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75–651 PDF 2002

S. HRG. 107–168

THE WORKFORCE INVESTMENT ACT

HEARING

OF THE

COMMITTEE ON HEALTH, EDUCATION,

LABOR, AND PENSIONS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON

EXAMINING CURRENT JOB TRAINING ISSUES RELATIVE TO A FRAGILE

ECONOMY, FOCUSING ON IMPLEMENTATION OF THE WORKFORCE INVESTMENT ACT OF 1998, STREAMLINING TRAINING SERVICES AT THE

LOCAL LEVEL, ENHANCED TRAINING OPTIONS, AND A STRONGER

ROLE FOR THE PRIVATE SECTOR

OCTOBER 4, 2001

Printed for the use of the Committee on Health, Education, Labor, and Pensions

(

00–000

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

JAMES M. JEFFORDS (I), Vermont

JEFF BINGAMAN, New Mexico

PAUL D. WELLSTONE, Minnesota

PATTY MURRAY, Washington

JACK REED, Rhode Island

JOHN EDWARDS, North Carolina

HILLARY RODHAM CLINTON, New York

JUDD GREGG, New Hampshire

BILL FRIST, Tennessee

MICHAEL B. ENZI, Wyoming

TIM HUTCHINSON, Arkansas

JOHN W. WARNER, Virginia

CHRISTOPHER S. BOND, Missouri

PAT ROBERTS, Kansas

SUSAN M. COLLINS, Maine

JEFF SESSIONS, Alabama

MIKE DeWINE, Ohio

J. MICHAEL MYERS, Staff Director and Chief Counsel

TOWNSEND LANGE MCNITT, Minority Staff Director

(II)

CONTENTS

STATEMENTS

THURSDAY, OCTOBER 4, 2001

Page

Kennedy, Hon. Edward M., a U.S. Senator from the State of Massachusetts ... 1

Wellstone, Hon. Paul D., a U.S. Senator from the State of Minnesota ............... 4

DeRocco, Emily S., Assistant Secretary For Employment and Training, U.S.

Department of Labor, Washington, DC; and Hon. Thomas M. Menino,

Mayor, Boston, MA .............................................................................................. 7

Nilsen, Sigurd R., Associate Director, Education, Workforce and Income Security Issues, U.S. General Accounting Office, Washington, DC; Rebecca

Yanisch, Commissioner, Minnesota Department of Trade and Economic Development, accompanied by Berilynn Corcoran; and Harry Van Sickle, Commissioner, Union County, PA, Lewisburg, PA ................................................... 21

ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:

Emily Stover DeRocco ...................................................................................... 35

Sigurd Nilsen .................................................................................................... 38

Letter to Senator Kennedy from George R. Boggs, dated Oct. 4, 2001 ........ 39

Letter to Senator Kennedy from Robert Mudge, dated Oct. 3, 2001 ............ 40

The WorkPlace, Inc .......................................................................................... 40

Greater Boston Chamber of Commerce .......................................................... 41

(III)

(1)

THE WORKFORCE INVESTMENT ACT

THURSDAY, OCTOBER 4, 2001

U.S. SENATE,

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS,

Washington, DC.

The committee met, pursuant to notice, at 10:06 a.m., in room

SD–430, Dirksen Senate Office Building, Senator Kennedy (chairman of the committee) presiding.

Present: Senators Kennedy, Jeffords, Wellstone, Murray, and

Clinton.

OPENING STATEMENT OF SENATOR KENNEDY

The CHAIRMAN. Good morning. The committee will come to order.

I would like to thank all of you for participating in this important hearing on job training, and I want to welcome Assistant Secretary Emily DeRocco and also a very, very good personal friend

and one of the great Mayors of our City of Boston, Tom Menino,

and others who will be testifying here today about the needs for

training and future prospects for employment in the United States.

Mayor Menino is an impressive leader in Massachusetts and

across the country on the importance of job training, and he has

been effective in giving important priority to this issue in the city

budget. He is a strong advocate for providing adult workers and atrisk youth with the skills that they need to compete for good jobs.

Thank you, Mayor Menino, for being here today and for all that

you do every day for our city and our State and our country.

The members of this committee have worked well together to create the current workforce investment system, and we are committed to ensuring that the system gets the attention and resources

that it needs to fulfill its promise.

The tragic events of September 11 have had a devastating impact

on thousands of American families. There are no words that adequately describe our concern for their plight. As a Nation, our

hearts are with all of these families. Many have shown their support by volunteering. Others have donated to charities.

The working families of the Nation are the true backbone of our

country. We are proud of their commitment, proud of their courage,

proud of their spirit, and proud of their strength.

Today this committee will focus its attention on the needs of

workers. Specifically, we want to ensure that the system that was

created to deal with job training and job placement is ready to

meet the extraordinary needs of the coming months.

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Over the past year, unemployment rates were up in 38 States,

with a national increase of one-half of one percent in the number

of dislocated workers during the year.

A significant share of the recent increase in unemployment is

due to the rise in the number of mass layoffs—layoffs that affect

50 or more workers in the same company. Over the course of the

past year, such layoffs have increased by 50 percent. In Massachusetts, the number of such layoffs has increased by 85 percent. Twothirds of those layoffs occurred in the manufacturing sector. These

workers need to be retrained because their jobs do not exist anymore.

There has rarely been a time when investing in job training is

more critical. In the strong economy of recent years, many workers

without high skill levels were able to obtain a job and learn the

needed skills while working. In the current slowing economy, competition for jobs is much greater. Workers without literacy skills,

without proficiency in English, without technology skills will find

themselves left behind.

Businesses struggling to compete in the modern world economy

need the best workforce that we can give them. Hardworking

Americans deserve the best training possible so that they can do

what they do best—make our country strong.

Job training is essential, and so are other steps. We need to

strengthen the unemployment insurance system. We need to provide health coverage for laid-off workers. These measures are especially important now because of the slowdown in the economy.

Our witnesses today have been asked to describe how the job

training system has evolved. Are workers getting better service at

the one-stop career centers? Are training dollars helping to match

skill programs with the jobs that are available in local areas?

We will begin this morning with comments from Assistant Secretary DeRocco and then hear from experts from the General Accounting Office, who will discuss the current report on implementing the Workforce Investment Act.

I want to mention some of the important information that we

have from a very important study that has just been completed at

Northeastern University. I will just read a few excerpts and include it in its entirety as part of the record.

‘‘We find very little comfort in the still relatively low unemployment rates in the region and State given the dramatically changed

condition in the region’s unemployment picture over the past 6

months.’’ They are describing New England.

‘‘Our analysis of unemployment data reveals that a disproportionate share of the Nation’s recent rise in aggregate unemployment has been concentrated in the New England region. The findings provided reveal that over the past 12 months, the national

number of persons officially classified as unemployed in the household survey increased by 747,000, or about 13 percent. In New

England, the number of unemployed persons rose at a much more

rapid rate over that same period of time. Unemployment in the region grew by 73,000 persons over a 12-month period. This represents an increase of 37 percent in open unemployment in the region, a rate of increase nearly three times that of the Nation.’’

3

‘‘In Massachusetts, total unemployment grew even more rapidly

than in the region. Since last winter, the number of unemployed

workers in Massachusetts is estimated to have increased by nearly

60 percent, growing by 52,400 persons over the time period, with

all of this increase taking place since the winter.’’ ‘‘These findings reveal that over the past 12 months, 13 percent

of the Nation’s increase in unemployment occurred in the New

England States despite the fact that New England accounts for

only one in 20 labor force participants in the Nation.’’ They make another interesting observation: ‘‘Our analysis clearly

indicates that rising layoffs are a key factor in explaining the worsening unemployment in New England. Mass layoff events are defined as a layoff in which a business establishment within a State

has at least 50 initial unemployment insurance claims during a 5-

week period. To qualify as an extended mass layoff, at least 50

workers must remain on layoff for at least 30 days. The number

of events that have occurred in the Nation has increased sharply

over the past year.’’ ‘‘Thus, as the national economy has weakened, New England has

experienced a disproportionate share of major national layoff actions. Similarly, Massachusetts saw the number of mass layoff

events rise by 85 percent over the past year, leading the region in

the rise in layoff events. This represents a 44 percent increase in

the number of persons losing their jobs due to mass layoffs.’’ [The document referred to was not received in time for press.]

The CHAIRMAN. So this is something that is taking place across

the country with particular focus in the New England area, although it is taking place across the country.

I just want to mention that strong support for the training programs comes equally from representatives of the workforce as well

as the business community. I will not take the time now, but will

include the relevant documents from the Chamber of Commerce

and other groups on this matter.

[Document referred to may be found in additional material.]

The CHAIRMAN. We in this committee spent 5 years restructuring

the workforce to bring 127 different workforce programs and 12 different agencies together into one-stop career centers to try to begin

to coordinate and consolidate and find out what the workers were

best suited for and then to ensure that there would be training programs, and then give the information to the trainees to find out

which programs would work best for them and, at the end of the

day, what the retention rate was when they got jobs after going

through the programs. So we increased the responsibility for the

training programs and for the workers and gave them greater flexibility, and we have found very broad success.

The real question is whether we are going to have the resources

to put these ideas to work. Last night, the President announced a

$70 billion stimulus program which has a variety of features. We

will not have an opportunity today to get into the training programs, but we want to underline the importance of the training

programs in this, and I think it is extremely important that that

stimulus program contain these training programs.

As a final point, a lot has been made in the past of unexpended

funds—and I am going to ask the Mayor to address this, and I will

4

just make a comment—what unexpended funds does not detail is

obligated funds. If you look at our region of the country, there may

be a couple of States that have not obligated their funds, but in the

great number of States, they are right up to here in terms of obligated funds. In many of our universities, for example, we have

changed the way of doing business so that the reimbursement goes

to the universities and colleges for the program only after completion. So those funds have been obligated, they have been earmarked, they are going to be used, and it should not be considered

that there are plenty of funds out there if only the interested parties would get busy about it.

When I first entered public office, if you worked in the Fall River

shipyard, your father worked there, and your grandfather worked

there. You had a high school education, and you had a good life.

Today, everyone who enters the workforce will have nine different

jobs. We understand that. But if this country is going to be competitive, if we are going to meet our responsibilities to the workforce, we have to make sure that we make available to American

workers the training to enable them to upgrade their skills and

continue to perform to ensure that we have the strongest economy

in the world and that those families will be able to reach their

highest dreams.

I turn now to the chairman of our workforce subcommittee, Paul

Wellstone.

OPENING STATEMENT OF SENATOR WELLSTONE

Senator WELLSTONE. Thank you, Mr. Chairman. I will be very

brief so we can get on with the testimony.

I was listening to your remarks, and you are quite right—along

with your help and Senator Jeffords’ and others, Senator DeWine

and I spent a good number of years on the Workforce Investment

Act.

The CHAIRMAN. Yes. I want to acknowledge that work.

Senator WELLSTONE. I have here a number of strong recommendations from businesses in Minnesota in behalf of these

workforce centers, and I would like to include that in the record.

The CHAIRMAN. It will be so included.

[The document referred to was not received in time for press.]

Senator WELLSTONE. The second thing I want to mention is that,

along with yourself and Senator Collins and Senator Enzi, we circulated a bipartisan letter urging the appropriators to increase the

2002 funding for workforce development, and I think it is going to

be key that this be a part of any economic stimulus package.

Then, believe it or not, I only have one other thing to do. There

is a lot that I could say but I will not—unless you encourage me,

which you will not—but I think everything that you said could

apply to Minnesota. The only thing I would say is that beyond the

aviation employees, I can tell you that I am going to have an employment and training hearing back home on Monday, and unfortunately, it will be packed with people, because this economic downturn cuts across a very broad sector of the population, including the

small business sector. So I think this hearing today is extremely

important.

5

Finally, to save time, I want to introduce on the second panel Rebecca Yanisch, who is the commissioner for the Minnesota Department of Trade and Economic Development. She has been commissioner for 6 months, but for 20 years, she has been about this work,

focusing on communities, economic development, workforce development. So I am very honored that she is here to represent our

State of Minnesota.

And I am hoping that Berilynn Corcoran will have a chance, Mr.

Chairman, to say just a few words, because hers is a powerful

story. She is a laid-off clerical worker from Northwest Airlines. She

is an IAM member from Minneapolis, a single mom with two children, who started as a cleaner in 1999 for Northwest. As a single

mom with two kids, she wanted weekends off, so she moved to a

clerical position and then, with little seniority, she was out of work

on September 24.

I have one additional point, Mr. Chairman. Ms. Corcoran’s son

Zach has been a kidney patient at Saint Jude’s and is also a Partner in Hope, and for the past 2 years, he has been collecting, if you

can believe it, aluminum cans and turning them in for cash, and

he recently turned over the proceeds of $300 to Saint Jude’s. This

is phenomenal kid with a phenomenal mother, and I am hoping

that with our commissioner, she can just have a few words also before the committee.

I thank you for being here, Mayor and Ms. DeRocco. We look forward to your testimony.

Thank you, Mr. Chairman.

The CHAIRMAN. I see my colleague and friend, Senator Jeffords,

is here.

Senator JEFFORDS. Why don’t we proceed with the testimony, Mr.

Chairman? Thank you.

The CHAIRMAN. Very good.

Before we begin I have a statement from Senator Enzi.

[The prepared statement of Senator Enzi follows:]

PREPARED STATEMENT OF SENATOR ENZI

Mr. Chairman. Thank you for calling this hearing to discuss job

training under the Workforce Investment Act.

As the former Chairman and now Ranking Member of the Subcommittee on Employment, Safety and Training, I have been a

strong supporter of the Act. When the legislation was passed in

1998, it was a milestone in the development and delivery of a comprehensive workforce investment system to better serve our nation’s workers and employers. Today, in the wake of the tragic

events of September 11 and the weakening economy, the Act plays

an even more critical role.

The fundamental principles upon which the bipartisan Workforce

Investment Act was based included: (1) state and local flexibility,

(2) a strong role for local workforce investment boards and the private sector, and (3) streamlining services.

Under WIA, states and localities have increased flexibility. Significant authority is reserved for Governors and local elected officials to implement innovative workforce training programs tailored

to meet the needs of the local and regional labor markets. As WIA

reflects, state and local governments, not the federal government,

6

are best-positioned to recognize and respond to workforce needs

and must be given the room to do so.

WIA creates a public/private sector partnership in the strong role

of local workforce investment boards. These local, business-led

boards focus on strategic planning and oversight of the local workforce investment system. Local businesses and labor have a direct

stake in the effectiveness of the local workforce investment system.

They also have direct insight to local workforce data and needs.

The active involvement of local business and labor is therefore critical to effective workforce training. WIA recognizes that decisions

should be made by those closest to the problem and, therefore, closest to the solution.

WIA was enacted to streamline the fragmented employment and

training system previously in place. By integrating services in the

‘‘one-stop’’ delivery system, employment and training services are

more accessible for individuals seeking jobs and training as well as

the businesses providing the jobs.

These principles of state and local flexibility, public/private partnership, and streamlined delivery were intended to ensure that

WIA withstood the test of time. Like so much else in the aftermath

of the terrorist attack , this nascent statute is being tested today

in a way that was hard to even imagine when the law was enacted.

However, I believe that the key principles upon which WIA was

built provide a structure for workforce investment in this country

that can effectively respond to the challenge.

Whether in a period of economic expansion or contraction, WIA

is designed to meet the changing workforce development needs of

the time. Through the operation of national emergency grants, WIA

also has a mechanism in place to provide assistance to dislocated

workers as a consequence of the terrorist attack and subsequent security measures. It is our responsibility to see that there is sufficient funding for WIA to perform the functions for which it was designed.

I have previously expressed serious concerns about the use of

workforce investment funds to offset for 2001 supplemental appropriations. previously in existence. There are no longer alternative

training programs for dislocated workers to access if we make it

impossible for them to access WIA’s one-stops by not restoring the

recission passed in July.

In my state, this recission would reduce funding for dislocated

workers from $555 thousand to $345 thousand. While these numbers might not seem significant to those from larger states, it represents a 38% cut in the funds Wyoming has available to assist

those hit by unemployment. This would have a serious adverse impact on the progress we have made in the implementation of WIA.

On top of the substantial recission of FY 2001 funds comes a FY

2002 budget cut at a time when workforce training is needed most.

Total state allotments for dislocated worker activities are cut by 6%

based on pre-recission numbers. In New York, the state hit hardest

by the terrorists attack, the state allotment for dislocated worker

activities is reduced by 25%. Wyoming’s allotment is reduced by

13%.

Even before the events of September 11, the proposed recission

and budget cuts in WIA funding seemed misguided. In the afterVerDate 11-MAY-2000 10:01 May 02, 2002 Jkt 990100 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 75651 SLABOR2 PsN: SLABOR2
7

math of the terrorist attack and ever weakening economy, the

recission and budget cut are unfathomable. Now is not the time to

undermine the principal mechanism through which workforce

training and assistance is delivered. Now is the time to enhance it

so that state and local workforce investment boards may provide

much-needed assistance to dislocated workers.

I thank you Mr. Chairman.

The CHAIRMAN. Ms. DeRocco, we want to thank you very much.

I understand that you have taken the time to visit ‘‘ground zero’’

last week. I know that it must have been as moving for you as it

has been for all of us.

We look forward to your testimony and importantly, we look forward to working with you on these issues in the Department.

Thank you very much for being here.

STATEMENTS OF EMILY S. DeROCCO, ASSISTANT SECRETARY

FOR EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF

LABOR, WASHINGTON, DC; AND HON. THOMAS M. MENINO,

MAYOR, BOSTON, MA

Ms. DEROCCO. Thank you, Mr. Chairman and members of the

committee. I am very honored to appear before you today.

I know that our purpose today is to discuss the progress in implementing the Workforce Investment Act, and we do believe that

the publicly-funded workforce system and the one-stop career systems being created in States and communities across the Nation

are critical components of the workers’ economic safety net in both

good and challenging economic times.

Today we face some of those challenging times. In August, as the

newly-confirmed assistant secretary of ETA, I began examining

progress in implementation of WIA. Then came September 11, a

day that is seared in our collective memories. On that day, thousands of workers went to work, and many never came home; and

thousands more, as survivors, lost their jobs and their families’ security.

Since that day, we at the Department of Labor have been focused

on deploying the tools and the resources of the publicly-funded

workforce system to assist those who have lost their jobs.

The Monday after the attack, I did go to New York City at the

request of New York Labor Commissioner Linda Angelo. She advised me that available data indicated that businesses in the area

of Lower Manhattan affected by the attack employed approximately 700,000 workers. Of these, preliminary estimates are that

75,000 will be filing unemployment insurance claims, and another

35,000 may attempt to access the Disaster Unemployment Assistance Program.

With Secretary Chao’s direction, we are working closely with

New York and Virginia and other States that are feeling the effects

directly of the attacks of September 11 and those workers who need

services as a result of the ripple effects of those attacks.

The Labor Department has already provided $25 million to New

York to create temporary jobs for dislocated workers. Another $3.5

million has been made available to New York to shore up their unemployment insurance infrastructure, and their UI claims workVerDate 11-MAY-2000 10:01 May 02, 2002 Jkt 990100 PO 00000 Frm 00011 Fmt 6633 Sfmt 6601 75651 SLABOR2 PsN: SLABOR2
8

load as it increases will require additional funds, and we are prepared to provide those.

We are working with the Commonwealth of Virginia to ensure

their unemployment insurance and disaster unemployment assistance infrastructure is available to meet workers’ needs. In fact, we

had Federal staff who joined with the Virginia Employment Commission staff at a temporary site at Reagan National Airport to

take the claims of workers dislocated as a result of the Pentagon

attack.

As other States like Minnesota experience mass layoffs or major

dislocations, I know that you know the resources of the Secretary’s

national reserve under WIA are available to assist in States’ and

communities’ efforts to supplement current services of the publiclyfunded workforce system.

Let me turn now to those current services and the original purpose of today’s hearing to discuss our progress in implementing the

Workforce Investment Act and the new integrated service delivery

system.

Generally, I can report to you that States and local communities

have made great strides in integrating WIA. All 54 States and Territories have plans approved by the Department and operational.

There are incredibly successful examples of one-stop career centers

in most States across the country.

Just as the General Accounting Office has been analyzing our

progress, so too has the Employment and Training Administration

in DOL. I want to take a moment to commend the GAO. In a

former life, I was part of their information-gathering team and participated in many of their discussions that led to their analysis,

and I know they have done an extraordinary job with some very,

very helpful results.

The three central issues that GAO has identified are indeed the

three issues that have surfaced from the Federal, State, and local

workforce system work groups that the ETA commissioned. Let me

comment on those three issues briefly.

First is the full integration within the one-stops. This effort to

build one-stop career center systems is not unlike a private sector

venture to establish a mega-merger of many dynamic companies.

They all have their own corporate cultures; some still have their

own requirements and funding streams. This creates tension; this

creates some difficulty.

However, again, there are outstanding examples of integrated

one-stops around the country. Some models that I would cite for

you are in San Diego, CA, where customer satisfaction surveys put

their customer satisfaction results absolutely parallel to some of

the private sector customer service leaders like Nordstrom.

We have attempted to help one-stops in the integration of services deal specifically with cost-sharing and cost allocation issues,

which has been a financial burden. We issued guidance to States

and communities to help in that regard, and we will be very much

more aggressive in the days ahead in sharing promising practices

from those States and communities that have been successful in integrating services.

The issue of the systems difficulty in recruiting eligible training

providers is a very challenging one. Our system reports that many

9

providers just simply find that the information requirements to get

on the list are too burdensome in relation to the number of WIAfunded participants who enter their programs. While States’ policies on these eligible training provider lists vary, it does appear

that the most successful are those that allow providers to apply

and update their data online and/or where States and communities

are assisting providers in making performance data available at a

lower cost.

Again, we do have successes in the system—I would point to Missouri and Texas as examples of eligible training provider systems

that appear to be working well, and we intend to help those States

lead the way for others who are having some difficulty getting this

part of the Workforce Investment Act operational.

Third, the GAO cited the challenge of fully engaging business, as

you have, Mr. Chairman, on the State and local workforce boards.

Nationally, we have engaged our business partners to help provide

peer-to-peer assistance in clarifying the business role, the critical

role in driving this system. We have identified successful board operations across the Nation, and we are using them as models for

other State and community boards to utilize.

Finally, I do want to assure you that we are keeping close watch

on the availability of funds in the present economy. This is a critical issue for the States and local communities who are committed

and dedicated to serving the needs of the businesses and workers,

their constituents as well as yours.

I want to thank you for this opportunity to share our observations with you. At the Department of Labor, it is our commitment

to continue to support State and local agencies as they work to

quickly and effectively help those affected by the September 11 attacks and the ripple effects that the attacks have caused. Next year

at this time, we will be able to come before you to reflect back and

say this system was up to the task. Thank you.

The CHAIRMAN. Thank you.

[The prepared statement of Ms. DeRocco may be found in additional material.]

The CHAIRMAN. Mayor Menino, welcome.

Mayor MENINO. Thank you, Senator Kennedy and members of

the committee.

I want to thank you for inviting me to testify today on the critical issue of workforce development. As our Nation works to regain

its economic footing, we must continue to build a workforce training and placement system that brings skills to people and people

to jobs.

The tragic events of September 11 have highlighted the plight of

workers laid off in the airline industry, in the hospitality industry,

and all the businesses that support these sectors. Yet even before

that sad day, American workers young and old were finding themselves out of work as a result of corporate cutbacks.

As vice president of the U.S. Conference of Mayors, I can tell you

that mayors saw this happening months ago. That is why we spoke

out in the summer against rescinding funds for job training for dislocated workers.

10

It just did not make sense to cut funding for dislocated workers

at a time when the number of people out of work was rising. And

it does not make sense now.

Let me express my appreciation and that of the U.S. Conference

of Mayors to the 45 Senators from both parties who signed a letter

to the Senate Appropriations Committee urging restoration of these

critical funds. You were right then, and you are even more right

now.

Over the last year and a half, our national unemployment figure

has climbed to almost 5 percent. In Boston, for example, the number of unemployed rose from 8,500 in August of 2000 to more than

13,000 in August of 2001—a jump of more than 50 percent.

For Massachusetts, the numbers are equally alarming—just over

90,000 in August of 2000 to more than 124,000 in August of 2001.

We know that this is not a local or regional phenomenon; pink

slips have sprouted up around the country as our economy has

slowed. Mayors hear these stories every day from our neighbors

and our friends.

On Tuesday, I met with Mayor Sharon Sayles Belton of Minneapolis, along with many business and labor leaders from her city.

They are facing enormous problems caused by Northwest Airlines

layoffs, and they also need help.

Senator Kennedy, I have faith that the strong and diverse economy of America’s cities will bounce back, but we need a jumpstart

now. And workforce development is the spark that we need to ignite our Nation’s economy.

Our job training systems are starved for funds. There are good

programs and good placement rates in our cities, but the funding

is short, and the challenge is tall. We have a good base to build

upon thanks to the one-stop career centers created by the Workforce Investment Act and the partnerships formed between business and local government. But right now, it takes every resource

that a career center has to handle the referrals from a single plant

closing.

Senator Kennedy, I want to thank you and your colleagues for

supporting these career centers. The system is in place, and it is

working. Now we need to do more. We have to support these centers by giving them the funding they need to put our people back

to work.

One-stop career centers provide a number of important services,

not just for workers but also for employers. But these centers are

working at full capacity and have been for a while—before the economic slowdown and before the tragedy on September 11.

I can assure you of this—if you give us the resources, we will

help people find new jobs. We need cooperation across a number of

Federal agencies to ensure a quick recovery. Job training and assistance in finding a job are only parts of the puzzle. Some people

will not get back to work unless we help them learn English. Some

will need to get high school credentials. Others need child care and

health care services.

Cities like Boston are doing our part with local dollars. In my

State of the City speech, I committed $2 million in city funds for

skills upgrading. In addition, Boston provided another quarter-million dollars to expand English as a second language programs.

11

That investment was matched three-to-one by foundations and the

private sector so that our new Bostonians can find better jobs and

better lives for their families.

This year, Boston spent $5 million—one of the largest amounts

spent nationally—to ensure that young people had jobs this summer. Let us not forget our young people. They are our future workforce and in many places, a key part of our economy. Let us not

cut their programs and steal their hopes for a better future.

We should remember that while these are tough times for our

economy, and some industries have been hit hard, there are other

industries and occupations in great need of skilled workers. We are

working extensively with the health care industry in Boston, not

only to ensure its long-term fiscal health but also to provide them

with a quality workforce that will continue to draw patients from

around the world.

If I can leave you with a few thoughts today about an economic

stimulus package, I would recommend the following. In addition to

providing the immediate benefits that laid-off workers need, give

cities the funds to provide workers with the skills training necessary for them to find new jobs. Invest in the one-stop career centers—the infrastructure created under WIA. We can put the money

to work quickly and we can give you real results. The fallacy is

that same people are saying that some cities have not spent their

money. There is a lag between billing and the Federal Government

paying it; it takes 6 to 12 months for that money to get spent.

Second, look at job training as something that extends beyond

the Workforce Investment Act. English classes help. GED programs

for adults help. Computer literacy also helps. We have a program

in Boston called Technology Goes Home that is training families,

adults and children, to use computers. I have seen family breadwinners and single parents get better jobs because they became

computer-literate. This is a program where we train parents and

children together, and they are able to bring a computer home.

Some of these families would never have a computer unless we had

this program in our city.

Third, in fact, if you want to stimulate the economy and improve

job skills, I would give a tax credit to every family of modest means

that buys a computer. It would boost manufacturing while expanding technology literacy. I think it is a winner both ways.

I hope the Senate will consider several other short-term tax incentives as a menu of options, including: credits for moderate and

low-income workers who spend their own hard-earned money to improve their chances for a better job; short-term tax credits for businesses that use the slowdown in the economy to retrain their workforce rather than laying them off; incentives and strategies for

small business owners and their workers to enable them to fully

participate in any workforce recovery strategy; increasing low-income housing tax credits to spur a lagging construction industry;

lifting the cap on State and local tax-exempt bonds as a means to

boost economic development; and incentives for travel, to get both

businesses and families back in the air, on the rails, and on the

road.

Again let me thank the committee for inviting me to testify

today. In the last few weeks, we have seen our country unite in

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ways that I do not think many of us could have imagined just 1

month ago. We have come together to help New York and Virginia

rebuild. We are supporting our military as they prepare to defend

freedom. We have reached out to the airline industry so that it can

continue to function as an important part of our economy. And

now, it is time for us to come together and support American workers. We need to put them back to work, and workforce development

should be an important part of an economic stimulus package. We

need to make the investment now, and we need to continue to do

so for generations to come.

Thank you very much.

The CHAIRMAN. Thank you, Mayor, for a superb statement.

I failed to mention that Mayor Menino will become chairman of

the U.S. Conference of Mayors in January, so this will be an important part of his leadership.

Let me ask you first, Ms. DeRocco, when the one-stop career center program went into effect, we were at a time of economic prosperity with low unemployment, relatively low interest rates, and an

expanding economy. We now have a transition, and maybe you

could comment about the kinds of challenges you face with this

transition, moving into increasing unemployment and how you are

adjusting to these changes. What have you learned from it, and do

you find that this is making it easier because the volume and demand are helping to get programs in place? What lessons are you

finding with increasing pressure?

Ms. DEROCCO. During the good economic times, the one-stop career centers as universal service centers experienced significant

business. As the Mayor pointed out, a significant amount of the

business was absolutely rapid reemployment of jobseekers who

came in, were in some instances able to use the self-help resources,

find a job, and go immediately back to work, and that was intended

as part of the Workforce Investment Act to be a critical component

of the one-stop career centers.

There has been much discussion about not as much training occurring in the first years of the Workforce Investment Act implementation, and that could well be largely a result of the good economic times and the fact that unemployment was low, businesses

were looking for workers, and it was possible for the system to

focus on the rapid reemployment portion of their business and their

jobs.

Now, clearly, we are going to be dealing with more dislocated

workers who perhaps may not be able to return to their same occupations, whose skills may in fact need to be upgraded, and the

training component of Title I of the Workforce Investment Act may

well be in more demand.

We believe the system is prepared to address the dislocated

workers as they enter the one-stop career center system. Again, I

would reference the provisions of the eligible training provider list

preparation that continues to be a challenge for our system. We

need to ensure that we have adequate lists, adequate opportunities,

adequate information for those individuals who are seeking to retool their skills so that they can select training opportunities that

will result in jobs in occupations and industries in demand in their

local labor markets.

13

We are going to be working very closely with the Title I components of our one-stop career center system to ensure that they are

prepared, that they have the resources and the tools they need to

serve those workers.

The CHAIRMAN. You are satisfied with the development of these

training programs, then, that they are good quality as they come

on line? Is that part of it taking time?

Ms. DEROCCO. I would say that we are not satisfied with the

progress that we have made in getting a sufficient number of training providers on the eligible training provider list. That is why I

referenced that it is important for us to learn from the States and

communities that have been successful, to find out what hurdles or

burdens they eliminated or removed so that more of the training

providers are willing to become training providers under the Workforce Investment Act system. We are going to be focusing on that.

The CHAIRMAN. Finally, in my State, for example, Lucent Technologies will release an additional thousand workers in the next

few weeks. That local area just outside Boston has absorbed over

2,000 layoffs in the last 10 months. These are good jobs, but these

are also skilled workers who will have to change fields in order to

find jobs.

What are the current resources at DOL to handle national emergency grants?

Ms. DEROCCO. For national emergency grants, we have under

current appropriations about $220 million. As you know, States

and communities can request national emergency grants for major

plant closings or major dislocations. Two hundred twenty million

dollars is a significant amount of money. We do not know at this

juncture, with the ripple effect of the September 11 attacks, just

how many States will be requesting help through the National

Emergency Grant Program. Currently, only Minnesota and the

State of New York have filed NEG applications. Our callouts across

the Nation to other States indicate that there may be as many as

10 in preparation.

The CHAIRMAN. Of the 10 in preparation, as I understand it, New

York has requested $155 million.

Ms. DEROCCO. New York did request $155 million, and the $25

million was part of the emergency supplemental directly.

The CHAIRMAN. There is a lot of need out there.

Ms. DEROCCO. Absolutely. I understand that.

The CHAIRMAN. Mayor, as I understand it, we have 16 different

areas in our State and three training programs in Boston, and you

have completed the first year of the program, and some 500 unemployed have gone through the program. Communities make their

own judgment about the number of centers they have. Brockton

has one, Worcester has three.

I want to hear what your sense is of the demand being placed

on the centers currently, and then, I would also like you to address

the targeting of at-risk youth, which has been a special concern of

yours with your Youth Opportunities Grants. These are kids who

have dropped out of school that we are trying to get back into

school and focused in terms of continuing their education, and we

have had good success in that.

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Those are two different issues, but perhaps you could address

both of them briefly.

Mayor MENINO. First, Senator, on the national emergency grant,

we have an application in, and we are waiting for it.

Ms. DEROCCO. It is coming.

The CHAIRMAN. There you go.

Mayor MENINO. We have about 300 folks who have been laid off,

Asian individuals who were just put out of work 1 day when the

guy closed his doors and said, ‘‘We are all done with our business.’’ Those folks are willing to go back to work, and it is part of the

process.

The CHAIRMAN. If I could just mention parenthetically how well

those grants have worked in the past through the Department.

They have had some really important impacts on people’s lives. I

have seen them work in a number of different communities. So I

know that we are hard-pressed in terms of getting resources in

there and so on, but we want to try to give support to things that

we do know work as well as trying other kinds of things.

Excuse me. Please go ahead.

Mayor MENINO. That was no slight to the Department of Labor,

because they have always been there in the past to help us with

folks who need retraining, and we thank them for that.

Let me just say on the career centers that we spent all of our

Workforce Investment Act funds last year and have committed all

of our funds for the current year. For dislocated workers, we could

have used our entire fiscal year02 budget in one plant closing. Just

think about that.

The one-stop career centers are seeing very large increases in

customers who have been laid off or had their hours reduced, which

is another phenomenon out there—they were working 30 hours a

week, and now they are down to 15 hours a week. That means they

are losing their health benefits as well, which is another issue that

develops here.

So I would just say that we absolutely need more training funds

coming through our doors so that we can make sure we can deal

with the individuals who need new jobs, but also, it is very important that we get them back to work and part of our society.

I have seen the career centers, I have been there, I have seen

the opportunities they give folks, and I will just say they are a

wonderful resource, especially with cities that are changing. Boston

is a minority/majority city today, and a lot of the folks need retraining. One-third of the folks who come to Massachusetts from

another country have either a bachelor’s degree or a master’s degree. How do you retrain them for real jobs? That is what the career centers can do—help those folks get real jobs in our society

and upgrade their status from working in a hotel or a restaurant.

So it is very important that these career centers get funding and

also receive the resources to continue. They are working throughout the country, and my workforce development person tells me

that this is probably one of the best programs that we have out

there.

The other one is the Youth Opportunities Program. We have

1,000 young men and women in that program. I go to the graduations and see the young people and the opportunities they get. If

15

we do not handle those 1,000 kids, where do they end up? They

could end up as a public safety issue or in the criminal justice system. We are able to grab some of those kids, train them for jobs,

give them opportunities with our counseling services, and it works

out very well for us, Senator. That is where you have to start, with

the young people. The kids need opportunities for a better future.

That is what we have done in the past, and that is what we have

to do in the future.

The CHAIRMAN. Excellent. Thank you.

Senator Wellstone?

Senator WELLSTONE. Thank you, Mr. Chairman.

Let me thank both of you for your testimony and also emphasize

the importance of the emergency grants. Minnesota certainly does

have an application in, and they have worked well, and some

States have really been hit hard. In our particular case, Northwest

Airlines is the largest private employer we have.

Ms. DeRocco, the Workforce Investment Act is near and dear to

my heart; it was one of the best bipartisan efforts, working on this

bill with Senator DeWine. One of the reports, though, that I have

heard is that the States and localities have put a lot of emphasis

on building a new delivery system but that there actually might

not be as much job training taking place as we would have hoped

for, because that is what this is all about.

Senator Kennedy alluded to this, but I want to engage you in a

discussion on this question, because my guess is that as we now

move into very uncharted economic territory, there is going to be

more of an emphasis and people saying, ‘‘Listen, we are here because we have got to find work, we have got to put food on the

table.’’ Ms. DEROCCO. Absolutely. I also alluded to it earlier. I think we

probably do not have enough evidence to know if the amount of job

training, which was less than people originally anticipated, including the Department of Labor, was a result of the State of the economy and the fact that many of the workers who were first and foremost interested in getting back to work and making an adequate

living and feeding their families in fact went to one-stop career centers, found there were jobs available, and went back to work. We

think that that had some significant impact on the amount of job

training that has occurred.

Secondarily, through our work groups of Federal, State and local

participants, we have identified what was a perception that the law

required a ‘‘work first’’ philosophy, and we have been asked to clarify that in fact there is no statutory requirement for that, and that

may have driven some local areas to a different kind of service delivery or a different approach.

Again, you wrote the Workforce Investment Act to be very State

and locally flexible, and there may well still be State and local

areas that choose to use the ‘‘work first’’ philosophy as the underpinning for their operations, but it is incumbent upon us to clarify

that the statute did not require that.

Third, I hope that you have heard our leadership, Secretary

Chao, and her commitment to re-skilling America and addressing

the skills gap that definitely exists between the jobs that are currently and will in the future be available and the skills of our

16

American workforce. So we are committed to the kind of training

that is necessary to build the skills of the American workforce.

Senator WELLSTONE. I think the emphasis on training for the

jobs, of course, is bread and butter for people, and the Mayor is

nodding his head. Sometimes, I think the ‘‘work first’’ that you are

alluding to gets us into trouble because, for example, on welfareto-work, what people are trying to do is find living wage jobs, so

the training is critically important. But ultimately what it is about

is investment in the skills. It is a human capital investment, and

I think we are going to have to really make sure that that is the

primary focus.

I remember—in fact, Commissioner Yanisch was there—we had

a gathering in the Phillips neighborhood in South Minneapolis before this sharp economic downtown, and there were a lot of people

there—it was pretty well-attended—and they were giving some of

the workforce investment people a little bit of trouble—I thought

it was positive trouble—you know me; I am for that—and basically

what they were saying was, ‘‘We are here, and you are talking

about these jobs and this information technology, and we are ready.

Why can’t we have this connection? Why can’t we be there, get

these skills and get that work?’’ So I just want to emphasize that.

Second, I am really glad the Mayor mentioned that letter. I think

all of us were on the letter, and we distributed it. I wanted us to

get over 50, and I think we can get well over 50 now. We got up

to 45 then.

But one of the things that came up was the whole issue of expended versus obligated funds and what is in the pipeline. I wonder if you could help us work through that, Ms. DeRocco, because

I think that is going to be critically important.

Ms. DEROCCO. We are trying to work through that as well. As

I understand from our budget office, there is about $1.8 billion,

quote-unquote, in the pipeline which is carryover money, and after

the first series of reports on expenditures came in and it showed

an extraordinarily low expenditure rate, we have been very adamant and outreaching in terms of telling States and local communities that they needed to include in their reports all obligations,

not just expenditures. And I think we are approaching a point

where our data will be far more accurate as a result of that emphasis and that understanding that perhaps the first round of reports

did not clarify. That is clearly number one.

No. 2, there are probably some equity issues in terms of where

the carryover money is and where it is not, and we need to get a

better handle on that.

And number three, there are some normal business practices

that require States and communities who are essentially operating

this business to have some carryover money, and that is why the

law allowed for 3-year obligational authority, and we understand

that.

So on all three fronts, we are looking at ways to have better information to report to you better and to work with you on the resource requirements.

Senator WELLSTONE. We need that.

Then, finally, Mayor, I am going to ask you a different kind of

question, because sometimes the discussion gets very complicated

17

with ‘‘obligated,’’ ‘‘expended,’’ and all the rest, and we have to do

that—it is very important—but why have you made this such a priority?

Mayor MENINO. Because of necessity in our cities today. With cities becoming more diverse, with cities being the economic engine— and do not ever forget that; cities are the economic engine of all

the States—we have had 8 years of cities doing very well. What I

am afraid of is that they are going to walk away from it.

In job training, we do not want to go back to a decade ago when

we had unemployment at 18, 19 percent. So training people for

those jobs is a must because our economy is changing every day.

In Boston, we are very fortunate that we have five different economies that drive our city, so that when one falters, another one will

pick it up. But how we train people for those jobs is the most important thing.

That is why the one-stop career centers are important to us as

well as the other job training programs. In Boston, we are fortunate that we have a linkage program which creates job trust money

for us to train people for jobs also.

So it is important that we have a well-trained workforce to be

able to fill those companies that are coming into our city with welltrained workers. That is what we want to do. That is an incentive

for businesses to locate within your city limits—that you have a

well-trained workforce ready to go to work—and that is what we

are doing in Boston.

Senator WELLSTONE. Thank you. I thank both of you.

The CHAIRMAN. Thank you.

Senator Jeffords?

Senator JEFFORDS. I appreciate both of you being here. This is

an incredibly important issue.

Yesterday I held a press conference with two young nurses who

were in nurses training and were called upon to act at the disaster

site. We have two areas of professional problems—math teachers

and nurses. Do you have a role in those areas, and what role, if

any, is there for those where you know there are thousands of jobs

available?

Ms. DEROCCO. We very strongly, particularly in the health services area, understand the issue of the shortage of nurses, and it is

an area that we would very much like to focus on in the coming

year. We have talked about having a business forum with health

service providers to identify what are the skills gaps that American

workers have that are not positioning them to move into nursing

and other health services occupations, what kind of assistance is

needed to ensure that that occupational need is filled, and to actually use some of our demonstration money to identify ways in

which we might better serve the needs of the health services industry and train more American workforce nurses.

So I would say yes, our system does have a role in this and one

that we want to prioritize in the coming year.

Senator JEFFORDS. Mayor?

Mayor MENINO. Senator, Boston is the health care center of the

world, really. We have the best health care providers. What we are

doing is working with some of our partners and our public health

commission to train 50 radiologists over the next 2 years for jobs

18

in the health care business. We are also offering 30 new nursing

and nursing assistant scholarship programs and providing 25 paid

internships for Boston residents so they can get into the nursing

field. We are also working with partners on Project RISE, where

80 graduates from the wide range of programs we have in our city

are going into health care positions in many different departments—radiology, medical records, billing, and environmental services.

So we are trying to deal with all the issues of the health care

industry, from radiology to the billing department to the nursing

division, giving scholarships to individuals to go into nursing.

Nursing is a vocation that people are no longer going into, so we

have to give scholarships and other incentives for them to get into

those programs.

Senator JEFFORDS. With respect to math teachers, I have over

the course of time helped them here in the City of Washington with

their struggles. They have found that the only way they can get

math teachers is by hiring a retired person or someone who is out

of work to come in and teach.

Do you have any ideas for helping in this critical area?

Mayor MENINO. While we have teacher shortages all over this

country, in Boston, we had 9,000 applicants for 250 jobs. That is

amazing. What we are doing is giving incentives for math teachers

to come into our system, and we are recruiting them. We have a

heavy recruiting program all over the country to get math and

science teachers into our system.

Senator JEFFORDS. Ms. DeRocco, the Disaster Unemployment Assistance Program, which comes under FEMA’s jurisdiction, has

been tapped to provide assistance to New York following the September 11 disaster. Although FEMA controls the funds for the program, it is my understanding that your agency oversees the implementation. How are you coordinating your efforts with FEMA?

Ms. DEROCCO. Very well, actually. The New York Disaster Unemployment Assistance Program and the Virginia Disaster Unemployment Assistance Program are up and available. They are operated and administered through the normal State unemployment insurance programs; they are available for individuals who are not

eligible for the normal State UI programs. I understand that New

York has had some DUA claims and that they are processing them.

We have heard of no glitches in either New York or Virginia in relation to the processing of disaster unemployment assistance

claims, and adequate money has been made available through

FEMA to support the claims load well into the future at this juncture.

Senator JEFFORDS. Thank you. I am pleased to hear that.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much.

Senator Murray?

Senator MURRAY. Thank you very much, Mr. Chairman, for holding this extremely important hearing. I think the issue that we are

discussing today is one that is probably going to decide the future

of our country and how we handle the workers who are being laid

off.

19

The clocking is ticking. In my home State of Washington, Boeing

has announced 30,000 layoffs. Those employees will start getting

those pink slips in 8 days, and we expect that 10,000 families will

have pink slips before Christmas. This is a very real and frightening scenario, and it is not just the Boeing workers; it is everybody

who supplies Boeing. Anybody who sells anything in our State

knows the implications of having that many people that quickly

laid off.

We are obviously working on the floor with Senator Kennedy and

Senator Carnahan on immediate assistance, and I hope we can get

that package passed, Mr. Chairman. I think it is extremely important that we let those workers know that we care as much about

them as we do the airlines that we helped a week and a half ago.

They are good Americans, they have worked hard, and we do not

want to lose them and their skills.

I believe—I am an optimist—I believe we will be back, and I

think Boeing will be just as strong as it was before, and the airlines will be just as strong, and this country will. We do not want

those workers to lose the skills they have and not be ready to be

employed again in the future. So the programs that we are talking

about today are important, and we need to have those benefits

there so that those families can make it through these difficult

times.

I am going to continue, obviously, to work with the worker program we have here, but the programs that you have, Ms. DeRocco,

are especially important. Senator Cantwell and I submitted a request to Secretary Chao to issue a national emergency grant for

laid-off Boeing workers, and I think the Department has that and

is reviewing it.

Do you support the use of these funds in circumstances like what

is happening in the airline and aircraft manufacturing industries?

Ms. DEROCCO. The national emergency grants are there for precisely that kind of purpose—a major plant closing or a major dislocation such as you are experiencing in the State of Washington.

It is important for us to quickly act on the national emergency

grants from the States. I understand that both our regional office

and our headquarters office have been in close contact with the

State of Washington to ensure that our action on the NEG proposal

is quick and sure.

Senator MURRAY. Have you had conversations with Secretary

Chao about this specifically?

Ms. DEROCCO. I was actually in her office at the time one of the

phone calls came in, and I know she is personally aware of the

grant action, and we will be monitoring its movement through the

Department very personally and will ensure that that is quickly

done.

Senator MURRAY. Very good. I think it needs to be done quickly;

as I said, those employees will be getting their pink slips in 8 days.

Ms. DEROCCO. I have made note of that.

Senator MURRAY. So there will be consequences, and we need to

be there for them.

The CHAIRMAN. If the Senator would yield, could you tell us, Ms.

DeRocco, what you have in emergency applications now and how

much resources you have, just so we have some idea as we are

20

dealing with the stimulus program? This seems to me to be one of

the programs that has worked very effectively in the past, and

there is a very considerable need.

Ms. DEROCCO. Yes. We have in current appropriations about $220 million, and the new appropriations will add additional dollars, we assume, to the Secretary’s national reserve from which the

national emergency grants will come.

Senator MURRAY. Two hundred twenty million new—— Ms. DEROCCO. No. The $220 million is in current appropriations.

The CHAIRMAN. But you have still $220 million leftover from last

year that is not obligated?

Ms. DEROCCO. Yes, sir, I believe we do. Remember the money to

support the New York national emergency grant came from the

emergency supplemental.

Senator WELLSTONE. Is this money before or after rescission?

Ms. DEROCCO. Post-rescission.

The CHAIRMAN. Post-rescission. So that is $155 million for New

York?

Ms. DEROCCO. The New York request was for $155 million, but

that was part of a much larger request that the State of New York

had submitted that the administration is looking at in total.

The CHAIRMAN. OK. So the funds will be eligible to be allocated under the $40 billion, would it not—is that your understanding— from that last $20 billion that has to be appropriated.

Ms. DEROCCO. The New York request is being considered as part

of that package, but we do have—— The CHAIRMAN. I see.

Senator MURRAY. Is anybody beyond New York—for the Boeing

workers, this is a direct impact as a result of what happened on

September 11; with the airline industry taking their orders back

and Boeing now having to lay off workers, it is a direct impact.

Will they be included in that?

Ms. DEROCCO. We have money at the Department of Labor in

the national emergency grant fund to handle any number of national emergency grants from States, including those directly resulting from the September 11 attack. So the first line of defense,

so to speak, will be for us to look at our national emergency grant

resources and make those available as appropriate to States who

are making applications to us.

The CHAIRMAN. If we could, Ms. DeRocco, we will ask staff after

the hearing to go over with you just what is in the pot, what is eligible out there—I think we need some clarification on our side—

and then we will also look at what we anticipate to be appropriated

and what the demand is on the first line. We all want to get first

priority for those areas that have been directly adversely impacted

in terms of September 11, as Senator Murray has said. There are

other areas as well, but we ought to have some idea to be able to

make judgments regarding the stimulus program.

Ms. DEROCCO. We will give you an accounting of that.

The CHAIRMAN. Good.

Senator MURRAY. Thank you very much.

Thank you, Mr. Chairman.

The CHAIRMAN. We want to thank you. You have been very, very

helpful. We want to work very closely with you, Ms. DeRocco, and

21

we thank you very much, Mayor, for giving us a very interesting

summation of both what you are doing and the needs out there.

I think you mentioned to us that you have 700 job partners out

there for people today, even though we have seen a sizeable increase in the numbers of unemployed by several thousand in the

City of Boston, and that the connection is training. That just reminds us again what needs to be done. We have a system I think

for the first time—we had a pretty good system, actually, in the

PIC program in Boston previously—but I think this program is

really set up to do a good job, and we want to make sure that we

do not flag in our commitment to these families.

We thank both of you very, very much for being here.

Mayor MENINO. Thank you, Senator, very much.

The CHAIRMAN. Our next panel will include Sigurd Nilsen from

the GAO. We thank Sigurd for the excellent report. They are involved in doing three more reports that Senator Jeffords and I had

requested.

Next, we welcome Harry Van Sickle, who is the Commissioner of

Union County in Lewisburg, PA, who is very active with the National Association of Counties, an important ally.

And our final panelist, I will let my friend and colleague Senator

Wellstone introduce.

Senator WELLSTONE. I have, so we can go ahead.

The CHAIRMAN. You have introduced her.

Mr. Nilsen, we will ask you if you will be good enough to proceed.

STATEMENTS OF SIGURD R. NILSEN, ASSOCIATE DIRECTOR,

EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES,

U.S. GENERAL ACCOUNTING OFFICE, WASHINGTON, DC; REBECCA YANISCH, COMMISSIONER, MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT, ACCOMPANIED BY BERILYNN CORCORAN; AND HARRY VAN SICKLE,

COMMISSIONER, UNION COUNTY, PA, LEWISBURG, PA

Mr. NILSEN. Thank you, Mr. Chairman and members of the committee. Thank you for inviting me here today to present the findings of our report on the Workforce Investment Act, which is being

released today and was requested by you and Senator Jeffords.

As you know, WIA was a landmark piece of legislation, passed

in 1998 to reform a fragmented employment and training system

to better serve workers and employers. WIA sought to streamline

the delivery of employment and training services, enable jobseekers

to make informed choices among training providers and course offerings, and enhance the private sector role of the workforce development system.

Today I will be highlighting findings in our report related to,

first, the operation of the one-stops; second, the impact of performance reporting requirements on training providers; and third, the

experience of private sector members on workforce boards.

First with regard to the operation of the one-stops, WIA’s mandatory partners are making efforts to participate in the one-stops as

required by the law. However, they are wrestling with questions of

how to accomplish the required participation as well as move closer

to the vision of full integration while also meeting clients’ needs,

22

complying with their programs’ rules, and staying within their programs’ budgets.

Many of the mandatory partners have expressed concerns that

significantly altering existing service delivery methods to participate in the one-stops might adversely affect the quality of services

they provide to their target populations. For example, staff from

Education’s Vocational Rehabilitation Program which serves the

disabled were concerned that one-stops may not adequately provide

the special services, equipment, or personnel that their clients

need.

Also, a number of partners have expressed concerns that altering

traditional service delivery methods to participate in the one-stops

may lead to conflicts with their own programs’ requirements regarding which individuals are eligible for the services they offer.

In addition, many of WIA’s mandatory partners said that participation in the one-stops created financial problems. For example, in

some locations, the employment service operates both at the onestop and at their existing offices.

Second, regarding the impact of performance measures on training providers, although training providers are making efforts to

participate in the WIA system, many believe that the new data collection and reporting requirements it brought are too burdensome

to warrant their participation in the system. As a result, they are

reducing the number of course offerings they make available under

WIA, in effect reducing the training options from which jobseekers

have to choose. For example, in the last year, nearly half of Vermont’s training providers and three-quarters of the course offerings

have been dropped.

Training providers with whom we spoke said that the few WIA

clients who have been sent to training since WIA was passed made

the data collection and reporting requirements even more onerous.

For example, because WIA requires that training providers report

program completion, placement, and wage data for all students in

a class regardless of whether or not they are WIA-funded, even if

only one student in a class of 100 were WIA-funded, the training

provider must provide the data on all 100 students.

Further, the methods being used to collect this data strain training providers’ resources or raise privacy concerns. For example,

some training providers planned to call students after they graduated, which was time-consuming and expensive, while others were

planning to provide students’ Social Security numbers to State

agencies and use unemployment insurance wage records for this

data. However, this raises privacy concerns.

Finally, regarding private sector involvement in WIA, private

sector representatives who are designated to lead the workforce investment boards have expressed frustration that State and local

boards are too large, exceeding 40 members in most locations, and

that the manner in which boards are operated may be diluting private sector input and ultimately discouraging their participation.

Private sector representatives also believe that the staff put in

place to serve the boards may not share employers’ perspectives regarding the system. The board staff, usually the public sector agency responsible for carrying out WIA, is responsible for setting up

meetings, developing meeting agendas, and ensuring that boards

23

stay current with compliance issues. However, we were told that

some private sector members had concerns about whether the staff

could remain independent.

In addition, private sector representatives believe that committees set up by the boards may dilute employers’ input into the system. We were told that private sector representatives are often

underrepresented or not represented at all on these committees.

In conclusion, I would like to say that implementation of WIA

has been more difficult than many realized it would be. The difficulty of overcoming years of inertia, getting people, programs and

organizations to work together that had either never dealt with

each other or who traditionally viewed each other as competitors

has not been easy.

So it is not surprising that there have been problems and that

the first year of implementation of WIA has had its challenges. But

remarkable progress has been made. The overriding goal of WIA to

create a more unified approach to workforce development is important and well worth the additional time and effort likely required

to make it happen.

How best to use the flexibility WIA provides, understand its new

requirements, and have the additional partners work together to

serve an area’s workforce needs does not happen overnight. As we

recommend in our report, it would help to provide additional guidance, technical assistance, and identify best practices. In addition,

allowing more time to pass to let the various partners in the system figure out how best to operate within the new framework that

WIA established may also be needed.

Mr. Chairman, this concludes my prepared statement. I will be

happy to answer any questions that you may have.

The CHAIRMAN. Thank you very much.

[The prepared statement of Mr. Nilsen may be found in additional material.]

The CHAIRMAN. Next, we turn to Ms. Yanisch.

Ms. YANISCH. Mr. Chairman, Senator Wellstone, members of the

committee, on behalf of all Minnesotans, I bring condolences to our

East Coast friends traumatized by the tragic events of September

11.

Unfortunately right now, there is little that we can do on behalf

of the victims of these horrific terrorist attacks. My job today is to

look ahead at how we at both the Federal and State levels might

alleviate the enormous suffering of all Americans and mitigate the

long-term economic disruption that surely lies before us.

This economic shock comes at a time of weakness in the economy. Moreover, the economic fallout has rippled far beyond ground

zero in New York and Washington. Many State governments, already struggling with economic slowdown and budget shortfalls,

have been pushed into further financial distress by recent events.

In Minnesota, the initial impact of the attack is being felt in the

airline and closely-related industries. Northwest Airlines, one of

the top private employers in Minnesota, has announced plans to

lay off up to 4,500 people in our State alone. This will be the largest one-time layoff in the record of our State.

But this is just the tip of the iceberg. The downturn in air travel

is likely to impact other sectors of our economy, leading to many

24

more layoffs by the end of 2001. The total number could easily

reach 15,000, pushing the unemployment rate up to the highest

level since 1996.

In Minnesota, we have a rich history of progressive involvement

in workforce development issues. We view our well-educated, welltrained, and highly-skilled workforce as one of our chief competitive advantages.

Governor Ventura believes that workforce development is economic development, and it is my duty as commissioner to carry

that vision forward. The Department of Trade and Economic Development currently provides two critical programs for job training— the Dislocated Worker Program and the Job Skills Partnership Program.

Minnesota has recognized the importance of realigning programs

to better assist unemployed and dislocated workers, and I have

been directed to merge departments and programs to maximize resources and services.

By next summer, all WIA programs will be incorporated into the

new Minnesota Department of Economic and Workforce Development. We want to build on this model of cooperation to ensure a

seamless transition from layoffs and dislocations to return-to-work

through supportive training programs.

The Dislocated Worker Program operates not as an entitlement

but as a program designed to help Americans who, through no fault

of their own, have lost their jobs.

To help put a face on this issue, here with me today is Berilynn

Corcoran. Berilynn is a single mom with two young sons. She is a

member of the International Association of Machinists. Last Monday, September 24, she was notified that she no longer had a job

with Northwest Airlines.

Berilynn brings an important perspective to this crisis. At the

age of 4, her son Zach was diagnosed with kidney cancer. He is

now in his third year of remission. Zach is a fighter, and his mom

is a fighter, too. At 8 a.m. the day after receiving her layoff notice,

Beri was one of the first workers signed up for the dislocated worker information meetings.

I ask your help in providing the resources to ensure that

Berilynn finds the right job with health benefits to support her

family. That is what the Dislocated Worker Program is all about,

and Minnesota’s commitment and investment goes beyond the Federal allocation. As one of only 10 States in the Nation to create its

own separately-funded programs, Minnesota has carried over more

than $20 million from good economic years to supplement $25 million that we will collect this year to invest in laid-off workers.

Minnesota has acted responsibly and will continue to act responsibly in tapping every resource at our disposal. The attacks on September 11 quite likely will result in long-term economic disruption.

We will need the support and flexibility in programs such as the

Workforce Investment Act to ensure that our unemployed and laidoff workers have the opportunity for training and retraining to

compete in our economy.

The formula funding to the States for the basic dislocated program will need to be increased along with funding for the Secretary’s reserve. Governor Jesse Ventura has submitted a request

25

for $24 million from this reserve to assist the thousands of dislocations we will be facing in Minnesota.

These dislocations will also put an inordinate burden on the entire one-stop workforce center system. Additional funds for the

basic adult and youth programs will be important as the States

struggle to meet these increased burdens. I would urge your continuing support for the important services that the Workforce Investment Act provides.

Minnesota is a national leader in developing the one-stop workforce centers offering job counseling and recruitment, computer

training, and a variety of other services for unemployed workers.

Today these highly effective workforce centers serve as the building

blocks for the State’s response to the current crisis.

In the immediate aftermath of the Northwest Airlines layoffs,

Minnesota’s rapid response team initiated a series of group information meetings, and a mobile resource center was located on the

site to help our dislocated workers.

In short, Minnesota officials are doing everything we can to

broaden and strengthen the State’s response during this very challenging time. Minnesota is proud of our economic diversity and

well-educated, resilient workforce. We have held our own despite

the recent economic slowdown, and with your support, I am confident that our State and our Nation will emerge from this current

crisis even stronger than before.

Thank you very much.

Senator WELLSTONE. Berilynn, do you want to add some words?

Your story is powerful.

Ms. Corcoran. Sure. Like they said, I lost my job on the 24th,

and I did go to the workforce center to fill out their survey. I would

love to be part of their committee.

I will do anything to get another job. I need the insurance. But

the biggest thing is the wait. What is going to happen? Is Northwest going to come back in a month? Will it be 2 months, or will

it be 5 months? I need the insurance now. I cannot wait until tomorrow or January or February or March. I need it now.

So thank goodness the programs were in place for me to take advantage of using all the resources, right there in front of me. They

were laid right in front of my face, and I could use all the resources

right there, and I signed up for everything I could possibly do to

help me proceed to my job opportunities as far as the State of Minnesota goes. And hopefully, within the next 2 weeks, they said I

should hear word as far as what kind of training I can do, whether

it is resume, interview training, possibly going back to school. I am

willing to do whatever I need to do to make sure I keep a roof over

our heads and food on our table.

Thank you.

The CHAIRMAN. I do not think you are going to have much trouble. [Laughter.]

Ms. Corcoran. Thank you.

The CHAIRMAN. I think you are going to do very well. It is very

impressive to get that kind of reaction and that kind of support.

[The prepared statement of Ms. Yanisch was not received by

press time.]

26

The CHAIRMAN. Mr. Van Sickle, we are delighted to have you

here.

Mr. VAN SICKLE. Thank you very much.

Senator Kennedy and members of the Senate Health, Education,

Labor, and Pensions Committee, I am Harry Van Sickle, a county

commissioner from Union County, PA and the chief elected official

of the nine-county Central Pennsylvania Workforce Development

Corporation and also vice chair of the National Association of

Counties Labor and Employment Steering Committee.

On a personal note, I want to thank the committee staff, especially Jane Oates and Marge Baker, for their help and support.

They have helped NACO a lot, and they have helped other organizations on this important issue, and without them, this hearing

and many other successes that we have had would not be possible,

so I just wanted to make sure I mentioned that.

I am delighted to have this opportunity to come before you to

speak about a topic of great importance to America’s counties and

of great importance to me, which is the Workforce Investment Act.

Before I begin, I would like to underscore that there are several

issues that need to be addressed through rulemaking and technical

amendments, which would include youth eligibility determination,

program and policy firewalls, alignment of resources, and funding

of the local workforce investment boards and one-stop centers. I

would be happy to have a discussion with you about that at another time.

For now, I would like to focus on program implementation and

the capacity of our system to be an integral part of your economic

stimulus efforts.

First, the Nation’s workforce development system is up and running. Across America, every State and locality has an operational

workforce development system. The system includes autonomous,

private sector-led workforce investment boards that target their energies toward strategic economic and workforce development

issues. It has a system of one-stops capable of delivering diverse

services to America’s workers.

We believe the Act could be strengthened if resources from the

17 mandated partners are aligned and directly coordinated by the

local workforce investment boards in a manner similar to Title I.

This would ensure that local workforce investment boards and

elected officials would have access to all resources for which they

are now accountable but over which they really have no control.

Second, workforce programs across America are responding to

the immense numbers of dislocations that are taking place and

processing them through core and intensive services. As you know,

according to the Bureau of Labor Statistics, more than 1.4 million

people were terminated from their jobs through July of 2001, and

there is reason to believe that an additional half million or more

workers have been furloughed since then.

Third, workforce programs across America are spending their

money in effective and creative ways. NACO has conducted two informal surveys of all workforce investment areas in the Nation.

Those surveys ask what percentage of funds have been obligated.

In the first survey, NACO learned that more than 80 percent of the

programs obligated more than 80 percent of their adult, youth, and

27

dislocated worker funds. In the more recent survey, NACO learned

that the vast majority of programs have obligated all or most of

their program 2001 dislocated worker funds. Some have indicated

that they will be unable to provide training to any more dislocated

workers; still others have indicated that there is such a demand on

their funds that unless they receive additional dollars, they may be

forced to lay off staff.

Fourth, workforce programs across America need additional

funds if they are to successfully respond to the surge in dislocations. Workforce development programs in virtually every State

have reported that they have obligated 100 percent of their funds

and that those funds will be spent on existing clients and that they

need additional resources in order to handle the continued onslaught of dislocated workers. New York workforce investment

areas provide a perfect example of this.

Onondaga County officials report that over 900 people have been

laid off in the past 2 weeks. All of their dislocated worker money

is spent, and most of their adult money is spent.

The Herkimer-Madison-Oneida Counties program expects to spend all of its funds and needs at least $250,000 more to meet demand.

The Erie County program projected a shortfall of nearly $900,000

in dislocated worker funds before the September 11 tragedy.

The Oyster Bay Consortium on Long Island reported that since

September 11, they have seen a dramatic increase in the number

of residents coming to their one-stop centers, including individuals

who want to change jobs so they do not have to commute to New

York City. And most importantly, they are out of training dollars.

Rockland County has obligated 100 percent of its dislocated

worker funds. Since September 11, they have seen a 60 percent increase in the number of dislocated workers enrolling in the onestop.

The message is clear. Local programs are responding to the crisis, spending their funds, and in desperate need of more funds.

Fifth, we do believe that we now have the infrastructure in place

to respond to the current economic crisis and that we can spend

any funds you are willing to provide to us either through a direct

appropriation or through an economic stimulus package.

Two novel approaches to delivering services come to mind. The

first is to permit us to treat some dislocated workers as incumbent

workers. By this, we mean giving us the flexibility to provide skills

upgrading to those airline, hospitality service, and high-tech workers who are likely to return to their same jobs once the immediate

crisis is over.

The second is to permit us to develop public sector employment

programs tied to efforts to shore up homeland security. As you

know, counties and cities are often the first to respond to emergencies and are also responsible for much of our infrastructure.

The types of emergency that we are now talking about—acts of terror—are new for all of us, but we do know that there are many dislocated workers with significant skills who might be able to help

local governments develop methods to secure their databases, identify ways of improving public health services and improving security at city and county buildings. These jobs would be short-term,

28

temporary, and designed to provide individuals with employment

during the recession only. And the NACO staff would obviously be

very happy to work with your staff to develop these ideas further.

Finally, let me conclude by saying that we do believe that the

Workforce Investment Act is an important piece of legislation, and

it has helped us improve the overall levels of service to workers

across America. With the appropriate resources, we can do substantially more.

Thank you very much.

[The prepared statement of Mr. Van Sickle was not received by

press time.]

The CHAIRMAN. Thank you all. Your testimony is very helpful.

We have heard a number of very useful and important observations. One of the last ones was Mr. Van Sickle’s point about the

need and how you have taken the resources that you have, and still

you have a very significant need.

As a member of your association, do you find that that kind of

need is out there with regard to other of your associates as well?

Mr. VAN SICKLE. Yes, it is pretty obvious from the results of the

survey. I have not seen it personally, but there is a tremendous

need out there. What I do know is that obligated funds—as we

talked about before, expenditures and obligations—the obligations

are going to be spent, and those are very, very high. If anything

more is put on this system right now, it will not be able to handle

it because the resources are not there to do it.

The CHAIRMAN. Thank you.

Mr. Nilsen, perhaps you could comment. I understand from staff

that we are going to get additional information in the next day or

two about the circumstance of these funds and what is out there

available and what has been obligated. What can you tell us about

your understanding about how much need is out there, and what

is the extent of funding that is obligated and still available?

Mr. NILSEN. We looked earlier this year at the amount of unexpended funds, and we did find, as everyone has said, that there is

a large amount of unexpended funds available. But again, people

were telling us that much, most, or nearly all of the funds had indeed been obligated.

One of the issues that I do not have an answer to, but I have

a question, is that right now, this year, as you stated in your opening remarks, the system has been working very well with a very

healthy economy. People have been coming in, and they have not

been receiving much training. When we looked at the nine onestops we visited from Vermont to California and Pennsylvania,

they sent very few people to training, but at the same time, people

were saying that they do not have much funds available for training.

What happens now, as unemployment increases and you have increased pressure on the system and the easy placements are not

going to be there, I do not know at this point.

The CHAIRMAN. But your sense is that a great percentage of the

funds have been obligated?

Mr. VAN SICKLE. That is what we have been told.

The CHAIRMAN. What can you tell us from the observations that

you have made about these centers in terms of addressing their

29

shortcomings? Do you have any additional sense as to how those

shortcomings are being addressed and what progress is being made

and whether there is anything we ought to be doing to try to help?

Mr. VAN SICKLE. Right now, the Department of Labor has a

number of working groups, and as we said in the report, we think

there needs to be a lot more technical assistance and guidance provided to the States, because as we see in local areas, there are

some one-stops that are working very well—they are able to get the

partners together and get a lot of cooperation—but that is not universal. We know there are a lot of problems with people saying,

‘‘This is the way we do things; this is the way we have always operated, and we cannot change that.’’ People need to know what flexibility they have.

We have been told by some of the programs that ‘‘Without changing our legislation, we cannot change how we operate.’’ We released

a report earlier this week on the Veterans Employment and Training Service. One of our major points in that is that they are not

fitting in. It is a Labor Department-funded program, and they are

not fitting into the one-stops. We made recommendations for legislative changes to make it easier for them to fit into the one-stops

and provide integrated services. I think you have the same kinds

of issues with some other programs, particularly those outside of

the Labor Department.

The CHAIRMAN. Did you reach any conclusions as to people’s satisfaction with the programs?

Mr. VAN SICKLE. We have not looked at that yet, no.

The CHAIRMAN. Thank you.

Senator Wellstone?

Senator WELLSTONE. Thank you.

As I was saying to Senator Kennedy, the Workforce Investment

Act—Senator Kennedy worked on it, and it was something that,

with Senator DeWine, we spent I do not know how much time on,

and some of these things, we can do some tweaking and make some

changes here legislatively that I think would help.

I want to put some questions to Commissioner Yanisch from

Minnesota, but first I want to say to Mr. Van Sickle that there was

something you said that I just want to get on the record, and I do

not want to use this for my own purposes, and you can tell me if

I am straining for what you said. But part of what you mentioned

was that there are also some public sector jobs here, especially

dealing with an infrastructure by way of protection that deals with

some of the anti-terrorism work that we might want to look at in

terms of job creation.

The reason why that really captured my imagination is that I do

think we might get to the point—it could be a different economy

for a while, where we are training people for jobs that do not exist.

The skills development and human capital and workforce development is terribly important, but there also has to be an economy

that is producing the jobs for people so the jobs will be there after

people are trained. Thus the economic stimulus package becomes

even more important.

I just want to mention a couple of things, one of which is that

the people in Minnesota who talk to me the most about one-stop

centers and how pleased they are are about it are the small busiVerDate 11-MAY-2000 10:01 May 02, 2002 Jkt 990100 PO 00000 Frm 00033 Fmt 6633 Sfmt 6601 75651 SLABOR2 PsN: SLABOR2
30

nesses. And frankly, a lot of the people who are hurting the most

right now are small businesses. There is no doubt about it in my

mind. In Minnesota, I hear it everywhere. They just do not have

the huge reservoirs of capital.

So I think in this economic stimulus package from the disaster

loans, which do not have to be based on geography and how we can

deal with 7(a) and 504 and making sure there is access to capital,

that this is going to be critically important.

I also think, frankly, that whether it be school construction and

rebuilding some of our crumbling schools, or whether it be housing—and God knows affordable housing is an issue—I think we are

going to have to look very seriously at some job creation programs,

both private and public sector. There is just no doubt about it; otherwise, ultimately, we will have the best workforce development,

people will get the skills, but the jobs will not be there.

I want to mention one other thing which ties into what was said,

and that is that I think child care has to be a piece of this, because

if we are talking about someone who has been working, a single

parent, and is now looking for the opportunity to get the skills to

look for another job, you are going to need some help when you are

out of work with child care expenses.

So I think there are a lot of pieces that have to be put together

here, and Commissioner, whether you meant to do it or not, to me,

at least, I think what you were saying was, ‘‘Listen, Senators, you

also have to be cognizant of the fact that beyond the job training,

there have got to be the jobs out there.’’ Am I correct that you were trying to emphasize that?

Mr. VAN SICKLE. Yes, very much so. And so many people with

so many skills will be out there through these mass layoffs, and it

just seems that especially at the county and city level, there is a

need for data protection, for security within the courthouses and so

forth. We do not all have that expertise, so why not put these people’s skills to work in their time of need also? They might not be

able to get back to work right away, but in the meantime, I think

this would be a very good addition to the homeland security department that Governor Tom Ridge is going to be running.

So yes, there are jobs out there, and there are people out there

with the skills that are needed on that front, so let us try to mesh

those.

Senator WELLSTONE. Quickly, Commissioner Yanisch, you said

that Minnesota has never experienced anything quite like this sudden downturn from 4,500 people losing their jobs, and then the ripple effect. Could you give us just a little bit more of a sense of the

impact as you see it on the State of Minnesota, and kind of spell

out for us where you see this heading in terms of the ripple effect

or what you see as the ripple effect?

Ms. YANISCH. Senator Wellstone, members of the committee,

what we are seeing happening is really unprecedented in our State.

Normally, Minnesota’s employment rate is at least half a percent

or greater under the national rate; instead now, with these major

layoffs in some of our core industries, including the airline industry, we are plummeting to new lows.

What we see happening here—and I am glad you brought up

small business activity, because that is a crucial part—in greater

31

Minnesota during the 1990’s, we had incredible job growth in our

manufacturing area in smaller communities, which I think is probably similar to some of the economic scenarios that Senator Clinton

sees in Upstate New York. What is happening now is that those

communities are being devastated as those small manufacturers

are closing their doors. So it is mass layoffs in companies that have

never done mass layoffs before, including 3M. It is across the board

closing the doors of small businesses which are the manufacturing

core of many communities in greater Minnesota.

So the combination of those two events is providing an incredible

amount of stress on our dislocated worker system.

Senator WELLSTONE. I thank you. I do not want to take any more

time, but would just say at the end that I really appreciate your

testimony. We will work very hard to get this national emergency

grant. Other States are certainly in dire need of it as well, and it

cannot become a zero sum game where something for New York is

not something for Minnesota, or something for Massachusetts. We

just cannot get into that. We are going to have to get the money.

Again, I have never looked forward so much and never dreaded

more at the same time the hearing that I am going to hold in Minnesota on Monday, because it is terribly important, and I want to

know and all of us want to know—I think this economic downturn

cuts across a very broad section of our population, but on the other

hand, I think there will be an awful lot of people in a lot of economic pain. We have got to get to work on the economy, and I also

believe it is the role of Government—it will not surprise you—to

help people when they are flat on their backs. I think that is part

of what we have got to do.

Thank you. Mr. Nilsen, I want to talk to you later, if I can, about

your report. Thanks for doing it.

The CHAIRMAN. Senator Clinton?

Senator CLINTON. Thank you, Mr. Chairman, and I want to

thank our panelists for being here to talk about this important

issue.

We are struggling with what was happening in the economy before September 11 and now the devastation following September

11. I think the combination of the mass layoffs and the slow but

steady loss of jobs before that puts us in a very difficult position.

Yet we know from our own experience that workforce training is

a key to getting back on our feet and getting people reemployed

and keeping people employed. So I thank you.

I also want to publicly thank the Department of Labor. I could

not get here in time to personally thank Ms. DeRocco, but the Department of Labor under Secretary Chao has been very helpful in

New York and provided us with some immediate money that was

extraordinarily needed.

One of the challenges that we face in New York is trying to grasp

the extent of damage that has occurred to the economy as well as

to human life and our infrastructure. The Department of Labor in

New York reported that 285,000 individuals have been displaced or

unemployed as a result of the terrorist attacks. There were other

workers, however, who were already put on notice that the economy was turning. We had 28,000 who received warning notices this

year, 9,000 more than last year.

32

I thank Mr. Van Sickle for referring to some of the New York

statistics, because there are very serious trends in rural New York

and in Upstate New York; it is not just in New York City. In Syracuse, one of the places that Mr. Van Sickle referenced, in Onondaga

County, our workforce investment board there reported that, ‘‘We

have laid off over 900 workers in the past 2 weeks. All of our dislocated money is spent. We have little adult money. We are desperate. Please help.’’ To put another human face on this situation, my office received

a call from a single mom who had worked for the U.S. Airways reservation center which had been in Syracuse for 21 years, and when

the September 11 disaster occurred, and U.S. Airways began cutting back everywhere, they served notice that they were going to

close that call center, putting more than 400 people out of work,

giving the workers literally 5 days to decide whether or not to move

to Florida. That is an impossible decision to make in 5 days when

you have children and parents and obligations. It is a very difficult

dilemma to face.

In Buffalo, which is Erie County, they are projecting an $866,920

shortfall in dislocated worker funding.

So we know that the dimensions of the problem are significant

and growing, and the Workforce Investment Act of 1998 was a forward-looking solution to try to unify our employment and training

systems. It has really only been up and going for 2 years, and there

are lots of kinks to be worked out in the system. I really appreciate

GAO giving us such good advice. But it is clear that we have to

continue to have these programs in place. They are part of a safety

net. If we could have the rate of unemployment that we had in the

last part of the 1990’s forever, we would not need it except for

those few exceptions. But we can never predict life like that. We

have no way to control natural disasters or, in the case of what

happened 3 weeks ago, this terrible attack. So we have got to be

better prepared, we have got to improve our workforce training programs, and we will be looking to your suggestions, every one of you

on this panel.

I specifically wanted to ask Mr. Nilsen—I was very interested in

your analysis of the difficulty that many localities are facing in setting up these one-stop centers. We have talked about one-stop centers for 15 years. Senator Kennedy reminded me that when I was

a civilian—100 years ago, it seems—I guess it was in 1990, I testified before this committee on behalf of workforce training and

school-to-work and other kinds of issues that we were confronting

in the economy at that time. That was a time of downturn, so people were focused on how we could get our workforce ready. During

the 1990’s, things turned up, and jobs were plentiful for people

willing to work, and we lost that sense of urgency. But the Workforce Investment Act and the idea of the one-stop centers is still

a very sound approach.

Could you tell us more about your recommendation for any guidance or waivers from the Federal Government in order to help localities meet their goals of providing unified services? I know we

have rules that have to be followed on specific programs and target

populations. No. 1, how do we do that without breaking the rules;

and number two, do we need these rules? How can we break

33

through these categories and look at people individually as they

represent themselves at the one-stop centers?

So if we have to live with the rules for a while longer, how do

we do it, but where do we go from here?

Mr. NILSEN. At the outset, we suggested that there needs to be

more Federal leadership from the relevant departments—the Departments of Education, Labor, Health and Human Services,

HUD—which all have programs that are operated and are mandatory partners in the one-stops. They need to set the stage to help

provide the guidance to the States and localities on what flexibility

they have in their programs and how they can use that flexibility

to integrate the services through the one-stops.

As I said, one of the concerns was that, ‘‘No, our program does

not allow us to do this.’’ Some of that is because this is just the

way they have always operated. In other cases, it is legislatively

mandated. The Veterans Employment and Training Service is one

key that we recently issued a report on, saying you need to make

some legislative changes to provide more flexibility for how those

programs operate in the one-stops.

For others, it is a matter of a priority system that they have established for meeting the needs of the hardest to serve within their

communities. For example, for the disabled workers under the vocational rehabilitation program, whereas WIA wants to serve everyone, they say no, we only serve the most disadvantaged. We

have heard about instances where people have been sent back and

forth between the two programs. They say, ‘‘You have to go back

to the adult WIA program.’’

So first, it is a matter of providing additional leadership in terms

of letting people know what is allowed, what their flexibility does

allow. It is also working to find those legislative changes, regulatory changes that need to be made in order to facilitate that. But

I think a lot of it is technical assistance and providing best practice

information for the locals so they can make the decisions about how

best to serve the needs in their local areas.

Senator CLINTON. Mr. Van Sickle?

Mr. VAN SICKLE. You hit the nail on the head, and it is exactly

what I was talking about, with alignment of resources. It really

should be fixed on a permanent rather than a temporary basis.

As you know, these workforce boards are private sector-led,

which is very, very key to this whole Workforce Investment Act. As

an example in Pennsylvania, there is about $1.8 billion set up for

employment and training programs, and only $600,000 comes

through the workforce investment board or is coordinated through

the workforce investment board. All the other funds are outside,

but they are supposedly brought into this one-stop system.

The problem with that is that you have offices set up outside the

one-stop system and a sometimes a reluctance—sometimes—to

bring a person into that one-stop to provide services for a targeted

population.

It makes no sense to me that a WIA person who is in that onestop cannot give services to a veteran who walks in, or someone

from OVR, and charge it off, obviously, to that funding stream. But

that is a problem within the one-stops right now, because number

34

one, the workforce investment boards, which are private sector-led,

are not able to coordinate all the funds.

Senator CLINTON. Thank you very much. We will certainly look

into that. Those are very helpful ideas, and I hope that all of our

panelists—I am glad to see you again, Commissioner Yanisch—will

help us work to streamline this system and make it produce the

results that we all want it to.

Thank you.

The CHAIRMAN. That is a very worthwhile point, and we should

try to figure out how we can do it.

In our State, we have the private sector REBs, or regional economic boards, and that does include those, and it works up there.

But we have got to figure out ways to do that in the broader sense,

so that is a helpful comment.

Thank you all very much for being here. Your testimony has

been very helpful. You remind us why we are here and why this

whole effort is important, so we are very grateful to you for making

the trip.

The committee stands in recess.

[Additional material follows.]

35

ADDITIONAL MATERIAL

PREPARED STATEMENT OF EMILY STOVER DEROCCO

Mr. Chairman and Members of the Committee: Thank you for this opportunity to

speak with you today about implementation of one of the Nation’s most critical resources for unemployed workers: the One-Stop Career Center system created under

the bipartisan Workforce Investment Act of 1998. We believe that during both good

and bad economic times, One-Stop Career Centers are important components of

workers’ economic safety net, be they dislocated workers, welfare recipients, or employed individuals trying to enhance their careers. The emphasis is on seamless

high-quality service to the customer. The ability of the workforce investment system

to meet the needs of workers who are laid off or seeking new employment will be

severely tested in the weeks and months ahead-and I know the system will rise to

the challenge-..

During my visit to New York City two weeks ago, I met with the New York State

Labor Commissioner to discuss their immediate needs in response to the September

11 attacks. Available data indicate that businesses in the area of lower Manhattan

affected by the attacks employed approximately 700,000 workers. Of these workers,

preliminary estimates are that over 75,000 workers may file Unemployment Insurance (UI) claims, and an additional 35,000 Disaster Unemployment Assistance

claims may be filed by individuals not covered by the basic UI program. We are

working closely with New

York, Virginia, and other affected states to ensure that needed services are available through the new workforce infrastructure. The Labor Department has already provided $25 million to meet immediate needs

in New York to create temporary jobs for dislocated workers and other unemployed

individuals to conduct clean up and restoration work and provide humanitarian assistance. We also have provided $3.5 million in administrative funds to the New

York Department of Labor to restore the UI claims processing infrastructure. In addition, administrative funds will be provided to cover the costs of increased UI

claims workload in New York. Our federal staff members are assisting in other ways

too-some volunteered last week to help the Commonwealth of Virginia take initial

UI claims at Reagan National Airport until Virginia could relocate staff to the area.

Ensuring that there are adequate financial resources is critical to meeting the demands of this crisis, but money alone is not enough. The services must be effective

and ‘‘user-friendly,’’ in the best traditions of high quality service. Workers who have

lost their jobs need to have quick access to their unemployment compensation benefits, and they need rapid reemployment services to find new jobs and, if needed, access to training and retraining to enter different jobs and careers. Many of these

workers will be able to help themselves through the use of electronic tools such as

America’s Job Bank. These tools are available at One-Stop Career Centers and

through any computer with Internet access. Many others who are not keyboard proficient or who face other barriers to reemployment will need staff-assisted services.

Finally, if we are to achieve the changes envisioned in the Workforce Investment

Act, we must continue with the creation of genuine relationships with the private

sector and between the workforce and

economic development systems. We also must produce high quality consumer information on occupations of the future and relevant training programs.

Today, I want to talk with you about the status of WIA implementation. In this

effort, we not only are trying to implement the provisions of the law, but also are

working on a long-term, sustained effort to build an integrated public workforce investment system in each state and across the nation. This requires dramatic

changes to our system, and tremendous commitment from all of our partners.

Generally, states and local communities have made great strides in implementing

WIA. All 54 states and territories have plans approved by the Department and are

operational. Some areas have met only basic requirements to date; many others are

striving for full implementation of WIA. In our recent survey of 130 local areas, all

of them, with the exception of a local area in one territory, had at least one comprehensive One-Stop Career Center up and running. GAO Report

I want to thank the General Accounting Office (GAO) for its extensive information-gathering efforts on subjects of immense importance to us as we enable the

states and local entities to strengthen this system. Its research has paralleled our

own investigation and analysis. The GAO identified three central issues in its report

that we agree are critical to the success of WIA implementation: (1) participation

in the One-Stop delivery system by -required partners; (2) participation by training

providers in the eligible training provider system; and (3) participation by private

sector representatives in the governance of the workforce investment system.

36

The GAO noted that many partners have programmatic or financial concerns with

regard to fully integrating their services in One-Stop Career Centers. This is not

unlike the private sector where a mega-merger of various dynamic companies can

create an inherent tension in the creation of a new corporate culture. The One-Stop

Career Center challenges are unique, however, in that they require the management

of a multitude of separate program funding arrangements and requirements, and

local governance roles and responsibilities must be evaluated and clarified. Guidance on sharing costs in a One-Stop service delivery system was prepared through

the collaborative effort of our federal partners, and was published in the Federal

Register earlier this year. Additional guidance and assistance will be available

through the dissemination of promising practices.

There are outstanding examples of integrated One-Stop Career Centers throughout the country, and they are setting new expectation levels for the workforce investment system. They show us that it is possible to effectively integrate employment, education, training, public assistance, and information services that customers need at a single location in their neighborhoods. The One-Stop Career Centers in San Diego, California, for example, are well integrated: WIA Youth Activities

are augmented by a Job Corps Center, and affiliation with the Black Contractors

Association, an organization that provides training in the building trades. Importantly, these centers strive to provide job seekers and employers with a positive experience at their centers. This is reflected in their recent customer satisfaction

score, which compares favorably to those earned by recognized customer service

leaders, including Nordstrom, Target, and Southwest Airlines. Since July of this

year, the San Diego Career Center Network has served over 26,000 individual customers, 83 percent of whom said they were satisfied with the Network’s services.

Another example is the One-Stop Career Center in Jamaica, New York, which

was highlighted in a recent New York Times article for its customer focus. As the

article emphasized, these centers help customers find their next job by offering job

counseling and recruitment services; free faxing and Internet access; computer

training; and workshops on resume writing, interviewing, and starting a business.

One satisfied customer was quoted as saying, ‘‘My experience was remarkable. They

treated us like professionals rather than problems. I think they want to help you

get through a period when you’re unemployed easily and to make that time a short

time.’’

The GAO also pointed out that some states have experienced difficulty recruiting

Eligible Training Providers because the providers believe the requirements to get

on the list are too burdensome when compared to the number of WIA-funded students they will enroll. This difficulty in recruiting providers reduces the number of

training options for individual customers, and it also decreases the amount of consumer performance information on training programs available for the general population. Some local Workforce Investment Boards are leading the way in working

through these difficult issues, and have met with success. While each state’s policies

are different, the most successful states have highly-developed written policies,

many allow providers to apply and update data on-line, and some states make provider performance data available at a low cost, for providers that choose not to collect it themselves. Missouri has 290 providers offering 7,696 training programs,

with 3,900 individuals receiving Individual Training Accounts, the financing mechanism created by this Committee under WIA to provide individuals with vouchers to

finance their training. In Texas, 9,500 adults took advantage of over 4,600 programs

offered by 400 providers in July and August of this year alone. These are just two

examples that show success is attainable for states that work closely with state education agencies, State and Local Boards, and providers.

Finally, the GAO found that private-sector representatives might be discouraged

from participating on workforce investment boards as a result of their large size,

and how states and localities are operating their boards. Successful Local Boards

require the active participation of business members to ensure that the workforce

development system prepares people for current and future jobs, and that the board

is involved in the area’s economic development activities. One example is the Pacific

Mountain Workforce Development Council in Olympia, Washington, which has

partnered with local Chambers of Commerce to help rebuild small towns devastated

by the loss of the logging industry. Other boards, like Kentuckiana Works in Louisville, Kentucky, provide current regionalspecific labor market information to local

stakeholders for strategic planning needs, thereby making the board useful in community and business planning efforts. Some boards have worked to increase member participation and create a more manageable governance structure by dividing

boards into smaller committees focused on specific issues. Again, these boards are

setting the standard for what others can achieve.

37

The GAO focused on three of the most important issues involved in such a massive change to the workforce development system, but there are others. The Employment and Training Administration (ETA) continues to work with states and local

areas to raise the entire system to the level of the model approaches I have highlighted and to address the challenges that still exist. At the same time, we are keenly aware that these local areas are successful because they realize a vision and objectives that are targeted to the local labor market. We are committed to assisting

whenever necessary while recognizing that innovation will come from the state and

local levels.

In consultation with the Department’s state, local, and other federal partners, including the Departments of Agriculture, Education, Health and Human Services,

and Housing and Urban Development, the Department has provided unprecedented

levels of guidance on implementing WIA since its passage. The Department held

town hall meetings around the country, providing an opportunity for the partners

and the public to comment on the various policy directions in the proposed implementing regulations and strategic planning guidance, including guidance on unified

planning with partner agencies. Last fall, after the July 2000 implementation deadline, ETA regional office staff conducted a series of on-site reviews to gauge the

progress that states and local communities were making in implementing WIA, to

identify emerging concerns and issues, promising practices, and technical assistance

needs.

We have found that definitions may vary within a State with respect to determining dislocated worker eligibility, including length of attachment to the workforce, for

example. Some State and Local Boards have not established clear procedures and

eligibility criteria for the three tiers of service: staff-assisted core services, intensive

services, and training services. These policies affect the numbers of individuals ultimately receiving services, beyond the self-directed core services.

We have convened four work groups that have been meeting since last spring to

get a clearer understanding of current challenges and to develop specific proposals

to consider in meeting them. The four groups of local, state and federal subject-area

experts focused on the following topics: (1) the One-Stop system, (2) adult services,

(3) youth services, and (4) attracting and retaining employer involvement on State

and Local Workforce Investment Boards. Based on the workgroups’ input and information, ETA has identified several actions needed to address key readiness issues,

many of which will occur by the end of the year. To address issues at local OneStop Career Centers, for example, we are working with a states to develop ways to

share promising practices. We plan to issue guidance this fall to address many

issues, including how to simplify participant eligibility determination and intake.

Through the assistance of our business partners, we will also work to increase the

understanding of board members about the roles and responsibilities of Local

Boards.

We have been working continuously with other federal partners, such as the Department of Education and the Department of Health and Human Services, to clarify for One-Stop operators what is permissible under various federal programs, and

to encourage the creation of productive partnerships and collaboration at the local

level. We plan to concentrate our efforts on issues relating to development of performance data on education and training programs, and how to bring new rigor to

all systems. We will continue to closely monitor WIA implementation efforts on the

ground and provide technical assistance and issue guidance when appropriate.

I want to assure you that we also are keeping close watch on the availability of

funds in the present economy. State and local community spending under the Workforce Investment Act has been less than anticipated. Because of slower spending,

there will be $1.8 billion in unexpended balances-an unprecedented level that will

allow the system to address the needs of state and local workforce systems and the

number of people

needing services over the next year. As states and local communities address local

economic challenges through reemployment and outcome-based training strategies,

expenditure rates likely will increase. As you know, the Administration is exploring

a range of options to stimulate the economy and provide assistance to dislocated

workers and the unemployed to address the economic disruptions triggered by the

terrorist attacks of September 11.

CONCLUSION

Thank you for this opportunity to share our observations about the implementation of the Workforce Investment Act. We are confident that WIA provides greater

opportunities for all Americans so they can gain the freedom to make sound economic decisions for themselves and for their families. At the Department of Labor

38

we will continue to support state and local agencies as they work to quickly and

effectively help those affected by the aftermath of September I 11h attacks, and the

ripple effect the attacks have caused. Next year at this time we will be able to reflect back and say, ‘‘They were up to the task.’’

I will be happy to answer your questions.

PREPARED STATEMENT OF SIGURD NILSEN

GAO has done a survey of 12 national organizations, states and local areas to assess the needs of the local and state workforce boards and the one-stop centers during the first year of full implementation of the Workforce Investment Act.

Early implementation has brought some challenges to local areas. This legislation

created sweeping changes in a fragmented job training system. Mandatory partners

(like Vocational Rehabilitation and Veterans) have struggled with how to participate

in the One Stop Career Centers without watering down the services that they provide to their target population.

This streamlined system requires 17 programs administered by 4 federal agencies

to make their core services available through the One Stop. A fully integrated system would have all partner programs under one management structure offering

joint delivery of services.

The business-led boards help the system to be driven by the labor market needs

in the local area. Workers are trained in fields where they can be placed in employment in their local area.

The Secretaries of Labor, Education, HHS and HUD jointly explore the programmatic and financial concerns raised by state and local implementers that affect

their ability to fully integrate services.

Training providers will also need time to resolve data collection issues before they

are judged on their performance. Congress may want to give training providers additional time before they have to meet all the WIA requirements.

Training providers are required to collect and report data on program completion,

placement and wage data for all students in a program, not just those funded by

WIA. This has become a potential burden to many providers and has raised concerns that providers may choose to ‘‘opt out’’ of the system.

The Department of Labor needs to disseminate the success stories of successful

implementation and continue to provide technical assistance as local areas struggle

with implementation issues.

Questions

1. The message that comes through in your report is that many states and locals

are not yet taking advantage of the flexibility we provided them under WIA. However, you also say that because WIA is still new, guidance and time are the courses

of action rather than significant congressional action. What do we need to do to

make sure they start to use their flexibility better? Do you think it’s time that we

reigned in that flexibility?

2. You recommended that Department of Labor and others provide better guidance to state and local implementers. While guidance can be helpful, aren’t we potentially overwhelming states and localities with information? What else needs to

be said, and is the federal government the one to be saying it?

3. Your report highlights the various issues that state and local implementers

raised concerning their ability to move closer to the vision of ‘‘full integration’’. Why

did you use that as the comparison, rather than looking at other models for onestop operation offered by Labor such as simple collection or electronic linkages?

4. If states and localities continue to operate the one-stops the way they are currently operating them, will WIA be successful in reforming the fragmented, duplicative system we had before WIA?

5. Your report says that training providers are dropping off the eligible training

provider list, but I’m not sure that’s necessarily a bad thing. It was our intention

that WIA would help weed out the inefficient training providers. Can’t we assume

that’s what is happening here? Should we be concerned that we are losing high

quality providers?

6. I understand that private sector representatives are frustrated with the board

operations. Do you think that the concerns expressed by the private sector are real

impediments to their getting involved? Is there really something that can be done

to get the private sector involved and accountable for the success of our nation’s

workforce development system?

7. I would be very interested to hear about some local success stories you witnessed during your audit work. What were states and locals doing to address some

of the problems you highlight in your report?

39

AMERICAN ASSOCIATION OF COMMUNITY COLLEGES,

WASHINGTON, DC 20036,

October 4, 2001.

Hon. Edward M. Kennedy,

U.S. Senate,

Washington, D.C. 20515.

DEAR MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE: The American Association of Community Colleges (AACC) appreciates the opportunity to submit comments for inclusion in the record of today’s hearing entitled, ‘‘Job Training: Helping

Workers in a Fragile Economy’’ held by the Senate Health, Education, Labor and

Pensions Committee. AACC represents over 1,100 regionally accredited postsecondary institutions of higher education—institutions that are deeply involved in the delivery and administration of job-training services throughout the United States. We

strongly support the Workforce Investment Act system and want to do all we can

to ensure that it realizes its potential.

Over the course of the implementation of the WIA, AACC has been concerned

about the level of its members’ involvement in the new system. Some of our colleges

feel that provisions regarding training providers create an undue burden and should

be reexamined. Many of our colleges are troubled by the increased levels of data

that the institutions must provide in order to be training providers, compared to the

Job Training Partnership Act.

AACC is pleased that, under WIA, community college programs are automatically

WIA-eligible for one year. However, to be re-certified as training providers, they

must submit on an annual basis completion rates, the percentage of individuals who

obtain employment, and wages at placement of employment for all individuals participating in the program. This requirement is serving as a strong disincentive for

widespread community college participation in the workforce development system.

There are considerable costs involved for our institutions in meeting these reporting requirements. Many are finding that they cannot maintain subsequent eligibility

because of the time and money involved in continually collecting, preparing and submitting the performance data. This problem tends to be more pronounced for our

smaller rural institutions that tend not to have the resources to dedicate to a whole

new system for data collection and reporting. Because of this general situation, our

institutions have had to reduce the number of programs they are making WIA eligible. Colleges are not receiving additional funding to cover the new expenses associated with reporting performance, nor are they recouping these costs through WIA

enrollments. This situation is compounded by the fact that our colleges gather similar, but different, data for the Carl D. Perkins Vocational and Technical Education

Act as well as numerous state and local accountability requirements. If current

trends continue, the goal of consumer choice envisioned by the law will be lost because of the diminishing number of programs made available. This would be an extremely negative outcome. Of course, scores of community colleges are making numerous programs available.

In addition, some community colleges are troubled by the many fewer enrollments

of WIA students compared to JTPA. We are concerned if this means that persons

who could greatly benefit from comprehensive training programs to improve their

long-term earnings potential are being steered into work first. Training is being relegated to an activity of last resort in the WIA system, then the system is shortchanging those whom it is intended to serve. It is failing both the businesses that

rely on finding well-trained workers and the participants who need additional training to secure better employment.

AACC would welcome the opportunity to share these and other thoughts with you

at length at an appropriate time. We appreciate your engagement in these critical

issues.

Thank you for extending us the opportunity to share our comments with the committee.

Sincerely,

GEORGE R. BOGGS,

President.

40

THE BOSTON PRIVATE INDUSTRY COUNCIL,

BOSTON, MA, 02019,

October 3, 2001.

Hon. Edward M. Kennedy,

U.S. Senate,

Washington, DC 20510.

DEAR SENATOR KENNEDY: I am writing on behalf of the Boston Private Industry

Council, which serves as Boston’s Workforce Investment Board, to ask for your support for full funding of the Workforce Investment Act (WIA) for fiscal year 2002. As

you know, this Act, passed in 1998, is the primary investment of the federal government in a skilled workforce, one of the critical elements of a competitive economy.

In Boston, we have spent our WIA resources carefully and completely, having served

nearly 10,000 Job seekers and over 2,000 employers through the one-stop career

centers, 360 individuals with training services, and 451 youth with alternative education services and summer jobs.

Our one-stop career centers are state of the art facilities with one-on-one counseling, highly utilized resource libraries, connections to all job banks, workshops on a

range of employment issues, and employer account managers. The centers, which

opened in 1996, have raised the employment rate of their Customers continuously

since replacing the employment service. Their customer satisfaction levels of Job

seekers and employers have always been in the high nineties.

We have certified over 300 vendors as part of the individual training account system. Of the individuals who have used training accounts, 75 percent have no more

than a high school education, and the majority are from communities of color. Most

importantly, 84 percent of the graduates are now employed, Wage rates for dislocated workers who graduated from training are at 115 percent of their previous

salaries.

Full funding of the Workforce Investment Act allows us to sustain these services,

just as the sudden turn of world events is causing lay-offs and job shrinkage in several industries including travel, tourism and hospitality. Additional funding would

allow us to target education and training vouchers for those who can use their period of unemployment to improve their skills in order to be more employable once

hiring in these industries resumes.

Simultaneously, it will be important to manage the impact of world events on

inner city youth. The Workforce Investment Act is the conduit for youth funds that

are now only a fraction of what they were ten years ago. Our youth system targets

at-risk youth who have dropped out of school and re-engages them in alternative

high school diploma programs. Boston is fortunate to be the recipient of a federal

grant that is allowing us to open a new Youth Opportunity Center in Roxbury this

October. We also fund summer jobs programs that are linked to the year-round education programs. The youth are predominately 14 and 15 year olds and are all lowincome.

You are most welcome to visit any of our centers, training programs or youth programs, or to refer a constituent to any of these services. I have attached an implementation report for the Workforce Investment Act to this letter for your information. Thank you for your support of this critical investment of federal dollars.

Sincerely,

ROBERT MUDGE,

President, Massachusetts, Verizon.

STATEMENT OF THE WORKPLACE, INC.

As a member of the Board of Director of The WorkPlace, Inc., I urge the Senate

HELP Committee on the Workforce Investment Act to provide greater support for

workforce development in the United States.

I respectfully request that you:

Do not rescind funding in the 2001 WIA budget.

Increase the 2002 WIA budget to meet the growing need in our labor force.

Recent attacks on the United States have presented us with our greatest challenge in decades. Our basic security is threatened, and our economy is producing

layoffs at every level. Workers competent in their former fields need job training for

other industries needing workers; employees previously new to the workforce find

themselves again dependent on public assistance; and others hoping to enter a job

see a bleak future.

As the cornerstone for workforce development, the Workforce Investment Act offers the opportunity to address our rising unemployment. Southwestern CTWorks

41

Centers, our three one stop centers in our region of Connecticut, have given career

assistance to over 16,000 people, and more than 600 were given job training. The

WIA supported this work and did not fully satisfy the need in the first year. The

need will grow.

Thank you for this opportunity to submit this testimony.

STATEMENT OF GREATER BOSTON CHAMBER OF COMMERCE

An historically low unemployment rate has triggered a demand for skilled workers, one of the most urgent needs facing Massachusetts employers. Member companies are finding it increasingly difficult to recruit and retain professionals at all levels, stifling their ability to meet current project demands. It is estimated that approximately ten percent of all job openings at Greater Boston technology companies

are currently unfilled.

At the State House and in Washington DC, the Chamber will continue to work

to ensure that member companies can recruit the talented workers they need.

[Whereupon, at 11:52 a.m., the committee was adjourned.]

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