Improving Our Response to Workforce Needs: Recommendations for the Reauthorization of the Workforce Investment Act of 1998 (WIA)

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Executive Summary

The Chicago Jobs Council (CJC) supports the concept of a system where job seekers of all skill levels and incomes as well as employers of all sizes and industry types can get the workforce development assistance they need. Developing public institutions that are free of categorical eligibility requirements and are alternatively driven by assessment of need is a long-term vision we promote. However, in the first couple of years of Workforce Investment Act (WIA) implementation, we have seen how the nation’s most needy job seekers were negatively affected by the mandate that local areas create “universal access” without the necessary resources or capacity to do so. The lack of unified planning by federal and state agencies, the existence of misaligned program requirements and performance measures, entrenchment of state agencies, and significant budget crises at the state level have put WIA’s universal access goal out of reach. Rather than supporting effective strategies that help job seekers with the fewest skills access career path employment and supporting needs of employers for qualified workers, time and funds have instead been poured into developing the infrastructure for local one stop systems that often do not meet their needs.

Through reauthorization, we urge our congressional leaders to refocus WIA to achieve four primary goals:

  • Stable, quality employment for the chronically unemployed
  • Job advancement for low-wage adult workers entering the labor market
  • Skill attainment by low-income adults with limited education
  • Access to work experience, literacy and English as a Second Language instruction, high school or General Equivalency Degree (GED) completion, and post secondary education for low-income youth

Employers will benefit equally from this refocusing. As baby boomers begin retiring and the global economy continues to produce widening skills and wage gaps, the public workforce development system must address the large population with limited academic, technological and vocational skills. Despite a downward-turned economy, many employers in several sectors such as health care and manufacturing report job openings that have gone unfilled because of a dearth of qualified candidates.

The Basics

In order to provide a context for our recommendations, this paper summarizes the basics of WIA, lessons learned thus far from WIA implementation, and background on WIA Reauthorization.

Recommendations

Refocusing the system on building the skills of the workforce and better meeting labor market needs will require the following changes through reauthorization of the law:

  1. Increase access to, and investment in, job-connected skill-building opportunities for low-income individuals.During the first year of WIA implementation, local training providers and business associations throughout the country began expressing concern about the significant decrease in the number of people receiving training. Some of the cited reasons for the decrease included a “work first” implementation of WIA and limited federal funds being appropriated for infrastructure development rather than for training. Indeed, the only data available from the U.S. Department of Labor to date confirms the decrease in training accessed by one stop system customers. Approximately 50,000 adults received training in WIA Program Year 2000, compared to 150,000 adults annually in the final years of the federal Job Training and Partnership Act (JTPA). This drop off was true in Illinois as well. Under this recommendation, CJC offers nine concrete ways to increase access to and investment in job-connected, skill building opportunities, including investing in more promising practices such as sectoral-focused training and transitional jobs programs, eliminating WIA’s mandated sequential access to services, and separating vocational adult education funding from other types of needed literacy funding.
  2. Measure and reward efforts that move low-income and other disadvantaged individuals toward stable employment and self-sufficiency. Because only the progress of WIA registrants is considered in the WIA Title I performance measures, local one stop centers and affiliates have a distinct incentive to register only those individuals who will help them achieve their performance goals. According to the General Accounting Office, many states feel their performance goals were set too high and reported that performance levels may be the driving factor in who gets served at the local level. Additionally, in its initial conception, WIA embraced the goal of self-sufficiency for low-wage workers but did not expand that goal for all individuals. Under this recommendation, CJC suggests three options for encouraging states and providers to increase registration of low-income and other disadvantaged populations, including using weighted performance measures and creating a new high performance state bonus. Additionally, this recommendation includes two suggestions for broadening the use of self-sufficiency standards.
  3. Work with other federal agencies to align the goals and outcomes for the nation’s workforce development system. States found it difficult to develop and implement unified plans under WIA, despite the option in the law, because of the misaligned goals and requirements of federal agencies. Lack of unified planning has significant impact on customers of the system. Job seekers, especially those who are most disadvantaged, are often subjected to numerous eligibility processes and convoluted communication from various providers before getting the workforce services they need to obtain their first entry-level job, switch to a better entry-level job, or advance in their careers. At best, the workforce service delivery system is difficult and confusing for even highly skilled job seekers to navigate and use. Some of the difficulty and confusion for job seekers results from public administration of funding, which places enormous operational strain on providers and results in inefficient program delivery strategies. Under this recommendation, CJC proposes six strategies for ensuring that federal departments are not working at cross-purposes or making coordination nearly impossible for states. Specific opportunities for coordination are cited, included with TANF, Unemployment Insurance, and Section 3 of the HUD Act.
  4. Increase investment in workforce development and create good jobs for low-income individuals.Federal budgets reflect continued divestment in workforce development programs that target low-income individuals. Between 1985 and 1999, overall funding for JTPA and WIA (excluding the summer youth program) decreased by 24%. According to The Workforce Alliance, this decreased funding was largely due to cuts to youth training, but adult training resources also experienced continuous decreases over the past decade: 49% of its value between 1985 and 2001. Last year, we saw Congress approve over $100 million in rescissions to the WIA FY2001 budget and the Administration continues to propose cuts for the next fiscal year budget. At the same time, states are facing the biggest deficits since World War II. Unstable federal commitment to workforce development has a great impact on local areas’ ability to address the growing skills gap currently having a negative impact on local business and residents. Under this recommendation, we make an argument for increased WIA appropriations and the need for federal investment in job creation strategies.