ultimately lead to further
reductions in the funding of training by local workforce investment
boards.
Access to Training
Funding is not the only barrier inhibiting access to training. The
Act limits access to training to individuals who have failed to obtain
viable employment through core services. This training as last resort
requirement slows the process of directing customers to the services
they need and wastes WIA resources. A proper needs assessment
documented in an Individual Employment Plan that demonstrates the need
for skills training should be all that is necessary to permit access to
training without delay. The law should be changed to make it clear that
career centers should provide an array of services, not a mandated
sequence of services.
Access to training for dislocated workers would be expedited
without delays or bureaucratic red tape if the law was changed to allow
participation in WIA intensive and training services to satisfy the
unemployment insurance work search requirements (as had been allowed
under JTPA).
Eligible Training Providers and Consumer Choice
WIA program performance reporting requirements should be limited to
WIA participants. If only a few WIA participants access a college
program, the college should not be required to track and report on all
the program's students, as is the case under the current law.
WIA and Perkins Act reporting requirements should be reconciled to
ensure that the same data is reported for both programs regarding
education program performance. The American Association of Community
Colleges has submitted a proposal to the U.S. Department of Labor
regarding how this can be accomplished.
Development and Expansion of Employer Services
One of the biggest problems with the federally-funded employment
and training system is that there are few employer services available.
The system is worker-focused. New and better services need to be
developed to engage employers in the design and delivery of the WIA
system, including job profiling and worker assessment services
(including the capability to refer workers to jobs based on objective
assessment data to determine if they meet an employer-specific skills
profile), and customized training services.
One of the biggest impediments to the development of new and better
WIA-funded employer services (besides the lack of available funds due
to declining appropriations) is the absence of performance standards
that have any relation to these services. All WIA-funded services are
subject to the same set of performance requirements, without regard to
who the customer is--workers or employers. WIA needs to develop a
separate and appropriate set of performance requirements for employer
services.
Customized training results should be measured not by worker wage
increases or employment gains, but by the achievement of company-
identified strategic objectives that motivate companies to engage in
incumbent worker skill development. These objectives will vary widely
from project to project and company to company, and may include
reorganization of the production/service delivery process, reduction of
waste, reorganization of staff into work teams, improved customization
of products or services, etc. WIA should establish a process for
identifying and tracking company-specific strategic objectives for
measuring the performance of incumbent worker training initiatives. The
Aspen Institute is currently researching how this can be done (see
Documenting Demand Side Outcomes Project, http://www.aspenwsi.org/
DDSOl.htm)
Performance Standards
In addition to the development of a separate performance system for
employer services, we recommend dropping the proposed inclusion of a
``program efficiency measure'' based on cost per participant. We have
been down this road before under JTPA and research has shown that
performance measures based on costs has led to ``creaming'' of the most
job-ready workers and restricted access to more costly services, such
as training, regardless of need (see National Commission for Employment
Policy, JTPA Performance Standards Effects on Clients, Services, and
Costs: Final Report, 1988). Let's learn from the past and not repeat
mistakes we have made before.
Youth Program Enhancement
In general, we agree with the nine WIA recommendations made by the
National Youth Employment Coalition. In particular, we strongly support
NYEC's recommendations regarding streamlining of WIA youth eligibility
determination, and building the capacity of local Youth Councils by
maintaining local WIB authority over council membership. One area where
we differ from NYEC is that we advocate a 50/50 split between in-school
and out-of-school youth program funding. These are the issues that most
directly inhibit community colleges and local communities from
effectively serving economically disadvantaged youth with WIA
resources.
Sincerely,
Holly L. Moore, Ed.D.,
President, Shoreline Community College.
John E. Lederer,
Executive Director, Government Relations and Grants.
______
Prepared Statement of Wade Delk
about the national organization for competency assurance (noca)
NOCA, the oldest and largest organization representing
certification agencies, testing companies, consulting firms and
individuals involved in professional certification, was created in 1977
as the National Commission for Health Certifying Agencies (NCHCA) with
Federal funding from the Department of Health and Human Services. Its
mission was to develop standards for quality certification in the
allied health fields and to accredit organizations that met those
standards. With the growing use of certification in other fields,
NCHCA's leaders recognized that what is essential for credible
certification of individuals in the healthcare sector is equally
essential for other sectors. With this vision, NCHCA evolved into the
National Organization for Competency Assurance. NOCA is a non-profit,
501(c)(3) organization, committed to serving the public interest by
ensuring adherence to standards that ensure the highest competence of
certification programs.
NOCA's membership is composed of more than 300 organizations
responsible for certifying specific skill-sets and knowledge bases of
professions and occupations at the national and international level.
Through certification, NOCA members represent more than six million
individuals around the world and include certification programs of some
150 professions and occupations, including 57 healthcare professions.
NOCA members certify individual skills in fields as diverse as
construction, healthcare, automotive, and finance. A current roster of
NOCA members is attached.
NOCA also brings the expertise of its internationally recognized
accrediting arm, the National Commission for Certifying Agencies
(NCCA). NCCA uses a peer review process to evaluate adherence to its
standards by certification programs and grants recognition through
accreditation to those programs that have met those standards. These
standards exceed the requirements set forth by the American
Psychological Association and the U.S. Equal Employment Opportunity
Commission and thus help to protect the health, safety, and welfare of
the public. NCCA is the national accreditation body that provides this
service for private certification organizations in all disciplines.
NOCA's mission is to promote excellence in competency assurance for
individuals in all occupations and professions. No other organization
has the presence in or commits the resources to the field of
certification. NOCA is proud of its position as the international
leader in competency assurance for certification programs, as well as
its role in promoting excellence in competency assurance for
practitioners in all occupations and professions.
what is certification?
The certification of professional and occupational skill-sets
affirms a knowledge and experience base for practitioners in a
particular field, their employers, and the public at large.
Certification represents a declaration of a particular individual's
professional competence. In some professions certification is a
requirement for employment or practice. Doctors, mechanics,
accountants, surveyors and many others are all required to go through a
certification process of some kind. In all instances, certification
enhances the employability and career advancement of the individual
practitioner or employee.
Many organizations in today's competitive and challenging economy
have recognized their workforce as their most valuable asset. Likewise,
individuals, whether employed or self-employed, know that now more than
ever before they must acquire and maintain more comprehensive skill-
sets to ensure their own attractiveness and ability in the workplace.
The benefits of certification include:
Higher wages for employees in the form of higher salaries
and pay scales, bonuses, or education assistance
A more productive and highly trained workforce for
employers
Prestige for the individual and a competitive advantage
over non-certified individuals in the same field
Enhanced employment opportunities
Assisting employers in making more informed hiring
decisions
Assisting consumers in making informed decisions about
qualified providers
Protecting the general public from incompetent and unfit
practitioners
Establishing professional standards for individuals in a
particular field.
Equal to the benefits of certification is the importance of
establishing an underlying certification program based on best
practices and recognized processes and procedures developed by the
field of certification. NOCA serves as the member-based organization
for the field of certification to enhance professional excellence and
ensure the competency of certification programs.
Indeed, many policy-makers have regarded certification as so
valuable to our nation's workforce and national security that the
Senate Commerce Committee recently added a provision the Federal
Aviation Administration reauthorization bill providing for the
certification of new security skill-sets for flight attendants.
noca's recommendations for enhancing the workforce investment act
Among the resources that will enable displaced workers move back
into employment, possibly better employment or enhanced career
opportunities, would be access to certification programs whose
prerequisites and requirements these workers may be eligible or could
quickly become eligible. Certification of one's specialized skills
learned from years on the job may well be the quickest pathway to
reemployment.
In many instances, an occupational certification does not require a
college degree. College is an expensive and time-consuming undertaking
which may not represent a viable alternative for many dislocated
workers. Some occupations, such as auto mechanics or X-ray technicians,
only require a certification, not a college degree. A certification in
either of these fields can open up a rewarding career path, with good
pay and opportunities for advancement, to many individuals.
NOCA recommends including information on opportunities for
certification and licensure as a core service available through the
One-Stop employment and training activities and including certification
and licensure in the scope of training services offered through the
One-Stop system.
Certification would offer a meaningful and direct pathway to re-
employment for many individuals eligible for assistance through the
One-Stop system. Certification may be a part of the training for
specific job skills required in local markets and will enhance the job
readiness of many with skills from previous work experience. Including
information about the vast array of opportunities available to job
seekers when they visit One-Stops is a sure way to assist an individual
in obtaining new work and possibly better career opportunities.
In fact, career counselors who staff One-Stop Centers are certified
as Global Career Development Facilitators by the National Board for
Certified Counselors, a NOCA member and the largest certification
program for the counseling profession. These career development
professionals receive specialized training for working in career
development fields. The Career Development Facilitators credential
establishes minimum competency requirements to serve the dislocated
worker and requires adherence to a professional Code of Ethics.
CONCLUSION
Improving the prospects for reemployment and career opportunities
of displaced workers represents the core of the Workforce Investment
Act. Many employers in today's competitive and challenging economy have
recognized that their workforce is their most valuable asset. Likewise,
individuals, whether employed or self-employed, know that now more than
ever before they must acquire and maintain more comprehensive skill-
sets to ensure their own marketability and competence in the workplace.
Certification represents an excellent pathway to employment
opportunities for workers in all areas in the economy. It also serves
as an important assurance for employers and the general public that
individuals have attained the necessary skill sets to provide the
services or carry out the scope of their employment. We hope that the
Subcommittee will recognize the important role that certification has
to play in the One-Stop system.
APPENDIX
NOCA Organizational Members
NOCA's Organizational Members consist of associations, certifying
organizations, customer groups, and government agencies that are
interested in credentialing.
AACE International
ACNM Certification Council, Inc.
Academy of Ambulatory Foot Surgery
Academy for Certification of Vision Rehabilitation and
Education Professionals
Accrediting Bureau of Health Education Schools
Aerobics and Fitness Association of America
American Academy of Audiology
American Academy of Nurse Practitioners
American Academy of Otolanyngology--Head & Neck Surgery
American Academy of Pain Management
American Academy of Wound Management
American Association for Medical Transcription
American Association for Respiratory Care
American Association of Critical-Care Nurses Certification
Corporation
American Association of Family and Consumer Sciences
American Association of Medical Assistants
American Association of Physician Specialists
American Board for Certification in Orthotics and
Prosthetics, Inc.
American Board for Occupational Health Nurses
American Board of Ambulatory Medicine
American Board of Cardiovascular Perfusion
American Board of Chiropractic Consultants
American Board of Chiropractic Orthopaedists
American Board of Chiropractic Sports Physicians
American Board of Industrial Hygiene
American Board of Nursing Specialties
American Board of Opticianry
American Board of Pain Medicine
American Board of Professional Neuropsychology
American Board of Surgical Assistants
American Board of Transplant Coordinators
American Board of Veterinary Practitioners
American Certification Agency for Healthcare Professionals
American Chiropractic Neurology Board
American Chiropractic Registry of Radiologic Technologists
American College of Forensic Examiners
American College of Healthcare Executives
American College of Sports Medicine
American Compensation Association
American Construction Inspectors Association
American Council of Certified Podiatric Physicians and
Surgeons
American Council on Exercise
American Fence Association, Inc.
American Hospital Association Certification Center
American Institute of Certified Public Accountants
American Lung Association National Asthma Education
Certification Board
American Medical Technologists
American Nurses Credentialing Center Commission on
Certification
American Occupational Therapy Association
American Osteopathic Association
American Payroll Association
American Petroleum Institute
American Physical Therapy Association
American Podiatric Medical Specialties Board
American Production and Inventory Control Society
American Reflexology Certification Board
American Registry of Diagnostic Medical Sonographers
The American Registry of Radiologic Technologists
American Society for Industrial Security
American Society for Microbiology
American Society of Anesthesia Technologists and
Technicians
American Society of Association Executives
American Society of Military Comptrollers
American Speech-Language-Hearing Association
Aquatic Exercise Association, Inc.
Art Therapy Credentials Board
Associated Landscape Contractors of Colorado
Association for Canadian Registered Safety Professionals
Association for Death Education and Counseling
Association for Investment Management and Research
Association of Government Accountants
Association of Medical Illustrators
Association of Professionals in Business Management
Association of Social Work Boards
Association of Surgical Technologists, Inc.
Association of Water Technologies, Inc.
BICSI: A Telecommunications Association
Behavior Analyst Certification Board
Biofeedback Certification Institute of America
Board for Certification in Pedorthics
Board for Orthotist/Prothetist Certification
Board of Certification for Emergency Nursing
Board of Certification in Professional Ergonomics
Board of Certified Safety Professionals
Board of Environmental, Health & Safety Auditor
Certifications
Board of Pharmaceutical Specialties
Board of Registered Polysomnographic Technologists
California-Nevada Section, American Water Works
Association
California Water Environment Association
Canadian Alliance of Physiotherapy Regulators
Canadian Board for Respiratory Care, Inc.
Canadian Chiropractic Examining Board
Canadian Council of Professional Engineers
Canadian Securities Institute
Certification Board for Music Therapists
Certification Board of Infection Control and Epidemiology
Certification Board Perioperative Nursing
Certification of Disability Management Specialists
Commission
Certified Financial Planner Board of Standards, Inc.
Certified Fund Raising Executive International
Credentialing Board
Certified General Accountants' Association of Canada
Certifying Board for Dietary Managers
Certifying Board of Gastroenterology Nurses and Associates
Clinical Nutrition Certification Board
College of Massage Therapists of Ontario
College of Medical Radiation Technologists of Ontario
College of Occupational Therapists of Ontario
College of Respiratory Therapists of Ontario
Commercial Real Estate Education Foundation, Inc.
Commission for Case Manager Certification
Commission for Certification in Geriatric Pharmacy
Commission on Dietetic Registration of the American
Dietetic Association
Commission on Graduates of Foreign Nursing Schools
Commission on Rehabilitation Counselor Certification
Computing Technology Industry Association
Construction Management Association of America
Consultant Services
Convention Liaison Council
Council on Certification of Nurse Anesthetists
Council on Licensure, Enforcement and Regulation
Council on Nutrition
Defense Activity for Non-Traditional Education Support
Dental Assisting National Board
The Educational Foundation of the National Restaurant
Association
Examination Board of Professional Home Inspectors
Hand Therapy Certification Commission, Inc.
Healthcare Quality Certification Board
Human Resource Certification Institute
IEEE Computer Society
ISA, the international society for measurement and control
Infusion Nurses Certification Corporation
Illinois Department of Professional Regulation
Institute of Certified Management Accountants
Institute of Hazardous Materials Management
Institute of Real Estate Management
International Air Filtration Certifiers Association
International Association for Colon Hydrotherapy
International Association of Healthcare Central Service
Materiel Management
International Association of Psychosocial Rehabilitation
Services
International Board of Lactation Consultant Examiners
International Certification and Reciprocity Consortium/
Alcohol & Other Drug Abuse, Inc.
International Conference of Building Officials
International Electrical Testing Association (NETA)
International Executive Housekeepers Association, Inc.
International Society for Clinical Densitometry
International Society of Arboriculture
Joint Commission on Allied Health Personnel in
Ophthamology
Knowledge Management Certification Board
Lamaze International
Liaison Council on Certification for the Surgical
Technologist
National Aerobics & Fitness Trainers Association
National Air Duct Cleaners Association
National Association Medical Staff Services
National Association for Subacute & Post Acute Care
National Association of Alcoholism and Drug Abuse
Counselors
National Association of Boards of Pharmacy
National Association of Forensic Counselors, Inc.
National Association of Legal Assistants
National Association of Mortgage Brokers
National Association of Purchasing Management
National Athletic Trainer's Association Board of
Certification
National Board for Certification in Hearing Instrument
Sciences
National Board for Certification in Occupational Therapy
National Board for Certification of Registrars
National Board for Certified Counselors
National Board for Professional Teaching Standards
National Board for Respiratory Care
National Board of Certification for Community Association
Managers, Inc.
National Board of Examiners in Optometry
National Board of Orthodontics, U.S.
National Business Aviation Association
National Center for Competency Testing
National Certification Board for Diabetes Educators
National Certification Board for Therapeutic Massage and
Body Work
The National Certification Board of Pediatric Nurse
Practitioners and Nurses
National Certification Commission for Acupuncture and
Oriental Medicine
National Certification Corporation for the Obstetric,
Gynecologic, and Neonatal Nursing Specialties
The National Commission for Health Education Credentialing
National Commission for the Certification of Crane
Operators
National Community Pharmacists Association
National Contact Lens Examiners
National Council for Interior Design Qualification
National Council for Therapeutic Recreation Certification,
Inc.
National Council of Architectural Registration Boards
National Council of Examiners for Engineering and
Surveying
National Council of State Boards of Nursing, Inc.
National Council for Therapeutic Recreation Certification
National Council on Qualifications for the Lighting
Professions
National Dental Hygiene Certification Board
National Examining Board of Ocularists
National Glass Association
National Ground Water Association
National Healthcareer Association
National Ground Water Association
National Indian Child Welfare Association
National Institute for Automotive Service Excellence
National Institute for Certification of Healthcare Sterile
Processing and Distribution Personnel
National Institute for Standards in Pharmacist
Credentialing
National Phlebotomy Association, Inc.
National Registry of Emergency Medical Technicians
National Registry of Food Safety Professionals
National Safety Management Society
National Strength and Conditioning Association (NSCA)
Certification Commission
National Surgical Assistant Association
North American Electric Reliability Council
North American Registry of Midwives
North American Technician Excellence
The Nuclear Medicine Technology Certification Board
Oncology Nursing Certification Corporation
Ontario College of Pharmacists
Ophthalmic Photographers' Society, Inc. Board of
Certification
Pharmacy Technician Certification Board
Professional Photographers of America
Project Management Institute
Radiology Coding Certification Board
Registry of Interpreters for the Deaf, Inc.
Registry of Magnetic Resonance Imaging Technologists, Inc.
Rehabilitation Engineering and Assistive Technology
Society of North America
Royal College of Physicians and Surgeons of Canada