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[Senate Hearing 107-168]
[From the U.S. Government Publishing Office]

                                                        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

                        U.S. GOVERNMENT PRINTING OFFICE
75-651                          WASHINGTON : 2002
_____________________________________________________________________________
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Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     JUDD GREGG, New Hampshire
TOM HARKIN, Iowa                     BILL FRIST, Tennessee
BARBARA A. MIKULSKI, Maryland        MICHAEL B. ENZI, Wyoming
JAMES M. JEFFORDS (I), Vermont       TIM HUTCHINSON, Arkansas
JEFF BINGAMAN, New Mexico            JOHN W. WARNER, Virginia
PAUL D. WELLSTONE, Minnesota         CHRISTOPHER S. BOND, Missouri
PATTY MURRAY, Washington             PAT ROBERTS, Kansas
JACK REED, Rhode Island              SUSAN M. COLLINS, Maine
JOHN EDWARDS, North Carolina         JEFF SESSIONS, Alabama
HILLARY RODHAM CLINTON, New York     MIKE DeWINE, Ohio

           J. Michael Myers, Staff Director and Chief Counsel

             Townsend Lange McNitt, Minority Staff Director

                                  (ii)

  

                            C O N T E N T S

                               __________

                               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)

  

                      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 at-risk 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.
    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. Two-thirds 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.''
    ``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 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.
    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, 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 aftermath 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 workload 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 publicly-funded 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 providers just simply find that the 
information requirements to get on the list are too burdensome 
in relation to the number of WIA-funded 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.
    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. 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 
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.
    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.
    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 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 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 welfare-to-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 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 well-trained 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 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.
    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 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 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, 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 one-stop 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 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 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, well-trained, 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 laid-off 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 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.]
    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 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 
one-stop.
    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, 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 one-stops 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 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 businesses. 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 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.
    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 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 
one-stop 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 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.]

                          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.
    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.
    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 One-Stop 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 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 one-stop 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?
        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.
                                 ______
                                 
               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 low-income.
    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 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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