[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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          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

                              ----------                              

                               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

                              ----------                              


                        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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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
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     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
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     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
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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
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Oriental Medicine
     National Certification Corporation for the Obstetric, 
Gynecologic, and Neonatal Nursing Specialties
     The National Commission for Health Education Credentialing
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Operators
     National Community Pharmacists Association
     National Contact Lens Examiners
     National Council for Interior Design Qualification
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Inc.
     National Council of Architectural Registration Boards
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Surveying
     National Council of State Boards of Nursing, Inc.
     National Council for Therapeutic Recreation Certification
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Professions
     National Dental Hygiene Certification Board
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     National Glass Association
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     National Indian Child Welfare Association
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Processing and Distribution Personnel
     National Institute for Standards in Pharmacist 
Credentialing
     National Phlebotomy Association, Inc.
     National Registry of Emergency Medical Technicians
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Certification Commission
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Certification
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     Registry of Magnetic Resonance Imaging Technologists, Inc.
     Rehabilitation Engineering and Assistive Technology 
Society of North America
     Royal College of Physicians and Surgeons of Canada
     Sales & Service Voluntary Partnership, Inc.
     Society of Actuaries
     Society of Cable Telecommunications Engineers
     The Society of the Plastics Industry, Inc.
     Society of Tribologists and Lubrication Engineers
     Transportation Professional Certification Board, Inc.
     Washington State Department of Health
     Wound, Ostomy, and Continence Nurses Certification Board

                Prepared Statement of Sory Hinton Jordan

    Good morning Mr. Chairman and Members of the Committee. I am Sory 
Hinton Jordan of California, President of IAPES, which is a nonprofit 
educational association representing 17,000 professionals worldwide who 
work in public and private workforce development programs. The mission 
of IAPES is to enhance, serve, and support those interested in 
workforce development programs. IAPES was founded in 1913 when there 
were only 62 public employment offices in the United States operating 
in 19 States. The need for uniformity in methods, procedures, and in 
the exchange of labor market data and workforce ideas was realized by 
many managers and officials of these early workforce agencies and so 
they helped to form our organization. I thank the Committee for the 
opportunity to share with you some thoughts about the reauthorization 
of WIA as it affects the important contributions our members provide in 
assisting workers and linking them to employers and opportunity.
    The 1998 enactment of the Workforce Investment Act was intended to 
reform the nation's employment and training system. It was recognized 
at the time that parts of the system were fragmented or overlapping and 
that the system as a whole could be coordinated and improved to better 
serve both job seekers and employers. WIA is an attempt to integrate 
employment and training services at the local level into a coordinated 
workforce development system. As you know, full implementation of WIA 
began in July 2000, with the primary focus on the establishment of a 
network of local one-stop delivery centers, which is where many of our 
IAPES members work to assist job seekers and employers.
    Over one million people received intensive services or training 
services through WIA-funded programs during the period July 1, 2001 to 
June 30, 2002. During this same period, millions more job seekers and 
employers benefited from job search and placement assistance, other 
labor market information, unemployment insurance assistance, counseling 
and customized services for veterans, adults, youth, individuals with 
disabilities and dislocated workers--all provided through this same 
coordinated workforce development system under the authority of WIA, 
the Wagner-Peyser Act, the Rehabilitation Services Act, the Adult and 
Vocational Education Acts and the Social Security Act.
    However, in the current national economic environment of high 
unemployment and historically long duration of joblessness, modest 
successes in reorganizing employment and training programs into a 
coordinated workforce delivery system have not proven sufficient to 
address the needs of the nine million Americans who are now out of work 
and the many millions more who have stopped looking for work. 
Strengthening the capability of programs that help Americans get back 
to work--both through reauthorization legislation and robust Federal 
funding--is even more essential at this time.
    Mr. Chairman, the House of Representatives has passed its proposed 
WIA reauthorization. We have some thoughts regarding the House bill 
that may be useful to you as you consider your own reauthorization 
bill.
    H.R. 1261, as passed by the House of Representatives, proposes to 
improve the workforce investment system through various amendments 
intended to strengthen one-stop career centers, alter WIA governance 
relationships, emphasize consumer choice, target youth services, and 
focus on performance outcomes.
    The House bill would alter the membership and responsibilities of 
State workforce investment boards. Greater responsibility would fall 
upon State workforce-related agencies, where there is a significant 
concentration of our IAPES membership. It is our hope that through such 
a ``refocusing'' State boards would ensure that State-level 
administrators of one-stop programs have a greater say in setting 
policies regarding the coordination of services within the one-stop 
centers. Our membership is pleased that the House bill emphasizes 
serving individuals with disabilities but feels more emphasis must also 
be placed on the special employment services required and well earned 
by our nation's veterans. We also feel that State authority to require 
a regional plan from local areas is an important feature of the House 
bill that can help improve the overall State workforce system. The 
House would drop the requirement that each of the local one-stop 
partner programs have a seat on the local board. While we do not oppose 
this change, we reiterate it is essential that the local labor exchange 
agency (the Employment Service) as well as representatives of the 
unemployment insurance agency, the labor market information agency, 
veterans and individuals with disabilities be at the table when 
decisions affecting the local labor market are made. H.R. 1261 provides 
that each one-stop partner program whose budget is controlled by the 
State must contribute a portion of its annual funding for allocation to 
the infrastructure funding of local one-stop centers. Again, while 
IAPES does not specifically oppose this concept, we want to ensure that 
the portion of the funds provided for infrastructure costs remains a 
small percentage of each partner program's overall funding and that it 
is proportionate to the program's use of the one-stop system. Our 
concerns were addressed by a House bill amendment offered by 
Representative Kline.
    The House bill also anticipates the consolidation of the three 
adult funding streams--WIA adult and dislocated worker funding streams 
and the Wagner-Peyser labor exchange (Employment Service) funding 
stream. Under this arrangement, all former Employment Service functions 
would be maintained through the provision of core services within the 
one-stop delivery system. Under current law, both WIA and the Wagner-
Peyser Act provide funds for services to connect job seekers with 
available jobs. All adults are eligible to receive these services. Such 
WIA activities are called 'core services' and under Wagner-Peyser they 
are 'labor exchange services.' But the services are very similar and, 
in many States, are offered through a coordinated or fully integrated 
local delivery system. The House would give governors the option of 
either providing the funds to the local areas or utilizing State 
employees to provide the services locally in the one-stop centers. 
Under Wagner-Peyser, but not WIA, there is a regulatory requirement 
that labor exchange services be provided by State merit staff 
employees.
    Some IAPES members feel that consolidation of these funding streams 
is consistent with the program delivery coordination that their States 
have pursued and, therefore, is appropriate. Based upon the comments we 
have received from our membership and the legislative outreach to the 
membership that we have undertaken, it is clear however that the 
majority of IAPES members strongly believe that the separate 
identification of labor exchange resources has been very valuable to 
their State's job seekers and employers. Also, Mr. Chairman, virtually 
all of our IAPES members appreciate that merit service requirements in 
many public programs grew out of patronage abuses that harmed public 
service capabilities. We feel the protections provided to vital public 
services through a merit service requirement remain extremely 
important. But many of our members feel this is not the only criterion 
that should be considered in deciding how to improve the workforce 
delivery system. However, all of our IAPES members are concerned about 
the availability of adequate Federal resources for the workforce system 
to serve employers and, particularly in difficult economic times such 
as these, job seekers. Frankly, Mr. Chairman, this latter concern of 
our membership is the strongest reason we feel it may not be prudent at 
this time to consider the consolidation proposed by the House. Since 
there are so few national organizations that focus on the ``employment 
security'' side of employment and training programs--including UI, ES 
and labor market information--and so few who also focus on VETS and 
services to individuals with disabilities, and since our Membership was 
historically concentrated in these areas, our organization has tended 
to focus here. In the past few years, Federal funding for employment 
and training programs has declined, in total, by significant amounts--
in spite of rising joblessness and unemployment duration. We worked 
very hard during this period to preserve Federal resources for UI 
administration, the Wagner-Peyser labor exchange, ALMIS, VETS and WIA 
disabilities activities. For fiscal year 2003, Congress, for the most 
part, protected these programs. At the same time however, the 
administration proposed (and continues to propose) large cuts in 
employment and training programs. The Congress responded last year by 
cutting other WIA programs by more than $600 million. We think this 
approach by the Congress is due, in part, to the historic commitment 
Congress has had to the UI and ES programs. Facing more Federal cuts 
for at least as long as these massive, renewed Federal deficits 
endure--which could be many more years, we think it is probably wiser 
to face our chances in the bruising annual Federal appropriations 
process with the limited leverage of a separate Wagner-Peyser funding 
stream still in place. We think, unfortunately, WIA programs will be 
cut again this year--and probably more in the years ahead. We think, on 
balance, it would be better if we had a shot at trying to protect labor 
exchange resources under Wagner-Peyser.
    Finally, Mr. Chairman, let me say a word about a program we were 
not so successful in defending in the appropriations process last year. 
America's Labor Market Information System is central to effective 
Federal, State and local policy making in the workforce system. And it 
is critical to the millions of individual decisions job seekers and 
employers make every year as well. Yet we, as a system, tend to ignore 
the essential services it provides when we make our funding decisions 
or consider legislative changes. I would therefore ask, Mr. Chairman, 
that we have the opportunity to continue discussing ALMIS issues as you 
work through the WIA reauthorization this year.
    Again, Mr. Chairman, thank you for offering IAPES this opportunity 
to submit this testimony.

                 Prepared Statement of Steve H. Perdue

    On behalf of the Board of Directors for the American Congress of 
Community Support and Employment Services (ACCSES), I welcome the 
opportunity to provide comment on the reauthorization of the Workforce 
Investment Act of 1998. ACCSES is a national, nonprofit organization of 
providers of vocational rehabilitation and community supports committed 
to maximizing employment opportunities and independent living for 
individuals with disabilities.
    As the Senate Health, Education, Labor, and Pensions (HELP) 
Subcommittee on Employment, Safety, and Training considers 
reauthorizing legislation for the nation's workforce development and 
public vocational rehabilitation systems, ACCSES appreciates the 
opportunity to share with you its recommendations. Earlier this year on 
April 24, ACCSES sent each of you a letter encouraging your 
subcommittee to pursue a more deliberative path on reauthorization of 
the Workforce Investment Act (hereafter referred to as WIA) and 
Rehabilitation Act (hereafter referred to as Rehab Act) by seeking 
greater public input from stakeholders. The public hearing convened on 
June 18 was a step in the right direction and hopefully additional 
hearings will follow.
    WIA was intended to provide displaced workers with the information, 
training, and resources necessary to obtain and retain employment 
through the design and implementation of the One-Stop Delivery System 
(hereafter referred to as the One-Stops). By establishing the One-
Stops, the previously fragmented employment and training system was 
replaced with an integrated, enhanced system of services and supports 
corresponding to needs of a competitive labor market.
    WIA also recognized that individuals with disabilities often 
required more specialized services and supports and, therefore, 
authorized certain mandatory partners participation, such as the 
Vocational Rehabilitation (VR) program. By mandating the State VR 
Agencies participation, individuals with disabilities were given 
physical, programmatic, and systematic accessibility to the workforce 
investment system.
    ACCSES contends that the following recommendations shall serve to 
improve the existing workforce development and public vocational 
rehabilitation system.

       UTILIZING COMMUNITY-BASED PROVIDERS IN THE ONE-STOP SYSTEM

    Community-based providers represented by ACCSES play a pivotal role 
in integrating individuals with disabilities into their communities, 
and providing the skills necessary to lead more productive lives. 
Community-based providers offer a wide array of services and supports, 
including vocational rehabilitation, employment skills, residential 
services, mental health services, substance abuse services, 
transportation, case management, day treatment, counseling, and family 
services. All of these services and supports represent a sound public 
investment because they assist individuals with disabilities become 
self-sufficient, tax-paying citizens.
    ACCSES believes that the ability of community-based providers to 
assist individuals with disabilities obtain and retain employment 
largely depends on a strong, comprehensive workforce development 
system. Therefore, it is critical that the necessary steps be taken 
during reauthorization to ensure that continued improvements are made 
to the WIA's infrastructure, along with the allocation of appropriate 
resources. One of the most significant improvements involves greater 
utilization of community-based providers in the One-Stop system.
    Challenge Industries, Inc. located in Ithaca, New York (Tompkins 
County) provides an excellent example of a community-based provider 
being included as an integral component in a successful One-Stop 
system. Challenge is a vocational rehabilitation agency, serving over 
500 job seekers per year comprised of individuals with disabilities and 
job seekers transitioning from public assistance.
    Although many areas in New York State report continued failure to 
widen participation in the local One-Stop infrastructure, Tompkins 
Workforce New York One-Stop system has achieved success, in part, by 
its inclusion of community-based providers. Where other One-Stops have 
been unable to achieve the overall goals set forth in WIA, Challenge's 
involvement in Tompkins Workforce New York One-Stop has helped to 
eliminate duplication of services.
    Some unique features, which have resulted from the inclusion of 
community-based providers in the Tompkins Workforce New York One-Stop 
system, include:
     Co-location of agencies serving job seekers with barriers, 
resulting in more effective networking and supports for job seekers 
(including, but not limited to, housing, transportation, child-care, 
financial planning, etc.)
     Active participation in One-Stop planning including 
marketing the ``system,'' rather than approaching the business 
community as several distinct agencies
     Greater support systems and individualized training 
opportunities for job seekers (have been able to tap into WIA funds, 
when VR is unable to financially assist)
     Shared staffing in the One-Stop Center which includes 
direct staff from community based agencies who specialize in serving 
individuals with disabilities
     Increased participation with AOSOS which has improved the 
reportable outcomes representing successful job placements of 
individuals with disabilities
     Disability expertise in the One-Stop system 
(accessibility, accommodations, workplace disclosure, social security 
advisement, tax credits and other work incentives)
    Community based providers have long histories of established 
relationships with the business community that have resulted in growing 
placement rates for job seekers with disabilities. In short, the 
success of the public VR system depends on its ability to collaborate, 
partner and include community-based agencies in serving individuals 
with disabilities in the One-Stop system.

       UTILIZING COMMUNITY-BASED PROVIDERS IN THE STATE VR SYSTEM

    ACCSES also contends that reauthorization should include 
comprehensive language that encourages State VR Agencies to utilize the 
services and supports provided by community-based programs. Considering 
the U.S. Supreme Court's 1999 Olmstead decision, President Bush's New 
Freedom Initiative, and subsequent Executive Order Number 13217, the 
success of the public VR program will depend, in large part, on its 
ability to collaborate and partner with other agencies, both public and 
private, in providing services and supports to individuals with 
disabilities. Since many States are focusing on Olmstead 
implementation, community-based programs will continue to play an 
increasing role in assisting individuals to obtain work.
    For instance, in Florida the total amount of VR expenditures spent 
in 2002 on private, community-based providers was approximately 8.3 
percent (total VR expenditures was $125,176,210 and $10,485,380 was 
spent on private providers). Yet, the private, community-based 
providers in the State produced almost four times as many successful 
closures (22.8 percent). There were 10,013 total employment outcomes 
defined as 26 closures and private, community-based providers closed 
2,284 cases.
    Likewise, the State VR Agency in Illinois spent approximately $24 
million of its $84 million budget on private, community-based providers 
(27 percent). The total number of successful outcomes achieved in 
Illinois last year was an estimated 6,600 and private providers closed 
42 percent of the cases (2,801). In Florida and Illinois, private, 
community-based providers have demonstrated their value to the VR 
program by successfully working with individuals with disabilities to 
obtain and retain employment.
    State VR Agencies and community-based providers, alike, need 
additional training on the needs and best practices in employment 
services for individuals with severe and persistent mental illness. 
Based on some estimates, the unemployment rate among this fragile 
population continues to remain around 90 percent. Therefore, increased 
resources for community-based demonstration projects for supported 
employment and supported educational services are needed.

               INCREASING COORDINATION AND ACCESSIBILITY

    For almost 30 years, the cornerstone of Title I of the Rehab Act 
has consistently been to provide individuals with disabilities with 
customized vocational rehabilitation, employment services, and other 
supports. More importantly though, Title I has represented the 
commitment of the Federal Government to empower individuals with 
disabilities to take control of their own lives by becoming more 
independent. ACCSES strongly believes that the reauthorization process 
needs to maintain this commitment by strengthening not weakening the 
public VR system.
    Clearly individuals with disabilities who access services and 
supports from the public VR system stand to benefit by becoming more 
self-sufficient and less dependent on the public doles. For example, 
according to the New Jersey Division Vocational Rehabilitation Services 
(NJDVRS) there were 3,788 recipients of NJDVRS services in New Jersey 
successfully rehabilitated and placed in jobs in fiscal year 2002. For 
those individuals placed successfully the average weekly wage at 
achievement of employment was $417 compared with an average weekly wage 
at the time of referral to NJDVRS of $74. This demonstrates 
considerable growth in the earning capacities of those who were 
successfully placed after NJDVRS services.\1\
---------------------------------------------------------------------------
    \1\ New Jersey Division of Vocational Rehabilitation Services, 
``Fiscal Year 2002 Report on Activity to Senators Frank Lautenberg and 
Jon Corzine,'' 2003.
---------------------------------------------------------------------------
    In addition the long-held belief that vocational rehabilitation 
saves tax dollars was supported by data on public support recipients 
from New Jersey who were referred for NJDVRS services and placed 
successfully. At the time of their referral, 30 percent were receiving 
some type of public support (SSDI, SSI, Public Assistance), while at 
the successful completion of their program and subsequent placement, 12 
percent continued to receive public support.\2\
---------------------------------------------------------------------------
    \2\ ``Fiscal Year 2002 Report on Activity to Senators Frank 
Lautenberg and Jon Corzine,'' 2003.
---------------------------------------------------------------------------
    Protecting the integrity of Title I and State VR Agencies must 
remain a priority to insure proper services for individuals with 
disabilities. Keeping the current program infrastructure and funding 
separate from other employment and training programs will best achieve 
this objective. During the 1998 reauthorization of the Rehab Act, 
attempts were made to consolidate VR programs into one funding source--
this was avoided because advocates successfully demonstrated that the 
One-Stops could not effectively work for all individuals with 
disabilities needing services. The same holds true today. Despite 
keeping the program infrastructure and funding separate, there has been 
little technical guidance on how best to effectively coordinate the 
services available at the One-Stops and its mandatory partners.
    A study completed in October 2001 by the General Accounting Office 
(GAO) determined that mandated partners were concerned that their 
participation may lead to serving ineligible clients. Specifically, 
State VR Agencies expressed apprehension that changes to their 
traditional service-delivery system was forcing them to serve 
individuals outside their target populations. Since many individuals 
who enter the system seeking services and supports are not disabled, 
GAO found that VR was reluctant to provide core services to these 
individuals. Yet, without VR's active participation and presence, the 
One-Stops are often ill-equipped to serve individuals with disabilities 
who require more specialized services and supports.\3\
---------------------------------------------------------------------------
    \3\ United States General Accounting Office, GAO-02-72, ``Workforce 
Investment Act: Better Guidance Needed to Address Concerns Over New 
Requirements,'' October 2001, p. 15.
---------------------------------------------------------------------------
    The Rehab Act mandates that State VR Agencies must serve 
individuals with the most severe disabilities based on an Order-of-
Selection if they do not have the funding to serve all. Local VR 
counselors have expressed programmatic concerns over serving non-
disabled individuals entering the One-Stops (i.e. providing initial 
intakes or making referrals). In response to their concerns, the U.S. 
Department of Education (DOE) has indicated that such services are 
permitted, and also in compliance with their WIA participation.\4\ 
Although DOE has attempted to provide clarification, the GAO study 
concluded, ``the lack of explicit direction leads to continued 
confusion and a general hesitancy to conduct activities not normally 
provided in their existing offices.'' The current 2003 reauthorization 
provides an excellent opportunity to clarify the ongoing confusion.\5\ 
Since resources available to individuals with disabilities are already 
limited, the need for clarification on delivery methods is essential to 
the One-Stops being able to successfully serve these individuals. In 
order to improve accessibility at the One-Stops, mandatory partners 
need additional technical guidance and resources to provide for local 
and regional planning. Congress and Federal agencies need to modify the 
authorizing legislation and regulations, respectively, to make them 
more uniform with the One-Stops.
---------------------------------------------------------------------------
    \4\ GAO-02-72, p. 18.
    \5\ United States General Accounting Office, GAO-02-72, ``Workforce 
Investment Act Better Guidance Needed to Address Concerns Over New 
Requirements,'' October 2001, p. 16.
---------------------------------------------------------------------------
    Also, incentives need to be given to mandatory partners for 
relocation to the One-Stops. One-Stops that have the physical presence 
of their mandatory partners are better able to serve their targeted 
populations seeking services and supports. Individuals with 
disabilities often have difficulties finding adequate and accessible 
transportation, therefore having a centralized location offering the 
desired information, training, and resources would help to alleviate 
this dilemma. In the GAO study, staff reported cases where individuals 
with disabilities were referred from one location to another in order 
to receive services.
    As previously mentioned, limited resources often create barriers to 
employment by complicating the ability of individuals with disabilities 
to access services. Mandatory partners participating in the One-Stops 
should be allocated additional funds for costs associated with their 
participation. Fiscal restraints placed on mandatory partners' ability 
to collocate with the One-Stops, while maintaining their existing 
locations, has made it hard to assign additional staff to the One-
Stops. Providing additional funding to link existing offices with the 
One-Stops would encourage greater participation. It would also grant 
individuals with disabilities options when attempting to access 
services.
    Better coordination between the One-Stops and its mandatory 
partners is also consistent with congressional intent to make the 
workforce development system physically and programmatically accessible 
to people with disabilities. The American with Disabilities Act (ADA) 
and Sections 504 and 508 of the Rehab Act also mandate that the One-
Stops include physical and programmatic accessibility standards. In 
many cases these standards have not been achieved by the One-Stops.
    Although ACCSES contends that improving the One-Stops accessibility 
is an essential piece of reauthorization, it should not come at the 
expense of the mandatory partners existing obligations. Many of the 
mandatory partners, such as VR, are already severely under-funded 
having to place people on waiting lists for services and supports. In 
fact, currently 37 State VR Agencies are operating under an Order-of-
Selection. Funds appropriated to the VR system should not be re-
directed for purposes other than the ones mandated by the Rehab Act. 
The Rehab Act clearly outlines accountability criteria for VR-related 
funds, which includes prohibiting the transfer of funds. Section 16(a) 
of the Rehab Act reads, ``No funds appropriated under this Act for any 
program or activity may be used for any purpose other than that for 
which the funds were specifically authorized.'' Therefore, ACCSES is 
strongly opposed to siphoning such funds for administrative and 
infrastructure development of the One-Stops.

               MAINTAINING DEDICATED PROGRAMS AND FUNDING

    It is widely recognized that individuals with disabilities require 
varying services and supports depending on the severity of their 
physical or cognitive impairment. In response to these differences, 
Congress authorized several smaller, specialized programs designed to 
address specific service needs of individuals with disabilities. The 
Rehab Act specifically includes four dedicated programs Supported 
Employment State Grant program, Projects With Industries (PWI), Migrant 
and Seasonal Farm workers, and Recreation Projects whose distinct tasks 
are better served separate from the larger State VR grants.
    The President's fiscal year (FY) 2004 budget proposes to fold these 
four smaller programs funded through Title VI of the Rehab Act into the 
larger VR State grant program. The President's budget argues that these 
programs are redundant and should have the same funding source. By 
consolidating these programs, individuals with disabilities will have 
less choices made available to them because many States would opt not 
to fund smaller programs as part of their core VR services, costing 
jobs and opportunities. Each of these programs is proven to be highly 
successful programs complimenting the basic State grants, despite being 
level funded year after year.
    The Projects with Industry (PWI) program provides an excellent 
example. PWI has a proven track record over more than 30 years of 
placing persons with disabilities into competitive jobs in the 
community. It has proven to be a most effective means of involving the 
business community in the rehabilitation process. PWI provides a bridge 
between the private business community and government supports for 
people with disabilities. In every nationwide PWI competition conducted 
during the last 15 to 20 years, the number of qualified applications 
has far exceeded the available funding.
    ACCSES believes additional funding should be made available so that 
more individuals with disabilities can be placed through PWI projects. 
Since this program serves a very important role as adjuncts to the VR 
services authorized under Title I of the Rehabilitation Act, ACCSES 
cannot support the President's request to consolidate these separate 
funding streams into the Title I State VR grant. ACCSES recommends that 
the Projects with Industry program maintained in the Rehab Act as part 
of WIA and be funded at $50 million for fiscal year 2004.
    Rather than eliminate the structural integrity of these successful 
programs, Congress should concentrate on improved coordination not only 
between intra-agency programs, but also on a larger scale between the 
One-Stops and its mandatory partners. Even more troubling is that the 
President also wants to consolidate three adult training programs 
administered under DOL.
    According to DOL's own website, ``The purpose of Adult programs 
under Title I of the Workforce Investment Act (WIA) is to provide 
workforce investment activities that increase the employment retention 
and earnings of participants, and increase occupational skill 
attainment by the participants. This program aims to improve the 
quality of the workforce, reduce welfare dependency, and enhance the 
productivity and competitiveness of the nation's economy.'' These 
objectives can be best attained by dedicated programs that tailor to 
the specific needs of workers with and without disabilities.
    ACCSES fears that the employment needs of individuals with 
disabilities trying to obtain employment and training skills will be 
harder to access under a consolidated One-Stop system. There are 
already enough barriers to employment facing this fragile population 
that is underserved by the One-Stops. The current law that provides 
dedicated funding for WIA adult, dislocated worker, and Wagner-Peyser 
State grants programs must be maintained.

                   PROVIDING FOR YOUTH-IN-TRANSITION

    In its 18th Annual Report to Congress on the implementation of the 
Individuals with Disabilities Education Act (IDEA), DOE's Office of 
Special Education Programs (OSEP) recognized that while all IDEA 
requirements are important, some of its requirements have a more direct 
relationship to student results than others. OSEP placed the highest 
priority on compliance with those IDEA requirements that have the 
strongest relationship with improved services and results for students 
with disabilities and their families. The first priority indicated was 
the statement of needed transition services for students with 
disabilities beginning no later than age 16 (and younger if 
appropriate).
    ACCSES supports that the full array of transition begins by age 14. 
The statement of needed transition services is the required link to the 
community; the drop out rate of youth with disabilities prior to the 
requirements in the current law necessitates its implementation prior 
to age 16. Using community based organizations in transition planning 
will assist students to be better prepared by providing them with 
opportunities to apply skills necessary for employment.
    In addition, ACCSES supports the proposed legislation with Senate 
Bill 1248 for IDEA reauthorization, which amends the Rehab Act to 
include language specific to VR counselors providing transition 
assistance for youth with disabilities. However, with 37 States already 
in an order of selection, the resources necessary to carry out this 
provision must be included. Under funding this provision will put an 
overwhelming burden on a system that is already lacking resources 
necessary to fulfill its current requirements. Also, the public VR 
system was designed to promote employment and training for individuals 
with disabilities. Their role in transition planning must be specific 
to these areas only.

                               CONCLUSION

    The ongoing reauthorization provides your Subcommittee the 
opportunity to remedy some of the inconsistencies that exist under the 
workforce development system that result in severe barriers to 
accomplishing the purpose of these programs, i.e. to further the 
education, employment, and independence of persons with disabilities. 
These barriers need to be removed. ACCSES believes that individuals 
with disabilities would be better served by a seamless service delivery 
system, whereby the Workforce Investment Act, Individuals with 
Disabilities Education Act, Rehabilitation Act, and Ticket to Work and 
Work Incentives Improvement Act coordinate and use identical language 
to foster smooth transition and cooperative services.

                  Prepared Statement of Diane D. Rath

    As Chair of the Texas Workforce Commission and the Commissioner 
Representing the Public, I appreciate this opportunity to submit a 
statement for the record regarding the reauthorization of the Workforce 
Investment Act (WIA). This landmark legislation brings together 
employers and workers in a system that meets the needs of both groups. 
By matching job seekers with targeted occupations in a particular area, 
Congress eliminated prior programs that provided training without 
consideration to the needs of employers, resulting in well-trained but 
unemployable individuals.
    The WIA is an essential part of our system in Texas. Through the 
foresight of then-Governor George W. Bush and the Texas Legislature in 
1995, we instituted services similar to those available through WIA, a 
full 3 years before WIA became law. The Texas Workforce Network, 
consisting of TWC and local workforce boards, offers a seamless 
delivery system for all employers and job seekers, regardless of their 
background or job status. If you go into one of the more than 270 
workforce centers and satellite offices throughout the State, you will 
not see unemployed people, welfare recipients, veterans, ex-offenders 
or employers, although all of those people are present. You will just 
see people being served through an integrated system. About 1.5 million 
job seekers receive employment services through our local workforce 
centers each year.
    Texas is one of the few States in the country with such a 
consolidated system, and it has been a tremendous success. We bring 
together clients seeking work under several Federal programs, including 
WIA, Temporary Assistance for Needy Families, Food Stamp Employment and 
Training, Trade Adjustment Assistance, Wagner-Peyser Employment 
Services, veterans assistance, and child care. We have received three 
consecutive WIA Incentive awards from the Secretary of Labor. We also 
have an outstanding record of placing adult TANF recipients in jobs, 
and Texas has received high performance bonuses from the U.S. 
Department of Health and Human Services in each of the past 3 years.
    Reauthorization of WIA presents us with the opportunity to build on 
these successes by providing increased flexibility to States and 
Governors. Our experience since 1998 has revealed the limitations of 
the current law, and certain changes are necessary to ensure that 
States can realize the full potential of the WIA system.

                        CONSOLIDATION OF FUNDING

    The States need additional flexibility in WIA funding to help 
employers recover and workers regain jobs. The limited transferability 
among WIA funding streams and the separation of WIA and Wagner-Peyser 
activities restricts the assistance that States and local workforce 
boards can provide. Our 1995 State law would block grant funds for 
Wagner-Peyser Employment Services (ES) to local areas, but the U.S. 
Department of Labor has not allowed Texas to implement that provision. 
We therefore strongly support the consolidation of WIA Adult, WIA 
Dislocated Worker, and Wagner-Peyser ES funds into a single funding 
stream. In addition to allowing us finally to conform to our State law, 
this consolidation will help eliminate inefficiency and duplication, as 
well as provide for greater integration of services to all customers.
    In a State as large and diverse as Texas, one size does not fit all 
and the current separation of Adult and Dislocated Worker funds does 
not meet local needs. In the Rio Grande Valley, the unemployment rate 
in the McAllen-Edinburg-Mission MSA stood at 11.4 percent in May 2003, 
the State's highest. Despite this high rate, the area does not need 
additional Dislocated Worker funding, but could use funding to upgrade 
the skills of Adult residents in the area to enable them to meet 
employers' needs. Similarly in the Dallas area, with unemployment at 
7.0 percent, the local workforce area does not need Adult funds, but it 
desperately needs Dislocated Worker funding in order to respond to the 
needs of the employers and residents in the area.
    Consolidation of these funding streams, along with ES funds, would 
ensure that ample resources are available to meet the unique workforce 
needs of all our local communities. The Governor should have complete 
discretion over the State's share of the consolidated funding grant to 
ensure that funds can be targeted where they are most needed.

                        BLOCK GRANTS AND WAIVERS

    We strongly support providing the Governor expanded block grant and 
waiver authority. The Governor is in a uniquely strategic position to 
identify the emerging needs of all regions of the State. The Governor 
therefore should have as much flexibility as possible to respond to 
those local needs.
    Block grant authority would enable the Governor to determine sub-
state funding and governance structures. The Governor would also be 
able to design and administer WIA Title I formula programs, both Adult 
and Youth, to meet the needs of employers and job seekers. As we have 
seen during this period of economic slowdown, those needs vary not only 
from region to region, but also from week to week and month to month. 
Waiting for the annual planning cycle to evaluate needs fails to take 
into account the volatile situation many areas are now experiencing, 
where employers are desperately trying to sustain their businesses but 
need the skills of their current workforce upgraded to stabilize the 
company and the community. This flexibility is limited under current 
law. States have this flexibility in TANF, and we need it under WIA.
    In addition, Texas has aggressively applied for and successfully 
used waivers under current law to develop innovative workforce 
development solutions and respond appropriately to employers' needs. 
Each of the waivers granted to us will improve our services for the 
affected populations, allow the Texas boards to respond to local 
economic conditions, and facilitate matching employers with job 
seekers. We urge you to continue and expand the Department of Labor's 
authority to grant waivers during reauthorization.

                         INFRASTRUCTURE FUNDING

    Partner programs in the one-stop system should be expected to share 
some of the costs of running the one-stop centers. This is an issue of 
fundamental fairness. Without the involvement of partner programs, 
infrastructure costs must be paid solely out of WIA funds, draining the 
resources available for the delivery of services.
    Texas has been proactive in developing cost allocation agreements 
with our one-stop partners. Accordingly, reauthorization should give 
States broad discretion in how to structure and administer 
infrastructure cost-sharing among partner programs. Most importantly, 
any new provisions addressing this issue should take care not to 
disrupt or undermine the innovative solutions that States are already 
implementing.

                         LOCAL AREA DESIGNATION

    Texas seeks the ability to maintain its current local workforce 
area designations, which reflect several local labor and economic 
markets within the State. The Governor should be able to design the 
geographic areas that best represent the distinctive characteristics of 
our large State. Local area designation should remain a State-level 
decision, and a local area's ability to appeal to the Secretary of 
Labor should be eliminated.

                                 YOUTH

    All Federal youth programs should focus on a strong educational 
background that would result in long-term attachment to the workforce 
and lifelong learning. We need to improve the activities that connect 
our youth with the local job market and promote youth development. 
There must be increased coordination among all programs serving youth. 
One integrated coherent strategy with meaningful outcomes is an 
overarching necessity.
    In addition, local workforce boards should be allowed to use the 
Eligible Training Provider system to secure training providers for 
youth activities, eliminating the requirement to competitively procure 
training providers for youth separately from the ETP system. This 
reform will improve the access youth have to services through workforce 
centers and expedite the process of providing those services.

                          PERFORMANCE MEASURES

    Our system is a success because businesses and industries view the 
Network as a viable solution to workforce needs. Because business is a 
primary customer of our system, performance measures should therefore 
evaluate how we serve employers.
    The system must focus on outcome, not process, measurements. We 
must be able to listen to the customer and design our services to meet 
those needs. We need to establish a core set of common performance 
measures such as employment, retention, and earnings that would apply 
across all partner programs. We also need to create common definitions 
and reporting formats that encourage common State and local reporting 
systems for one-stop partner programs. We need to encourage co-
enrollment among programs to maximize available training and related 
resources.
    As a further step, the workforce development system could be 
greatly improved by the increased integration of Federal programs. 
Different definitions for common populations, different funding cycles, 
and different performance measures result in competing priorities at 
the local level. The lack of integration causes administrative 
complexity, increased administrative costs, and diverts the focus from 
providing quality services to the employers and residents.

                            EDUCATION ISSUES

    Another example of the need for improved integration among Federal 
programs relates to the adult education program under Title II of WIA. 
Thousands of garment workers have been affected along the Texas-Mexico 
border as the textile industry has moved to other countries. The 
workers left behind may receive assistance under the Trade Act, but the 
adult education services provided are intended only to help the worker 
get his or her high school GED without consideration of workplace 
skills. The result is a worker that may have improved English skills 
but is still unemployable. While this is a Texas-specific example, 
other States may have similar situations. Adult education programs 
should prepare a worker to go to work, to continue to be self-
sufficient, instead of leaving that person better educated but still 
unemployed.
    Another challenge has arisen with changing interpretations by 
educational agencies of the Family Educational Rights and Privacy Act 
(FERPA), which deals with the confidentiality of student enrollment 
data. As you may know, WIA called for increased accountability by 
education and training providers, and directed States to set up 
performance reporting systems that evaluate graduates' outcomes in the 
workforce. To do this, workforce agencies compare the wage records 
reported by employers quarterly with the enrollment and graduation 
records at educational institutions to determine whether the student 
was employed in the field for which he was trained. This disclosure--
for reporting to oversight Federal agencies and to the Congress, not 
for public disclosure--is one of the hallmarks of WIA, to instill 
accountability in the use of taxpayer dollars for training purposes. No 
longer are public funds used to pay for training where jobs don't 
exist. Training can be provided with WIA funds if it meets the 
requirements of employers within industries and for occupations and 
jobs in demand that have been targeted by the local workforce board in 
its annual plan.
    The information provided via student records is not intended to 
reveal how an individual student performed in class, but rather to 
disclose how effective the training provider was in preparing students 
for the world of work. The reluctance of our education partners to 
share this data with workforce agencies makes it difficult to assess 
the effectiveness of WIA funding within the country's higher education 
system, and challenges the procedures by which Congress can assess the 
effectiveness of the entire workforce investment system.
    The accountability provisions of WIA have strengthened the 
performance outcomes relative to the use of our WIA training funds. 
However, the reporting requirements are so burdensome that we are 
losing some of our State's most valuable training providers--our 
community colleges. While we want to ensure that WIA participants 
receive training for jobs that exist, we must also ensure that 
participants can choose from a broad array of programs and providers. 
Granting States increased authority to determine standards for training 
providers would be welcome to these important partners.

                                CLOSING

    I appreciate the opportunity to submit comments to the subcommittee 
and hope you can see why we are proud of our accomplishments in Texas. 
We believe we have built a strong foundation for our reformed workforce 
system and look forward to new opportunities to build programs that 
will serve Texans better.

               Prepared Statement of C.W. Van Valkenburgh

    Thank you, Mr. Chairman and Members of the Subcommittee for this 
opportunity to testify on the reauthorization of the Workforce 
Investment Act (WIA). I serve as CEO of Rappahannock Goodwill 
Industries in Fredericksburg, VA, and am testifying today on behalf of 
Goodwill Industries International, Inc.
    As you know, Goodwill Industries is a major player in the 
employment and training provision arena.
    Goodwill Industries may be best known for its retail thrift stores. 
We have a presence in nearly 95 percent of counties in the United 
States and are among the top 25 retailers in the United States based on 
the number of stores that we operate.
    What many people don't know is that Goodwill Industries is also the 
largest provider of job training and career services in the nation, 
serving individuals with significant barriers to work. In 2002, we 
helped more than 583,000 individuals in the United States and Canada 
obtain job training, build career ladders, obtain work-supports such as 
childcare and transportation, and find the employment they need to 
become self-sufficient. More than 100,000 of those individuals were 
placed into good jobs in their communities.
    This is what Goodwill has been doing for more than 100 years. While 
our origins were faith based, we operate now as independent, not-for-
profit, community-based organizations in 23 countries worldwide. 
Collectively, we are the seventh largest nonprofit organization in the 
United States.
    Yet, it is our business model that distinguishes us from many other 
nonprofits and charities. Goodwills operate as autonomous 
organizations, run by highly-trained CEOs, generating their own revenue 
streams in each of the 166 Goodwill territories throughout this nation. 
In aggregate, Goodwill Industries' revenues in 2002 totaled more than 
$2.06 billion.
    Almost 75 percent of those revenues were derived from our retail 
operations selling used clothing or other goods that were donated by 
generous individuals in our communities including, I imagine, many of 
the members of this committee. The useable items are then resold and 
more than 85 percent of those revenues are pumped directly back into 
serving people in our communities. The remainder of our revenues is 
derived largely from contracts and services that we provide to 
businesses and public-sector entities. We are best described as highly 
efficient businesses whose fundamental mission is to enhance the 
quality and dignity of life for individuals, families, and communities.
    Mr. Chairman, it is this unique perspective as operators of 
businesses, our strong connections in local communities, and our 
unrivaled level of service to the hardest-to-serve populations that 
makes us a vitally important thread in this nation's safety net for the 
most disadvantaged persons.
    Our programmatic knowledge and experience with communities of all 
sizes and compositions compels us to offer this feedback about the 
Federal employment and training system, authorized in 1998 by the 
Workforce Investment Act (WIA).
    Goodwills operated career resource centers in communities long 
before WIA was passed. Many of these centers are now operating as 
official one-stop centers in dozens of communities throughout the 
nation. In the vast majority of our 166 territories in the United 
States, we serve as a direct service provider of vocational training or 
job readiness programs. In 2002, nearly 198,000 of the total clients we 
served were referred to Goodwills by one-stop centers and we continue 
to strengthen our partnerships within the national system. We serve on 
local and State workforce investment boards in many communities; in 
some cases in seats reserved for community-based organizations and in 
other areas servings as a business partner.
    Mr. Chairman, the wisdom of the WIA system as Congress constructed 
it in 1998 is that it creates a framework for local communities to 
connect many dissociated programs into a cohesive network of 
specialized service providers and gives the client the power to build 
his or her own career opportunities with professional guidance.
    While initial steps have been taken to deploy that vision 
nationally, we believe that this system must be given the time and 
resources to reach its potential. Since the system has had less than 
three full years to transition to the new framework, we believe that 
only modest changes to the system would be prudent at this time. 
However, there are several recommendations that we urge the committee 
to consider when reauthorizing the Act. Central to each of these points 
is the need to dramatically improve access to training and work 
opportunities that lead to self-sufficiency.
    First, Mr. Chairman, despite the fact that Goodwills are serving 
many individuals through work with our local workforce boards, we 
believe that much more should be done to truly integrate the voluntary 
partners, particularly community-based organizations, into the system.
    The success of WIA's demand-driven one-stop delivery system depends 
on the effectiveness of partnerships between service and training 
providers, including community-based organizations (CBOs), which often 
provide highly successful programs to assist individuals with specific 
needs and often seriously disadvantaging conditions.
    However, the Department of Labor has found that both community-
based organizations and faith-based organizations often are not fully 
utilized as partners in the workforce investment system. In many areas, 
community-based organizations running effective, successful programs 
may be listed as eligible training providers, but receive few referrals 
from one-stop operators.
    We hope that the committee will take steps in the reauthorization 
to encourage workforce areas to further utilize the wide range of 
eligible providers offering various types of training and job-readiness 
services and fully leverage the collective capacity of these 
organizations on behalf of job seekers. If the system is to truly 
become a demand-driven system, then clients--our--customers must be 
given sufficient, real-time information about the availability and 
outcomes of all eligible service providers.
    Second, the WIA system needs far more resources to serve the 
tremendous number of individuals who need skills training or employment 
assistance, yet are falling through the cracks of the system every day. 
Workforce areas simply do not have the resources to provide intensive 
training services to every eligible individual walking through the 
door. Neither do they have the resources to help the vast numbers of 
individuals working at poverty-level wages upgrade their skills and 
begin building career ladders.
    In light of this persistent inability to serve everyone that needs 
assistance, it is critical that we continue to emphasize and prioritize 
funds for those with the most significant barriers to work: chronically 
unemployed individuals, individuals with disabilities, displaced 
homemakers, new entrants to the workforce, those for whom English is 
not the first language or who need literacy training, or individuals 
with substance abuse problems.
    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. WIA also required local areas with limited ``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, regardless of 
how the funding streams are structured in the reauthorized legislation. 
Individuals with barriers to work should not be relegated to a ``second 
tier'' priority.
    Third, many of the reauthorization proposals that have been widely 
discussed have involved some provisions for streamlining the 
performance measurement protocols required by the Act. The system is 
and should be set up to encourage and reward positive outcomes. 
Accountability for performance is critical to maximizing our resources. 
However, some measures, such as the proposed cost per client 
``efficiency'' measure, fail to fairly characterize the fundamental 
differences between the populations each provider serves. Serving 
populations with greater disadvantages often incurs a higher cost per 
participant and may require more time for successful placements.
    To ensure that programs are not disincentivized from serving ``hard 
to serve'' individuals, the common outcome measures established by 
reauthorization legislation should include a ``weighting'' mechanism to 
provide greater clarity on how localities and providers are performing. 
Congress should provide greater incentives for serving individuals with 
barriers to work, and certainly should not inadvertently discourage it.
    We also believe that, to be truly effective in holding localities 
accountable for performance within the context of a customer-driven 
system, Congress should retain the measure of ``customer satisfaction'' 
already in use for both job seekers and the business community.
    Fourth, we believe that the legislation must prioritize the 
systemic elimination of barriers faced by disabled individuals, those 
with limited English proficiency, and those with other barriers to work 
in accessing one-stop services. Sections 501 and 504 of the 
Rehabilitation Act of 1973 require Federal agencies to provide 
reasonable accommodation to employees and applicants for employment who 
have disabilities. However, individuals seeking employment and training 
services through our nation's one-stop system too often encounter 
physical or systemic barriers to accessing those services. Congress 
must demand that one-stop facilities funded and developed under the 
Workforce Investment Act system be made fully accessible in terms of 
programs and services to all persons with barriers to work.
    Finally, the legislation must strive to leverage existing 
relationships between businesses and community-based organizations that 
match employer demands with job seekers to move chronically unemployed 
individuals into the workforce and to create incumbent worker training 
opportunities that prioritize retention and advancement of low-wage 
workers into career ladders leading to higher-wage job opportunities.
    Already, many intermediary organizations such as Goodwill 
Industries have strong partnerships with members of the business 
community to train and employ workers in high-demand fields. Goodwill 
is fortunate to work nationally with companies such as Bank of America 
training individuals for jobs in the financial industry and CVS for 
opportunities in the retail, pharmacy, and photo technician fields. 
These are but two illustrative examples of partnerships between 
Goodwills or other CBOs and businesses in localities, and the 
legislation should facilitate and encourage such promising practices.
    Mr. Chairman and Members of the Subcommittee, I understand that it 
is often difficult from where you are sitting to see the changes that 
these programs make in people's lives. Those of us that actually run 
programs and provide services are occasionally uplifted by the 
infinitely rewarding smiles or words of gratitude from our graduating 
clients. We get to hear the inspiring words of people like Rose Hunter, 
our 2002 graduate of the year, who had a history of mental illness, 
suffered for more than 15 years in an abusive marriage, and lived in 
poverty-level conditions before coming to Goodwill.
    Today, Hunter works as a respected counselor in the psychiatric 
ward of Elmhurst Hospital in New York. She organizes group discussions, 
advocates for patient rights and counsels patients who are experiencing 
similar difficulties to what she endured. She has reached financial 
independence and no longer relies on government assistance. Speaking of 
her experience with Goodwill, she stated that its Creative Recovery 
Program ``helped me grow in many ways, by opening so many doors I 
couldn't open myself.''
    The story of Janice Armstrong from Saint Petersburg, FL, was 
similar. She explains it profoundly:
    ``When I moved back to Tampa in 1999 after leaving an abusive 
marriage of 17 years, I was like a big plot of rich quality land, but 
without seed and tools to farm it, it wasn't very valuable. Then I went 
to Goodwill for help. Goodwill told me `we can give you the seeds and 
the tools to work the land, but you have to do the work.' I thought, 
`This is a pretty good deal. They help me, they back me, and I get an 
education and career out of this.' Last January I started working at 
Tampa General as a surgical tech in the cardiac OR. I graduated from 
school last March. Though I work in Cardiac O.R., the Life Link 
surgeons are who I usually scrub with. Life Link deals in organ 
transplants. Before I went to Goodwill I was much like someone needing 
an organ transplant. I was living, but the quality of life wasn't 
there. Now, I have a whole new life. I'm self-sufficient. I will 
receive my first raise now in January; I have great benefits and a 
wonderful life. But, but, but none of this would have been possible 
without my parents, my family, my friends and Goodwill. I had the best 
team support anyone could have. I can truly say that I am blessed.''
    The stories are echoed by thousands of individuals who come to us 
every day for vocational training or other assistance in finding or 
preparing for work. These are the voices that the WIA system must be 
adequately prepared to nurture, and these are the individuals who most 
need the limited help that our Federal system can provide. Thus, we 
hope that you will do everything possible to improve access to training 
for individuals with barriers to work and help build bridges to self-
sufficiency for those who face disadvantaging conditions as you 
consider provisions to include in reauthorization legislation.
    Again, thank you for this opportunity to provide testimony. We hope 
that you will consider Goodwill Industries International as an ongoing 
resource on issues affecting those individuals who we serve and look 
forward to answering any questions that you may have.

  Prepared Statement of the Indian and Native American Employment and 
                           Training Coalition

       SECTION 166: THE CORNERSTONE FOR NATIVE AMERICAN SERVICES

    The Native American programs authorized under Section 166 have a 
unique status within the Workforce Investment Act (WIA). The purposes 
of this Section include a community focus, unlike that of all the other 
programs under the Act. The service population for the Section 166 
programs consists of Native Americans--American Indians, Alaska Natives 
and Native Hawaiians--with a special relationship to the United States 
government established in the Constitution, treaties and numerous 
statutes. Native American people suffer from the most severe 
unemployment and poverty rates of any group in the country. And the 
Section 166 programs are to be administered in a way consistent with 
basic Federal Indian policy, of which they are an important element.
    The special status of the Section 166 programs and the support 
provided for them under WIA are central to the relationship between 
Native American people and their institutions and the rest of the 
federally-funded workforce system. The provisions of Section 166 of the 
current law must be retained and strengthened in any WIA 
reauthorization measure. In this regard:
     Native American programs must remain separate and 
distinct, with their own purposes and governing policy retained from 
Section 166 of WIA.
     The flexibility of the current Section 166 programs must 
be continued and strengthened, governed by requirements which are 
specifically appropriate for Native American programs.
     The funding for the Section 166 Comprehensive Services and 
Supplemental Youth Services programs must be increased significantly.
    The Indian and Native American Employment and Training Coalition 
shares the commitment of leaders of the Senate Subcommittee on 
Employment, Safety and Training that the reauthorization of WIA should:
     Improve the ability of WIA to operate effectively in rural 
areas. Most Indian reservations and Alaska Native villages are very 
rural.
     Support economic development. Many of the problems of 
Native American people are directly or indirectly related to the lack 
of jobs in Native American communities.
     Further the flexibility permitted by the WIA law. Many 
Native American communities face labor market conditions very different 
from those of prosperous metro areas. The only way services can be 
effective is if there is an ability to tailor the delivery of workforce 
services to local conditions.

          REAUTHORIZATION ISSUES AND NATIVE AMERICAN PROGRAMS

    Pending proposals for the reauthorization of WIA would continue 
Native American programs under Section 166 as special, nationally-
administered programs, providing funding directly to Indian tribes, 
Alaska Native and Native Hawaiian organizations and Indian-controlled 
organizations serving Native people in off-reservation areas. However, 
several features of H.R. 1261, intended to address issues in the State-
administered programs, would have very serious adverse consequences for 
the Section 166 programs. The provisions relate to:
     The financing of one-stop centers. H.R. 1261 and other 
proposals would give Governors and local Workforce Investment Boards 
the authority to take Federal funds appropriated for services for 
Native American people away from Native grantees to use to fund the 
State's one-stop centers and their services for non-Native people.
    Native grantees and the Coalition strongly oppose these provisions. 
One-stop centers are often geographically inaccessible to Native 
people, especially those in rural areas. They do not provide the 
special services relevant to Native people and available through their 
own tribal and off-reservation organizations. Diverting Federal funds 
appropriated to serve Indian and other Native American needs to the 
States to be used for services to non-Native people would set a very 
serious precedent in Federal-Indian relations. Moreover, Native WIA 
programs, funded at a level of approximately $70 million per year 
cannot make any significant difference in the financial base of the 
State's one-stop centers, whose partners collectively receive nearly 
$32 billion per year (including TANF funds).
    The distribution of youth funding. Indian tribes and other grantees 
receiving Section 166 Supplemental Youth Services funds are currently 
allocated 1.5 percent of the approximately $1 billion provided for 
basic WIA youth services. H.R. 1261 would reduce the base on which the 
reservation of Section 166 Supplemental Youth Services funds is 
calculated by 25 percent.
    Native grantees and the Coalition strongly urge the Congress to 
retain and increase the current funding level for the Section 166 
Supplemental Youth Services program. Native grantees funded under this 
program should receive not less than $15 million per year. The first 
contact with a work environment for many youth in reservation areas is 
through this program. Over the years it has enabled thousands of Native 
youth to establish a permanent, productive attachment to the workforce. 
In addition, Section 166 grantees serving off-reservation areas need 
support from the proposed Youth Challenge grant program and through the 
pilot and demonstration program account to assist the Native youth they 
serve to enter the workforce.
    In addition, the responsibilities of the Native American Employment 
and Training Council are at stake in reauthorization. Under current 
law, these responsibilities include assisting the Labor Department in 
identifying highly qualified candidates to lead the Native programs 
Division within DOL. Native grantees and the Coalition oppose the 
provision in H.R. 1261 which would eliminate this responsibility, 
depriving the Department of valuable expertise in selecting persons for 
this position.
    The Coalition would like to thank the Committee for the opportunity 
to discuss WIA reauthorization issues of concern to the Native American 
community.

 Prepared Statement of the National Community Provider Coalition (NCPC)

    The National Community Provider Coalition (NCPC) is a newly-formed 
coalition of national organizations working to promote and enhance the 
employment, community living, economic self-sufficiency, and inclusion 
of individuals with disabilities by supporting community provider 
organizations offering employment, vocational, and related services and 
supports.
    As representatives of community providers across the nation, we 
believe that individuals with disabilities want to work and are able to 
do so, given the appropriate supports and services. The Workforce 
Investment Act of 1998 (WIA) and other employment programs authorized 
under the Act, hold the promise of assisting many individuals with 
disabilities who want to work in obtaining and maintaining employment 
within their communities. While WIA was intended to create a 
comprehensive, seamless workforce development system for all job-
seekers, individuals with disabilities have faced numerous barriers 
when attempting to access the system. Further, community providers who 
want to participate in the system and assist individuals with 
disabilities to gain and retain employment have also faced numerous 
challenges.
    The NCPC believes that reauthorization of WIA, which includes 
reauthorization of the Rehabilitation Act of 1973, as amended, (the 
Rehabilitation Act), presents an opportunity to strengthen the nation's 
workforce system for individuals with disabilities and assist community 
providers in becoming true partners in the system. A major overhaul of 
current law is not warranted at this time. Yet, improvements can be 
made.
    As the Senate considers reauthorization of WIA, and the programs 
authorized under the Rehabilitation Act, we offer these recommendations 
to ensure WIA fulfills the promise to individuals with disabilities, 
creates true partnership with community providers, and establishes the 
comprehensive, seamless system envisioned by Congress. We maintain WIA 
reauthorization must:
     Increase physical and programmatic access to One-Stops;
     Utilize performance measures that account for serving 
individuals with disabilities;
     Improve transition services to youth with disabilities;
     Strengthen the role of community providers in One-Stops 
and on State and local Workforce Investment Boards;
     Ensure separate, adequate funding for WIA programs and 
provide dedicated funding for One-Stop infrastructure; and
     Strengthen programs and partnerships authorized under the 
Rehabilitation Act.

       I. FULFILLING THE PROMISE TO INDIVIDUALS WITH DISABILITIES

    In February 2001, President Bush noted that the unemployment rate 
for people with disabilities hovers at 70 percent, and pledged to 
increase the ability of Americans with disabilities to integrate into 
the workforce. Individuals with disabilities want to work, and as 
community providers have long demonstrated, they can work when provided 
with appropriate supports and services. Local One-Stop Centers could 
provide vital employment and training services to many individuals who 
are not being served by the Vocational Rehabilitation system (VR) to 
increase their employment, retention, and earnings capacity. However, 
the workforce development system cannot assist individuals in achieving 
successful employment if individuals with disabilities cannot get 
through the door or cannot access needed supports and services once 
inside.

A. Increasing Physical and Programmatic Access to One-Stop Services

    Universal access is one of the underlying principles of WIA. For 
more than 25 years, Section 504 of the Rehabilitation Act has mandated 
that Federal programs, or programs that receive Federal funds, are to 
be physically and programmatically accessible to people with 
disabilities. For more than 13 years, the Americans with Disabilities 
Act has required States to make programs under their jurisdiction 
physically and programmatically accessible to people with disabilities. 
In 1998, Congress required the Federal agencies to make their 
electronic and information technology accessible to people with 
disabilities under Section 508 of the Rehabilitation Act. Together, 
these provisions are the driving force behind universal accessibility 
at the One-Stop system.
    Reasonable accommodations are necessary to ensure the meaningful 
participation of many individuals with disabilities in the services and 
programs available at the One-Stops. Unfortunately, despite the 
provisions in WIA that require One-Stops to be universally accessible, 
far too many fail to provide reasonable accommodations; too many 
individuals with disabilities are prevented from entering the centers, 
let alone utilizing the programs and services.
    Individuals with disabilities often need a broad array of 
individualized supports and services to assist them in obtaining and 
retaining employment. Unfortunately, too many One-Stops do not offer 
the array of supports and services necessary to assist individuals with 
mental retardation, cerebral palsy, and other significant disabilities. 
While it is already difficult to physically access many One-Stops, 
obtaining necessary services should not be further complicated by 
requiring individuals with disabilities--many of whom lack direct 
access to transportation or live in areas without accessible public 
transportation--to go somewhere else, some other time, on some other 
day for services that should be readily available.
    WIA's ``work-first approach'' has also hampered the ability of 
individuals with disabilities to access needed services and supports 
and, in particular, training. The ``work-first approach'' promotes 
employment at any job as soon as it can be found, without consideration 
of an individual's interests or capabilities, and without consideration 
of multiple and complex supports needed to obtain or sustain 
employment. Individuals with significant disabilities may need a 
comprehensive array of training supports and services before they begin 
working, as well as on-going or post-employment supports and training.
Recommendations
    NCPC recommends that the Senate take action necessary to ensure 
compliance with current requirements for universally accessible 
services. State and local workforce boards must recognize this 
obligation and guarantee both physical access and programmatic access 
at the One-Stops for individuals with disabilities, including 
individuals with significant disabilities. Specifically, NCPC makes the 
following recommendations:
     State and local workforce plans must reflect a commitment 
to assure that individuals with disabilities have physical and 
programmatic access to the workforce investment system;
     State and local workforce boards must increase the 
capacity of the workforce system to serve people with disabilities in 
outreach, intake, assessments, and service delivery;
     State and local workforce boards must demonstrate a 
commitment to training the One-Stop staff in serving individuals with 
disabilities;
     Delivery of One-Stop services must be flexible so that 
individuals with disabilities can access individualized training as 
appropriate; and
     States should require that their workforce investment 
systems comply with Section 508 of the Rehabilitation Act.

B. Performance Measures

    NCPC maintains the current performance measurement system is 
flawed. According to testimony provided by the Government Accounting 
Office (GAO) to this Subcommittee, the need for One-Stops to meet 
current performance measures is often the driving factor in deciding 
who receives WIA services. In order to meet current performance 
measurements, One-Stop staff is often reluctant to serve clients who 
may be less likely to find employment or experience earnings increases. 
Accordingly, some clients are denied services. The need to meet 
specific performance measures creates a disincentive to provide 
services to harder-to-serve populations. NCPC believes that the effect 
of this flawed system significantly impacts the ability of individuals 
with disabilities to receive appropriate training and employment 
services.
    However, the application of the Office of Management and Budget's 
fourth proposed measure of efficiency (annual cost per participant) to 
all One-Stop partners is not the answer. This application would create 
additional disincentives to serving people with disabilities, many of 
whom require more costly services over a longer period of time. If 
performance measures are truly intended to rate performance 
accountability, it is important to ensure that we are measuring the 
effectiveness of the services provided, and not the cost.
Recommendations
    Accordingly, NCPC makes the following recommendations:
     Performance measures must be tailored to acknowledge the 
differences in populations being served, recognizing and crediting 
provision of services to harder-to-serve populations; and
     Congress should direct the Department of Labor to develop 
measures that more clearly represent the individualized needs of 
participants, including individuals with disabilities, and that provide 
incentives to serve individuals with significant barriers to 
employment, such as individuals with disabilities.

C. Transition Services

    Youth with disabilities require proactive support from the 
workforce development, vocational rehabilitation, social security, 
education, and other systems to successfully gain the experience, 
education, and skills to achieve and sustain employment. They confront 
many challenges in making the transition from school to adult life, but 
with appropriate supports can succeed in securing jobs, accessing post-
secondary education, living independently, and fully participating in 
their communities. NCPC appreciates efforts to strengthen access to 
transition services through the reauthorization of IDEA, and recommends 
that comparable improvements be advanced through the reauthorization of 
WIA as well.
    The transition from high school to post-secondary education, 
employment, and independent living must begin early, or at least by 14 
years of age (OSEP Report, 2001). Ideally, it is at this point that 
young persons with disabilities, their families, and education, 
rehabilitation, workforce development, and other agencies initiate 
planning, services, and experiences that support future education and 
foster basic work skills development and employment, in order to 
develop essential skills for independent living. This dialogue should 
be inclusive and tailored to the unique needs and interests of each 
participating youth.
    The workforce development system should play a crucial role in 
helping youth with disabilities transition out of high-school into 
employment. Unfortunately, however, the percentage of students with 
disabilities currently participating in comprehensive transition 
programs through WIA is very low, and students with significant 
disabilities are being served at even lower rates. We believe that 
there are a number of factors for this low rate of engagement: lack of 
awareness and understanding of the needs of youth with disabilities by 
the local workforce boards; uncertainties regarding eligibility of 
youth with disabilities, particularly those students receiving SSI 
benefits; outcome measures that work to create disincentives to serving 
youth with disabilities, particularly youth with significant 
disabilities; the lack of training of One-Stop staff in serving youth 
with disabilities; the failure to work with the local schools in 
developing effective transition programs; and the complete lack of 
outreach to youth with disabilities, particularly youth with 
significant disabilities. Proposals that significantly limit funding 
for in-school youth would only exacerbate the challenges an already 
underserved group of children face.
Recommendations
    NCPC believes that this reauthorization presents an important 
opportunity to improve transition services, and thus, employment 
outcomes, for youth with disabilities, and makes the following 
recommendations:
     State and local workforce boards should place greater 
priority on serving youth with disabilities, particularly youth with 
significant disabilities, and should demonstrate this commitment in 
State and local plans;
     Local One-Stop staff must receive better training on how 
to serve and provide reasonable accommodations to youth with 
disabilities;
     Performance indicators should measure functional skills 
related to employment, such as handling money, making change, 
recognizing common symbols, getting to work on time, or dressing for 
work appropriately, as well as unpaid work experience, such as 
community service;
     Planning and implementing successful transition services 
for youth with disabilities must include and support families of youth 
with disabilities;
     State and local workforce boards should recognize the role 
of nonprofit community providers and utilize the expertise in providing 
transition services to youth with disabilities and their families 
through partnerships, grants, or contracts; and
     The local workforce boards must create a system--a 
collaboration among agencies--particularly education, in order to 
assure that youth with disabilities have successful post-secondary 
outcomes.

        II. CREATING TRUE PARTNERSHIPS WITH COMMUNITY PROVIDERS

    Under WIA, Congress established a public-private partnership from 
which all job-seekers could benefit. Actively involving all 
stakeholders in the system is critical to the success of this public-
private partnership. WIA job seekers in general, and individuals with 
disabilities in particular, could benefit from the WIA-envisioned, 
public-private partnerships between the One-Stops and community-based 
providers that current practice now impedes. Unfortunately, State and 
local workforce investment boards (WIBs) and local One-Stops have 
failed to adequately and effectively involve an essential partner: 
community organizations with experience in providing employment 
supports and services to individuals with disabilities (community 
employment providers).

A. Strengthening the Role of Community Providers in One-Stops

    Community employment providers continuously demonstrate that 
individuals with disabilities can work and be productive members of the 
community. Community providers have a long history of working with 
employers; they have demonstrated the benefits of hiring individuals 
with disabilities to local businesses, as well as to local, State and 
the Federal government. They have experience in tailoring jobs for 
individuals who were previously unseen as potential employees. They are 
employers themselves, many of whom are experiencing shortages of well-
trained workers. In short, community providers have a first-hand 
understanding of the local workforce needs. All too often, local One-
Stops do not recognize the value of partnering with private community 
employment providers.
    Community providers are excellent and appropriate--yet, often 
overlooked--resources for One-Stops. Community providers have proven to 
be cost-effective in delivering skills development and training. 
Community providers can assist One-Stops in serving job-seekers with 
disabilities by offering the missing training, employment services, and 
needed wrap-around supports to sustain successful employment of people 
with disabilities. Being on the front lines each and every day, they 
have developed creative approaches to jobs and job-training options 
that enable individuals with disabilities--and in particular, those 
with the most significant disabilities--to become productive employees.
    As employers themselves, community providers can also assist One-
Stops in training and other employment services to job-seekers without 
disabilities. Community providers have experience in assisting 
individuals who may have numerous barriers to employment; these same 
providers may also have the experience and staff resources necessary to 
assist other job seekers.
    There are many examples of successful partnerships between One-
Stops and community providers. One example is Challenge Industries, 
Inc. located in Ithaca, New York. Challenge is a vocational 
rehabilitation agency, serving over 500 job seekers per year and is 
comprised of individuals with disabilities and job seekers 
transitioning from public assistance. The program is an integral 
component in the successful Tompkins (County) Workforce New York One-
Stop system.
    Although many areas in New York State report continued failure to 
widen participation in the local One-Stop system, Tompkins Workforce 
New York One-Stop system has achieved success, in part, by its 
inclusion of community providers. Where other One-Stops have been 
unable to achieve the overall goals set forth in WIA, Challenge's 
involvement in Tompkins Workforce New York One-Stop has helped to 
eliminate duplication of services. Some unique features, which have 
resulted from the inclusion of community providers in the Tompkins 
Workforce New York One-Stop system, include:
     Co-location of agencies serving job seekers with barriers, 
resulting in more effective networking and supports for job seekers 
(including, but not limited to, housing, transportation, child-care, 
financial planning, etc.);
     Active participation in One-Stop planning, including 
marketing the ``system,'' rather than approaching the business 
community as several distinct agencies;
     Greater support systems and individualized training 
opportunities for job seekers (have been able to tap into WIA funds, 
when VR is unable to financially assist);
     Shared staffing in the One-Stop center, which includes 
direct staff from community based agencies who specialize in serving 
individuals with disabilities;
     Increased participation with America's One-Stop Operating 
System has improved the reportable outcomes representing successful job 
placements of individuals with disabilities; and
     Disability expertise in the One-Stop system 
(accessibility, accommodations, workplace disclosure, social security 
advisement, tax credits and other work incentives).
    In order to better serve individuals with disabilities seeking One-
Stop services, examples like the one above must become the rule, not 
the exception. One-Stops must draw upon community providers as 
partners--not as competitors in the One-Stop system.
Recommendations:
     One-Stops must actively reach to and partner with 
community providers serving individuals with disabilities.
     The Department of Labor and State workforce boards should 
create incentives to encourage One-Stops to serve individuals with 
disabilities and partner with community providers.

B. Ensuring Representation of Disability Interest--Including Community 
                    Providers--on State and Local WIBs

    Congress understood the important role that community employment 
providers play in assisting job-seekers with disabilities and included 
provisions in WIA that community organizations be represented on both 
State WIBs and local WIBs. To address the needs of individuals with 
disabilities, Section 111(b)(1)(C)(v) of the Act provides that State 
WIBs shall include representatives . . . of organizations that have 
experience and expertise in the delivery of workforce investment 
activities, including . . . community organizations within the State 
[emphasis added]. Section 117(b)(2)(A)(iv) states that membership of 
each local WIB shall include representatives of community 
organizations, including organizations representing individuals with 
disabilities for a local area in which such organizations are present 
[emphasis added].
    Nearly 5 years after implementation of the WIA, many State and 
local boards do not fully understand the need to involve community 
employment providers. State WIBs are attempting to address the 
employment needs of individuals with disabilities by including a 
representative of the State vocational rehabilitation program (VR) on 
the State WIB, as required by WIA. However, all too often, VR is 
represented by the head of the umbrella agency housing the Designated 
State Unit administering the VR program, rather than the director of 
the VR program. In addition, some States--based on the grandfather 
clause in Title I of WIA--use previously existing boards to operate as 
the State WIB and may not have anyone at all representing VR.
    Community providers have also had limited success in becoming 
members of local WIBs. Currently, WIA requires local WIBs to include 
representatives of local community-based organizations. As a result, 
many WIBs include representatives of the public VR program and 
individuals with disabilities. Across the country, however, providers 
have offered differing experiences of serving on local boards. Although 
some excellent relationships have been established between local 
boards, VR, people with disabilities, and community-based providers, 
other regions are sorely lacking such relationships and have expressed 
concerns over the inability to establish such relationships.

Recommendations
     States and the One-Stops should take additional steps to 
get more representation from the disability community in the WIA system 
by ensuring direct representation of Vocational Rehabilitation (VR), 
community-based providers, and people with disabilities on State WIBs.
     Section 111(b)(1)(C)(v) should be amended to read as 
follows (proposed language is bold type):
    (v) representatives of individuals and organizations that have 
experience and expertise in the delivery of workforce investment 
activities, including chief executive officers of community colleges 
and community-based organizations within the State (including 
organizations representing and providing employment service to 
individuals with disabilities);
     NCPC believes each State WIB must also include in its 
membership the State's VR director, i.e., the person who is responsible 
for overseeing the administration of the State plan for VR services, or 
an individual designated by the VR director. In States where the law 
has established a separate State VR agency to serve individuals who are 
blind and visually impaired, the director of that specific VR program 
should also be a voting member of the State WIB.
    To accomplish this recommendation, Section 111(b)(1)(C)(vi)(II) 
should be amended to read as follows:
    Section 111(b)(1)(C)(vi)(II):
    (vi)(II) in the case of the public Vocational Rehabilitation 
program authorized under Title I of the Rehabilitation Act of 1973 (29 
U.S.C. 720 et seq.), the Vocational Rehabilitation director employed by 
the Designated State Unit or the Vocational Rehabilitation directors in 
States that have a separate State entity that is responsible for the 
rehabilitation of individuals who are blind and visually impaired; and
    Redesignate current subsection (vi)(II) as (vi)(III).
     With respect to local WIBs, Section 117(b)(2)(A)(iv) must 
be strengthened to ensure that the interests of people with 
disabilities continue to remain a part of local WIA implementation by 
making specific reference to a representative of the public VR program, 
a representative of community-based providers, and at least one 
individual with a disability.

     III. ESTABLISHING THE COMPREHENSIVE, SEAMLESS WORKFORCE SYSTEM

    To ensure the comprehensive, seamless One-Stop system that WIA set 
to create, One-Stops and their public and private partners must have 
adequate funding to deliver the services and supports required by all 
job-seekers, including individuals with disabilities.
    To date, funding levels for One-Stops and their services have not 
kept pace with the demand. WIA adult, dislocated worker, and youth 
training programs all received less funding from fiscal year 2002 to 
2003, and again the President's fiscal year 2004 budget request. Just 
last week, the House and Senate Appropriations Committees approved WIA 
funding levels for fiscal year 2004 that, in general, are equal to 
fiscal year 2003 amounts. Given inflation and current demands on the 
system, this equates to a funding cut. Better alternatives than simply 
cutting WIA funding must be identified and implemented. As the nation's 
economy fails to rebound as quickly as hoped, as State budget deficits 
continue to grow, and as more individuals find themselves struggling in 
today's economy, it is imperative that the nation's workforce 
investment system has appropriate funding to support the demands on the 
system.
    An important funding issue that WIA reauthorization must address is 
the lack of One-Stop infrastructure funding. Currently, no funding 
source exists to support One-Stop infrastructure. Yet, a sound 
infrastructure is critical to the success of One-Stops--to increase 
physical and programmatic access and improve services available to all 
participants, and particularly individuals with disabilities.
    As a recent GAO report found, paying for the costs associated with 
operating One-Stops without a dedicated funding stream has been an on-
going challenge. Lack of infrastructure funding has contributed to the 
physical and programmatic inaccessibility on many One-Stops for many 
individuals with disabilities. The lack of specific infrastructure 
dollars often results in funding being diverted from WIA programs and 
services and from mandatory partners. As a result, funding is taken 
from service delivery and precludes job-seekers from obtaining 
necessary services. In particular, individuals with disabilities cannot 
receive the individualized supports and services to obtain and maintain 
employment. Providing infrastructure funding will allow WIA program and 
other partner program funding to be directed to delivering services to 
job-seekers and will help offset reductions in Federal appropriations 
for WIA programs. Therefore, a separate line-item for infrastructure 
funding must be authorized so that other WIA programs--as well as other 
partner programs such as vocational rehabilitation--are not raided.
    The NCPC is also concerned with the Administration's proposal that 
was incorporated into the House-passed WIA reauthorization legislation 
(H.R. 1261) that would consolidate funding for all three of the WIA 
Title I adult programs--adults, dislocated workers, and the Wagner-
Peyser State grants into one single grant. While the intent is to free-
up funding that would have been dedicated for administrative purposes, 
the NCPC believes that, by consolidating funding streams into one 
single fund, dislocated workers will be able to access a 
disproportionate amount of funding, crowding out individuals with 
disabilities seeking individualized supports and services as adult 
workers.
Recommendations
     Adequate funding must be provided for WIA programs to 
support current demands on the system;
     Separate, dedicated funding must be authorized in order to 
support physically and programmatically accessible infrastructures of 
One-Stops; and
     Separate funding for WIA adult, dislocated worker, and 
Wagner-Peyser grants programs must be maintained.
                iv. strengthening the rehabilitation act
    While reauthorization of WIA and its programs offers the 
opportunity to strengthen partnerships between the workforce investment 
system and community providers, attention must also be paid to 
strengthening partnerships among programs authorized by the 
Rehabilitation Act of 1973, as amended (Rehab Act), and community 
providers.

A. Reconnecting Partnership between JWOD & Fed/State VR

    The Rehab Act should acknowledge that individuals with disabilities 
may benefit from other Federal and State job training and 
rehabilitation related programs, including the Javits-Wagner-O'Day 
Program (JWOD). The Rehab Act must require State VR agencies to 
collaborate and cooperate with these programs to ensure the full 
participation of individuals with disabilities in the benefits of these 
State and Federal programs. State VR agencies must only provide the 
technical assistance needed to assist and facilitate the physical and 
programmatic accessibility of all job training and rehabilitation 
related programs for persons with physical, mental, sensory and 
cognitive disabilities.
    The VR program and the JWOD program must work cooperatively to 
create employment opportunities for people with severe disabilities and 
to prepare them to succeed. Policies, practices, and events of recent 
times have limited the cooperation of these two venerable programs. 
Common ground should be identified on which the employment of people 
with severe disabilities can once again be the focus of their 
cooperative efforts.
Recommendations:
     Add State plan requirements for State agencies to:
    1. Describe the manner in which cooperative agreements with private 
nonprofit vocational rehabilitation service providers will be 
established; and
    2. Identify the needs and utilization of community rehabilitation 
programs under the Act commonly known as the Javits-Wagner-O'Day Act.

B. Defining Extended Employment

    Currently, the Rehab Act does not have a definition of extended 
employment. NCPC believes a definition of extended employment is 
needed.
Recommendation
     Add a definition of extended employment to the Rehab Act 
that defines extended employment to mean work in a non-integrated or 
sheltered setting for a public or private nonprofit agency or 
organization that provides compensation in accordance with Section 
14(c) of the Fair Labor Standards Act and any needed support services 
to an individual with a disability to enable the individual to continue 
to train or otherwise prepare for competitive employment, unless the 
individual through informed choice chooses to remain in extended 
employment.

C. Ensuring Effective Implementation of the Ticket to Work Program 
                    Through the Rehab Act

    The Ticket to Work and Work Incentives Improvement Act of 1999 
(TTWWIIA) created the Ticket to Work and Self-Sufficiency Program 
(Ticket Program). Two significant goals of TTWWIIA are to increase the 
universe of private providers who will assist Social Security 
Disability Income (SSDI) and Supplemental Security Income (SSI) 
beneficiaries with disabilities in obtaining employment and increase 
the employment rate of people with disabilities, reducing their 
reliance on Social Security benefits. The Social Security 
Administration (SSA) began rollout of the Ticket Program in early 2002 
and the Ticket Program will be nation-wide by 2004. Eligible 
beneficiaries receiving a ticket to work will be able to deposit their 
Ticket with an Employment Network (EN) or the State VR program and 
receive services and supports to obtain or regain employment.
    The Rehab Act must ensure that individuals with a Ticket who are 
also eligible for VR services choose when and where to deposit their 
Ticket. Local community employment providers serving as ENs and the VR 
program must work together, as necessary, to ensure that individuals 
with severe disabilities receive necessary services and supports to be 
successful under the Ticket Program and can reach their employment 
goals.
Recommendations
     The Rehab Act must ensure that the Rehabilitation Services 
Administration (RSA), the SSA, and the Department of Labor (DoL) work 
cooperatively for effective implementation of the Ticket to Work 
Program across the nation.
     The Rehab Act must require RSA, SSA, and DoL to work 
cooperatively to provide outreach to eligible individuals receiving 
Tickets and potential ENs about the Ticket Program.
     The Rehab Act must encourage RSA and SSA to work together 
to ensure that individuals receiving VR services who receive a Ticket 
have real choice when selecting an EN and that there is no auto-
assignment of tickets to VR.

D. Dedicated Funding Must Remain for Supported Employment, Projects 
                    With Industry, Migrant and Seasonal Farmworkers, 
                    and Recreation Projects

    The Rehabilitation Act includes a number of smaller, specialized 
programs designed to address specific service needs of individuals with 
disabilities. NCPC strongly supports the balance that is struck with 
these dedicated programs and urges their continuation in the pending 
reauthorization of the Rehabilitation Act. Since these programs serve a 
very important role as adjuncts to the VR services authorized under 
Title I of the Rehabilitation Act, NCPC cannot support the President's 
request to consolidate these separate funding streams into the Title I 
State VR grant.
Recommendation
     The Supported Employment State Grant program, Projects 
With Industries (PWI), Migrant and Seasonal Farmworkers, and Recreation 
Projects must continue to exist as distinct programs within the 
Rehabilitation Act.
    Prepared Statement of the Society of the Plastics Industry, Inc.
    The Society of the Plastics Industry, Inc. (SPI) is pleased to have 
the opportunity to submit comments to the Senate Committee on Health, 
Education, Labor, and Pensions Subcommittee on Employment, Safety, and 
Training for its June 18, 2003, hearing on the Workforce Investment Act 
(WIA) reauthorization.
    Founded in 1937, SPI is the primary plastics industry trade 
association representing the entire plastics industry supply chain 
which includes plastics products processors, manufacturers of machines 
and molds, and raw material (resin) suppliers. The plastics industry 
represents the fourth largest manufacturing sector in this country, 
employing 1.5 million workers and providing $330 billion in annual 
shipments.

                    SPI SUPPORTS WIA REAUTHORIZATION

    SPI supports the reauthorization of WIA. It has made a significant 
contribution to the needed training and education of incumbent workers 
in the plastics industry. Even though manufacturing industries in the 
U.S., including the plastics industry, have experienced a serious 
economic downturn and resulting layoffs, there still exists a shortfall 
of skilled employees. Workers in manufacturing need to be much more 
skilled than 20 years ago. The WIA has demonstrated that it can play a 
significant role meeting this need that is critical to ensuring the 
competitiveness of U.S. manufacturing.
    Further, SPI supports the reauthorization of WIA because Federal 
monies are subsidizing training and certification that businesses could 
not otherwise afford. The training and certification programs have been 
shown to reduce operating expenses and increase profits; thereby, 
making the businesses more competitive.
    Finally, without the Federal assistance, today most companies 
cannot afford training and certification. Training budgets have been 
drastically reduced in most companies, especially smaller to mid-sized 
companies, which comprise a large part of the U.S. plastics industry. 
State funded customized training programs through community colleges 
and technical colleges have been cut also.

                    SECTOR-BASED TRAINING UNDER WIA

    SPI has been able to help the plastics industry utilize training 
opportunities under the WIA and hopes to significantly expand such 
opportunities. Further in the testimony are summaries of two workforce 
training projects that SPI conducted with the States of Florida and 
North Carolina. Both of these projects were fully funded with WIA 
dollars, at a cost of $700 per person in Florida (2001) and $800 per 
person in North Carolina (2002-2003). WIA monies subsidized the cost of 
both training and certification testing.
    SPI has conducted operator training and certification testing in 
injection molding and extrusion in FL, NC, SC, GA, PA, CA, OH, MI, WI, 
NH, NY, KY, AR, MD, LA, KS. In NY, FL, NC, SC, and CA, companies 
received 100 percent funding through their local Workforce Investment 
Board (WIB) or a State-funded program. PA and KY offered a 50 percent 
reimbursement through State funded programs. The other States did not 
offer funding for IWT or funding was not available because their IWT 
program was under development. In some cases, partial funding was 
available through either local or State programs but funds were 
obligated for the agent's fiscal year or companies chose not to apply 
for partial funding due to the ``red tape'' involved. In instances 
where SPI or a company receives funding, training is coupled with the 
respective certification exam. Companies can elect to participate in 
the National Certification in Plastics Program (NCP) exam without 
participating in the training program. In most cases, if a company 
participates only in the NCP, the company pays for the testing.
    The National Certification in Plastics Program is conducted under 
the auspices of SPI. The NCP program was implemented in 1998 and the 
training program for operators was implemented in 2000. Approximately 
150 companies have participated in either SPI's testing or training 
programs. Between 1998 and 2003, SPI administered Internet-based 
certification exams in injection molding, extrusion, blow molding or 
thermoforming to 642 workers. Of the 642, approximately 92 percent or 
590 workers have passed one of the exams and become certified 
operators. In addition to these 642 workers, SPI has tested an 
additional 1,066 workers in injection molding or extrusion following 
their completion of SPI's 28-hour training course. Of the 1,066 
workers, approximately 85 percent or 906 workers have earned their 
certification as plastics operators.
    In addition to operator training delivered via SPI's Plastics 
Learning Network (PLN), SPI has partnered with Paulson Training, Inc. 
to conduct technician level training in injection molding 
troubleshooting. Approximately 157 technicians in FL, NC, SC, NY, and 
NH have participated in this 2-day seminar. 127 of the 157 received 100 
percent funding for the training subsidized with WIA dollars by local 
workforce boards. This training did not result in certification, but 
companies viewed it as important technical training.

      RECOMMENDATIONS TO STREAMLINE AND FINE TUNE WIA TO INCREASE 
                             EFFECTIVENESS

    Some State programs are more effective than others because they 
have streamlined the process for companies. Thus far, Florida has been 
the most customer-friendly for SPI because there is one point person at 
the State Workforce Investment Board (WIB) level rather than multiple 
contacts at the local WIB level.
    For reporting purposes, SPI has one report to submit to the State 
rather than one report per WIB. From the company's perspective, the 
application is not cumbersome and can be submitted by the Internet.
    SPI and Florida's point person divide the responsibilities and 
communicate frequently when funding grants are involved. Reporting by 
the company is minimal and all forms are web-friendly. On the other 
hand, when IWT programs are administered at the local level, SPI 
develops a relationship with more people, and is more involved in 
building local training partnerships. This type of collaboration has 
proven valuable for the community/technical college system, economic 
and workforce development agencies, and the participating companies.
    Simplicity is the key to State programs working more effectively. 
Keep the IWT application short, simple, and ask only for necessary 
information (info that is needed for tracking standard outcomes). Also, 
timely turn-around time for application approval is important. IWT 
application review committees should work to expedite the evaluation 
and approval process.

                    WIA SHOULD BE MORE DEMAND DRIVEN

    SPI has found that States that identify ``high-skills'' targeted 
industries are more responsive to employers and their current and 
future workforce needs. In these States, local boards have a sense of 
direction and support from the State, and can focus on serving growth 
industries.

                      WIA SHOULD BE MORE FLEXIBLE

    WIA should be flexible in order to be able to adjust to an ever-
changing economy and resultant changing needs of workers. SPI recently 
hosted a focus group for evaluating its current training and 
certification programs, and also for assessing future training and 
certification needs. This effort resulted in recommendations to develop 
technical level training and technical certifications for the plastics 
industry.

         PROVIDE MORE DEFINITION FOR INCUMBENT WORKER TRAINING

    SPI thinks that the training of the unemployed, underemployed, 
welfare recipients, and dislocated workers is very important; however, 
SPI thinks that the training of incumbent workers is equally important. 
Companies that remain sufficiently competitive to be able to create 
jobs are those that continuously upgrade the skills of their workforce.
    WIA funds should be allocated at the local level depending on 
current and projected workforce needs. In areas where there have been 
numerous closures and layoffs, awards of WIA funds should reflect the 
need for re-training and education of dislocated workers.
    Also, awards of WIA funds should reflect the current and future 
needs of incumbent workers in high-skills and growth sectors, thus 
providing upward mobility for incumbents, and at the same time, 
providing entry level jobs for the unemployed and underemployed.
    SPI thinks that the WIA should provide more definition for IWT. 
This would be especially valuable because IWT training is a growing 
trend with local and State WIB's. WIA says little about IWT. There are 
few guidelines mentioned. Because of this, local and State workforce 
boards create their own guidelines. Many guidelines require too much 
work and documentation for the participating companies.
    Several local WIB's with which SPI has worked created requirements 
much like those in other funded programs. For instance, one local board 
created an employee information sheet that was two pages long. 
Questions about drug abuse, pregnancy, etc. were included, much like 
the standard WIA application. Initially, the board asked employers for 
two forms of ID on each student along with a copy of their I-9 form. In 
addition, the application had so many performance and monthly reporting 
requirements that several of the companies lost interest. One company 
said, ``Forget it, I don't have the time for this bureaucracy.''

                      COMPOSITION OF STATE BOARDS

    Board membership at the State and local levels needs to be at least 
51 percent business representation and chaired by business in order to 
be more effective. Inclusion of economic and workforce agencies is also 
important, along with representation from educational institutions. 
Legislative representation and labor union representation should be 
encouraged but not made a requirement.

              WORKFORCE INVESTMENT IS ECONOMIC DEVELOPMENT

    Workforce investment goes hand in hand with economic development. 
Human capital is any company's most valuable resource. Targeted and 
``growth'' occupations should get greater consideration for WIA funds.

         WIA SHOULD PROVIDE GUIDANCE ON HOW TO MEASURE OUTCOMES

    While there is significant focus on outcomes, there is not a system 
in place to educate and train companies on how to measure outcomes. It 
is easy to measure retention or wage increase within 6 months but it is 
more difficult to measure turnover rate, quality improvements, decrease 
in worker's compensation costs, machine down time, etc. all of which 
affect a company's bottom line. Similarly, SPI is not aware of any 
system for measuring delivery effectiveness other than the standard job 
retention and wage increase metrics.
    A customer satisfaction indicator for both employers and 
individuals should be maintained, and One Stop Center performance must 
be measured towards customer satisfaction. The best One-Stop Centers 
are those that gather customer service input from employers and 
individuals and then use the information productively. To be a 
``Certified One-Stop'', a customer service indicator should be a 
requirement.

          NATIONAL ASSOCIATION OF WORKFORCE BOARDS PARTNERSHIP

    SPI thinks that the Act's support of sector-based training 
alliances across the nation is very important and is working to more 
effectively utilize such alliances. On June 24, SPI announced a 
strategic alliance with the National Association of Workforce Boards 
(NAWB) for the purpose of educating State and local workforce boards 
about the plastics industry and enlisting their assistance and 
resources in creating training partnerships.
    SPI is targeting State and local WIB's in the top 20 plastics 
employment States. NAWB is also targeting/educating State and local 
WIB's in the top 10 plastics employment States. This effort has just 
begun and more time is needed to ascertain the effectiveness of the 
combined efforts of SPI and NAWB.
    Working with NAWB should allow SPI to more effectively target 
training for plastics companies. SPI has already targeted regions 
within States that have a high density of plastics companies. Working 
with NAWB will allow SPI to reach the other half of the equation . . . 
the local boards. WIA allows clients and companies the flexibility of 
choosing their training providers.
    SPI hopes that the partnership will facilitate communication among 
local boards, companies, community agencies, educational institutions, 
and SPI. SPI thinks that a more informed audience will result in boards 
and companies that have interest in collaborative training projects 
that may utilize WIA funds. The alliance will provide information aimed 
at helping plastics manufacturing companies in the regions to upgrade 
the skills of the current and future plastics industry workforce.
           examples of spi's work with state workforce boards
    Following are two models, one in Florida and one in North Carolina, 
that illustrate how SPI has worked with State Workforce Boards.

           FLORIDA INCUMBENT WORKER PLASTICS TRAINING PROJECT

The Consortium

    The Florida Plastics Learning Consortium was a partnership between 
Workforce Florida, Inc. (WFI) and SPI that conducted the Florida 
Incumbent Worker Plastics Training Project between March 13 and July 
27, 2001. This innovative project brought together a State Workforce 
Development Board, a national trade association, a State broadcasting 
network, a manufacturing extension research and training program, 33 
Florida plastics manufacturing companies, and 9 educational 
institutions to train and certify incumbent workers as plastics 
operators. In addition to the broad stakeholder involvement, the 
project was unique because it utilized WIA dollars to fund the 
industry-specific training and testing.

The Service Providers

    The Plastics Learning Network (PLN) and the National Certification 
in Plastics (NCP) programs, administered by SPI, provided both the 
training and certification testing services. The NCP was developed by 
the industry in collaboration with the Educational Testing Service's 
Chauncey Group to provide an independent, third party evaluation of 
employee skills resulting in a portable national credential. The PLN is 
a consortium of the SPI, the Polymers Center of Excellence (PCE) and 
South Carolina Education Television (SCETV), which broadcasts plastics 
training nationwide.

Background and Goals

    In 1999, the State Workforce Development Board, Workforce Florida, 
Inc., in conjunction with Enterprise Florida, Inc., the State economic 
development entity, identified a need for skills upgrade training for 
existing workers in the plastics industry. The plastics industry sector 
is considered a ``targeted industry'' in Florida, offering ``high 
skill/high wage'' jobs.
    The goal of WFI was to assist employers in upgrading the skills of 
their workers, thus providing an avenue for advancement and retention. 
A secondary goal of WFI was to pilot a multi-employer training project 
utilizing an alternative delivery method for use as a model for future 
projects in other industries.
    To achieve this goal, WFI and SPI, through a State Incumbent Worker 
Training Program grant award, created a partnership whereby WFI fully 
funded the PLN certification training and testing for qualified Florida 
companies, a value of $700 per worker. SPI provided the live, 
interactive training via satellite to designated downlink sites in 
Florida and subsequent testing of participants at designated testing 
centers utilizing Florida's educational system.
    Several partners made additional cash and in-kind contributions to 
the training project. For example: SPI contributed an estimated 
$149,000 in marketing efforts and staff time, PCE contributed $18,000 
in-kind for instructor training and course development, SCETV 
contributed $8,000 in-kind for staff time, and many of the 
participating employers paid their employees wages while in training as 
well as associated travel expenses.
    When asked how Command Medical Products, Inc., Ormond Beach, 
Florida, compensated their employees for participating, Brad Harris, VP 
of Operations, responded:
    All hourly participants were paid their normal wage rate during the 
training sessions. Our training goal was to increase company knowledge 
in extrusion while providing a foundation for new and incumbent 
extruder operator learning.
    The potential financial gain for all participants was the 
promotional opportunity that would result from business growth. New 
extrusion operators could also benefit from the knowledge gained 
through PLN since their wage progression is based on demonstrated 
skill. Two employees have received increases based on these criteria.

Incumbent Worker Plastics Training Project

    The Florida Incumbent Worker Plastics Training Project was well 
received by employers and employees because the training was: State 
funded, conveniently delivered, live and interactive, short-term in 
length, and resulted in a national credential for the workers. David 
Outlaw, Plant Manager of Precise Technology, St. Petersburg, Florida 
observed:
    The PLN courses are useful for all departments within a plastics 
operation because they remove the mystery usually confined to the 
manufacturing floor and help administrative, manufacturing, design, 
mold-building and maintenance people understand the fundamentals of the 
business.
    Because of this project, I have become more involved in workforce 
development on a local and State level. Overall, we have brought people 
and organizations together who want to work toward improving the lives 
of our workers and the Florida economy.

Program Delivery

    To deliver the training, PLN utilized SCETV for broadcasting and 
the renowned Polymers Center of Excellence in Charlotte, NC, for 
instruction. PLN contracted with 10 Florida downlink sites equipped 
with distance-learning classrooms. These sites included seven community 
colleges, one technical college, one plant facility and one middle 
school.
    Incumbent workers enrolled in either ``Preparation for National 
Certification in Injection Molding'' or ``Preparation for National 
Certification in Extrusion.'' Classes were held at the sites 2 times 
per week, from 4-6 p.m. for 7 weeks. After completion of training, 
workers took the National Certification in Plastics exam at their local 
community college, with college personnel serving as proctors. The exam 
was administered through Net Certification, an on-line testing vendor.

Outcomes

    Through this collaborative partnership, 210 of the 230 incumbent 
workers (91.3 percent) completed the training and passed the NCP exam, 
thereby receiving a nationally recognized, portable credential as 
either an injection molding or extrusion operator.
    The incumbent workers that participated were from 33 companies 
located across two Florida counties in both rural and urban areas. This 
training project produced more highly skilled and knowledgeable workers 
resulting in 33 promotions at an average wage increase of $.59/hour 
(ranging from $.25/hour to $.97/hour) at 8 of the 33 companies. Other 
companies plan to consider wage increases at the time of employee 
performance evaluations.

Conclusion

    The Florida Plastics Learning Consortium is an excellent example of 
how an innovative, collaborative training partnership can leverage 
multiple resources to serve employers throughout a State, resulting in 
benefits for the incumbent worker, the employer, the local community, 
and the State. In 2002, the NAWB recognized WFI's and SPI's partnership 
with a prestigious Theodore E. Small Workforce Partnership Award.
    Workforce Florida, Inc., the State's workforce board, has supported 
SPI's training initiatives in Florida since the spring of 2001. SPI has 
completed its third training contract with Workforce Florida who has 
said that ``SPI is Florida's poster child'' for successful incumbent 
worker training. The 2001 grant greatly influenced the two additional 
grants that SPI received. In the fall of 2001, SPI received a grant 
through The Agency for Workforce Innovation, which is under the 
umbrella of Workforce Florida. This grant ended in fall 2002 and was 
for operator training and certification.
    In the spring of 2003, SPI received a grant through Workforce 
Florida's Incumbent Worker Training Program. As in the spring of 2001, 
this grant was for technician training. Workforce Florida reported at 
the recent SPI/NAWB Alliance Luncheon that 84 percent of the trainees 
in the spring 2001 project are still employed in the plastics industry 
and have averaged a wage increase of $1.00/hour.

















































































     NORTH CAROLINA PLASTICS INCUMBENT WORKER DEMONSTRATION PROJECT

About The Consortium

    The North Carolina Plastics Incumbent Worker Demonstration Project, 
a partnership among United Southern Industries, Inc. (USI), Isothermal 
Planning and Development Commission and the Region C Workforce 
Development Board, the North Carolina Department of Commerce Commission 
on Workforce Development, and SPI, served as one of the models for the 
State's Incumbent Workforce Development Program (IWP) implemented 
statewide in March 2003. The project was unique because it utilized WIA 
dollars to fund the industry-specific training and certification 
testing.

The Service Providers

    SPI's Plastics Learning Network (PLN) and the National 
Certification in PlasticsTM (NCP) program provided both the training 
and certification services. PLN is a consortium comprised of SPI, the 
Polymers Center of Excellence (PCE) and South Carolina Educational 
Television (SCETV) that broadcasts PLN's training courses nationwide. 
The NCP was developed by the plastics industry in collaboration with 
the Educational Testing Service's Chauncey Group to provide a portable 
national credential. Net Certification, Inc. manages the NCP exam via 
the Internet.

Background and Goals

    North Carolina is the ninth largest State in the nation in terms of 
plastics employment and shipments. In 2001, it provided 57,200 jobs and 
generated $11.4 billion in shipments. With the decline of textile and 
furniture manufacturing in the State, thousands of manufacturing jobs 
have been lost to foreign competition. In the spring of 2002, 
continuing education and customized training staff of North Carolina's 
Community College System met with SPI to discuss the implementation of 
a pilot training project to evaluate the viability of distance training 
via PLN with Internet-based certification testing. Blue Ridge and 
Isothermal Community Colleges provided technology and staff support 
services for the project that served six injection molding companies 
and one blow molding company from Western North Carolina.
    The project was a success, with 20 of 23 students earning their 
NCP. The continuing education departments of both colleges subsidized 
the course tuition, provided distance-learning classrooms and served as 
testing centers delivering training in injection molding live via 
satellite February-April 2002.
    United Southern Industries, Inc. (USI) participated in the pilot 
project, training and certifying 16 production workers. Todd Bennett, 
USI vice president, saw the positive impact that the IWT program had on 
his company, and wrote a letter in response to Roger Shackleford, 
Executive Director of NC's Commission on Workforce Development, asking 
the State to consider implementing a State-wide incumbent worker 
training program.
    With an IWP not yet finalized and available, the Region C Planning 
Commission approached USI about participating in an incumbent worker 
demonstration project. For this project, USI submitted a proposal to 
Region C to train and certify production workers at a cost of $800 per 
worker via SPI's Plastics Learning Network.
    The goal of the demonstration project was to train 60 USI 
production workers and certify ninety percent, or 54 of the 60 workers. 
USI selected material handlers, quality inspectors, machine operators 
and technicians to participate. The goal of the State was to provide 
financial assistance for upgrading the skills of USI's workers and to 
evaluate the benefits of incumbent worker training.

The North Carolina Plastics Incumbent Worker Training Demonstration 
                    Project

    Joe Bennett--President & CEO United Southern Industries, Inc. said 
of the project:
    The Incumbent Worker Training pilot program has helped USI meet 
many of our goals in employee growth and development. SPI's National 
Certification in Plastics program has offered our company a 
standardized method of training production workers. Consequently, we've 
seen reductions in employee turnover, improved product quality to our 
customers, decreases in employee accidents and increases in production.
    Our employees realize personal, professional, and financial rewards 
and recognition for completion of the training and certification 
programs that USI and the State workforce system make available to 
them. Value from training extends beyond our employees and their 
families to our community and to our State by maintaining healthy 
businesses and keeping manufacturing jobs on U.S. soil.

Program Delivery

    PLN used two instructors from the Polymers Center of Excellence in 
Charlotte, NC, and broadcast from SCETV's studio in Rock Hill, SC. SPI 
contracted with Isothermal Community College in Spindale, NC, to 
provide the downlink and distance learning classroom. USI chose to 
train some employees in the fall of 2002 and others in the spring of 
2003. USI employees attended ``Preparation for National Certification 
in Injection Molding'' classes at the college on Monday and Wednesday 
evenings for seven weeks. Twenty-nine of 32 workers passed the NCP 
exam. In June 2003, USI begins training 27 more workers via in-house 
instruction by a PLN instructor, followed by certification testing.

Outcomes

    Through this collaborative partnership, USI has trained and 
certified 29 of 32 employees, or 90.6 percent of participants. The 
certified workers received a nationally recognized, portable credential 
as an injection molding operator and a 50 cents per hour wage increase. 
It is noteworthy that three of the certified workers spoke English as a 
second language and received additional tutoring in math and reading, 
provided by USI employees.
    USI realized an immediate reduction in turnover after it began 
training and certifying employees via PLN courses and the NCPTM exam 
in 2000. The company also has documented savings from scrap reduction, 
improved quality, and reductions in cycle time, machine downtime, 
absenteeism, returns, rejects, and workers compensation claims.
    In 2001, USI implemented an ROTC (Recruitment, Orientation, 
Training, and Certification) program aimed to recruit, orient, train, 
and certify new production workers in a systematic manner. Since 
implementation, USI has drastically reduced employee turnover which has 
resulted in a cost savings for the company. Prior to implementation, 
USI's turnover rate was 471 employees in 2000. In contrast, the company 
only lost 24 employees in the first 7 months of USI's fiscal year 2003. 
At an estimated $5,000 per employee turnover, that is a reduction from 
$2.3 million to $120,000, or a savings of $2.24 million. Additionally, 
in keeping with a commitment made in the grant proposal, USI has hired 
six employees through the local JobLink Career Center, North Carolina's 
One-Stop System.

Conclusion

    North Carolina's Plastics Incumbent Worker Training Demonstration 
Project is an excellent example of how incumbent worker training can be 
industry-driven at the local level and can create win-win partnerships 
with local workforce boards and educational institutions. This project 
has already provided direction and incentives for other incumbent 
worker training partnerships in North Carolina. According to Todd 
Bennett--Vice President & General Manager for United Southern 
Industries, Inc.:
    In my assessment, the only way to implement continuous change and 
remain competitive in the global economy is to provide all the players 
on the team with an abundance of training. I am certain that exercising 
repetition dramatically increases the execution rate. Training is 
simply exposure to new and or proven techniques, theories, practices or 
concepts. In order to see these benefits you must practice new ways of 
doing things and that involves continuous training.
    SPI appreciates the opportunity to present its view on the 
Workforce Investment Act reauthorization, and we would be happy to 
further discuss any issues contained in this statement, or any related 
issues.
    (For Further Information Contact: Maureen A. Healey, Vice President 
of Government Affairs, The Society of the Plastics Industry, Inc., 801 
K St., NW, Suite 600K, Washington, DC 20006, Phone: 202-974-5219, E-
mail: [email protected].)

          Prepared Statement of Wider Opportunities for Women

   REGARDING ``SELF-SUFFICIENCY'' VERSUS ``SUITABLE'' EMPLOYMENT AS 
              CRITERIA FOR INTENSIVE AND TRAINING SERVICES

    Wider Opportunities for Women (WOW) works nationally and in its 
home community of Washington, D.C. to achieve economic independence and 
equality of opportunity for women and girls. For more than 38 years, 
WOW has helped women learn to earn, with programs emphasizing literacy, 
technical and nontraditional skills, the welfare-to-work transition, 
and career development. Since 1964, WOW has trained more than 10,000 
women for well-paid work. WOW is recognized nationally for its skills 
training models, technical assistance, advocacy for women workers, and 
nationwide work in developing and implementing the Self-Sufficiency 
Standard.
    We represent a national network of women's employment organizations 
and 35 State-level coalitions working to provide greater economic 
opportunity to low-income families across the country. Through WOW's 
Family Economic Self-Sufficiency project, our State-level coalitions 
have been working over the past 7 years to put tools and resources in 
the hands of State-level policymakers, advocates and direct service 
providers to improve programs and policies that effect low-income 
families.
    On behalf of these organizations and our own, we thank you for the 
opportunity to submit comments on the changes the Senate should make to 
the Workforce Investment Act (WIA), focusing specifically on the 
importance of retaining ``self-sufficiency'' as a goal in WIA and as 
the criteria for eligibility for services.

What Does Current Law Say About Eligibility for Intensive and Training 
                    Services?

    One of the criteria for individuals to have access to intensive 
services--which, under current law, is the gateway to training 
services--is being employed, but in need of intensive services to 
obtain or retain employment that allows for self-sufficiency. The 
Federal regulations clarify that State or Local Boards must set the 
criteria for determining whether employment leads to self-sufficiency. 
At a minimum, such criteria must provide that self-sufficiency means 
employment that pays at least the lower living standard income level, 
as defined in WIA section 101(24). Self-sufficiency for a dislocated 
worker may be defined in relation to a percentage of the layoff wage. 
Implicitly, if an employed worker (who qualifies for and uses any 
Intensive Service) needs additional training in order to improve their 
earnings towards ``self-sufficiency,'' then they are eligible for 
Training Services.

Why Is Defining Eligibility for Services in Relation to ``Self-
                    Sufficiency'' Important?

    Title I of WIA establishes the following principles of purpose: 
``increase the employment, retention, and earnings of participants, and 
increase occupational skill attainment by participants, and, as a 
result, improve the quality of the workforce, reduce welfare 
dependency, and enhance the productivity and competitiveness of the 
Nation.'' Simply put, the Workforce Investment Act invests, and should 
continue to invest, in people and their skills. Without self-
sufficiency language, WIA will become little more than a job placement 
entity.
    The current language gives low-income workers, who do not earn 
enough to support their families, access much needed services. These 
services--including ESL training, career planning and job training--
give workers the tools to build the skills necessary to find work that 
will allow them to provide for themselves and their families. In the 
current system, an industrious worker who is employed but still unable 
to cover basic costs can meet with an employment specialist in a One-
Stop to develop a career plan that would help them move their family 
toward self-sufficiency. If that worker needs particular training or 
other services to achieve that goal, the current system can invest in 
that worker to help them achieve it. These are also the services that 
can keep individuals in the workforce and reduce the likelihood they 
will need to rely on welfare in the future. The House bill, H.R. 1261, 
would block that worker from having access to those services through 
the One-Stop.

``Suitable Employment'' Suits Neither the Worker nor the Economy

    In the House bill, the term ``suitable employment'' would replace 
``employment that allows for self-sufficiency.'' Although the governors 
would be given the power to define the term ``suitable employment,'' it 
already has currency in the unemployment system.
    The term generally refers to moving an unemployed worker back into 
the workforce at a level that is comparable to his or her previous wage 
in work that is suitable for their current skill set--regardless of 
whether that work would provide enough income for the worker to become 
self-reliant. In contrast to a standard based on real costs of living 
and working in a given community, ``suitable employment'' is often 
based on what an individual is already earning, and the skills the 
individual already possesses or does not possess, regardless of need.
    This philosophy suggests that an individual's current skill set is 
appropriate, both for the worker and the economy--which is often not 
the case. Census data and reports from the Chamber of Commerce make 
clear that the jobs of yesterday are not the ones that employers are 
trying to fill today and certainly not tomorrow. Indeed the Chamber 
projects that 70 percent of employers in the next 10 years will require 
more highly skilled workers. In using a definition like suitable 
employment, the One-Stops are fated to lead workers to those jobs in 
which they will stagnate rather than in which they can grow and respond 
to the changing demands of the labor market.

What Should the Senate Do Instead?

     Reject the provision to change the focus of WIA from 
``self-sufficiency'' to ``suitable'' jobs in H.R. 1261. The definition 
of ``suitable employment'' is completely contrary to the current intent 
of WIA, which is to help workers advance. Instead, the House proposal 
would stop workers dead in their tracks.
     Retain self-sufficiency as a mission of WIA and as a 
criteria for receiving services. Removing the implicit and explicit 
goal of self-sufficiency, will deter low-wage workers from upgrading 
their skills and moving towards employment that would make them less 
dependent on the public system for support. H.R. 1261 does take the 
positive step of aligning eligibility criteria for unemployed and 
employed workers; however, that eligibility criteria must be self-
sufficiency for both groups.
     Strengthen the law by moving definition of self-
sufficiency from the regulations into legislation. In 1998, Congress 
articulated a vision that workers be served if they were not on a path 
to self-sufficiency. Congress left it to the Administration to 
articulate how ``self-sufficiency'' was defined. A 2003 survey of local 
workforce investment boards by the National Association for Workforce 
Boards and Wider Opportunities for Women showed that almost half of 
responding local boards defined self-sufficiency higher than the 
Federal regulatory requirements, and that more than a third of those 
used the Self-Sufficiency Standard as the definition. The Senate should 
codify the definition of self-sufficiency in the reauthorization of 
WIA.

Background on the Self-Sufficiency Standard

    The Self-Sufficiency Standard is a measure of how much income 
families need to cover their basic costs, depending on where they live 
and who is in their family. It is useful for workforce policymakers at 
the local, State and Federal levels because it is both geographically-
specific down to the county level--making it useful for local workforce 
boards--and is calculated using a consistent methodology--allowing for 
State and Federal policymakers to make comparisons outcomes across the 
State or across the country. The Standard has been calculated for 35 
States, and used in a variety of ways in State policy. The Workforce 
Investment Act currently authorizes demonstration and pilot projects to 
assist local areas in developing and implementing local self-
sufficiency standards to evaluate the degree to which participants are 
achieving self-sufficiency.

Other Applications of the Self-Sufficiency Standard in WIA

    In addition to maintaining the focus on self-sufficiency through 
eligibility criteria, the self-sufficiency standard should be adopted 
in two other areas of WIA.
    The Senate must:
     Insist on accountability by measuring outcomes. To 
understand the impact of WIA on different groups of job seekers, 
Congress must have data on demographics of who is served, the jobs they 
enter and whether they are nontraditional for women.\1\ In addition, 
Congress must have information about actual wages, set in a context of 
local cost of living, i.e., the self-sufficiency standard.
---------------------------------------------------------------------------
    \1\ According to the Department of Labor, nontraditional jobs for 
women are those in which less than 25 percent of the workers are 
female. Increasing women's access to these jobs is a compelling 
strategy for achieving family economic self-sufficiency. These jobs 
offer good benefits and wages that are between 20 to 30 percent higher 
than jobs where women are traditionally clustered.
---------------------------------------------------------------------------
     Make comprehensive information and career planning fully 
accessible. One-stops have done a poor job of ensuring that job seekers 
have full information about the services available; career options; 
cost of living and skills necessary to compete for jobs. Job seekers 
need complete information on several fronts:
     all services available through the one-stop system;
     local cost of living and how much income a family needs to 
be economically self-sufficient;
     high-skill, high-wage, locally-demanded career options, 
including those that are nontraditional; and
     how a job seeker's skills align with labor market needs.

Additional WIA Recommendations

    Wider Opportunities for Women believes that a workforce development 
system that responds to and respects the particular needs of a diverse 
workforce is one that ultimately benefits all workers and employers, 
and is prepared to address the emerging challenges of the 21st century 
workforce. To that end, we also urge the Senate to:
     Reject the block grant consolidation of Adult, Dislocated 
Worker and Employment Service programs and funds.
     Restore workforce funding to adequate levels.
     Encourage training for and placement in high-wage, high-
demand jobs, with a special emphasis on nontraditional jobs for women.
     Target services to the needs of job seekers.
     Improve performance measurements instead of simplifying 
them.

    [Whereupon, at 11:51 a.m., the subcommittee was adjourned.]

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