[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                       WORKFORCE INVESTMENT ACT:
                       RECOMMENDATIONS TO IMPROVE
                   THE EFFECTIVENESS OF JOB TRAINING

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON HIGHER EDUCATION,
                 LIFELONG LEARNING, AND COMPETITIVENESS

                              COMMITTEE ON
                          EDUCATION AND LABOR

                     U.S. House of Representatives

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JUNE 28, 2007

                               __________

                           Serial No. 110-51

                               __________

      Printed for the use of the Committee on Education and Labor


                       Available on the Internet:
      http://www.gpoaccess.gov/congress/house/education/index.html


                                 ______
                                     
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                    COMMITTEE ON EDUCATION AND LABOR

                  GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice       Howard P. ``Buck'' McKeon, 
    Chairman                             California,
Donald M. Payne, New Jersey            Ranking Minority Member
Robert E. Andrews, New Jersey        Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia  Peter Hoekstra, Michigan
Lynn C. Woolsey, California          Michael N. Castle, Delaware
Ruben Hinojosa, Texas                Mark E. Souder, Indiana
Carolyn McCarthy, New York           Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts       Judy Biggert, Illinois
Dennis J. Kucinich, Ohio             Todd Russell Platts, Pennsylvania
David Wu, Oregon                     Ric Keller, Florida
Rush D. Holt, New Jersey             Joe Wilson, South Carolina
Susan A. Davis, California           John Kline, Minnesota
Danny K. Davis, Illinois             Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona            Kenny Marchant, Texas
Timothy H. Bishop, New York          Tom Price, Georgia
Linda T. Sanchez, California         Luis G. Fortuno, Puerto Rico
John P. Sarbanes, Maryland           Charles W. Boustany, Jr., 
Joe Sestak, Pennsylvania                 Louisiana
David Loebsack, Iowa                 Virginia Foxx, North Carolina
Mazie Hirono, Hawaii                 John R. ``Randy'' Kuhl, Jr., New 
Jason Altmire, Pennsylvania              York
John A. Yarmuth, Kentucky            Rob Bishop, Utah
Phil Hare, Illinois                  David Davis, Tennessee
Yvette D. Clarke, New York           Timothy Walberg, Michigan
Joe Courtney, Connecticut            Dean Heller, Nevada
Carol Shea-Porter, New Hampshire

                     Mark Zuckerman, Staff Director
                   Vic Klatt, Minority Staff Director
                                 ------                                

                   SUBCOMMITTEE ON HIGHER EDUCATION,
                 LIFELONG LEARNING, AND COMPETITIVENESS


                    RUBEN HINOJOSA, Texas, Chairman

George Miller, California            Ric Keller, Florida,
John F. Tierney, Massachusetts         Ranking Minority Member
David Wu, Oregon                     Thomas E. Petri, Wisconsin
Timothy H. Bishop, New York          Cathy McMorris Rodgers, Washington
Jason Altmire, Pennsylvania          Virginia Foxx, North Carolina
John A. Yarmuth, Kentucky            John R. ``Randy'' Kuhl, Jr., New 
Joe Courtney, Connecticut                York
Robert E. Andrews, New Jersey        Timothy Walberg, Michigan
Robert C. ``Bobby'' Scott, Virginia  Michael N. Castle, Delaware
Susan A. Davis, California           Mark E. Souder, Indiana
Danny K. Davis, Illinois             Vernon J. Ehlers, Michigan
Mazie Hirono, Hawaii                 Judy Biggert, Illinois


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 28, 2007....................................     1
Statement of Members:

    Altmire, Hon. Jason, a Representative in Congress from the 
      State of Pennsylvania, prepared statement of...............    54
    Hinojosa, Hon. Ruben, Chairman, Subcommittee on Higher 
      Education, Lifelong Learning, and Competitiveness..........     1
        Prepared statement of....................................     2
        Additional submissions:
            Statement of the National Youth Employment Coalition.    54
            Internet link to the statement of the National 
              Network for Women's Employment.....................    58
    Keller, Hon. Ric, Ranking Minority Member, Subcommittee on 
      Higher Education, Lifelong Learning, and Competitiveness...     3
        Prepared statement of....................................     4
        Additional submission: statement of Gary J. Earl, 
          president, CEO, Workforce Central Florida..............    58

Statement of Witnesses:
    Baxter, Sandra, director, National Institute for Literacy....    27
        Prepared statement of....................................    29
    Ferguson, Bruce, Jr., president, WorkSource..................    37
        Prepared statement of....................................    39
    Ganzglass, Evelyn, director, Workforce Development Center for 
      Law and Social Policy......................................    18
        Prepared statement of....................................    20
    Gragg, Rachel, Ph.D., Federal policy director, the Workforce 
      Alliance...................................................     8
        Prepared statement of....................................    11
    Jurey, Wes, president and CEP, Arlington, TX, Chamber of 
      Commerce...................................................    35
        Prepared statement of....................................    37
        Additional submissions:
            Statement of the Business Coalition for Student 
              Achievement........................................    63
            Statement of Arthur J. Rothkopf, Business Coalition 
              for Student Achievement (March 13, 2007)...........    65
    Nilsen, Sigurd R., Director, Education, Workforce and Income 
      Security Issues, Government Accountability Office..........     6
        Prepared statement of....................................     8


                       WORKFORCE INVESTMENT ACT:
                       RECOMMENDATIONS TO IMPROVE
                   THE EFFECTIVENESS OF JOB TRAINING

                              ----------                              


                        Thursday, June 28, 2007

                     U.S. House of Representatives

                   Subcommittee on Higher Education,

                 Lifelong Learning, and Competitiveness

                    Committee on Education and Labor

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 1:30 p.m., in 
Room 2175, Rayburn House Office Building, Hon. Ruben Hinojosa 
[chairman of the subcommittee] presiding.
    Present: Representatives Hinojosa, Tierney, Yarmuth, Scott, 
Keller, and McKeon.
    Staff present: Aaron Albright, Press Secretary; Sarah 
Dyson, Administrative Assistant, Oversight; Lamont Ivey, Staff 
Assistant, Education; Brian Kennedy, General Counsel; Ricardo 
Martinez, Policy Advisor for Subcommittee on Higher Education, 
Lifelong Learning and Competitiveness; Joe Novotny, Chief 
Clerk; Lisette Partelow, Staff Assistant, Education; Michele 
Varnhagen, Labor Policy Director; James Bergeron, Deputy 
Director of Education and Human Services Policy; Kathryn Bruns, 
Legislative Assistant; Kirsten Duncan, Professional Staff 
Member; and Susan Ross, Director of Education and Human 
Resources Policy.
    Chairman Hinojosa [presiding]. A quorum is present. The 
hearing of the subcommittee will come to order.
    Good afternoon, and welcome to the first Subcommittee on 
Higher Education, Lifelong Learning and Competitiveness hearing 
on the reauthorization of the Workforce Investment Act.
    The programs authorized under the WIA provide the key 
supports to economic self-sufficiency for many in our 
communities. They fund job training, adult education and family 
literacy services, and vocational and rehabilitative services.
    Given that we know that nearly two-thirds of the workers 
who will make up the workforce of 2020 are already in jobs 
today, our future competitiveness, our productivity and 
prosperity largely rests on fully developing the skills of 
today's workers and creating opportunities for their career 
development and advancement.
    It is my hope that we can work in a bipartisan manner to 
renew the Workforce Investment Act, avoiding the divisive 
issues of the past and putting America's workers in a position 
to lead the way in a global marketplace.
    In 1998, with the Workforce Investment Act, we took a bold 
step forward in trying to unify collection of discrete 
workforce development programs into a coherent system that 
would serve workers and employers alike. WIA envisioned one-
stop services for locally developed solutions to workforce 
development needs. We have come a long way since 1998, but we 
can do more.
    First, we need to reaffirm our commitment to funding these 
programs. I am pleased that one of the first things we did when 
the Democrats assumed the majority was to reverse the trend in 
funding cuts for the program by adding more than $184 million 
for fiscal year 2007.
    As we hear from today's distinguished panel of witnesses, 
it is my hope that we can focus on how to improve the system 
created by the Workforce Investment Act so that we can spark 
innovation and strong partnerships at the state and local 
levels without losing sight of our obligation to ensure that 
our programs reach those with greatest needs.
    We need to make sure that our program structures and 
performance measures do not provide disincentives to reaching 
English language learners, adults with disabilities, migrant 
and seasonal farm workers, adults with low levels of education 
or low levels of literacy, or others who may need multiple 
supports to achieve their full potential in the workforce.
    Yesterday the Education and Labor Committee approved the 
Green Jobs Act of 2007, which would create a new program in our 
workforce investment system focused on federal renewable energy 
and energy efficiency initiatives. This is one example of how 
we can use the workforce investment system to meet the demand 
for a skilled workforce while addressing a challenge of 
national and global importance; that is the energy 
independence.
    As we move forward with the reauthorization process, I hope 
that we can identify other creative ways to harness the power 
of today's workforce to address national needs now and in the 
future.
    I am also interested in exploring how we can ensure that we 
have the data evaluation measures in place to identify best 
practices and emerging areas for workforce development while 
ensuring that the programs are making a difference in the 
communities with greatest needs.
    I would like to thank the witnesses, each and every one of 
you, for joining us today. I am looking forward to your 
testimony and recommendations.
    I would like to yield now to the ranking member, my friend 
and colleague, Mr. Ric Keller of Florida, for his opening 
statement.
    [The statement of Mr. Hinojosa follows:]

 Prepared Statement of Hon. Ruben Hinojosa, Chairman, Subcommittee on 
        Higher Education, Lifelong Learning, and Competitiveness

    Good afternoon and welcome to the first Subcommittee on Higher 
Education, Lifelong Learning and Competitiveness hearing on the 
reauthorization of the Workforce Investment Act.
    The programs authorized under the Workforce Investment Act provide 
the key supports to economic self-sufficiency for many in our 
communities. They fund job training, adult education and family 
literacy services, and vocational and rehabilitative services. Given 
that we know that nearly two-thirds of the workers who will make up 
workforce of 2020 are already in jobs today, our future 
competitiveness, productivity, and prosperity largely rest on fully 
developing the skills of today's workers and creating opportunities for 
their career development and advancement.
    It is my hope that we can work in a bipartisan manner to renew the 
Workforce Investment Act, avoiding the divisive issues of the past, and 
putting America's workers in a position to lead the way in a global 
marketplace.
    In 1998, with the Workforce Investment Act, we took a bold step 
forward in trying to unify a collection of discreet workforce 
development programs into a coherent system that would serve workers 
and employers alike. WIA envisioned one-stop services for locally 
development solutions to workforce development needs. We have come a 
long way since 1998 but we can do more.
    First, we need to reaffirm our commitment to funding these 
programs. I am pleased that one of the first things we did when the 
Democrats assumed the majority was to reverse the trend in funding cuts 
for the program by adding more than $184 million for fiscal year 2007.
    As we hear from today's distinguished panel of witnesses, it is my 
hope that we can focus on how to improve the system created by the 
Workforce Investment Act so that we can spark innovation and strong 
partnerships at the state and local levels without losing sight of our 
obligation to ensure that our programs reach those with the greatest 
needs. We need to make sure that our program structures and performance 
measures do not provide disincentives to reaching English language 
learners, adults with disabilities, migrant and seasonal farm workers, 
adults with low levels of education and low levels of literacy or 
others who may need multiple supports to achieve their full potential 
in the workplace.
    Yesterday, the Education and Labor Committee approved the Green 
Jobs Act of 2007, which would create a new program in our workforce 
investment system focused on federal renewable energy and energy 
efficiency initiatives. This is one example of how we can use the 
Workforce investment system to meet the demand for a skilled workforce 
while addressing a challenge of national and global importance--energy 
independence.
    As we move forward with the reauthorization process, I hope that we 
can identify other creative ways to harness the power of today's 
workforce to address national needs now and in the future. I am also 
interested in exploring how we can ensure that we have the data 
evaluation measures in place to identify best practices and emerging 
areas for workforce development while ensuring that the programs are 
making a difference in the communities with the greatest needs.
    I would like to thank the witnesses for joining us today. I am 
looking forward to your testimony and recommendations.
    I would now like to yield to the Ranking Member, Mr. Ric Keller of 
Florida for his opening statement.
                                 ______
                                 
    Mr. Keller. Thank you very much, Mr. Chair, for holding 
today's hearing on the Workforce Investment Act in an effort to 
help us prepare to reauthorize the law.
    I look forward to working with you and my colleagues on 
both sides of the aisle in this effort. Judging from the 
conversations we have had, I feel confident that we will make 
good bipartisan progress on this bill.
    The Workforce Investment Act coordinates the programs that 
provide the primary assistance for unemployed workers. Prior to 
Congress's 1998 WIA reforms, the nation's job training system 
was at times fragmented, duplicative and overlapping and did 
not always serve either jobseekers or employers as well as it 
should. As a result of the 1998 reforms, we now integrate 
employment and training services at the local level in a more 
unified workforce development system.
    I have seen that firsthand in my area in Orlando, Florida. 
I have worked very closely with Mr. Gary Earl, who is the head 
of Workforce Central Florida in the greater Orlando area, and I 
have been very impressed with the one-stop centers that I have 
seen in our community.
    In one location, you can get a resume prepared, have job 
training and even job placement. If that location isn't 
convenient to you, he even has an R.V. that he takes out to the 
rural communities and they provide all those services there. 
And I have been pleased to be a part of that and gone out into 
the communities with the R.V. to meet folks. And I can tell you 
how excited I have seen folks from rural areas to have that 
kind of attention. It has really made a positive difference.
    Last Congress the senior Republican, Mr. McKeon, and 
Minority Leader Mr. Boehner crafted the Job Training 
Improvement Act, which was designed to build upon the 
significant changes made by the bipartisan WIA reforms in 1998.
    The Job Training Improvement Act improved job training 
opportunities for Americans striving to get back to work by 
several measures, including streamlining unnecessary 
bureaucracy, increasing cooperation among workforce development 
partners, and creating personal reemployment accounts of up to 
$3,000 to help unemployed Americans purchase job training and 
other key services.
    These are just a few of the principles that I hope we can 
build upon in reauthorizing the Workforce Investment Act this 
year in a bipartisan manner.
    I want to thank today's panel of witnesses for being here 
to discuss the law's successes and challenges, as well as their 
potential recommendations for improvement as we move forward to 
reauthorize the Workforce Investment Act. I know there is room 
for improvement, and I look forward to working with all of you 
during this process.
    Thank you, Mr. Chairman, and I will yield back the balance 
of my time.
    [The statement of Mr. Keller follows:]

Prepared Statement of Hon. Ric Keller, Ranking Member, Subcommittee on 
        Higher Education, Lifelong Learning, and Competitiveness

    Good afternoon. Thank you Mr. Chairman, for holding today's hearing 
on the Workforce Investment Act (WIA) in an effort to help us prepare 
to reauthorize the law. I look forward to working with you and my 
colleagues on both sides of the aisle in this effort. Judging from the 
conversations that we have had, I feel confident that we will make 
good, bipartisan progress on this bill.
    The Workforce Investment Act (WIA) coordinates the programs that 
provide the primary assistance for unemployed workers. Prior to 
Congress's 1998 WIA reforms, the nation's job training system was 
fragmented, duplicative and overlapping, and did not serve either job 
seekers or employers well. As a result of the 1998 reforms, WIA now 
integrates employment and training services at the local level in a 
more unified workforce development system.
    Last Congress, the Senior Republican Mr. McKeon and Minority Leader 
Boehner crafted the Job Training Improvement Act, which was designed to 
build upon the significant changes made by the bipartisan WIA reforms 
of 1998. The Job Training Improvement Act improved job training 
opportunities for Americans striving to get back to work by 
streamlining unnecessary bureaucracy, increasing cooperation among 
workforce development partners, allowing faith-based service providers 
to participate in the job training system, and by creating personal 
reemployment accounts of up to $3,000 to help unemployed Americans 
purchase job training and other key services. These are just some of 
the principles that I would like to build upon in reauthorizing the 
Workforce Investment Act.
    I would like to thank today's panel of witnesses for being here to 
discuss the law's successes and challenges, as well as their potential 
recommendations for improvement as we move forward to reauthorize the 
Workforce Investment Act.
    I know that there is room for improvement, and I look forward to 
working with all of you during this process. I yield back.
                                 ______
                                 
    Chairman Hinojosa. With that, I would like to introduce our 
very distinguished panel of witnesses here with us this 
afternoon.
    And I will start with Dr. Sigurd Nilsen, who is the 
director of education, workforce and income security at the 
GAO, which is the General Accountability Office, located here 
in Washington, D.C. Sigurd's research has focused on public 
policy analysis and management related to workforce 
development, employment training, labor market issues and 
performance management. Before joining GAO, Dr. Nilsen was with 
the Economic Service at USDA. Mr. Nilsen has received numerous 
awards throughout his career and received his Ph.D. in 
economics as well as his undergraduate engineering degree from 
Cornell University.
    Dr. Gragg is the second witness, and I see that Dr. Gragg 
is federal policy director for the Workforce Alliance, and she 
is based in Washington, D.C. Prior to her present position, she 
was at the Center for Community Change, coordinating national 
grassroots organizations in legislative advocacy. She has also 
served as a legislative assistant for Senator Wellstone. Rachel 
was awarded a Ph.D. from the University of Washington.
    The third one will be Dr. Evelyn Ganzglass, who is director 
of workforce development at the Center for Law and Social 
Policy here in the nation's capital. She has devoted her 30-
year career to strengthening connections among workforce 
development, education, economic development and social service 
policies to help low-income families advance out of poverty. 
She is a nationally renowned expert, and prior to CLASP she was 
at National Governor's Association and served in the Department 
of Labor's Employment and Training Administration.
    The next one will be Dr. Sandra Baxter. Dr. Baxter joined 
the staff of National Institute for Literacy in 1999. Two years 
later she was designated interim director, and in 2005 she 
became the director of that center. She has been very active in 
managing the institute's literacy work in early childhood, 
adolescent and adult reading. Prior to joining the institute, 
Sandra was a senior evaluator at GAO, where her work focused on 
federal education policy and programs. She has an undergraduate 
degree from Howard University, a master's degree from Loyola 
College and a Ph.D. from Harvard University.
    Mr. Wes Jurey has been the president and CEO of the 
Arlington, Texas, Chamber of Commerce for 6 years. And prior to 
his present position, he held a similar assignment in the city 
of El Paso, where I first met him. The Chamber was recently 
awarded a contract by the Tarrant County Workforce Development 
Board to serve as the board's employer outreach arm in a pilot 
project monitored by the Texas Workforce Commission. Wes was 
one of nine individuals appointed by Assistant Secretary Emily 
DeRocco to the Department of Labor Panel that developed the 
department's 5-year research plan. He has a long career in 
nonprofit management, the Methodist Church, the YMCA and the 
Chamber of Commerce.
    At this time it gives me great pleasure to yield to Ric 
Keller of the 8th District from Florida to introduce a person 
from his district.
    Mr. Keller. Thank you, Mr. Chairman.
    And I am very honored to be able to introduce a fellow 
Floridian, Mr. Ferguson. Bruce Ferguson serves as the president 
and CEO of WorkSource in Jacksonville, Florida. It is called 
WorkForce in our area but WorkSource in north Florida.
    In this role, he leads a workforce system consisting of 
eight one-stop career centers and a business services center 
within a six-county region of northeast Florida. He has over 15 
years of experience in workforce development. He is very 
involved with the Chambers of Commerce in northeast Florida and 
has been a strong catalyst in helping for relationships with 
these vital partners.
    Mr. Ferguson has the very uncomfortable situation of being 
a University of Georgia graduate, knowing full well that the 
University of Florida is the reigning national champion in both 
football and basketball. [Laughter.]
    It is something he has to live with every day. It is not 
where you start, it is where you end up, after all. And he also 
has an MBA from Jacksonville University.
    And, Bruce, we appreciate you being here today.
    Chairman Hinojosa. Now we are going to get started with our 
first presenter, our first witness, and I call on Dr. Nilsen to 
please start.

 STATEMENT OF SIGURD R. NILSEN, DIRECTOR, EDUCATION, WORKFORCE 
  AND INCOME SECURITY ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Nilsen. Thank you, Mr. Chairman.
    Mr. Chairman and members of the subcommittee, thank you for 
inviting me here today to present the findings from our work on 
the Workforce Investment Act.
    My testimony today will discuss first the progress made in 
implementing key provisions in WIA and, second, challenges 
still facing the program to implement an integrated system.
    Seven years after implementing WIA, the system and its 
infrastructure continue to evolve. The one-stop system under 
WIA is designed to serve both employers and jobseekers. We 
found that employers are aware of, use and are satisfied with 
the one-stops in their area, especially medium and large 
employers.
    Yet regardless of size, employers hired a small percentage 
of new hires, about 9 percent, through the one-stops, and 
mainly lower-skilled workers. However, employers told us that 
they would hire more jobseekers from the one-stops if the one-
stops had more workers with the skills they were looking for.
    WIA provides the flexibility for local areas to develop 
ways to serve jobseekers and employers in ways that best meet 
their local needs. While about 40 percent of funds were used to 
provide training to over 400,000 jobseekers annually, the vast 
majority of those who use the one-stops get other types of 
assistance from the one-stops. However, those individuals are 
not reflected in the program performance data from the 
Department of Labor.
    States reported increased availability of services at one-
stop centers, but in the case of the employment service, they 
were not always onsite. And while Labor officials expressed 
concern that these standalone offices cause confusion and 
promote inefficient use of resources, they say they lack the 
authority to prohibit these standalone locations.
    Yet optional partners are providing assistance through the 
one-stops as well. For example, 33 states reported that TANF 
services were generally available through the one-stops.
    Despite the progress states and local areas have made in 
developing the system, key aspects of the program could be 
improved. Funding issues continue to plague the system, in part 
because WIA's statutorily determined dislocated worker formula 
causes wide fluctuations in funding levels that do not reflect 
actual changes in layoff activity.
    Also, Labor's focus on using expenditure data rather than 
expenditures plus obligations fails to consider the roll of 
obligations in determining available funds. And Labor's 
estimates overstate the actual level of available funds.
    Yet when we looked at this issue, we found that states 
spent two-thirds of their money in the first year they became 
available and virtually all of the money within 2 years, even 
though they had 3 years to spend the money.
    Moreover, little is known about what the system is 
achieving. WIA performance data did not include information on 
all customers receiving services. In 2004, Labor first proposed 
an improved data system but underestimated the time and 
resources needed to implement it.
    In response to concerns, Labor modified its design. Its 
current proposal, called Whisper, was set to be implemented on 
July 1, 2007, just a few days from now. But given that no 
guidance has been issued, it is unlikely that that will happen.
    However, our preliminary look at this data system is 
positive. It appears that this new data system would likely 
address many of the issues we have raised as we looked at the 
problems with the data in WIA.
    In addition, because local areas can decide who gets 
tracked--that is, who is tracked for performance--they often 
choose to register only those who can help them meet their 
performance levels. Thus, assistance is not driven by a 
client's needs but is driven to meet performance standards.
    Moreover, no information exists on what works and for whom. 
WIA, when it was passed in 1998, required an impact evaluation 
by 2005, but Labor has not yet begun such a study.
    In conclusion, in the 7 years since WIA was implemented, 
much progress has been made in developing and implementing an 
integrated system of universal access. States and local areas 
have used the flexibility under WIA to tailor services to meet 
local needs. As the Congress moves toward reauthorizing WIA, 
consideration should be given to maintaining state and local 
flexibility whereby innovation and system ownership can be 
fostered.
    However, some aspects of WIA could be improved through 
legislative action.
    First, improving the data on people who use the system. 
Requiring all jobseekers who receive WIA-funded services to be 
included in the performance measurement system would improve 
the understanding of who gets served and what happens to them.
    Second, improving funding stability. If Congress chooses 
not to make formula changes, it can still reduce volatility in 
the dislocated worker allocation by requiring the use of hold-
harmless or stop-gain provisions as there are in the adult 
allocation.
    Furthermore, we have made a number of recommendations to 
Labor to improve aspects of the current system. While Labor has 
implemented many of them, several key concerns remain 
unaddressed. In the absence of action by Labor, Congress may 
wish to consider taking action in these areas as well: 
requiring the use of obligations, for example, as well as 
expenditures to determine available funds; requiring a 
systematic approach to adjusting performance goals for states 
and localities based on the populations they serve and the 
local economic conditions in their areas; and perhaps most 
importantly, mandating rigorous program evaluation.
    Mr. Chairman, my final comment is that steps need to be 
taken to encourage further integration of programs through the 
one-stop system to create a true workforce development system 
out of the all-too-often-siloed programs that still pervade 
many local areas.
    In 1998, WIA provided the framework. More still needs to be 
done to achieve the vision of WIA.
    This completes my prepared statement. I would be happy to 
answer any questions at this time.
    [An Internet link to Mr. Nilsen's prepared statement 
follows:]

               http://www.gao.gov/new.items/d071051t.pdf

                                 ______
                                 
    Mr. Tierney [presiding]. Thank you, Mr. Nilsen.
    It is the two ``now finally's'' that got us a little over 
the line on that.
    I appreciate your testimony.
    And I understand from all the witnesses that 5 minutes is a 
tough constraint on that. We will try to be a little liberal, 
but if you are going to get to recommendations, we certainly 
want to hear them. So you may want to just give us a synopsis 
of your written testimony, which will be entered on the record, 
and then make sure that you try to wrap up as close to the 5 
minutes as you can. We would appreciate it.
    Dr. Gragg?

 STATEMENT OF RACHEL GRAGG, PH.D., DIRECTOR OF FEDERAL POLICY, 
                     THE WORKFORCE ALLIANCE

    Ms. Gragg. Thank you.
    Chairman Hinojosa, Ranking Member Keller, members of the 
subcommittee, thank you for holding this hearing today and 
inviting me to participate.
    I am Rachel Gragg, federal policy director for the 
Workforce Alliance, a national multi-stakeholder coalition of 
CBOs, community colleges, unions, business leaders, local 
officials and others from the workforce development field.
    Creating a stable workforce to ensure America's economic 
competitiveness is an important and popular topic of 
conversation right now, and a properly targeted and resourced--
--
    Mr. Tierney. Dr. Gragg, I don't mean to make you be a speed 
reader on that, and I understand that you would like to get 
everything that you have written down in, but if I could just 
ask you again, we would like to have a conversation with you 
and we are happy to have it at a more moderate tone so that we 
can really appreciate what you are saying.
    Ms. Gragg. I will slow down a little.
    Mr. Tierney. I will be a little liberal with it, but as I 
say, just cut out those parts you think we can get from reading 
your report, and the others will be fine.
    Ms. Gragg. I will slow down a little bit.
    Mr. Tierney. Thank you.
    Ms. Gragg. A properly targeted and resourced WIA system 
could go a great way toward helping more of today's workers 
gain the skills our economy needs. To that end, we have 
submitted written testimony with extensive recommendations to 
make WIA work better for both workers and employers.
    However, for the sake of time I will focus my remarks today 
on what we see as the three most important elements of an 
effective workforce development system: training workers, an 
efficient and adequately resourced public infrastructure, and 
creating institutional capacity to organize sector partnership.
    First, the WIA system must adapt to the needs of the 
current economy by providing more training for skilled jobs. 
The committee is well aware of the fact that, despite recent 
improvements by many local areas, WIA is still training fewer 
workers than did its predecessor program JTPA.
    Of the $2.4 billion in adult and dislocated worker funds 
spent locally during 2003, only about 40 percent went to 
training services. The larger portion of WIA dollars has gone 
to less expensive core or intensive services or toward 
infrastructure maintenance.
    To improve access to training under WIA, Congress should 
first eliminate the sequence of services. Local WIA systems 
should be able to offer services in any order and in any 
combination and ensure that the WIA system invests more 
resources and training.
    Congress should establish a required percentage consistent 
with current averages that must be spent on services with an 
emphasis on training. Congress should allow, with some limits, 
a portion of that percentage to be achieved by leverage in new 
public-or private-sector dollars.
    Second, while we feel WIA should train more workers, we 
also support continued investment in the two public systems 
that comprise our nation's workforce development 
infrastructure, the Wagner-Peyser Employment Service and the 
WIA One-Stop Career Centers.
    We know there are valid concerns about whether current 
levels of infrastructure spending are warranted, especially 
when it seems to come at the expense of worker training. 
Currently, WIA's design, particularly when coupled with 
significant federal funding cuts, pits infrastructure spending 
against training as states struggle to meet multiple mandates 
with limited funding.
    Instead, Congress should decide how much money the system 
should be spending on infrastructure and then ensure adequate 
and consistent funding and evaluation.
    To maintain and improve the public infrastructure under 
WIA, Congress should first reject efforts to block-grant E.S. 
and WIA Title I Programs. This has been a recurrent stumbling 
block that has prevented WIA's reauthorization in previous 
Congresses.
    And Congress should also establish a separate budget line 
for WIA infrastructure. Establishing a WIA infrastructure line 
item comparable to the existing E.S. line item would establish 
a relatively predictable amount of funding available to state 
and local WIA planners and at the same time allow Congress to 
set some balance between what is being spent on training versus 
infrastructure operation.
    Third, we encourage Congress to bring WIA current with the 
cutting edge of today's workforce development field. That is 
sector partnerships that bring together a wide range of 
stakeholders to develop long-term plans for worker advancement 
and job creation within specific local or regional industries.
    Examples of these partnerships can be found throughout the 
country, including Project Quest in Texas, the Extended Care 
Career Ladder Initiative in Massachusetts, the Wisconsin 
Regional Training Partnership, Focus Hope and the State 
Regional Skills Alliances in Michigan, Washington State's 
Industry Skills Panel, and Pennsylvania's Industry Partnerships 
Initiative.
    These partnerships work in industries ranging from long-
term and acute health care to manufacturing to biotechnology to 
transport and logistics. And they look at labor needs at 
multiple levels in each of these industries. In many cases, 
these partnerships, once established, can effectively leverage 
and target a local area to WIA training dollars and 
infrastructure to better assist an industries growth.
    However, WIA currently provides no funding to directly 
support the development of such partnerships. And as a result, 
their existence is uneven across the country, largely dependent 
on those areas where there are additional state or 
philanthropic funds.
    Sector partnerships require a unique capacity different 
from that which is required to run a good training program or a 
good one-stop or E.S. labor exchange and require distinct 
funding and performance measures. They are even different from 
what is required to run a good WIB in that they organize 
specific segments of the business community.
    Partnerships are organizing and planning endeavors 
regularly convening a range of key stakeholders connected to an 
industry to assess how that industry might be saved or expanded 
through new shared workforce pipelines, investments in new 
technologies or other means of production and new pathways for 
worker advancement.
    To create designated capacity for sector partnerships, 
Congress should first establish a separately funded sector 
partnership subtitle under WIA. We urge the committee to work 
with the Judiciary Committee to legislate that the portion of 
H-1B visa fees currently being used by DOL without oversight be 
used instead to fund a new WIA sector partnership subtitle.
    We also encourage Congress to ensure that sector 
partnership proposal reflects a set of key principles, such as 
promoting true multi-stakeholder consortia, including multiple 
firms, Labor, education and training providers, the public 
workforce system and other participants deemed necessary.
    Such partnerships should also ensure that a wide range of 
workers, including low-income workers, benefit, by prioritizing 
programs that include career pathways and by paying attention 
to wage and benefit standards.
    A partnership proposal should also recognize leadership 
already shown by some states and allow state flexibility, take 
into account current expertise and reward continued state 
investment.
    That is the end of my prepared remarks, and I would be 
happy to answer any questions.
    [The statement of Ms. Gragg follows:]

Prepared Statement of Rachel Gragg, Ph.D., Federal Policy Director, the 
                           Workforce Alliance

    Chairman Hinojosa, Ranking Member Keller and members of the 
Subcommittee, thank you for inviting me to testify before you today 
regarding the Workforce Investment Act (WIA). I am Rachel Gragg, 
Federal Policy Director for The Workforce Alliance, a national, multi-
stakeholder coalition that advocates for improvements in our federal 
workforce development system.
    TWA is a coalition of community-based training organizations, 
community colleges, unions, business leaders, local officials, and 
leading technical assistance and research organizations from the field 
of workforce development. This alliance of stakeholders, who have not 
previously come together, ensures that our efforts are not in the self-
interest of a particular group, but are instead in the broader public 
interest of the nation. Our mission is to advocate for public policies 
that invest in the skills of America's workers, so they can better 
support their families and help American businesses better compete in 
today's economy. Many of our member organizations will be directly 
tasked with implementing any changes Congress makes to WIA, and our 
reauthorization recommendations reflect their considerable experience 
and expertise.
    Before I begin my remarks, I would like to thank the members of 
this committee for holding this hearing and demonstrating your 
commitment to WIA reauthorization. Globalization, shifting 
demographics, technology and variable market demands have indelibly 
affected the American labor market and resulted, appropriately, in an 
increased focus on maintaining and promoting our economic 
competitiveness. Although Congress has struggled for several years to 
complete WIA reauthorization, we believe that this legislation is an 
important part of wider efforts to build a U.S. workforce that has the 
skills needed to compete in a global economy, attract and retain good 
jobs, meet business demands, and ensure broadly shared prosperity. We 
look forward to continuing to work on these issues under the 
Committee's leadership.
Introduction
    Creating a skilled workforce to ensure America's economic 
competitiveness is a popular topic of conversation both in Congress and 
in the national public dialogue--as it should be, given that our place 
in the global economy affects the quality of life of every American. It 
seems in these conversations, however, that talk about policy solutions 
often quickly turns toward high school and college students. We are 
concerned that these conversations increasingly exclude the vast 
majority of America's future workers--that is, adults already in the 
workforce.
    The workforce of today is the workforce of tomorrow. Roughly 65 
percent of the 2020 workforce and 43 percent of the 2030 workforce are 
already working. And employers are already facing a significant skills 
gap today, not in some distant future. In a 2005 study by the National 
Association of Manufacturers, 90 percent of respondents reported 
shortages of qualified skilled production workers across a range of 
occupations. To address the true needs of our nation's labor market, 
the adult workforce must be central, not peripheral, to the discussion 
about U.S. competitiveness.
    Furthermore, the national conversation about skills attainment and 
competitiveness is increasingly focused on improving the number of 
workers with bachelor's or advanced degrees, particularly in science, 
technology, engineering, and math (STEM) fields. Yet this focus alone 
will not prepare U.S. businesses and workers to compete because the 
major skills gap in our country is not just at the top of the labor 
market. The reality is that the most significant skills gap in this 
country is in occupations that require more than a high school degree, 
but less than a four-year degree. These middle-skills jobs represent 
over 40 percent of our labor market, they are crucial to our nation's 
infrastructure and economy, typically cannot be outsourced, and are 
experiencing some of the greatest growth and gaps.
    Occupations experiencing skills gaps include construction workers, 
operating engineers, carpenters, iron workers, cement masons, 
bricklayers, truck drivers, plumbers, welders, auto mechanics, medical 
technicians, and some nursing fields. The total number of jobs 
requiring a post-secondary vocational award or associate's degree is 
projected to grow 21 percent between 2004 and 2014, faster than the 
overall increase in employment projected for that same period. Of the 
55 million job openings between 2004 and 2014 filled by workers who are 
new to their occupation, 15 million (more than one-quarter) will be 
filled by workers who have some college education or an associate's 
degree but do not have a bachelor's degree.
    Given this reality, it is vitally important that our federal 
workforce development system--of which WIA is an important piece--play 
a key role in a comprehensive national human capital investment 
strategy.
    And, given this reality, we believe it is time for the United 
States to guarantee that our workforce has access to a new minimum 
standard of skill attainment: at least two years of postsecondary 
education or job training, the level required to obtain the jobs in 
greatest demand. A new 21st century skills guarantee--one that updates 
the minimum high school standard that our nation established a century 
ago--is the right thing for America's workers and industries. Ensuring 
that every U.S. worker has at least an industry certification, 
vocational degree or two years of college should be a national priority 
and Congress should use WIA reauthorization to begin to meet this 
priority.

Reauthorization priorities: Building a robust Federal workforce 
        development system
    When considering WIA reauthorization, we urge Congress to measure 
policies against such a skills guarantee and consider what it would 
take to provide every worker with 2 years of postsecondary education or 
training, ensuring a workforce with the skills to compete and providing 
business with the skilled labor force it demands. It is this kind of 
guarantee that will bring about the greatest returns for our nation.
    To begin working toward such a goal, we believe a strong federal 
workforce development system should do three things well: train 
workers; maintain a well-resourced public infrastructure; and create 
designated, institutional capacity to organize industry or sector 
partnerships. Our recommendations for reauthorization reflect this 
belief.

            Increasing Access to Training under WIA

    The WIA system must adapt to the needs of the 21st century economy 
by providing more training for skilled jobs in local economies. Our 
labor market is experiencing significant skills shortages across 
occupations and many workers struggle to support themselves and their 
families in low-wage jobs yet the WIA system is providing less training 
than it did five years ago.
     A smaller percentage of participants are receiving 
training under WIA than under its predecessor program, the Job Training 
Partnership Act (JTPA), even though the number of individuals who 
exited the WIA program in 2004 (545,000) exceeded the 413,000 
participants in the last year of JTPA (1999) by almost one-third. In 
2004, 49 percent of adults who exited WIA received training, compared 
to 76 percent of adults who participated under JTPA in 1999.
     More WIA dollars are spent on infrastructure than on 
training. Of the $2.4 billion in adult and dislocated worker funds 
spent locally during 2003, only about 40 percent was spent on training. 
The rest was spent on program costs (including job search assistance, 
case management, and supportive services) and administration.
     WIA's design overly restricts access to training. Because 
of the wide range of mandated activities that must be provided with WIA 
funding, local areas have had to use WIA funds--which, under JTPA, 
could have been devoted entirely to services--to develop the system's 
infrastructure (including WIBs, one-stop centers, and ITA systems). 
Infrastructure spending continues to be needed to support core and 
intensive services and sometimes leaves little left over for training.
    Furthermore, WIA's ``sequence of services'' requires that 
participants must be unable to obtain or retain employment after core 
services before they can engage in intensive services and then they 
must be unable to obtain or retain employment after intensive services 
before they can receive training. Although WIA does not mandate any 
minimum length of time that individuals must spend in core or intensive 
services before they can start training, many one-stops consider 
training as a last resort for clients. Centers have focused on the 
initial use of lower-cost core or intensive services to move clients 
into a lower-skilled job than what they might have achieved over time 
with additional training. This is too restrictive in both theory and 
practice.
    To improve access to training under WIA, Congress should:
     Eliminate the sequence of services. Local WIA systems 
should be able to offer services (core, intensive, or training) in any 
order or in any combination, as needed by the individual job-seeker and 
by local market conditions.
     Ensure that the WIA system invests more resources in 
training. Congress should establish a required percentage (consistent 
with current averages) of allocated WIA formula dollars that must be 
spent by states and localities on worker services, with an emphasis on 
training. Congress should allow a portion of that base percentage to be 
achieved by leveraging new public or private-sector dollars for a 
portion of that service provision.

            Maintaining and Improving the Public Infrastructure
    While we feel WIA should be training more workers, we also fully 
support continued, wellresourced investment in and improvement of the 
two public systems that comprise our nation's workforce development 
infrastructure: the Wagner-Peyser Employment Service (ES), and the WIA 
One-Stop Career Centers and associated Workforce Investment Boards 
(WIBs). Together, these two systems provide a range of important core 
services related to eligibility assessment and referral, labor 
exchange, and labor market information. In addition, WIBs are 
attempting to bring a new level of coordination between the private-
sector and federally funded public agencies with some connection to 
local workforce training and placement.
     Efforts to dismantle the public infrastructure are 
detrimental to the system. Rather than devoting attention and resources 
toward ensuring that we have a strong and efficient public 
infrastructure, some WIA reauthorization proposals have been more 
focused on essentially ending the federal government's commitment to 
the maintenance of either system. These proposals have included the 
block-granting and elimination of the Wagner-Peyser and WIA Title I 
programs; elimination of the merit staffing provisions that have 
contributed to the stability of the Employment Service dating back to 
the 1930s; Career Advancement Accounts (CAAs) intended to circumvent 
One-Stops in the distribution of WIA training funds; and various grant 
programs proposed as an alternative to the formula-funded WIA 
infrastructure. Such proposals, if adopted, could lead to the quick 
dismantling of ES or One-Stop infrastructures in many states. The 
resulting chaos, rather than achieving new efficiencies, would more 
likely lead to further frictions in the dispersal of training funds, 
unemployment insurance, or sound labor market information to workers in 
need.
     WIA's design--particularly when coupled with significant 
federal funding cuts--pits infrastructure spending against training. 
There are valid concerns about whether the current level of public 
infrastructure expenditures in some states or localities is warranted, 
particularly in those areas where such expenditures seem to have come 
at the expense of worker training. Congress is asking valid questions 
about how much is being spent by state and local systems on 
administration, governance and even basic core services relative to 
what is being invested in training that will bring workers to some 
level of industry certification or vocational credential. However, the 
current structure of WIA formula funding creates no incentive for 
states and localities to begin addressing these issues. Wholesale 
efforts by USDOL and others to just eliminate these systems has 
similarly prevented constructive discussions in Congress about how to 
create stable funding for both ES and One-Stop systems in a manner that 
will encourage better local coordination.
    To maintain and improve the public infrastructure under WIA, 
Congress should:
     Reject efforts to block-grant ES and WIA Title I Programs. 
This has been a recurrent stumbling block that has prevented WIA's 
reauthorization in previous Congresses which we hope the 110th Congress 
will avoid.
     Establish a separate budget line for WIA infrastructure. 
Currently, as states try to meet federal WIA mandates, the public 
infrastructure is funded almost entirely out of limited Title I dollars 
that otherwise could go toward worker training, contributing to the 
perception that WIA infrastructure is taking scarce resources away from 
training. In fact, Congress has created a public infrastructure without 
designating what it feels is the proper level of funding to maintain 
it. Establishing a federal WIA Infrastructure line-item, comparable to 
the existing line item for the Employment Service, would both establish 
a relatively predictable amount of funding available to state and local 
WIA planners for infrastructure activities from year to year, and at 
the same time allow Congress to set some balance between what is being 
spent on WIA training services versus infrastructure operation.

            Creating Designated Capacity for Industry or Sector 
                    Partnerships
    Our above recommendations will improve WIA's formula-funded 
services and infrastructure. However, by considering new investment 
strategies in Industry or Sector Partnerships, Congress could bring WIA 
current with the cutting edge of today's workforce development field.
    Currently there are such Industry or Sector Partnerships in 
operation or being developed across the country. Examples include 
Project Quest in Texas, the Extended Care Career Ladder Initiative in 
the healthcare sector in Massachusetts, the Wisconsin Regional Training 
Partnership, Focus:Hope and the State's Regional Skills Alliances in 
Michigan, Washington State's Industry Skill Panels, and Pennsylvania's 
Industry Partnerships initiative. National evaluations, such as those 
conducted by the Aspen Institute, have documented significant results 
for both participating workers and businesses. Philanthropy, including 
the Charles Stewart Mott Foundation and the new National Fund for 
Workforce Solutions, has been a prime investor in these efforts, 
particularly in low-income communities. Several states have initiated 
their own state-funded sector initiatives, such that the National 
Governors Association recently established a Sector Academy to help 
states expand and replicate these efforts.
     Industry or Sector Partnerships create unique capacity to 
organize industries for business expansion and worker advancement, by 
bringing together various stakeholders connected to a local industry 
and helping them plan for long-term industry survival and growth 
through new shared investments in the people of that region. However, 
this requires creating a specialized, industry-specific capacity that 
can regularly convene multiple firms, unions, colleges, community-based 
organizations, economic developers and representatives of the local 
workforce system, to assess how that industry might be saved or 
expanded through new shared workforce pipelines, investments in new 
technologies or other means of production to better harness the local 
skilled workforce, and develop new pathways for advancement that ensure 
all local workers have a chance to share in an industry's future 
prosperity.
     Sector Partnerships involve different activities requiring 
distinct investments and performance measures. These partnerships focus 
on a single industry because the specific challenges that industry 
faces are likely to vary dramatically from those of other local 
industries--even as every industry in the region, once it determines 
its future direction, will eventually need access to a public workforce 
system that can fund training designed by these partnerships, refer 
workers trained to industry specifications, and provide access to other 
public resources or information that can help further an industry's 
goals. In other words, these partnerships comprise a new set of 
industry-specific activities and capacities that can complement and 
target the services and infrastructure already established under WIA. 
Different from overseeing a labor exchange infrastructure or running a 
training program, sector partnerships engage in activities that are 
currently not funded by WIA formula dollars (nor evaluated by WIA 
performance measures), including:
     Regularly convening industry players who have otherwise 
not collaborated in the past;
     Conducting research on market trends and innovations that 
could help the industry develop and retain a more productive workforce;
     Developing shared training capacity, overseen by all 
stakeholders in the industry, to begin implementing these new 
innovations;
     Developing new career pathways, either within firms or 
across firms in the industry, whereby local workers can advance into 
higher-skilled and higher-paying jobs; and
     Leveraging resources to implement those strategies, 
whether they be targeted services from local WIA systems or dollars 
from other public or private sources.
     Congress has failed to adequately invest in Sector 
Partnerships. WIA, authorized nearly ten years ago, provides no funding 
to directly support the development or maintenance of Sector 
Partnerships, even though they are responsible for catalyzing some of 
our most successful local WIA systems. (WIA's greatest indirect 
contribution is through its 15 percent state set-aside, which some 
states have used toward their sectoral efforts.) As a result the 
implementation of sector initiatives has been uneven across the 
country, largely dependent on those areas where there are additional 
state or philanthropic funds.
    Given the appetite in the field for sector strategies, the U.S. 
Department of Labor, during both the Clinton and Bush Administrations, 
has supported industry-targeted partnership development. However these 
programs have not been formally connected to the public workforce 
system, and have been episodic at best. Concerns have been raised by 
some Members of Congress about these grants (``Hi-Growth'' and WIRED) 
under the current Administration, particularly about how the grants 
were awarded, their lack of evaluation, and their disconnect from the 
congressionally authorized WIA system. There has been some discussion 
of curtailing the funding source for these grants--that portion of H-1B 
visa fees that have been funding USDOL workforce programs since 1998--
and redesignating those fees to another purpose. While we recognize the 
legitimate cause for concern, we would urge Congress to consider the 
continued use of these fees for a congressionally authorized sectoral 
grant program that could dramatically improve a reauthorized WIA.
    To create designated capacity for Sector or Industry partnerships, 
Congress should:
     Establish a separately funded Sector or Industry 
Partnerships competitive grant sub-title under WIA. We urge the 
Committee to work with the Judiciary Committee to legislate that the 
portion of H-1B visa fees currently being used, without oversight, by 
USDOL grant programs instead be used to Sector Partnerships under a new 
WIA subtitle. Under the last Congress, the House WIA bill did include a 
small ``Business Partnerships Grants'' program, proposed by Rep. 
Andrews (D-NJ). The Senate WIA bill also included sectoral partnerships 
as an allowable formula-funded activity. We regarded both proposals as 
recognition of the importance of Sector Partnerships. However, to 
merely designate such partnerships as an allowable activity, without 
any substantial additional funding, would unfortunately create yet 
another demand on already overextended WIA formula resources.
    Principles for a Sector Partnership grant program should include:
     True Multi-Stakeholder Consortia: Federally funded 
partnerships should be comprised of the full consortium of stakeholders 
who can impact a local industry's success, including multiple firms 
(versus a single employer), unions or labor-management partnerships if 
an industry is organized, education and training providers (e.g., 
colleges, community-based organizations) that serve an industry, 
leaders from the public workforce system, and other participants deemed 
necessary by the local partnership.
     A Range of Workers Should Benefit: To ensure that 
partnerships are not focusing only on high-end occupations, there 
should be explicit expectations that funded partnerships focus on 
industry workforce needs at a variety of levels, so that immediate 
interests in developing highly skilled workers for particular 
occupations is complemented by plans to train and advance lower-skilled 
workers in that industry as well. In addition, attention should be paid 
to the types of jobs which served workers are accessing, including pay 
and benefit standards, and the types of jobs that are being created or 
retained through these partnerships.
     States as Co-Investors, with Strategic Flexibility and 
Basic Standards: Given the leadership already shown by some states in 
sectoral efforts, a federally authorized grant program should be a 
structured in a way that allows state flexibility, takes into account 
current state expertise, and rewards (rather than supplants) continued 
state investment. At the same time, a congressionally authorized grant 
program should include basic standards that reflect already established 
best practices from the field, and ensure that a full range of workers 
and industries--including those otherwise excluded from mainstream 
industrial development efforts--are served by these investments.
     Congressional Evaluation, Based on Distinct Performance 
Measures: Such grants should be evaluated for how well they are 
benefiting different types of workers, particular industries, and 
otherwise improving local WIA systems. Therefore, WIA common measures 
would not be sufficient. Rather, longer-term evaluations should assess 
outcomes such as the number of local firms participating in these 
shared systems, the creation of sustainable skilled worker pipelines, 
the actualization of career pathways across firms, the leveraging of 
public and private resources from outside the WIA system, and the 
quality of jobs created / saved through these investments.

            Other Reauthorization Issues
    Although these reauthorization issues--increasing access to 
training, investing in the public infrastructure, and creating capacity 
for Sector or Industry Partnerships--are among the most important for 
TWA and our members, there are several other areas where we feel WIA 
could also be strengthened.

            Improve the WIA Performance System
    Few policy makers or advocates are satisfied with the data 
available for the WIA system, including the current required 
performance measures.
     The data are not comprehensive. Because states are not 
required to report on all participants, the data provide an incomplete 
picture of the system's outcomes. States are required to report only on 
WIA participants who receive intensive services or intensive and 
training services. Because most individuals participating in the system 
receive only core services, the performance system reports on only a 
small subset of individuals and only who receive the most intensive 
services.
     Performance goals are not adjusted for the type of 
participant being served or local economic conditions. The lack of 
adjustment for demographic characteristics (such as barriers to 
employment) or local economic conditions has encouraged ``creaming'' of 
participants, where caseworkers are more likely to enroll participants 
who would have done well without the program. This means that people 
who most need services may not be receiving them.
     No measure assesses overall one-stop performance. A 
significant amount of spending is invested in the one-stop delivery 
infrastructure, yet no performance measures attempt to quantify the 
outcomes or effectiveness of this spending.
    To improve WIA's performance measurement system, Congress should:
     Require the adoption of sensible common measures across 
federally funded programs with a workforce development goal. Common 
measures should track placement, retention and earnings--but not in a 
way that encourages low-cost approaches (such as an efficiency measure) 
or discourages service to low-wage or participants with barriers to 
employment (such as average or median earnings).
     Require that WIA performance measurement take into account 
local market conditions and demographic characteristics of individuals 
being served. Local areas should have the flexibility to adjust 
negotiated performance levels according to changing local economic 
conditions and the types of clients they are serving. During recessions 
and in markets with significant dislocations or those experiencing a 
decrease in quality employment opportunities, for example, states and 
local areas have had difficulty achieving performance levels negotiated 
during WIA's implementation in the late 1990s. In addition, local areas 
and providers serving individuals with significant barriers to 
employment should be able to have their performance incentives adjusted 
or waived to relieve them of facing penalties for the lower outcomes or 
higher costs associated with such populations.
     Require WIA to track its contribution to workers earning a 
skilled credential that lands them a skilled job over time. The system 
should track over time the number of workers who have received, through 
WIA assistance (full or partial), a vocational degree, industry-
certified credential, or other recognized set of skills equivalent to 
two years of training past high school. Setting national goals in this 
area will help assess how well WIA is preparing the U.S. workforce for 
the 21st century global economy.

            Address the Issue of Eligible Providers under WIA
    Rather than enhancing customer choice (one of WIA's goals), WIA has 
unintentionally narrowed the range of training providers available to 
participants in the system. In many areas, some training providers--
which once ranged from large community colleges to unions, and from 
joint labor-management funds for specific industries to small 
community-based organizations serving specific neighborhoods or 
populations--have chosen not to participate.
     Small, community-based training programs that rely on a 
limited range of funding sources may not be able to assume the cash 
flow risks of WIA's vouchers (called Individual Training Accounts or 
ITAs), particularly if the start of a training class is contingent on 
the open enrollment of a certain number of ITA holders. This problem 
did not exist when training contracts guaranteed a certain number of 
paid slots.
     Community-based organizations (CBOs) may not be able to 
afford to run a program if ITA amounts do not cover their actual costs. 
As a result, some effective CBOs have chosen not to provide services 
under WIA. Their withdrawal has limited consumer and challenged local 
WIBs which, in some cities, have lost several of their best service 
providers.
     Larger institutions, such as community colleges--which 
typically receive multiple sources of funding for any one classroom of 
students--have found WIA's performance requirements to be at odds with 
their statutory mission. For example, an open admissions policy can 
result in significant drop-out rate and bring down WIA performance. 
Colleges have also found that WIA performance measures are too costly 
because they must report on the employment and earnings outcomes of all 
of a program's students, even if only a few were WIA-funded. Many 
colleges with strong workforce preparation records have opted out of 
WIA.
    To expand provider participation in WIA, Congress should:
     Allow states to set their own standards for eligible 
training providers. Congress should give states the authority to 
establish their own criteria for determining who is an eligible 
training provider without, however, abandoning the collection of 
outcome data to ensure individual participants in the system are being 
adequately served by individual programs.
     Reject efforts to enact a federal definition of preferred 
providers. Congress should reject efforts to designate a particular 
type of education and training provider as categorically better than 
another. States and localities should have the flexibility to choose 
their training providers based on performance, not federal designation.
Looking forward
    While we suspect that the issue is simply too large to address as 
part of the current reauthorization (at least if we have any hope of 
getting it done in this Congress), it does seem that the current 
workforce investment system suffers from the problem of trying to be 
all things to all people, and often falls short on all measures as a 
result. We believe that in the long-term, Congress should attempt to 
resolve inherent conflicts among WIA's laudable goals--especially 
between universal access to core services and access to training 
services for participants.
    On the one hand, a main principle of the system is universal 
access. As DOL states in the preamble to the WIA final rule:
    ``Universal access. Any individual will have access to the One-Stop 
system and to core employment-related services. Information about job 
vacancies, career options, student financial aid, relevant employment 
trends, and instruction on how to conduct a job search, write a resume, 
or interview with an employer is available to any job seeker in the 
U.S., or anyone who wants to advance his or her career.'' (65 Federal 
Register 49294)
    In addition, WIA regulations specify that:
    ``The system must include at least one comprehensive physical 
center in each local area that must provide the core services specified 
in WIA section 134(d)(2), and must provide access to other programs and 
activities carried out by the One-Stop partners.'' (Sec. 662.100(c))
    The cost of creating and maintaining the infrastructure necessary 
for this type of universal access system is significant and undoubtedly 
deters WIA's ability to fund other services as intensely. Yet, WIA is 
routinely criticized for not providing enough training, or at least not 
providing as much training as JTPA. However, such criticisms seem akin 
to judging public libraries solely by how many people actually check 
out books, rather than considering the much wider range of services 
libraries typically provide to patrons and local communities.
    We must decide what we want WIA to do, and adequately fund it to 
achieve those goals. If WIA is to be more of a training program--
particularly one focused on a hard-to-serve clientele--then its goals, 
responsibilities, and expectations need to be adjusted to reflect that.
    Congress needs better information on WIA to support such decision 
making. It is not currently possible, from publicly available 
documents, to determine how many individuals are receiving WIA 
services, at what level, and at what cost.
    We recommend that Congress commission two studies of WIA:
     A study of current WIA inputs and outputs that provides 
more thorough information about who is being served and through what 
types of services. Such a study should:
     Quantify WIA spending by states and local areas on one-
stop infrastructure and contributions from each required partner for 
such infrastructure, including money spent on facilities, maintenance, 
rent, HVAC, supplies, etc.
     Quantify WIA spending by states and local areas and 
contributions from each required partner on services, including 
training, case management, and supportive services (such as 
transportation and child care).
     Quantify the number of individuals served at all WIA 
levels, including core, intensive, and training services.
     Quantify the spending per participant on services and the 
spending per participant on infrastructure.
     Quantify state and local spending by mechanism (ITA vs. 
contract) for training.
     Quantify how states are spending statewide funds (i.e., on 
what activities and services).
     A study of WIA reporting and performance requirements, 
including recommendations for the most appropriations reporting and 
performance requirements for future collection. Relying on the data 
collected in the first study, as well as data from the current WIA 
performance system and other studies of WIA (including GAO studies), 
such a study should make recommendations about:
     The appropriate data to collect to judge the performance 
of the WIA system overall.
     Whether data should be adjusted for the types of 
populations being served and local economic conditions and, if so, an 
empirically supportable method for doing so.
     The feasibility of evaluating return-on-investment or 
other cost-effectiveness measures for the WIA system.
     The funding necessary for states and local areas to adjust 
their data systems to conform to recommended changes.
Conclusion
    In conclusion, I would return to the point where we started: if we 
have any hope of ensuring that the workforces of 2020 and 2030 will be 
able to compete in the global economy, then we must invest in training 
for today's workers--as they will become tomorrow's workforce. 
Furthermore, we must also recognize that many of the jobs that support 
our economy, jobs where we are facing significant skills shortage both 
in the short-and long-term, are not just at the top of the labor market 
but also in the middle--jobs that often require more than a high school 
degree, but less than a four-year degree.
    In the 1920s, the U.S. promised every American a high school 
education, in part to meet the needs of an industrializing economy. In 
the 1950s and 60s, the U.S. gave millions of adults and young people 
access to college and twice as many again access to vocational 
education through the GI Bill as a way to fuel the post-war economy. In 
both cases, visionary leaders developed bold, new education and 
training policies that addressed new economic realities.
    Today, America's leaders want to build a U.S. workforce that has 
the skills to compete in a global economy, attract and retain jobs, 
meet business demand, and ensure broadly shared prosperity. Given the 
economic and labor market realities that we face today, the Workforce 
Investment Act must be an engine for raising our nation's guaranteed 
education and training floor and ensuring our workforce and businesses 
have the skills to compete.
                                 ______
                                 
    Mr. Tierney. Thank you very much, Doctor.
    You know, I joke with you and I hope you realize I am just 
being funny. One, the stenographer doesn't have to take it all 
down by hand, so she is alive and well.
    You have to be from New England to talk that fast and to 
hear somebody talk that fast, so I am fine with it. I don't 
know how some of my friends from the South might be doing with 
this.
    And the last part is, I do that so much that I was trying a 
case one time and the stenographer came out with a bandage 
about this big on his hand, trying to get me to have sympathy 
and slow down on that.
    Ms. Gragg. That was actually slow for me.
    Mr. Tierney. Ms. Ganzglass?

     STATEMENT OF EVELYN GANZGLASS, DIRECTOR OF WORKFORCE 
   DEVELOPMENT, CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON

    Ms. Ganzglass. Well, I am from New York and I will try to 
slow down. We are supposed to be fast talkers.
    First of all, thank you for inviting me to testify on this 
important topic.
    The United States needs a strong federally-funded workforce 
development system to promote a high-skilled, high-productivity 
economy that provides greater opportunity for all workers.
    The unfortunate reality is that one in four American 
workers is earning poverty-level wages, and most low-wage 
workers experience limited, if any, earnings growth over time.
    Today's WIA system is stretched too thin to adequately 
support either employers' need for a skilled workforce or to 
help low-income jobseekers and workers build the skills 
necessary to succeed.
    Currently, WIA mandates to provide universal access to 
services through a one-stop system and other requirements, 
combined with significant decline in funding since the law was 
enacted, has led many parts of the system to concentrate on the 
provision of low-intensity employment services aimed at rapid 
labor market attachment. These services are provided at the 
expense of skill development, which should be the central focus 
of the system.
    CLASP recommends that the following changes be made in 
Title I Adult and Youth Programs and in Title II Adult 
Education to add greater value to the economy and to expand 
advancement opportunities for low-income populations.
    First we recommend a focus on quality training. We suggest 
setting a floor, such as 50 percent of Title I expenditures, on 
training. Research tells us that, to be effective, workforce 
education and training must be targeted at good jobs available 
in the local economy, and it must be of a sufficient duration 
to result in employer recognized credentials that enable people 
to access jobs that provide family supporting wages and 
benefits.
    We do not believe that primary reliance on vouchers by any 
name is the best way to deliver training services.
    Adult education authorized under Title II should not be 
seen as an end in and of itself but as a beginning of an 
educational pathway. Research has shown that even those who 
initially have very low basic skills can substantially increase 
their earnings if they do not stop with adult education but if 
they go on to post-secondary education and job training.
    We also suggest that Congress encourage stronger 
connections between workforce investment, the Title I programs, 
and adult education systems. In particular, the act should 
encourage the development of programs that blend occupational 
training with basic skills and English language instruction to 
accelerate learning and help students gain valuable skills and 
credentials.
    Second, we urge Congress to place greater priority on 
helping low-income youth and adults and individuals with 
barriers to employment enter and succeed in the labor market. 
This includes reauthorizing the Youth Opportunity Grants aimed 
at high-poverty communities.
    Our research has shown that under WIA there has been a 
substantial decline in the share of adults receiving training 
who are low-income or have barriers to employment. A 
reauthorized WIA system should strengthen priority of service 
requirements, mandate the adjustment of performance standards 
to encourage the provision of services to disadvantaged 
populations and require the system to connect individuals with 
barriers to employment to necessary support services.
    Third, we recommend strengthening WIA's catalytic role in 
the labor market. It is in further needed changes in employment 
and educational practices and policies that workforce 
investment boards can expand economic opportunity for many 
youth and adults than can directly be served in the program. 
Research suggests that sectoral approaches are particularly 
promising.
    Finally, Congress should require consistent national 
reporting on expenditures on core, intensive and training 
services, and should also require the development and 
implementation of a strong research agenda to inform continuous 
improvement of the system.
    In conclusion, we believe that the adoption of these 
recommendations will go a long way toward the creation of a 
more effective workforce development system. However, a system 
cannot be expected to meet the critical workforce challenges 
facing this country without additional funding. We urge 
Congress to invest in making the workforce system a more 
effective policy tool for building a stronger and fairer 
economy.
    Thank you for providing me the opportunity to testify.
    [The statement of Ms. Ganzglass follows:]

Prepared Statement of Evelyn Ganzglass, Director, Workforce Development 
                    Center for Law and Social Policy

    Thank you for inviting me to testify. I am the Director of 
Workforce Development at the Center for Law and Social Policy (CLASP). 
CLASP is a nonprofit organization engaged in research, analysis, 
technical assistance, and advocacy on a range of issues affecting low-
income families. Since 1998, we have closely followed research and data 
relating to implementation of the Workforce Investment Act.
    The United States economy is undergoing a major transformation that 
requires a ``high-road'' path to US global competitiveness, which is 
characterized by high skills, high productivity and greater opportunity 
for all workers. A key component of such a strategy is a strong 
federally funded workforce system. Congress has the opportunity to 
build such a system through the reauthorization of the Workforce 
Investment Act (WIA) and subsequent appropriations decisions. While 
education and training strategies are critical to helping workers 
succeed, they are a complement to and should not be a substitute for 
other labor market policies aimed at ensuring the safety and security 
of America's workers, and a competitive advantage for America's 
businesses.
    CLASP recommends that the following changes be made in Titles I and 
II of WIA to better support employers and help low-income individuals 
and low-wage workers build the skills necessary to succeed and compete:
     WIA should focus on providing high-quality job training 
and education that results in employer-recognized credentials and lead 
to family-supporting wages and benefits.
     The act should place greater priority on helping low-
income youth and adults, and individuals with barriers to employment 
enter and succeed in the labor market.
     A central part of WIA's mission should be helping low-wage 
workers stay employed and advance to better jobs.
     Congress should strengthen WIA's catalytic role in 
increasing regional productivity and competitiveness.
     Congress should require investment in research and 
improved data reporting.
     Congress should increase financial support for this 
severely underfunded system.
Why the U.S. needs a strong workforce development system
    Today's global, technologically oriented economy is creating new 
challenges for employers and for workers and their families.
    There is a widening skills gap between available workers and 
available jobs, a gap that threatens to put the brakes on those sectors 
of the economy that are most critical to economic growth. In many 
regions of the country, especially in the health care and manufacturing 
sectors, employers say they can't find enough skilled workers to be 
able to compete in a global market. This is one reason that, as the 
Wall Street Journal reports, employers are now paying college-educated 
workers 75 percent more than those with only a high school diploma, 
compared to just 40 percent more back in the 1980s.
    This gap between the skills many employers say they need and the 
skills workers have is likely to worsen in coming years. According to 
the Bureau of Labor Statistics, between 2004 and 2014, 24 of the 30 
fastest-growing occupations are predicted to be filled by people with 
postsecondary education or training (either a vocational certificate or 
degree).
    No Child Left Behind and other school reforms, even if effective, 
cannot fulfill employers' current and future workforce needs. According 
to the Aspen Institute, about two-thirds (65 percent) of our 2020 
workforce is already beyond the reach of our elementary and secondary 
schools. In fact, the number of people (50 million) aged 18 to 44 with 
a high school diploma or less is equal to the number of classes that 
will be graduating high school over the next seventeen years.\1\ If we 
want a skilled workforce in the future, we must invest in the skills of 
those already working right now.
    Along with addressing the looming skills gap, job training and 
education are essential for individual advancement. As the following 
figure illustrates, education pays off in the labor market in terms of 
employment and earnings.



    But educational attainment is no longer synonymous with advancement 
or always sufficient to achieve it. The historic link between rising 
productivity and rising wages has been broken. Wages and income have 
stagnated as GDP has grown. In 2005, one in four American workers 
earned poverty-level wages that did not allow them to achieve economic 
self-sufficiency.\2\



    Workers are frequently stuck in these low-wage jobs, and most low-
wage workers experience little or no earnings growth overtime. In fact, 
for young, low-income hourly workers who were tracked during the boom 
years of the 1990s, the median growth in wages was just 0.2 percent a 
year.\3\
WIA today: Too many goals, too little funding
    The Workforce Investment System is struggling to meet the law's 
various requirements. In 1998, when WIA replaced the Job Training 
Partnership Act (JTPA), Congress aimed to bring together a fragmented 
group of workforce development programs to create a one-stop system in 
which employers and job seekers could easily access a wide array of 
employment and training services. WIA mandated universal access to a 
set of core services, with sequential eligibility for intensive and 
training services (many localities initially interpreted this provision 
to mean that training was a last resort for individuals who had not 
found work through core or intensive services). Federal workforce 
development funds were no longer targeted exclusively toward serving 
low-income adults (as they were under JTPA). WIA also emphasized more 
private sector involvement in the public workforce system and a dual 
focus on employer and jobseeker needs. The law mandated a strong policy 
role for business-led state and local Workforce Investment Boards 
(WIBs) and stronger connections between workforce and economic 
development.
    These mandates were not accompanied by a significant increase in 
funding. In fact, U.S. Department of Labor expenditures on training and 
employment assistance have suffered cuts that translate into a drop in 
expenditures per worker from $63 in 1986 to $35 in 2006, without an 
adjustment for inflation.\4\ The funding declines, increased mandates 
on the system to provide universal services, and tiered service 
delivery model have all led the system to a focus on lower-intensity 
core services--at the expense of skill development and systemic labor 
market change, which should be at the center of the nation's workforce 
development system.
    The number of adults exiting the program who received training 
declined 26 percent* between 1998 (the last full year of operation 
under JTPA) and 2004.\5\ As the following table illustrates, there has 
also been a decline in the share of adults receiving training, who are 
low income or have barriers to employment.\6\ In 1998, 96 percent of 
trainees were low income.\7\ This fell to 82.4 percent in 2000, the 
first full year of WIA data was available, and has continued to decline 
each year, falling to 65.6 percent by 2004.\8\ Several factors may be 
contributing to the declining share of low-income exiters or exiters 
with employment barriers: program performance measures; sequential 
service requirements; and the lack of any strong, explicitly defined 
targeting requirement in current law.\9\ According to the Government 
Accountability Office (GAO), performance measures are driving local 
staff to be reluctant to provide WIA-funded services to job seekers who 
may be less likely to find employment or experience earnings increases 
when placed in a job.\10\



    *The Government Accountability Office (GAO) and the Department of 
Labor (DOL) Office of Inspector General have both raised serious 
concerns about the completeness and accuracy of the WIASRD data, upon 
which this figure is based. Despite our concerns about the WIASRD data, 
it is the only available data on which to make comparisons between JTPA 
and WIA, and as such we have decided to include it. A GAO review of 
training in PY03 estimated that 184,767 individuals were trained during 
that year. According to WIASRD data, there were 102,415 exiters who 
received training in 2003. Although the GAO estimate includes 
participants who had not exited the program (unlike WIASRD data which 
just captures exiters) and may include duplications since it is based 
on reports from local boards of the number of individuals enrolled in 
each category of training as opposed to the total number of people 
receiving training, it is still substantially higher than the number of 
exiters as reported in the WIASRD.
---------------------------------------------------------------------------
    The act also sought to address concerns about the weak performance 
of many training programs through the use of market mechanisms to 
ensure customer choice. Under WIA, training providers are required to 
meet performance-based eligibility criteria; and when providing access 
to training, local boards generally are required to provide eligible 
individuals with individual training accounts (ITAs) for use with 
eligible providers. Individuals are intended to select providers using 
performance and cost information generated through the new provider 
certification system. Implementation of these requirements has 
increased administrative complexity and diverted attention and 
resources from more effectively addressing critical skill development 
needs.\11\
    The law's focus on training primarily through ITAs unnecessarily 
discourages the use of contract training, which in certain cases may be 
better suited to the needs of individuals with barriers to employment. 
A GAO report found that although the vast majority of local boards use 
ITAs, most have faced challenges in managing their use. Fifty-two 
percent of local boards responding to the GAO survey encountered 
challenges linking ITA systems to local economic and business 
strategies.\12\ Nearly two-thirds of the local boards reported that the 
lack of performance data on providers was a challenge, since it 
hindered their ability to determine which providers served participants 
most effectively.\13\ Furthermore, anecdotal information suggests that 
experience in implementing these provisions has shown that training 
providers are reluctant to comply with the requirement to provide data 
on performance because not enough WIA funding is flowing to training 
provider to warrant this change in data systems.
Recommendations for Strengthening the WIA System
    We believe that with some redirection, the WIA system can become a 
more effective policy tool for building a stronger and fairer economy. 
To this end, we recommend that Congress refocus WIA's service delivery 
and policy coordination functions in the following ways:
    WIA should focus on providing high-quality job training and 
education that result in employer-recognized credentials and lead to 
family-supporting wages and benefits.
    In Title I, this means shifting the focus of local WIA services 
from placing unskilled workers in low wage jobs to providing training 
that qualifies low income people for jobs with family supporting wages 
and benefits. This will require an increase in the amount of available 
resources that are spent on training as well as the design of training 
programs which lead to employment with family supporting wages.
    Expenditures. Although administrative data on the percentage of 
adult and dislocated worker funds being spent on training is lacking, a 
GAO study found that local workforce boards nationwide used an 
estimated 40 percent of available WIA funds to serve adults and 
dislocated workers during PY 2003 on training for WIA participants.\14\ 
Anecdotal information suggests that local investment in training varies 
widely, with some localities spending less than 10 percent of WIA funds 
on training. We recommend setting a floor for how much of WIA funding 
must be devoted to training--such as 50 percent--with a reasonable 
phase-in period for reaching that floor. Florida implemented a policy 
through statute that requires that at least 50 percent of Title I funds 
be allocated to ITAs.\15\ As a result, in 2005, 64 percent of Florida's 
expenditures went to ITAs.\16\
    Training design. Research suggests that training can help people 
advance beyond low-paying jobs, but that the length and design of 
training provided matter to the results that are achieved. After an 
extensive review of strategies to help low-income workers advance, 
Poppe, Strawn and
    Martinson conclude that ``degrees, certificates and credentials 
recognized by employers are key and for many will determine how far 
they can progress in their career pathway.'' \17\ A study of adult 
students who enrolled in Washington State Community and Technical 
Colleges found evidence that attending college for at least one year 
and earning a credential provides a substantial boost in earnings for 
adults with a high school diploma or less who enter higher education 
through a community college.\18\
    Emerging research on sectoral training programs, whose content is 
tailored to industry requirements, shows that two years after training, 
participants earned higher incomes, worked more consistently and had 
higher quality jobs. However, differences in wages and wage gains 
achieved corresponded to the length and intensity of provided and the 
quality of jobs in the targeted sectors.\19\
    Shorter term training has led to mixed results for welfare 
recipients and low-income individuals. As the researcher LaLonde, who 
reviewed experimental and quasi experimental evaluations of federal job 
training programs including CETA and JTPA, points out, ``Given that 
existing public sector sponsored employment and training programs 
usually are less intensive and expensive than an additional year of 
schooling, it would be surprising if they generated larger earnings 
increases. Instead, we should expect that most JTPA programs, which 
usually cost several hundred to a few thousand dollars per participant, 
would generate annual earnings gains of perhaps several hundred 
dollars.'' \20\
    The National JTPA Study that was conducted from 1986 to 1993 and 
augmented with follow-up data showed positive impacts on earnings for 
adults, although they were typically modest. Adult women experienced a 
per enrollee impact over the entire seven year follow-up of $3,206 (or 
5 percent). The study found more positive impacts were concentrated 
among women in the OJT and Other category.\21\ The most durable 
earnings impacts associated with JTPA and welfare-towork programs 
emphasized a combination of training and work-based learning, including 
apprenticeship and customized training.\22\
    In Title II, a focus on quality education means updating the Adult 
Education and Family Literacy Act to increase hours of instruction, 
increase student persistence in adult education, increase transitions 
from adult education to postsecondary education and training programs, 
and help low-income adults attain employer-recognized credentials that 
can help them earn family-supporting wages.
    We also suggest that Congress encourage stronger connections 
between the workforce investment and adult education systems, in order 
to better meet the needs of limited English proficient job seekers and 
those with basic skills deficiencies. In particular, the act should 
encourage the development of programs that blend occupational training 
with basic skills and English language instruction, to accelerate 
learning and help students gain the skills and credentials required for 
higher paying jobs. Recent research on the Integrated Basic Education 
and Skills Training (I-BEST) program in Washington State underscores 
the potential of this approach. I-BEST students earned five times more 
college credits than traditional ESL students and were 15 times more 
likely to complete job training.\23\
    Even those who initially have low basic skills can substantially 
increase their earnings if they do not stop with adult education but go 
on to postsecondary education and job training.\24\ For example, 
welfare recipients who attended California community colleges and 
earned associate degrees found that by the second year out of school, 
their median annual earnings were four times higher (403 percent) than 
before they entered training. Earnings increases were highest for those 
in occupational programs.\25\ Two independent evaluations of the San 
Antonio, Texas job training program Project Quest, which provides long-
term training in hard-to-fill occupations for those who otherwise would 
not have the opportunity, found wage gains of between $5,000 and $7,500 
a year for program participants.\26\
    A study of adult students who enrolled in Washington State 
Community and Technical Colleges with a high school diploma or less 
found that after five years there was a significant earnings advantage 
for students who took at least one year's worth of college-credit 
courses and earned a credential.\27\ Compared with students who started 
in ESL and earned fewer than ten college credits, students who started 
in ESL and completed one year of college-credit courses and earned a 
credential earned $7,000 more a year. Those who started in ABE or GED 
had an $8,500 earnings advantage.\28\
    WIA should place greater priority on helping low-income youth and 
adults and individuals with barriers to employment enter and succeed in 
the labor market.
    In many high-poverty communities, the broad economic trends I 
discussed earlier contribute to high levels of labor force detachment, 
and incarceration, low levels of educational attainment, and chronic 
unemployment in substantial segments of the working-age population.
    A reauthorized WIA should strengthen priority of service 
requirements, mandate the adjustment of performance standards to 
encourage the provision of services to populations with barriers to 
employment, and require the system to connect individuals with barriers 
to employment to necessary support services such as mental health and 
substance abuse services. Transitional jobs programs are a useful model 
for helping populations with barriers to employment enter and succeed 
in the labor market by providing supportive services in combination 
with time-limited subsidized employment.\29\
    The act should make clear that training can be provided through 
contract training, as well as through ITAs. The current requirement 
that training be provided through ITAs (with certain exceptions for 
contract training, including on-the-job and customized training) 
unnecessarily discourages the use of contract training, which can be a 
vehicle for developing specialized training programs for individuals 
with barriers to employment.
    In addition, youth funding should be directed at building an 
effective transition support system for out-of-school and extremely 
vulnerable youth, such as those who are homeless and transitioning from 
the foster care or the justice system. In particular, Congress should 
reauthorize Youth Opportunity Grants directed at communities of high 
poverty or low graduation rates, to allow these communities to build 
the capacity to address the dropout prevention and recovery problem at 
scale. The WIA youth title already requires infusion of youth 
development activities, provision of case management, and follow-up to 
ensure labor market success. With the ability to use funds flexibly in 
partnership with other systems, the youth title could serve as an 
effective tool for leveraging other resources to create a more 
comprehensive approach to connecting the most challenged youth to the 
education, training, and support needed for successful labor market 
transition.
    A central part of WIA's mission should be helping low-wage workers 
stay employed and advance to better jobs.
    The prevalence of low-wage work means that our nation's job 
training system must not only focus on making job placements but also 
make retention and advancement a central part of its mission. This will 
require the system to work on both the supply and demand sides of the 
labor market. On the supply side, the workforce system should focus on 
connecting workers and job seekers to good jobs, helping incumbent 
workers build skills to advance to better jobs, and facilitating the 
receipt of work supports for low-wage workers that promote attachment 
to the labor market. On the demand side, the workforce system should 
work with employers to improve job quality and to develop workplace 
practices that support retention and advancement.
    The workforce system should collaborate with employers to provide 
skill upgrading opportunities for low-wage workers.\30\ Using public 
dollars to upgrade the skills of low-wage workers is a necessary 
complement to private sector investment in training, which tends to be 
focused on higher-skilled, higher-wage workers. Researchers studying 
employer-provided training found that ``workers with some college were 
twice as likely as workers with a high school degree or less to receive 
employer sponsored training in 1995, and this gap grew somewhat by 2001 
as the percentage of workers with high school education or less who 
received training declined.'' \31\
    Research also suggests that helping low-income adults obtain 
higher-quality jobs than they would find on their own can lead to 
better job retention and larger long-term wage growth.\32\ Thus it is 
critical that the nation's workforce investment system identify high-
wage and high-quality jobs and connect job seekers and low-wage 
incumbent workers to these jobs. The workforce system should be 
encouraged to support employers who provide good jobs, and to work with 
others to improve job quality and to develop workplace practices that 
support retention and advancement. Several WIBs have designed creative 
ways of targeting good employers. For example, WIBs can require that 
businesses who benefit from WIA training investments provide employment 
opportunities that meet certain state or locally defined job quality 
standards. Such standards might include certain wage levels, 
availability of benefits (such as healthcare, paid leave, or retirement 
plans), reliable hours, workplace training, opportunities for 
advancement, and release time for training.
    The system should also work with participants after job placement 
to promote retention--by providing ongoing career counseling, helping 
connect low-wage workers to work supports, and helping workers address 
barriers that may affect their ability to keep a job. Frequent turnover 
results in lower earnings, due to more frequent periods of 
unemployment, and in a lack of work experience and job tenure, which 
are associated with increased earnings over time.\33\ Some workforce 
agencies have already recognized the importance of providing retention 
services to workers and employers. For example, the SF Works program 
provides one year of retention services (which include online skills 
upgrading, mentoring, support, brown bag seminars, and professional 
development planning) to individuals who are placed in jobs.\34\
Congress should strengthen WIA's catalytic role in the labor market
    Current coordination efforts around one-stops have eased access to 
a variety of community services, but they have not gone far enough to 
address the greater labor market challenges I just discussed. WIA 
discretionary funding should be used to provide incentives for state 
and local WIBs to be more proactive in carrying out their strategic 
policy coordination role, to foster better integration of services 
across funding streams, and to support economic development and effect 
changes in educational and employment policies and practices.
    WIA can foster changes in the education system that can expand 
learning opportunities for many more students than can be directly 
trained through limited WIA funds. The system can help broker 
articulation agreements to facilitate transitions from secondary 
education and adult education and job training programs to 
postsecondary education; promote greater flexibility in scheduling and 
program design, so that working adults can more easily participate in 
educational programs; and promote sectoral strategies and other public-
private partnerships to aid in the economic transformation and to 
connect low-income populations to the engines of regional economic 
growth.
    The system should work with employers, preferably on a sectoral 
basis, to improve workplace practices, including creating internal 
career ladders, offering competitive wages and benefits, providing OJT 
and informal apprenticeships, linking training to advancement, cross-
training employees, implementing a mentoring program, creating employee 
stock option plans, developing supervisory training, offering elder 
care and/or child care, providing assistance with transportation, 
offering an Employee Assistance Plan (EAP), providing flextime, and 
providing flexiplace.\35\ These types of workplace practices help 
workers and benefit businesses by increasing retention, decreased 
absenteeism, and increasing productivity.
Congress should require investment in research and improved data 
        reporting
    Congress and the WIA system are hampered by a lack of sufficient 
information to support system improvement. Congress should require 
consistent national reporting on expenditures on core, intensive, and 
training services. Congress should require the development and 
implementation of a strong research agenda to support the goals of the 
reauthorized system and the release of completed research studies by 
the U.S. Department of Labor.
    Congress should also consider requiring the creation of a national 
task force aimed at furthering system integration and aligning goals, 
performance measures, and accountability structures across federally 
funded workforce programs. Greater alignment among programs will make 
it easier to blend resources and provide relevant and holistic 
responses to the needs of employers, individuals and families in 
today's highly competitive economy. The 110th Congress has a unique 
opportunity to make progress in this regard, since in addition to WIA, 
it is considering changes to the Higher Education Act, No Child Left 
Behind, the Trade Adjustment Assistance Reform Act, unemployment 
insurance reform, and other related legislation.
Conclusion
    The workforce system is critical to helping jobseekers and workers 
succeed in today's global economy and to ensure America's 
competitiveness. We believe that the adoption of these recommendations 
will go a long way toward the creation of a more effective workforce 
development system. However, the system cannot be expected to meet the 
critical workforce challenges facing this country without additional 
funding. We urge you to invest in making sure the system can meet these 
unprecedented challenges.
    Thank you for providing me the opportunity to testify.

                                ENDNOTES

    \1\ Based on calculations by Julie Strawn using Western Interstate 
Commission for Higher Education projections of high school graduates, 
available at: http://www.wiche.edu/policy/Knocking/1988-2018/ and March 
2007 Current Population Survey (CPS) figures for the number of prime 
age adults (18-44) with a high school diploma or less.
    \2\ Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto, The 
State of Working America 2006-2007, Economic Policy Institute, 2007. 3 
Newman, Katherine S. Chutes and Ladders: Navigating the Low-Wage Labor 
Market. Russell Sage Foundation Books, 2006. 4 Joan Fitzgerald and 
Andrew Sum, ``What Can Worker Training Do?'' in Ending Poverty in 
America: A Special Report for the Council on Foundations Annual 
Conference, Demos and The American Prospect, 2007.
    \5\ Government Accountability Office, Substantial Funds Are Used 
for Training, but Little is Known Nationally about Training Outcomes, 
2005 and Abbey Frank and Elisa Minoff, Declining Share of Adults 
Receiving Training under WIA are Low-Income or Disadvantaged, Center 
for Law and Social Policy, 2005, http://www.clasp.org/publications/
decline--in--wia--training.pdf.
    \6\ Abbey Frank and Elisa Minoff, Declining Share of Adults 
Receiving Training under WIA are Low-Income or Disadvantaged, Center 
for Law and Social Policy, 2005, http://www.clasp.org/publications/
decline--in--wia--training.pdf.
    \7\ Data on JTPA participants are drawn from the SPIR database. 
This data can be found in the Social Policy Research Associates WIASRD 
Databook, PY 2002.
    \8\ The definitions of ``terminees'' and ``exiters'' are comparable 
under the two programs. Frank and Minoff, Declining Share of Adults; 
Social Policy Research Associates, 2004 WIASRD Data Book, February 2, 
2006.
    \9\ Abbey Frank and Elisa Minoff, Declining Share of Adults 
Receiving Training under WIA are Low-Income or Disadvantaged, Center 
for Law and Social Policy, 2005, http://www.clasp.org/publications/
decline--in--wia--training.pdf.
    \10\ Government Accountability Office. (GAO-03-884T), Workforce 
Investment Act: Exemplary One-Stops Devised Strategies to Strengthen 
Services, but Challenges Remain for Reauthorization, June 18, 2003.
    \11\ In 2005, 203 requests for waiver of major reporting 
requirements or funding requirements were submitted by State WIA 
Directors to ETA.
    \12\ Government Accountability Office, Substantial Funds Are Used 
for Training, but Little is Known Nationally about Training Outcomes, 
2005.
    \13\ Ibid.
    \14\ The GAO study defines available funds as the combined amount 
of program year 2003 funds and funds carried over from program year 
2002. Government Accountability Office, Substantial Funds Are Used for 
Training, but Little is Known Nationally about Training Outcomes, 2005.
    \15\ The 2000 Florida Statues Chapter 445 Workforce Innovation 
445.003 (3)(a)(1).
    \16\ Workforce Investment Act (WIA) Annual Report for 2005-2006 
Program Year, Workforce Florida, Inc., 2006.
    \17\ Nan Poppe, Julie Strawn, and Karin Martinson, ``Whose Job is 
It? Creating Opportunities for Advancement,'' in Workforce 
Intermediaries in the 21st Century, ed. Robert P. Giloth, 2003.
    \18\ Washington State Board for Community and Technical Colleges. 
Building Pathways to Success for Low-Skill Adult Students: Lessons for 
Community College Policy and Practice from a Longitudinal Student 
Tracking Study. April 2005. Research Report No. 06-02.
    \19\ Lily Zandniapour and Maureen Conway, Gaining Ground: The Labor 
Market Progress of Participants of Sectoral Employment Development 
Programs, The Aspen Institute, and Sectoral Strategies for Low-Income 
Workers: Lessons from the Field, forthcoming from the Aspen Institute.
    \20\ Chris King, ``The Effectiveness of Publicly Financed Training 
in the United States,'' in Job Training Policy in the United States, 
ed. Christopher J. O'Leary, Robert A. Straits and Stephen A. Wadner, 
Upjohn Institute, 2004. p. 67.
    \21\ Chris King, ``The Effectiveness of Publicly Financed Training 
in the United States,'' in Job Training Policy in the United States, 
ed. Christopher J. O'Leary, Robert A. Straits and Stephen A. Wadner, 
Upjohn Institute, 2004.
    \22\ Ibid.
    \23\ Washington State Board for Community and Technical Colleges, 
I-BEST: A Program Integrating Adult Basic Education and Workforce 
Training, December 2005, http://www.sbctc.ctc.edu/docs/data/research--
reports/resh--052--i-best.pdf. The state has now refined the I-BEST 
model and taken it statewide.
    \24\ G. Hamilton, Moving People from Welfare to Work: Lessons from 
the National Evaluation of Welfare-to-Work Strategies, U.S. Department 
of Health and Human Services, 2002, http://aspe.hhs.gov/hsp/newws/
synthesis02/; Johannes Bos, Susan Scrivener, Jason Snipes, and Gayle 
Hamilton, Improving Basic Skills: The Effects of Adult Education in 
Welfare-to-Work Programs, U.S. Department of Health and Human Services, 
Administration for Children and Families and Office of the Assistant 
Secretary for Planning and Evaluation, and U.S. Department of 
Education, 2001.
    \25\ Anita Mathur with Judy Reichle, Julie Strawn, and Chuck 
Wiseley, From Jobs to Careers: How California Community College 
Credentials Pay Off for Welfare Participants, Center for Law and Social 
Policy, May 2004.
    \26\ Paul Osterman, ``Employment and Training Policies: New 
Directions for Low-Skilled Adults,'' in Reshaping the American 
Workforce in a Changing Economy, ed. Harry Holzer and Demetra Smith 
Nightingale, Urban Institute, 2007.
    \27\ The study followed two cohorts of students educational 
attainment and earnings for five years. One cohort consisted of 
students age 25 or older with a high school education or less and one 
cohort was comprised of 18-24 year olds who lacked a high school 
diploma or GED. There were 34,956 students between the two cohorts.
    \28\ Washington State Board for Community and Technical Colleges. 
Building Pathways to Success for Low-Skill Adult Students: Lessons for 
Community College Policy and Practice from a Longitudinal Student 
Tracking Study. April 2005. Research Report No. 06-02.
    \29\ Allegra Baider and Abbey Frank, Transitional Jobs: Helping 
TANF Recipients with Barriers to Employment Succeed in the Labor 
Market, Center for Law and Social Policy, May 2006, http://
www.clasp.org/publications/transitional--jobs--06.pdf.
    \30\ Duke et al., Wising Up.
    \31\ Kelly Mikelson and Demetra Smith Nightingale, Estimating 
Public and Private Expenditures on Occupational Training in the United 
States, prepared for the U.S. Department of Labor, December 2004.
    \32\ Nan Poppe, Julie Strawn, and Karin Martinson, ``Whose Job is 
It? Creating Opportunities for Advancement,'' in Workforce 
Intermediaries in the 21st Century, ed. Robert P. Giloth, 2003.
    \33\ Harry Holzer and Karin Martinson, Can We Improve Job Retention 
and Advancement among Low-Income Working Parents? Urban Institute, 
2005.
    \34\ Center for Workforce Preparation, Completing the Workforce 
Puzzle: How Chambers Can Help Businesses Find, Keep and Advance 
Employees, U.S. Chamber of Commerce, 2002.
    \35\ Jobs for the Future, Hiring, Retaining, and Advancing Front-
Line Workers: A Guide to Successful Human Resource Practices, 2003.
                                 ______
                                 
    Mr. Tierney. Thank you very much.
    Dr. Baxter?
    Ms. Ganzglass. With 21 seconds to go.
    Mr. Tierney. You did well on that.
    Dr. Baxter, please.

 STATEMENT OF SANDRA BAXTER, DIRECTOR, NATIONAL INSTITUTE FOR 
                            LITERACY

    Ms. Baxter. I would like to thank the subcommittee for 
inviting us to testify today. We are indeed privileged to be 
here.
    The National Institute for Literacy was created by a 
bipartisan act of Congress in 1991 and reauthorized under the 
Workforce Investment Act of 1998. Under provisions of the act, 
the Institute is required to provide national leadership for 
literacy, to serve as a national resource for adult education 
and literacy programs, and to promote closer coordination among 
federal agencies on issues concerning literacy.
    In keeping with our authorizing legislation, the Institute 
views literacy broadly. We don't see it just as the ability to 
read. Rather, literacy represents the sum of many skills: 
reading, writing, speaking in English, computing and solving 
problems at levels of proficiency to function on your job, in 
your family and in your community.
    In just 1 week, our nation will pause to mark the Fourth of 
July and to celebrate our independence. But for so many adults 
living in the United States and the children who are dependent 
upon them, there will be less to celebrate because they are not 
full partners in the American dream.
    Many adults lack the basic literacy skills needed to obtain 
a good enough job to take care of themselves and their families 
as well as contribute to our national economy. They have not 
acquired the basic skills they need to understand how to 
maintain good health or to follow a doctor's instructions to 
get well when they are sick. And many of them, too many of 
them, lack the skills to read a book to their children at 
bedtime or help their children with homework.
    The low levels of literacy attainment among a large portion 
of the nation's adult population are particularly threatening 
to America's future because the majority of workers who will be 
in the workforce 20 years from now are the workers who are in 
the workforce now.
    Here are just a few facts that I would like to share with 
you from the latest national assessment of adult literacy.
    Overall, 93 million adults have limited reading, writing 
and math skills. Nearly one-half of the nation's adults, 43 
percent, have prose literacy skills at the below-basic or basic 
level. And 34 percent of the adults tested have below-basic or 
basic skills in document literacy skills. And slightly more 
than half, 55 percent of the nation's adults, had quantitative 
skills at the below-basic or basic level.
    This is cause for concern. If the United States is to 
maintain a competitive place in the global economy, we must 
address the literacy needs of the adults who are either already 
in the workforce or who should be in the workforce but lack the 
skills to acquire work.
    The Educational Testing Service recently published a report 
called ``America's Perfect Storm: Three Forces Changing Our 
Nation's Future.'' It said, ``There has been a profound 
restructuring of the U.S. workplace driven by technological 
innovation and globalization. Jobs associated with college-
level education are expected to generate about 46 percent of 
all job growth in the next 10 years.''
    And according to the Bureau of Labor Statistics' 
Occupational Outlook Handbook, the number of jobs requiring an 
associate's degree or post-secondary vocational credential also 
will grow by a little more than 24 percent in the next decade.
    There is a lot of work for us to do. Fortunately, the adult 
education system is prepared and is increasingly well-
positioned to help the nation meet this challenge.
    Through the U.S. Departments of Education, Labor, Health 
and Human Services and the National Institute for Literacy, the 
federal government is playing a significant role in supporting 
adults to achieve the literacy skills they need to find and 
hold jobs.
    I would like to take just a few minutes to talk with you 
about our accomplishments and----
    Mr. Tierney. Those are dangerous words, Dr. Baxter. 
Actually, you have about a half-minute left, so if you could 
wrap it up in a minute or so, we would appreciate it.
    Ms. Baxter. Okay, I can do that.
    One of the most important things that we have done over the 
past decade has been to develop new resources on teaching 
adults to read. We conducted a systematic review of the 
research on how to teach adults to read, and, using that, we 
have created a teacher's manual and an online diagnostic tool 
for adult educators that they can use to diagnose adults who 
come to their programs to determine what skills they really 
need.
    I would like to point out that what is important about this 
effort is that it really has been a wonderful example of 
coordination and cooperation between government agencies. Those 
tools are now being used by the United States Department of 
Education as the basis for a program that they are calling 
STAR, which is a multi-state effort to improve reading 
achievement.
    So the investment made through the institute is being 
leveraged by a much larger department, better positioned for 
dissemination and technical assistance.
    In conclusion, I would just like to say that literacy 
skills really are the building blocks for a successful life in 
this nation. And when we think about the numbers of adults who 
really lack those basic skills, this is an issue that we really 
must pay much more attention to and really have a strong 
emphasis on in the Workforce Investment Act.
    My prepared testimony has more data that you can use, and I 
am happy to answer questions.
    [The statement of Ms. Baxter follows:]

 Prepared Statement of Sandra Baxter, Director, National Institute for 
                                Literacy

    Good afternoon, and thank you for inviting me to present testimony 
at this hearing today. My name is Dr. Sandra L. Baxter, and I am the 
Director of the National Institute for Literacy (the Institute). The 
Institute serves as an important catalyst in the Federal government for 
improving opportunities for adults, youth, and children so that they 
may thrive in a progressively literate world.
    The Institute was created by a bipartisan act of Congress in 1991 
and reauthorized in the Workforce Investment Act (WIA) of 1998. It is 
tasked through WIA to provide national leadership for literacy, serve 
as a national resource for adult education and literacy programs, and 
promote closer coordination among federal agencies around issues of 
literacy. In keeping with its authorizing statute's definition of 
literacy, the Institute views literacy as more than just an 
individual's ability to read. Rather, literacy represents the sum of 
many skills--reading, writing, speaking in English, computing, and 
solving problems at levels of proficiency necessary to function on the 
job, in the family and in society.
    My remarks today will focus on the state of adult literacy, provide 
an overview of adult literacy services, describe some of the challenges 
facing the field, and review the critical role the Institute has played 
and can play in meeting those challenges.
    In just one week, our nation will pause to celebrate the 4th of 
July, a day that marks our independence to govern ourselves, protect 
ourselves, and establish commerce. It will be a day of celebration for 
the gifts that freedom has brought all of us.
    But for far too many adults living in the United States and the 
children who are dependent upon them there will be less to celebrate 
because they are not full partners in the American dream. Many adults 
lack the skills to obtain a good job to support themselves and their 
families as well as contribute to the nation's economy. They have not 
acquired the basic skills they need to understand how to maintain good 
health or follow their doctor's orders to get better when they are 
sick. And many of them lack the skill to read a book to their children 
at bedtime or help their children with homework.
A Profile of Adults' Literacy Skills
    We know about these adults' challenges from results of the 2003 
National Assessment of Adult Literacy (NAAL), a survey conducted by the 
Institute of Education Sciences' National Center for Education 
Statistics. The NAAL measured the ability of the nation's adults ages 
16and older to find and use basic information and services they need to 
be healthy and to perform everyday literacy tasks. The NAAL uses a 
definition of literacy similar to the one found in WIA, describing 
literacy as ``using printed and written information to function in 
society, to achieve one's goals, and to develop one's knowledge and 
potential.'' The NAAL is the most current and comprehensive data 
available to the field.
     Between 1992 and 2003, there was an increase in skill 
level for some racial groups. Most notably, average prose scores 
increased for Blacks and Asians/Pacific Islanders. Average document and 
quantitative literacy scores also increased for Black adults.
     Women's document and quantitative literacy increased 
between 1992 and 2003. Men still scored higher than women in 
quantitative literacy, but the increase in women's scores narrowed the 
gap.
     Nearly half the nation's adults--43 percent--had prose 
literacy skills at the Below Basic or Basic levels. Those performing at 
the Below Basic skill level were able to perform only the simplest and 
most straightforward literacy tasks, such as searching a short text to 
find out what a patient is allowed to drink before a medical test. 
Those at the Basic skill level were able to perform an everyday task, 
such as finding an explanation of how people are selected for a jury 
pool in a pamphlet developed for prospective jurors.
     Slightly more than half--55 percent--of the nation's 
adults had Below Basic or Basic quantitative literacy skills. Those 
adults performing at the Below Basic skill level were able to perform 
tasks such as adding the amounts on a bank deposit slip. Those with 
Basic level quantitative skills were able to perform tasks like 
comparing the ticket prices for two events.
     Between 1992 and 2003, there was a decrease in the 
percentage of the total population scoring Below Basic in quantitative 
literacy.
     While two-thirds of the nation's adults demonstrated 
document literacy skills at or above the Intermediate level, just 13 
percent of those adults had Proficient--the highest skill level--
document literacy skills. But 34 percent of the adults tested had Below 
Basic or Basic document literacy skills.
     In the adult prison population, 56 percent of inmates had 
prose literacy skills at the Below Basic or Basic level, 50 percent had 
document literacy skills at the Below Basic or Basic level, and 78 
percent had quantitative literacy skills at the Basic or Below Basic 
level.
     Adults who spoke only English before starting school had 
higher average health literacy than adults who spoke other languages 
alone or other languages and English. In addition, some 49 percent of 
adults who had never attended or did not complete high school had Below 
Basic health literacy compared with 15 percent of adults who ended 
their education with a high school diploma and 3 percent with a 
bachelor's degree.
    Low literacy levels among a large portion of the nation's adult 
population are particularly threatening to America's future because the 
majority of workers who will be in the workforce in 20 years are the 
same people who are in it now, according to Tough Choices or Tough 
Times: The Report of the New Commission on the Skills of the American 
Workforce. Changes in the educational attainment of the U.S. workforce 
compared with other nations intensify the threat. The New Commission on 
the Skills of the American Workforce reports that, ``Whereas, for most 
of the 20th century the United States could take pride in having the 
best educated workforce in the world, that is no longer true. Over the 
past 30 years, one country after another has surpassed us in the 
proportion of their entering workforce with the equivalent of a high 
school diploma and many more are on the verge of doing so. Thirty years 
ago the United States could lay claim to having 30 percent of the 
world's population of college graduates. Today that proportion has 
fallen to 14 percent and is continuing to fall.''
    Furthermore, too many youth in the nation's schools drop out before 
they have mastered the fundamental skills, especially reading, they 
need to meet the responsibilities of adult life. ``The dropout rate for 
African-American, Hispanic, and Native American students approaches 50 
percent...,'' said U.S. Secretary of Education Margaret Spellings in 
her May 9 speech to the National Summit on America's Silent Epidemic in 
Washington, D.C. She also noted that every year nearly a million 
students fail to graduate from high school.
    The low literacy skills and low educational attainment of today's 
workforce hardly amount to adequate preparation for the challenges of a 
dramatically changing workplace. The Educational Testing Service (ETS), 
in America's Perfect Storm: Three Forces Changing Our Nation's Future, 
observes there has been ``...a profound restructuring of the U.S. 
workplace driven by technological innovation and globalization.'' Jobs 
associated with college level education are expected to generate about 
46 percent of all job growth between 2004 and 2014, according to 
America's Perfect Storm. The number of jobs requiring either an 
associate's degree or a postsecondary vocational credential also will 
grow by a little more than 24 percent during this decade, according to 
the Bureau of Labor Statistic's Occupational Outlook Handbook, 2002-
2003.
    If the United States is to maintain a competitive place in the 
global economy, it must address the literacy needs of adults who are 
either already in the workforce or who should be, but do not have the 
basic literacy skills. Adults must have the literacy skills to succeed 
in either postsecondary education or training in preparation for an 
adequately-paid job or struggle to raise their families on the meager 
wages of a high school dropout.
    Adult education is an important means of directly responding to 
this terrible need for a more literate, better educated workforce. In 
her action plan for higher education, Secretary Spellings emphasized 
addressing adult literacy as ``a barrier to national competitiveness 
and individual opportunity.'' Fortunately, the adult education system 
is increasingly positioned to serve as a full partner in a national 
effort to prepare adults for postsecondary education and job training.
The Adult Education System: A Full Partner in Education and Training
    In fact, the federally-funded adult education system primarily 
serves learners who are currently employed and who are in the prime of 
their working lives. According to Adult Education in America: A First 
Look at Results from the Adult Education Program and Learner Surveys, 
published by the Educational Testing Service in March 2007, 85 percent 
of students were most likely to have income from salaries or wages 
suggesting that they are employed rather than receiving public 
benefits. Forty-five percent of learners were between the ages of 25 
and 44, and another 25 percent were between 19 and 24. Slightly more 
than half were women (55 percent), and slightly less than half (44 
percent) were enrolled in English as a Second Language (ESL) classes. 
Almost 40 percent were enrolled in Adult Basic Education (ABE) level 
classes and the remainder (17 percent) in Adult Secondary Education.
    The English Language Learners enrolled in federally-funded adult 
education come to programs with a wide range of educational 
backgrounds, including nearly a third with at least some education 
beyond the postsecondary level, according to the ETS report. Of the 34 
percent of learners in the ETS survey who reported not having had any 
schooling in the United States, 4 percent had no education at all 
before they arrived here and 24 percent completed school up to the 
eighth grade. Almost 40 percent completed some secondary education, and 
28 percent had continued past the secondary level, including 13 percent 
with bachelor's degrees. Overall, 29 percent of participants in adult 
education learned Spanish as their first language, 7 percent learned an 
Asian language, and 2 percent learned a European language.
    In Program Year 2004-2005, total enrollment in federally-funded 
adult education programs was 2.58 million, according to the U.S. 
Department of Education. More current data from a survey conducted in 
2006 by the National Council of State Directors of Adult Education 
(NCSDAE) reports 917 programs in 40 states with waiting lists that 
total approximately 100,000 adults. The demand for additional services 
varies by state with waiting lists in some New York programs so long 
that lotteries for seats were established rather than keeping waiting 
lists. And according to the NCSDAE survey, 44 percent of local programs 
in Rhode Island have waiting lists. The highest need, 77 percent, is 
for adults at the lowest levels of adult basic education and English 
literacy. For 52 percent of adults in Rhode Island, the wait to access 
services was 12 months or more.
    The Federally-funded programs that serve adult learners are 
typically not large or generously funded. Again, according to the ETS 
report, most programs are small or mid-sized with a median enrollment 
of 318 learners, a median budget of $199,000, and a median per-student 
expenditure of $626. Slightly more than half of all adult education 
programs (54 percent) are run by local education agencies. The majority 
of programs offered classes more than 40 weeks per year with 4-6 hours 
per week of instruction the most common category of class time. Only 17 
percent of adult education program staff are full-time employees who 
work more than 35 hours per week. Part-time staff account
    Despite the federally-funded adult literacy system's modest 
profile, it achieves results that suggest it is already making a 
substantial contribution to the overall education and workforce 
development system. In 2006, the Federally-funded Adult Education State 
Grants program run by the U.S. Department of Education's Office of 
Vocational and Adult Education (OVAE) received the highest possible 
rating--effective--from the Office of Management and Budget using its 
Program Assessment Rating Tool or PART. The PART report identified the 
percent of adult education students who obtained a GED or high school 
diploma increased by 55 percent from 2001 to 2006, and the Federal cost 
per GED or diploma was $3,081 compared to a range of $12,000 to $90,000 
for other Federal job training programs. In addition, according to the 
ETS report, ``Overall, a little more than one-third of learners 
completed an educational functioning level by the end of the program 
year'' with the largest percentage of completers coming from the ASE 
level. On average learners participated in adult education for under 
100 hours during the year.
    Through the U.S. Departments of Education, Labor, and Health and 
Human Services and the National Institute for Literacy, the Federal 
government has played and continues to play a significant role in 
supporting adults to achieve the literacy skills and abilities they 
need to find and hold jobs, prepare for postsecondary education and 
training, and function effectively within their families and 
communities. Within the broad guidance of WIA and the NCLB, the 
Institute's defining responsibility has been to provide the 
information, resources, and support that would lead to stronger and 
more effective literacy programs.
    The Institute works in collaboration with other Federal agencies 
and non-governmental organizations in order to convene leaders and 
innovators to advance a comprehensive literacy agenda that will protect 
the United States and its citizens into the future. The Institute also 
customarily consults with nationally recognized experts and 
stakeholders to identify gaps in knowledge and capacity that other 
organizations have not addressed and worked to close. Integrating 
knowledge, research, and practice is at the heart of our work to deepen 
public awareness and understanding of literacy as a critical national 
asset.
The National Institute for Literacy: Leadership and Impact
    Since its inception, the Institute has chosen its projects and used 
its resources strategically to accomplish its goals. The Institute's 
annual appropriation under WIA has never exceeded $6.6 million, so we 
strive to make only investments that leverage other agencies' work or 
develop an idea or approach that stands to advance the quality of adult 
literacy services. The Institute's Advisory Board--composed of 10 
members appointed by the President--has provided advice that has helped 
keep the Institute focused on what's most important for its 
programmatic and operational activities.
    I'd like to share with you just a few highlights of our recent and 
on-going work. In the past several years, the Institute, with funding 
from both its WIA and NCLB appropriations, has provided leadership in 
developing and disseminating resources that support improved reading 
instruction for adults based on the most rigorous and recent research 
available. The Institute convened and worked closely with a panel of 
nationally recognized adult reading researchers to produce the first 
systematic review of the literature on adult reading research and 
instruction. The resulting report, Research-Based Principles for Adult 
Basic Education Reading Instruction and an online reading diagnostic 
tool, Match-a-Profile, have become the basis of workshops, conference 
presentations, and a practitioner handbook that the Institute is making 
widely available in print. The Institute also plans to develop an 
online course using the handbook content to provide greater access to 
interested practitioners.
    The Institute's work on adult reading also offers an excellent 
example of the way in which agencies can complement and advance each 
other's work without duplicating it. In this case, the Institute's 
Research-Based Principles report was adopted by the U.S. Department of 
Education's Office of Adult and Vocational Education (OVAE) and used as 
the underpinnings of the Student Achievement in Reading (STAR) project. 
The STAR project, a multi-state effort to promote effective reading 
instruction at the state and local levels through site-based reform, 
extends the reach of the research findings through comprehensive 
technical assistance. In addition, the report's findings and the 
Institute's online reading diagnostic tool also inform a reading 
toolkit that OVAE has developed as part of STAR.
    The Institute's collaborative efforts and support for research also 
have included joint efforts with the National Institute for Child 
Health and Human Development (NICHD). For the past five years, the 
Institute, OVAE, and NICHD have supported a joint national research 
program on adults' acquisition of reading skills. All three agencies 
have contributed funding to this effort, which is managed by NICHD to 
ensure the highest standards of research rigor. At the program's 
inception, the Institute worked with NICHD on a series of technical 
assistance workshops on research design and related issues to encourage 
the broadest possible participation in the program by educational 
researchers.
    Building on the Institute's deep involvement in funding, 
translating, and disseminating reading research, the Institute is now 
leading an effort under the auspices of the Interagency Coordination 
Group for Adult Education to develop an adult literacy research agenda. 
This group is pursuing comprehensive and preventative approaches to 
addressing the findings of the NAAL and focusing resources across 
Federal agencies to ensure that all adults have the opportunity to gain 
literacy skills and to become successful in all areas of their lives. 
The Institute supported webcasts of the events and continues to offer 
the video on its website (www.nifl.gov).
    Using information from six Federal agencies with a stake in 
improving adult literacy, including the U.S. Department of Labor, the 
Institute is developing a research agenda. Our intent is to finalize a 
document that represents an interagency consensus on federal research 
priorities in adult literacy to inform future investment decisions. 
Agencies could
    As an initial step, the Departments of Labor and Education are 
considering jointly funding a secondary analysis of the NAAL data. This 
additional analysis could serve to further the understanding of 
correlations between literacy, education levels, employment in specific 
industries, language barriers and economic status. These important 
correlations are not addressed in the current report and would help 
inform how the public workforce system assists individuals with 
literacy challenges.
    The Institute, its Federal partners, and adult literacy providers 
have learned the value of looking to the research to guide their 
activities. In fact, the Department of Education has an on-going 
rigorous evaluation to gauge the impact of an enhanced English as a 
Second Language (ESL) curriculum on the English reading, writing, and 
speaking skills for adult ESL students. This study will provide 
valuable information that strengthens the research base and will help 
improve program services. Experts advising the Institute on ESL 
literacy research and services note that more study of English Language 
Learners' acquisition of basic skills could deepen our understanding 
and lead to further improvements in practice.
    Many questions remain unanswered concerning effective program 
models, curriculum, instructional approaches, and other service-
delivery issues. For example, even today, research has yet to be 
conducted that compares the benefits of an instructional program for 
English language learners with reading and oral language components to 
instruction that concentrates on building reading skills alone. There 
is also great need for information about how best to integrate the 
teaching of vocational skills with basic literacy skills, including 
English language literacy, so learners can advance in their jobs more 
quickly. Research to inform English language learners' transitions from 
one level to the next--from English as a Second Language (ESL) classes 
to Adult Basic Education (ABE) classes, from ABE to GED; and from GED 
to post-secondary education and training--is lacking and yet essential.
    Using the available research to inform practice has been a priority 
in the adult literacy field and continues to be. For example, the 
Institute has coordinated interagency efforts to review the literature 
on adolescent reading. The initiative has produced a guide for teachers 
on evidence-based instructional practices for improving adolescents' 
literacy skills as well as a publication for parents and another for 
school administrators. The Institute expects to publish all products by 
the end of this calendar year.
    The Institute has made a sustained commitment to two projects that 
pioneered new approaches to adult literacy services when they were 
first introduced and now, though no longer new, improve the rigor of 
those services. In the late 1990s, the Institute began the Bridges to 
Practice project to train adult literacy practitioners to recognize 
adults with learning disabilities and teach them with appropriate 
methods. Bridges was one of the early efforts in adult literacy to 
translate the findings from rigorous research--funded by the 
Institute--for use in improving instructional practice.
    Earlier in the 1990s, the Institute envisioned and developed a 
completely new use of technology to improve teaching and learning in 
adult education through a project called the Literacy Information and 
Communication System (LINCS). LINCS established the first online portal 
to instructional resources, websites, reports and other information 
useful to adult literacy administrators, teachers, and tutors. The 
Institute also offered assistance on using technology and introduced 
the use of discussion lists. Now, using new, more stringent selection 
criteria, the Institute is emphasizing the quality of materials it 
provides through LINCS, maximizing the capacity of its regional centers 
as the Institute's dissemination arms, and focusing the discussion 
lists on serving as professional development tools.
    Technology continues to present important opportunities to extend 
and improve adult literacy instruction. Because of the demands of work 
and family, adult learners constantly struggle to find time to attend 
classes. And yet the amount of time dedicated to learning is extremely 
important, especially for beginning English language learners. For this 
reason, greater use of technology as a tool to extend classroom 
learning and to develop anywhere/anytime-learning modules could improve 
both access to services and opportunities to learn. A few initiatives 
already have begun making workplace-related curriculum for English 
language learners available to students with iPods or MP3 players. 
Building on these efforts to exploit technology to make it easier for 
more adults--not just those enrolled in programs--to spend time 
learning language, literacy, and workplace skills would represent a 
great step forward for the field.
    And finally, I would like to share with you information about our 
dissemination activities. Beginning with the passage of the Reading 
Excellence Act in 1998 and continuing with No Child Left Behind, the 
Institute has led an interagency effort called the Partnership for 
Reading to develop and publish a variety of resources on reading for a 
wide audience concerned with literacy across the lifespan. To date, the 
Institute has funded on behalf of the Partnership the distribution of 
more than 13 million copies of its publications on reading research, 
instruction and adult literacy to teachers, principals, administrators 
and families. Under the auspices of the Partnership, the Institute is 
also leading and funding the National Early Literacy Panel to 
synthesize the literature on how young children from birth through age 
five learn the skills that will prepare them to be successful readers. 
The report's findings will then become the basis of new materials for 
families, early childhood centers, business, and policymakers.
    What I've discussed today suggests reason for optimism. We live in 
a great Nation. Our economic, scientific, and social success is built 
on a promise that all adults and children will have the opportunity to 
develop the literacy skills they need to function effectively in 
society, achieve their goals, and develop their knowledge and 
potential. This has been America's promise since it's founding and it 
remains so today. It is the legacy we leave our children and the hope 
we offer immigrants who come to this country to build a better life for 
themselves and their families.
    But, there is sobering news. More than 10 years have passed since 
the first national survey of adult literacy, and our most recent 
assessment of adult literacy in 2003 tells us little has changed during 
that time. Approximately 93 million adults still cannot read above a 
basic level and even more cannot perform simple, everyday quantitative 
literacy tasks required in this society. They as individuals and we as 
a nation are not well prepared to face the dramatic changes already 
underway in the workforce.
    It's not too late to change this picture. Adult education is 
increasingly positioned to serve as a full partner in a national effort 
to prepare adults for postsecondary education and job training. And the 
National Institute for Literacy, in collaboration with its federal and 
non-government partners, stands ready to continue its work to improve 
opportunities for adults, youth, and children to acquire the literacy 
skills they need to thrive in our increasingly complex and literate 
society. Literacy skills are the building blocks for success in our 
families, in our schools, in our communities, and in our economy. Let's 
make sure every individual in our Nation has those skills.
    Thank you, Mr. Chairman, for giving the Institute this opportunity 
to address the committee.
                                 ______
                                 
    Mr. Tierney. Thank you.
    And as we said, that will be entered on the record. We 
don't mean to be rude to the witnesses, believe me. We want to 
hear what you have to say, but we also want to get a chance to 
ask some questions before they start calling for votes 
downstairs and everybody's day gets prolonged on that.
    Mr. Jurey?

 STATEMENT OF WES JUREY, PRESIDENT AND CEO, ARLINGTON, TEXAS, 
                      CHAMBER OF COMMERCE

    Mr. Jurey. Mr. Chairman, members of the subcommittee, thank 
you for inviting me to testify today.
    I am Wes Jurey, president and CEO of the Arlington Chamber 
of Commerce, here to testify on behalf of the U.S. Chamber of 
Commerce, where I serve as chairman of the Institute for a 
Competitive Workforce, a 501(c)(3) affiliate.
    I have provided you with my written testimony. It has very 
specific recommendations. But I thought I would focus the oral 
testimony on what I believe to be the real impact of those 
recommendations, where, as you say, the rubber meets the road, 
when the local workforce investment board is trying to deliver 
on the promise of WIA.
    In preparing for these comments, I met with and talked to a 
number of people at the federal, state and local levels who I 
have worked with in the past. And I think we concurred on two 
things.
    One, that this is an opportunity to make significant 
enhancements to WIA that will better serve the people we are 
trying to serve: workers wanting to get a better job or workers 
needing training to be employable, and the employer who needs 
that very smart, skilled workforce. Because we recognize, in an 
innovation economy, we really need highly trained and smart, 
innovative people.
    My introduction to the Department of Labor occurred very 
rapidly. When I took on the role of the El Paso Chamber of 
Commerce, I was confronted with the loss of 29,000 jobs in the 
garment industry. They were going offshore, they were not 
coming back, and that represented 11 percent of all the jobs in 
our labor market.
    I quickly became acquainted with the Department of Labor. 
The outcome was a $45 million grant. The goal was to put these 
ladies back on the employment rolls, who were at the time 
picketing my office. They were mostly middle-aged, Spanish-
speaking women with few transferable skills, and they were 
looking to us both as perhaps a cause and as an answer.
    They were surprised when I invited them into the Chamber 
and asked them to join our team and think about how we would 
work with them. And we moved rapidly forward until 3 months 
prior to the end of the 3-year grant period, when the workforce 
board called me and said, ``The good news is we have trained 
thousands of these displaced workers. The challenge is, we have 
only secured about 67 jobs for thousands of workers. Can you 
help?'' And in 30 days we posted over 8,000 job openings for 
over 4,000 initial trainees.
    My point in telling you that story is, under WIA's current 
regulations, what I have just described could not have been 
done. The processes, the procedures, the applications, the 
formulas, the ability to be that flexible and that focused on 
that significant of an occurrence simply would not have 
happened.
    The second point I would like to make on that is that the 
employers were there in a very structured way from the 
beginning. They were a part of thinking about the challenge. 
They were a part of thinking about the solution. And they were 
bought into the need for the retraining and the eventual hiring 
of these individuals.
    A related matter I would like to briefly about: one-stops. 
They are one of the critical parts of WIA, and yet many of them 
operate without true integrated partnerships that engage higher 
education, public education, the publicly funded system and 
employer-based organizations. And in a structured manner, when 
you bring those parties to the table, they work effectively.
    We created a one-stop in El Paso that housed 47 separate 
tenants, including the community college and one-stop. We 
created a similar one in Arlington. But in both cases, again, 
private non-WIA dollars were brought to the table in 
significant ways to enable that to take place.
    The third thing I would like to briefly mention is funding: 
how do we simplify funding so that when, for example, we are 
confronted with trying to introduce new curriculums to allow 
RFID technologies to be used on a General Motors assembly line, 
it can impact 2,400 jobs; it doesn't take 3 months and many 
lawyers to accomplish that feat and that task.
    We have really moved rapidly from the shade tree mechanic, 
if you think about skills needed, who did physically tighten 
the bolts on the engine to the computer engineer who operates 
the automated robotically driven assembly line at General 
Motors today.
    From a board perspective, I would like you to think about 
how we engage employers, how easy it really is to bring them 
onto the board. There is far more structure for everyone who is 
a member of that board except the employer.
    And yet when the grant we talked about or the contract we 
talked about was struck between the Workforce Commission, the 
local board, our chamber and the Ft. Worth Chamber, it took 
attorneys 3 months to be able to do it within the current 
system, even though the outcome was that we doubled the number 
of employers in less than a year using Work in Texas.
    Lastly, in summary--I know I am down to those last 
minutes--you saved the Southern states for last; we do talk a 
little slower--I would like to make four points.
    As you frame these issues going forward, think about how 
these funds can be somewhat simplified and made a little more 
flexible. How can we ensure that local boards address the true 
needs they are encountering?
    How do we, secondly, spend more of the dollars on training 
or retraining or incumbent worker training?
    Third, how do we actually incentivize innovation and 
employer engagement?
    And fourth, how do we really focus performance measures on 
things that matter?
    And I will use as my final example a workforce board I know 
that was highly successful in moving workers from the welfare 
and unemployment rolls to becoming employed. And then on the 
audit, the thing that mattered was the procedural issues rather 
than the fact that the true outcome of moving many, many people 
out of unemployment and welfare and onto employment rolls was 
overlooked in that process.
    I would be happy to offer to work with the committee on 
behalf of both the Arlington and U.S. Chambers as you process 
through these opportunities to really think about how we 
structure a national system truly needed to ensure that we have 
the workforce of the future.
    Thank you.
    [An Internet link to Mr. Jurey's prepared statement 
follows:]

http://www.uschamber.com/NR/rdonlyres/esckw76mozy3656dukd7mdg3q7spy3zdg 
  fxajcrb5zxxcm4p3jmfm6ylim5hgicocwd2gmnqw457u4x62spmxoctlha/070628--
                           wia--testimony.pdf

                                 ______
                                 
    Mr. Tierney. Thank you, sir.
    Mr. Ferguson?

STATEMENT OF BRUCE FERGUSON, JR., PRESIDENT AND CEO, WORKSOURCE

    Mr. Ferguson. Mr. Chairman and other distinguished members 
of the subcommittee, I am Bruce Ferguson, Jr., president and 
CEO of WorkSource. We are the regional workforce board serving 
northeast Florida and the Jacksonville region.
    This afternoon I want to take some time and speak to some 
issues that are of utmost importance to us as you work toward 
reauthorization of WIA.
    Businesses and jobseekers are operating and working within 
the reality of a global economy. It is critical that WIA be 
reauthorized so that we can help our businesses and our workers 
compete on a global scale.
    It is imperative that we keep the private-sector leadership 
of our system intact. In fact, we would recommend that based on 
our experience that you consider local boards having a super-
majority of private-sector members make up the bulk of the 
board.
    With the business in charge of our local system, we have 
transformed our organization. We have shifted our priorities 
and asked, how can we operate differently to better use the 
funding that we have and leverage resources from our partners?
    Those partnerships that are encouraged by WIA have been 
another driving force in our success. One partner that is 
invaluable to our system is economic development. Working with 
Cornerstone, our regional economic development organization, 
provides us insight into the targeted industries and their 
skill needs in our region.
    That insight in local labor market conditions led us to 
major policy changes. In the Jacksonville region and through 
Florida, unemployment is at record lows. We have changed our 
entire training strategy to reflect the businesses' need for 
just-in-time training. Businesses cannot wait for 2 to 4 years 
for skilled workers. They need them now.
    Last year we trained over 2,800 training graduates; 85 
percent of those trainees were through skills upgrades. And 15 
percent were funded through the traditional ITA methodology.
    But even more importantly, 90 percent of our training 
investment in trainees were in those regional targeted 
industries, and that is good for business and that is good for 
workers. We are trying to encourage workers to go into the 
types of occupations that are in growth in our region, and that 
is why that partnership with economic development is so 
critical.
    This is by design that that 90 percent went to those 
targeted industries. It is win-win for both those businesses 
and for the workers for opportunity, for advancement, as well 
as job security.
    With greater flexibility in funding, we also need and can 
begin to design an effective workforce pipeline for all young 
people. We believe in career academies that work, where 
students can graduate with valuable skills and industry-
recognized credentials that lead to real employment right away 
or to advanced education.
    An example of that that is working right now in our region 
is the Aviation and Aerospace Academy in St. John's County, 
Florida. Aviation and aerospace is a targeted industry, and 
this academy prepares students by connecting learning directly 
to earning.
    Students that complete the program not only have great job 
opportunities and the ability to further their education, that 
education will be furthered with one of the higher education 
partners Embry-Riddle Aeronautical University. Those students 
are earning industry certification and college credit while 
they are in high school.
    We must also provide a flexible workforce system that 
engages workers at every stage of their career, offering skill 
advancement either in the classroom or on the job. The focus of 
a successful career development system, one that supports 
businesses and business growth and global competitiveness, is 
not focused solely on job placement. It centers on the skill 
sets required by local industry and how workers can obtain 
those skills through education, training and job succession.
    WIA funding of the workforce system is still based on a 
concept of equity rather than competitiveness. While we 
certainly recognize it is important to help everyone engage in 
meaningful work, a funding formula based primarily on 
unemployment doesn't address the needs of our businesses or 
workforce in the current state. It doesn't help us compete in 
the global economy.
    Our economic development partners today are not just 
competing against typical regional rivals. We are facing 
increasing competition from countries such as Malaysia, India 
and China. Our workforce and education systems need to reflect 
the current reality of global competition.
    Currently, funding is delivered in silos based on 
categories of workers. We need funding that is flexible and 
allows us to react to local labor market conditions. We realize 
there is no one-size-fits-all formula. But based on measures 
solely on unemployment penalizes states that have put people to 
work but now need help building workforce skills to expand 
business.
    Our great state of Florida had the foresight to design a 
system that takes the best of what WIA had designed and build 
an even more integrated system involving WIA, Wagner-Peyser 
Welfare Transition and other funds under one local umbrella to 
be decided as to how to spend those dollars best to meet our 
regional needs.
    Reauthorization needs to expand that flexibility, eliminate 
meaningless silos, and create a funding formula that recognizes 
21st-century workforce challenges.
    Mr. Chairman, that concludes my remarks, and I welcome any 
questions. Thank you.
    [The statement of Mr. Ferguson follows:]

    Prepared Statement of Bruce Ferguson, Jr., President, WorkSource

Introduction
    Chairman Ruben E. Hinojosa, Mr. Keller, and the other distinguished 
members of this Subcommittee: my name is Bruce Ferguson, Jr., President 
and CEO of First Coast Workforce Development, Inc., known locally as 
WorkSource. We are the Regional Workforce Board of Northeast Florida, 
the Jacksonville area, serving Baker, Clay, Duval, Nassau, Putman and 
St. Johns counties in Northeast Florida.
    In my testimony today, I would like to briefly speak to the areas 
of governance, training, life long career services, performance 
outcomes and funding, and why I believe these issues are of utmost 
importance as you work toward reauthorization of the Workforce 
Investment Act (WIA).
    For perhaps the first time in our history, local workforce boards 
are challenged to provide services within the reality of a global 
economy. Prosperity in the New Economy requires a highly skilled and 
productive workforce. Throughout the United States, worker skills and 
the preparation of workers have been identified as two of the greatest 
competitive challenges facing the nation's communities today.
    The Workforce Investment Act, the foundational legislation by which 
workforce investment boards are authorized to offer labor exchange and 
training services, is under consideration for reauthorization. I am 
pleased to be here today to let you know what we think is working--and 
what needs more work.
What the WIA Legislation Got Right
    WIA created a system that was ``customer-focused.'' In Florida, we 
determined that the primary customer of our system was the business 
community that creates the jobs workers need. The WIA legislation 
mandated that local workforce boards include business as an active 
partner. It's imperative that we keep that part of the system intact. 
In fact, we would recommend, based on our experience, that local boards 
have a ``super majority'' of at least 65% of their board members 
comprised of private industry.
    With business in charge of our local system, we found ourselves 
changing our organizational culture -from an internal focus on process 
and procedures to an external focus on results. If you want a system 
that is truly market-driven, the market must have a voice. That strong, 
private-sector business voice is what set us on a new path of 
responsiveness to business needs. The business leadership of our board 
asked questions that don't typically get asked in many public sector 
led initiatives; questions, for example, about the return on investment 
of funds in particular projects and contracts. It didn't take long for 
us to shift our priorities and ask how we could operate differently to 
better use our funding and leverage resources from partners.
    Another point that WIA got right was encouraging partners to work 
together to provide seamless services to jobseekers. Bringing agencies 
together was good for the jobseeker, but it also helped us to eliminate 
duplication of services and achieve more by working together. One 
partner that we have found to be invaluable is economic development. By 
bringing our local ED organizations in as valued partners, we gain 
insight into targeted industries and can help shape the workforce our 
local economy demands.
    Under WIA, training was finally delivered in response to the local 
labor market. The legislation required that training resulted in an 
industry-recognized certification. In our local region, we invested in 
education to learn the language of economic development, and changed 
our training strategy to focus on helping companies and industries 
expand.
Training Strategies Mandated by Global Competition
    In the Jacksonville region, we have changed our entire training 
strategy to reflect business' need for just in time training. Business 
can no longer wait 2--4 years for skilled workers--they need them now. 
We have dramatically changed the way we deliver training--93% of our 
training budget last year was used to fund skills upgrades for employed 
workers. The traditional method of funding training through Individual 
Training Accounts (ITAs) costs us an average of $4,000 per trainee and 
may take from six months to two years to complete. Our Employed Worker 
Training program cost averages less than $500 per trainee and is 
delivered in a few short weeks or months, at the business partners' 
discretion. Training in the workplace does not incur any additional 
supportive services costs such as childcare or transportation. We also 
have a partner in case management; the company's HR department helps us 
track career advancement and completion points.
    Last year, we had 2,835 training graduates, 2,427 of which were 
trained and certified at the job site as part of the workday. Only 408 
trainees, or 15%, were funded through traditional ITAs. As you can see 
in the chart on page 5, over 90% of our training investment went to 
regional targeted industries as defined by our economic development 
partnership. I want to stress that this is by design. Since our region 
has determined that these industries are the ones we want to grow and 
recruit, we need to ensure that we invest our limited workforce funds 
in these industries. This is a win-win for businesses and for workers. 
Businesses get the skilled workforce that they need in order to be 
competitive, and workers attain skills in industries that are growing 
and expanding in the region leading to advancement opportunity and 
better job security.


    In our new training model, business is more than a partner; it 
becomes an investor in the system. Federal law mandates that business 
contribute at least 51% of the cost of customized training; in our 
experience locally, business is contributing about 65% of the cost. To 
us, this indicates that if you design the right system, business is 
willing to invest in it.
    Atlantic Marine, a shipbuilder in Jacksonville, FL, was 
experiencing challenges with its workforce. The company employed about 
600 workers in two categories: welders and shipfitters. Welders came on 
board and assembled plates and decks in the first part of a ship's 
construction. After the welding was completed, the company laid off 
many welders and hired shipfitters, whose job it was to assemble the 
components of the hull. This hiring and layoff cycle was creating both 
morale and quality problems. Workers were less productive at the end of 
the project, anticipating layoffs. The shipfitters' productivity was 
impacted during their phase of the project by having to correct 
mistakes left behind by welders. Turnover was high due to the unstable 
nature of the work.
    WorkSource developed a customized training program for Atlantic 
Marine's workers. Approximately 230 employees were cross-trained, 
building shipfitting skills among welders and turning shipfitters into 
certified welders. The cross-training was developed by senior 
WorkSource staff with Atlantic Marine's HR Director, and delivered 
through instructors from the Hobart Institute of Welding Technology. 
The welding curriculum included flux core, fabric
    Atlantic Marine's workforce morale improved dramatically. Stable 
employment helped workers focus and be more productive on the job. The 
workers' salaries increased an average of 25% to 30%, based on their 
increased value to the company. Quality on the job increased, as well. 
The welders were more attentive to quality issues, since they would be 
employed as shipfitters on the second phase of construction, and would 
have to correct any quality problems themselves.
    While business is the target of this strategy, workers receive the 
greatest benefit from getting certified training in the workplace. Many 
of our education partners are having trouble finding the capacity to 
train students. Classrooms are full; students have to wait months, even 
years, to get traditional classroom training. They also have to try to 
balance family, job and transportation issues to attend traditional 
classes.
    Many lower-skilled workers have struggled in a traditional 
classroom setting. They are more likely to succeed when the training is 
in the context of the work they do every day. Taking learning out of 
the classroom and into the workplace has reinforced the relevancy of 
education, allowing workers to see the direct application of obtained 
skills. This ``pull'' system helps workers advance up the career 
ladder, creating opportunities for entry level workers to obtain 
employment. In an era of low unemployment, where retention of workers 
is critical to the company's success, investment in training builds 
worker loyalty and earning power. Companies don't learn skills, workers 
do, and when workers have the skills that are in demand in the 
marketplace, they will always be able to find jobs that provide 
economic self-sufficiency.
    In 2006, WorkSource provided more than 2,400 individuals with 
training in the workplace. This effort was supported by our community 
college partners who trained over 80% of our customers, and the 
training was accomplished as part of their normal workday. Eighty-three 
percent of these graduates were in medical occupations, the vast 
majority of them graduating to become nurses, an occupation that is 
experiencing a critical shortage in Florida. Through one of 
WorkSource's job training programs, the Career Advancement and 
Retention Challenge (CARC), employees who are patient care technicians 
or health aides may move up to Certified Nursing Assistant positions, 
and eventually acquire nursing degrees.
    Jacksonville resident Larissa Karolides was able to advance her 
career through the CARC program. She moved to the U.S. in 2000 from 
Russia, and spoke very little English when she arrived. Larissa soon 
began a job at the River Garden Hebrew Home, a senior care facility, 
where she constantly worked to improve her English skills. River Garden 
helped her enroll in the CARC program for Certified Nursing Assistant 
training, and supported her through the licensing process.
    Larissa completed her Licensed Practical Nurse (LPN) training 
through Florida Community College at Jacksonville (FCCJ) at River 
Garden Hebrew Home as part of her work day. When she graduated in 
August 2006, Larissa's salary nearly doubled--going from $10 per hour 
to $20 per hour as an LPN. In 2008, Larissa plans to enroll in Florida 
Community College's Registered Nurse program to obtain her 
certification.
Building a Workforce Pipeline that starts with our K-12 Educational 
        System
    Each year WorkSource serves about 1,000 at-risk in-school and out-
of-school youth. These are young people who come from foster care and 
the juvenile justice system, youth with disabilities, and children of 
incarcerated parents. We are very pleased with the results we have 
witnessed while assisting these youth. We are deeply committed to 
helping the most in need, recognizing that they are an important part 
of our future success. We would also like to point out, however, that 
they represent only a fraction of the workforce of tomorrow that is so 
vital to our future.
    With greater flexibility in funding, we can begin to design an 
effective workforce pipeline for all young people. The pipeline starts 
with a partnership between the workforce and education community, 
bringing them together to create contextual learning experiences. We 
believe in creating Career Academies that really work--where students 
graduate with valuable skills and industry recognized credentials that 
lead to real employment right away.
A Career Academy Model that Works--St. Johns County, Florida
    An example of a system that works is the Aviation and Aerospace 
Career Academy, located in St. Johns County, FL. The Florida Choices 
model helped the local school district develop an aerospace / aviation 
curriculum for middle school students. The program showcases this 
regional targeted industry and prepares students to enter the Aviation 
and Aerospace Academy (AAA.) The curriculum emphasizes science, math, 
aviation and aerospace engineering. Students completing the AAA program 
of study not only have job opportunities, but the ability to further 
their education at one of the country's top aeronautical universities, 
Embry Riddle Aeronautical University (ERAU.)
    Articulation agreements lead students to several bachelor level 
degrees at ERAU: Aeronautical Science, Aviation Maintenance Science, 
Aeronautics, Aerospace Electronics, Aerospace Engineering, Aerospace 
Studies, Air Traffic Management, Applied Meteorology, Aviation Business 
Administration, Aviation Management, Civil Global Security and 
Intelligence Studies, Human Factors Psychology, Human Factors and 
Systems BS/MS, Safety Science, Science, Technology & Globalization, and 
Space Physics.
    Students may graduate from the Aviation-Aerospace Academy with up 
to 24 college credits in Aviation Maintenance Technology. Graduating 
students have a real choice; they may enter the workforce immediately 
with an industry certification -Aviation Maintenance Technician with an 
FAA Power Plant Rating -or they may enroll at the university level to 
further their education. Students in the Aviation or Aerospace 
Engineering program of study may also graduate with 24 credits and 
continue on to a post-secondary institution to complete their 
bachelor's degree in only 2 years--saving them about $20,000 in tuition 
costs.
    This is the real purpose of a workforce development system--to 
create a talent pipeline that engages students at an early age in 
thinking about work and the relationship between learning and earning. 
We have always been committed to serving students at risk; to be 
competitive in the global economy, we must also be sure to include the 
entire workforce of tomorrow. We believe that the workforce system 
should be funded to support the education system by providing 
meaningful career advice to young people while they are making critical 
life and education choices. We need to reach them while they are still 
in school, instead of waiting until they have left the classroom.
Life Long Career Services
    After school, we must provide a flexible workforce system that 
engages workers at every stage of their career, offering entry points 
for skill advancement in the classroom or on the job. In order to be 
competitive in the global economy, we must create a culture of lifelong 
learning that rewards higher skills with economic advancement.
    WIA promised a new system where ``placement'' no longer needed to 
be followed immediately by ``termination.'' The vision was that this 
change would result in a shift from short-term ``episodic'' fixes to a 
system where individuals could access information and services 
continuously throughout their lifetime. The focus was on opportunities 
for low-wage workers to benefit from the workforce investment system. 
This was truly a step in the right direction. Now, after 10 years of 
experience, we know where improvements can be made to the system.
    WIA mandates that services are delivered through a Core/Intensive/
Training matrix. We have found a high degree of customer 
dissatisfaction with this methodology. Job-seekers, especially at the 
entry level, don't understand the dynamics of the local labor market, 
nor how to pursue their career options within the reality of the 
marketplace.
    The focus of a successful career development system, one that 
supports business growth and global competitiveness, is not job 
placement. Rather, it centers on the skill sets needed in the local 
labor market, and how workers can obtain those skills through 
education, training and job succession. WorkSource, Cornerstone (our 
regional economic development entity), and our community college and 
training partners have come together on an innovative project that has 
established Northeast Florida as an undisputed leader in workforce 
preparation. Named ``R3 Formula for the New Workforce'', this strategy 
encompasses a wide variety of activities that are designed to recruit 
proficient workers, retain valuable workers and re-train workers with 
new skills.
    This philosophy is embodied in a career development methodology 
resulting in income growth. The Income Growth Strategy promotes wage 
progression through rapid attachment to the workforce, continual skill 
gains, and personal development activities. As a strategic framework, 
this approach builds upon a program design generally referred to as 
``post-employment'': placement, retention, advancement and/or rapid re-
employment services. The foundation of this approach is that all 
employment and training services are delivered within the framework of 
the skills needs of the business community.
    The Income Growth Strategy involves designing a planned sequence of 
service interventions, which target the needs of the job seeker in the 
larger context of serving our business customer. The model embraces 
incremental income goals achieved through labor market advancement. In 
our model, job seekers are not necessarily terminated from career 
development services at job placement. Success is measured by the 
ongoing skill development and wage growth of the job seeker.
    Traditionally, workforce system contact with the employer ends at 
placement or soon thereafter, not resuming until the next time 
placement services are needed. Under Income Growth, a business services 
strategy, represents activities, such as employed worker training, as 
value-added products for the employer, part of a comprehensive set of 
business services.
    Providing services to the worker is no longer limited to a physical 
one-stop location, but may be offered at the worksite, at a training 
center, or over the internet.


    Currently, performance standards drive the system toward an early 
termination approach. We must create strategies that allow workers to 
access a flexible system that offers skill attainment and comprehensive 
career development services. System performance should be measured, 
incrementally, as a worker progresses in income growth without 
terminating them from services.
What We Need Now for the New Economy
    WIA funding of the workforce system is still based on the concept 
of equity, rather than competitiveness. While we recognize that it's 
important to help everyone engage in meaningful work, a funding formula 
based primarily on unemployment doesn't address the needs of our 
businesses or our workforce. It doesn't help them compete in the global 
economy.
    When we compete against other cities for new industries and good 
jobs, we're not competing against the places that we were five years 
ago. Today, our economic development partners are not just competing 
against typical regional rivals in Georgia, North Carolina or Alabama 
or even cities in other regions, we are facing increasing competition 
from countries such as Malaysia, India and China. With the advent of 
technology, companies can now locate their businesses where they find 
the best talent for any given aspect of their business. U.S. companies 
are establishing a global footprint in order to compete and to open new 
markets. Our workforce and education systems need to reflect the 
current reality of global competition.
    The consumer of our training system is business--but to date, there 
is no funding and no performance measure that is tied to serving 
business. Currently funding is delivered in silos based on categories 
of workers (adult, dislocated, etc.) We need funding that is flexible 
and that allows us to react to our local labor market conditions. We 
recognize that our economy may be completely different than that of a 
Detroit, Michigan or an Albuquerque, New Mexico. A onesize-fits-all 
approach to funding, based on measures like unemployment, will penalize 
states that have put people to work and now need help to build 
workforce skills and expand business.
    We've spent ten years building partnerships, learning how to 
understand the market, and building the foundations to be competitive. 
We must continue to build on the things that WIA got right--a demand-
driven, flexible system that allowed us to become a meaningful player 
in growing the economy.
    We believe that, with a flexible system, we can really make a 
difference. The State of Florida had the foresight to design a system 
that takes the best of what WIA had designed and build an even more 
integrated system based on business involvement and local decision-
making. By pulling together WIA, Wagner-Peyser, Welfare Transition, 
Food Stamp Employment and Training, and Veterans funds and funneling 
the integrated funding through the regional workforce boards, we have 
been able to shape our policies and training to meet our local business 
needs. Florida's (seasonally adjusted) unemployment rate for May 2007 
was 3.4%. Florida has consistently had the lowest unemployment rate of 
the ten most populous states and continued to be below the national 
average.
    Since 2002, Florida has recorded 57 consecutive months of job 
growth, more than any of the populous states. Today, unemployment rates 
in our region hover around 3%, and we have reduced the dependence on 
public assistance from 12,000 families to a caseload of around 600. 
[Source: Workforce Florida, Inc.] These milestones have been reached 
through leveraging of resources and partners. Reauthorization of WIA 
needs to expand that flexibility, eliminate meaningless silos and 
create a new formula for funding that recognizes 21st century workforce 
challenges of business retention and expansion.
Where do we go from here?
     We ask your support to improve the legislation in a manner 
that broadens, coordinates, and supports partnerships at a local 
delivery level. Local boards are responsible for the system-wide 
coordination of resources and services, but distinct program rules, 
coupled with the authority granted to state and federal partners, 
undermines seamless delivery to the public.
     Local boards should have a ``super majority'' of at least 
65% of their board members comprised of private industry. The current 
requirement that the board chair should be appointed from the private 
sector is a critical factor in maintaining business involvement.
     Performance standards must be re-visited and redesigned to 
give all programs common goals. In addition, we must create standards 
that reinforce and reward ongoing career development services and end 
short term episodic fixes. WorkSource supports performance standards 
that target income growth and skill attainment as outcomes for all 
programs. We believe these measurements should be calculated 
incrementally while the job seeker or worker is receiving services, not 
at termination. Also, we support the creation of performance standards 
that measure business involvement and satisfaction with the workforce 
system.
    The workforce development pipeline begins in our K-12 educational 
system. In addition to intervening with the most at-risk youth, career 
services must be provided to all young people. Incentives should be 
used to should to encourage regional workforce boards to work in 
partnership with their educational systems to create workforce learning 
environments, i.e. Career Academies, that reflect the skills needed in 
the local labor market, and provide real credentials for High School 
graduates. Funding streams must be merged at the federal level to 
ensure real flexibility in providing effective services at the local 
level. Maintaining separate funding streams will continue to keep the 
focus on programmatic issues and not on services.
    We urge that funding formulas be based on building competitiveness, 
rather than an approach that only considers equity. A funding formula 
based on unemployment and poverty rates won't lead to our workers 
obtaining the skills to compete in the global economy.
    Chairman Hinojosa, that concludes my remarks. I want to thank you 
again for this opportunity to testify before the Subcommittee on this 
critical issue. I welcome any questions that you may have.
                                 ______
                                 
    Mr. Tierney. Thank you, Mr. Ferguson.
    Thank all of the witnesses for their testimony today, both 
written and oral.
    Mr. Scott, would you care to start us with a question, 
please? You are recognized for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    I want to thank all of our witnesses.
    And I noticed that Mr. Ferguson and Ms. Ganzglass both 
mentioned certification of workers. I assume this would mean 
that a person could go into a jobsite and say I have been 
certified as a waiter or even a housekeeper or an events 
housekeeper or anything, so the employer wouldn't even have to 
interview the person; they know they are qualified and can get 
right on to hiring.
    Do I understand that right?
    Ms. Ganzglass. I think that is part of it.
    There are two parts to the certification issue. One is that 
employers recognize the certificate, and it has value in the 
labor market.
    The second is also to make sure that they aren't dead-ends 
in training, so people can continue their education and 
training and perhaps move on over time. And too many of our 
programs really don't have the certification or the credit, in 
education terms, that goes with the training, so they become 
dead-end training.
    Mr. Scott. How do you decide what credentials are needed? 
Is that decided on a local basis or a national basis?
    Ms. Ganzglass. On a local basis, but I will turn to----
    Mr. Ferguson. For us, we certainly have local targeted 
industries and so forth. The state of Florida also determines 
statewide targeted industries. Some of those overlap.
    The best example that I can give of the certification is in 
using that skills upgrade training for workers, particularly at 
the entry level, is something we have done with our medical 
industry. We have a Career Advancement and Retention Challenge, 
where we have gone into some of our hospitals and nursing homes 
and engaging those individuals that may be employed as a 
patient care technician that employers have identified could be 
certified as either a certified nursing assistant or an LPN.
    We have a whole group of people that we have been able to 
take from that certified nursing assistant kind of first job at 
an $8-or $10-an-hour wage that are now LPNs making $20 an hour. 
We have some that have gone on to graduate as RNs.
    So this is a long-term process. It is not a, ``Get one 
certification, and then we will see you.'' It is really an 
income growth strategy.
    Mr. Scott. And I assume you do labor surveys to figure out 
what people need to be trained for, what jobs are available.
    Mr. Ferguson. Absolutely. We specifically and only target 
those in-demand occupations.
    Mr. Scott. Now, some of the proprietary schools have taken 
people's money for training and provided no training. Others 
have in 6 months converted a low-skilled worker to a high-
skilled worker in just a few months.
    Do you use appropriate use of the proprietary schools?
    Mr. Ferguson. We have a process in the state of Florida 
where any of our training providers must apply through our 
Department of Education to be certified and so forth. And we do 
use private providers as well as community colleges. Because of 
the community college value, probably 80 percent of our 
training is done through our community college partners.
    Mr. Scott. Now, some of this training would be on the 
employer's dime if you weren't doing it. Is the fact that we 
are doing this, some of what the employer would traditionally 
do, does that help us attract jobs and keep jobs?
    Mr. Ferguson. Certainly one of the things that we have 
behind this, this is a partnership with the employer, and the 
employer becomes an investor in this. We typically can fund 
with those WIA dollars only 50 percent of the funding for the 
training. The employer must contribute at least half of the 
funding as well.
    We have found over time that the employers are actually 
contributing in the neighborhood of 60 to 65 percent of the 
training costs, and that really helps us leverage those 
dollars. The employers are invested in this, and they want 
higher-skilled, more productive workers, and they are willing 
to invest in that.
    Mr. Scott. When a plant closes, do you get extra money?
    Mr. Ferguson. I am sorry?
    Mr. Scott. If a plant in your area closes, do you get extra 
money to deal with the influx of people that need training?
    Mr. Ferguson. We certainly have the dislocated worker 
funding silo that comes to us. If it is an extraordinarily 
large layoff, we can certainly apply to the Department of Labor 
for additional funds or to the state for additional funds.
    Mr. Scott. What do you have for summer jobs for youth? Have 
you studied the summer jobs program?
    In my other committee, I am the chairman of the Crime 
Subcommittee, and I was wondering if the summer jobs program 
has been studied to ascertain whether it reduces juvenile 
crime.
    Mr. Ferguson. We engage really in a year-round youth 
program strategy, and we specifically work through our Chamber 
of Commerce for those summer jobs and internships that provide 
the kids that are involved with that directly into the 
workplace so that they get a feel for real life.
    And we work with Juvenile Justice and so forth to address 
those certain situations.
    Mr. Scott. Any question in your mind as to whether it 
reduces crime?
    Mr. Ferguson. I would say that, if they are actively 
engaged in a work relationship. But I cannot provide you any 
statistics right now. I would be glad to do so.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Tierney. The gentleman yields back.
    Mr. Keller, you are recognized for 5 minutes.
    Mr. Keller. Well, thank you very much.
    The biggest things that I hear when I talk to folks back in 
central Florida about what is important to them are two: Number 
one, they want local control and flexibility; and, number two, 
you want to send people into areas where they can actually get 
a job.
    Mr. Ferguson, is that a fair summary of what you are 
hearing back home?
    Mr. Ferguson. That is certainly it. Certainly skilled labor 
availability is a major concern of our business community. And 
if you can't get all the people that you need, then we 
certainly need more productivity out of those we have got. 
Which is why we are investing in that skills upgrade and then 
allowing folks to earn higher wages, because they have greater 
skills sets.
    Mr. Keller. Now, I want to talk about the big issue of 
making sure they get a job here in a second, but let's take the 
local control and flexibility. It is fair to say that there are 
probably some industries in Jacksonville, Florida, that they 
have a great demand for workers that may be different than what 
industries in Vermont need. Is that correct?
    Mr. Ferguson. Absolutely. And even within our own state, 
our northeast Florida economy is much different than that of 
Miami and Orlando, with such a huge tourism base and so forth.
    Mr. Keller. Right.
    Mr. Ferguson. We have a very diverse economy, and we need 
the flexibility to respond to our own individual labor markets.
    Mr. Keller. Mr. Jurey, one of the things you talked about 
was the need to engage business. And I wrote down your 
comments. You gave an example of there were thousands of people 
who were trained but only 67 jobs, and you guys stepped in and 
helped with that.
    There seems to be a couple different ways to make sure 
people get placed, and I want to get your thoughts on it. One 
is to very much engage businesses and go to your major 
employers, ``What specific skills do you need? Do you need a 
photocopier? What machine? And we will get them trained on 
that,'' for example.
    Or you can also say to a vendor, ``Hey, we are going to 
hire you to provide this specific training and pay you $4,000, 
but you are only going to get $2,000 for the training and the 
other $2,000 is going to come after they have worked there for 
a certain period of time.''
    What do you think about those two approaches? Do we need 
one or both? What are your thoughts?
    Mr. Jurey. I think they both work. Your bottom line is, how 
do we ensure that the skills the people going through the 
training will receive really do match the skills needed to get 
a job?
    And it isn't so much training to the job anymore. I will go 
back to the General Motors example. There was a day when you 
trained an autoworker to mechanically put in an engine in a 
car. That same autoworker today almost needs to be a computer 
engineer.
    Mr. Keller. Right.
    Mr. Jurey. Because he is operating a computer that operates 
a robotic arm, puts a computer chip driven window assembly in 
the auto body as it comes down the row.
    And so, if we don't think from the skills perspective 
rather than a job perspective, I think that is where you start 
framing the issue.
    The second thing is, how do you engage employers in really 
defining that? Too often we let a training provider define, 
without a significant amount of employer input, what those 
skills are. And sometimes that becomes the skills that the 
developed curriculum already existing provides.
    Mr. Keller. Let me stop you there.
    Mr. Ferguson, to overcome that, do you ever have any 
situation where there are literally financial incentives for 
the vendors providing the training to also engage in placement, 
to make sure that they get their people jobs? How do you make 
sure that that happens?
    Mr. Ferguson. When the state looks at certifying a training 
provider, they are looking at graduation rates, they are 
looking at placement rates for whatever type of training they 
are doing. So there are those safeguards there, and we want 
them to be involved in that.
    Mr. Keller. And by having local control, you can make sure 
that the people who are certified to be on your individual 
training account list are people who are working in areas where 
there is a need for jobs.
    Mr. Ferguson. That is correct. And----
    Mr. Keller. Let me just give you an example. For example, 
if I was right out of college and I thought, what kind of job 
would I like? I think it would be pretty cool to be a 
whitewater rafting guide. That would probably be my first 
choice. Or maybe be a racquetball coach for my second choice. 
But there are probably not going to be jobs in that area. Like, 
in Orlando, we need welders and nurses.
    Well, you would then be in a position locally to say, 
``Hey, we know you think that is a real cool job, but let me 
focus on some of these targeted areas, because we can get you 
placed and you can make $20 an hour.''
    Mr. Ferguson. Absolutely. Having the flexibility to say, 
``That is an admirable career goal, but that is not where we 
need to invest.'' We have limited dollars, so we have to ensure 
that those limited dollars go toward areas of greatest success, 
and that is our targeted industries. That is where our region 
has determined our job growth has the greatest opportunity, and 
we want to ensure that those businesses have the skill sets to 
grow. And that is good for the workers, because that 
opportunity for them to advance is going to be there.
    Mr. Keller. I don't know how much time I have left. Let me 
just ask one--I will wrap up pretty soon.
    Let me ask you this, Mr. Ferguson. In my area, we have 
around 3 percent unemployment. Sometimes it goes down to 2.6 
percent. Sometimes it goes up a little. It may be similar in 
your area. Pretty low for low unemployment.
    Tell us, who are those 3 percent? Who are these people that 
are struggling in such a robust economy? And what do you do to 
help get those folks into the workforce in your area?
    Mr. Ferguson. That is truly one of the biggest challenges 
that we have. Some of those 3 percent are the individuals that 
are moving from one job to another and are out for a period of 
time, but there are others that are very difficult to serve and 
find that job.
    The beauty of low unemployment is that employers tend to 
relax their hiring standards. So if we can go in and help them 
get that initial job and help ensure that they are successful 
and then work with that company to increase their skill set and 
show the value of that worker--many of these individuals have 
not done well in traditional education. But when you get them 
in the job and training in things that are directly related to 
what they are doing, the success rate goes up tremendously.
    They don't really want to go back to school. They don't 
have good memories of that. So that whole income growth 
strategy of engaging the individual in the workplace with the 
business as a partner has been tremendous for us.
    Mr. Keller. Thank you very much.
    And I will yield back the balance of my time.
    Mr. Tierney. Thank you, Mr. Keller.
    Mr. Yarmuth?
    Mr. Yarmuth. Thank you, Mr. Chairman.
    And thanks to all the witnesses.
    I am going to follow up on something Mr. Jurey talked 
about.
    And I am not picking on you.
    Mr. Jurey. That is quite all right.
    Mr. Yarmuth. I am actually impressed with what you said.
    We had, back in April, in my office, put together a 
workforce development forum, which was based around our WIB 
office. We also had religious leaders, we had union leaders, we 
had business leaders, higher education representatives.
    So your comment that the process--I took this to be your 
meaning--needs to be expanded to a certain extent was something 
that was very salient for me, because what became clear in 
discussing this whole issue was that there were some areas of 
pretty serious disconnect here.
    And everybody has mentioned nurses, and that is almost a 
universal need throughout the country, and that is pretty easy. 
We know that our schools can train nurses and they can find 
jobs.
    In many other cases, what we found was businesses talking 
about needs for certain employees, the training being done and 
then there not being any opportunities for them. We found 
another disconnect in which labor union people said, ``Well, we 
have got phenomenal training facilities here.'' The building 
trades built a multimillion-dollar, state-of-the-art training 
facility. Nobody will use them because the business community 
doesn't want to get involved with union employees.
    So I guess my question is, to the extent that we are 
dealing with this particular program and piece of legislation, 
is there anything in the act or anything we should add to the 
act in the reauthorization that will help expand the input that 
we get?
    And also are there any structural impediments to, for 
instance, making use of a union-based training facility that 
may be able to train people not necessarily for a specific job 
but, in the case of building trades, for a multitude of jobs?
    I will kind of leave that open to anyone.
    Mr. Jurey. Well, I think there are several things you can 
think about there.
    One, if you look at the structure of the board itself, it 
is more structure than defined in selecting board members who 
are not employer reps than employer reps. There is very little 
true structure defining how you go about doing that.
    And so it is almost a hit or miss when you come to 
employers who serve on the board. There is really not as 
clearly defined a role for the organizations that represent 
employers, and yet almost everyone else at the table engages 
them or attempts to. The colleges want to engage employers, 
universities want to, local workforce boards want to, and they 
tend to do it one at a time.
    And a very different way for you to think about a Chamber 
of Commerce or an employer-based association is, we have 
already organized the employer community. That is what we do 
for a living. We have organized several thousand employers.
    And if you think about using that organized framework as a 
way to reach out to employers, they are essentially paying us 
to represent them. They don't have the time--the General Motors 
plant manager in my community has had to go from turning out an 
auto every 2 minutes off the assembly line to one every 55 
seconds. And his supplier network of over 600 suppliers and 
assemblers have to reduce their cost to General Motors 2 
percent a year in that plant so they can stay competitive. And 
he has 2,400 union jobs.
    He doesn't have time to stop and try to work his way 
through the acronym-laden alphabet soup to understand what is 
out there that he can work with. But if I call the General 
Motors plant manager and say, ``This is a really critical 
meeting, you need to be there. Here are the players that will 
be at the table and here is why you ought to care,'' he will 
take time out from that plant job and he will come to the 
meeting.
    And so, you need to think, as you go through this 
reauthorization, about how you truly structure it to engage the 
employer community in those salient, meaningful ways.
    The third thing that I would look at is the whole 
procurement process.
    Here is a true, real-life story. In trying to make sure 
that we retain those 2,400 union jobs, that plant said, ``We 
have done about everything we can. We are running the front-end 
loaders at racetrack speeds. We need to look at RFID 
technologies. And to do that, we are going to need new 
curriculum developed,'' and so on and so on.
    Well, in an effort to make sure that the dollars spent 
didn't get lost in admin costs, we are structuring an approach 
where the commission is going to finally fund the local board, 
who will fund our 501(c)(3) foundation, who will finally fund 
the university to develop that curriculum, so that the majority 
of the dollars are spent on real curriculum development for how 
to assimilate RFID technology on that highly automated robotics 
assembly line.
    But we shouldn't have to go through four or five layers of 
passing the dollars through to be able to do something that 
simple on the procurement side of things. So, again, there are 
processes and procedures that seem to take precedence over 
getting people off welfare and into an employable job, getting 
an incumbent worker trained so they can move up the ladder, 
making way for an entry-level worker.
    And if you can find ways to more effectively structure the 
employer role and make the procurement system a little less 
challenging to work through, without losing the accountability, 
then I think that you would see employers more actively 
engaged. And they would see that the programs that are offered 
are meaningful to them. And you might find if you somewhat 
formalize it, that bringing all of those strategic partners to 
the table, it leverages all of their dollars.
    And we are in an era of scant dollars. Resources are tight. 
You have heard many of the speakers today talk about how to 
leverage employer dollars with WIA dollars. But then if you 
leverage community college dollars and university dollars and 
other dollars as well, then we begin to put the resources on 
the table that, as these strategic partners collaborate, can 
make a difference in our workforce.
    Mr. Tierney. Thank you, Mr. Yarmuth.
    I yield to myself for 5 minutes to ask a couple of 
questions here. Dr. Gragg and Ms. Ganzglass and Dr. Baxter, I 
just want to hear from you a little bit.
    Do you think the current membership makeup, where the 
chairperson is from the business sector and at least half the 
board is from the business sector, strikes the right balance? 
Is there not enough business people on the board or too many 
people on your local WIB?
    Ms. Ganzglass. It is really not an area that we focus on as 
much as some other people perhaps, but what I was going to 
respond to the previous discussion I think is very relevant 
here as well.
    The programs that seem to really be working in engaging 
employers and working with multiple employers and helping solve 
employer problems, industry problems, not just a one-time fix 
but actually dealing with the issues of turnover in the 
industry, and health care is one of those, and restructuring 
the job so that they are desirable jobs for people, and people 
don't just turn in and out, is how to engage employers.
    And I have always thought that the WIA system and perhaps 
the WIB structure itself should much more recognize the 
sectoral composition of a community. Because at the moment, it 
is really individual employers who are appointed for whatever 
reason in the community that end up on a WIB. And you really 
need to think about it more systematically and how to interact 
with the sector and build into those kinds of programs as well 
as pathways for low-income people to enter, but then also allow 
low-wage workers to move up.
    And so it is a much more systemic approach than sending 
someone to training or even an on-the-job training contract, 
which is fine, but the others, I think, have broader and more 
lasting impact in the economy.
    Mr. Tierney. Just generally whoever might want to respond: 
Are we having difficulty getting the right kinds of employers 
on the boards?
    Right now, if you have your local municipal chief executive 
making appointments, does that, by and large, cover a wide 
range of jobs and industries in that sector? Or are we finding 
that it narrows to far down to being a replay of the Chamber of 
Commerce or the Rotary but not necessarily bringing in some of 
the new industries, some of the technologies, things like that? 
Is this a common issue or one that we need to be concerned 
with?
    Mr. Jurey. I think the structure is hit or miss. For 
example, right now, a local workforce investment board can 
choose to call the Chamber for a nominee or they can choose not 
to. They can choose to propose nominees from a variety of 
places.
    And so, again, there is really not quite the focus on 
saying, ``Have we looked within that regional economy at the 
drivers, and have we ensured that, as we bring those employers 
on the board, they do represent the emerging in-demand 
occupations, that they are people prepped and willing and ready 
and able to provide the kind of direct input needed to shape 
that system so that it is meaningful?''
    Mr. Tierney. I guess the difficult part for us would be 
whether or not that is something you legislate or whether that 
is your local municipal chief executive having the vision to 
actually go out and make those appointments.
    Is there a recommendation that that type of thing be 
legislated?
    Mr. Jurey. Well, if you look at how most local workforce 
boards' language reads, it is pretty definitive on local 
representatives from organized labor. That is not a great, 
broad decision the local workforce executive director makes. It 
is pretty clear about cities and municipalities and 
universities and education reps, but then it just said employer 
reps.
    Mr. Tierney. Which I guess would be an indication. I was 
here and I don't exactly remember the conversation on that, but 
I would guess that the indication was thinking that the local 
person would know better what industries in their area would 
have these needs and be able to change from time to time and 
move around.
    I am not sure it is working that way in my district, which 
is why I posed the question.
    Mr. Jurey. Well, it could be something as simple as saying 
local representatives that would be inclusive of and 
representative of the general driving industry clusters in the 
region. I mean, there might be ways to create a little more 
structure in the language so that there is a little more focus 
so that you weren't entirely dependent on whether the man to my 
left is visionary or not.
    Mr. Tierney. Thank you.
    Mr. Nilsen, I just want to ask you one question before my 
time expires. What do we need to do to get better data here so 
we can really track what is working and what is not working?
    Mr. Nilsen. Two things need to be done, Congressman 
Tierney.
    One is you need information on everybody who comes through 
the system. Right now we don't have that. And a lot of local 
areas are already doing it, so if you mandate it, I don't think 
it is going to be a big burden on local communities.
    So that we know who is getting what services, who is 
getting training, who is getting job search assistance, so that 
we know--because, right now, there are incentives to only 
register those people who we think are going to be a success. 
And locals have told us that numerous times across the country, 
``We want to be successful so we register those people for 
intensive services for training if we are going to be 
successful, and then we serve the others based on, you know, 
what is left, in a sense.''
    Secondly, you need to do rigorous impact evaluations--that 
is, look at what is going to happen, what happens to people in 
the absence of a program, so that we know what works for 
particular population groups. That was mandated in WIA 1998, 
that Labor do such an evaluation and complete it by 2005. That 
was not done. I don't know what else you can do to get that 
done, but you need the rigorous impact evaluations in addition.
    Mr. Tierney. Thank you.
    I just want to close out my commentary with looking at the 
composition of the boards. And the section on that, the 
language we have now is, ``Representatives of the business and 
local areas should be people who are owners of businesses, 
chief executives or operating officers of businesses and other 
business executives or employers with optimum policymaking or 
hiring authority who represent businesses with employment 
opportunities that reflect the employment opportunities for the 
local area and are appointed from among individuals nominated 
by local business organizations and business trade 
associations.''
    Do we think we need to work on that language?
    Mr. Jurey. I would.
    Mr. Tierney. Would you be good enough to give us some 
suggestions on what you think and send that in to us? I don't 
mean to give you a homework assignment----
    Mr. Jurey. Absolutely.
    Mr. Tierney [continuing]. But anybody on the board that has 
a recommendation on that, we would be happy to hear.
    Mr. Scott, you have a question? Mr. Scott?
    Mr. Scott. Thank you, Mr. Chairman.
    I would like to ask Mr. Ferguson, when we are getting our 
groups together to help out, are the high schools involved in 
what contribution they could make to making sure the young 
people are fully qualified and ready to work? Are they part of 
that team?
    Mr. Ferguson. Absolutely. They are a critical part. And our 
Chamber of Commerce has really taken a lead role in helping to 
drive those career academies and help transform those high 
schools. And the high schools, in particular in our St. John's 
County School District, is onboard and going gangbusters with 
that. But they are important partners.
    Mr. Scott. And you mentioned summer jobs. Is there a 
waiting list for the summer jobs in most areas?
    Mr. Ferguson. There is a waiting list because the funds are 
very limited. We cannot possibly serve all of those who would 
like to participate.
    Mr. Scott. And what do you have for people who have 
previously been incarcerated, in prison?
    Mr. Ferguson. We have direct relationships with our 
Departments of Juvenile Justice, as well as the Department of 
Corrections. As individuals are coming out, we have some good 
partnerships with some faith-based partners that provide 
specific counseling and assistance for those individuals as 
well.
    Mr. Scott. Are those people receiving the services that 
they need, or do we need to do more?
    Mr. Ferguson. We could certainly always do more.
    One of the things we are pulling together, many of the 
different faith-based--there are a lot of small organizations 
that are reaching various populations of those that are coming 
out of our prison systems. And we are in the process right now, 
from a board level, of pulling kind of a task force together to 
look at that and see how can we increase the capacity of our 
region to serve those. Because we have a large number coming 
out of our system.
    Mr. Scott. And one last question, if I could, Mr. Chairman.
    Ms. Baxter, in welfare reform we have work fairs where 
people have to do things, a certain number of hours of work. 
Should getting an education and training count toward that 
goal? Or should they be forced to just get whatever job is 
available, dead-end or otherwise?
    Ms. Baxter. In my experience, the training and the 
education is very important. And I think that one of the issues 
we have to be concerned about is that it goes just beyond 
getting a job but having the capacity to move along or have a 
career ladder for a job as well. So my answer would be that 
education and training is very important.
    I think the existence of an organization or an entity in 
federal government, like the National Institute for Literacy, 
really spoke to congressional concern about just the issue you 
are raising, and that the education and the literacy needs 
would not be forgotten as we were thinking about workforce 
development or as we were thinking about other issues that 
literacy plays a role in.
    So from my perspective and from where I sit, it is a very 
important piece, yes, and should be included.
    Mr. Tierney. Thank you very much.
    All members, by unanimous consent, have 14 days to submit 
any remarks that they care to have entered on the record.
    All of you folks, your comments will be entered on the 
record. We thank you very much for your testimony today.
    Unless somebody has something they absolutely cannot leave 
without saying--and I see that nobody does--I want to thank you 
very, very much for your help and your assistance.
    The meeting is adjourned.
    [The statement of Mr. Altmire follows:]

Prepared Statement of Hon. Jason Altmire, a Representative in Congress 
                     From the State of Pennsylvania

    Thank you, Mr. Chairman, for holding this hearing on the 
reauthorization of the Workforce Investment Act.
    When the Workforce Investment Act was passed in 1998 it represented 
a departure from the way the federal government provided services to 
the unemployed and underemployed. Prior to the Workforce Investment Act 
these services were provided by a variety of different programs that 
had little connection to each other. The Workforce Investment Act 
attempted to unify these varying programs by creating one system that 
could serve all individuals who were unemployed or underemployed.
    In many ways the Workforce Investment Act has been successful. A 
recent report by the General Accounting Office on the Workforce 
Investment Act indicates that federal services for unemployed and 
underemployed workers have become more accessible under the Workforce 
Investment Act. Furthermore, 70 percent of employers report having 
hired at least some of their employees using the one-stop system 
created by the Workforce Investment Act, and these employers generally 
reported that they were satisfied with the services provided by the 
one-stops.
    Despite the general improvements to federal job-training programs 
made by the Workforce Investment Act, additional changes can and should 
be made to further increase the effectiveness of this legislation. In 
particular, I would like to examine how the Workforce Investment Act 
can be altered to better serve the needs of the underemployed. As this 
committee begins the reauthorization of the Workforce Investment Act, I 
look forward to working with my colleagues on this and other issues, so 
that we can improve this critical legislation.
    Thank you again, Mr. Chairman, for holding this hearing. I yield 
back the balance of my time.
                                 ______
                                 
    [Additional submissions from Mr. Hinojosa follow:]
    [The prepared statement of the National Youth Employment 
Coalition follows:]

     Prepared Statement of the National Youth Employment Coalition

    Chairman Hinojosa, Ranking Member Keller, and Members of the 
Committee:
    Thank you for the opportunity to submit this testimony on the 
importance of federally funded youth workforce development programs, 
per the June 28, 2007, subcommittee hearing entitled, Workforce 
Investment Act: Recommendations to Improve the Effectiveness of Job 
Training. The Workforce Investment Act of 1998, administered by the 
U.S. Department of Labor, needs your continued support to have a long-
term impact on the lives of America's young people.
    Established in 1979, the National Youth Employment Coalition (NYEC) 
is a national membership network of over 250 member organizations in 40 
states dedicated to improving the effectiveness of organizations that 
seek to help youth become productive citizens. NYEC promotes policies 
and practices that help young people, particularly disadvantaged youth, 
connect to employment and education opportunities. NYEC strives to 
achieve its mission by tracking, crafting and influencing policy; 
setting and promoting quality standards; promoting professional 
development; and building organizational capacity of youth serving 
organizations. NYEC works at the nexus of the three fields of practice: 
youth development, workforce development, and education. To learn more 
about NYEC, visit www.nyec.org.
    NYEC's membership includes a broad range of direct service 
providers, local and state workforce agencies, research and policy 
organizations, national organizations, and technical assistance 
providers. While NYEC members work with out-of-school and in school 
youth, the common denominator for the majority of the membership is 
their focus on improving policies and practices for youth, ages 14-25, 
who have been poorly served by traditional youth serving-systems and 
are the least likely to make a successful transition to adulthood.
    The Workforce Investment Act (WIA) of 1998 represented a dramatic 
shift in the delivery of employment and training services to young 
people, adults and dislocated workers. For the youth component of WIA, 
this meant a greater focus on all aspects of a young person's 
development, not just their employment and training needs. Researchers 
have identified the following elements as essential in a successful 
youth development approach: 1) focus on strengths; 2) leadership 
opportunities; 3) sense of personal identity; 4) broadening of 
perspective; 5) safe surroundings; 6) civic involvement and community 
service; 7) connections with caring adults in a mentoring relationship; 
and 8) positive peer interactions.
    While the Job Training Partnership Act (JTPA) which preceded WIA, 
was focused on a narrow set of short-term, stand-alone services, WIA 
sought to create a more comprehensive workforce investment system that 
focused on long-term intervention in the lives of young people. In 
order for long-term interventions to be successful, the system had to 
provide program participants with more intensive services like job 
training, counseling, mentoring, follow-up activities and others. 
Additionally, creative ways of reaching young people who were not in 
the public school system had greater importance because of the WIA 
requirement that 30% of youth funds be spent on out-of-school youth. 
This stimulated many localities to think outside of the box because 
traditional means of locating eligible young people, i.e. the public 
school rolls, were not applicable in this instance. WIA also targets 
resources on the hardest to serve including young offenders, foster 
care youth, pregnant and parenting youth, and runaway and homeless 
youth.
    According to the Department of Labor's Fiscal Year 2005 Performance 
and Accountability Report, WIA is successful. In Program Year 2004 
(July 2004-June 2005), WIA programs exceeded the Department's targets 
for Diploma Attainment among youth 14-18 (65% v. 53%), entry to 
employment for youth 19-21 (72% v. 68%), and employment retention for 
youth 19-21 (82% v. 79%). The Report concluded that ``Results for PY 
2004 continue an upward trend that began with WIA implementation in 
1998. All three outcome indicators have increased from PY 2003 and 
exceeded performance targets. Most important is the continued increase 
in high school diploma attainment, given the strong statistical 
correlation between educational attainment and success in the labor 
market.''
    The Workforce Investment Act is not perfect. But, at its core, it 
does provide the basic structure upon which we can build a workforce 
which is competitive. Perhaps most important to our continued economic 
competitiveness, WIA recognizes that it is the very neediest 
disconnected youth, who , if reconnected to education and the 
workforce, can provide the greatest overall benefit to our economy. 
There are enough examples of successful programs to state categorically 
that with the necessary funding and support, the workforce investment 
system successfully addresses the needs of youth who are either 
struggling, on the verge of dropping out of school, or who have left 
the school system and are still in need of work related skill and 
academic skill development.
    Unfortunately, rather than increasing support for successful WIA 
youth programs, funding has been cut by one-third since 2001. The 
current federal investment in youth employment and training only 
reaches a fraction of the eligible youth. About 3.8 million 16-24 year-
olds lack a high school diploma or GED. According to the most recent 
data from the Department of Labor Federal Research and Evaluation 
Database, the Workforce Investment Act provides approximately 150,000 
disadvantaged young people opportunities to turn their lives around--
less than 5 percent of the 3.8 million low income youth who are at-
risk, out-of-school and out-of-work. This is simply inadequate if we 
are to compete in the 21st century.
    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 future on-the-job training. With 
increased competition from abroad, the high dropout rate in our public 
school system, and persistent youth unemployment, the need for such 
programs has never been greater. If we do not adequately invest in WIA, 
these youth will remain on the margins, drain the economy of needed 
resources and not become the viable participants in the workforce that 
we need them to be.
    Therefore, we propose the following recommendations:
    Increase support and investment in the Workforce Investment Act 
Youth Funding Stream. Current proposals in both the House and Senate 
appropriate FY2007 levels ($940,500,000) for Youth Job Training 
activities. This continues to be extraordinarily inadequate to meet the 
needs of youth job training and education programs across the country, 
forcing service providers to cut back heavily on the numbers of 
eligible youth they are able to serve. WIA Youth Activities funds 
should be, at a minimum, authorized at levels matching or greater than 
funding levels in FY 2001, $1.4 billion.
    Maintain the Youth Opportunity Program. Both the Center for Law and 
Social Policy (CLASP) and GAO evaluations of the original Youth 
Opportunity (YO) grants have shown them to be a very effective means of 
targeting disconnected rural and urban youth populations and to result 
in increased youth employment and enrollment in post-secondary 
education. Funding for YO should be separate and in addition to WIA 
Youth Activities formula funds at a minimum of $250 million and 
consideration should be given to expanding eligibility for the grants.
    Retain Local Flexibility and Promote Cross-Sector Collaboration. 
Significant pluralities of disconnected youth populate public care 
systems. Yet, communication and cooperation between systems is often 
piecemeal and inefficient. Therefore, it is in the individual and 
collective interest of these systems to work together to reduce the 
number of disconnected youth.
    In addition, NYEC supports the continuation of local flexibility 
provided by WIA, yet recognizes that states are key to enabling local 
workforce development systems that are effective and accountable. 
Specifically, the state role in 1) coordination; 2) cross program 
integration; and 3) delivery of technical assistance, is critical.
    States and communities should be encouraged and provided incentives 
to promote greater coordination and linkages between the various 
systems and programs that target and serve disconnected youth. In 
particular, states and communities should promote linkages between 
youth workforce development and education systems, juvenile justice/
youth correction and child welfare systems, and programs that target 
pregnant and parenting teens and runaway and homeless youth.
    Allow youth ages 14-24 to be eligible for WIA youth programs.
    For disconnected youth, there currently exist very few systems 
which focus specifically on the difficulties of transitioning to 
independent adulthood. This transition period, where the goal is self-
sufficiency and workforce productivity, is a unique period, and 
therefore needs a unique commitment. School and child welfare programs 
end their services at age 18. Post-secondary education and adult basic 
education programs focus on providing education skills, but do not 
teach how to live as an independent and self-sufficient adult. It is 
estimated that by the age of 25, five percent of youth remain 
disconnected.\1\ For those five percent, it is crucial that programs 
exist to provide the services they need to become connected. In 
general, as WIA services are provided to in-school and out-of-school 
youth and seek to connect youth to employment, an expanded age range 
would provide more flexibility, continuity, and additional options 
across systems for youth.
---------------------------------------------------------------------------
    \1\ ``Connected by 25: Improving the Life Chances of the Country's 
Most Vulnerable 14-24 Year Olds'', Michael Wald and Tia Martinez, 
Stanford University, p. 3.
---------------------------------------------------------------------------
    Streamline and Expand Eligibility. According to a 2002 GAO survey 
of state and local workforce boards, documenting eligibility has been 
``difficult to accomplish and resource-intensive.'' State and local 
officials have asserted that, ``many at-risk youth were unable or 
unwilling to provide pertinent documentation of their income 
eligibility, such as their parents' paycheck stub or tax return.'' \2\ 
In addition, obtaining all of the necessary documentation is time 
consuming and diverts financial and staff resources away from direct 
service delivery. Older youth, in particular, who may not live with 
their families, and may be homeless and transitory, find it very 
difficult to produce the documents required to determine their 
eligibility. As a result, countless eligible youth, discouraged by the 
cumbersome process, never complete the registration process.
---------------------------------------------------------------------------
    \2\ GAO Report to Congressional Requesters, ``Workforce Investment 
Act: Youth Provisions Promote New Service Strategies, but Additional 
Guidance Would Enhance Development'', April 2002, p. 29.
---------------------------------------------------------------------------
    Because WIA eligibility requirements have proven to be so 
burdensome to service providers and so lacking in the flexibility 
needed to promote cross-system collaboration, we recommend that the 
following changes be made to streamline the eligibility process and 
expand income and group eligibility requirements:
     Allow cross program eligibility for young people and 
families who have been determined eligible for other means-tested 
federal programs that require families or individuals to be low-income. 
At minimum, restore the Job Training Partnership Act (JTPA) provision 
that allowed students who are determined eligible for free or reduced 
lunch under the National School Lunch Program to be automatically 
determined income eligible.
     Include foster youth in the out-of-school category, and 
allow court-involved youth or youth court-ordered to attend alternative 
schools in the out-of-school category.
     Amend other federal program statutes to enable federally-
funded programs to share select case information with other human/youth 
service agencies when authorized in writing by a parent or youth age 18 
or above.
     Clarify that self-certification methods, such as sampling 
and other methods that reduce the documentation burden, are acceptable 
alternatives to individual documentation.
     Increase the WIA youth program poverty guidelines to 200 
percent of the lower living standard.
     Allow for school-wide eligibility (school-wide projects) 
for students enrolled in schools in which 40 percent of the students 
are Title-I eligible for free or reduced lunch.
    Support a Performance Measurement System that takes into account 
the challenges associated with serving the hardest to serve 
populations. Such a performance system should be designed to capture 
gains over time and include progress measures based on the youth 
population served and type of services offered. In addition, we are 
concerned that excluding Literacy and Numeracy Gains measures for in-
school youth may serve to push youth service providers to only provide 
services to out-of-school youth. Though many providers are focused on 
out-of-school youth, providers must have the flexibility of serving 
eligible in-school youth in their programs. Many of the programs funded 
by WIA which integrate reading, writing, and math with career and life-
skills training simply are not available in the traditional educational 
setting. Our members report that these integrated youth services, in 
many areas offered exclusively by WIA funded programs, can reach the 
at-risk and disconnected students who are not succeeding in traditional 
educational settings.\3\
---------------------------------------------------------------------------
    \3\ Guidance regarding the measurement of interim and progress 
measures can be found in ``PEPNet Guide to Quality Standards for Youth 
Programs'' and ``From Data to Results,'' National Youth Employment 
Coalition, 2005.
---------------------------------------------------------------------------
    Reduce barriers to serving hard-to-serve youth populations. We 
believe that the common performance measures for eligible youth should 
include clarifying language that urges the negotiation of performance 
goals that reflect the challenges inherent in serving hard-to-serve 
youth populations, such as youth who are subject to the justice system, 
dropouts, youth with disabilities, pregnant or parenting, homeless and 
runaway youth, foster children, or former foster children. Without 
language that explicitly communicates that programs serving hard-to-
serve youth populations cannot be expected to achieve the same outcomes 
as programs serving other easier-to-serve youth populations, these 
youth will continue to be denied access to services.
    Base the formula for allocating WIA Youth Activities funds to 
states on youth joblessness, rather than unemployed individuals. 
Currently, the formula allocates one-third of funds on the basis of 
local workforce area relative numbers of unemployed individuals (adults 
& youth), one-third on the basis of the relative numbers of unemployed 
individuals (adults & youth) in excess of 4.5 percent of the civilian 
labor force in each local workforce area, and one-third on the basis of 
relative numbers of disadvantaged youth in each local workforce area. 
Employment statistics illustrate that youth unemployment is currently 
almost four times the rate of adult unemployment (averaging between 14 
and 15 percent). Traditional unemployment numbers do not include 
unemployed individuals who have stopped looking for work and dropped 
off the unemployment rolls, and thus are not reflective of total 
unemployment. We are concerned that the present formula does not direct 
funds to the areas most in need. We propose replacing the ``relative 
excess number of unemployed individuals'' with some measure of youth 
joblessness, in order to reallocate the youth funding towards a focus 
on the areas most in need of youth workforce development funds. As the 
Bureau of Labor Statistics (BLS) does not currently measure youth 
joblessness, we recommend investment in research to enable BLS to 
conduct a study on how best to collect this data and integrate it into 
the formula.
    Maintain Youth Councils or, as an alternative, require 
representatives with experience serving youth facing barriers to 
employment to serve on workforce investment boards. Youth Councils are 
often strong and influential in cases when Workforce Investment Boards 
(WIBs) and staff have empowered the Youth Council with full authority 
and accountability for youth program development and oversight. In many 
of the local workforce areas, Youth Council chairs are members of their 
WIBs and/or their WIB's Executive Committee, and therefore, are well-
positioned to make recommendations on behalf of their Youth Councils. 
These WIBs often ratify most of the Youth Councils' work and direction. 
These WIBs have strong committee structures and work with most of their 
committees in this manner. However, some Youth Councils experience 
difficulty developing beyond being advisory bodies to their WIBs. If 
Youth Councils are not maintained, then it is imperative to require 
representatives with experience serving youth facing barriers to 
employment to serve on Workforce Investment Boards. Representation from 
the youth community can help to foster and promote cross-system 
collaboration.
Conclusion
    Federal investment, and support of effective programs such as those 
supported by WIA youth formula funds, is crucial if more youth are to 
have the opportunity to successfully reconnect to society. The long-
overdue reauthorization of the Workforce Investment Act youth is the 
time to provide young people with meaningful pathways to employment and 
education opportunities in order to ensure that we remain competitive 
in the 21st century.
    We firmly believe that the economic health of our nation depends on 
investments we make in youth workforce development, education, and 
youth development programs and that our economy will suffer if we do 
not increase our national investment in our emerging young workforce.
    NYEC thanks the Subcommittee for its commitment to the Workforce 
Investment Act and to young people. We would appreciate the opportunity 
to work with you and serve as a resource as you move forward with the 
Workforce Investment Act.
                                 ______
                                 
    [An Internet link to the prepared statement of the National 
Network for Women's Employment follows:]

                 http://www.womenwork.org/pdfresources/
    Women%20Work!%20Recommendations%20for%20WIA%20Reauthorization--
                               FINAL.pdf

                                 ______
                                 
    [Additional submission from Mr. Keller follows:]
    [The prepared statement of Gary J. Earl follows:]

 Prepared Statement of Gary J. Earl, President, CEO, Workforce Central 
                                Florida

    Chairman Hinojosa, Ranking Minority Member Keller, and 
distinguished members of this Subcommittee, I am Gary J. Earl, 
President and CEO of Workforce Central Florida. Workforce Central 
Florida is the Regional Workforce Investment Board under the current 
Workforce Investment Act for the five County area surrounding Orlando, 
Florida. We cover the areas of Orange, Seminole, Osceola, Lake and 
Sumter Counties. We are a regional entity formed by combining the areas 
of two previous Private Industry Councils and adding additional 
counties from each of two other Councils, in order to achieve a 
regional economic area that resembles the kind of regional entity 
envisioned in much of recent discussion on the matter of what the right 
size region might be. Our geographic footprint covers the areas of five 
school districts, three community college districts, and at least seven 
economic development organizations, and each and every one of those is 
a valued partner to our enterprise. To give you some perspective, 
Workforce Central Florida's WIA Adult allocation was larger than that 
of nine states when we checked just a few months ago. At Workforce 
Central Florida, We believe that to compete in the global economy of 
the 21st Century, America, Florida, and our Region must maximize the 
productive potential of all segments of its population and its 
businesses.
    As Background, I would like to share some of Florida's WIA history 
with you. Florida's response to the challenges and opportunities 
offered by the Workforce Investment Act, the amendments to the Wagner-
Peyser Act, and the enactment of the Temporary Assistance for Needy 
Families Act were unique. Florida was an early implementation state in 
the initial phases of WIA, having anticipated much of what was working 
its way through Congress at the time as the new Workforce Investment 
Act. After a long process of public hearings, stakeholder focus groups, 
and so forth, in Florida's landmark Workforce Innovations Act of 2000, 
the State Legislature established the State Workforce Board as the 
policy and oversight body for all workforce development activity in 
Florida, the Agency for Workforce Innovation as its administrative arm, 
and the Regional Workforce Development Boards as the local planning and 
oversight entity responsible for programs operated at the local level. 
This followed several years of discussion and reorganization at the 
state and local levels, as we adapted to the changes in federal 
workforce legislation, the movement of welfare transition programs away 
from a social service design to one of reemployment.
    As I am sure you know, the Workforce Investment Act of 1998 was 
built on five key principles: 1) streamlined services in a one-stop 
environment, 2) customer choice, 3) universal access to all customers, 
4) strengthened accountability, and 5) private sector authority. In the 
Workforce Innovations Act of 2000 (FL), Florida adopted four more of 
its own: 1) self-sufficiency and self-reliance, 2) performance 
accountability, 3) privatization as a cornerstone of operations, and 4) 
local governance by the private sector leadership. Further, the Florida 
Senate Select Committee on Workforce Development identified several key 
issues facing the economy of Florida that had direct implications for 
the workforce Development system. They included, 1) disconnect between 
the workforce system and the state's economic development strategy, 2) 
insufficient number of potential employees with the technical or 
professional skills to meet the needs of Florida's employers, 3) 
insufficient number of potential employees with adequate literacy 
skills, work ethic, and good work habits to meet the needs of Florida's 
employers, 4) problems of welfare transition clients and other 
``working poor'' Floridians, 5) employers' need for continual 
enhancement of employee skills, 6) small business workforce needs, 7) 
strategic, effective, and innovative use of workforce system resources, 
and, 8) multiple, overlapping administrative structures.
    Florida's Legislature concluded, in the preamble to Florida's 
Workforce Innovations Act that, ``Florida's [local business] 
communities have demonstrated in the Workforce * * * programs that they 
have the energy, capacity, and the will to tackle some of society's 
toughest challenges. The nexus between workforce challenges and 
workforce solutions is in the [local business] community and, to the 
greatest possible extent the authority to implement those solutions 
should reside there, as well.'' We believe these actions were directly 
attributable to the private sector leadership involved at both the 
state and regional board levels. In Florida, the oversight delegated to 
the private sector mandated in the Workforce Investment Act was 
extended to all labor market exchange and welfare transition programs 
as well.
    Workforce Central Florida believes that Florida's Workforce 
Development System stands out as a model for the rest of the country. 
Very few states have their own laws on the subject of Workforce 
Development and only a hand full have laws as comprehensive as that of 
Florida. While functional consolidation of all programs related to 
activities in the publicly funded labor market exchange systems is 
still a topic of debate for the large portion of the country, Florida's 
Workforce Innovation Act of 2000 did that to the extent allowed by 
federal law.
    The genius and the key to the success of Florida's system design 
over the years in hitting performance goals, successfully navigating 
welfare reform, responding to disasters, and tackling special charges 
such as Florida Rebuilds (hurricane response) has been in the systems 
recognition of the private sector leadership at the local level as the 
``nexus'' of workforce development activity. Who better to establish 
and maintain policy on labor market exchange than the local business 
leaders who make up the consumer base of the services provided by the 
system? The state law clearly established the state level 
responsibilities as policy and enablement, and anticipated all 
consolidated activities to be overseen at the local level by the 
several regional Workforce Investment Boards.
    Workforce Central Florida recently celebrated its tenth 
anniversary. I would like to share with you some of our accomplishments 
over that period. In the last ten years, Workforce Central Florida has:
     Assisted over 38,676 employers recruit and hire,
     Assisted over 38,676 employers recruit and hire,
     Helped nearly 900,000 residents looking for work,
     Provided over $14M in training scholarships to upgrade the 
skills of Central Florida residents,
     Awarded 44 college scholarships to youth,
     Helped to reduce welfare roles by 80%, saving 
approximately $35M/year in welfare expenditures,
     Partnered with other agencies to help bring another $8.5M 
in grants to our local area,
     Reduced infrastructure from over 1 dozen offices to 5 one-
stop career centers; redirecting funds saved into other services,
     Placed over 320,000 job seekers into jobs,
     Helped over 9000 at risk youth stay in school,
     Received over 55 local, state and national awards of 
excellence,
     Hosted over 1000 HR professionals and CEOs at our 3 
workforce summits,
     Provided outplacement services to area employers for over 
32,000 individuals they had to lay off,
     Partnered with school districts to provide ESOL to 
hundreds of individuals who do not speak English, and
     Directed over $100,000,000 to area organizations through 
contracts for services.
    During that ten year period, there were a number of events that we 
consider significant milestones. I will list a few of them:

1996: New board seated in newly-configured 5 county region
1997: WAGES (welfare reform) launched
    Service delivery in One-Stop began
1998: Teen pregnancy prevention kicked off
    1st web site unveiled
1999: Local WAGES Board and CFJEP merged; WCF is new name
    1st regional labor market study conducted
2000: Search for unrestricted resources becomes a priority of Board
    One-Stop served over 65,000
2001: Workforce Watch e-newsletter began
    Partnered with chambers to train businesses regarding services
    President Bush visited our one-stop center after 9-1-1.
2002: Launch of Employed Worker Training as priority of Board
    Board adopted policy that the employer is our customer
2003: 1st regional workforce summit held--275 attend
    Board designated targeted industries, directing resources to those 
industries in the area compatible with area's economic development 
strategies
2004: Inaugural State of Workforce survey released
    Mobile Express begins service
    NEG response is implemented after hurricanes
2005: State and national recognition received for business and 
        healthcare models
    Katrina came ashore; staff was sent to Mississippi
    Won high performing region designation
    Orange County Mayor's Job Fair held for Katrina victims in area

    I relate these historical facts to make a central point. Workforce 
Central Florida is a success story because the policies followed over 
that time period were generated by an overwhelmingly private sector led 
Board of Directors at the local level. I say overwhelmingly because we 
have maintained a super majority across that period, not just the 
required simple majority. Furthermore, we have maintained within our 
own bylaws a definitional requirement for a quorum that requires not 
just a majority of active Board members to be present to conduct 
business, but an additional requirement that a majority of those 
present must be private sector representatives. That is our corporate 
culture. If we are to truly ensure that the ``investment'' in workforce 
investment is to be an investment in our communities' comprehensive 
economic development strategies, then all expenditures and practices at 
the local region level must be overseen and managed by the local 
regional Boards. In my view, this would necessarily extend even to 
expenditures made under any form of Individual Training Accounts, or 
any of the other several labels that have been suggested for the same 
kind of activity. Without such local oversight, such expenditures have 
no more accountability than FEMA credit cards and can hardly be called 
``investments''. I would recommend to you without reservation, that as 
you deliberate on improving our nation's workforce development system, 
that you consider similar requirements regarding the private sector 
leadership at both the local and state levels.
    I would also like to take this opportunity to suggest a number of 
other recommendations which I would, on behalf of my Board and 
colleagues ask that you consider. As we look for ways to improve 
services to our primary customers the employers we need to continue to 
be able to identify and design program and service mixes that best fit 
the needs of the local Workforce Boards business community. We must go 
beyond ``continue'' to ``triage and blend'' the traditional State 
managed workforce programs with and accompanying traditional local 
workforce programs. One size rarely fits all therefore we recommend 
exploring ways to customize, mix and blend services for the local 
business communities. Therefore, we would ask that you: Allow Local 
Regional Workforce Boards the authority to operate Incumbent Worker 
Training (IWT). Include IWT as another arrow in the local workforce 
quiver of services, continue to explore eliminating the 50% match 
requirement for customized training, provide that services for business 
should include targeted skill development for customized skill needs, 
allow local Workforce Boards the authority to add performance criteria 
for local training provider's eligibility, continue the prohibition of 
listing On-the-Job Training providers (OJT) and customized training 
providers from State Training Providers List, and we request that 
scarce Youth formula dollars not be used to fund new youth programs 
like the National Youth Challenge Grant and other future youth 
programs. In fact, in recent years, the Department (USDOL) has engaged 
in a good bit of discretionary grant-making in areas other than youth, 
as well. Efforts to engage Faith-Based and Community-Based 
Organizations are noteworthy; however, these activities have been 
largely conducted with little or no notice to or coordination with 
designated authorities at the state and local level. In the case of 
some of the WIRED grantees, entities (which did not exist prior to the 
grant) were formed specifically for that purpose without any 
consultation and agreement by local elected officials; creating 
questionable and unclear situations regarding accountability. Some 
large national grants were given to companies offering wages so low 
that such companies would not be considered for funding assistance by 
local authorities at the local level. Discretionary activities of the 
Department should be coordinated with local and state authorities, in 
order to ensure that such activities enhance the economic strategies of 
local areas.
    Adequately funded One-Stop Infrastructure is critical to maximizing 
the availability of training and retraining services, as well as 
support services, for America's employers and workers. Although the 
Workforce Investment Act mandates specific partners within the One-
Stops, partners are not required to pay their fair share and partners 
often choose not to participate when they are pressed to pay. 
Transportation is an issue in most of our regions, making it difficult 
for customers to travel to the various partners' offices. The rising 
costs of infrastructure, physical and electronic, are placing a strain 
on the local workforce boards and their partners. More partners with a 
mandate to share costs are needed to shoulder the infrastructure 
burden. With declining funding and only limited financial support from 
partners, many workforce boards have found it necessary to close One-
Stops. We would ask that you create an infrastructure funding mechanism 
whereby States are required to determine and appropriate contributions 
to the One-Stop infrastructure from WIA mandated partners, without 
federally imposed caps on such contributions and/or establish a 
separate, new authorization for One-Stop infrastructure funding that 
brings together all partners with the needed resources to support a 
comprehensive workforce system.
    Regarding accountability, we would note that in our private sector 
businesses, we expect to be held accountable for employee, customer 
service, and bottom line performance. The public workforce development 
system and its' local programs must also be held accountable, both 
fiscally and programmatically. We support evaluation measures that make 
sense for legislative purposes, as well as managerially meaningful for 
local Boards. ``Accrued expenditures'' must be included in any 
meaningful measurement system, as has been recommended by the GAO, for 
several years now. We support efforts to target performance standards 
under WIA that will help build a comprehensive, outcome oriented 
national public workforce system, and we would hope that there is to be 
room for locally developed measures, as well. We would recommend 
caution with implementation of any measures that may cause unintended 
consequences, such as a tendency to serve individuals who are most job-
ready.
    Finally, and perhaps most importantly, regarding GOVERNANCE, we 
believe that legislation must ensure the continuation of strong, 
locally-based, private sector business-led decision making process of 
the current workforce investment system, the formation of workforce 
regions from the local area up, not the top down, as this is 
fundamental to a region's legitimacy at the local level, and the 
appointment of local boards by local elected officials.
    In the Workforce Investment Act, Congress struck a very delicate 
balance between the authorities and responsibilities given to the 
federal, state and local levels in the system. As an example, the Act 
clearly gave the responsibility of certification of one-stop centers to 
the local Workforce Investment Boards. It also left the oversight of 
the Wagner-Peyser functions at the state level. Care needs to be taken 
that the notion that the proper roles of the federal and state levels 
are to enable the local WIBs, set direction and policy appropriate to 
that level, and assure accountability, and that operational decision 
making occurs at the local WIB level. The states should establish the 
overall framework for service delivery in consultation with the local 
areas. The final determination on service delivery mix should be made 
at the local area, closest to the customer, not micro managed by the 
state. There is a distinct difference between setting standards for 
certification and conducting the actual certification within those 
standards or guidelines. To assist in the clarity of the legislation, 
we recommend the following items:
    Retain the requirements that Chief Elected Officials and Local WIB 
members be included on the State Board (retained from current 
law).Local WIB members on the State Board provide a frontline view that 
many of the appointed business seats and mandatory partner seats may 
not have.
    Focus the role of State boards on providing guidance to partner 
programs on their appropriate roles and contributions to the One Stop 
infrastructure. State boards need to be given tools to fully engage 
partner programs such as the Vets and Vocational Rehabilitation 
programs in the infrastructure of the One-Stop Centers. Many Centers do 
not have co-location of these programs and even if they do they are 
often not structurally a part of the One-Stop team.
    Ensure that regional planning is conducted only after first 
consulting with local boards and local elected officials; and regional 
plans must incorporate the plans of each of the local areas within the 
region. Regional plans should add value to and not be developed at the 
expense of the local area's needs. While regional planning is necessary 
for labor market and economic development information there are still 
unique challenges to the local regions.
    Streamline the membership requirements of local Board membership 
without diluting the private sector representation. There are too many 
mandated partners that do not bring strategic direction or policy 
governance to the State and Local Board memberships. Board size and its 
effect on a Board's ability to function is a serious issue, 
particularly where the area covered by a given Board is large, entails 
heavy time and travel demands on the volunteers, and as a result, makes 
meetings difficult. The requirements for ``representatives'' should be 
minimized wherever possible, but only in the context of and in 
agreement with current requirements of the Act itself. Boards need to 
continue to be driven by the private sector membership and eliminating 
requirements for multiple seats for one-stop partners would enhance 
business leadership. Perhaps a minimum requirement for representation 
on the State Board of Regional Workforce Investment Boards' membership 
would enhance coordination between the two. Specifically, at the local 
level the reduction of requirement to have a representative of each of 
the One-Stop Partners on the local board would help to reduce the size 
of boards to a manageable level and would remove contractors from 
sitting at the board table (as many do across the nation). Local Board 
membership should be Business led with a strong (if not super) majority 
and removing those who are representatives of Unemployment Compensation 
or Trade Adjustment Act and other operational partners would foster the 
environment of a demand-driven, pro-active workforce system.
    I would add to these comments only one more in conclusion. It is 
imperative that we ``get it right'', and therefore, proper deliberation 
is necessary. However, it is, in my view, also (and perhaps more) 
important that we get it sooner rather than later. We need 
reauthorization now so we can move forward in ensuring our communities' 
competitiveness as expediently as possible. Mr. Chairman, Mr. Keller, 
and Members, I want to thank you for the opportunity to comment.
                                 ______
                                 
    [Additional submissions from Mr. Jurey follow:]
    [The statement of the Business Coalition for Student 
Achievement follows:]





                                ------                                

    [The statement of Mr. Rothkopf, submitted at the March 13, 
2007, Committee on Education and Labor joint Senate hearing, 
``Elementary and Secondary Act Reauthorization: Improving NCLB 
to Close the Achievement Gap'' follows:]

   Prepared Statement of Arthur J. Rothkopf, Business Coalition for 
                          Student Achievement

    Chairman Kennedy and Chairman Miller: I am pleased and honored to 
be here today. Thank you for your kind invitation.
    By way of introduction, I am Arthur Rothkopf and I serve as Senior 
Vice-President and Counselor to the President of the U.S. Chamber of 
Commerce.
    I am also testifying today on behalf of the Business Coalition for 
Student Achievement (BCSA). BCSA is a coalition spearheaded by the U.S. 
Chamber of Commerce and the Business Roundtable. The coalition 
represents over sixty business leaders from sectors across our economy. 
BCSA is led by Co-Chairs Craig Barrett, Chairman of the Board of Intel; 
Arthur F. Ryan, Chairman and Chief Executive Officer of Prudential 
Financial, Inc; and Edward B. Rust Jr., Chairman and CEO, State Farm 
Insurance Companies.
    Together, we are committed to achieving the goals of No Child Left 
Behind (NCLB). We strongly urge Congress to act swiftly this year to 
reauthorize this law and strengthen its core principle of 
accountability to ensure that all high school students graduate 
academically prepared for college, citizenship and the 21st century 
workplace.
    The United States in the 21st century faces unprecedented economic 
and social challenges: global competition, the retirement of 77 million 
baby boomers, and the fact that 90% of the fastest-growing jobs will 
require some postsecondary education. It is for these very reasons that 
a recent survey of our affiliated chambers from around the country 
rated workforce and education reform as their number one priority. The 
business community is very much in tune with what is happening--or not 
happening--in our school systems. That's because it is business that 
hires the graduates and must rely on the end product of those schools. 
No one is more in touch with both the successes and the failures.
    Last week the U.S. Chamber issued a report providing further 
confirmation of the need for the business community to be deeply 
concerned about the state of education in this nation. The research for 
this report entitled, ``Leaders and Laggards: A State-by-State Report 
Card on Educational Effectiveness,'' was carried out on behalf of the 
Chamber by the Center for American Progress and Frederick M. Hess of 
the American Enterprise Institute. The report analyzed existing state-
by-state data related to academic as well as key business metrics such 
as innovation, flexibility, and fiscal prudence. Building upon the 
research in Leaders and Laggards, the U.S. Chamber and the Center for 
American Progress released A Joint Platform for Education Reform, which 
echoes the U.S. Chamber's proposals for a stronger education system. 
These proposals include: better teaching, more innovation, better data, 
and better management.
    The study found that K-12 public education has been an abysmal 
failure. This poor performance threatens the future of our children and 
America's competitive position in the world. This is made clear when 
looking at the academic achievement of fourth and eighth grade students 
based upon the National Assessment of Educational Progress (NAEP).
    Even in Massachusetts, which has the highest percentage of 4th and 
8th graders scoring at or above the proficient level on NAEP reading 
and math--less than half of all students meet this target. Overall, 
only about one-third of all 4th and 8th graders in the country are 
proficient in reading and math.
    The data is even more disheartening for the academic achievement of 
low-income and minority students. In our report, we graded states on a 
curve from A to F. Of the nine states which were awarded an ``A''--not 
one had an average percentage of 4th and 8th grade African Americans 
above 22 percent in math and reading. The results for Hispanic students 
were nearly identical.
    Our report highlighted what has also been a fixture of our current 
education system--an unacceptable level of student dropouts. Only about 
two-thirds of all 9th graders graduate from high school within four 
years and only about half of minority students.
    Even among those students who do manage to graduate and move on to 
college, at least 40% have to take at least one remedial course when 
they get there, indicating that high schools are not adequately 
preparing students for the rigor of a postsecondary education 
curriculum. Businesses report the same dismal results for young people 
that they hire.
    This is directly related to another significant finding of our 
report--the lack of rigor in state academic standards. States were 
graded on the quality, rigor, and specificity of their academic 
standards. Only four states were given an A for their standards. 
Furthermore, only eight states have aligned their academic standards 
and graduation requirements with college and workplace expectations.
    In light of these statistics, ``is NCLB really paying off?'' The 
answer is ``yes.''
    As abysmal as this data is, it represents improvement for 
elementary and middle school students from where this nation was prior 
to enactment of NCLB. Specifically, according to the US Department of 
Education, the July 2005 long-term Nation's Report Card (NAEP) results 
showed national student achievement in reading and math at all-time 
highs and the achievement gap closing.
     For America's nine-year-olds in reading, more progress was 
made in five years than in the previous 28 combined.
     America's nine-year-olds posted the best scores in reading 
(since 1971) and math (since 1973) in the history of the report. 
America's 13-year-olds earned the highest math scores the test ever 
recorded.
     Reading and math scores for African American and Hispanic 
nine-year-olds reached an all-time high.
     Math scores for African American and Hispanic 13-year-olds 
reached an all-time high.
     Achievement gaps in reading and math between white and 
African American nine-year-olds and between white and Hispanic nine-
year-olds are at an all-time low.
    The 2005 Nation's Report Card on state-level data included similar 
glimmers of hope. For example, in the State of Georgia, in 2004-05, 
more than 70 percent of the state's limited English proficient (LEP) 
students scored proficient or better in reading, up 23 percent from 
2002. Among third-graders with disabilities in Georgia, 81 percent 
scored proficient or better in reading, up 26 percentage points.
    But to be clear, our nation has a long way to go, particularly for 
our high school students--an area which receives little attention under 
NCLB. The 12th grade NAEP results released last month demonstrates just 
how far we must travel.
    The report found that----
     Only 23% of 12th graders are proficient in mathematics.
     27% of 12th-grade students lack even basic high school 
reading skills, up from 20 percent in 1992.
     Only 35% of students are proficient in reading, a drop 
from 40 percent in 1992.
    What is the solution to address these issues? Some have suggested 
it's time to turn back the clock and go back to a time before NCLB when 
schools, districts and states were not held accountable for reducing 
education achievement gaps.
    NCLB opponents point to a vast array of rationalizations for their 
claims.
     Some groups have argued that NCLB takes away local 
control. They fail to highlight that under NCLB each state determines 
its own system of accountability, its own standards and assessments, as 
well as what it means for students in the state to be ``proficient.'' 
Similarly, they fail to point out that each state determines how 
schools in the state will use the federal dollars to improve 
education--indeed a vast majority of funds are used solely to hire 
teachers. Only when schools are identified for improvement do they 
begin to have increased restrictions on the expenditure of a portion of 
their federal funding.
     Some groups claim that NCLB is overly punitive to school 
systems in which students are not reaching achievement expectations. 
Let's not lose sight of the focus of this Act. NCLB's focus is on 
helping students succeed--it is not about supporting a bureaucracy at 
the expense of helping students learn. NCLB requires states and 
districts to support underperforming schools--that is, schools where 
students have been struggling oftentimes for generations--by requiring 
schools to develop plans on how to help struggling students and by 
providing tutoring and public school choice options to students in 
struggling schools.
     Some groups demand that NCLB accountability requirements 
be suspended in anticipation of ``full funding'' To focus only on 
funding misses the point. The U.S. has the highest spending per student 
of any nation in the world. The reason NCLB is working to increase 
student achievement is that the Act focuses on transparency, 
accountability and results.
     The question should be not how much more funding we need 
to improve student achievement, but how well is the money currently 
available being currently spent. In the Chamber's Report Card, our data 
showed that money alone does not guarantee academic success, but rather 
how wisely those dollars are spent.
    There has been a disconcerting lack of attention to ensuring that 
education dollars are delivering real value. Some states are spending 
less money and achieving real results. Despite steps to increase per 
pupil spending, decrease student-teacher ratios, and recruit a better-
prepared teaching force, student test scores have remained stubbornly 
flat over the past 35 years. By international standards, the U.S. 
spends far more than other nations on education--and has smaller class 
sizes--yet receives far less value in terms of educational outcomes.
    The bottom line is that these and other excuses should be fully 
examined. The burden of any of the NCLB requirements must be weighed 
against the alternative--that is, turning our back on the millions of 
students who are benefiting from its provisions.
    The Business Coalition for Student Achievement remains committed to 
the tenets of the No Child Left Behind Act. As your Committees move 
forward with reauthorization, the Coalition strongly urges you to build 
upon the successes of NCLB, particularly in the following areas:
    1. FOCUS ON COLLEGE AND WORKPLACE READINESS.--We know that 
educators are finding it difficult to help students reach today's 
standards. However, all of the analyses of current State standards and 
tests conclude that they are not aligned with the expectations of 
college and the workplace. The law needs to include incentives for 
States to raise their standards and avoid lowering them.
    2. EMPHASIZE SCIENCE, TECHNOLOGY, ENGINEERING AND MATH.--NCLB 
includes a major focus on reading, which is appropriate. As we move 
forward, the law needs to continue to make early reading a priority 
while also adding an emphasis on science, technology, engineering and 
math.
    3. ENHANCE DATA-DRIVEN DECISION MAKING.--Perhaps the most difficult 
thing that business leaders have encountered in our efforts to help 
improve education has been the absence of good, reliable data. It's 
impossible to imagine running a company without the use of valid data 
to inform decisions. The quality of the data has improved over the past 
five years, but the data systems in many States and districts are 
antiquated and need to be overhauled.
    4. INCREASE TEACHER AND PRINCIPAL EFFECTIVENESS.--One of the areas 
where the current law did not accomplish its objectives has been in 
making sure that all students are taught by highly qualified teachers. 
The Coalition believes that the law needs to expand its focus to 
effectiveness rather than just compliance to ensure that our teachers 
are not only ``highly qualified'' but also ``highly effective.''
    5. STRENGTHEN AND REFINE ACCOUNTABILITY.--The law should provide 
guidance on ways that States can differentiate among districts and 
schools that are close to or far from making AYP, and ensure that 
resources for improvement focus on those with the highest 
concentrations of underperforming students. We also support provisions 
that would permit States to use rigorous measures of year-to-year 
growth in student academic achievement and other methods verified by 
the Secretary that are consistent with the goal of all students 
reaching proficiency in reading, math and science.
    6. INVEST IN SCHOOL IMPROVEMENT AND ENCOURAGE INNOVATION.--Our last 
point brings us full circle to the rationale for the law. It is not to 
punish schools. It is not to make educators look bad. It is about 
improving schools. It is about improving student achievement. It is 
about investing in what research has proven works while also 
discovering new models and innovations. We want to increase the 
capacity of States and other entities to better assist schools that 
need help making AYP; target funding, assistance and distribution of 
effective educators to high-need schools; and continue support for 
innovative models, such as charter schools, diverse providers and 
techniques that effectively integrate technology into appropriate 
aspects of teaching, learning and management.
    For too long the business community has been willing to leave 
education to the politicians and the educators--standing aside and 
contenting itself with offers of money, support, and goodwill.
    Not anymore. This is a matter of critical national urgency. What's 
at stake is nothing less than the continued success and competitiveness 
of the American economy--and the continued viability of the American 
Dream.
    America needs a world-class education system. Students deserve it, 
parents demand it, and businesses require it to compete and win in the 
global economy.
    This concludes my prepared written testimony. I look forward to 
discussing my comments in more detail during the question and answer 
period, but before that, I would again like to thank the two Committees 
for inviting me here today.
                                 ______
                                 
    [Whereupon, at 2:50 p.m., the subcommittee was adjourned.]

                                 
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