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87–960 PDF 2004

S. HRG. 108–324

REAUTHORIZATION OF THE WORKFORCE

INVESTMENT ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON EMPLOYMENT, SAFETY, AND

TRAINING

OF THE

COMMITTEE ON HEALTH, EDUCATION,

LABOR, AND PENSIONS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON

EXAMINING PROPOSED LEGISLATION AUTHORIZING FUNDS FOR

PROGRAMS OF THE WORKFORCE INVESTMENT ACT

JUNE 18, 2003

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

(
COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

JUDD GREGG, New Hampshire, Chairman

BILL FRIST, Tennessee

MICHAEL B. ENZI, Wyoming

LAMAR ALEXANDER, Tennessee

CHRISTOPHER S. BOND, Missouri

MIKE DEWINE, Ohio

PAT ROBERTS, Kansas

JEFF SESSIONS, Alabama

JOHN ENSIGN, Nevada

LINDSEY O. GRAHAM, South Carolina

JOHN W. WARNER, Virginia

EDWARD M. KENNEDY, Massachusetts

CHRISTOPHER J. DODD, Connecticut

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

JAMES M. JEFFORDS (I), Vermont

JEFF BINGAMAN, New Mexico

PATTY MURRAY, Washington

JACK REED, Rhode Island

JOHN EDWARDS, North Carolina

HILLARY RODHAM CLINTON, New York

SHARON R. SODERSTROM, Staff Director

J. MICHAEL MYERS, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON EMPLOYMENT, SAFETY, AND TRAINING

MICHAEL B. ENZI, Wyoming, Chairman

LAMAR ALEXANDER, Tennessee

CHRISTOPHER S. BOND, Missouri

PAT ROBERTS, Kansas

JEFF SESSIONS, Alabama

PATTY MURRAY, Washington

CHRISTOPHER J. DODD, Connecticut

TOM HARKIN, Iowa

JAMES M. JEFFORDS (I), Vermont

ILYSE W. SCHUMAN, Staff Director

WILLIAM KAMELA, Minority Staff Director

(II)
CONTENTS

STATEMENTS

WEDNESDAY, JUNE 18, 2003

Page

Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming, opening

statement .............................................................................................................. 1

Murray, Hon. Patty, a U.S. Senator from the State of Washington, opening

statement .............................................................................................................. 3

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

opening statement ................................................................................................ 6

Prepared statement .......................................................................................... 7

Dodd, Hon. Christopher J., a U.S. Senator from the State of Connecticut,

opening statement ................................................................................................ 8

Prepared statment ............................................................................................ 9

Harkin, Hon. Tom, a U.S. Senator from the State of Iowa, prepared statement ...................................................................................................................... 11

Nilsen, Sigurd R., Director, Education, Workforce, and Income Security

Issues, Accompained by Dianne Blank, Assistant Director, U.S. General

Accounting Office ................................................................................................. 12

Prepared statement of:

Sigurd Nilsen ............................................................................................. 22

Austin, Curtis C., President, Workforce Florida, Inc., Tallahassee, FL; James

N. Ellenberger, Deputy Commissioner, Virginia Employment Commission,

Richmond, VA; Michael H. Kennedy, Executive Director, Pacific Mountain

Workforce Development Council, Lacey, WA; Michael E. Smeltzer, Executive Director, Manufacturers’ Association of South Central Pennsylvania,

York, PA; and Charles Ware, Chairman, Wyoming Workforce Development

Council, Cheyenne, WY ....................................................................................... 37

Prepared statements of:

Curtis C. Austin ........................................................................................ 39

James N. Ellenberger ................................................................................ 47

Michael H. Kennedy .................................................................................. 52

Michael E. Smeltzer .................................................................................. 59

Charles Ware ............................................................................................. 64

ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:

Questions of Senator Kennedy for Curtis C. Austin, James N.

Ellenberger, Michael H. Kennedy, and Sigurd Nilsen ............................... 75

Questions of Senator Kennedy for Michael E. Smeltzer and Charles

Ware ............................................................................................................... 76

Questions of Senator Harkin for Sigurd Nilsen ............................................. 76

Questions of Senator Murray for Panel I ....................................................... 77

Questions of Senator Murray for Panel II ...................................................... 78

Coalition of service providers, advocacy groups, and individuals ................. 79

(III)
Page

IV

International Association of Jewish Vocational Services .............................. 81

National Hire Network .................................................................................... 82

Deborah Lincoln ............................................................................................... 83

Greg Nickels, Mayor of Seattle ........................................................................ 85

Shoreline Community College ......................................................................... 86

Wade Delk ......................................................................................................... 88

Sory Hinton Jordan .......................................................................................... 93

Steve H. Perdue ................................................................................................ 95

Diane D. Rath ................................................................................................... 100

C.W. Van Valkenburgh .................................................................................... 103

Indian and Native American Employment and Training Coalition ............. 106

National Community Provider Coalition (NCPC) .......................................... 107

Society of the Plastics Industry, Inc. .............................................................. 114

Toward a National Workforce Education and Training Policy ..................... 119

North Carolina Plastics Incumbent Worker Demonstration Project ............ 158

Wider Opportunities for Women (WOW) ........................................................ 160
(1)

REAUTHORIZATION OF THE WORKFORCE

INVESTMENT ACT

WEDNESDAY, JUNE 18, 2003

U.S. SENATE,

SUBCOMMITTEE ON EMPLOYMENT, SAFETY AND TRAINING,

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:04 a.m., in room

SD–430, Dirksen Senate Office Building, Hon. Michael B. Enzi

(chairman of the subcommittee) presiding.

Present: Senators Enzi, Murray, Kennedy, and Dodd.

OPENING STATEMENT OF SENATOR ENZI

Senator ENZI. I call the subcommittee hearing to order, and I

would like to begin by thanking Senator Murray and our distinguished panelists for joining me today to answer some important

questions like: How can we help American workers find new or better jobs? How do Americans get the training to be skilled employees? How can we help American businesses find the skilled employees they need to compete in a changing global economy?

We can do all three things by creating a more demand-driven

and flexible workforce development system, a system that works

for both large and small businesses and in urban and rural areas.

Workforce development can be a powerful economic development

tool.

In these challenging times, reauthorization of the Workforce Investment Act gives us an opportunity to improve the lives of millions of our workers and increase the strength of our businesses

and thereby our communities.

In 1998, the Workforce Investment Act, WIA, was enacted to create a streamlined job training and employment system that would

be responsive to the needs of employers and workers. WIA may be

a fairly new system, but we have already learned a great deal

about its strengths and weaknesses. These lessons reinforce what

I learned as a small business owner in Wyoming, that is, rural

areas face unique workforce development challenges. The real opportunity in America comes from the small business sector in all

States, where the American dream can still happen. Economic development and workforce development go hand in hand. Washington cannot and should not determine State, local, and individual

workforce needs. And overly burdensome administrative requirements divert resources from serving customers. I will give a little

more detail.
2

First, rural areas face unique workforce development challenges.

One-stop career centers are the focal point of WIA’s job training

and employment system, yet distance can create a barrier to a onestop access in many rural and frontier areas, like Wyoming. A job

seeker or employer or employer in, for instance, Dubois, WY, has

to travel 150 miles round trip to go to the nearest one-stop center

in Lander, WY. It is hard to understand the impact of distance

here where in Washington, there is the nearby Judiciary Square

satellite one-stop or a South Capitol Street one-stop to visit. Technology can effectively remove the barrier created by distance. Wyoming has created a virtual one-stop to make WIA services available

in every community in the State, and I am so pleased that Charlie

Ware, the chairman of Wyoming’s Workforce Development Council,

is here to tell us about this and other steps that Wyoming has

taken to improve service in the rural areas. And, in fact, we have

a number of Wyoming folks that have come out today to observe

this and to talk to other people. As you meet them, you may think

that most of Wyoming is here. It is true.

[Laughter.]

But when you are from a State that has three Senators—we

count the Vice President in that—we really do have a significant

number of people here.

Through the reauthorization, we should leverage technology to

improve access to WIA services in all rural areas. Remember, onestop centers are not just bricks and mortar.

Second, the real opportunity in America comes from the small

business sector where the American dream can still happen. However, WIA currently fails to tap into this opportunity effectively.

The system needs to be more responsive to the needs of small business. The small employers with limited personnel and limited resources are in the most need of WIA services to find and develop

skilled workers. Yet small businesses are the least likely to know

about the system, let alone to navigate it. They do not have the

extra person to specialize in some of these things.

Third, the workforce development and economic development go

hand in hand. You need businesses to provide skilled jobs. You also

need a skilled workforce to attract business to an area. The new

Lowe’s Home Improvement distribution center in Cheyenne, WY,

proves that workforce development is a powerful economic development tool. Lowe’s was looking at a number of sites to open a regional distribution center. The Wyoming Department of Workforce

Services, the State and local economic development agencies, and

the local community college partnered to provide job training to

meet Lowe’s needs. This was the primary reason they selected

Cheyenne. The distribution center will bring 700 new jobs to Cheyenne, which is a large number for Wyoming.

Fourth, Washington cannot and should not determine the State,

local, and individual workforce development needs. An important

goal of WIA was to allow State and local flexibility to implement

innovative workforce programs tailored to meet the needs of local,

regional, and State labor markets. States and localities, not the

Federal Government, are best positioned to recognize and respond

to workforce needs. However, current law has restricted the ability

of States and localities to implement job training and employment
3

services best suited for their needs. Current law has also restricted

the ability of participants to receive the services that meet their

needs. By building more flexibility into the system, the full promise

of the Workforce Investment Act can be achieved.

Finally, overly burdensome administrative requirements divert

resources from serving customers. The system must have accountability. However, the 17 current performance measures must be

simplified to more accurately and easily show the impact WIA is

having. We need the sales pitch. We do not need mounds of data.

The current excessive data collection and reporting requirements

have deterred some training providers from even participating. Difficulty of documenting low-income eligibility for youth has left atrisk youth out of the system. By reducing administrative complexity, more resources can be devoted to helping people get new or better jobs.

With these lessons in mind, reauthorization of the Workforce Investment Act should focus on improving job training and employment services in rural areas, particularly with the use of technology, increasing the participation of small business, linking workforce development with economic development, and building more

flexibility into the system. Some States and localities have found

creative ways to overcome challenges imposed by current law. Wyoming has done a magnificent job with the resources they have been

allotted under the current law. And I do commend their ingenuity.

What we have to do now is structure the reauthorization so our

States have built-in flexibility they need to help the unemployed

and the underemployed. States and localities should be able to target efforts more directly toward people rather than toward paperwork.

Deputy Secretary of Labor Cameron Findlay has already testified

before this committee about the administration’s innovative proposal for improving the Workforce Investment Act through reauthorization. Today we will hear from the General Accounting Office

and leaders from the business community and workforce development community. Reauthorizing the Workforce Investment Act this

year is a priority for the President, for the Department of Labor,

and for me. I look forward to working with the administration,

with my colleagues and the committee, and with the stakeholders

on a bipartisan bill—and we have been working toward that already—that builds on the lessons we have learned about this vital

legislation.

I will now recognize the distinguished ranking member from

Washington, Senator Murray, for any statement she might want to

make.

OPENING STATEMENT OF SENATOR MURRAY

Senator MURRAY. Well, thank you, Mr. Chairman. Let me commend you for calling this second hearing of the Employment, Safety and Training Subcommittee to update the Workforce Investment

Act to meet the needs of workers and employers. I am happy to join

in welcoming our two distinguished panels of witnesses. They bring

unique perspectives on how we can strengthen and improve services to employers and job seekers, and I welcome all of their expertise.
4

I especially want to thank this morning Mike Kennedy from Pacific Mountain Workforce Development Council in Lacey, WA, for

making the long journey across our country to share his insights

with the subcommittee this morning.

Mr. Chairman, as we talk about WIA and performance measures

and personal re-employment accounts, it is easy to get caught up

in the jargon. But behind each one of these programs are real people who have lost their jobs through no fault of their own. They

want to work. They want to pay their mortgage. They want to put

food on the table. And we have got an obligation to help them succeed. These families are balanced on the leading edge of our economy. Outward job opportunities and skills are constantly shifting.

We need to give them a strong, solid foundation to a good-paying

job.

I see the challenges in my home State of Washington. Our unemployment rate is 7.3 percent. That is the second highest unemployment in the Nation. Tens of thousands of workers in my State have

lost their jobs over the last 21⁄2 years, and they desperately need

retraining services.

We have also seen that the number of people using one-stop centers has increased dramatically. What we do with this act may

make the difference between someone who is trapped outside the

workforce without the skills they need and someone who can compete and win in today’s economy. So I hope we do not lose sight

of the families that are affected by every change we make.

Let’s also remember that unemployment is not a partisan issue.

It is an American challenge and one that we must face together.

I hope that under the leadership of our chairman we will continue

the strong tradition of bipartisanship around workforce development issues.

Of course, WIA has only been operational for 3 years, which is

not enough time to fully analyze the success and the failures of the

current system. I do not believe we have the kind of empirical evidence to suggest wholesale changes to the act. I have been encouraged to see new partnerships developing in my State with the business community, organized labor, community colleges, and the provider community. We must build on these successes and not throw

the workforce system into chaos by implementing sweeping

changes.

As we begin to update our workforce programs, let’s keep in

mind that we do not want to push people into dead-end jobs just

to get them off the rolls. Our goal is to empower people to find jobs

that will last and will truly improve their lives. To meet that goal,

I am focusing on three priorities.

First, we must empower WIA’s two customers—business and

workers—to use their firsthand knowledge to meet local employment needs while providing the appropriate incentives and flexibility to bring people and businesses into one-stop centers. This flexibility, however, should not mean using block grants to consolidate

services. For example, we should not eliminate Wagner-Peyser

funding for the critical labor exchange function carried out by the

U.S. Employment Service. I will work hard during the appropriations process to seek renewed Federal infrastructure funding for

one-stops. My goal for this funding is to help reduce the financial
5

burdens facing one-stop partners and to encourage greater cooperation and increase leveraging of resources at the State and local

level.

Second, we should make WIA’s services more efficient at every

level by streamlining the performance, reporting, and eligibility criteria, and knocking down barriers to job training. We must strike

an appropriate balance between State and local control. For example, Washington State has done an excellent job of governance

through its tripartite board structure. Any reauthorization bill

must continue to allow Governors to retain this type of flexibility

in deciding how best to structure its State board.

And, finally, we should provide more appropriate performance

measures to reflect the type of work and labor market being

served. I would also note that we have got to stop the funding cuts

that are undermining our workers. We have got to fund workforce

development programs adequately to meet the growing needs of

millions of unemployed and underemployed Americans who have

worked hard and played by the rules.

Before I close, I want to raise some concerns about the personal

re-employment accounts that the administration has proposed. To

me, that proposal is inadequate and unfair. First of all, the accounts do not provide enough money to really help a dislocated

worker. The average training program costs $5,000. The President

only offers $3,000. So workers will simply not be able to afford the

training that they need.

In addition, if you take the $3,000, then you are cut off from getting any other support from Workforce Investment Act programs

for a full year. And these accounts are not open to everyone. They

are only available to people who are collecting unemployment benefits. That leaves out people whose benefits have expired, new entrants, many women and minorities, and low-wage workers.

Someone who has lost his or her job might not even be eligible

for re-employment accounts. And even if they are, there is not

enough money for even the average training program, and they are

cut off from receiving any other WIA support for an entire year.

That is not the type of solid and reliable framework to help dislocated workers. We are trying to build a springboard that dislocated workers can use to find a good job.

I am concerned there are many holes in the administration’s approach, and I am afraid that many people are going to fall through

the cracks instead of getting the support that they need.

Mr. Chairman, in closing, I believe that a strengthened Workforce Investment Act can help provide the skills training employers

need to remain competitive in our global economy, and I look forward to working with you, Mr. Chairman, and all the members of

the HELP Committee in fashioning a bipartisan reauthorization

bill that will be responsive to the needs of all working Americans.

Thank you, Mr. Chairman.

Senator ENZI. Thank you.

Senator Kennedy?
6

OPENING STATEMENT OF SENATOR KENNEDY

Senator KENNEDY. Well, thank you, Mr. Chairman, and I will be

very brief, and I appreciate your courtesy in letting me say just a

word.

First of all, I want to thank you for your great interest in the

whole issue of training for workers in this country and for your

willingness to keep an open mind in developing what we all hope

will be a strong, bipartisan bill to meet the very critical need.

I thank Senator Murray, who gave an excellent outline of both

the challenges in developing the legislation and also, I thought, a

very keen observation about the personal re-employment accounts.

Mr. Chairman, I remember very well, I go back to the time that

we had the CEDA program, when we had all of the challenges that

were out there in the CEDA program, and then we had the JTPA,

which was primarily the work of a Republican Senator from Indiana, Senator Quayle. It was the only social program that was

passed in the first 4 years of the President Reagan period. But he

spent a lot of time on this. I had my differences with Dan Quayle,

but I respected the work that he placed on this and the priority

that he placed on it. And the JTPA was a very creative way to try

and be responsible to the business and local needs. And in a number of places in my State, it worked extraordinarily well. In other

places it was weak. But what was recognized by Senator Kassebaum and us on this committee later was that we had six different

agencies, 26 different training programs, and we ought to bring

them all together. And that is what WIA was really all about. And

I believe that we ought to give it a chance.

I think the excellent GAO report in reviewing places where it has

been very successful would indicate that that is the best way to

move it. We cannot constantly every 4 years try and find a new

way of trying to restructure and reorganize something which is of

such fundamental and basic need in terms of working Americans.

When I came to the Senate, if you worked down at the Falls River

Shipyard, your grandfather worked there, your father worked

there, you had one job. Now you have seven jobs once you enter the

job market. You need continuing training, training, education,

training, training, training, training. And I think the genius of this

proposal is that it has the different streams in terms of the youth

with all the complexity, the fact we have close to 500,000 youths

that drop out every year, working with the children in school, out

of school. The youth councils, we could talk about that. You have

the dislocated. You have the adult worker. You have the new kinds

of pressures with migrant workers and immigrant workers that are

coming in here, working with the business community, the employment services and the value that they have.

I agree with you, Mr. Chairman, this is not particularly an item

for our committee because it talks about using the FUTA programs

and contributions in terms of the training programs, and that really is not quite in our jurisdiction. And if it is going to be altered

and changed, I think we will have to give it a good deal more

thought. I think that employment service is working.

Sure, we need to bring some—take a number of the recommendations that have been made in the GAO and from a number of the
7

WIA Boards. I have spent time in my own State recently in traveling the State and listening to both the boards, the business community, and others. And they make a lot of good suggestions. My

hope is that we could find common ground, we could build on what

we have tried to do in the past, and really make a difference.

What we are facing in this country now is a skill shortage. We

have got workers that are out there that want to work, as Senator

Murray said. It is just the skill shortage. And we need to have a

good, effective, committed program, and I want you to know that

we want to work with you and the committee to try and achieve

that.

I thank you for letting me say a word.

[The prepared statement of Senator Kennedy follows:]

PREPARED STATEMENT OF SENATOR KENNEDY

I commend our Chairman, Senator Enzi for calling this important hearing and for his leadership on these workforce issues over

the years. This hearing will provide important information as we

prepare legislation to reauthorize the Workforce Investment Act.

The 1998 Act accomplished a major reshaping of Federal job

training programs, moving to the concept of One-Stop service to

help workers acquire the skills that were in demand by area businesses. That bipartisan legislation was a significant step in simplifying the Federal programs to meet the needs of workers and

employers more effectively, and the reauthorization gives us an opportunity to build on that achievement.

Today’s struggling economy puts this system to a difficult test.

Since January 2001, millions of jobs have been lost. Over eight million Americans are out of work, including two million who are classified as long term unemployed because they have been out of work

for more than 6 months.

The new system of One-Stop Centers is helping these workers

and their families make it through these hard times. The Centers

are helping unemployed workers to identify available jobs and obtain the training they need to qualify for good jobs.

This year’s reauthorization bill will enable us to strengthen this

system and make it more effective in meeting the needs of businesses and workers, and establish key links between economic development and workforce development.

In recent weeks, I have had the opportunity to meet with constituents who serve on local Workforce Investment Boards in Massachusetts. They have had good ideas for improving the law, but

they emphasized that the law is in the early stages of implementation, and the last thing they want is sweeping changes for political

reasons.

I look forward to working with my colleagues to improve the formulas in the current system, but now is not the time to eliminate

the Employment Service by blending its support with other funding

streams. To avoid duplication, there are many other ways to meet

that goal. Dislocating State workers will only add to the growing

numbers of the unemployed and force States to design a new system during the current fiscal crisis.

We must continue to target resources on teenagers and young

adults. Last summer was the worst summer for young people 16–
8

19 trying to get ahead in the job market—only 39 percent of teenagers were employed, the lowest rate since 1965. Clearly, we need

a job creation program for these young people, to give them the incentive they need to pay for college or to get a firm footing in the

workforce. Unfortunately, this summer may well set new records

for teenage unemployment.

We need to look closely at low-wage workers as well—hard-working Americans who lack the skills to move into better-paying jobs.

We must work with employers to provide skills training for these

workers long before they are unemployed. Improving the skills of

low-skilled workers adds to the productivity of businesses and

makes our country stronger.

We must also strengthen the safety net for workers who are most

at risk in the current economy. Migrant and seasonal farmworkers

deserve specific programs to meet their unique needs. Offenders returning to society have special needs to become productive citizens,

and they deserve assistance in making a successful transition back

into their communities.

We also plan to focus on standards for accountability, so that we

can assess how well workers are obtaining training and services,

and how well businesses are using the system.

I look forward to the testimony today, and I especially thank

Sigurd Nilsen and GAO for all of their work on the Act’s implementation.

Senator ENZI. Thank you. I appreciate those comments. You

mentioned the two earlier programs, CEDA and JTPA. My wife

was on State Advisory Councils for those, so I have a little background in that. Now she is on the National Advisory Council for

Apprenticeships, so I still get excellent advice.

[Laughter.]

Senator Dodd?

OPENING STATEMENT OF SENATOR DODD

Senator DODD. Well, thank you, Mr. Chairman. I will ask unanimous consent that my opening statement be included in the record.

And let me echo the comments of Senator Kennedy with regard to

both you and Senator Murray. Senator Enzi, in your tenure here,

you have not wandered around and gotten involved in a lot of different issues. You have focused in your tenure here on workplace

issues, and I want to commend you for it. From the very beginning

you have had a consistent message, looking for different ways to

focus on these issues. And we are fortunate to have you chairing

this committee; someone who cares so much about these particular

issues. Senator Murray as well has been a champion on these questions over the years.

Just to echo what has been said, I guess, by others already—I

am concerned as well that we not try and make sweeping changes

here. A lot of places did not really get to implement the Workforce

Investment Act until the year 2000, so it is just beginning, and the

idea of not giving this a chance to really show what it can do would

worry me. We do that too often here. We reinvent the wheel all the

time, and if we do so now, we can do it at our peril, particularly

for the workers and the businesses. I think it is very important

when we talk about this, while the emphasis obviously and to a
9

large extent is on seeing to it that people can have work, it is a

critically important issue for businesses to be able to have a

trained workforce that can compete and do the jobs in a 21st century economy.

And so while this will do an awful lot for individual workers, it

does a great deal for businesses out there that need to have the talented people to do the job.

I would be remiss if I did not express my concerns about the

budget areas with regard to WIA. While we are all talking about

the importance of WIA, we must lay the groundwork—and obviously the questions will have to focus on this to some extent. The

budget request for 2004 consolidates adult, dislocated workers and

employment service allotments to States into a single formula

grant. Consolidation will likely cut job training spending by $144

million and serve 100,000 fewer youths. At least, those are the predictions here. And that is at a time when we are seeing 9 million

Americans out of work. The unemployment rates, while they have

not climbed as dramatically in the last month or so, but certainly

at 6.1 percent the rate is high and there is every indication that

those numbers are probably going to continue to climb before this

bottoms out. We are estimating in my State we will lose an additional 10,000 workers before we get a bottoming-out of this problem.

So at a time when the economy is worsening to some extent, unemployment rates are rising and there are pressures on businesses

and industries to compete in the global marketplace, the Workforce

Investment Act has done an awful lot, and we ought to continue

to give it a chance to do what many people felt it would do when

we enacted it.

So I am very interested in observations this morning from our

witnesses who I am sure have a lot to suggest to us. But my hope

would be we do not go and redo WIA all over again at a time when

it is going to be very important that we put some resources behind

it and let this program work as well as those who spent the hours

putting it together envisioned it might work back in 1998.

Thank you.

[The prepared statement of Senator Dodd follows:]

PREPARED STATEMENT OF SENATOR DODD

I would like to thank Chairman Enzi and Senator Murray for

scheduling today’s hearing on re-authorizing Title I of the Workforce Investment Act (WIA). In 1998, Congress overwhelmingly endorsed WIA, bipartisan legislation to streamline the way we deliver

and fund job training programs.

I hope this subcommittee can work together, Democrats and Republicans, to craft a bill that provides targeted improvements to

the WIA system. Such a revamping of the system in 1998 could

only have happened because of bipartisan work and I hope we remember that bipartisan spirit as we move forward with the reauthorization of such an important bill. I think it is appropriate to

discuss prudent ways to strengthen and improve the system to

meet the needs of workers and businesses but I will say at the outset that I have concerns with efforts to make large programmatic
10

and funding allocation changes to the WIA system so soon. After

all, most States did not begin implementing WIA until July 2000.

When Congress enacted WIA, we understood that it would withstand an economic boom or bust. However, none of us knew just

how quickly the economy would be turned on its head. Budget surpluses have been replaced with staggering deficits at the Federal

and State level. The May unemployment rate is at 6 percent, with

nearly 9 million people out of work. The poverty rate is escalating

and foreclosures and personal bankruptcies are skyrocketing. Rising natural gas prices impact consumer and business spending. The

economy is hurting.

Few issues are as important to the future of this country as the

lifelong education and training of our workforce. Now more than

ever, businesses must have access to workers who have the skills

to compete in a global economy with emerging technologies and

company downsizing. It is imperative that our delivery of services

meet the employment needs of the new century.

At a time when 9 million people are unemployed and the unemployment rate at 6.1 percent, I do question the Administration’s

call for steep tax cuts and deep cuts to job training and education

funding. The President’s budget request for fiscal year 2004 consolidates Adult, Dislocated Workers and Employment Service allotments to States into a single formula grant. Consolidation will likely cut job training spending by $144 million and serve 100,000

fewer youths. I contend that without an educated and sufficiently

trained workforce, our country cannot prosper.

States are facing funding shortfalls of dramatic proportions. In

Connecticut, the shortfall is projected at several hundred million

dollars and there is no budget agreement yet. Department and

agency closures are proposed which will translate into a decline in

services for the poor, elderly and unemployed. Already in 2003, the

State has reduced Customized Job Training and Apprenticeship

programs and closed four One-Stop centers. The remaining centers

will have to further dip into valuable service resources to pick up

the slack. I am pleased that several of our witnesses, including the

GAO, have raised concerns about one-stop infrastructure funding

and whether equitable cost-sharing agreements among partners

has been successful.

I am concerned that targeting $3.6 billion toward the President’s

new program entitled Personal Re-employment Accounts (PRA)

may reach only 1.2 million unemployed workers nationwide and

may reduce flexibility for workers and businesses. Funding for

PRAs will come at the expense of other training services.

WIA has been successful. One-Stop centers provide critical services to workers, but the workforce boards have also been able to

work with local areas to ensure that businesses use the One-Stop

system to find workers. Leaders of the workforce boards and mayors in Connecticut have alerted me to the challenges they will face

if consolidation and cuts to WIA become a reality.

The elimination of Youth Opportunity Grants (YOG) will be devastating to the country, to the State of Connecticut, and most importantly to our youth. In 1999, Hartford was awarded a Youth Opportunity Grant of $28 million over 5 years to establish ‘‘one-stop’’

youth centers in local communities to serve 1,400 youths to in-
11

crease high-school completion rates, increase employment and

entry into post-secondary training.

Connecticut’s unemployment rate for April is 5.3 percent and in

the month of April alone, the State lost 1,200 jobs. In just under

3 years, the State has lost 44,000 jobs. More than 2,800 State employees lost their jobs in early 2003. In early June, a Fairfield University economist stated that Connecticut may lose an additional

10,000 jobs before the economy bottoms out.

The Capital Region Workforce Development Board’s One-Stop

system serves 17,000 individuals in the Hartford area and WIA

cuts will translate into decreased services to job seekers; further

One-Stop closures; fewer skilled training programs to meet local

business needs; and fewer services to the growing dislocated worker population. Finally, there is a real concern that businesses will

relocate or choose not to come to the area if there is a shortage of

skilled workers.

I look forward to hearing from our witnesses today and moving

forward with a bipartisan Senate bill to reauthorize the Workforce

Investment Act.

Senator ENZI. Thank you. I thank all my colleagues for their

comments and I submit a prepared statement from Senator Harkin

for the record.

[The prepared statement of Senator Harkin follows:]

PREPARED STATEMENT OF SENATOR HARKIN

Thank you, Mr. Chairman for holding this hearing today on the

future of the Workforce Investment Act. This program is especially

critical as it applies to our struggling economy.

WIA is still a young job training program. It replaced the Job

Training Partnership Act with the mission to consolidate, coordinate, and improve employment, training, literacy, and vocational

rehabilitation programs. Simply, it was supposed to make job

search and training assistance more user-friendly to quickly get

people back into the workforce with good-paying jobs as well as

provide opportunities for at-risk youth.

We passed WIA into law in 1998 and gave States until July 2000

to fully implement the job training program. In that time, I have

a general idea of how WIA seems to be working in my State of

Iowa and nationwide. Unfortunately, that’s pretty much all we

have at this point. A general idea. WIA is too new and we have

too little data to justify overhauling the whole program.

Unfortunately, that’s exactly what the House did earlier this

year. They block-granted the program—which will do nothing to

help get people back to work.

Instead, we need to fill the gaps and fix the problems we’ve identified to improve WIA. Let me list a few:

Tweak the funding formula. My State has difficulty planning in

the long term when the annual amount it receives from the Department of Labor radically changes from year to year. Other States

have experienced this as well.

We need faster turnaround time on emergency grant funding for

job training. I’ve mentioned this before at a previous hearing on

the Labor HHS appropriations subcommittee where I serve as

ranking member. In some cases, Iowa had to wait more than a year
12

before it received an ‘‘emergency grant’’ to provide training to laid

off workers. That is simply unacceptable. This is not a user-friendly

job assistance program if people have to wait a year for training.

The performance measurement system is flawed. As the GAO

concluded, the need to meet certain performance measures may be

causing one-stop centers to deny services to some clients who may

need them the most. Also, there is no measure that assesses overall

one-stop center performance and the limited data we do receive is

often too outdated to be of any real use.

Our one-stop centers and workforce boards need more guidance

from the Federal Government on priorities as well as more flexibility.

And I keep hearing that disability access to one-stop centers is

a serious problem.

If we correct these problems in the reauthorization bill, we will

have made significant progress in providing people the kind of job

assistance they need to find a good-paying job. But if we block

grant WIA, it sends the message that we really don’t care and we

don’t want to deal with it. In this struggling economy, we owe

America’s workforce more than that. I thank the Chair.

Senator ENZI. We will move right away to panel number one.

Today we have Sigurd Nilsen, who is the Director of Education,

Workforce, and Income Security at the U.S. General Accounting Office in Washington, DC., and we look forward to your report. Thank

you.

STATEMENT OF SIGURD R. NILSEN, DIRECTOR, EDUCATION,

WORKFORCE, AND INCOME SECURITY ISSUES, ACCOMPANIED BY DIANNE BLANK, ASSISTANT DIRECTOR, U.S. GENERAL ACCOUNTING OFFICE

Mr. NILSEN. Mr. Chairman, Members of the Subcommittee,

thank you for inviting me here today to present the findings from

our report on promising one-stop practices we are releasing today

that was requested by Senator Kennedy and by House Chairmen

Boehner and McKeon. With me today is Dianne Blank, the Assistant Director, who was responsible for the day-to-day operations of

the study and so much of our other work on the Workforce Investment Act.

In the barely 3 years since the full implementation of WIA,

States and localities have found ways to use the flexibility in WIA

to develop creative ways, new ways to improve their one-stop system. From the more than 51 stops identified and nominated to us

as exemplary nationwide, we visited 14 that had developed promising strategies to streamline services for job seekers, engage and

serve employers, and build a solid one-stop infrastructure. I want

to share some of the examples of promising strategies from the 14

sites we visited.

As you know, one of the primary objectives of WIA was to

streamline the provision of services from the myriad employment

training programs. What we found was that at all of the 14 sites

we visited, there was a focus on streamlining services for job seekers that included actions to ensure that job seekers could readily

access needed services, educate program staff about all the onestop services available to job seekers, and consolidate case manage-
13

ment and intake procedures. Some of the one-stops found ways to

serve job seekers who may have been unable to come into the onestop center due to transportation barriers or other issues. For example, in Boston, the one-stop placed staff in off-site locations, including family courts, correction facilities, and welfare offices, to

give job seekers ready access to employment and program information. Other one-stops had staff placed at the entrance to the onestop to guide job seekers to the right service.

Next, another major innovation of WIA was to focus on engaging

the employer community. All 14 one-stops did an exceptional job of

engaging and serving the needs of their local employers by dedicating specialized staff to establish relationships with employers, by

establishing links with employers through intermediaries such as

local chambers of commerce and economic development agencies,

and by providing tailored services to meet employers’ specific workforce needs.

Staff at some of the one-stops we visited worked with industry

clusters to more efficiently meet local labor market demands, particularly for industries with labor shortages. For example, the onestop in Aurora, CO, dedicated staff to address the 1,600-nurse

shortage in the Denver metro area. The Aurora one-stop assisted

in the creation of a health care recruitment center designed to provide job seekers with placement assistance and health care-related

training.

Another example is from Clarksville, TN, where the one-stop

staff worked with chamber of commerce members to help banks in

the community that were having difficulty finding entry-level employees with the necessary math skills. The one-stop developed job

training for job seekers that focused on the specific skills needed

in the banking industry locally.

Also, all of the one-stops we visited tailored their services to

meet employers’ specific workforce needs by offering an array of job

placement and training assistance designed for each employer.

These services included specialized recruiting, pre-screening, and

customized training programs. For example, one of the Nation’s

largest cabinet manufacturers was considering several locations for

a new production facility. The one-stop in Pikeville, KY, drew the

plant to eastern Kentucky by offering a tailored set of services that

included holding a 3-day job fair, providing support for training,

and that resulted in the hiring of 105 people immediately and the

promise of another 350 workers in the coming year.

Now I would like to quickly mention some of the issues raised

in our work over the past 3 years that should be addressed during

WIA reauthorization.

First, WIA’s current performance measurement system is flawed.

The need to meet certain performance measures may be causing

one-stops to deny services to some clients who may be most in need

of services. In addition, the data used to measure outcomes are outdated by the time they are available and are not useful for day-today program management.

Another issue concerns WIA’s allocation formulas. The formulas

do not reflect current program design and have caused wide, unwarranted fluctuations in funding levels from year to year, especially for the dislocated working program.
14

Another funding-related issue is the fact that we have provided

no separate funding source to support one-stop infrastructure, and

developing equitable cost-sharing agreements has not always been

successful, largely because of limitations in the way funds for some

of the mandatory partner programs can be spent.

Another ongoing issue for WIA is that the provision for certifying

training providers as eligible is considered overly burdensome by

many providers and may reduce training options for job seekers as

providers have withdrawn from the WIA system.

Finally, we have recommended that labor develop a research

agenda that better assesses the impact of integrated strategies on

services to job seekers and employers.

In conclusion, WIA represented a fundamental shift in the way

federally funded employment and training services are delivered to

job seekers and employers. It was a far more radical change than

it initially appeared, but in just under 3 years, States and localities

have learned to embrace its flexibility and develop systems that

meet local needs. They are doing what we envisioned: bringing on

new partnerships and forging new relationships at all levels. They

are actively working to engage the employer community and involve intermediaries and others to address the economic development needs of local communities. Some aspects of the law that

have caused difficulties deserve attention during reauthorization.

But given the significance changes brought about by WIA, more

time is needed to allow a better assessment of what is working and

what is not before making major changes in WIA’s structure.

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

be happy to answer any questions you or other members of the subcommittee may have at this time.

Senator ENZI. Thank you very much. We appreciate the conciseness but also the specificity of what you had in your remarks, and

it was extremely helpful.

Now, you visited 14 one-stops across the country.

Mr. NILSEN. Yes.

Senator ENZI. I appreciate that. I like it when people actually

take a look at what is happening on the ground. Did you look at

the unique challenges that are faced by rural one-stops? And what

are some of the innovative ways that the rural one-stops are overcoming some of those challenges?

Mr. NILSEN. The one-stops we visited were across the country,

North, South, East, West, urban, rural. We had seven sites out of

the 14 that served rural populations. Some, like in Killeen, TX,

were focused almost exclusively on serving rural populations as

well as Pikeville, KY. Others, like the St. Louis one-stop, served a

mixture of both suburban, urban, and rural populations, covering

a broad area.

Some of the issues for rural populations, it is surprising, sometimes are not that much different from some of the challenges facing urban. Transportation in rural areas is a big issue, and getting

to the one-stop, as you mentioned in your opening remarks, people

have to cover broad distances to get to the one-stops.

So what one-stops have done is devise transportation strategies

to bring folks into the one-stop. Some particularly pick locations
15

that are on interstates or if there are bus lines for easy access. Bus

lines certainly are more an issue that is useful in urban areas.

The other thing is using technology to better allow access to services. In Killeen, TX, for example, the local libraries all had active

computers that were hard-wired into the one-stop system so people

could work on their resumes there. They provided some training remotely through the computer systems.

So these are ways they are using technology to help serve populations that may not find it convenient to get to the one-stop readily.

Senator ENZI. Thank you. And if you think of some other ways

that transportation or technology or things solve some of those

rural problems——

Mr. NILSEN. Many of the sites have gone after transportation

grants to try to facilitate getting loaner cars even that they have

and having special van transportation to bring people in, help them

get to interviews.

Senator ENZI. Workforce development must be driven by demand, the job at the end of the pipeline, and it is my firm belief

that we should be training people for skills that employers need.

All of the one-stop centers that you have cited as exemplary have

developed strategies to engage and provide services to the employers.

I am particularly concerned about engaging the small businesses

who do not have the resources to reach out or to work the system

themselves. It is my understanding there have been some specialized—some of the places have done some specialized one-stop staff

to outreach to those employers. Could you give me a little more information on that?

Mr. NILSEN. That is correct. It seems like one of the biggest targets of the one-stops in the employer community often is the small

employers because they can provide the kinds of services that small

employers often cannot afford to provide for themselves because

they do not have huge human resource departments.

We saw one-stops that had tax assistance on-site at the one-stop.

They provided information for how to start a business, how to develop new businesses. They also provided space to do interviewing

on-site to small businesses. They linked with the chambers of commerce, which is a place where many small businesses meet to have

support. And they also linked with the economic development agencies that looked at growing local businesses or attracting new businesses to the area.

Serving businesses they understand is how you get the jobs that

you need to place your job seekers into. They did many things.

They held job fairs to bring more employers into the one-stop, having on-site referrals and providing space on a regular, ongoing

basis that any employer can come in and use.

Senator ENZI. I am almost out of time, but I have to ask one

more question, and that is, if you can describe some of WIA’s reporting requirements for training providers that impact the quality

and quantity of the training options. You mentioned those words.

Mr. NILSEN. Right now many of the training providers that were

providing training under JTPA are saying that the new reporting

system is burdensome. We have somebody, even as few as one per-
16

son enrolled in a particular class, and now I have to provide placement and wage information on everybody in that class, whether

they were supported by WIA or not. And they are just finding that

burdensome.

About half the States have requested and received a waiver from

the Labor Department to continue providing services without providing the outcome information. But there are other issues related

to privacy. That was a concern for many of the training providers.

But they were just feeling that this is not worth the effort.

So what has happened is that many of the providers have limited

the number of courses they offer to WIA participants, so the range

of courses available has shrunk somewhat. And this is even from

community colleges who say we do not have the time, we do not

have the money to do this, this is too burdensome.

Senator ENZI. It seems to be one of the consistent comments that

we get. Thank you very much. My time is up.

Senator Murray?

Senator MURRAY. Thank you, Mr. Chairman.

First of all, it was really heartening to read in your testimony

of the successful programs and strategies that one-stops across the

country have implemented. I have a couple of follow-up questions

to the implementation challenges that you talked about in your testimony.

Based on your evaluation of the implementation of WIA, you believe that incremental changes are necessary, not wholesale

changes, and I wondered if you could talk a little bit about why you

came to this conclusion, why you think that incremental changes

are more appropriate than some of the wholesale revisions that we

have heard others suggest.

Mr. NILSEN. At this point, this July 1 is the third anniversary

of the full implementation of the Workforce Investment Act. What

we saw when we were out looking at the system when it was first

being implemented is that these were major dramatic changes that

were being made. People had to figure out how to build new relationships, how to bring everybody together at one-stops, negotiating

agreements. It took a year, sometimes a year and a half, as much

as 2 years, really to get up and running.

People are just now starting to understand what the flexibility

that WIA now provides for them has allowed them to do. So, in a

sense, they are just—this is just the end of first-phase implementation. Now they are able to build on that knowledge and continue

to bring in partnerships.

The TANF program in many places increasingly is being collocated, particularly the employment training assistance for TANF

recipients is being provided increasingly through the one-stops.

TANF is not a required partner. But they are realizing that they

have the benefit of sharing information. So they are continuing to

build other relationships.

At this point, the performance measures, as I said, are a big impediment to serving a broad range of populations. But our view is

that the system is maturing. Three years is not enough time for the

system to mature. Incremental change—because right now, when

we found 50 nominations and we went to 14, there are a lot of

other one-stops out there that have not quite figured it out yet.
17

And one of the consistent recommendations that we have made in

our series of reports is that the Department of Labor be much more

proactive in providing information to the one-stops across the country about the flexibility, how to use it, how far can they go. And

the Department of Labor, in response to our most recent report,

has said they are trying to do more with their website and outreach and provide the information, providing the information sharing.

But there are 1,972, almost 2,000 one-stops out there that still

have a lot to learn. Many of them still have not figured it out yet.

That is why we suggest incremental change at this time.

Senator MURRAY. OK. The administration has proposed folding

the WIA adult programs into one adult block grant, which I would

assume is a radical change. Can you make some suggestions about

how we can make WIA and Wagner-Peyser more fully integrated

so we can maximize some of the resources?

Mr. NILSEN. I think bringing the resources of Wagner-Peyser together to the one-stop is critical to the system. How that is done

and how you merge adult, dislocated, and the Wagner-Peyser services, we do not know exactly the best way to do that. But what we

have seen is that a universal system—one-stops should be universal. Anybody who needs assistance should know that this is the one

place they go regardless of whether they are a youth, an adult, a

dislocated worker, whether they are looking for just a placement or

whether they are looking for career changes. This needs to be a

universal system.

The other concern about how the system comes together relates

to the performance measures. Our work in the last year looked at

older workers and training for incumbent workers, that is, skill upgrading for people who have a job. And one of the things we consistently heard is that there are disincentives in the WIA system

for providing training for these populations, particularly when you

look at the wage gain, earnings gain measures. Because if you compare somebody who is out of work coming into the system getting

a job, their wage gain is huge. When you compare that with someone who already has a job, they are getting some skill upgrading

to enable them to either keep the job or perhaps over the next year

move into a higher series, the wage gains in the short run are relatively small. So there is a built-in disincentive in the system for

providing training to incumbent workers.

The same thing for dislocated workers. Many of them come from

higher-wage jobs. Coming into the system and getting assistance is

a career change often resulting in a wage loss. If you look at the

national statistics on earnings gain comparing the adults and dislocated, right now the average nationwide earnings gain for adults

is over $3,000. The average for dislocated workers is about $103.

So without controls in the system to make sure that if you are

providing job training assistance, intensive assistance to a high

number of incumbent workers, dislocated workers, older workers,

the performance measures need to be corrected to adjust for that.

Senator MURRAY. Well, I share that concern, and I know in

Washington State we have a lot of disproportionately large number

of high-skilled Boeing workers who are unemployed. And I am concerned that we need to figure out how to allow some of our per-
18

formance measures to be more tailored to unique demands of

States and local communities, and maybe you could share with us

real quickly what changes in the performance measures you would

recommend so that we can better serve some of our harder-to-train

or harder-to-re-employ workers.

Mr. NILSEN. One concern I have right now with the performance

measurement system is that it is a small subset of the people getting services at the one-stops that are registered and counted in

the system. Anyone who comes in for self-service or just placement

assistance does not get entered into the system. It is only those

who get intensive services or training.

So right off the bat, you have people—you have a system operating and you have no idea how many people you are providing assistance to and what is happening to the vast majority of people

coming into the system for services. So that would be the first

thing. You need to know who is coming into the system, what are

they getting, what is happening to them.

Second, you need to look at how you correct for differences in the

population that you serve. If you are serving a high proportion of

people who have very intensive needs, that needs to be recognized

as compared with folks where you have low unemployment, people

with skills coming in, and you are just transitioning them into a

new job.

Senator MURRAY. My time is up, Mr. Chairman. Thank you very

much.

Senator ENZI. Senator Dodd?

Senator DODD. Thank you, Mr. Chairman and I thank you, Mr.

Nilsen, for your testimony, very concise and informative, which is

always appreciated in the committee.

A couple of questions, maybe a little bit redundant, but I was

struck by one of the things you said, and that is the problems we

are facing in terms of having dedicated funds for operational purposes. I think there is maybe one State of all 50 that is not going

through a budget deficit problem in the country. I think New Mexico is maybe the only one because the previous Governor just vetoed everything during his tenure.

Senator ENZI. And Wyoming.

Senator DODD. And Wyoming.

The deficits are pretty staggering, and we are seeing the pressures. You noted this in your study, that there were many superbly

run centers, and I concur with that, by the way. Budget shortfalls

in some States have led to reduced customized job training in the

apprenticeship programs and closed four one-stop centers in my

State. So the remaining centers are forced now to pick up the slack.

Workers have to travel greater distances to get the kind of assistance and support, and a lot of it is because of not having a dedicated operational fund to support that.

I wonder if you might just comment on that. That is my State.

Is that unique? Is this going on across the country?

Mr. NILSEN. It is my sense it is likely going on throughout the

country. This has been—when we went out and did our first look

at how WIA was being implemented, this was the issue we heard

over and over again, paying for the one-stop. Because you have 17

mandatory partners, the Labor Department programs, the WIA
19

programs, are the only ones—they are footing most of the bill often

for operating the one-stops.

The other partners, some of them, voc rehab, for example, says

we cannot spend money to pay you rent to collocate at the one-stop.

What they do is work on providing in-kind services so they have

staff that work in the one-stop. But other programs already were

set up, so bringing them into the one-stop saying, you know, I have

already got—you know, I am spending all the money I have; I cannot give you more money.

Over time, I think they have figured out ways to work on that,

but right now, as they are facing budget shortfalls, it is very likely

that that is going to get tougher and tougher to fund those onestops.

Senator DODD. The irony in a sense, as the economy worsens, the

need for this grows. The deficits mount, we cut back the centers at

the very time when you would be insisting that we have more activity here, expanding it in order to give people a chance to get

work and help employers and so forth that are facing the problems

the chairman and Senator Murray have talked about. We are going

in the opposite direction, it seems to me. If this is a trend line

across the country where, as a result of State shortfalls you are

closing these centers, making it more difficult for people to get assistance, making it more difficult for employers to find people to

work, it just seems to me to be counterproductive.

Mr. NILSEN. One of the things we have found in a recent study

is a thing called the Reed Act which distributed excess funds from

the unemployment insurance system from the Federal Government

down to the States last year. There was $8 billion a year ago

March distributed down to the States. I think it was about something like 22 States reported to us last year that they are using

some of that money to help fund their one-stops. So this was, you

know, new money introduced to them, but they are having to do

it. This money is also available to pay unemployment insurance

benefits, extended benefits, things like that, expand coverage of

other populations. But apparently because of shortfalls in funding

from other sources, they were using these funds to partially fund

the one-stops in their States.

Senator DODD. Let me jump to another area if I can, again, on

youth and youth training and youth employment. This is a growing

problem. We are looking at numbers already this year with summer jobs—I do not know what the headlines are like in every other

State, but in mine I am seeing headlines about the number of

young people who will not be able to find work, not getting work,

and that poses some specific problems over these coming few weeks

of summer.

But in my State, we have also been recognized as having one of

the most successful youth opportunity programs called YO Hartford. It received a grant of $28 million over 5 years to provide some

1,400 youths ages 14 to 21 with help they need to become productive and responsible adults. Again, I think all agree that these

kinds of efforts, if they are done right, really can be very, very

helpful.

Hartford, CT, I might point out, despite the fact that my State

is always listed as one of the most affluent States in the country,
20

if not the most affluent State on a per capita income basis, Hartford, CT, my capital city, is one of the poorest cities in America.

I have around 6 percent or 9 percent of people who own their own

homes. I will not bore you with all the details, but the fact of the

matter is, despite this reputation of being a State of great affluence, I have a lot of poverty in my State, living cheek to jowl with

wealth—in an area not much bigger than Yellowstone National

Park. And it is not just Hartford. It is my other cities as well.

But a real effort has been made here to do something about our

young people. It is a result of a coordinated effort between inclusion of the Hartford Public Schools, City of Hartford, Capital Region Workforce Development Board, United Way, Progress Collaborative, it is called, which is made up of the Hartford Puerto Rican

Forums, the Hartford Areas Rally Together, and several other organizations. This program has succeeded in showing—a lot of these

kids have been very successful—what a community effort can really

do to improve their lives.

However, under the proposal that has been outlined by the Bush

administration, the youth opportunity grants would be eliminated,

and places that have made a difference in areas like Hartford

would lack or be denied these funds.

What is your assessment of that?

Mr. NILSEN. We have not specifically looked at the youth opportunity grants at this point, but we did take a look at the WIA

youth program early on to look at how it is getting up and running.

Things people told us was the youth councils were something they

supported. They liked having youth councils. Even getting them together was hard, but they liked having them.

Bringing in out-of-school youth was one of the biggest challenges

they faced. But, in general, having the targeted program was something that they supported, and it was the only program left in WIA

that was income-tested so that it is focused on an economically disadvantaged population.

I know that the youth opportunity grants are separate from that

but similarly targeted, so I would guess that there is something

that people at the local level have found very useful.

Senator DODD. Very, very helpful. One last question if I can, and

that is these performance standards, performance measures. I am

always concerned when we set up a new program, new agencies,

that we may not set up the best performance measures. I am concerned that some of the hardest-to-serve individuals are not being

registered by local providers, therefore, denying them services because it may adversely impact their performance evaluations. And

so I get nervous that when you set up these standards in such a

way that people want to show that they are doing well, the hardest-to-serve people get left behind because they do not necessarily

make the great statistics along the way.

Would you comment on that for me, please, and give me some

sense of how the performance evaluation or measures are being

used in this program?

Mr. NILSEN. You make a good point. Number one, these job

training systems focus on the outcomes measures they are given.

In JTPA and in WIA, the system follows the measures. So if you

give a system measures to follow, they focus on these measures. So
21

we have job placement, retention, earnings gains, and customer

satisfaction.

These are the right kinds of things to measure from a program,

but as I noted in my testimony and our past reports have shown,

the way these things are constructed right now provide some disincentives for providing services to perhaps the hardest-to-serve.

And we have found—people tell us in the one-stops that they go

through a screening to make sure that people they enroll, people

who are going to go into intensive services and training, they want

to feel fairly confident that they are going to be successful. Otherwise, they figure out other less intensive ways to serve them. And

as you point out, these could be the people who you think need the

most intensive services.

Senator DODD. Who might make it anyway. The ones you take

may make it anyway.

Mr. NILSEN. The ones you take may have made it anyway.

Senator DODD. So the justification for the program becomes suspect in some ways.

Mr. NILSEN. That is why, as I said before, I think having a universal count of everybody who comes in the system is an important

way to start and work against a kind of creaming mentality where

you can take and shift people off. But also you need to acknowledge

the different characteristics of the population you are serving and

give folks credit for providing services to the hardest-to-serve.

Senator DODD. Absolutely. That is why we do this.

Mr. Chairman, we might take a look at that as we get it to the

reauthorization.

Senator MURRAY. Well, Mr. Chairman, if I could just comment,

Washington State is going to a swipe card system as of July 1st

this year, and they will be keeping track of everyone.

Senator DODD. Great. Good. We might want to write something

into the bill. I thank you very much. I took a little more time, and

I apologize.

Senator ENZI. We would be happy to make those cards in Wyoming.

[Laughter.]

I want to thank you for your testimony, both the oral testimony

and the written testimony, and the answers to the questions. You

have been a wealth of information, and I appreciate the way that

you have said it so that even I could understand it.

[Laughter.]

We would also like to be able to submit some questions to you,

other ones that we may not have had time for in our presentations

here.

Mr. NILSEN. Certainly, Senator Enzi, we would be happy to answer those. Thank you very much.

Senator ENZI. We really appreciate the help. Thank you for coming today.

[The prepared statement of Mr. Nilsen follows:]
22

PREPARED STATEMENT OF SIGURD R. NILSEN

WORKFORCE INVESTMENT ACT

Exemplary One-Stops Devised Strategies to Strengthen Services, but Challenges Remain for Reauthorization

Why GAO Did This Study

This testimony highlights findings from today’s report on strategies that exemplary one-stop centers have implemented to strengthen and integrate services for

customers and to build a solid one-stop infrastructure. It also shares findings and

recommendations from GAO’s past work on challenges that States and localities

have experienced as they implement the Workforce Investment Act (WIA), which

may be helpful as WIA is reauthorized.

What GAO Recommends

Because little is known about whether promising one-stop service delivery approaches are meeting customers’ needs, GAO has recommended that the Secretary

of Labor collaborate with other Federal agencies to develop a research agenda that

examines the impacts of these promising approaches on one-stop customer satisfaction and outcomes. In addition, GAO has recommended that the Secretary take

steps to alleviate problems pertaining to the WIA performance measurement system, WIA allocation formulas and one-stop infrastructure finding, and the process

for certifying eligible training providers. Finally, GAO has suggested that Labor provide clearer guidance and greater opportunities for one-stop administrators to share

promising practices in one-stop service delivery and management.

What GAO Found

The workforce development system envisioned under WIA represents a fundamental shift from prior systems, and barely 3 years have passed since it was fully implemented. States and localities have found ways to use the flexibility in WIA to develop creative new approaches to providing services through their one-stop systems.

In particular, a group of 14 one-stops, identified as exemplary by government officials and workforce development experts, developed promising strategies in several

key areas. To streamline services for job seekers, they ensured that job seekers

could readily access needed services, made sure that staff were knowledgeable about

all of the one-stop services available, or consolidated case management and intake

procedures. To engage and serve employers, the centers dedicated specialized staff

to work with employers or industries, tailored services to meet specific employers’

needs, or worked with employers through intermediaries. To build a solid one-stop

infrastructure, the centers found innovative ways to develop and strengthen program partnerships and to raise additional funds beyond those provided under WIA.

GAO’s work on WIA implementation over the past 3 years has identified a number of issues that should be considered during WIA reauthorization. First, the performance measurement system is flawed—the need to meet certain performance

measures may be causing one-stops to deny services to some clients who may most

need them; there is no measure that assesses overall one-stop performance; and the

outcome data are outdated by the time they are available and are not useful in dayto-day program management. Second, funding issues continue to plague officials.

The funding formula used to allocate funds to States and local areas does not reflect

current program design and often causes unwarranted fluctuations in funding levels

from year to year. In addition, WIA provided no separate funding source to support

one-stop infrastructure, and developing equitable cost sharing agreements has not

always been successful. Third, many training providers consider the current process

for certifying their eligibility to be overly burdensome, resulting in reduced training

options for job seekers as providers have declined to serve WIA-funded clients. Finally, State officials have told GAO that they need more help from the U.S. Department of Labor in the form of clearer guidance and greater opportunities to share

promising practices in managing and providing services through their one-stop centers.

Mr. Chairman and Members of the Subcommittee: Thank you for inviting me here

today to present the findings from our recent work on the Workforce Investment Act

(WIA). As you know, WIA represented a significant departure from earlier job training programs. Passed in 1998 and implemented by most States in July 2000, it was

designed to unify a fragmented employment and training system and create a single, universal system—a one-stop system that could serve the needs of all job seekers and employers. WIA sought to streamline the delivery of federally funded employment and training services, enabling job seekers to make informed choices

among training providers and course offerings, and enhancing the private-sector role
23

1Workforce Investment Act: One-Stop Centers Implemented Strategies to Strengthen Services

and Partnerships, but More Research and Information Sharing is Needed, GAO–03–725 (Washington, D.C.: June 18, 2003). 2While WIA was enacted in 1998, States were not required to implement major provisions

of WIA until July 1, 2000, when JTPA’s repeal was effective.

in the workforce system. WIA gave States and localities flexibility in deciding how

to implement the one-stop system, allowing local one-stops to tailor their systems

to local needs. Four separate Federal agencies—the Departments of Labor, Health

and Human Services (HHS), Education, and Housing and Urban Development

(HUD)—fund about 17 categories of programs that are required to provide services

through the one-stop system. In addition to programs that are required to take part

in the new system, Labor encourages States and localities to include optional partners, such as Temporary Assistance for Needy Families (TANF), in order to better

meet the specific workforce development needs of their local area. Labor takes a

lead role in this new system and is responsible for assessing the effectiveness of

Labor-funded programs and for providing guidance to States and localities as programs deliver their services through the one-stop system.

Since WIA was enacted, we have issued numerous reports that addressed State

and local efforts related to WIA, including challenges in implementing the new

training provider system, new partnership requirements, and the new performance

measurement system, as well as issues related to funding. While much of our past

work has focused on challenges pertaining to WIA implementation, today we are releasing a report that examines how States and localities have used the flexibility

in WIA to develop promising approaches to streamline jobseeker services, engage

employers, and strengthen one-stop infrastructure.1 My testimony today will discuss

(1) promising strategies to improve one-stop services and operations being implemented by a group of 14 one-stop centers that were identified as exemplary and (2)

challenges identified in our previous work that States and localities have faced in

implementing WIA.

In summary, in the barely 3 years since the full implementation of WIA, States

and localities have found ways to use the flexibility in WIA to develop creative new

ways to improve their one-stop systems. In particular, a group of 14 one-stops, identified as exemplary by government officials and workforce development experts, developed promising strategies in the key areas of streamlining services for job seekers, engaging and serving employers, and building a solid one-stop infrastructure.

However, despite the successes State and local officials are having as they implement WIA and continue to build relationships among the myriad partners in this

new, and dramatically different system, challenges remain. First, the performance

measurement system is flawed, causing some one-stops to deny services to some clients who may be most in need of them. Moreover, outcome data are outdated and

are, therefore, not useful for day-to-day program management. Second, funding

issues also continue to plaque the system. The funding formulas used to allocate

funds to States and local areas do not reflect current program design and has

caused wide and unwarranted fluctuations in funding levels from year to year. In

addition, WIA provided no separate funding source to support one-stop infrastructure, and developing equitable cost sharing agreements has not always been successful. Third, many training providers consider the current provisions for certifying

their eligibility to be overly burdensome, which may reduce training options for job

seekers as providers have withdrawn from the WIA system. Finally, State officials

have told us that they need more help from Labor in the form of clearer guidance

and instructions and greater opportunities to share promising practices in managing

and providing services through their one-stop centers.

BACKGROUND

The Workforce Investment Act created a new, comprehensive workforce investment system designed to change the way employment and training services are delivered. When WIA was enacted in 1998, it replaced the Job Training Partnership

Act (JTPA) with three new programs—Adult, Dislocated Worker, and Youth—that

allow for a broader range of services, including job search assistance, assessment,

and training for eligible individuals.2 In addition to establishing three new programs, WIA requires that a number of other employment-related services be provided through a one-stop system, designed to make employment and training services easier for job seeker customers to access. WIA also requires that the one-stop

system engage the employer customer by helping employers identify and recruit

skilled workers. While WIA gives States and localities flexibility in implementing

these requirements, the law emphasizes that the one-stop system should be a customer-focused and comprehensive system. Such a system gives job seekers the job
24

search and support services they need and provides services that better meet employers’ needs. (See fig. 1.)

The major hallmark of WIA is the consolidation of services through the one-stop

center system. Seventeen categories of programs—termed ‘‘mandatory partners’’—

with appropriations totaling over $15 billion from four separate Federal agencies,

are required to provide services through the system. (See table 1.)
25

3TANF provides low-income families with income support and employment-related assistance.

4For more information on TANF participation in one-stop centers, see GAO–02–739T.

WIA allows flexibility in the way these mandatory partners provide services

through the one-stop system, allowing co-location in one building, electronic linkages, or referrals to off-site partner programs. While WIA requires these mandatory

partners to participate, WIA did not provide additional funds to operate one-stop

systems and support one-stop partnerships. As a result, mandatory partners are expected to share the costs of developing and operating one-stop centers.

Beyond the mandatory partners, one-stop centers have the flexibility to include

other partners in the one-stop system. Labor suggests that these additional, or optional partners, may help one-stop systems better meet specific State and local

workforce development needs. These optional partners may include TANF3 or local

private organizations. States have the option of mandating particular optional partners to participate in their one-stop systems. For example, in 2001, 28 States had

formal agreements between TANF and WIA to involve TANF in the one-stop system.4 In addition, localities may adopt other partners to meet the specific needs of

the community.

About $3.3 billion was appropriated in fiscal year 2003 for the three WIA programs—Adult, Dislocated Worker, and Youth. The formulas for distributing these

funds to the States were left largely unchanged from those used to distribute funds
26

5 In some cases, supplemental data sources may be used when UI data are not available.

6The centers in our study represented a geographic and demographic mix, ranged from rural

to urban, and served from 500 to 42,500 customers each month. Some of the sites, such as Kansas City, Missouri, represented a mix of urban, suburban, and rural customers. They also represented a mix of one-stop operators—those responsible for administering the one-stop centers—

including nonprofit organizations, a consortium of one-stop partners, and local government entities.

under JTPA and are based on such factors as unemployment rates, including the

number of long-term unemployed, and the relative number of low-income adults and

youth in the population. In order to receive their full funding allocation, States must

demonstrate the effectiveness of their three WIA programs by tracking and reporting a variety of performance measures. These performance measures gauge program

results in the areas of job placement and retention, earnings change, skill attainment and customer satisfaction. WIA requires States to use Unemployment Insurance (UI) wage records to gather this information about WIA participants.5 States

are held accountable by Labor for their performance in these areas and may suffer

financial sanctions if they fail to meet their expected performance standards. WIA

did not establish any comprehensive measures to assess the overall performance of

the one-stop system.

WIA also requires that training providers wishing to serve individuals’ training

needs through WIA’s Adult and Dislocated Worker Programs meet key data reporting requirements, including completion rates, job placement rates, and wages at

placement for all students they serve, including those not funded under WIA. WIA

requires the collection of these outcome data so that job seekers receiving training

can use them to make more informed choices about training providers. Unlike prior

systems, WIA requires that individuals eligible for training under the Adult and

Dislocated Worker Programs receive vouchers—called Individual Training Accounts—which they can use for the training provider and course offering of their

choice, within certain limitations. WIA also requires these data so that States and

localities can assess training providers’ performance. For example, a State might

only allow training providers’ courses with an 80-percent completion rate to remain

on the training provider list. If a course fails to meet that level, it would no longer

be allowed to serve WIA-funded individuals.

Finally, WIA called for the development of workforce investment boards to oversee

WIA implementation at the State and local levels. At the State level, WIA requires,

among other things, that the workforce investment board assist the governor in

helping to set up the system, establish procedures and processes for ensuring accountability, and designate local workforce investment areas. WIA also requires that

boards be established within each of the local workforce investment areas to carry

out the formal agreements developed between the boards and each partner and

oversee one-stop operations. WIA requires that private-sector representatives chair

the boards and make up the majority of board members. This is to help ensure that

the private sector is able to provide information on the available employment opportunities and expanding career fields and help develop ways to close the gap between

job seekers and labor market needs.

STATES AND LOCALITIES HAVE EMBRACED WIA’S FLEXIBILITY TO DEVELOP PROMISING

APPROACHES TO SERVING JOB SEEKERS AND EMPLOYERS

States and localities have found ways to use the flexibility in WIA to develop creative new ways to serve job seekers and employers. In particular, a group of 14 onestops, identified as exemplary by government officials and workforce development

experts for our study of promising one-stop approaches, has developed strategies for

streamlining services for job seekers, engaging and serving employers, and building

a solid one-stop infrastructure.6 All of the 14 centers in the study streamlined services for job seekers by ensuring that they can readily access needed services, by educating program staff about all of the one-stop services available to job seekers, or

by consolidating case management and intake procedures. In addition, to engage

employers and provide them needed services, all of the centers used strategies that

included dedicating specialized staff to work with employers or industries, tailoring

services to meet specific employers’ needs, or working with employers through intermediaries, such as Chambers of Commerce or economic development entities. Finally, to provide the infrastructure needed to support better services for job seekers

and employers, many of the one-stops we visited found innovative ways to develop

and strengthen program partnerships and to raise additional funds beyond those

provided under WIA. (Figure 2 shows the locations of the 14 one-stop centers we

visited.)
27

SELECTED ONE-STOPS USED STRATEGIES TO STREAMLINE SERVICES FOR JOB SEEKERS

All of the one-stop centers in our recent study focused their efforts on streamlining services for job seekers by ensuring that job seekers could readily access needed

services, educating program staff about all of the one-stop services available to job

seekers, or consolidating case management and intake procedures. To ensure that

job seekers could readily access needed services, one-stops we visited allocated staff

to help them navigate the one-stop system, provided support to customers with

transportation barriers, and expanded services for one-stop customers. For example,

managers in Erie, Pennsylvania, positioned a staff person at the entrance to the

one-stop to help job seekers entering the center find needed services and to assist

exiting job seekers if they did not receive the services they sought. In addition to

improving access to one-stop center services on-site, some of the one-stops we visited

found ways to serve job seekers who may have been unable to come into the onestop center due to transportation barriers or other issues. For example, in Boston,

Massachusetts, the one-stop placed staff in off-site locations, including family courts,

correctional facilities, and welfare offices, to give job seekers ready access to employment and program information. Finally, one-stops also improved job seeker access

to services by expanding partnerships to include optional service providers—those

beyond the program partners mandated by WIA. These optional partners ranged

from federally funded programs, such as TANF, to community-based organizations

providing services tailored to meet the needs of local job seekers. The one-stop in

Dayton, Ohio, was particularly proactive in forming optional partnerships to meet

job seekers’ service needs. At the time of our visit, the Dayton one-stop had over

30 optional partners onsite.

To educate program staff about one-stop services, centers used cross-training sessions in order to inform staff about the range of services available at the one-stop.

Cross-training activities ranged from conducting monthly educational workshops to

a shadow program to help staff become familiar with other programs’ rules and operations. Officials in Salt Lake City, Utah, reported that cross-training improved

staff understanding of programs outside their area of expertise and enhanced their
28

ability to make referrals. The Pikeville, Kentucky, one-stop supported cross-training

workshops in which one-stop staff from different partner programs educated each

other about the range of services they could provide. After learning about the other

programs, Pikeville staff collaboratively designed a service delivery flow chart that

effectively routed job seekers to the appropriate service providers, providing a clear

entry point and a clear path from one program to another. In addition, the Vocational Rehabilitation staff at the Pikeville one-stop told us that cross training other

program staff about the needs of special populations enabled them to more accurately identify hidden disabilities and to better refer disabled customers to the appropriate services.

Centers also sought to reduce the duplication of effort across programs and the

burden on job seekers navigating multiple programs by consolidating case management and intake procedures across programs through the use of shared service

plans for customers and shared computer networks. Ten of the 14 one-stops we visited consolidated their intake processes or case management systems. This consolidation took many forms, including having case workers from different programs

work as a team developing service plans for customers to having a shared computer

network across programs. For example, in Blaine, Minnesota, caseworkers from the

various one-stop programs met regularly to collaborate in developing and implementing joint service plans for customers who were co-enrolled in multiple programs. To efficiently coordinate multiple services for one-stop customers in Erie,

Pennsylvania, one-stop staff used a networked computer system with a shared case

management program, so that all relevant one-stop program staff could share access

to a customer’s service plan and case file. In Kansas City, Missouri, the Youth Opportunity Program and the WIA Youth Program staff shared intake and used a combined enrollment form to alleviate the burden of multiple intake and assessment

forms when registering participants.

SELECTED ONE-STOPS DEVELOPED STRATEGIES TO ENGAGE AND PROVIDE SERVICES TO

EMPLOYERS

All of the one-stops we visited engaged and served employers by dedicating specialized staff to establish relationships with employers or industries, by working

with employers through intermediaries, or by providing specially tailored services

to meet employers’ specific workforce needs. One-stop officials told us that engaging

employers was critical to successfully connecting job seekers with available jobs. In

order to encourage employers’ participation in the one-stop system, specialized staff

outreached to individual employers and served as employers’ primary point of contact for accessing one-stop services. For example, the one-stop in Killeen, Texas,

dedicated specialized staff to serve not only as the central point of contact for receiving calls and requests from employers but also to identify job openings available

through employers in the community. In addition to working with individual employers, staff at some of the one-stops we visited also worked with industry clusters,

or groups of related employers, to more efficiently meet local labor demands—particularly for industries with labor shortages. For instance, the one-stop in Aurora,

Colorado, dedicated staff to work with specific industries, particularly the

healthcare industry. In response to a shortage of 1,600 nurses in the Denver metro

area, the Aurora one-stop assisted in the creation of a healthcare recruitment center

designed to provide job seekers with job placement assistance and healthcare-related training.

In addition to dedicating specialized staff, all of the one-stops we visited worked

with intermediaries to engage and serve employers. Intermediaries, such as a local

Chamber of Commerce or an economic development entity, served as liaisons between employers and the one-stop system, helping one-stops to assess the workforce

needs of employers while connecting employers with one-stop services. For example,

the one-stop staff in Clarksville, Tennessee, worked with Chamber of Commerce

members to help banks in the community that were having difficulty finding entrylevel employees with the necessary math skills. To help connect job seekers with

available job openings at local banks, the one-stop developed a training opportunity

for job seekers that was funded by Chamber members and was targeted to the specific skills needed for employment in the banking community. Specialized staff at

many of the one-stops we visited also worked with local economic development entities to recruit new businesses to the area. For example, the staff at the Erie, Pennsylvania, one-stop worked with a range of local economic development organizations

to establish an employer outreach program that developed incentive packages to attract new businesses to the community.

Finally, all of the one-stops we visited tailored their services to meet employers’

specific workforce needs by offering an array of job placement and training assist-
29

7While several centers had enthusiastically adopted fee-based services as a method of raising

funds, it is important to note that managers of at least one center said they chose not to charge

for services because they believed this might deter some employers or job seekers from accessing

the services they need.

ance designed for each employer. These services included specialized recruiting, prescreening, and customized training programs. For example, when one of the nation’s

largest cabinet manufacturers was considering opening a new facility in the eastern

Kentucky area, the one-stop in Pikeville, Kentucky, offered a tailored set of services

to attract the employer to the area. The services included assisting the company

with pre-screening and interviewing applicants and establishing an on-the-job training package that could use WIA funding to offset up to 50 percent of each new hire’s

wages during the 90-day training period. The Pikeville one-stop had responsibility

for administering the application and assessment process for job applicants, including holding a 3-day job fair that resulted in the company hiring 105 people through

the one-stop and a commitment to hire 350 more in the upcoming year. According

to a company representative, the incentive package offered by the one-stop was the

primary reason the company chose to build a new facility in eastern Kentucky instead of another location.

ONE-STOP CENTERS BUILT A SOLID INFRASTRUCTURE BY STRENGTHENING PROGRAM

PARTNERSHIPS AND RAISING ADDITIONAL FUNDS

To build the solid infrastructure needed to support better services for job seekers

and employers, many of the one-stops we visited developed and strengthened program partnerships and raised funds beyond those provided under WIA. Operators

at 9 of the 14 one-stops we visited fostered the development of strong program partnerships by encouraging communication and collaboration among partners through

functional teams and joint projects. Collaboration through teams and joint projects

allowed partners to better integrate their respective programs and services, as well

as pursue common one-stop goals and share in one-stop decision-making. For example, partners at the Erie, Pennsylvania, one-stop center were organized into four

functional teams—a career resource center team, a job seeker services team, an employer services team, and an operations team—which together operated the one-stop

center. As a result of the functional team meetings, partners reported that they

worked together to solve problems and develop innovative strategies to improve

services in their respective functional area.

One-stop managers at several of the sites in our study told us that the co-location

of partner programs in one building facilitated the development of strong partnerships. For this reason, one-stop managers at several of the centers reported that

they fostered co-location by offering attractive physical space and flexible rental

agreements. For example, in Pikeville, Kentucky, the local community college donated free space to the one-stop on its conveniently located campus, making it easier

to convince partners to relocate there. Partners were also eager to relocate to the

Pikeville one-stop because they recognized the benefits of co-location for their customers. For instance, staff from the Vocational Rehabilitation Program said that colocation at the one-stop increased their customers’ access to employers and employment-related services. Several one-stops that did not co-locate found ways to create

strong linkages with off-site partners. For example, in addition to regular meetings

between on-site and off-site staff, the one-stop in Aurora, Colorado, had a staff person designated to act as a liaison and facilitate communication between on-site and

off-site partners. Nationwide, co-location of partner services has been increasing

since WIA was enacted. For example, in 2000, 21 States reported that Education’s

Vocational Rehabilitation Program was co-located at the majority of their one-stops;

this number increased to 35 States by 2001. Similarly, TANF work services were

co-located in at least some one-stops in 32 States in 2000, increasing to 39 States

by 2001.

Managers at all but 2 of the 14 one-stops we visited said that they were finding

ways to creatively increase one-stop funds through fee-based services, grants, or contributions from partner programs and State or local governments. Managers said

these additional funds allowed them to cover operational costs and expand services

despite limited WIA funding to support one-stop infrastructure and restrictions on

the use of program funds. For example, one-stop operators in Clarksville, Tennessee,

reported that they raised $750,000 in fiscal year 2002 through a combination of feebased business consulting, drug testing, and drivers’ education services. Using this

money, the center was able to purchase a new voice mail and computer network system, which facilitated communication among staff and streamlined center operations.7 Centers have also been proactive about applying for grants from public and
30

8See, Workforce Investment Act: Improvements Needed in Performance Measures to Provide a

More Accurate Picture of WIA’s Effectiveness, GAO–02–275 (Washington, D.C.: Feb. 1, 2002). 9See, for example, Workforce Training: Employed Worker Programs Focus on Business Needs,

but Revised Performance Measures Could Improve Access for Some Workers, GAO–03–353

(Washington, D.C.: Feb. 14, 2003); Older Workers: Employment Assistance Focuses on Subsidized

Job and Job Search, but Revised Performance Measures Could Improve Access to Other Services, GAO–03–350 (Washington, D.C.: Jan. 24, 2003).

private sources. For example, the one-stop center in Kansas City, Missouri, had a

full-time staff person dedicated to researching and applying for grants. The one-stop

generated two-thirds of its entire program year 2002 operating budget of $21 million

through competitive grants available from the Federal Government as well as from

private foundations. This money allowed the center to expand its services, such as

through an internship program in high-tech industries for at-risk youth. One-stop

centers also raised additional funds by soliciting contributions from local or State

Government and from partner agencies. For instance, the Dayton, Ohio, one-stop received $1 million annually from the county to pay for shared one-stop staff salaries

and to provide services to job seekers who do not qualify for services under any

other funding stream. Dayton one-stop partners also contributed financial and inkind resources to the center on an as-needed basis.

DESPITE SUCCESSES, SOME ASPECTS OF WIA HAVE STYMIED OFFICIALS’ EFFORTS TO

IMPLEMENT WIA AS INTENDED

Despite the successes State and local officials are having as they implement WIA,

some key aspects of the law, as well as Labor’s lack of clear guidance in some areas,

have stymied their efforts. First, the performance measurement system is flawed—

the need to meet certain performance measures may be causing one-stops to deny

services to some clients who may be most in need of them; there is no measure that

assesses overall one-stop performance; and the data used to measure outcomes are

outdated by the time they are available and are, therefore, not useful in day-to-day

program management. Second, funding issues continue to plague the system. The

funding formulas used to allocate funds to States and local areas do not reflect current program design and has caused wide fluctuations in funding levels from year

to year. In addition, WIA provided no separate funding source to support one-stop

infrastructure and developing equitable cost sharing agreements has not always

been successful, largely because of the limitations in the way funds for some of the

mandatory programs can be spent. Third, the current provision for certifying training providers as eligible is considered overly burdensome by many providers and

may reduce training options for job seekers as providers have withdrawn from the

WIA system. Finally, State officials have told us that they need more help from

Labor in the form of clearer guidance and instructions and greater opportunities to

share promising practices in managing and providing services through their onestop centers.

WIA’S PERFORMANCE MEASUREMENT SYSTEM MAY BE CAUSING SOME CLIENTS TO BE DENIED SERVICES AND DOES NOT PROVIDE AN ACCURATE PICTURE OF WIA’S EFFECTIVENESS

The performance measurement system developed under WIA may be causing

some clients to be denied services and does not allow for an accurate understanding

of WIA’s effectiveness. First, the need to meet performance levels may be the driving factor in deciding who receives WIA-funded services at the local level. Officials

in all five States we visited for one study told us that local areas are not registering

many WIA participants, largely because local staff are reluctant to provide WIAfunded services to job seekers who may be less likely to find employment or experience earnings increases when they are placed in a job.8 For example, one State official described how local areas were carefully screening potential participants and

holding meetings to decide whether to register them. As a result, individuals who

are eligible for and may benefit from WIA-funded services may not be receiving

services that are tracked under WIA. We found similar results in our studies of

older workers and incumbent workers.9

Performance levels for the measures that track earnings change for adults and

earnings replacement for dislocated workers may be especially problematic. Several

State officials reported that local staff were reluctant to register already employed

adults or dislocated workers. State and local officials explained that it would be

hard to increase the earnings of adults who are already employed or replace the

wages of dislocated workers, who are often laid off from high-paying, low-skilled jobs

or from jobs that required skills that are now obsolete. In addition, for dislocated
31

10The formulas for distributing these funds to the States were left largely unchanged from

those used to distribute funds under JTPA.

workers, employers may provide severance pay or workers might work overtime

prior to a plant closure, increasing these workers’ earnings before they are dislocated. Many dislocated workers who come to the one-stop center, therefore, have

earned high wages just prior to being dislocated, making it hard to replace—let

alone increase—their earnings. If high wages are earned before dislocation and

lower wages are earned after job placement through WIA, the wage change will be

negative, depressing the wage replacement level. As a result, a local area may not

meet its performance level for this measure, discouraging service to those who may

need it.

Second, outcomes are measured largely using unemployment insurance (UI) wage

data, but these data suffer from time delays of up to as much as 14 months, making

the data outdated by the time they are available. For example, we asked States in

a survey we conducted in 2001, how quickly job placement outcome data would be

available to them from UI wage records. We found that for 30 States, the earliest

time period that job placement data would be available was 6 months after an individual entered employment, with 15 States reporting that it may take 9 months or

longer. Similarly, over half of States reported that obtaining the necessary information on employment retention could take a year or longer. In fact, current available

data on the wage-related measures reflects performance from the previous program

year. While UI wage records are the best data source currently available for documenting employment, the lack of timely data makes it difficult for State and local

officials to use the performance measures for short-term program management, including improving one-stop services. Some States and localities have developed other

means, sometimes adding additional performance measures, to fill this information

gap.

Finally, there are no measures to gauge the performance of the one-stop system

as a whole. At least 17 programs provide services through the one-stop system and

most have their own performance measures. Although these performance measures

may be used for assessing outcomes for individual programs, they cannot be used

to measure the success of the overall system. For example, no program has a measure to track job seekers who use only self-service or informational activities offered

through the one-stop, which may constitute a large proportion of job seekers. Not

knowing how many job seekers use the one-stop’s services limits the one-stop’s ability to assess its impact. Furthermore, State and local officials told us that having

multiple performance measures has impeded coordination among programs. There

has been limited progress in developing overall performance measures for the onestop system. Labor convened a working group in September 2001 to develop indicators of the one-stop system’s performance, but they have not yet issued them.

FUNDING THE SYSTEM ENVISIONED UNDER WIA IS HAMPERED BY FLAWED FUNDING FOR- MULAS AND THE LACK OF A SPECIFIC FUNDING SOURCE FOR THE ONE-STOP INFRA- STRUCTURE

As States and localities have implemented WIA, they have been hampered by

funding issues, including flawed funding formulas and the lack of a funding source

dedicated specifically to the one-stop infrastructure. We identified several issues associated with the current formulas. Formula factors used to allocate funds are not

aligned with the target populations for these programs, there are time lags in the

data used to determine these allocations, and there is excessive funding volatility

associated with the Dislocated Worker Program that is unrelated to fluctuations in

the target populations. As a result, States’ funding levels may not always be consistent with their actual need for services. In addition, no funding source exists with

which to fund the one-stop infrastructure, and the volatile funding levels that States

have experienced in the past 3 years have limited their ability to plan and develop

their one-stop systems under WIA.

FORMULAS USED TO ALLOCATE FUNDS HAVE LIMITATIONS

Some of the factors used in the formulas to allocate funds are not clearly aligned

with the programs’ target populations.10 For example, the Youth program targets

a specific group of low-income youth with certain barriers to employment. However,

two-thirds of its funds are distributed based on two factors that measure general

unemployment rather than youth unemployment. The remaining third is distributed

according to the number of low-income youth in States, but even this factor does

not measure low-income youth who face barriers to employment. The target population and formula for the WIA Adult program also are misaligned. Basic services
32

provided through the Adult program are open to all adults regardless of income,

while low-income adults and public assistance recipients have priority for training

and other more intensive services. However, the WIA Adult allocation formula is

more narrowly focused on States’ relative shares of excess unemployment, unemployment in Areas of Substantial Unemployment (ASUs), and low-income adults. Finally, the Dislocated Worker Program is targeted to several specific categories of individuals, including those eligible for unemployment insurance and workers affected

by mass layoffs. The factors used to distribute Dislocated Worker funds are not,

however, specifically related to these populations. Two-thirds of program funds are

distributed according to factors that measure general unemployment. One-third is

distributed according to the number of long-term unemployed, a group that is no

longer automatically eligible for the program.

In addition to formula misalignment, allocations may not reflect current labor

market conditions because there are time lags between when the data are collected

and when the allocations are available to States. The oldest data are those used in

the Youth and Adult program formulas to measure the relative numbers of low-income individuals in the States. The decennial Census is the source for these data,

and allocations under this factor through 2002 are based on data from the 1990

Census. The data used to measure two of three factors for both the Youth and Adult

programs are more recent, but are still as much as 12 months out of date. The time

lags for the data used to calculate Dislocated Worker allocations range from 9

months to 18 months.

Finally, funding for the Dislocated Worker Program suffers from excessive and

unwarranted volatility—significantly more volatile, as much as 3 times more so,

than funding for either the Youth or Adult program. Some States have reported that

this volatility makes program planning difficult. While some degree of change in

funding is to be expected due to changing dislocations in the workforce, changes in

funding do not necessarily correspond to these changes. For example, changes in the

numbers of workers affected by mass layoffs from year to year—one measure of dislocation activity—ran counter to changes in Dislocated Worker allocations in several

States we examined. In New York, for example, dislocations due to mass layoffs increased by 138 percent in 2001, but funding allocations that year decreased by 26

percent. Conversely, in 1999, New York’s dislocations decreased by 34 percent, while

funding allocations actually increased by 24 percent.

Several aspects of the Dislocated Worker formula contribute to funding volatility

and to the seeming lack of consistency between dislocation and funding. The excess

unemployment factor has a ‘‘threshold’’ effect—States may or may not qualify for

the one-third of funds allocated under this factor in a given year, based on whether

or not they meet the threshold condition of having at least 4.5 percent unemployment statewide. As a result, small changes in unemployment can cause large

changes in funding, and when the economy is strong and few States have unemployment over 4.5 percent, the States that do qualify for this pot of funds may experience large funding increases even if their unemployment falls. In addition, the Dislocated Worker formula is not subject to the additional statutory provisions that

mitigate volatility in Youth and Adult program funding. These provisions include

‘‘hold harmless’’ and ‘‘stop gain’’ constraints that limit changes in funding to within

90 and 130 percent of each State’s prior year allocation and also ‘‘small State minimums’’ that ensure that each State receives at least 0.25 percent of the total national allocation. While these provisions prevent dramatic shifts in funding from

year to year, they also result in allocations that may not as closely track changes

in the program target populations.

Developing alternative funding formulas to address the issues we have identified

is an important but challenging task. This task is complicated by the need to strike

an appropriate balance among various objectives, such as using formula factors that

are best aligned with program target populations and reducing time lags in data

sources, while also using available data sources to measure these factors as accurately as possible. In addition, there have been proposals for reauthorizing WIA that

would substantially modify the program target populations and funding streams,

which in turn would have consequences for revising the funding formulas.

FUNDING ONE-STOP INFRASTRUCTURE HAS BEEN CHALLENGING

Many of WIA’s mandatory partners have identified resource constraints as a

major factor in their ability to participate in the one-stops. In fact, the participants
33

11The symposium included officials from the key associations representing State and local implementers, such as the National Association of Workforce Boards and the American Association

of Community Colleges. 12See Workforce Investment Act. Better Guidance Needed to Address Concerns Over New Requirements, GAO–02–72, (Washington, D.C.: Oct. 4, 2001). 13The most recently available data on the proportion of WIA job seekers who receive training

shows an overall decline from JTPA figures. During program year 2001, 43 percent of participants who exited the adult and dislocated worker programs had received training under WIA.

By comparison, during program year 1998, 73 percent of JTPA exiters (including adults, dislocated workers, and older workers) had received training. This decline may result from a variety of factors, one of which may be fewer training opportunities.

in a GAO-sponsored symposium 11 identified insufficient funding levels as one of the

top three WIA implementation problems. Labor also found that in many States, the

agencies that administer the Employment Service program had not yet been able

to co-locate within the one-stops. We were told by Employment Service officials and

one-stop administrators we spoke with that this was often because they still had

leases on existing facilities and could not afford to incur the costs of breaking those

leases. Limited funding made it even more difficult to assign additional personnel

to the one-stop or to devote resources to developing electronic linkages with the onestop. In the States we visited, mandatory partners told us that limited funding was

a primary reason that, even when they co-located staff at the one-stop, they did so

on a limited basis. As a result, mandatory partners had to employ a wide range of

methods to provide the required support for the operation of the one-stops. Across

all the sites we visited for an early implementation study, WIA’s Adult and Dislocated Worker programs and, across most sites, Employment Service, were the only

partners consistently making monetary contributions to pay for the one-stops’ operational costs. Other mandatory partners tended to make in-kind contributions—for

example, Perkins and Adult Education and Literacy partners provided computer or

GED training.

Mandatory partners also noted that restrictions on the use of their funds can

serve as another constraint affecting their ability to contribute resources to the onestops. Some programs have caps on administrative spending that affect their ability

to contribute to the support of the one-stop’s operations. For example, WIA’s Adult

and Dislocated Worker programs have a 10-percent administrative cap that supports both the one-stops’ operation and board staff at the local level. In addition,

as we have reported in the past, regulations often prohibit States from using Federal program funds for acquisition of real property or for construction.12 This means

partners, such as those carrying out Perkins, cannot provide funds to buy or refurbish a one-stop building. Moreover, Adult Education and Literacy and Perkins officials noted that under WIA they can only use Federal funds for the purpose of supporting the one-stop, though only a small portion of their funds come from Federal

sources.

WIA’S SYSTEM FOR CERTIFYING TRAINING PROVIDERS MAY REDUCE TRAINING OPTIONS

FOR JOB SEEKERS

Training options for job seekers may be diminishing rather than improving, as

training providers reduce the number of course offerings they make available to

WIA job seekers. 13 According to training providers, the data collection burden resulting from participation in WIA can be significant and may discourage them from

participating. For example, the requirement that training providers collect outcome

data on all students in a class may mean calling hundreds of students to obtain

placement and wage information, even if there is only one WIA-funded student in

that class. Even if they used other methods that may be less resource-intensive,

training providers said privacy restrictions might limit their ability to collect or report student outcome data. Training providers also highlighted the burden associated with the lack of consistency between the States use for WIA and for other mandatory partners. For example, the definition a State establishes for ‘‘program

completer’’ for students enrolled in WIA can be different from the definition a State

establishes for students enrolled in Education’s Carl D. Perkins Vocational Education Program (Perkins). Training providers find the reporting requirements particularly burdensome given the relatively small number of individuals who have

been sent for training. Guidance from Labor and Education has failed to address

how training providers can provide this information cost-effectively.

STATES AND LOCALITIES SEEK MORE HELP FROM LABOR

In addition to challenges arising from implementing portions of the law, State and

local officials often cite the need for more help from Labor in terms of clearer guid-
34

14See Workforce Investment Act: Improvements Needed in Performance Measures to Provide a

More Accurate Picture of WIA’s Effectiveness, GAO–02–275 (Washington, D.C.: Feb. 1, 2002). 15See Workforce Investment Act: Better Guidance and Revised Funding Formula Would Enhance Dislocated Worker Program, GAO–02–274 (Washington, D.C.: Feb. 11, 2002). 16See Workforce Investment Act: Youth Provisions Promote New Service Strategies, but Additional Guidance Would Enhance Program Development, GAO–02–413 (Washington, D.C.: Apr.

5, 2002). 17See Workforce Investment Act: States’ Spending Is on Track, but Better Guidance Would Improve Financial Reporting, GAO–03–239 (Washington, D.C.: Nov. 22, 2002).

ance and definitions and greater opportunities for information sharing. Although

Labor has provided broad guidance and technical assistance to aid the transition

from JTPA to WIA, some workforce officials have told us that the guidance has not

addressed specific implementation concerns. Efforts to design flexible programs that

meet local needs could be enhanced if Labor addressed the concerns of workforce

officials with specific guidance and disseminated information on best practices in a

timely manner. A number of our studies have recommended that Labor be more

proactive and provide better guidance and clearer definitions • on participant registration policies and on performance measure definitions to

allow for accurate outcome tracking and better program accountability 14

• on how to better administer the WIA dislocated worker program, including how

to provide additional assistance to local areas using rapid response funds 15

• on how to more effectively administer the WIA youth program, including how

to recruit and engage parents, youth, and the business community; improve competition in contracts for services to youth; determine eligibility; and retain out-ofschool youth 16

• on a definition of unliquidated obligations so that it includes funds committed

at the point of service delivery, specifies what constitutes an obligation and the

timeframe for recording an obligation in order to improve financial reporting. 17

Labor has taken limited steps to respond to these recommendations. It has released revised guidance on the performance measurement system and has allowed

States to revise their negotiated performance levels, which may address possible disincentives to serving certain job seekers. Labor is also currently finalizing guidance

for State and local areas on services for dislocated workers. In response to our recommendations pertaining to the WIA Youth Program, Labor agreed to issue a toolkit on effective youth councils; reach out to new providers to enhance competition;

simplify eligibility documentation; and develop a best practices Web site on serving

out-of-school youth. In addition, Labor agreed with our findings and recommendations related to providing clearer definitions of unliquidated obligations; however, it

declined to consider obligations in assessing WIA’s financial position. Finally, Labor

has convened a one-stop readiness workgroup that included representatives from

Education, HHS, and HUD. This group has developed a set of suggested strategies

for addressing major WIA implementation issues and plans to disseminate a national issuance, signed by the heads of all the Federal partner agencies, that would

emphasize the commitment of these Federal partners to the one-stop system.

We have also recommended that Labor be more proactive in sharing various

promising practices to help States and localities still struggling with implementation

challenges. Our reports have recommended that Labor share promising practices in

areas that include cost-effective methods of collecting training provider information,

addressing the difficulties of using UI data in measuring outcomes, better ways to

coordinate services for TANF clients through the one-stop, and better spending management strategies.

While Labor has developed several mechanisms for providing guidance and allowing local one-stop administrators to share best practice information, these efforts

have been limited. Labor is establishing a new unit within ETA—the Office of Performance and Results—whose function will be to coordinate efforts to identify and

share promising approaches in areas such as the use of supplemental data sources

to close gaps in UI data. In addition, Labor’s primary mechanisms for distributing

information about promising practices at one-stop centers are a Web site, forums,

and conferences. The promising practices Web site, in particular, represents a good

step toward building a mechanism to support information sharing among one-stop

administrators. However, neither Labor nor the Web site’s administrators have conducted a customer satisfaction survey or user evaluation of the site, so little is

known about how well the site currently meets its objective to promote information

sharing about promising practices at one-stop centers. In addition to the Web site,

Labor cosponsors several national conferences to promote information sharing and

networking opportunities for State and local grantees and stakeholders. Labor also

hosted several forums during WIA implementation to allow information exchanges

to occur between the department and State and local one-stop administrators. While
35

these conferences and forums provide a venue for one-stop managers to talk with

one another about what is and is not working at their centers, participation is limited to those who can physically take part.

CONCLUDING OBSERVATIONS

WIA represents a fundamental shift in the way federally funded employment and

training services are delivered to job seekers and employers. It was, perhaps, a far

more radical change than it initially appeared. But, in just under 3 years, States

and localities have learned to embrace its flexibility, developing systems that meet

local needs. They are doing what WIA envisioned—bringing on new partnerships

and forging new relationships at all levels. They are actively working to engage the

employer community and involve intermediaries and others to address the economic

development needs of local communities. The process of implementation has not

been perfect, but it is moving forward. Some aspects of the law that have caused

difficulties may deserve attention during reauthorization. But, given the significant

changes brought about by WIA, more time may be needed to allow a better assessment of what is working and what is not before making major changes in WIA’s

structure.

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

any questions you or other Members of the Subcommittee may have.

GAO CONTACT AND ACKNOWLEDGEMENTS

For future contacts regarding this testimony, please contact Sigurd R. Nilsen at

(202) 512–7215. Individuals making key contributions to this testimony included

Dianne Blank, Elisabeth Anderson, Katrina Ryan, and Tamara Harris.

RELATED GAO PRODUCTS

Workforce Investment Act: One-Stop Centers Implemented Strategies to Strengthen

Services and Partnerships, but More Research and Information Sharing is Needed. GAO–03–725. Washington, D.C.: June 18, 2003.

Workforce Investment Act: Issues Related to Allocation Formulas for Youth, Adults,

and Dislocated Workers. GAO–03–636. Washington, D.C.: April 25, 2003.

Multiple Employment and Training Programs: Funding and Performance Measures for Major Programs. GAO–03–589. Washington, D.C.: April 18, 2003.

Food Stamp Employment and Training Program: Better Data Needed to Understand Who Is Served and What the Program Achieves. GAO–03–388. Washington,

D.C.: March 12, 2003.

Workforce Training: Employed Worker Programs Focus on Business Needs, but Revised Performance Measures Could Improve Access for Some Workers. GAO–03–353.

Washington, D.C.: February 14, 2003.

Older Workers: Employment Assistance Focuses on Subsidized Jobs and Job

Search, but Revised Performance Measures Could Improve Access to Other Services. GAO–03–350. Washington, D.C.: January 24, 2003.

Workforce Investment Act: States’ Spending Is on Track, but Better Guidance

Would Improve Financial Reporting. GAO–03–239. Washington, D.C.: November 22,

2002.

Workforce Investment Act: States and Localities Increasingly Coordinate Services

for TANF Clients, but Better Information Needed on Effective Approaches. GAO–02–

696. Washington, D.C.: July 3, 2002.

Workforce Investment Act: Youth Provisions Promote New Service Strategies, but

Additional Guidance Would Enhance Program Development. GAO–02–413. Washington, D.C.: April 5, 2002.

Workforce Investment Act: Better Guidance and Revised Funding Formula Would

Enhance Dislocated Worker Program. GAO–02–274. Washington, D.C.: February 11,

2002.

Workforce Investment Act. Improvements Needed in Performance Measures to Provide a More Accurate Picture of WIA’s Effectiveness. GAO–02–275. Washington, D.C.:

February 1, 2002.

Workforce Investment Act. Better Guidance Needed to Address Concerns Over New

Requirements. GAO–02–72. Washington, D.C.: Oct. 4, 2001.

Workforce Investment Act. Implementation Status and the Integration of TANF

Services. GAO/T–HEHS–00–145. Washington, D.C.: June 29, 2000.

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36

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PUBLIC AFFAIRS

Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512–4800 U.S. General

Accounting Office, 441 G Street NW, Room 7149, Washington, D.C. 20548.

Senator ENZI. If we could have our next panel move up to the

table?

Senator MURRAY. Mr. Chairman, while our panel is convening, I

understand you are going to keep the record open for 2 weeks in

order for us to submit additional testimony and questions. Is that

correct?

Senator ENZI. That is right.

Senator MURRAY. Thank you very much. I appreciate that.

Senator ENZI. That will be for both those of us who showed up

and those who did not.

I appreciate this panel of involved experts, and I look forward to

the testimony. The first person then is Curtis Austin, who is the

executive director of Workforce Florida, Inc., from Tallahassee, FL.

Welcome, Mr. Austin.
37

STATEMENTS OF CURTIS C. AUSTIN, PRESIDENT, WORKFORCE

FLORIDA, INC., TALLAHASSEE, FL; JAMES N. ELLENBERGER,

DEPUTY COMMISSIONER, VIRGINIA EMPLOYMENT COMMISSION, RICHMOND, VA; MICHAEL H. KENNEDY, EXECUTIVE DIRECTOR, PACIFIC MOUNTAIN WORKFORCE DEVELOPMENT

COUNCIL, LACEY, WA; MICHAEL E. SMELTZER, EXECUTIVE

DIRECTOR, MANUFACTURERS’ ASSOCIATION OF SOUTH

CENTRAL PENNSYLVANIA, YORK, PA; AND CHARLES WARE,

CHAIRMAN, WYOMING WORKFORCE DEVELOPMENT COUNCIL, CHEYENNE, WY

Mr. AUSTIN. Thank you, Mr. Chairman, members of the committee. I am the president of the State board, and that means that I

come to you looking at having dealt with an early implementation

State for the past several years. In the 1990s, Florida policymakers

got together, and they decided the public workforce system was

broken. I provided the committee material that showed that less

than 9 percent of employees ever interfaced with the system back

in the year 2000 and less than 12 percent of the businesses in the

State ever interfaced with the system.

They began a series of bipartisan reforms that anticipated the

Workforce Investment Act being adopted. Florida passed laws in

1996, 1998, and the year 2000. That reform, which was supported

and sponsored by Governors Lawton Chiles, Buddy McKay, and

Jeb Bush, transformed the system that today serves at least 20

percent of the people who come in who get a new job every year

and at least 25 percent of the businesses that interface with the

system.

They found out that even in a difficult economy, we can be able

to transition and be able to make significant improvements. If you

will notice in the data that I provided you, there have been wage

rate gains for those individuals placed in increased placements,

even in years when the economy has not been particularly successful. Last year, more than 100,000 people interfaced with the system

than did the year before successfully to obtain jobs.

Now, Florida has been very thankful for the Workforce Investment Act because it gave greater freedom than existed under

JTPA. In my prepared testimony, which I have provided you already, I focused on four things, and I want to talk about those only

briefly.

The first is the consolidation of the workforce funding streams.

We do not believe in Florida that that is a major change. When

funding comes down from Wagner-Peyser, from dislocated worker

and adult, it is based upon the economy, of where the economy was

12 months, 24 months, or even longer ago. It does not tell us how

to be able to react.

Senator Enzi, I am originally from Pocatello, ID. I travel every

2 years through Cheyenne, WY, and no one would have known

when they appropriated the money to the regional area that affected Cheyenne about 700 jobs to come into an area. And putting

700 additional jobs in Cheyenne does something dramatically different in a community. And all at once, we found—9/11 was a big

eye-opener in Florida because we found out—we went from a position where we had less than 3 percent unemployment in some of
38

our regions to all of a sudden where we had tens of thousands of

people unemployed.

When we can shift the resources which Washington has given us

from labor market exchange functions in Wagner-Peyser to training, as the economy directs, or if I can move it from adult to dislocated worker or back and forth, I have less need to come to Washington and ask for resources.

We have found out in much of our State—and Florida is a very

rural State. It has some huge cities in it, but the rest of it is all

rural. And we have found out that one major employer coming into

the State or leaving the State means that we have less ability to

be able to function.

The Congress took money back from the entire workforce systems, dislocated workers, that was sitting there not being appropriately used after the war in Afghanistan. And it was done partially because the funding streams come down and tell you can only

use it in certain areas. If the Governor was allowed to be able to

move those funding streams where the need exists, we believe that

the system would be even more effective.

Second, I want to echo Senator Murray’s discussion when she

says that there has got to be some degree where the Governor has

some control over State boards and the system. Much of what you

hear up here from local workforce systems and State WagnerPeyser agencies I believe is really warfare among State agencies

and has less to do with serving customers than it does to be able

to preserve infrastructures that already exist.

How things are done in Connecticut, how they are done in Wyoming, how they are done in Washington State, how they are done

in Florida is going to depend upon what is going to be successful

in that area. And we believe there should be great latitude given

on how Governors can be able to structure a system and be able

to force these people to work together. Too often, my frustration

has been that I am always in somebody else’s fight. I am always

trying to be able to get two people to come back to the table and

say, all right, will you two guys work this out one way? Vocational

rehabilitation one time got kicked out of one of our one-stops, and

we told them you cannot do that.

Sometimes the biggest thing you can do is say, ‘‘I am going to

go tell the Governor.’’ The last thing they want is somebody to go

telling on them. But we believe there should be great latitude in

that area.

We must also realize that workforce development is economic development. All these infrastructure pieces are put together.

Now, I do not want to get into partisan fights or I do not want

to get into philosophies about the money issues, but I have heard

several of the members talk about the fact that we do not have

enough money in the system. And we quit 3 years ago relying upon

appropriations from the State and the Government to be able to

fund all these operations. Twenty-seven million dollars taken by

Workforce Florida at the State level was matched with $130 million—private sector, public sector, other operations—to be able to

bring some stability into the system.

We have found that the public sector is not the only place to be

able to fund all of these issues. But that only happens if you have
39

the appropriate partnership with your private sector. I have given

you specific examples inside the testimony of some of the things

that we have done in Florida.

Finally, we welcome the simplified measures. We really ask you

to do one thing for us. Do not give us a bunch of processes. Tell

us what you want. We will perform. Hold our feet to the fire. Take

money away from us if we do not perform. Give us bonuses if we

do. Florida went to a performance-based system. We decided that

if at McDonald’s you purchase a hamburger and it is all there, we

do not care about all the process. That is what we are doing with

our workforce system.

We want to have someone who is a skilled worker who meets the

needs of business, and that is where we are at today. Thank you.

Senator ENZI. I appreciate those comments. I would not have

guessed Idaho. I would have guessed Texas by your name.

[Laughter.]

Mr. AUSTIN. Same family.

[The prepared statement of Mr. Austin follows:]

PREPARED STATEMENT OF CURTIS C. AUSTIN

I would like to thank you for the opportunity to share my thoughts on reauthorization of the Workforce Investment Act. In Florida, we have used the flexibility provided by the Federal Government to dramatically improve service to job-seekers, incumbent workers and employers in Florida. With bi-partisan leadership, the evolution of Florida’s workforce system has enjoyed the support of Governors Lawton

Chiles, Buddy McKay and Jeb Bush. Governor Bush has encouraged us to do everything possible to create new jobs and help Floridians keep their jobs. The reauthorization of the Workforce Investment Act is an additional opportunity to fine-tune the

workforce system.

Without reconstructing the history of workforce development in Florida, it would

suffice to say that the business community in large measure had lost confidence in

the public workforce system to deliver relevant services. Just 3 years ago, less than

12 percent of the businesses in Florida that hired new workers, interfaced with the

publicly-funded Wagner-Peyser services. Worse, less than 9 percent of workers took

time to register with the system for employment. With WIA fully implemented in

Florida, more than 25 percent of businesses are using the system for some, if not

all, of their hiring and nearly 20 percent of those hired have registered with the

local one-stops for one-stop services. Development of a one-stop employment system,

integrating labor market exchange and training functions with resources to support

both, has been one key to changing attitudes in the State towards the public employment system.

Florida has recorded positive job growth for the last 13 months-the only State in

the nation that can make that claim—creating 92,800 new jobs over the last year

(April 2002—April 2003). However, many of those jobs are entry level jobs. The public workforce system is designed to direct entry level employees not only to new jobs,

but to increased skills to insure that each worker who obtains employment can become self-sufficient. The passage of the Workforce Investment Act has assisted Florida to make great headway in delivering appropriate services to workers and employers. As the Senate addresses reauthorization, I would hope the following issues

are considered, so the workforce system may evolve to the next level.

GIVING STATES GREATER FLEXIBILITY

The first priority is the consolidation of workforce funding streams. September 11, 2001 demonstrated how conditions can quickly change from a situation

in some localities of near full-employment, with a desperate need for additional

workers, to one of significant lay-offs. Priority services and priority programs may

change over-night. The ability to invest public resources in labor market exchange,

training dislocated workers, retraining incumbent workers, or assisting disadvantaged adults to the next career level should be only one factor to influence workforce

activities. Labor market conditions in a given area should be the other. Today,

changes occur quickly and must be responded to quickly. The frustration the Congress seemed to have with the workforce system’s failure to quickly utilize Work-
40

force Investment Act funds and invest them in local communities, as evidenced by

the de-authorization of appropriated dislocated worker funds, is—in part—a function of appropriating funding based on where the labor markets were, not where

they are or where they may be. Funds are currently allocated on a ‘‘needs based

formula’’ that reflect where the economy was. The introduction of a major employer

or the loss of the same can dramatically change the economic situation.

In response to September 11th, the State, using WIA funding and two national

emergency grants, initiated Operation Paycheck. Operation Paycheck was a partnership between Workforce Florida (the State workforce investment board), the Agency

for Workforce Innovation (State agency for Wagner-Peyser, WIA, TANF, FSET,

Vets, etc. funds), private training providers, and the Department of Education, Division of Community Colleges. The program was designed to build quickly upon the

work and educational experience of dislocated workers by identifying existing skills,

transferable from declining occupations to those in expanding sectors of the economy. More than 8,800 dislocated workers were trained for new employment. Seventy

percent (70.0 percent) of Operation Paycheck customers enrolled in high tech training. Completion rates for the program and wages earned were well above traditional

training programs. The need for Federal funding would have been mitigated, had

Florida been able to shift funds from Wagner-Peyser activities to those training activities that became the areas of greatest need. Providing such combined funding

in the form of block grants or authorizing States to do the equivalent would greatly

assist in making what was a responsive system, a better system.

In addition, the integration of these funding streams will help put an end to ‘‘turf’’

battles that exist in many States between competing agencies. Too often such agencies view the federally provided funds as ‘‘our money’’ or ‘‘your money,’’ instead of

‘‘the people’s money sent from Washington to do ‘‘the people’s business.’’ A one-stop

system should have integrated services, that focus on the customers (job seekers,

incumbent workers, and businesses). Integration would help bring an end to turf

battles that do little to address customer needs.

The second flexibility issue is gubernatorial leadership in program administration. The administration’s proposal identified several areas of focus that

deal with ‘‘doing government better.’’ These include the streamlining of the State

board, strengthening the State’s authority to change local area designations, and the

proposals for funding one-stop infrastructure by all mandated partners. All of these

changes are designed to make the system a system (not feuding State and local administrations) and refocus the efforts of the system to service delivery and performance from current process. While Florida would prefer that all boards, State and

local, are majority-business lead, we recognize that giving the Governor flexibility

to tailor the system to the needs and capacities of a given State is one key to the

success of the system.

The proposals to give added flexibility regarding the composition of the State

board and to give the governor authority over the designation of local service delivery areas are necessary to build a workforce system. While service delivery is best

provided through a one-stop system attuned to local concerns, all need to know that

the public workforce system is a national system designed to meet the needs of

workers and businesses. Too much time has been spent in the public workforce system arguing over process and ‘‘turf’’ and not enough on business and worker needs.

While some progress has been made under WIA to decrease the time spent on

‘‘administrivia’’ and increase efforts at providing services, the administration’s proposals recognize problems in getting the system to ‘‘work.’’ The increased flexibility

provided in the administration’s proposal recognized that much of the solution cannot be legislated from Washington, but must be ‘‘worked out’ at the State or local

level.

WORKFORCE INVESTMENT IS ECONOMIC DEVELOPMENT

Third, invest workforce funds for the economic betterment of communities. Governor Bush sent an important signal to the workforce system when his

first appointment to chair the State board, Toni Jennings, was not only a private

sector businesswoman and former State Senate President, but the incoming head

of the Florida Chamber of Commerce. The second person he asked to chair the State

board, Ray Gilley, is the private sector CEO of the Mid-Florida Economic Development Council. Likewise, the Governor selected the former CEO of a south Florida

economic development agency, Susan Pareigis, to head the Agency for Workforce Innovation, the State steward of Federal WIA funding.

Florida has taken the increased freedom granted under the Workforce Investment

Act to begin an outreach to business. The State has focused on dispelling the

misperception that our workforce system is for the poor, underprivileged only. That
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misperception made businesses hesitant to participate and branded the workers as

less than capable. Focusing on providing credentialed, skilled workers—no matter

what funding streams were used in obtaining that preparation—has been essential

to Florida’s success.

Building a skilled workforce is one of the most urgent challenges to ensuring Florida’s economic competitiveness, particularly for our value-added targeted industries

statewide. Engaging the business community not only insures jobs for job-seekers,

but assists in the State’s aggressive pursuit of other sources of funds for existing

training programs and potential expansion of services. For example, Workforce Florida, the State workforce investment board, has committed over $27.5 million to special training initiatives in key targeted industries and critical shortage areas. This

investment will result in over 31,000 trained workers (or $884 per trainee from the

resources of the State board). More importantly, this investment has been met with

an additional $137 million leveraged from matching sources (private and public sector).

While Florida understands that Federal money should not be used to entice movement of industry or business from one State to another (cash for the move), much

can be done to grow industry within a State, assist new businesses, assist in the

creation of businesses and to assist local businesses to upgrade the skills of their

employees. When possible, the workforce system should assist in preventing layoffs

(dislocations) if the skills of existing workers can be upgraded and business productivity improved. For too long the system has waited for business downturns or failures to interface with business. In one success story, Florida used different ‘‘pots

of funds’’—transparent to a Florida panhandle employer located in Walton County—

to provide local WIA funds for skills upgrade training of existing workers and State

general revenue funds to train new workers.

We have used several different sources of funds to build an alliance with the economic development community and the chambers of commerce in the State to address business needs. The transition of welfare recipients from welfare to work was

assisted by chambers of commerce throughout the State (lead by the Greater Orlando Chamber) educating employers how to benefit from employing first time workers at higher wages and with greater benefits. As employers understood the cost of

failing to retain entry level workers, attitudes began to shift.

Likewise, regional workforce boards have come to understand the needs of businesses and a great partnership is being formed that is in the interest of both the

private and public sector. If businesses do not stay and grow in a community, training for jobs does not matter. Florida has stopped training for just any job, and has

limited its scarce training dollars to be used for targeted occupations, occupations

growing in demand in Florida with wages that enable one to be self-sufficient. At

the State level, money is provided through competitive processes to assist local regions in the continued diversification of Florida’s economy.

FOCUS ON OUTCOMES

Finally, focusing on outcomes instead of the processes leads to progress.

The proposed consolidated measures ask critical questions: After all we have done,

did the person get a job?; How valuable are the skills that person has acquired in

the market place? (or How much did he or she make?); Have they been able to retain their employment?; and How much is this costing us? Florida has now tracked

these same measures for 3 years. I have attached a copy of the last 3 years results

for your consideration. Combining effectiveness measures and efficiency measures

allows assessment of a system and allows comparison with other service delivery

systems. These questions are reasonable and should allow the Federal Government

to assess whether the funds are being properly invested in communities or not. They

allow individual States to add additional measures to ensure that the needs of a

particular State are addressed.

While I have heard concern that measuring efficiency can divert attention from

the hardest to serve, that has not been our experience in Florida. Florida’s look at

‘‘efficiency’’ has revealed the duplicative administration of the public workforce system. It is not unusual for administrators in one part of the system, to be frustrated

and purchase duplicative services elsewhere, rather than fix what seems to be broken. For example, when labor market information is provided in less than friendly

format to businesses, purchasing the same type of data a second time—rather than

fix the service already being provided by the system—should not be the first solution. Measures of efficiency are important because service costs are driven lower—

not with decreased services for those who need them, but by forcing the bureaucracy

to work for economies of scale in purchasing and partnership in procuring services.
42

Florida strongly encourages the model of demanding high performance and providing flexibility in obtaining the performance goals. If processes are dictated, the

resources any given State can use to maximize performance are dramatically decreased. We have used an incentive award system in Florida for 4 years, (much like

the WIA incentive awards), rewarding local regions with additional resources for a

job well done. It has been one of the great drivers for system-wide performance improvement.

Florida welcomes the narrowed scope that allows comparison between all workforce programs (including those funded by education and other public sector activities). When public resources are being used for public ends, it is critical that policy

makers and administrators can compare program successes. I worked for the Florida

Legislature for more than 9 years and found that the ability to compare programs

rarely resulted in decreased performance. Likewise, tracking too many measures,

provided too little attention to drive any meaningful improvement.

Trying to control both process and outcome leads to difficult if not impossible situations. For example, the administration sought to bring greater clarity to the mission of WIA youth funds by asking that such funds be focused on out-of-school

youth. In the legislative process, those who want in-school youth served have

amended the law in part, to allow service to this group. However the House bill

would preclude such services to take place in in-school settings. The policy could

mean that you let the kids back on the street and try to ‘‘collect them’’ again for

an after-school program, or that you fail to give services to young people bussed over

great distances in rural areas. I would urge you to make clear your desired outcomes, and then let the States and local areas find a way to accomplish those goals

taking advantage of local conditions.
43
44

Senator ENZI. The next presenter is James Ellenberger, who is

the deputy commissioner of the Virginia Employment Commission.

Thank you for coming.

Mr. ELLENBERGER. Thank you very much, Mr. Chairman and

members of the subcommittee. I am delighted to be here on behalf

of Virginia Governor Mark Warner and the Commonwealth of Virginia to share our views on this important issue involving the

Workforce Investment Act.

There are really three key issues that I am going to focus on. I

would like, Mr. Chairman, for my testimony to be entered into the

record. I am going to be summarizing most of it.

Senator ENZI. All testimony will be put in in its entirety, so we

appreciate the consolidation.

Mr. ELLENBERGER. The three issues that I really want to focus

on are the importance of moderation. It is drastically important for

those of us who are in the pits trying to make the workforce investment system work that any changes that are instituted and put in
45

place are changes that are moderate. We do not need to overturn

the system and to make things more difficult.

I want to talk about the importance of maintaining separate

funding streams for adult education in WIA, for dislocated workers,

and, in particular, for Wagner-Peyser. It has critical importance for

agencies and States like Virginia.

I also want to talk about personal re-employment accounts, particularly in view of the fact that the President visited the Commonwealth yesterday to make a renewed pitch to Congress to revisit

the issue of personal re-employment accounts. The position of the

Commonwealth is quite different than that expressed by the President in the Commonwealth yesterday.

Both the administration proposal and the House bill that was

passed, H.R. 1261, would consolidate the funding streams for adult

ed., dislocated workers, and Wagner-Peyser. And we believe, as we

believe the majority of the States would concur with us, that this

is the wrong approach. We see this as a direct attack on the 60-

year-old public employment service and an effort to end appropriate focus through separate funding streams on segments of the

population with very different problems.

It is hard to believe, as we look at it, that there is serious support for a proposal to fold a program with 60 years of proven and

effective service to employers and to workers into a program that

does not yet have 4 years of practical experience.

Governors are being asked to forego one of the most useful and

flexible block grants to States, that of the Wagner-Peyser system,

in favor of a single and largely prescribed and locally controlled

funding system.

Workers are being asked to give up a publicly operated, free, and

nondiscriminatory job service in return for a myriad of disconnected programs that could be privately operated, charge for services, and require certain conditions in order to obtain employment.

Employers are being asked to give up valuable statewide services, including listings, screenings, placement services that are currently provided by the employment service in favor of a system

that will not be able to offer comparable services nor guarantee

that they could be provided without discrimination or charges.

As in many States, our workforce development system is constructed around and dependent upon a Wagner-Peyser system. The

employment service is the anchor for 70 percent of the comprehensive one-stops in the Commonwealth of Virginia. It is also the anchor for our work search requirements under our unemployment

insurance law. And as our law requires, claimants have to register

with the employment service in order to retain eligibility.

Additionally, our employment service is staffed by a merit-based

staff of State employees who administer the employment service.

They have a level of professionalism, competence, and skill that is

possessed that we feel would be lost by repealing the WagnerPeyser Act.

The Wagner-Peyser Act provides important services to workers

across the spectrum. In addition to the employment service, we administer the veterans program, the migrant seasonal farm worker

program, the worker opportunity tax credit program, the Trade

Act. We provide alien labor certifications and disseminate labor
46

market information, among other tasks. Repeal of the WagnerPeyser will severely diminish, if not destroy, our ability to provide

these valuable services to citizens of our Commonwealth. Proposals

to devolve and block grant the employment service will threaten

the very foundation of the national labor exchange and a consistent

service delivery method that is provided around the country.

Virginia has one of the most active employer advisory committee

networks in the entire country. We have 33 local committees representing over 1,800 employers in the Commonwealth, and I am

pleased to have with me today—and I would like, Mr. Chairman,

if I could, to introduce the Chair of our State Employer Advisory

Committee, Ms. Patricia Moore, and the Chair of our Northern Virginia Employer Advisory Committee, Ms. Judy Lawrence.

Ms. Moore and Ms. Lawrence, along with many employers

throughout Virginia, have written to Members of Congress about

the impact of H.R. 1261 in the House on the employment service.

In her letter to Senator John Warner, who is a member of the Senate HELP Committee, Ms. Moore asked why the Congress would

‘‘want to fix something that is not broken.’’ She pointed out that

the employment service is open to all job seekers, not just hard-toserve populations, and that employers value the recruitment and

placement services—matching the right people with the right opportunities and the right companies—that is the hallmark of the

employment service program. She noted that the stability and continuity of the employment service stands in stark contrast to the

continual changes, transition, and difficulties faced by those who

would be asked to assume the duties that are now provided by

Wagner-Peyser.

Mr. Austin mentioned the importance of flexibility, and we would

concur that we need flexibility in our program. But if we look at

what happened after 9/11, Virginia was impacted severely, particularly in Northern Virginia, National Airport and many, many employers who service Pentagon-related operations.

We established a special satellite office at National Airport using

Wagner-Peyser funds. As I said earlier, it is the most flexible grant

program in existence. We did this without having to go to the Department of Labor and seek additional funds. We brought in the

local WIBs. We had our employees from 40 offices around the State

come and volunteer to work Saturdays and Sundays. We had employers from our employer advisory committees come and man tables and give advice to workers who were seeking jobs on how to

get employment, how to get into training programs.

Now, we did apply for a national employment grant from the Department of Labor to help us absorb the costs of that operation.

Unfortunately, we had to absorb it out of our existing WagnerPeyser funds and other funds. But, nonetheless, we had the flexibility to act immediately, and we did so, in the first week following

9/11.

I want to talk just briefly about personal re-employment accounts. Since the President was in Annandale yesterday and there

were some workers that he introduced, two of those workers—Ms.

Mitchell and Mr. Orlandella—were introduced as perhaps examples

of how PRAs could aid workers who were struggling to gain new

skills and new jobs.
47

Well, the fact of the matter is that both Ms. Mitchell and Mr.

Orlandella were recipients of significant assistance through our dislocated worker program and national emergency grant funds. And

the fact of the matter is that the PRA program would have a limit

of $3,000 that those workers would be able to spend on the training

that they received, far less than they got under the dislocated program that they did get. And on top of that, if they were unsuccessful in getting a job after spending their PRA money on training,

they would be blocked, as Senator Murray pointed out, for a year

from getting services from Workforce Investment Boards.

The last issue I want to touch on, Senator—and this will be very

quick—1261 in the House has a provision which would permit for

the first time public funds to be used to allow recipients of those

funds to discriminate against applicants, employers, job seekers,

even providers, on the basis of religion. And I would suggest—Virginia is opposed to that. I would suggest that that is a surrogate

for discrimination on many other bases as well. It could be race,

could be age, could be gender, could be disability, could be sexual

orientation, and it is something that I would hope the Senate

would absolutely say no to.

Thank you.

Senator ENZI. If we could just get you to have a little passion.

[Laughter.]

Thank you very much for your comments.

[The prepared statement of Mr. Ellenberger follows:]

PREPARED STATEMENT OF JAMES N. ELLENBERGER

Mr. Chairman and Members of the Committee: Thank you for the opportunity to

testify on behalf of the Virginia Employment Commission (VEC) regarding the reauthorization of the Workforce Investment Act. I am pleased to represent Virginia

Governor Mark Warner and the Commonwealth of Virginia on this important issue.

The VEC is the lead agency charged with administering the Workforce Investment

Act in the Commonwealth.

Virginia was not among the States implementing the Workforce Investment Act

early. As a result of a State level reorganization of the predecessor agency, and because we needed to build a statewide network to administer the program, Virginia

did not implement WIA until July 2000. Consequently we have approximately 3

years experience in administering the program, during which time the guidance we

received from the U.S. Department of Labor was evolving and changing. Frankly,

Virginia feels that the program has only been operational long enough to just now

allow us to begin evaluating its successes and shortcomings. Until we have more

experience, more data and more consensus among partners, clients and participants,

we, along with many of our sister States, feel that it would be most prudent to make

modest and gradual changes rather than impose large-scale changes and revisions.

While there are some issues that the VEC would like to see addressed during the

reauthorization of the Workforce Investment Act, we are compelled to address the

following issues as the most salient for our State:

Consolidation of Funding

Both the Administration proposal and the bill passed by the House of Representatives (H.R. 1261) would consolidate Adult, Dislocated Worker and Wagner-Peyser

funding streams into a single block grant. Virginia, as we believe the vast majority

of States, opposes this approach. We see this proposal as both a direct attack on

the 60-year-old public employment service and an effort to end an appropriate focus,

through separate funding streams, on segments of the population with very different

problems.

Wagner-Peyser

It is hard to believe that there is serious support for the proposal to fold a program with 60 years of proven and effective service to employers and workers into

a program that does not yet have 4 years of practical experience. Governors are
48

being asked to forego one of the most useful and flexible block grants to States, the

Wagner-Peyser system, in favor of a single and largely prescribed, locally controlled

funding stream. Workers are being asked to give up a publicly operated, free and

non-discriminatory job service in return for a myriad of disconnected programs that

could be privately operated, charge for services and require certain conditions for

employment. Employers are being asked to give up valuable statewide listings,

screening and placement services currently provided through the employment service in favor of a system that will not be able to offer comparable services nor guarantee that they could be provided without discrimination or charges.

As in many States, Virginia’s workforce development system is constructed

around and dependent upon our Wagner-Peyser infrastructure. The employment

service is the anchor for 70 percent of the comprehensive One-Stop Centers in our

State. The employment service is also the ‘‘anchor’’ for the work search requirements under Virginia’s Unemployment Insurance statute. Our law requires claimants, as a condition of eligibility, to register for work with our employment service

and to report to the employment service as required by the Commission.

Additionally, a merit-based staff of State employees administers the employment

service. The level of professionalism, competence and skill that is possessed by these

public servants would be lost through the repeal of Wagner-Peyser.

Abolition of the Wagner-Peyser Act could jeopardize the integrity of both the employment service as well as unemployment insurance procedures in Virginia. As others have pointed out, the employment service is financed by statutorily dedicated

Federal employer payroll tax funds that, under the Administration’s plan as well

as under H.R. 1261, could be used in the future to fund private or contract job placement services. Such a change would fundamentally alter the principle of providing

an unbiased and nonpartisan agency to make job placements and even pay Ul benefits. Coupled with companion proposals from the Administration, including Personal

Reemployment Accounts and Unemployment Insurance Reform, some have concluded that the long-term goal is to privatize or abolish unemployment insurance

in the United States.

Services to Workers

Virginia has a network of 39 full-service local offices strategically located throughout the State. Services provided are available to all citizens regardless of income

status, residence, employment status, or any other restrictive criteria. In the past

year over 475,000 new employment applications were received from customers including 60,000 veterans and 300,000 claimants for unemployment insurance benefits. Our employment service enforces the work test and ensures that all claimants

are registered and, when possible, matched with suitable job openings. Additionally,

the employment service in Virginia administers the veterans program, the migrant

and seasonal farmworker program, the work opportunity tax credit program, the

trade act program, provides alien labor certifications, and disseminates extensive

labor market information among other tasks. Repeal of the Wagner-Peyser Act will

severely diminish, if not destroy, our ability to continue to provide these valuable

services to the citizens of our Commonwealth. The repeal will undermine the principle of an unbiased, nonpartisan agency to administer job referrals and assist in

the payment of Ul benefits. Proposals to devolve and block grant the Employment

Service will threaten the very foundation of a national labor exchange and a consistent service delivery method currently provided throughout the nation.

Services to Employers

The employment service in Virginia has a long history of providing valuable services and resources to employers and businesses. We have one of the Nations most

active and influential Employer Advisory Committees comprised of 33 local committees representing over 1800 Virginia employers. With me today are representatives

of Virginia’s employer community who are strong supporters of the present employment service and who have been in active opposition to the Administration’s proposal to repeal the Wagner-Peyser Act. Patricia Moore, Senior Business Development Manager for ALEX or Alternative Experts, is the Chair of our statewide Employer Advisory Committee. Judy Lawrence, Manager of NAI or National Associates,

Incorporated, is the Chair of the VEC’s Northern Virginia Employer Advisory Committee.

Ms. Moore and Ms. Lawrence, along with many employers throughout Virginia,

have written to Members of Congress about the impact of H.R. 1261 on the employment service in Virginia. In her letter to Virginia Senator John Warner, a member

of the Senate HELP Committee, Ms. Moore asked why the Congress would ‘‘want

to fix something that is not broken.’’ She pointed out that the employment service

is open to all jobseekers, not just the hard-to-serve populations, and that employers
49

value the recruitment and placement services—matching the right people with the

right companies—that is the hallmark of employment service programs. She noted

that the stability and continuity of the employment service stands in stark contrast

to the continual changes, transition, and difficulties faced by those who would be

asked to assume the duties that are now provided under the Wagner-Peyser Act.

The VEC has also partnered with the ‘‘National Business Partnership Group,’’ a

group of major national employers who wish to recruit nationwide and receive a consistent level of service from State to State. Employers the VEC is currently working

with include: Venzon, Manpower, Jiffy Lube, K-Mart, Toys R Us, Home Depot, Swift

Transportation, and HCA Hospitals Inc. These partnerships could be severely weakened, if not eliminated, by the proposal to repeal the Wagner-Peyser Act.

All of our 39 local offices throughout Virginia have dedicated staff who routinely

work with their local employer and business community in providing labor market

information, job listing services, job matching, mass recruitment services, testing,

reemployment services, and a host of other valuable benefits. Over the past year the

employment service in Virginia received over 125,000 job listings from employers resulting in 502,000 referrals of interested candidates. We have also just recently implemented ‘‘Business Resource Units’’ into our local offices to further enhance our

ability to provide high caliber recruitment assistance, and other business services

to our employers. The repeal of Wagner-Peyser will severely diminish if not destroy

our ability to maintain this high quality level of service to our State’s employers.

Adult and Dislocated Worker Funding

While Virginia would welcome more flexibility in the allocation of WIA funding

that would enable the Governor to be more responsive to critical needs, our great

fear is that block grants will ultimately lead to ever shrinking and inadequate funding for vital programs.

When Congress established separate funding streams for Adult Education and

Dislocated Worker Programs they did so in response to specific needs in identifiable

and discrete communities. To the extent that those funding streams are commingled

with others the end result is to diffuse the rationale and dilute the support for these

programs. WIA adult education is targeted primarily at poor people and those without a connection to the labor force. Dislocated worker programs are targeted at communities of workers with long and strong attachment to the labor force that are suffering high unemployment due to plant closings, downsizing or relocations.

A direct result of the proposal to block grant these programs will be to have different but equally worthy groups competing over shrinking resources. The Government Accounting Office concluded in its report 8 years ago that block grants not

only led to programming and administrative difficulties but that, once established,

overall funding is greatly reduced from levels in existence prior to consolidation.

Personal Reemployment Accounts

Although the current versions of reauthorization do not establish Personal Reemployment Accounts (PRAs), the concept of PRAs and the Workforce Investment Accounts have consistently been linked in the Administration’s proposal. Among the

many problems with this concept, PRAs appear to restrict rather than expand services and benefits for unemployed workers. Not only would the value of PRAs be less

than what is currently available under WIA Individual Training Grants, workers

who use PRAs would be precluded from using WIA resources for 1 year after exhausting their PRA accounts. Given that PRAs would be targeted to those individuals profiled as most likely to exhaust their unemployment benefits, it seems shortsighted to deny these individuals the training and retraining tools that the VEC and

its One-Stop partners have to assist in their re-employment.

Rather than establish a new, administratively cumbersome program, Virginia

would welcome additional funding for extended benefits for the long-term unemployed and for training those who need to upgrade their skills.

Infrastructure Funding

In Virginia most of the funding for space and equipment for the One-Stop system

has come from WIA and Wagner-Peyser funds. Although we have found that WIA

partners are willing to establish a presence in One-Stop Centers, they are less willing to bring resources to the table to meet infrastructure and operating expenses.

Part of the issue with infrastructure funding is that while partner agencies do

provide some employment services and training, this function is usually but a portion of their overall mission. So, for example, while various offices of the Department of Social Services may offer training programs under Welfare-to-Work, the

agency also deals with child-protection, child support collection, foster children, and

myriad other programs. The current One-Stop system does not offer enough space
50

for the partner agencies to have all of their functions co-located, nor is it clear that

it would be appropriate to do so.

In order to establish the type of One-Stop system envisioned by the WIA, and one

that most benefits the users of the system, long-term reengineering of infrastructure

funding across multiple categorical programs is necessary. Such a venture will take

a long-term commitment and certainly cannot be expected after only the initial 5-

year sunset of the existing legislation. In most cases, each partner has long-term

financial and contractual commitments to their individual facilities and offices

throughout the State. Building a system focused on the universal customer is a

major change in delivery and it must be viewed in terms of ‘‘investment return’’.

Without the capital costs placed into the system building, the service outcomes cannot be expected.

Virginia recognizes that there is valid concern that funding pooled by the Governor to cover infrastructure related costs has the potential to diminish program

service funding. However, if the proper and adequate infrastructure is not in place

to support the new system, it is unlikely that the seamless, one-stop delivery of

services will ever be achieved. Congress needs to address infrastructure funding,

perhaps with dedicated funding, that will not diminish the ability of the partners

in the One-Stop system to provide program support for their constituents.

Waiver of Non-Discrimination, Worker Protections, and Non-Displacement

Requirements

It is our understanding that both the House version and the Administration proposal would broaden the Secretary’s ability to grant waiver authority. While the

WIA program in Virginia would benefit from increased flexibility in some aspects,

we would oppose the waiver of important worker protections and support preserving

the civil rights of all participants. In particular, we oppose the provision in H.R.

1261 that would permit some recipients of WIA funding to discriminate against a

participant, employee or partner on the basis of religion.

Changes in Governance Structure

We support measures to reduce the size of State and local workforce boards.

While we recognize that it is important to have good representation on the boards,

it is also important the size of the boards be kept to a manageable level. In recent

legislation approved by the 2003 Virginia General Assembly, the Governor Warner

reduced the size of the State Workforce Council from 43 to 29 and instituted certain

statewide planning and performance standards. This structure maintains local administrative authority for the program, but ensures that local programs meet minimum standards for quality and accountability.

The VEC supports active business and labor representation on both the State and

the local boards. However, it has been our experience that cumbersome governance

structures and overly large boards inhibit such participation. Virginia supports providing Governors with sufficient flexibility to tailor the program to their States and

sufficient authority to enforce accountability.

The current reauthorization also highlights questions about who should be responsible for certifying One-Stop Centers. Currently local workforce boards are charged

with this duty. Since the inception of the WIA, the VEC has been careful not to impose on local prerogatives. However, as our own legislative branch study has found,

the quality of local programs varies significantly. Therefore, under recent legislation

approved by the Virginia General Assembly, the statewide workforce council is required to create procedures, guidelines, performance measures, and directives applicable to local workforce investment boards and the operation of One-Stop Centers

required by the WIA. The bill also requires each local workforce investment board

to develop and submit to the Council an annual workforce demand plan for its area

based on a survey of local and regional businesses that reflects local employer needs

and the availability of trained workers to meet those needs.

Sequence of Services

Virginia’s service delivery under the WIA system was initially established as a

‘‘work first’’ system. Under this sequence of services, all applicants were required

to search for work before training was made available. This was appropriate at that

time and in that economy—unemployment rates were at historic lows and locating

a job was not difficult in most areas of the State. By using a work first approach,

we ensured that training funds were concentrated on those most in need of assistance.

But what was appropriate in the economy of 2000 may no longer be appropriate

in 2003. Unemployment has approximately doubled, and plant closures and the

shifting of production abroad have devastated certain areas of the State. For many

of the individuals affected by these structural changes in our economy, their job no
51

longer exists and their skills are no longer marketable. For those who are ready to

work, work first is still a valid approach. Virginia needs the flexibility, based on

careful assessment of individual clients, to offer training or other services based on

individual needs rather than to require participants to first look for jobs in fields

that no longer exist.

Conclusion

Again, the Workforce Investment Act has been operational in Virginia for only 3

years, hardly long enough for a comprehensive evaluation. We have put so much

time and effort into getting the program up and running—designating areas, establishing One-Stops, developing memoranda of understanding—that we have not been

able to put the time and attention we would like to devote to system building. We

urge the Senate not to engage in wholesale revisions at this time. In particular, we

ask that you not roll Wagner-Peyser’s 60 years of experience into 5 years of experimentation. Instead, Virginia asks that reauthorization focus on those areas where

there is a demonstrated need for tweaking, and that you allow us, and all States,

time to build the delivery system under WIA that the Congress originally intended.

Thank you.

Senator ENZI. The next person, of course, is from Lacey, WA, and

has had an introduction, but I will mention that he is Michael Kennedy, the executive director of the Pacific Mountain Workforce Development Council. Thank you for being here. Your testimony?

Mr. KENNEDY. Good morning. Chairman Enzi and Senator Murray, our senior Senator from the great State of Washington, I feel

privileged to offer testimony as you deliberate on the reauthorization of the Workforce Investment Act.

I am approaching my 30th year as a workforce professional.

Since 1986, I have been the executive director of the Pacific Mountain workforce area, and currently I am also the chairman of the

Washington Workforce Association, which is a professional organization of the 12 workforce investment directors from the State of

Washington.

The Pacific Mountain area stretches 7,000 square miles, beginning at the southern tip of the beautiful Puget Sound. Our counties—there are five—begin with Thurston, home to our State capital, Olympia; Grays Harbor, Pacific, Mason, and Lewis Counties.

While the Nation struggles with an unemployment rate at 6.1

percent, two of our counties are above 9 percent; two are above 8

percent; and our State battles a 7.3 percent unemployment rate,

the second in the Nation. These are tough times in our area.

The Workforce Investment Act has been a valuable resource as

we look for local and State solutions to our current economic conditions. You have an opportunity to make that resource even better.

The Workforce Investment Act is about to celebrate its fifth anniversary in August. In Washington State, however, the Act was not

implemented until the 1st of July 2000. We are just approaching

the completion of our third year.

The Act, while not perfect, goes a long way to acknowledge the

value and importance of employers as our customers, to create a

vision of a skilled workforce, to ensure competitiveness in the global economy, and recognizes the importance of local workforce

boards, led by business, to seek solutions to the unique workforce

issues in our communities through collaboration. The Act, however,

does not fully support this vision.

As you craft new legislation, I would like to urge you to consider

a few improvements. The one-stop delivery system model is an effective resource in serving business and job-seeker customers. It is,
52

however, an unfunded mandate. Currently, it is like passing a tin

cup among partners, and even if the Governor holds the cup, it is

not the solution to funding the system. Unless legislation creates

infrastructure funding, precious direct service dollars will continue

to be diverted. We cannot continue to do this and maintain our

ability to meet the demands of business and job seekers.

The Workforce Investment Act is over-regulated. If Assistant

Secretary of Labor Emily DeRocco is correct that the Workforce Investment Act is an economic development program with social benefits, not a social program with economic benefits, empower the

workforce system to respond to the needs of local businesses by

granting authority to train incumbent workers with local funds;

untie our hands so we can be a true partner with economic development organizations battling to attract or retain high-skill, highwage jobs.

The Workforce Investment Act creates a workforce system. This

system must be held accountable by common measures that are

standardized across programs. The administration’s proposal is a

beginning, but remains complex and burdensome.

Additionally, it attempts to measure efficiency through a costper-participant model. I believe we are making an investment in

our participants. So a return on investment performance model

would be preferable to just measuring the costs.

I am also concerned that educational attainment will not be a

performance measure. How can we ignore this measure in a workforce system that includes education programs?

The Workforce Investment Act values customer choice and establishes individual training accounts, a voucher system to pay for tuition and fees. The system does not cover the full cost of training

at a public provider such as a community or technical college. At

a time when most schools are at capacity, a customer with a voucher may not get choice because the program is full and they will be

placed on a waiting list. Colleges are not in a position to expand

high-demand training programs unless the full cost of the program

is covered. Local boards need the authority to contract with eligible

providers to expand the capacity to train.

In May of this year, Washington State was notified that it would receive a $3 million national incentive award based on exceeding

and meeting all Federal performance standards under the Workforce Act. We celebrate our achievements, informing partnerships

and responding to the needs of our businesses and job seekers, and

working toward the enviable goal of a skilled workforce.

I ask you to continue to support our efforts by improving the current legislation and empowering the system to continue to respond

to the needs of our employers and workers.

Thank you.

Senator ENZI. Thank you, and thank you for all the travel that

you had to do to get here. I recognize that, being from Wyoming.

[The prepared statement of Mr. Kennedy follows:]

PREPARED STATEMENT OF MICHAEL H. KENNEDY

America’s strength as a nation and as a leader of the global community of nations

depends on our continuing economic vitality. And our economy depends, first and

foremost, on the skills of the workers who create and produce American products,

services, technology and innovations.
53

American business cannot be competitive in the global market without highly

skilled workers. More than any time in history, American economic competitiveness

depends on our ability to provide U.S. businesses with a highly skilled, highly

adaptable workforce.

The Workforce Investment Act, however, is over-regulated and under-funded. The

workforce system deserves the authority and resources necessary for a flexible, effective and immediate response to the economic challenges in our communities. We

need to increase the influence of local business and labor over the local systems.

The current act, by omission or commission, creates barriers that have limited our

ability to provide training to support retention, expansion and retooling of growth

industries, and our ability to obtain effective data for improving performance and

measuring our effectiveness.

Funding

While the U.S. economy’s demand for highly skilled workers has increased exponentially over the last 20 years, Federal funding to meet that need has decreased

by 25 percent.

The workforce development system includes many organizations and funding

streams working together to serve businesses and workers. Broadly defined, it includes Workforce Investment Act, Unemployment Insurance, Pell grants, secondary

and postsecondary career and technical education, higher education, and Temporary

Assistance for Needy Families, among others. The one-stop system created by WIA

attempts to create coordinated customer service among these multiple programs.

While this section primarily addresses potential improvements in WIA funding, all

workforce development funding streams are inter-related and need comprehensive

support from the Federal level.

Specifically, funding for the Workforce Investment Act (WIA) is totally inadequate. This funding breaks down into four major activities, all of which need significant improvement.

1. Dislocated Worker funding is stretched thin throughout Washington State and

the flood of laid off workers coming through the doors of our one-stop centers has

doubled and continues to grow. Washington State has lost nearly 80,000 jobs since

9/11 and the effects of the recession remain entrenched.

If Federal dislocated worker formula funding does not increase, our efforts to retrain laid off workers will be hamstrung. Our economic recovery will languish, sending new jobs overseas or the other States because we have not been able to prepare

our workforce to meet the demands of business.

2. The Workforce Investment Act (WIA) requires the creation of one-stop centers

to provide access to and coordination among workforce development services, but

provides no Federal appropriation to support these centers. This unfunded mandate

means the infrastructure costs of the one-stop system are paid by diverting resources from direct customer service and skills training under WIA and other funding streams. One-stop centers are an effective resource in serving job seekers and

businesses. For example, WorkSource centers in Washington exceeded all Federal

performance measures while serving 321,000 people last year—50,000 more than

the previous year—all with no dedicated Federal funding. These results were

achieved by pooling WIA, Wagner-Peyser, and many other funding streams, and

paying the infrastructure costs with funding that would otherwise have provided additional direct services to businesses and workers. We cannot continue to do this.

If Federal funding does not materialize, we will need to downsize the one-stop system or divert additional funding away from career training in order to keep the

doors open at one-stop centers.

3. WIA adult funding is a critical tool for helping working people move up and

helping businesses increase productivity, but funding levels have been declining for

years. The need for businesses to update their workers’ skills and remain ahead of

their competition has increased dramatically as the pace of change in the marketplace has increased. Likewise, the need for low-wage workers to increase their skills

and move up has increased due to TANF reforms. The funding for the system that

trains and places low-wage adults must also increase to keep pace with these demands.

4. WIA youth funding is sufficient to serve only 10 percent of eligible, at-risk

youth, according to the U.S. Department of Labor. This is inadequate for an issue

of such magnitude. According to research funded by the Gates Foundation, ‘‘Only

67 percent of all Washington State public school students from the class of 2001

graduated from high school. . . . Graduation rates are significantly lower for African-American students (53 percent), Latinos (47 percent) and Native Americans (47

percent).’’ Additional WIA funding would mean additional resources to serve our

students.
54

The WIA system has successfully addressed the needs of youth who are either

struggling, on the verge of dropping out of school, or who have left the school system

still in need of work related skill and academic skill development. In Washington,

these programs produce a return on investment greater than 3 to 1 based on increased tax receipts due to increased employment. The $2,300 cost per participant

yields $34,300 in increased lifetime earnings, which in turn yields $7,300 in increased tax revenues. Additionally, the average investment in youth in the WIA system is very small compared to the cost of juvenile incarceration, lost future productivity and the cost of training in the future. We cannot afford to gamble on the future of our non-college bound youth and it is necessary that we make that investment now.

Development of a highly skilled highly adaptable workforce is a national priority

that is absolutely vital for economic recovery and growth. For example, WIA funding

should be increased to $7 billion, from the current level of $3.5 billion, over 4 years,

as shown in Attachment A.

This should not be accomplished at the cost of other programs that impact the

competitiveness of the American workforce. Rather we should build a stronger workforce system through coordinated investments in all programs with relevant workforce components, including WIA, Unemployment Insurance, Pell grants, secondary

and post-secondary career and technical education, higher education, and Temporary Assistance for Needy Families.

As the economy has changed over time, the importance of a skilled workforce has

increased dramatically. It is time for Federal funding for workforce development, in

the Workforce Investment Act and all related funding streams, to reflect this.

Our Customers—Business and Workers

Workforce Investment Boards are focused primarily on serving the workforce

needs of local businesses. This, in turn, enhances our ability to move local workers

into good local jobs. It also enhances our ability to ensure that the local labor force

can be rapidly trained, retrained and redeployed as demand for workers changes.

Workforce Investment Boards work in partnership with their States’ Governors in

tackling the economic recovery, student achievement, and competitiveness challenges facing their States. They support their Governor’s initiatives at the local

level, since they are the ‘‘front line’’ of service to our citizens and employers. They

strengthen their States’ competitiveness by bringing together key leaders in strategic industries and creating public/private partnerships to attack skill shortages in

these industries; and they initiate business/education partnerships to enable all students to succeed in their futures.

As Assistant Secretary of Labor Emily DeRocco expresses it, ‘‘WIA is an economic

development program with social benefits, not a social program with economic development benefits.’’

Therefore, it is critical that local, State, and Federal decisions be focused primarily on increasing responsiveness to the workforce needs of local businesses. This

can be accomplished as outlined below:

1. Maintain local leadership. The personnel needs of businesses are extremely localized. In the Northwest and across the nation, each local economy demands a customized strategy for developing the local workforce. This strategy can only come

from the local business leaders, who know, better than anyone else, what their industries need to increase productivity, remain competitive and profitable and create

more jobs for local workers. Now, and into the future, the system must be more responsive to the needs of local business and economic development, and more able

to close local skills gaps and move local workers into good, highly skilled careers.

2. Enhance the stature of business and labor to strengthen the ability of business

and labor to customize the local system to meet their needs. The workforce system

has two clearly defined customers: businesses and workers. The business and labor

representatives on local boards are the voice of the customer, and should therefore

have particularly strong influence over how workforce development are provided in

their communities. WIA took a step in the right direction, which we can build upon

by enhancing business and labor leadership of local boards, and in turn giving local

boards greater influence over the local system. This could be accomplished by addressing the following three needs:

a. Waiver authority should allow boards to change their composition to increase

manageability and responsiveness to the needs of business and workers. If business

and labor in a local community are not fully satisfied with the board structure prescribed by WIA section 117(b)(2), they and their local elected officials should be empowered to change the structure to make the board more responsive to their needs.

As with current waiver authority, local waiver applications would be approved by

the Governor and Federal level.
55

b. Make WIA funding more flexible, allowing boards and local elected officials to

direct funding where it will do the most good locally. Currently, the funding silos

are very rigid, and boards do not have much flexibility to address local needs. This

ties the hands of these private-sector boards, as well as the local elected officials

in the community.

Therefore, WIA reauthorization should create greater authority to transfer and

combine funds in order to strengthen service to local businesses and promote economic development. Greater flexibility within the WIA adult, youth, and dislocated

worker (including rapid response) funding streams would create greater local capacity to tailor funding to local circumstances. It must be recognized that each funding

stream has a constituency that places high value on maintaining a distinct funding

source for their programs, and a compromise should be reached that reflects these

concerns while increasing flexibility among funding streams.

c. Increase local boards’ waiver authority. At times, the regulations of WIA work

counter to the unique needs of a local community. To address this, local boards

should be given greater authority to initiate waivers. All waiver authority should

be used to demonstrably improve service to the system’s customers: local businesses

and workers. This will ensure a strong voice for local business and labor representatives in the waiver process and keep the system customer-driven. As with current

waiver authority, local waiver applications would be approved by the Governor and

Federal level.

These reforms create a workforce development system that is more directly driven

by the needs of local businesses and workers. Business and labor are given a stronger voice on local boards, and greater flexibility to use those local boards to meet

their needs. As a result, these boards will be able to better guide the system to support economic development needs in their communities.

These are not minor changes. They are critical to America’s ongoing economic success. American businesses compete in the global marketplace by providing high

quality products using the most modern high-tech production methods. This simply

cannot be done without highly skilled workers. American economic competitiveness,

and job creation for workers, depends on our ability to provide companies with the

skilled workers they need, exactly when they need them. Putting business and labor

in the driver’s seat of local workforce development is fundamental to the success of

the American economy.

Barriers

WIA is over-regulated. This creates inefficiencies that reduce our ability to create

the greatest value per dollar for our local businesses and workers. The changes outlined below would create a more streamlined and powerful workforce development

system, one that can work in partnership with local economic development entities

to attract, retain and expand businesses, and monitor progress to make continual

improvements.

1. Increase access to sectoral and incumbent worker training. Local boards are

working closely with colleges and other training providers to create sectoral and incumbent worker training, and to tailor it to address the precise skills needed by

local industry sectors. However, demand still far exceeds supply, and WIA formula

funding often does not allow for creation of such programs. Instead, they are usually

created through use of scarce Governor’s discretionary funds.

The WIA formula funds should be increased and made more flexible, to allow

them to be used for intensive sectoral training programs, particularly for incumbent

workers, layoff prevention, and out-placement. Such programs should include a commitment from local employers to interview trainees both at program entrance and

completion. These intensive courses, tied directly to local businesses’ skills needs,

are critical for making our workforce highly adaptable, so workers can be rapidly

retrained and redeployed to meet the changing demands of the fast-moving global

economy.

2. Increase access to in-demand training courses. Many of the most effective training courses are not available to all who could benefit from them, simply because the

classes are full and there is little capacity to expand them. WIA funding could be

used to help solve this problem, if the regulations more clearly allowed local boards

to fully fund high skill, high wage training courses at community colleges and other

training institutions, via a contract for service rather than through ITAs. This

would allow local boards to pay for all costs to expand capacity so that WIA trainees

may access demand courses that would otherwise be closed to them due to excess

demand.

3. The 100 percent match requirement for customized training should be reformed. The 100 percent requirement leads to tracking multiple in-kind employer

contributions, making the system overly complicated to employers. This requirement
56

is a disincentive and a major barrier to small and medium sized employers who simply cannot afford to participate in the program. Employer match is an important

indication of employer commitment and demonstrates that the training is of value

to the employer, but it need not be so complicated for the employer to track. If the

goal of customized training is to provide businesses with a trained and work ready

workforce in a user-friendly manner, then the match requirement should be reduced

and/or simplified.

4. The performance accountability system should offer timely management information and adopt common measures.

Currently, the accountability system produces annual reports using data that are

over 1-year-old when published. This is not useful to local board members who want

to continually make adjustments and evaluate their impact on improving outcomes.

The current reporting system is not useful for continuous quality improvement.

Therefore, the performance measurement system should include real time indicators for local management purposes, designed in close cooperation with the local

Workforce Development Councils, to complement the longer-term Unemployment Insurance data that is currently used for longer-term accountability. For the purpose

of continuous quality improvement and local board oversight, a performance improvement system requires a rapid feedback loop, not year old data.

The Administration’s proposal for common measures is a beginning. In present

form, they are complex and burdensome. Of particular concern is the inclusion of

an efficiency measure through a ‘‘cost per’’ mode. Presumably, less cost is best? This

is an ‘‘investment’’ and presumably more is better! Educational attainment is not

a proposed measure. How can we ignore this outcome in a workforce system that

includes education programs?

Over 90 percent of individuals receiving services through the one-stop system are

receiving core services only (such as labor market information) for which they don’t

have to register. Currently, there is no national system for collecting data on core

services to non-registrants. This lack of data understates the major undertaking of

universal access and the results of the one-stop system.

5. State and local board membership should be flexible. The Workforce Investment

Act specifies the membership required for newly created State or local boards. In

order to have all the required members, a board must have over 40 members. Instead of creating a new board, States and local areas may choose to use a qualifying

entity that was in existence on December 31, 1997. U.S. Department of Labor rules

prohibit any significant change in the organization of the pre-existing entity or in

the categories of members represented on the entity that requires a change in the

entity’s charter. A significant change includes the addition of a single voting member representing a category that was not included on December 31, 1997. The Act

itself is silent on the ability of pre-existing entities to change membership structure

over time.

Many find that the membership required for new boards is too large. The size

makes it likely that at any given meeting the private sector members will be outnumbered by members representing the public sector and vendors, defeating the intent of WIA to have a private sector driven system. In addition, less populous workforce development areas have a difficult time recruiting a sufficient number of private sector representatives to fulfill the membership required for a new local board.

Department of Labor rules that virtually prevent any change in the membership

structure of pre-existing boards forever freeze in place the old structure. This rigidity prevents boards from evolving to meet changing economic or social conditions or

changes in State or local government structures.

Any amendment should remove these rigid requirements and allow the State and

local boards to require memberships that meet the unique needs of the State or local

area.

The originally proposed technical amendments to WIA should be enacted. Soon

after WIA became law, technical amendments were offered that would have allowed

youth who are eligible for free school lunches to automatically meet the income requirements for WIA eligibility; increased local flexibility to define out of school

youth; and clarified the relationship between Pell grants and WIA funding. These

were never enacted, and would further reduce bureaucratic barriers that make the

system difficult to navigate, and sometimes counterproductive, for the workers, job

seekers, and youths we serve.

To lead the global economy of the 21st Century, America must have the most

skilled workforce in the global economy. We have a system that has proven its ability to deliver just that. To use Washington State as an example, all Federal standards are surpassed by Washington’s Workforce Development Councils. Washington’s

statewide results were 105 percent of target for customer satisfaction, 106 percent
57

for youth outcomes, 103 percent for dislocated worker outcomes, and 101 percent for

low-income adults.

More importantly, the system rapidly adapts to changing economic need. In Washington, when the shortage of skilled health care personnel became evident, workforce development councils rapidly invested over $7.5 million to address this need

for the health care industry. They worked with the State Workforce Investment

Board and the Employment Security Department to create industry skill panels to

identify local businesses’ needs, and a new customized training program, Industries

of the Future, to address those specific needs. This means that local industries in

Washington like biotechnology, information technology, food processing, industrial

construction, health care, and manufacturing now have a pipeline of skilled workers

feeding their industry, and a feedback mechanism to adjust that pipeline when their

personnel needs change.

This system is creating an American workforce whose skills and productivity will

be without rival. But the system is badly under-funded and over-regulated. Perhaps

most troubling, it does not give its business and worker customers a sufficient leadership role. With the adjustments described above, however, the American workforce

development system can build on its past successes and become a more efficient,

more powerful engine of economic growth for our nation. This opportunity should

not be missed.

Senator ENZI. Our next presenter is Michael Smeltzer, who is the

executive director of the Manufacturers’ Association of South Central Pennsylvania, from York, Pennsylvania. Welcome.

Mr. SMELTZER. Thank you. Chairman Enzi, Senator Murray,

good morning to you. Thank you for inviting me to speak this

morning.

My association is fortunate to be affiliated with the National Association of Manufacturers and Center for Workforce Success,

where I am provided the opportunity to share ideas and best practice workforce recruitment, retention, and advancement models

with business organizations around the country. My testimony

today represents the views of the Manufacturers’ Association of

South Central Pennsylvania and primarily from a small business

perspective, where approximately 70 percent of our member companies employ 50 or fewer workers.

The challenge for the small employer is one of resources. The

typical small business does not have a dedicated human resource

person, does not have the time to seek the one-stop center, and

does not have the time to commit to the WIB, the Workforce Investment Board. At the same time, I think we can all agree that
58

the small employer offers the greatest opportunity for employment

and broad skill development.

The Workforce Investment Act of 1998 represented a great turning point in improvements to the delivery of services through the

public workforce system, especially to those in the employer community, who were encouraged to partner with the system to meet

their workforce needs.

The proposed framework for reauthorization of the Workforce Investment Act, which was largely accepted in H.R. 1261, builds

upon the strengths and weaknesses of the 1998 law, and we firmly

believe this framework will move the system forward in a way that

is beneficial for all relevant parties and, in particular, the small

business community.

In 1998, we viewed WIA as a new law that would open the door

for employers to forge new and innovative partnerships with the

system, key decisionmakers, and policymakers. Our association

members who are represented on the WIBs soon grew frustrated

with the bureaucracy and encouraged the association to lead the

way to change. But change did not come through the board. So we

were essentially left to create a parallel infrastructure that is

aimed at demonstrating how the system could be more responsive

to meeting the workforce needs of employers.

Despite our frustration with opportunities not fully achieved

under the 1998 law, we are committed to maintaining our connection to the workforce investment system, and we believe in the onestop system for the delivery of services.

The balance of my comments will focus on the challenges that I

observe in the current system and recommendations for improvement.

We support streamlined membership and responsibilities of both

State and local boards. At the State level, we support a State

Workforce Investment Board that is majority business and chaired

by business. Membership should also include the State agencies responsible for administering the one-stop partner programs, the

State economic development agency, labor union, and State legislators.

At the local level, the appointed WIB must be given both the responsibility and authority to adopt the Workforce Investment Act

requirements. A system that allows local elected officials to control

policy, funding, and service agencies is not conducive to a functional WIB.

Flexibility of funding. The current silo model of funding streams

to States prevents funding from being diverted to the areas of

greatest need. We support the proposed consolidation of funding

streams to State and local areas.

My next point deals with incumbent worker training. WIA reauthorization provides an opportunity to simplify the requirements

for customized training, on-the-job training, and incumbent worker

training. In addition to these key reforms, we support proposals to

reduce the planning cycle from 5 to 2 years. We also support the

need to support our Nation’s youth, the future workforce of America. To that end, we support recommendations to target the majority of funds allocated for youth activities under WIA to youth who

are most in need.
59

Finally, we support modifications to the performance indicators

as contained in H.R. 1261. We encourage the committee to maintain a customer satisfaction indicator for both employers and individuals. In short, one-stop center performance must be measured

toward customer satisfaction.

In closing, I would like to thank you for providing me the opportunity to share with you my association’s experience with the current system and recommendations for reauthorization. I want to reiterate that the system is not broken, but does need to be finetuned in order to continue the advances that were envisioned by

you and your colleagues in Congress 5 years ago.

I would now be happy to answer any questions. Thank you.

Senator ENZI. Thank you, and we will have questions for the

panel as a whole when we finish the other member here.

[The prepared statement of Mr. Smeltzer follows:]

PREPARED STATEMENT OF MICHAEL E. SMELTZER

My name is Michael E. Smeltzer and I am the Executive Director of the Manufacturers’ Association of South Central Pennsylvania. The Association is a non-profit

business membership organization, representing more than 350 manufacturing and

related companies in south central Pennsylvania. Approximately 70 percent of the

member companies of my Association employ 50 or fewer workers. My Association

is fortunate to be affiliated with the National Association of Manufacturers and the

Center for Workforce Success, where I’m provided the opportunity to share ideas

and best practice workforce recruitment, retention and advancement models with

business organizations from around the country. My testimony today represents the

views of the Manufacturers’ Association of South Central Pennsylvania.

I would also like to extend my appreciation to Chairman Enzi and members of

the Subcommittee for inviting me to testify on reauthorization of the Workforce Investment Act. The opportunity to share insights and provide recommendations on

behalf of the Association on such a key piece of legislation is extremely gratifying.

My views this morning will be primarily from the small business perspective. I will

also be speaking from over 25 years of experience in managing human and capital

resources for manufacturing companies in the Commonwealth of Pennsylvania.

The challenge for the small employer is one of resources. The typical small business does not have a dedicated human resource person, does not have the time to

seek the One-Stop Center, and does not have the time to commit to the WIB. At

the same time, I think we can all agree that the small employer offers the greatest

opportunity for employment and broad skill development.

The Workforce Investment Act of 1998 represented a great turning point in improvements to the delivery of services through the public workforce system. Especially to those in the employer community, who were encouraged to partner with

the system to meet their workforce needs.

But Mr. Chairman, just as the tide turned in 1998, many of the Pennsylvania employers who dove in, ready and willing to get involved, are encountering challenges

that are blocking effective implementation of the law and they are no closer today

than they were 5 years ago to a public system that is responsive to their workforce

needs.

The Bush Administration’s proposed framework for reauthorization of the Workforce Investment Act, which was largely accepted by the House of Representatives

in H.R. 1261, builds upon the strengths and weaknesses of the 1998 law, and we

firmly believe this framework will move the system forward in a way that is beneficial for all relevant parties, and in particular, the small business community. I

want to publicly thank Secretary Chao and Assistant Secretary DeRocco for their

great leadership in the transformation and integration of the One-Stop system into

a cohesive and demand driven workforce investment system.

Simply stated, the engine that drives the system is not broken. But it needs to

be fine-tuned in order to ensure that the Workforce Investment System is demand

driven, flexible, balanced and responsive to employers and their current and future

workforce.

I would like to briefly share with you our introduction to and experience with the

workforce investment system. Approximately 5 years ago, the Association’s employers could not find enough workers to satisfy the demand. There was an insufficient
60

supply of welders, machinists, and qualified entry-level workers. We found that

schools (teachers and students) had little interest in manufacturing careers. We

found that our employers had little knowledge of the public workforce development

system. We also found people being trained in areas where few jobs existed.

At that time, we viewed the Workforce Investment Act of 1998 as a pew law that

would open the door for employers to forge new and innovative partnerships with

the system, key decision makers and policy makers. In fact, I am pleased to share

with you that several Association members were appointed to seats on the newly

established local workforce investment boards, and they brought with them the following message:

‘‘A SUCCESSFUL WORKFORCE DEVELOPMENT SYSTEM MUST BE BROAD

AND TALL. BROAD TO SERVICE THE ECONOMIC DIVERSITY OF THE COMMUNITY, TODAY AND TOMORROW. TALL TO HELP WORKERS ADVANCE

THEMSELVES. BUT MOST IMPORTANT TO ALL, A SUCCESSFUL WORKFORCE DEVELOPMENT SYSTEM MUST RESPOND TO THE NEEDS OF EMPLOYERS; THE DEMAND SIDE OF ANY SUCCESSFUL ECONOMY.’’

But they quickly realized that there was little connection among employers, educators and the one-stop infrastructure. Such a connection is necessary to meet the

manufacturing industry’s needs.

Despite these initial challenges, we continued to try to maintain involvement in

the system. In 2001, the Association developed programs to inform students, parents, and teachers at schools on manufacturing career opportunities in technical careers and strengthening the training programs provided by the Association, we

began to share that information with the one-stop system.

Our Association members who were represented on the WIBs soon grew frustrated with the bureaucracy and encouraged the Association to lead the way to

change. But change did not come through the Board. So, we were essentially left

to create a parallel infrastructure that is aimed at demonstrating how the system

could be more responsive to meeting the workforce needs of employers.

We developed and funded two pilot programs to achieve this objective.

One program is focused on soliciting input from employers on workforce development needs in targeted industry groups. Multiple consortiums of companies are now

in place and providing feedback and direction on specific sector needs. We are moving towards having a ‘‘Skills Specialist’’ in place to access employers, determine

needs, and educate the employer on the public system. Small business owners do

not have the time or the resources to learn and take advantage of the services provided by a One-Stop. These are the very businesses that have the greatest need to

develop their workforce.

The second program is focused on informing the supply side (potential employees)

of the job and training opportunities available. This program, which is being funded

by the Association and a local private foundation, will involve several Chamber of

Commerce groups, faith based organizations and other community based groups.

This program is intended to inform the general public of specific job opportunities,

but more importantly, information on One-Stop services. It is our intention to share

the pilot programs with the One-Stop centers. However, it is very unfortunate that

we had to develop this parallel track when the infrastructure is ideally in place

through WIA.

Despite our frustration with opportunities not fully achieved under the 1998 law,

we are committed to maintaining our connection to the workforce investment system, and we believe in the one-stop system for the delivery of services. We do not

want to walk away, we want to make improvements. But this can only occur with

changes to the underlying statute.

The balance of my comments will focus on the challenges that I observe in the

current system and recommendations for improvement.

MAKING DEMAND DRIVEN VISION A REALITY: RECOMMENDATIONS FOR REFORM

We support reforms to the Workforce Investment Act that will focus on the demand of employers in order to be flexible to adjust to an ever-changing economy.

With an understanding of the demand, the system can then work with individuals

to provide the necessary tools to achieve a positive outcome for both the individual

and the employer. This is not possible without the expertise and access to business

partners.

This can be accomplished through reauthorization on three fronts.

Clarify the membership and function of State and local workforce investment

boards. We support streamlined membership and responsibilities of both State and

local boards. At the State level, we support a State workforce investment board that

is majority business and chaired by business. Membership should also include the
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State agencies responsible for administering the One-Stop partner programs, the

State economic development agency, labor union and State legislators. We also support the proposed role of the State board to set policies and priorities for the OneStop Career Center system.

At the local level, the appointed WEB most be given both the responsibility and

authority to adopt the workforce investment act requirements. A system that allows

local elected officials to control policy, funding and service agencies is not conducive

to a functional WIB.

Flexibility of Funding

The current ‘‘silo’’ model of funding streams to States prevents funding from being

diverted to the areas of greatest need. We support the proposed consolidation of

three funding streams for WIA Adult, Dislocated Worker and Wagner-Peyser into

one funding stream to States and local areas. This will increase and improve services to adult workers and strengthen opportunities for unemployed workers to be

more strongly connected and employment matched to their skill level or training

that will lead to employment.

Simplify access to WIA dollars for incumbent worker training and customized

training. My next point deals with incumbent worker training. With the advancing

levels of technology in today’s economy, more workers are classified as underemployed. WIA reauthorization provides an opportunity to simplify the requirements for customized training, on the job training and incumbent worker training.

Pennsylvania employers are committed to strengthening our workforce, especially

during these times, when the manufacturing workforce of today may look much different tomorrow. We want to provide every opportunity possible to not only train

new entrants into the industry, but help current workers maintain and improve

their skills in order to stay flexible with the demands of the industry.

Other Reforms

In addition to these key reforms, we support the Administration’s proposals to reduce the planning cycle from 5 to 2 years. We believe that State and local workforce

strategies must be tied to local economic indicators.

The workforce development and economic development stakeholders in each community (town, county, region or State) need to be rewarded for collaboration efforts

that realize true system change and improvement. Local and State WIB groups that

work together to serve a common need by adopting innovative ideas that focus more

on outcome than process need financial support.

We also recognize the need to support our nation’s youth, the future workforce

of America. To that end, we support recommendations to the Department of Labor

to target the majority of funds allocated for youth activities under WIA to youth who

are most in need. Youth who are out of school, ages 16–21.

Finally, we support modifications to the Performance Indicators as contained in

House passed bill (H.R. 1261). We encourage the committee to maintain a customer

satisfaction indicator for both employers and individuals. In short, One-Stop Center

performance must be measured towards customer satisfaction.

In closing, I would like to thank you for providing me the opportunity to share

with you my Association’s experience with the current system and recommendations

for reauthorization. I want to reiterate that the system is not broken, but does need

to be fine tuned in order to continue the advances that were envisioned by you and

your colleagues in Congress 5 years ago. On behalf of the Manufacturers’ Association of South Central Pennsylvania, I would like to urge the committee to recognize

and accommodate the importance of small business in workforce investment. The

changes being suggested by the Bush Administration, and those I offered today; will

enable the system to better meet the country’s workforce needs in the 21st Century.

I would now be happy to answer any questions.

Senator ENZI. This panel was done in alphabetical order, which

brings us to Mr. Ware, and being from Wyoming, I am aware of

this penalty of being the last in the alphabet.

[Laughter.]

Senator MURRAY. Washington understands that as well.

Senator ENZI. We do appreciate Mr. Ware, who is the chairman

of the Wyoming Workforce Development Council from Cheyenne,

WY, for coming today. He is also the vice president of Wyoming’s

Contractors Association. And before I have you do your testimony,

though, I do want to introduce briefly the other folks who are here
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from Wyoming: Ray Wolf, who is the president of the Wyoming

Contractors Association; Kathy Emmons, who is our director of the

Wyoming Development Workforce Services; her administrator of

quality assurance, Chris Corliss; and their communications manager, Rachel Gurt; and Jonathan Downing, who is Wyoming’s

Workforce Investment Board policy analyst and used to be my

scheduler.

We also have Charlie’s son, Chris Ware, who is an agent with the

FBI who came up from North Carolina to hear his Dad testify. So

we will be looking forward to having him move back to Wyoming.

[Laughter.]

Mr. Ware, thank you.

Mr. WARE. Thank you, Chairman Enzi, and good morning, Senator Murray. That introduction was great. I appreciate that.

I was appointed to the council by our previous Governor, just a

little background, and was moved up to the Chair of the State

Workforce Investment Board, and our current Governor has continued to keep me in that position. And I will speak from that point

of view.

My comments today will focus on the perspective of the Workforce Investment Board Chairperson representing small businesses

in a rural State. I will cover: one, the impact of WIA reauthorization in rural States; second, using WIA programs to link workforce,

economic, and community development efforts; three, the value of

improving the user-friendliness of WIA to small businesses; and,

four, building flexibility into the new WIA program.

I will first talk about the impact of the WIA reauthorization to

rural States. In rural States, it is critical to have flexible methods

to ensure rural access to the one-stop systems. Senator Enzi made

a comment about the example of Dubois, WY. Maybe some of the

people in the room want to know where Dubois is. It is 70 miles

east of Jackson Hole. I think most people know where Jackson

Hole is. So a point there.

That is a challenge, and what Wyoming has done in this case is

to make one-stops more accessible, we have developed the Wyoming Job Network, an Internet-based program which supports Wyoming’s virtual one-stop. One out of two Wyoming workers are registered on this network. This means that 65,000 job seekers and

17,000 employers used this network over last year, which is one

way to shrink our distances in a rural State.

On the youth issue, we believe the change in focus to out-ofschool youth from in-school youth is positive but, again, should be

flexible to meet the needs of a rural State. The ability to conduct

outreach and intake services to youth during school hours is critical to serving our youth. If we want until after school hours, our

ability to reach youth is impaired. For example, in Sundance, WY,

which is on the South Dakota-Wyoming border, our intake workers

travel 70 miles one way from the local one-stop to conduct outreach

activities. It could be difficult to access students after school traveling these distances.

Second, on WIA’s link to rural workforce and economic community development, again, Senator Enzi made a comment about the

ability to attract Lowe’s distribution center. In Wyoming, we developed the Wyoming Workforce Development Training Fund to flexi-
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bly meet training needs for Wyoming workers and employers. The

fund offers grants up to $2,000 per worker to increase workers’

skills. The result has been increased skills and wages for over

8,000 workers in Wyoming.

When Lowe’s came to town, the location was ideal because Cheyenne is at the crossroads of two large interstates that go north and

south and east and west. They met with workforce service officials

and economic development people to determine the needs that they

needed in the workforce to build this facility there.

The flexibility and cooperation between all the entities were able

to offer a special warehouse training program through the community college where we trained 300 workers, and Lowe’s hired 90

percent of those people, and they are still working, and they were

all employed at a very competitive wage. For that reason, we were

able to secure Lowe’s as an employer and a new business where

otherwise we have lost it to a different region in the country.

Third, in improving the user-friendliness of WIA to small businesses, a scenario that I am personally involved in, we have

learned in Wyoming when we embark on new construction projects,

we often find ourselves searching for qualified workers to meet new

construction demands. Seeing this need, the Wyoming Contractors

Association invested $1 million in building the McMurry Regional

Training Center in Casper, WY, to offer construction craft training.

As the center grew, it discovered a previously untapped pool of

workers in WIA and TANF customers that, with training, could fill

part of this need.

We ran a fairly large TANF project. We had 60 people trained

through a TANF program. Thirty people graduated from the class.

Six of these were female graduates, and I am pretty sure the number—we had at least three or four of those who were single moms.

They tripled their income in 8 months after graduating from the

class, and they basically went from $6.50 an hour to $18.50 plus

$4 in benefits, $22.50 an hour, running heavy equipment.

The class provided them with benefit to the industry but, more

importantly, it provided low-skilled workers with personal success

and an income that they thought they would never be able to

reach. That is really what this whole bill is about, I believe the reauthorization is. We want to get people to have personal success

and be able to earn money and contribute to the country.

On Workforce Investment Boards, as a rural State we support

the proposed flexibility for Governors to have discretion over the

size and membership of the board, while ensuring a majority of the

board membership is from the private sector.

Finally, on building additional flexibility into WIA, we strongly

support the administration’s proposal to combine the WIA adult,

dislocated worker, and Wagner-Peyser funding streams into a single formula. This challenge will streamline program administration

and reduce the current complexity of parallel management across

separate States. As a rural State, we are also well aware that this

is rocking the boat in some respects, but it works for rural States.

We also support the small-State provision of 0.3 of 1 percent for

all funding sources rather than multiple levels of different sources.

This amount will provide critical funding for the small rural States.

As Wyoming moves forward with developing its workforce and
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workforce development system, we are pleased to see the new and

innovative changes within the administration’s proposed WIA reauthorization. Wyoming, of course, is eager to be an early implementer of the new proposals because of the ability to work closely

amongst the cross-sections of the different departments.

Thank you.

[The prepared statement of Mr. Ware follows:]

PREPARED STATEMENT OF CHARLES WARE

Good morning. Chairman Enzi and Members of the Subcommittee, I thank you

for inviting me to testify on reauthorization of the Workforce Investment Act (WIA).

I am Charles Ware, the private sector State Chairperson of the Wyoming Workforce Development Council. I am the Executive Vice President of the Wyoming Contractors Association and manage all legislative and training needs for a construction

membership of 249 members.

My comments today will focus on the perspective of a Workforce Investment

Board Chairman representing small businesses in a rural State. I will cover: (1) the

impact of WIA Reauthorization in rural States; (2) using WIA programs to link

workforce, economic, and community development efforts; (3) the value of improving

the ‘‘user-friendliness’’ of WIA to small business; and (4) building flexibility into the

‘‘new WIA.’’ These are the critical issues for a rural State like Wyoming.

Impact of WIA Reauthorization in Rural States

Overview

WIA has had a profound positive effect on workforce development in Wyoming.

WIA has changed the way we operate and how we invest in workforce development.

Like several other States, Wyoming recently retooled its workforce development programs and governance, to be more demand driven and responsive to the changes

of a fluid economy. We are quite literally in our first year of operation under a new

structure. The new structure delivers comprehensive workforce developmental services in partnership with State and local small businesses, economic and community

development groups, health and family services, employment, and education related

State agencies. These partnerships ‘‘fit’’ very well with the Administration’s efforts

to address the challenges of globalization, technological advances, and the demographic changes that the American workforce is currently facing. Rural States rely

predominantly on WIA and related Federal funding sources to deliver workforce investment services. As WIA Reauthorization moves forward, these changes will have

a profound impact on the futures of rural States.

For Wyoming, a diversified workforce will lead to a diversified economy. The commodities and tourism industries primarily drive Wyoming’s economy. We tend to act

‘‘counter-cyclical’’ to the national economy. While the rest of the nation has experienced an economic downturn over the past year, Wyoming has remained virtually

untouched. If the national economy experiences growth, Wyoming’s economy will

likely slow. If the national economy slows, Wyoming tends to grow.

Wyoming is seeking new strategies to diversify its economy; a critical component

of those strategies is a well-trained, highly skilled workforce responsive to the

changing demands of the State, regional, and national economy. Workforce development in Wyoming is a partnership between the public and private sector. Wyoming’s

Governor Dave Freudenthal and Department of Workforce Services Director, Kathy

Emmons have demonstrated leadership in continuing to build partnerships at State

and local levels to focus workforce and economic development strategies to support

our workforce and business partners.

As WIA Reauthorization moves forward it is critical to have flexible methods to

continue to ensure rural access to One-Stop Systems. To physically access our services, customers in Dubois, Wyoming travel 150 miles roundtrip to access our OneStop Office in Lander. Though, they can access Wyoming’s ‘‘Virtual’’ One-Stop,

which provides rural access in every Wyoming community, 24 hours a day, seven

days a week. The Wyoming Job Network (an internet based program) supports Wyoming’s ‘‘Virtual’’ One-Stop. Approximately 135,000 of Wyoming’s 275,000 workers

are registered on the Wyoming Job Network. Approximately 65,000 job seekers and

17,000 Wyoming employers have used the Wyoming Job Network to access services

over the past year. This is a critical tool to workforce development for a workforce

system that covers 97,818 square miles. While our employees and contractors log

thousands of miles a year, we have the equivalent of one full service physical OneStop for every 5,100 square miles. Flexible outreach efforts to rural communities
65

continue to be a critical component of ensuring effective workforce development

practices in Wyoming as we have 5.1 persons per square mile.

As Wyoming moves into its fourth year of WIA implementation we look to new

technologies like our State’s video conferencing system and Internet based programs

as a means to provide rural access to workforce services. Our goal would be that

these technologies improve service, efficiency, and reduce the thousands of miles our

employees and contractors travel each year to provide quality services. In the future, we would look for the opportunity for eligible training providers to provide

services through the Internet or video conferencing technologies. The reporting requirements placed upon Wyoming’s eligible training providers (56 percent of which

are out of State) have on occasion acted as a deterrent to providing services rurally,

whether the provider is a publicly funded community college or private sector.

Building flexibility for rural States into the provision of eligible training services

and reporting is a critical component to utilizing new technologies.

Youth Services

We believe the change in focus to out-of-school youth from in-school youth is positive, but should be flexible to meet the needs of a rural State. With this change

there will come a total rethinking of how services will be delivered. The ability to

conduct outreach and intake services to youth during school hours is critical to

being able to serve this population. If we wait until after school hours our ability

to reach this population is impaired. In Sundance, Wyoming, population 1,139 people, our intake workers travel 70 miles (one-way) from the ‘‘local’’ One-Stop to conduct these outreach activities. Reaching these youth while they are in school is important. As students of Sundance High School may travel as much as 90 miles

roundtrip to school each day. Students traveling these distances to school each day

can be difficult to access in a non-school environment and work readiness opportunities are limited because of a limited employment base in a community like

Sundance, Wyoming.

We support improving performance accountability; in fact Wyoming’s WIA Title

I-B, ABE/GED, and Perkins programs became eligible this past year for incentive

funds due to improved performance, even though the existing system of seventeen

statutory performance indicators is a cumbersome bureaucratic challenge. Reducing

the number of indicators allow for more focus on achieving desirable outcomes. The

elimination of the requirement to competitively contract for youth services will be

a positive step in WIA reauthorization. This requirement would offer flexibility to

rural State Workforce Investment Boards, as there is limited availability of qualified

service providers to make a competitive process viable and meaningful.

We support Governors establishing Youth Councils as they see fit. I personally

support all States continuing with Youth Councils. The bottom line, to our country,

is that our youth will continue to be the strength of this country and take it to the

next level of leadership and success. We need to invest more time and money in our

youth to make this happen.

Rural Workforce Economic and Community Development Strategies

Wyoming’s workforce development system in partnership with WIA and other

Federal and State programs, seeks to develop a truly diversified economy and workforce. It should be responsive and flexible to the changing demands of a regional

and global economy. Our focus is on developing our rural economies and communities by developing a highly skilled local and homegrown workforce.

In Wyoming, we have developed the Wyoming Workforce Development Training

Fund designed to flexibly meet the changing training needs of Wyoming workers

and employers. The training fund application is designed to be simple as it is two

pages in length, easily accessible, and responsive to employer needs. The fund offers

grants up to $2,000 per year per worker to increase a worker’s skills. In order to

access funds for approved training, employers commit to increase worker wages as

a result of successful training. The result has been increased skill levels, training,

and wages for over 8,000 Wyoming workers. It has also significantly improved our

workforce, our economic development efforts, and made our workers more competitive, regionally and globally.

This training fund also has pre-employment grants available to businesses seeking to grow, expand, or relocate to Wyoming. These grants are powerful economic

development tools as they serve to train what would have been a previously untrained workforce specific to a relocating business’s needs. Recently Lowes Home

Improvement Stores chose Cheyenne, Wyoming as the location for a regional distribution center.

Lowes met with local and State economic development, community college, and

Wyoming Department of Workforce Services officials, the purpose, to determine its
66

business needs. Approximately 300 workers received warehouse training through

the local community college in coordination with economic development and supported by the Wyoming Workforce Development Training Fund. Lowes or another

business hired 90 percent of those workers at a competitive salary. The center will

employ approximately 700 new workers when at full capacity. Without the ability

to flexibly respond to a business need, Wyoming may have lost this new business

to another State in the region. The return on investment for Wyoming taxpayers

was earned even before Lowes received its first delivery for regional distribution.

Under the existing WIA, Wyoming has difficulty accessing incumbent worker

training funds considering the reporting requirements and restrictions placed on the

funds. The Workforce Development Training Fund helped us rapidly respond to

Lowes unique training needs. As a result of Lowes success, we continue to see more

warehousing operations consider Wyoming as a regional warehousing cluster. We

are pleased with the potential opportunity to flexibly leverage WIA incumbent worker funds in the future to meet training needs of Wyoming workers and business,

just as we have with the Wyoming Workforce Development Training Fund.

Allowing funds to be used for economic development activities will enhance workforce and economic development initiatives. In the past Wyoming has been limited

in these efforts due to current WIA requirements. Such a provision would allow a

stronger partnership with economic development agencies and allow the workforce

system to further develop partnerships with existing and new businesses in a local

area. This provision would also enhance new opportunities with organizations such

as the local Chambers of Commerce, economic developers and rural business associations.

Improving the ‘‘User-Friendliness’’ of WIA to Small Business

In Wyoming, the private sector built its own workforce development flexibility,

when out of necessity, we developed the McMurry Regional Training Center. As a

rural State with less then 500,000 in population, we have learned when we embark

on new construction projects, we often find ourselves looking to out-of-state workers

to meet new construction demands. The Wyoming Contractors Association under the

leadership of such members as Neil McMurry of Casper and Ray Wulf of Gillette,

recently built the McMurry Regional Training Center in Casper, Wyoming with the

goal of training a local workforce in the construction trades responsive to Wyoming’s

needs.

As the McMurry Regional Training Center has grown, we have discovered a previously untapped pool of workers in WIA and TANF customers that, with training,

can become a part of the highly skilled portion of the Wyoming workforce. We saw

the need to recruit and train new workers in the State. A $1 million training center

was built to offer construction craft classes. We linked with the State to train some

folks through a TANF grant, which provided more flexibility then WIA. The initial

class had 38 participants and 14 graduates. After graduation, the graduates essentially tripled their income in eight months. The class provided job skills from which

they were able to find personal success and create an income they thought was unattainable. This is what motivates all of us. When we as employers and policymakers develop legislative strategies and businesses that fulfill our basic needs, we

have a success that is sustainable. The additional result is a vibrant economy and

growth in GDP.

In reviewing additional aspects of WIA, continued consideration should be given

to making the system flexible for small businesses. Wyoming supports the provision

of reducing the number of performance standards from 17 to 8. Though, primarily

using unemployment insurance data for measures such as the entered employment

rate and employment retention rate may not give an accurate reflection of the customer’s ultimate employment outcome. The workforce system serves many customers. We would urge that in reauthorizing WIA, the WIA system be designed to

be more flexible. The seventeen performance indicators (though well intentioned)

have in the past been a distraction from WIA’S overall goal of investing in and developing a workforce responsive to the changing needs of ever changing economies.

The largest groups of customers are job seekers and employers, yet many of the

performance measures are on job seekers only. If the intent of WIA Reauthorization

is to improve services to employers, consideration should be given to performance

measures designed to gauge the services to employers, because what is measured,

is accomplished. Focusing on measuring services to employers would also result in

focusing improving user-friendliness to small business.

In order to further improve the ‘‘user-friendliness’’ of WIA to small business, Governors should have the authority to determine what standards, information, and

data should be required for eligible training providers in their State. In rural areas,

the critical mass of training providers is limited. In addition, enrollment in various
67

training programs is cost-prohibitive for providers to invest in a data collection system, which essentially eliminates them as an eligible provider and lessens the number of providers from which customers may choose services.

One of the largest potential impacts of WIA reauthorization would be a new provision for incumbent workers. Under H.R. 1261 local funds can be used for incumbent

worker training. Businesses with fewer than 50 employees will only be required to

match 10 percent of the costs of the training. This provision will allow a larger pool

of funds for incumbent worker programs. This will allow small businesses with limited training budgets to truly benefit from WIA funds.

Workforce Investment Boards

In Wyoming we have streamlined our governance structure as a State board by

working to ensure flexibility in implementing WIA programs and collaboration in

bringing private sector solutions to public sector challenges. It is critical to have the

ability to communicate the private sector’s needs to our public sector partners. Our

workforce investment board offers small businesses a forum by which they may communicate the constantly changing private sector needs for a well-trained and highly

skilled workforce with the public sector. Our goal in Wyoming is simple, to develop

a demand driven workforce responsive to private sector worker and employer needs.

A challenge for single workforce area States, like Wyoming, is that one board carries out the duties for both local and State boards. As a rural State, we support the

proposed flexibility for Governors to have discretion over the size and membership

of the board while ensuring a majority of the board is from the private sector. We

strongly support continued connections between the private sector and post-secondary education, training, social services, and economic development systems to prepare our emerging and second-career workforce for career opportunities and skills

in new job sectors. Having these partners ‘‘at the table’’ is a critical link to communicating the private sector’s challenges to the systems that ultimately may provide

public sector solutions. It is crucial to future efforts, to maintain a majority private

sector representation on State level Workforce Investment Boards. To divert from

a private sector majority would be detrimental to true comprehensive workforce development.

I have found that our public sector partners often coordinate their efforts to ensure they are meeting their customer’s needs. A strong private sector membership

on a State workforce board leads to a more global approach of addressing true workforce development. One of the critical components in meeting those needs is the

partnership developed on a board that is not dominated by the government sectors.

Building Additional Flexibility Into WIA

Consolidated Adult Funding Streams

We strongly support the Administration’s proposal to combine the WIA Adult,

WIA Dislocated Worker and Wagner-Peyser funding streams into a single formula

program. This change will streamline program administration at the State and local

level and reduce the current complexities of duplicative management across separate programs. In reality, unless core services were to dramatically change, our current coordination of services would continue, though we would expect the flexibility

to strategically allocate our resources to be more responsive to a changing environment.

At the program level Wagner-Peyser and WIA services, funds, and personnel are

currently coordinated in our State between the core services being primarily funded

by Wagner-Peyser, and the intensive and training services being provided by WIA.

This consolidation will encourage this system to be further integrated versus running two separate and duplicative, related services. From a flexibility perspective,

its safe to say, we would much rather have our Governor making the call on what

services to offer as he/she would have the flexibility to focus them in areas that

would be in Wyoming’s best interest, and would help meet our unique rural workforce needs.

Flexible Funding

We support the small State provision of 0.3 of one percent for all funding sources

rather than multiple levels for different funding sources. This amount may seem of

little significance to larger States, however, it helps provide the necessary funding

for small States.

The discretionary One-Stop delivery activities for low wageworkers are a positive

aspect of the Administration’s WIA Reauthorization Proposal. In Wyoming, one of

the largest challenges workers face are day care and transportation. This provision

would allow funding to help meet these challenges.
68

The provision changing the planning cycle from 5 years to 2 years is positive because today’s economy can shift dramatically in 2 years. If the planning cycle for

State and local plans is reduced from 5 to 2 years, the plan must be made simple

and meaningful. As it is now, the development of a plan is incredibly time consuming and small States have small staff to carry out such activities. This cycle should

be consistent throughout the entire Act.

One-Stop Certification

The provision of One-Stop Center certification will further enhance the One-Stop

system. This provision offers the opportunity for a formal process of communication.

The Workforce Investment Board will have the opportunity to clearly communicate

the acceptable standards of service to One-Stop Centers expected by the Workforce

Investment Board. This will give private sector led boards the ability to set guidelines on services provided by One-Stops in rural areas.

Native Americans in Wyoming have unique rural workforce and economic development challenges. Like Wyoming, they need the flexibility to meet their unique

needs.

Conclusion

As Wyoming moves forward with developing its workforce and its workforce development system, we are pleased to see the new and innovative changes within the

Administration’s proposed WIA Reauthorization. We would seek to be an early implementer of many of the new proposals. These changes will complement our efforts

to diversify our workforce, improve connections with small business, and have a

trained workforce available and responsive to a rapidly changing global economy.

This concludes my remarks. I would be glad to respond to any questions you may

have. Thank you.

Senator ENZI. Thank you very much. When I was mentioning the

people from Wyoming, I left out the contingent of 4-H people that

have been listening from out there, just outside. So out of 493,000

people, we have had pretty good attendance today.

[Laughter.]

I thank all of you for your testimony, both the full version and

what you were able to emphasize while you were speaking. And I

will mention that this session will be open yet for 2 weeks so that

people can submit additional questions, both those of us who are

here and those who are involved in Medicare and prescription

drugs, which is keeping a lot of people away from the committee

today, but another very important thing for the United States. But

we do have some questions now as well, but we will not be able

to get to all of them because of time constraints.

Mr. Ware, you noted in your written testimony that rural areas

rely predominantly on the Workforce Investment Act and related

Federal funding to deliver the job training and services. You also

mentioned the need for flexibility. Could you tell me a little bit

more about how building more flexibility in the system would improve the workforce development services in Wyoming and other

rural States?

Mr. WARE. Yes, Senator. In my written statement, I think there

was a key point, and that was that in Wyoming as well as the rest

of the rural States, we have two issues to deal with in every aspect,

and that is distance and demographics. And related to your question specifically, by having more flexibility in the rural States, it

allows, for example, the Lowe’s instance, the success we had there,

to have the leaders in the areas that we make those decisions to

be able to be flexible. We actually moved some funds around to create the money to do that training, and by moving quickly and being

flexible, we were able to bring a new business, a fairly substantial

new business into Wyoming.
69

Senator ENZI. Thank you.

Wyoming has done a remarkable job of leveraging the technology

to improve access to the one-stop centers in the rural areas, as you

mentioned in your testimony.

Mr. WARE. Yes.

Senator ENZI. Yet the employees and contractors still travel

thousands of miles a year to provide services. What could the workforce development system do to encourage and enable use of these

new technologies to deliver the quality services.

Mr. WARE. The State of Wyoming in the last 2 years through its

legislature has actually created the Department of Workforce Services and carved it out of the Department of Employment, and that

is one to deliver better services and more services across the State,

and key to that, Director Emmons, who is here today, has created

six regional areas with the regional directors having full power to

make decisions on local issues, whether it is economic development,

workforce development, etc. And that I think is a good example of

how we can be more responsive and provide more services.

The one-stops are a great idea, but the one-stops only become a

library unless they can actually place people. And that is real critical.

Senator ENZI. Thank you, and I do appreciate all of the Wyoming

input that we have had as we have been working the bill and as

we will have.

Mr. Austin, the workforce development needs of Florida and

Washington are different from Wyoming. Mr. Ware cited the need

for flexibility to improve services in rural States like Wyoming. You

and Mr. Kennedy both noted in your written testimonies the need

to make the Workforce Investment Act more flexible.

How would more flexibility improve the investment system in

your respective States?

Mr. AUSTIN. I think as Mr. Kennedy said, there is a great need

for incumbent worker training. We have some places in Florida

that we actually have—when I went to college, they said 4 percent

was full employment. We have regions that have got 2.3 percent.

And if we can—when we are given a dislocated worker fund—this

current year, based upon what was happening last year and the

year before on our funding, we have $27 million more coming into

Florida this year than last year under the Workforce Investment

Act, many more dislocated worker dollars, but we actually have put

most of those people back to work.

If we can use those dollars to be able to train adults and incumbent workers, we strengthen our economy in a different kind of

way. And it is part of the flexibility issue that we talk about. When

Wyoming has got this large unemployment rate and Florida is actually below the national average, something is amiss when we are

appropriating dollars based upon where the economy was, not

where it is. And when we tie the hands of the Governor to say you

will use it for where the economy was and not be able to use it

where it is, if we can money back and forth between WagnerPeyser and adult and dislocated worker, we can deal with the economy as it is today. And so we can invest all those funds.

You look at how much of the WIA money sits out there, and, I

mean, it has been a concern about the expenditure rates. The Con-
70

gress has a legitimate reason to ask why isn’t the money being invested into the system, but part of it is because it comes down in

these funding streams and says, I am sorry, you cannot use it.

If we want to use money at the local level for incumbent worker

training, we have to enroll people as though they are coming into

a welfare system. Your labor unions, your businesses go absolutely

berserk when you take an employee off of their floor and ask them,

tell me, are you receiving food stamps right now. Neither the employer nor the labor union want me to be able to ask that question.

I do not have to do that with State-level income and worker

training funds. But at the local level, because of the fact that I cannot be able to use those funds, and I cannot use any of the dislocated worker funds to train incumbent workers. So those flexibilities simply say that we can be able to react to the situation as it

exists.

And, Senator, I know there were concerns expressed by Mr.

Ellenberger about those places where you do not have—you know,

everybody is a State employee. Florida is one of those States where

we do not have everybody who is a merit retention staff employee

or a State employee. They are the same people who deliver the

services, whether a private employer person is the individual or if

it is a local worker, the same people get the jobs because they have

the skill sets. They are just as professional, those local WIBs, as

they are at the State merit retention agencies. But the flexibility

says let’s design the system so it works wherever it is at, and that

is what it would allow us. It would allow us to actually invest those

dollars in a timely manner so we do not have money sitting

around.

Senator ENZI. Thank you.

Mr. Kennedy, did you want to comment on that?

Mr. KENNEDY. Well, my comment would be that at the local level

the funds that we receive on an annual basis cannot be used to

train incumbent workers. That is a prohibition in the Act. And we

then are bound to ask the State to be able to assist an employer

either who wants to train for upgrade for higher skills or attempt

to retain an employer who may be at risk of moving because there

are funds available elsewhere. And it just ties our hands. It is not

the way that we should be doing business. We are a system that

for years and years has been based on a model of supply side that

is being allowed to move to a demand side to respond to the needs

of employers. And the direct beneficiary of that is the worker, because we are being able to train in high-skill, high-wage jobs. That

is an area where we cannot do it.

Senator ENZI. Thank you.

I will take just a minute more for one more question, because

Mr. Smeltzer has a different situation than anybody else on the

panel, and I do not want to pass up the opportunity to get that.

My question is: How can the workforce development system be

made more responsive to the needs of small businesses? And, most

importantly, how can the business intermediaries like your association help?

Mr. SMELTZER. First of all, I think many headlines today tell you

that our manufacturing industry in this country is under attack
71

and is struggling to establish a way to compete in this global economy.

From the small business perspective, our small business owners

would like to invest in the future. They are able to reach out for

funds to purchase capital equipment, to improve the technology capabilities within their companies that will allow them to compete.

The small business owner is having trouble finding funds to train

their workers to complement that technology.

We have a desire to move our workers to a greater level, but the

expense of training today, as we are looking at advanced technology, is really preventing us from moving in that direction.

To respond to your question, how can an organization like mine

provide assistance, as I mentioned in my testimony, the small business does not have the resources, does not have the time to devote

to the one-stop center, to devote to the WIB board, and that is

what they look for me to do. They look for me to represent them

and their views on the WIB board. They look to me to organize

them to pursue funding programs, be it State or Federal programs,

to provide incumbent worker training that is affordable, again, to

allow them to compete in the global economy. So I am a resource

to the small business owner.

Senator ENZI. Thank you. Very important point.

Thank you for indulging me for that last question.

Senator MURRAY. Sure. Thank you very much, Mr. Chairman.

Mr. Austin, you have talked a lot about the need for flexibility.

I am sure you are aware that States do have transfer authority for

up to 30 percent, and I am curious if Florida has used any of their

transfer authority in their adult and dislocated worker funds?

Mr. AUSTIN. We do that regularly, but we do not have authority

to be able to move workforce labor market exchange pieces in Wagner-Peyser to WIA. But you are right; we have used the 30 percent

extensively to be able to put those funds as best we can into areas.

What we have found out is that gives us some greater flexibility.

It does not give us all the things that we would like.

Senator MURRAY. Mr. Ellenberger, you have listened to everybody else comment about flexibility. Do you have any comments to

add to that?

Mr. ELLENBERGER. Yes, I do, Senator Murray. Governor Warner

is a strong supporter of increased flexibility. He has identified

workforce development as one of the key issues in his administration, and shortly after he took office, he establish in the Commonwealth three centers that we call Coordinated Economic Relief Centers, or CERCs, and they have taken the concept of one-stop centers and expanded that to offer other State services, including assistance to small businesses and health assistance and all the resources at the State’s disposal being put in a single location. And

we are in the process now of trying to expand that concept to all

of our one-stops. Initially, the CERCs were focused primarily in

areas hardest hit by trade and high levels of unemployment, structural unemployment, very serious problems, and mostly rural

areas. And we are now taking that concept and expanding it

throughout the State with our other one-stops. We need that flexibility to do that, and we think that the current Wagner-Peyser sys-
72

tem certainly gives the Governor a lot more flexibility than it

would under a block grant approach.

Senator MURRAY. Mr. Austin, Florida has a policy that requires

local areas to spend 50 percent of adult and dislocated worker

training funds on their ITAs. Have any of your local areas reported

any difficulty in meeting that 50-percent requirement?

Mr. AUSTIN. Yes, ma’am. When we began, that number was literally picked out of the air by a State legislator who said, okay, we

are going to make sure that the money actually gets into training,

and they kind of picked it out of the air. The first year was a nightmare trying to be able to determine. We do not use the exact same

definitions as the Federal Government does on what constitutes an

ITA, but they are close.

In the first year, we ended up having 48 percent of the money

going in that direction. After the second year, we put monetary—

we do sticks and carrots all over the Florida system. It is designed

to try to be able to introduce the marketplaces, so we give bonuses

for people who perform well, and we decided that you could not—

there were three mandates that the legislature placed in the law,

that being one of them, in addition to Federal regulations. And so

we said you cannot qualify for a bonus if you do not meet it. And

since that point, we have only had one of the 24 regions not meet

it.

Senator MURRAY. Thank you.

According to statistics that have been provided by the Center for

Law and Social Policy, significantly fewer workers have received

training under WIA over the last several years. The sequencing of

services language contained in the law appears to be a significant

barrier to training. I do not know if you can do it today, but can

each of you provide us the information on the percentage and

amount of adult and dislocated worker funds that are spent on

training in your particular State or local area and submit that back

to this committee. I do not know if anybody has got that today.

Probably not. OK. Well, if you could get it back to the committee,

I would appreciate it.

Mr. Chairman, I know we are running out of time, and I have

a number of questions that I will submit for the record. But I did

want to ask the panel specifically about performance issues because we have talked quite a bit about that. The current performance measures in WIA have been criticized for being overly burdensome and for not measuring the right kind of outcomes, and I am

curious what each of the panelists would give us as recommendations for the committee on performance measures. And if we could

just go down and start with Mr. Ware.

Mr. WARE. Thank you, Senator. Wyoming and most of the rural

States support going down from that 17 to 8, and, more specifically,

on the employer side we would like to see some performance measures that address the satisfaction and interaction between the service and the employer, to use that as a criteria.

Senator MURRAY. Mr. Smeltzer?

Mr. SMELTZER. Yes, Senator, we as well support the movement

from 17 to 8 performance measures. We would also suggest that

the customer satisfaction indicators for both employers and individuals be included, so 17 to 8 plus 2. I was a math major.
73

[Laughter.]

Senator MURRAY. Mr. Kennedy?

Mr. KENNEDY. Senator, I support going down to eight, and I

would like to see the performance measure proposed for cost per

participant changed to a return on investment model, and I would

also like to see a performance measure in one of those eight that

would recognize educational attainment having been achieved inasmuch as education is our partner in the training program.

Senator MURRAY. Mr. Ellenberger?

Mr. ELLENBERGER. Senator Murray, we also support reducing the

number of performance measures, and Governor Warner had legislation that was adopted by the recent session of the General Assembly in Virginia which gives more authority to our State Workforce Board in the establishment of State standards of performance

that will apply to local WIBs.

Senator MURRAY. Mr. Austin?

Mr. AUSTIN. We think also that a simplification is there. We are

not like where most States are because this has not been a burden

on our educational institutions. We collect this data from public

and private institutions. As it is right now, we download all of

their—the people who have graduated or come out of those institutions, and as a fact if they receive any State funding, that data. So

WIA was not a burden to Florida, but simplifying what you are focusing on always simplifies what you are going to be able to improve upon. And we already calculate all the measures that are

under WIA right now. You will see in the 3-year report that I gave

to you that the cost per service is something we have been tracking

for 5 years.

Senator MURRAY. Well, the administration proposal is to eliminate the customer satisfaction and skills measures and add what

is called an efficiency measure. Senator Dodd spoke a little bit

when he was here about the concern about creaming some of the

top people and losing a lot of the folks who really need help. Are

any of you concerned about that?

Mr. AUSTIN. Yes. I can tell you, it is not—there are effectiveness

measures and efficiency measures, and it is looking at those two

together. We have never penalized people for spending more than

a minimum amount on areas. But what we have found out is we

have local WIBs when we began this process that were spending

as much as $23,000 a job and something that is critically wrong.

And being able to measure that and ask what was happening and

using our business sector people as a board of directors at the local

level quickly cleared up that problem. Penalizing if you do not have

a certain level is one issue because cheapest is not always best. But

there is a major problem involved if you are spending way too

much in terms of infrastructure and not delivering a service.

Senator MURRAY. Mr. Kennedy?

Mr. KENNEDY. I believe that when you look at a cost per model

you are basically putting out there that less is better, and every research paper that I have read indicates that the more we are willing to invest in our customers, the better return we have in terms

of better jobs and retention and wage gain, and that is a step backwards. That is back to JTPA days in the 1980s.
74

Senator MURRAY. Anybody else care to comment on that? Mr.

Ware?

Mr. WARE. Senator, I would just say that even on the broader

points of doing some of these block grant things, there can be some

problems involved with actually doing that. If the State boards and

the local boards are watching and monitoring it, they become a

check and balance in that system.

Senator MURRAY. Well, thank you. I know my time is up, Mr.

Chairman, but I think we have to be really careful that we do not

set up a system that does that, and that we really encourage participants getting better skills, which should be the focus of this legislation.

I realize my time is up. I do have questions that I do want to

submit for the record as well.

Senator ENZI. We will be doing that, and I want to thank you

for your help at this hearing today. You are one of the most efficient questioners that I have ever run into.

And for the panel, I do not know of a panel that I have sat in

front of before that had as many ideas that I could write down or

as many quotable quotes.

[Laughter.]

So we will be using both of those, and I will try and attribute

them. But it has been an extremely helpful day, and we will have

some more questions for you, which, again, will be helpful for us

to get the things done that you have been mentioning today.

Thanks to everybody. The hearing is adjourned.
75

ADDITIONAL MATERIAL

QUESTIONS OF SENATOR KENNEDY FOR CURTIS C. AUSTIN

Question 1. You were very enthusiastic about WIA in your testimony-you gave

statistics, for instance, about the number of businesses using the system and the

number of employees registered with local one-stops. Could you elaborate on why

you think the Act has been so successful in Florida?

Question 2.If the Act is changed so that funds can be easily transferred among

agencies or given in block grants, how would the state determine when the funds

should be transferred or determine which agencies would receive which percentage

of the block grant? Could you give us a hypothetical example (or an example from

the Operation Paycheck program you highlighted) of how the state would determine

the distribution of funds or decide when a situation would warrant spreading funds

differently among agencies?

Question 3. Could you elaborate a bit on the efforts that Florida has made to create a partnership between the state workforce system and business?

Question 4. Did Florida use the current waiver authority to transfer funds from

adult to dislocated this year? If so, what percent? Could you describe some other

initiatives that Florida applied for waiver authority to implement?

QUESTIONS OF SENATOR KENNEDY FOR JAMES N. ELLENBERGER

Question 1. Could you elaborate a bit on the impact that WIA has had on Virginia

during the time that it has been implemented?

Question 2. In your testimony, you say that Virginia opposes folding WagnerPeyser into WIA. One of my specific concerns is the Trade Adjustment Assistance

(TAA) program. Currently, TAA is operated through the employment service—have

you had experience with these programs, and would you care to comment?

Question 3. In your testimony, you say that incorporating the Wagner-Peyser and

Adult, Dislocated Worker funding streams into a single block grant would have a

detrimental affect on workers who now fall under the Adult Dislocated Worker funding. Could you elaborate a bit on the real effects that the block grant would have

on those workers?

Question 4. Could you elaborate on how the state would determine which people

should be accepted into the program without having looked for a job first?

QUESTIONS OF SENATOR KENNEDY FOR MICHAEL H. KENNEDY

Question 1. In your testimony, you discuss the inadequacy of the funding for onestop centers, dislocated worker, adult, and youth programs under WIA. What are

some of the consequences of the inadequate funding in human terms? How have the

services provided been affected? How have real workers and businesses been impacted?

Question 2. Why, in your opinion, has the dislocated worker funding stream failed

to keep up with the flood of laid off workers, particularly in the wake of 9/11? How

would you suggest the funding formula be adjusted to meet these demands?

Question 3. You contend that the workforce development system needs to be more

directly driven by the needs of local businesses and workers. Can you provide specific examples of some of the needs of local Washington businesses and workers that

are not currently being met and describe how the increases in local authority you

suggest would alleviate these problems?

Question 4. How would you suggest we balance improvements in data collection

without overburdening training providers?

QUESTIONS OF SENATOR KENNEDY FOR SIGURD NILSEN

Question 1. First, Mr. Nilsen, I want to thank you for all of the work that you

have done on the Implementation of the Workforce Investment Act. Your work has

informed all of us of the early successes and some of the challenges.

One of the areas that will certainly come up during the reauthorization is the performance measures. You bring up some things in your report that I would like you

to comment on further; the first is this idea of assessing the system’s performance

-could we get some of your ideas on how we could better look at systemic results?

You also mention that some of the performance measures may be causing some

operators to deny training to some people ---could you expand on that?

Question 2. One of the areas that we will have great discussion on is the formula.

I know that GAO is taking an in-depth look at the formula issue, but could I ask

you to make some brief comments on some of the issues with the current formula?
76

Question 3. One of the things that I have heard in my meetings on the Workforce

Investment Act is the need to have a funding stream for the operation of the OneStops. In your study, how have local areas dealt with paying for the operational

costs and what has been the impact on dollars spent on actual training?

Question 4. Your best practice work has been both informative and helpful to us

as we try to get a clear picture of what are some of the innovative strategies that

have helped businesses and workers. What kinds of assistance could the Department of Labor provide to make sure that local areas could learn from each other’s

experiences?

QUESTIONS OF SENATOR KENNEDY FOR MICHAEL E. SMELTZER

Question 1. In your testimony you mentioned that Pennsylvania employers encountered challenges that blocked effective implementation of the law in 1998 and

that those challenges still exist today. What do you think was the major cause of

the law not being properly implemented?

Question 2. What do you think was the major cause of the WEB not being responsive to the concerns of employers?

Question 3. What type of a program do you suggest should be set up to make incumbent worker training more accessible? Also will this training be separate from

the training opportunities given to those just beginning to enter the workforce?

QUESTIONS OF SENATOR KENNEDY FOR CHARLES WARE

Question 1. First of all, I just want to say that I appreciate the perspective you

bring on the needs of rural states and workers. I was intrigued by your discussion

of the Wyoming’s ‘‘Virtual’’ One-Stop—it’s wonderful that you’ve been able to reach

so many people on-line. Can you talk a little bit more about how you’ve managed

your virtual outreach efforts?

Question 2. It sounds as though the Wyoming Workforce Development Training

Fund has been quite a success. As the rest of us begin looking at incumbent worker

training programs, can you provide any insights into how we might enjoy the same

success?

Question 3. Thank you for bringing attention to the unique situation of small businesses. In terms of performance indicators, how do you think we should measure

effectiveness for small businesses—where one additional employee might mark a

significant increase?

Question 4. Should we be concerned that adults who are entering the job market

may have to compete with workers who have been employed and lost their jobs if

adult funding streams are consolidated?

Question 5. Has Wyoming used the current authority to transfer money between

adult and dislocated funding streams?

QUESTIONS OF SENATOR HARKIN FOR SIGURD NILSEN

Question 1. My office has received numerous complaints by people with disabilities and organizations representing individuals with disabilities that the one-stop

centers are not accessible to and useable by individuals with disabilities. In GAO’s

work on evaluating WIA and the one-stop centers, did you gather any information

on whether individuals with disabilities have been able to gain access to the onestop centers and effectively use the services provided by the one-stops nationally?

If so, what have you found?

Question 2. Your report notes that the Department of Labor has not conducted

any customer satisfaction or user evaluation of the sites for the general population.

Is the same true for people with disabilities and their ability to access and use the

one-stop centers? If such information is not gathered by DOL, are you aware of any

other reports or investigation into the accessibility and useability of the one-stop

centers for people with disabilities conducted through on site visits or interviews/

surveys of people with disabilities who have sought services from the one-stop centers?

Question 3. Your report notes that the Pikeville one-stop told GAO that crosstraining staff about the needs of special populations has helped its staff to accurately identify hidden disabilities and better refer customers with disabilities to the

appropriate services. That is a laudable result if the one-stop center is not only referring individuals, but also providing services itself for those individuals with disabilities who prefer to use the one-stop center’s resources and not use vocational rehabilitation. We have been told that some of the one-stop centers are automatically

referring all individuals with disabilities to vocational rehabilitation and are not

able to or willing to provide services to individuals with disabilities who prefer to
77

access the services at the one-stop center. Has GAO gathered any information on

this problem and if so, what have you found?

QUESTIONS OF SENATOR MURRAY FOR PANEL I

INTRODUCTION

First of all, it was heartening to read in your testimony of the successful programs

and strategies one-stops across the country have implemented. I have several followup questions to the implementation challenges you outlined in your testimony.

WIA System Change—Based on your evaluation of the implementation of WIA,

you believe that incremental changes are necessary, but not wholesale revisions.

Question 1. Can you speak to how and why you have come to this conclusion, and

why incremental changes are more appropriate than the wholesale revisions others

suggest?

Question 2. Instead of radically overhauling the newly implemented WIA system

by folding in WIA Adult programs into one Adult block grant as proposed by the

Administration, what changes can you suggest to make to WIA and Wagner-Peyser

more fully integrated to maximize the use of available resources?

Performance measures—high skilled but hard to place workers—I find it troubling

that the performance measures are not only based on outdated data, but also on

inconsistent incentives. They do not take into account the unique employment placement challenges faced by certain States; for example, Washington State has a disproportionately large number of high skilled workers like Boeing machinists who

are out of a job.

Question 3. From your research, how can the Federal Government be flexible in

allowing performance measures to be tailored to the unique demands of State and

local communities?

Question 4. Additionally, what changes in the performance measures would you

recommend for one-stops to have an incentive to serve the hard to train or hard to

reemploy worker?

Data collection requirements for training providers—The burdensome requirements for data collection have resulted in a decline in the availability of training

options for WIA job seekers.

Question 5. What suggestions do you have for cost-effective data collection, or

would you instead recommend eliminating the requirement for training provider

data collection as the House bill has done?

Guidance from Labor—In the barely 3 years WIA has been fully operational, the

DOL has made strides in developing mechanisms to provide broad guidance and in

establishing the Office of Performance and Results within ETA. You mention in

your testimony that Labor needs to provide more guidance addressing specific implementation concerns, and that there is a need for Labor to disseminate more information on best practices.

Question 6. Based on your research and experience, what are the most effective

tools and types of information for Labor to share with one-stops?

Question 7. What other measures would you recommend for Labor to augment

their technical assistance?

Expenditure of WIA formula dollars—In a previous report you discussed the issue

of expenditure versus obligation of WIA funds at the State level.

Question 8. Do you have a policy recommendation on the best way to calculate

how quickly States are expending their WIA formula dollars?

Infrastructure funding—Currently, WIA does not provide funding for one-stop infrastructure, which has hampered the ability of one-stops to co-locate mandatory

partners and provide effective services.

Question 9. What recommendations do you have on providing system infrastructure funding that is so vitally needed? How should we require contributions from

partner programs?

Superwaiver proposed by the Administration—The Administration proposes that

Governors should be provided with broad superwaiver authority, giving them an unfettered ability to waive program requirements across the board for a variety of domestic programs, including WIA.

Question 10. Can you describe for the Committee specifically how the current

waiver authority, which allows Governors to already waive almost every provision

of WIA, is so onerous that it would require the radical transfer of authority to the

States that a superwaiver would provide?
78

QUESTIONS OF SENATOR MURRAY FOR PANEL II

Specifically for Curtis Austin—Florida has a policy that requires local areas to

spend 50 percent of adult and dislocated worker training funds on ITAs.

Question 1. Does Workforce Florida believe this policy has resulted in more individuals gaining access to training?

Question 2. Have local areas reported any difficulty in meeting the 50 percent requirement and having adequate funds to pay for other required core and intensive

services?

The rest of the questions can be addressed to all Panel II witnesses.

Adult and Dislocated Worker Funds—According to statistics provided by the Center for Law and Social Policy, significantly fewer workers have received training

under WIA over the last 2 years. The sequencing of services language contained in

the law appears to be a significant barrier to training.

Question 3. Can you provide information on the percentage and amount of adult

and dislocated worker funds spent on training in your particular State or local area?

Who is Being Served?—Over 90 percent of individuals receiving services through

the one-stop system are getting only core services for which they do not have to register for—job search, labor market information, and general information.

Currently there is no system for collecting data on core services to non-registrants. Without this information we don’t know the real number of people looking

for work or retraining. With this information we could more accurately tailor the

one-stop experience to suit all of the needs of a particular population, and help people better move into intensive and training services.

These non-registrants can also have a financial impact on one-stop centers. They

often drain resources but aren’t accurately counted for in the budgetary purposes.

Question 4. Should the Administration require collaboration with State and local

stakeholders to identify a very limited number of basic measures to determine who

is really being served by one-stops?

Question 5. Should we use technology like swipe cards to track those using core

services so that usage and repeat usage can be included in any cost measures we

adopt?

Business Partnerships—The involvement of the business community in WIA at the

local one-stop level remains an important necessity for the ongoing success of workforce programs. Earlier during this hearing we heard from the GAO about a number

of positive examples of business partnerships with local one-stops.

Question 6. How can we make the WIA system more relevant to business and how

do we create stronger ties to economic development?

Additional Funds—Many States and local workforce boards have found creative

solutions to increasing their workforce budgets by leveraging dollars from a variety

of governmental and non-governmental sources.

Question 7. How can we encourage the WIA system to enhance its focus on training and leverage other partner resources for training?

Performance Measures—The current performance measures in WIA have been

criticized for being overly burdensome and for not measuring the right kind of outcomes.

Question 8. What recommendations do you have for the committee on performance

measures?

The Administration’s proposal would eliminate the customer satisfaction and

skills attainment measures and add an efficiency measure.

Question 9. Do you believe the efficiency measure would lead to ‘‘creaming’’ and

is it the right approach to eliminate the measures most relevant in assessing our

assistance to business?

Question 10. Should we continue to encourage participants’ attainment of better

skills?

Access to Training—WIA authorizes local boards to issue Individual Training Accounts vouchers to pay for tuition and fees for training programs at local colleges.

But because they only cover tuition and fees, ITAs do not cover the full cost of training at a public provider such as a community or technical college.

Colleges are not in the current financial position to expand enrollment unless the

full costs of the enrollment is covered. Especially in the programs that are in the

greatest demand in the labor market—such as health care providers.

Question 11. Should local boards have the ability to contract to expand capacity

in a training program on a state’s training provider list that would otherwise be unavailable to WIA participants with ITAs, due to student demand that exceeds capacity?

Question 12. Should we clarify the relationship between Pell Grants and ITAs, so

that Pell can be used to support the cost of this training?
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High Skilled but Hard to Place Workers—Washington State has a disproportionately number of high skilled workers who are out of a job. They need access to comprehensive training and new skills to get a job so they can provide for their families.

Currently, performance measures are not consistent from area to area and State

to State. They too often reward for factors like wage increase, comparable job placement, etc. In the case of the laid-off Boeing Machinists, these are difficult measures

to meet.

With some WIA funding tied to these performance criteria, boards have a strong

disincentive to serve the hard to train or hard to reemploy worker. Putting a high

skilled worker in a new job with a comparable wage can be far more difficult than

finding a job for a laid-off low skilled worker.

Question 13. How can we provide incentives for local boards to serve these more

difficult cases?

Question 14. Currently we reward States on how successful their system is, so

how can we reward States like Washington that are successful at placing higher

skilled workers in good jobs?

Personal Reemployment Accounts—Will These Really Help?—As you all know, the

President has proposed to create a program that would provide up to $3,000 for unemployed individuals who are about to exhaust their UI benefits to help them quickly find work or train for a new job. The total cost of the program is purported to

be $3.6 billion, and it will be administered by our State one-stop system.

Question 15. How will we pay for both WIA services—$3-plus billion—and PRAs—

$3.6 billion—with the larger fiscal problems facing our nation?

Question 16. If the most meaningful training averages $5,000, is $3,000 really

enough for a worker to get the training they need to get a good job?

Question 17. With the employment bonus option, aren’t PRAs just an incentive to

get a low skilled/low paid job as soon as possible rather than finding meaningful

training?

July 2, 2003

Hon. MICHAEL B. ENZI,

Hon. PATTY MURRAY,

U.S. Senate,

Washington, D.C. 20510–6300

Dear Chairman Enzi and Senator Murray, we are writing to express our strong

belief that the reauthorized Workforce Investment Act (WIA) must ensure service

for individuals with significant barriers to work and increase their access to skills

training.

We believe that we must improve the integration of one-stop partners and continue building a high quality, universally accessible system of one-stop career centers to meet the needs of business and workers.

Together we comprise a diverse coalition of service providers, advocacy groups,

and individuals committed to ensuring that all Americans have access to training

opportunities for jobs that will allow them to support themselves and their families.

We represent individuals with disabilities and those with limited English proficiency

(LEP). We represent welfare recipients, entering the workforce for the first time;

single parents, who have significant child care responsibilities or who are caring for

aging parents, children with disabilities, or other relatives; displaced homemakers,

who may or may not have work experience, but need skill upgrades to be competitive after an absence from the labor market; and women seeking decent wages via

jobs that have historically been nontraditional, such as those in the trades or technology.

We have worked to implement the WIA legislation and analyze its effects, and

have worked to identify and remedy problems that have emerged in the initial years

of the Act’s implementation. We are especially concerned about the Department of

Labor data showing that the number of individuals receiving training under WIA

declined dramatically compared to the prior system. Training matters for all workers, but is critical for those with barriers to employment. Employers increasingly demand high skilled labor and better-educated workers, yet the nation’s workforce development system has made it more difficult for job seekers to access training.

The importance of training and education is born out by a number of studies and

Census reports. Education and training gives job seekers the skills necessary to succeed in jobs with career potential and upward mobility. Moreover, the U.S. Bureau

of Labor Statistics has found that jobs requiring the least education will experience

the lowest growth over the next 10 years, while the jobs requiring at least an associate’s degree will grow at a rate of 31 percent. As a result, we believe that increased
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access to training is essential and that WIA should be revised during reauthorization to better meet the dual needs of job seekers and employers for higher skills.

As you know, current law requires that state plans detail how states will serve

low-income individuals, persons seeking nontraditional employment, and others

with multiple barriers to employment (including individuals with disabilities and

those with limited English proficiency). The 1998 Act also required local areas with

limited allocated ‘‘adult stream’’ funds to give public assistance recipients and lowincome individuals priority for intensive and training services. This is a vitally important component of the law that must be maintained, and as such, we support

efforts in the Senate to use the current law as the starting point. Individuals with

barriers to work should not be relegated to a ‘‘second tier’’ priority. Reauthorization

of WIA presents Congress with an opportunity to substantially improve access to

training for individuals with barriers to work and help build bridges to self-sufficiency. In keeping with this goal, the legislation should include the following: • Incumbent worker training opportunities that prioritize the retention and advancement of low-wage workers up career ladders leading to higher-wage job opportunities; • Strong incentives for targeting ‘‘harder-to-serve populations’’ through demonstration, research and other discretionary projects; • Adjusted outcome measures that recognize the higher costs and societal benefits

of moving harder-to-serve individuals toward self-sufficiency; • Reporting requirements that look at outcomes in relation to the local cost of living, local labor market conditions, and for different populations; • Dedicated general fund resources for the operation of one-stop centers, ensuring

that critical program funds are not diverted from mandatory partner appropriations

or siphoned away from individual training accounts for program participants; • Incentives for business partnerships, such as employer driven on-the-job training programs targeted to training low-wage earners for jobs in emerging sectors and

non-traditional work opportunities; • Ensuring accessibility to all one-stop programs and services for all individuals

seeking assistance, particularly those with disabilities and/or limited English proficiency; • Substantially increased authorization of resources for training, supportive services, and retention efforts.

Additionally, eligibility for services under current WIA law includes language suggesting that an individual must be found to be ‘‘unable’’ to obtain employment

through the core services in order to access intensive services, and likewise unable

to obtain employment through intensive services in order to access training. This

has led many to interpret the law as requiring a rigid ‘‘sequence of services’’ for WIA

participants rather than offering an array of services that best fits their demonstrated needs. It has, therefore, often been implemented in a manner that limited

access to training services for WIA clients, thereby forcing some individuals to be

immediately placed in low-paying jobs rather than allowing them to train for more

skilled positions that may better meet the needs of local employers.

We support the Administration’s intent to eliminate this unnecessary sequential

eligibility process and believe reauthorization legislation should clarify that participants may receive intensive and training services in any sequence that will assist

them in addressing barriers to work and obtaining family supporting jobs.

Providing a level playing field for all Americans to develop their skills is not just

a matter of their economic survival but a necessity for our nation’s growth. As a

nation, we will be losing a number of skilled workers upon the retirement of baby

boomers. It is imperative to address the skills and training needed to meet the demands of the economy, and to ensure all skills shortages are met in the U.S. workforce. We cannot let our nation’s education and training policies fail the population

we most need to develop to maintain our economic vitality.

We appreciate your commitment to assisting unemployed and low-wage workers

and those with significant barriers to work. Job training and employment needs are

of common importance to the economies of all regions of this nation, regardless of

geographic location or party representation. Thus, we hope that the reauthorization

of this legislation can be accomplished in a bipartisan manner and look forward to

working with you and members of the Senate Health, Education, Labor and Pensions Committee on this year’s reauthorization effort.

Sincerely, American Congress of Community Support & Employment Services

(ACCSES); American Network of Community Options & Resources (ANCOR); American Psychological Association; Association of Farmworker Opportunity Programs;

Carlos Rosario International Career Center; Center for Community Change; Coalition on Human Needs; Council for State and Vocational Rehabilitation Administrators; Easter Seals; Evangelical Lutheran Church in America; Goodwill Industries
81

International; Immigration and Refugee Services of America/U.S. Committee for

Refugees; International Association of Jewish Vocational Services; Latino Community Development Center; Legal Action Center; Lutheran Services in America;

MALDEF (the Mexican American Legal Defense and Educational Fund); National

Advocacy Center of the Sisters of the Good Shepherd; National Alliance For Partnerships in Equity; National Alliance to End Homelessness; National Asian Pacific

American Legal Consortium; National Association for Bilingual Education; National

Coalition for the Homeless; National Council of La Raza; National Employment Law

Project; National Immigration Forum; National Immigration Law Center; National

Puerto Rican Coalition; NISH; SER—Jobs for Progress National, Inc; The Arc of the

United States; The Workforce Alliance; UCP Public Policy Collaboration; United

Jewish Communities—Washington Action Office; Wider Opportunities for Women;

STATE AND LOCAL ORGANIZATIONS COSPONSORING LETTER: Albuquerque

Hispano Chamber of Commerce (NM); Asian Law Caucus (CA); Asian Pacific American Legal Center (CA); Arizona Women’s Education & Employment, Inc. (AZ);

Calexico Community Action Council (CA); California Association for Bilingual Education (CA); Cambodian Community Development Inc. (CA); Center for Training &

Careers/WorkNET (CA); Centro Campesino (FL); Centro de Accion Latino (NC);

CHARO Community Development Corporation (CA); Coalition of Florida Farmworker Organizations, Inc (FL); Connecticut Women’s Education and Legal Fund

(CT); El Centro Del Pueblo (CA); El Concilio—Stockton (CA); Hacienda Community

Development Corporation (OR); Hard Hatted Women (OH); Hispanic Committee of

Virginia (VA); Hispanic Office of Planning and Evaluation, Inc. (MA); Housing Development Corp. of Northwest Oregon (OR); Illinois Coalition for Immigrant and

Refugee Rights (IL); Indiana Coalition on Housing and Homeless Issues, Inc. (IN);

Instituto del Progreso Latino (IL); Literacy Volunteers of Southeast Connecticut

(CT); MAAC Project (CA); Mattie Rhodes Center (MO); Maui Economic Opportunity,

Inc. (HI); Oregon Council for Hispanic Advancement (OR); San Diego County SER/

Jobs for Progress, Inc. (CA); Siete del Norte (NM); Spanish Action League (NY);

Sunflower Community Action—Hispanos Unidos Chapter (KS); Sweatshop Watch

(CA); Texas Council on Family Violence (TX); Texas Fragile Families Initiative (TX);

The Unity Council (CA); United Laotian Community Development (CA); Washington

State Migrant Council (WA); Watts/Century Latino Organization (CA); Women at

Work (CA); Women’s Association for Women’s Alternatives (PA).

INTERNATIONAL ASSOCIATION OF JEWISH VOCATIONAL SERVICES,

PHILADELPHIA, P.A. 19103,

June 18, 2003.

Hon. MICHAEL B. ENZI,

Hon. PATTY MURRAY,

U.S. Senate,

Washington, D.C. 20510–6350

DEAR SENATORS ENZI AND MURRAY: On behalf of the International Association of

Jewish Vocational Services (IAJVS), I am writing to convey my deep conviction that

the reauthorized Workforce Investment Act (WIA) must focus on expanding the resources and options available for skills training that will allow Americans to support

themselves and their families.

IAJVS is a not-for-profit association that links 30 non-sectarian health and

human service agencies in the United States, Canada, Israel and Argentina. With

combined annual budgets of $390 million, our premier network of employment and

training service providers assists over 320,000 individuals annually from across the

social strata to improve their lives through access to a wide range of educational,

vocational and rehabilitation services. Each year, more than 40, 000 employer organizations partner with our service agencies in providing training and employment

opportunities to dislocated workers, welfare recipients, refugees, persons with disabilities, the elderly, and youth transitioning to work, from both the Jewish and

non-Jewish communities.

The network of IAJVS affiliates believes that the reauthorization of WIA affords

Congress with the occasion to improve access to training and to help build bridges

to self-sufficiency. To meet this goal, IAJVS suggests that the following could

strengthen WIA:

Increase Resources Available for Training. In order to adequately address

the serious skills development needs of both workers and employers, resources must

be increased. As the demand for a highly skilled labor force continues to rise, it is

critical that our nation’s workforce acquire the skills necessary for our country to

compete in the global economy.
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Expand Training Options. To expedite training services for those who have a

demonstrated need, allow flexibility for individuals to access an array, rather than

sequential, series of core, intensive and training services. According to a recent

study by the Center for Law and Social Policy, there was a 66 percent decline in

the number of individuals receiving training between the final year of the Job

Training Partnership Act (JTPA) and the first program year of WIA. Our network

of provider agencies continue to report on individuals who show the capacity to benefit from skills training yet are being denied the opportunity and forced into unskilled, low-paying jobs. These individuals remain ill equipped to support their families.

Maximize State and Local Flexibility. Local Workforce Investment Boards are

in a better position to assess worker and business needs than State agencies. With

many States facing massive budget deficits, governors and State legislatures will be

tempted to use WIA block grant funds to offset cuts to other State-funded programs.

Create New Opportunities for Business Engagement in the WIA System.

It is imperative that employers have an increased stake in WIA. The system should

invest in industry-specific intermediaries that allow multiple employers in a single

sector to collaborate with local trainers and worker representatives to develop workforce strategies for that industry.

A skilled American workforce is critical to the economic survival and growth of

our nation. We share in your commitment and look forward to working with you

and the members of the Senate Health, Education, Labor and Pensions Committee

on this year’s reauthorization.

Sincerely,

GENIE COHEN,

Executive Director.

NATIONAL HIRE NETWORK,

WASHINGTON, D.C. 20002,

July 1, 2003.

Hon. MICHAEL B. ENZI,

Hon. PATTY MURRAY,

U.S. Senate,

Washington, D.C. 20510.

DEAR SENATORS ENZI AND MURRAY, we are writing to share our concerns with you

regarding reauthorization of the Workforce Investment Act (WIA). The reauthorization of WIA presents a great opportunity for meeting the challenges faced by hard

to employ job seekers. As advocates for sound public policies affecting the employment of individuals with criminal records we believe that the WIA reauthorization

is an invaluable tool capable of being modified to address the specialized needs of

individuals with multiple barriers to work.

Over 600,000 individuals return to communities every year from U.S. State and

Federal prisons. In order to obtain a job, many of these men and women need access

to training and supportive services if they are to find a job and keep it. Recent evidence has shown that workforce development innovations when planned well can

connect people with criminal records to the labor market and reduce recidivism. Unfortunately, there tends to be a dearth of workforce development resources dedicated

to serve this particular hard-to-employ population during their incarceration and

after they are released. Individuals with criminal records encounter specific difficulties when trying to obtain employment including the stigma associated with having

a criminal record held by employers and potential co-workers, lack of education and

training limiting the number of jobs they might be qualified to perform, and licensing restrictions and other bans that limit the pool of jobs to which people with criminal records might have access. Access to services before and after release is a crucial

component of success for those at high risk of re-arrest and re-incarceration. When

an individual with a criminal record is able to find and keep a job he or she becomes

a productive and respected tax-paying member of the larger community.

The National H.I.R.E. (Helping Individuals with criminal records Reenter through

Employment) Network, a Legal Action Center innovation, is dedicated to identifying

and addressing the barriers to employment that people with criminal records confront. The H.I.R.E. Network works as a rigorous analyzer of national and State government policy and serves as a clearinghouse of information dedicated to influencing

public policy discussions and facilitating changes in workforce development and

criminal justice settings in an effort to increase the number and quality of employment opportunities for people with criminal records.
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The Workforce Investment Act is an untapped resource for assisting people with

criminal records, as they attempt to reconnect with their families and enter the

workforce. One of the articulated goals of WIA is to lead its consumers to self-sufficiency. WIA reauthorization will be enhanced if it incorporates methods and strategies designed to improve job training, employment and supportive services for hardto-serve individuals with one or more barriers to employment, including people with

criminal records. More specifically, we are interested in the adoption of language

that acknowledges the increasing number of labor force participants who begin their

job searches facing multiple barriers to labor market success and that encourages

policy and programmatic innovations designed to alleviate those barriers and increase employment opportunities for ‘‘hard-to-employ’’ job seekers. In addition, we

would like to see specific references to the efficacy of transitional jobs as an integral

part of a hard-to-employ person’s job search and post employment services made

available to the harder-to-employ immediately following their attachment to a job.

In order to assist the hard-to-employ and people returning to their communities following a period of incarceration in their efforts to lead healthy, productive lives we

encourage you to consider the following recommendations: • Require States to reserve a percentage of the funds dedicated to statewide activities to create innovative programs that provide services to hard-to-serve populations with particular barriers to long-term employment. • Require States to include in their plans specific statements and strategies addressing how employment, training and supportive services will be provided to individuals with criminal records, individuals in treatment or recovery for alcohol and

other drug addictions, homeless individuals, or other identified hard-to-employ populations. • Require State and local Workforce Investment Boards to include representatives

who serve a cross-section of hard-to-serve individuals, including people with criminal records, in their board membership. • Maintain and increase funds for Programs for Corrections Education and Other

Institutionalized Individuals (Section 225 Title 2). • Provide financial rewards to States that employ a certain number of people with

more serious barriers to employment, such as individuals with criminal records and

alcohol and drug addictions. • Commit additional funding to develop specific workforce development programs,

such as transitional jobs programs, for individuals with criminal records. • Improve reporting requirements to include all WIA participants who attempt to

access services at the One Stop Service Delivery Centers, especially those with one

or more barriers to employment.

The use of the Workforce Investment Act to create educational, job training and

employment opportunities for hard-to-serve individuals with one or more barriers to

employment, such as people with criminal records, is necessary to ensure the success of WIA. Thank you for your time and thoughtful consideration of our concerns.

If you have questions or would like to discuss anything in this letter further, please

feel free to call Alexa Eggleston, JD, Policy Associate at the Legal Action Center’s

National H.I.R.E. Network, (202) 544–5478, x11.

Sincerely, National Organizations—Center for Community Change; Correctional Education Association; Legal Action Center’s National H.I.R.E. Network; National Advocacy Center of the Sisters of the Good Shepherd; National Alliance to

End Homelessness; National CURE (Citizens United for Rehabilitation of Errants);

Open Society Policy Center; Rebecca Project for Human Rights; Volunteers of America (VOA); State and Local Organizations—Center for Community Alternatives

(NY); Centerforce, Inc. (CA); D.C. Employment Justice Center (DC); Greater Hartford Legal Aid, Inc. (CT); Offender Aid & Restoration of Richmond, Inc. (VA);

STEPS to End Family Violence (NY); The Bronx Defenders (NY); The New York

Urban League (NY); The Safer Foundation (IL); Women in Prison Project/Coalition

for Women Prisoners (NY); Individual Supporters—Kelly McGowan, Upstream (NY,

NY); Marc A. Rogers, Ph.D. (NY, NY); Robert M.A. Johnson, Anoka County Attorney

(MN); Tony L. Hodges (Meridian, MS).

July 2, 2003.

Hon. MICHAEL B. ENZI,

Hon. PATTY MURRAY,

U.S. Senate,

Washington, D.C. 20510.

DEAR SENATORS ENZI AND MURRAY, the purpose of this letter is to submit comments to the Subcommittee on Employment, Safety and Training on the reauthor-
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ization of the Workforce Investment Act (WIA). As you are aware, the House of Representatives acted on H.R. 1261, and a number of the provisions in that legislation

are of concern to us. I encourage the Senate to revise the legislation as it comes

before you and work toward a compromise that supports a strong partnership between the State and local entities in providing workforce services.

I support the recommendations made by the General Accounting Office (GAO)

that whole-scale, major changes to WIA should not be considered at this time. The

dramatic changes envisioned by the WIA are just beginning to take hold in most

States and it is premature to consider several provisions contained in H.R. 1261.

Proposal to Repeal the Wagner-Peyser Act

I strongly urge you to reject repeal of the Wagner-Peyser Act, which would eliminate the 60-year-old U.S. Employment Service (ES), and undermine the principle of

an unbiased, nonpartisan agency to administer job referrals and assist in the payment of UI benefits. For over 60 years, the Act has served as the foundation of public labor exchange activities. Oregon’s workforce system is built primarily upon our

Wagner-Peyser and State supplemental funds, thus a repeal of the Wagner-Peyser

Act would have a devastating impact on the comprehensive statewide system.

The ES system is a Federal-State partnership that provides assistance in matching job seekers with employers. The ES program also enforces the work test for unemployment insurance, ensuring that UI claimants are registered for and matched

with suitable job openings. The program also assists veterans, migrant and seasonal

farm workers and other groups, performs alien labor certification and provides labor

market information research.

Unlike private vendors, the ES places no restrictions on the employers or workers

it serves. It is often the last resort for workers turned away from private placement

agencies, and it occupies a unique position in the WIA One-Stop system, serving as

the ideal entryway to One-Stop centers. The strong ES infrastructure in Oregon

must be kept in place for the benefit of employers and job seekers. WIA envisions

a universal system for businesses and job seekers. Wagner-Peyser could be supported by consolidated funding, but the Wagner-Peyser Act should not be repealed.

Funding Split Between the State and Local Levels for Adult Programs

I would like to express our support for the National Association of State Workforce Agencies’ (NASWA) statement on Reauthorization of the Workforce Investment

Act of 1998, dated June 18, 2003. Throughout the statement, the need for additional

flexibility to Governors is emphasized. The Governor must have maximum flexibility

and authority to direct funds to the local level in a manner that best responds to

the needs of the State.

I urge the Senate to support a provision that provides a 50–50 split with no

strings attached to the State share. Governor Kulongoski’s strategy around economic and workforce development is to consolidate funding to shift the workforce

system to a more demand-driven system. To do this, the Governor needs the authority to decide how much of the State’s 50 percent share is sent to the local organizations.

It is important for the Governor and the State workforce board to have substantial latitude and flexibility in allocating resources to the local level and to deliver

appropriate services throughout the State. The Governor needs this flexibility to develop strategies that would consolidate funding and increase strategic reserves that

will shift the workforce system to a more demand-driven system meeting the business needs of the employer community.

Additionally, without dedicated Federal funding for infrastructure, the ‘‘one-stop’’

service delivery system is compromised. Partner contributions are critical to the realization of a true one-stop environment where all pertinent services are offered to

workers and business. Requiring partner contributions will increase their level of

involvement in the one-stop environment, help ensure that each partner’s customers

are accessing and benefiting from one-stop services, and improve the umbrella of

services provided customers and the rewards shared by all.

Provisions for Designation and Re-Designation of Local Workforce Areas

States, in partnership with local representatives, should be given maximum flexibility to structure a State workforce development system, as originally proposed by

the Administration, to best respond to State and local conditions and workforce

needs. Agreements on local area designations should be made as a result of discussions at the State and local level, without Federal involvement.
85

Increased Waiver Authority of USDOL and Ability To Apply for a State

Block Grant Option

The language in the House bill does not provide sufficient waiver authority for

the States, nor does it contain an option for the State to apply for a block grant,

as proposed by the Administration. As was the case under TANF, many States are

way ahead of the Federal statute and have developed partnerships with other Federal and State programs in a truly seamless system. Statutory limitations to increased waiver authority should be removed. In addition, the legislation should

allow Governors to apply for block grant authority. Under this authority, Governors

would have discretion in administering WIA.

The downturn in the economy, and the Northwest’s high unemployment rate, are

key reasons why Congress needs to strengthen the Nation’s publicly-funded workforce system and allow flexibility for the State to design and operate a system that

meets its unique needs.

I look forward to working with you as this legislation moves through the Senate

and into discussions with the House. If I can provide any additional information,

do not hesitate to contact me at (503) 947–1477.

Sincerely,

DEBORAH LINCOLN,

Director.

CITY OF SEATTLE,

SEATTLE, WASHINGTON 98104,

June 27, 2003.

Hon. PATTY MURRAY,

U.S. Senate,

Washington, D.C. 20510.

DEAR SENATOR MURRAY: I want to thank you for your leadership regarding the

need to create more effective and comprehensive national workforce development

policies that will help ensure that our nation’s workers have the skills they need

to find and retain family wage jobs. Well trained adaptable workers are a key element in ensuring that our business community can successfully compete in increasingly competitive world markets. These policies are particularly important as our

national, State and local economies continue to suffer from slow growth and very

high levels of long-term unemployment.

The reauthorization of the Workforce Investment Act provides an important opportunity to advance policies that will benefit workers and strengthen our economic

competitiveness. The debate surrounding the passage of H.R. 1261 identified a number of issues that the City of Seattle believes needs to be addressed by the Senate.

I want to submit the following comments as part of the deliberations of the subcommittee and full committee.

The reauthorization of the Workforce Investment Act should address the following

key issues:

Oppose block grants. The new legislation should not include a block grant that

would include the Dislocated Worker and Adult programs in the Workforce Investment Act and/or the U.S. Employment Service authorized under the Wagner-Peyser

Act. The creation of a new block grant will undercut support for these important

programs and may make them more vulnerable to further cuts.

Maintain and adequately fund the Employment Service. It is important

that Congress continue to authorize and adequately fund U.S. Employment Service.

The elimination of the Employment Service would end a decades-old, clearly defined, Federally funded national commitment to employment services for all U.S.

citizens and residents. Abandoning this commitment through a block grant or elimination of funding is unacceptable.

Increase funding to meet the needs of workers and businesses. The Senate

should insist on a major expansion of funding for the Workforce Investment Act to

help our dislocated workers as well as other workers who lack the skills and education needed to find family wage jobs. The past 2 years has seen three million jobs

disappear nationally while the Puget Sound region has been very hard hit by longterm layoffs. The administration’s proposals to keep funding below fiscal year 2002

levels are unacceptable. The Federal Government needs to strengthen and expand

our national commitment to helping our struggling unemployed workers and our

businesses that need skilled workers.

Create a dedicated fund source for ‘‘One-Stop’’ system. The Workforce Investment Act’s support for the creation of State and local ‘‘One-Stop’’ systems was
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a major positive step in system reform and integration. The congressional failure

to adequately fund these systems have left them unable to adequately serve the

needs of unemployed and employed workers and our businesses. H.R. 1261’s solution of providing ‘‘One-Stop’’ funding by taking moneys from the system’s mandatory

partners is the wrong approach. Congress should create a separate dedicated funding stream for the ‘‘One-Stop’’ systems that will ensure that these systems can effectively meet the demand for services in our city and across the country.

Oppose Personal Reemployment Account. The Senate should ensure that the

new legislation does not include Personal Reemployment Accounts for dislocated

workers that had been proposed by the administration. This type of policy will undercut the long-term viability of the dislocated worker program and make it more

difficult for hard-pressed dislocated workers to find new family wage jobs.

Increase training opportunities by changing sequence of service requirements. The passage of the Workforce Investment Act included a rigid ‘‘sequencing

of services’’ prior to participants becoming eligible for more intensive services and

training. This policy has had the effect of substantially reducing the numbers of system clients that receive training. This short-sighted policy needs to be changed. The

new legislation should make substantial changes in program design that will allow

more workers to receive the training they need to find family wage jobs.

Maintain current relationships between State and local funding and decision-making. The City believes that the current funding splits and decision-making

authority contained in current law should be maintained. Local elected officials and

our business, labor, and community partners have the primary responsibility in

making the ‘‘One-Stop’’ system work as well as implementing the local WIA programs. Reducing local authority or the percentage of funds flowing to local communities will undercut our efforts to make the system work well.

Support better performance measures. The City supports better performance

measures across programs that will focus on short- and long-term economic progress

for participants. It is important to recognize that participants may have different

immediate goals. If their goals are educational in nature, the performance measures

should be focused on increased basic skills, training completions, and receipt of certificates and post secondary credentials and transitions to employment. If the goal

is employment, the performance measures should be focused on employment indicators such as entry in employment, promotions, short- and long-term earning gains,

job retention and lifting participants and their families substantially above the poverty line.

Maintain employer payments for H1-B program. It is important for Congress

to continue the mandatory employer payments for using the Hl-B program that allows foreign nationals to enter the country and fill skilled jobs that cannot be filled

by Americans due to a lack of skilled workers. This program needs funding to help

train Americans who want to compete for these family wage jobs. The elimination

of the mandatory employer payments will cut off another important opportunity for

unemployed and underemployed Americans wanting to start new careers that will

adequately support their families.

Thanks for your hard work in promoting national workforce development policies

that will well serve the needs of workers and employers in our city, State, and nation.

Sincerely,

GREG NICKELS,

Mayor of Seattle.

SHORELINE COMMUNITY COLLEGE,

SEATTLE, WASHINGTON,

June 23, 2003.

Hon. PATTY MURRAY,

U.S. Senate,

Washington, D.C. 20510.

DEAR SENATOR MURRAY: We appreciate the opportunity to submit these written

comments and add them to the public record for the Subcommittee on Employment,

Safety, and Training’s recent hearing on the reauthorization of the Workforce Investment Act (WIA).

WIA is a critical component of the nation’s workforce development strategy and

an essential resource for widening access to career education, training, and economic

opportunity. Community and technical colleges have a vital role to play in the delivery of WIA-funded services, but unfortunately, since the program was first enacted
87

in 1998, that role has diminished substantially and the Act has failed to live up,

so far, to its promise. The transition from JTPA to WIA has made access to core

employment services easier and more effective by enhancing program coordination

at the local level, but this has come at the substantial cost of reduced funding for

training and employer services. Furthermore, some of the ‘‘reforms’’ proposed by the

House of Representatives (H.R. 1261) will actually exacerbate this and other problems. A discussion of recommended changes to WIA (and items that should not be

changed) follows.

Program Funding

After 5 years of WIA implementation and declining appropriations, it is clear that

WIA has been asked to do more than it can possibly handle with the resources it

has been given. The mandate to establish locally-responsive and integrated one-stop

career center systems came with no additional funding. Scarce WIA dollars that

should have gone to the direct provision of employment and training services, have

instead been used across the country to pay the rent and operating expenses of

large, integrated career centers—an expense that did not exist prior to WIA’s enactment.

The mandate to provide core and intensive services to all workers who come in

the door has left virtually nothing for more expensive services like training. A recent report from the Center for Law and Policy Studies estimated that the number

of dislocated workers receiving training between 1998 (under JTPA) and 2000

(under WIA) declined from 149,000 to 42,000. The decline in training is even worse

for the low-income adult program (see CLASP, Program Update: Workforce Investment Act, March 2003, Update No. 1).

To ensure that sufficient resources are in place to fund the service delivery infrastructure and training, WIA appropriations should be increased and separate funding streams should be established for infrastructure and training.

Finally, the proposed integration of Wagner-Peyser funding into WIA will only set

the stage for the ‘‘block and cut’’ defunding scenarios we have seen before. It will

give State employees previously funded through the Wagner-Peyser program a claim

on local WIA resources for the provision of core services that will ultimately lead

to further reductions in the funding of training by local workforce investment

boards.

Access to Training

Funding is not the only barrier inhibiting access to training. The Act limits access

to training to individuals who have failed to obtain viable employment through core

services. This training as last resort requirement slows the process of directing customers to the services they need and wastes WIA resources. A proper needs assessment documented in an Individual Employment Plan that demonstrates the need

for skills training should be all that is necessary to permit access to training without delay. The law should be changed to make it clear that career centers should

provide an array of services, not a mandated sequence of services.

Access to training for dislocated workers would be expedited without delays or bureaucratic red tape if the law was changed to allow participation in WIA intensive

and training services to satisfy the unemployment insurance work search requirements (as had been allowed under JTPA).

Eligible Training Providers and Consumer Choice

WIA program performance reporting requirements should be limited to WIA participants. If only a few WIA participants access a college program, the college should

not be required to track and report on all the program’s students, as is the case

under the current law.

WIA and Perkins Act reporting requirements should be reconciled to ensure that

the same data is reported for both programs regarding education program performance. The American Association of Community Colleges has submitted a proposal

to the U.S. Department of Labor regarding how this can be accomplished.

Development and Expansion of Employer Services

One of the biggest problems with the federally-funded employment and training

system is that there are few employer services available. The system is worker-focused. New and better services need to be developed to engage employers in the design and delivery of the WIA system, including job profiling and worker assessment

services (including the capability to refer workers to jobs based on objective assessment data to determine if they meet an employer-specific skills profile), and customized training services.

One of the biggest impediments to the development of new and better WIA-funded

employer services (besides the lack of available funds due to declining appropria-
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tions) is the absence of performance standards that have any relation to these services. All WIA-funded services are subject to the same set of performance requirements, without regard to who the customer is—workers or employers. WIA needs

to develop a separate and appropriate set of performance requirements for employer

services.

Customized training results should be measured not by worker wage increases or

employment gains, but by the achievement of company-identified strategic objectives

that motivate companies to engage in incumbent worker skill development. These

objectives will vary widely from project to project and company to company, and

may include reorganization of the production/service delivery process, reduction of

waste, reorganization of staff into work teams, improved customization of products

or services, etc. WIA should establish a process for identifying and tracking company-specific strategic objectives for measuring the performance of incumbent worker training initiatives. The Aspen Institute is currently researching how this can be

done (see Documenting Demand Side Outcomes Project, http://www.aspenwsi.org/

DDSOl.htm)

Performance Standards

In addition to the development of a separate performance system for employer

services, we recommend dropping the proposed inclusion of a ‘‘program efficiency

measure’’ based on cost per participant. We have been down this road before under

JTPA and research has shown that performance measures based on costs has led

to ‘‘creaming’’ of the most job-ready workers and restricted access to more costly

services, such as training, regardless of need (see National Commission for Employment Policy, JTPA Performance Standards Effects on Clients, Services, and Costs:

Final Report, 1988). Let’s learn from the past and not repeat mistakes we have

made before.

Youth Program Enhancement

In general, we agree with the nine WIA recommendations made by the National

Youth Employment Coalition. In particular, we strongly support NYEC’s recommendations regarding streamlining of WIA youth eligibility determination, and

building the capacity of local Youth Councils by maintaining local WIB authority

over council membership. One area where we differ from NYEC is that we advocate

a 50/50 split between in-school and out-of-school youth program funding. These are

the issues that most directly inhibit community colleges and local communities from

effectively serving economically disadvantaged youth with WIA resources.

Sincerely,

HOLLY L. MOORE, ED.D.,

President, Shoreline Community College.

JOHN E. LEDERER,

Executive Director, Government Relations and Grants.

PREPARED STATEMENT OF WADE DELK

ABOUT THE NATIONAL ORGANIZATION FOR COMPETENCY ASSURANCE (NOCA)

NOCA, the oldest and largest organization representing certification agencies,

testing companies, consulting firms and individuals involved in professional certification, was created in 1977 as the National Commission for Health Certifying Agencies (NCHCA) with Federal funding from the Department of Health and Human

Services. Its mission was to develop standards for quality certification in the allied

health fields and to accredit organizations that met those standards. With the growing use of certification in other fields, NCHCA’s leaders recognized that what is essential for credible certification of individuals in the healthcare sector is equally essential for other sectors. With this vision, NCHCA evolved into the National Organization for Competency Assurance. NOCA is a non-profit, 501(c)(3) organization, committed to serving the public interest by ensuring adherence to standards that ensure

the highest competence of certification programs.

NOCA’s membership is composed of more than 300 organizations responsible for

certifying specific skill-sets and knowledge bases of professions and occupations at

the national and international level. Through certification, NOCA members represent more than six million individuals around the world and include certification

programs of some 150 professions and occupations, including 57 healthcare professions. NOCA members certify individual skills in fields as diverse as construction,

healthcare, automotive, and finance. A current roster of NOCA members is attached.
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NOCA also brings the expertise of its internationally recognized accrediting arm,

the National Commission for Certifying Agencies (NCCA). NCCA uses a peer review

process to evaluate adherence to its standards by certification programs and grants

recognition through accreditation to those programs that have met those standards.

These standards exceed the requirements set forth by the American Psychological

Association and the U.S. Equal Employment Opportunity Commission and thus help

to protect the health, safety, and welfare of the public. NCCA is the national accreditation body that provides this service for private certification organizations in all

disciplines.

NOCA’s mission is to promote excellence in competency assurance for individuals

in all occupations and professions. No other organization has the presence in or

commits the resources to the field of certification. NOCA is proud of its position as

the international leader in competency assurance for certification programs, as well

as its role in promoting excellence in competency assurance for practitioners in all

occupations and professions.

WHAT IS CERTIFICATION?

The certification of professional and occupational skill-sets affirms a knowledge

and experience base for practitioners in a particular field, their employers, and the

public at large. Certification represents a declaration of a particular individual’s

professional competence. In some professions certification is a requirement for employment or practice. Doctors, mechanics, accountants, surveyors and many others

are all required to go through a certification process of some kind. In all instances,

certification enhances the employability and career advancement of the individual

practitioner or employee.

Many organizations in today’s competitive and challenging economy have recognized their workforce as their most valuable asset. Likewise, individuals, whether

employed or self-employed, know that now more than ever before they must acquire

and maintain more comprehensive skill-sets to ensure their own attractiveness and

ability in the workplace.

The benefits of certification include:

• Higher wages for employees in the form of higher salaries and pay scales, bonuses, or education assistance

• A more productive and highly trained workforce for employers

• Prestige for the individual and a competitive advantage over non-certified individuals in the same field

• Enhanced employment opportunities

• Assisting employers in making more informed hiring decisions

• Assisting consumers in making informed decisions about qualified providers

• Protecting the general public from incompetent and unfit practitioners

• Establishing professional standards for individuals in a particular field.

Equal to the benefits of certification is the importance of establishing an underlying certification program based on best practices and recognized processes and procedures developed by the field of certification. NOCA serves as the member-based

organization for the field of certification to enhance professional excellence and ensure the competency of certification programs.

Indeed, many policy-makers have regarded certification as so valuable to our nation’s workforce and national security that the Senate Commerce Committee recently added a provision the Federal Aviation Administration reauthorization bill

providing for the certification of new security skill-sets for flight attendants.

NOCA’S RECOMMENDATIONS FOR ENHANCING THE WORKFORCE INVESTMENT ACT

Among the resources that will enable displaced workers move back into employment, possibly better employment or enhanced career opportunities, would be access

to certification programs whose prerequisites and requirements these workers may

be eligible or could quickly become eligible. Certification of one’s specialized skills

learned from years on the job may well be the quickest pathway to reemployment.

In many instances, an occupational certification does not require a college degree.

College is an expensive and time-consuming undertaking which may not represent

a viable alternative for many dislocated workers. Some occupations, such as auto

mechanics or X-ray technicians, only require a certification, not a college degree. A

certification in either of these fields can open up a rewarding career path, with good

pay and opportunities for advancement, to many individuals.

NOCA recommends including information on opportunities for certification and licensure as a core service available through the One-Stop employment and training

activities and including certification and licensure in the scope of training services

offered through the One-Stop system.
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Certification would offer a meaningful and direct pathway to re-employment for

many individuals eligible for assistance through the One-Stop system. Certification

may be a part of the training for specific job skills required in local markets and

will enhance the job readiness of many with skills from previous work experience.

Including information about the vast array of opportunities available to job seekers

when they visit One-Stops is a sure way to assist an individual in obtaining new

work and possibly better career opportunities.

In fact, career counselors who staff One-Stop Centers are certified as Global Career Development Facilitators by the National Board for Certified Counselors, a

NOCA member and the largest certification program for the counseling profession.

These career development professionals receive specialized training for working in

career development fields. The Career Development Facilitators credential establishes minimum competency requirements to serve the dislocated worker and requires adherence to a professional Code of Ethics.

CONCLUSION

Improving the prospects for reemployment and career opportunities of displaced

workers represents the core of the Workforce Investment Act. Many employers in

today’s competitive and challenging economy have recognized that their workforce

is their most valuable asset. Likewise, individuals, whether employed or self-employed, know that now more than ever before they must acquire and maintain more

comprehensive skill-sets to ensure their own marketability and competence in the

workplace. Certification represents an excellent pathway to employment opportunities for workers in all areas in the economy. It also serves as an important assurance for employers and the general public that individuals have attained the necessary skill sets to provide the services or carry out the scope of their employment.

We hope that the Subcommittee will recognize the important role that certification

has to play in the One-Stop system.

APPENDIX

NOCA Organizational Members

NOCA’s Organizational Members consist of associations, certifying organizations,

customer groups, and government agencies that are interested in credentialing. • AACE International • ACNM Certification Council, Inc. • Academy of Ambulatory Foot Surgery • Academy for Certification of Vision Rehabilitation and Education Professionals • Accrediting Bureau of Health Education Schools • Aerobics and Fitness Association of America • American Academy of Audiology • American Academy of Nurse Practitioners • American Academy of Otolanyngology—Head & Neck Surgery • American Academy of Pain Management • American Academy of Wound Management • American Association for Medical Transcription • American Association for Respiratory Care • American Association of Critical-Care Nurses Certification Corporation • American Association of Family and Consumer Sciences • American Association of Medical Assistants • American Association of Physician Specialists • American Board for Certification in Orthotics and Prosthetics, Inc. • American Board for Occupational Health Nurses • American Board of Ambulatory Medicine • American Board of Cardiovascular Perfusion • American Board of Chiropractic Consultants • American Board of Chiropractic Orthopaedists • American Board of Chiropractic Sports Physicians • American Board of Industrial Hygiene • American Board of Nursing Specialties • American Board of Opticianry • American Board of Pain Medicine • American Board of Professional Neuropsychology • American Board of Surgical Assistants

• American Board of Transplant Coordinators

• American Board of Veterinary Practitioners

• American Certification Agency for Healthcare Professionals

• American Chiropractic Neurology Board
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• American Chiropractic Registry of Radiologic Technologists • American College of Forensic Examiners • American College of Healthcare Executives • American College of Sports Medicine • American Compensation Association • American Construction Inspectors Association • American Council of Certified Podiatric Physicians and Surgeons • American Council on Exercise • American Fence Association, Inc. • American Hospital Association Certification Center • American Institute of Certified Public Accountants • American Lung Association National Asthma Education Certification Board • American Medical Technologists • American Nurses Credentialing Center Commission on Certification • American Occupational Therapy Association • American Osteopathic Association • American Payroll Association • American Petroleum Institute • American Physical Therapy Association • American Podiatric Medical Specialties Board • American Production and Inventory Control Society • American Reflexology Certification Board • American Registry of Diagnostic Medical Sonographers • The American Registry of Radiologic Technologists • American Society for Industrial Security • American Society for Microbiology • American Society of Anesthesia Technologists and Technicians • American Society of Association Executives • American Society of Military Comptrollers • American Speech-Language-Hearing Association • Aquatic Exercise Association, Inc. • Art Therapy Credentials Board • Associated Landscape Contractors of Colorado • Association for Canadian Registered Safety Professionals • Association for Death Education and Counseling • Association for Investment Management and Research • Association of Government Accountants • Association of Medical Illustrators • Association of Professionals in Business Management • Association of Social Work Boards • Association of Surgical Technologists, Inc.

• Association of Water Technologies, Inc.

• BICSI: A Telecommunications Association

• Behavior Analyst Certification Board

• Biofeedback Certification Institute of America

• Board for Certification in Pedorthics

• Board for Orthotist/Prothetist Certification

• Board of Certification for Emergency Nursing

• Board of Certification in Professional Ergonomics

• Board of Certified Safety Professionals

• Board of Environmental, Health & Safety Auditor Certifications

• Board of Pharmaceutical Specialties

• Board of Registered Polysomnographic Technologists

• California-Nevada Section, American Water Works Association

• California Water Environment Association

• Canadian Alliance of Physiotherapy Regulators

• Canadian Board for Respiratory Care, Inc.

• Canadian Chiropractic Examining Board

• Canadian Council of Professional Engineers

• Canadian Securities Institute

• Certification Board for Music Therapists

• Certification Board of Infection Control and Epidemiology

• Certification Board Perioperative Nursing

• Certification of Disability Management Specialists Commission

• Certified Financial Planner Board of Standards, Inc.

• Certified Fund Raising Executive International Credentialing Board

• Certified General Accountants’ Association of Canada

• Certifying Board for Dietary Managers
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• Certifying Board of Gastroenterology Nurses and Associates • Clinical Nutrition Certification Board • College of Massage Therapists of Ontario • College of Medical Radiation Technologists of Ontario • College of Occupational Therapists of Ontario • College of Respiratory Therapists of Ontario • Commercial Real Estate Education Foundation, Inc. • Commission for Case Manager Certification • Commission for Certification in Geriatric Pharmacy • Commission on Dietetic Registration of the American Dietetic Association • Commission on Graduates of Foreign Nursing Schools • Commission on Rehabilitation Counselor Certification • Computing Technology Industry Association • Construction Management Association of America • Consultant Services • Convention Liaison Council • Council on Certification of Nurse Anesthetists • Council on Licensure, Enforcement and Regulation • Council on Nutrition • Defense Activity for Non-Traditional Education Support • Dental Assisting National Board • The Educational Foundation of the National Restaurant Association • Examination Board of Professional Home Inspectors • Hand Therapy Certification Commission, Inc. • Healthcare Quality Certification Board • Human Resource Certification Institute • IEEE Computer Society • ISA, the international society for measurement and control • Infusion Nurses Certification Corporation • Illinois Department of Professional Regulation • Institute of Certified Management Accountants • Institute of Hazardous Materials Management • Institute of Real Estate Management • International Air Filtration Certifiers Association • International Association for Colon Hydrotherapy • International Association of Healthcare Central Service Materiel Management • International Association of Psychosocial Rehabilitation Services • International Board of Lactation Consultant Examiners • International Certification and Reciprocity Consortium/Alcohol & Other Drug

Abuse, Inc. • International Conference of Building Officials

• International Electrical Testing Association (NETA)

• International Executive Housekeepers Association, Inc.

• International Society for Clinical Densitometry

• International Society of Arboriculture

• Joint Commission on Allied Health Personnel in Ophthamology

• Knowledge Management Certification Board

• Lamaze International

• Liaison Council on Certification for the Surgical Technologist

• National Aerobics & Fitness Trainers Association

• National Air Duct Cleaners Association

• National Association Medical Staff Services

• National Association for Subacute & Post Acute Care

• National Association of Alcoholism and Drug Abuse Counselors

• National Association of Boards of Pharmacy

• National Association of Forensic Counselors, Inc.

• National Association of Legal Assistants

• National Association of Mortgage Brokers

• National Association of Purchasing Management

• National Athletic Trainer’s Association Board of Certification

• National Board for Certification in Hearing Instrument Sciences

• National Board for Certification in Occupational Therapy

• National Board for Certification of Registrars

• National Board for Certified Counselors

• National Board for Professional Teaching Standards

• National Board for Respiratory Care

• National Board of Certification for Community Association Managers, Inc.

• National Board of Examiners in Optometry
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• National Board of Orthodontics, U.S. • National Business Aviation Association • National Center for Competency Testing • National Certification Board for Diabetes Educators • National Certification Board for Therapeutic Massage and Body Work • The National Certification Board of Pediatric Nurse Practitioners and Nurses • National Certification Commission for Acupuncture and Oriental Medicine • National Certification Corporation for the Obstetric, Gynecologic, and Neonatal

Nursing Specialties • The National Commission for Health Education Credentialing • National Commission for the Certification of Crane Operators

• National Community Pharmacists Association

• National Contact Lens Examiners

• National Council for Interior Design Qualification

• National Council for Therapeutic Recreation Certification, Inc.

• National Council of Architectural Registration Boards

• National Council of Examiners for Engineering and Surveying

• National Council of State Boards of Nursing, Inc.

• National Council for Therapeutic Recreation Certification

• National Council on Qualifications for the Lighting Professions

• National Dental Hygiene Certification Board

• National Examining Board of Ocularists

• National Glass Association

• National Ground Water Association

• National Healthcareer Association

• National Ground Water Association

• National Indian Child Welfare Association

• National Institute for Automotive Service Excellence

• National Institute for Certification of Healthcare Sterile Processing and Distribution Personnel

• National Institute for Standards in Pharmacist Credentialing

• National Phlebotomy Association, Inc.

• National Registry of Emergency Medical Technicians

• National Registry of Food Safety Professionals

• National Safety Management Society

• National Strength and Conditioning Association (NSCA) Certification Commission

• National Surgical Assistant Association

• North American Electric Reliability Council

• North American Registry of Midwives

• North American Technician Excellence

• The Nuclear Medicine Technology Certification Board

• Oncology Nursing Certification Corporation

• Ontario College of Pharmacists

• Ophthalmic Photographers’ Society, Inc. Board of Certification

• Pharmacy Technician Certification Board

• Professional Photographers of America

• Project Management Institute

• Radiology Coding Certification Board

• Registry of Interpreters for the Deaf, Inc.

• Registry of Magnetic Resonance Imaging Technologists, Inc.

• Rehabilitation Engineering and Assistive Technology Society of North America

• Royal College of Physicians and Surgeons of Canada

• Sales & Service Voluntary Partnership, Inc.

• Society of Actuaries

• Society of Cable Telecommunications Engineers

• The Society of the Plastics Industry, Inc.

• Society of Tribologists and Lubrication Engineers

• Transportation Professional Certification Board, Inc.

• Washington State Department of Health

• Wound, Ostomy, and Continence Nurses Certification Board

PREPARED STATEMENT OF SORY HINTON JORDAN

Good morning Mr. Chairman and Members of the Committee. I am Sory Hinton

Jordan of California, President of IAPES, which is a nonprofit educational association representing 17,000 professionals worldwide who work in public and private

workforce development programs. The mission of IAPES is to enhance, serve, and
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support those interested in workforce development programs. IAPES was founded

in 1913 when there were only 62 public employment offices in the United States

operating in 19 States. The need for uniformity in methods, procedures, and in the

exchange of labor market data and workforce ideas was realized by many managers

and officials of these early workforce agencies and so they helped to form our organization. I thank the Committee for the opportunity to share with you some

thoughts about the reauthorization of WIA as it affects the important contributions

our members provide in assisting workers and linking them to employers and opportunity.

The 1998 enactment of the Workforce Investment Act was intended to reform the

nation’s employment and training system. It was recognized at the time that parts

of the system were fragmented or overlapping and that the system as a whole could

be coordinated and improved to better serve both job seekers and employers. WIA

is an attempt to integrate employment and training services at the local level into

a coordinated workforce development system. As you know, full implementation of

WIA began in July 2000, with the primary focus on the establishment of a network

of local one-stop delivery centers, which is where many of our IAPES members work

to assist job seekers and employers.

Over one million people received intensive services or training services through

WIA-funded programs during the period July 1, 2001 to June 30, 2002. During this

same period, millions more job seekers and employers benefited from job search and

placement assistance, other labor market information, unemployment insurance assistance, counseling and customized services for veterans, adults, youth, individuals

with disabilities and dislocated workers—all provided through this same coordinated

workforce development system under the authority of WIA, the Wagner-Peyser Act,

the Rehabilitation Services Act, the Adult and Vocational Education Acts and the

Social Security Act.

However, in the current national economic environment of high unemployment

and historically long duration of joblessness, modest successes in reorganizing employment and training programs into a coordinated workforce delivery system have

not proven sufficient to address the needs of the nine million Americans who are

now out of work and the many millions more who have stopped looking for work.

Strengthening the capability of programs that help Americans get back to work—

both through reauthorization legislation and robust Federal funding—is even more

essential at this time.

Mr. Chairman, the House of Representatives has passed its proposed WIA reauthorization. We have some thoughts regarding the House bill that may be useful to

you as you consider your own reauthorization bill.

H.R. 1261, as passed by the House of Representatives, proposes to improve the

workforce investment system through various amendments intended to strengthen

one-stop career centers, alter WIA governance relationships, emphasize consumer

choice, target youth services, and focus on performance outcomes.

The House bill would alter the membership and responsibilities of State workforce

investment boards. Greater responsibility would fall upon State workforce-related

agencies, where there is a significant concentration of our IAPES membership. It

is our hope that through such a ‘‘refocusing’’ State boards would ensure that Statelevel administrators of one-stop programs have a greater say in setting policies regarding the coordination of services within the one-stop centers. Our membership

is pleased that the House bill emphasizes serving individuals with disabilities but

feels more emphasis must also be placed on the special employment services required and well earned by our nation’s veterans. We also feel that State authority

to require a regional plan from local areas is an important feature of the House bill

that can help improve the overall State workforce system. The House would drop

the requirement that each of the local one-stop partner programs have a seat on

the local board. While we do not oppose this change, we reiterate it is essential that

the local labor exchange agency (the Employment Service) as well as representatives

of the unemployment insurance agency, the labor market information agency, veterans and individuals with disabilities be at the table when decisions affecting the

local labor market are made. H.R. 1261 provides that each one-stop partner program

whose budget is controlled by the State must contribute a portion of its annual

funding for allocation to the infrastructure funding of local one-stop centers. Again,

while IAPES does not specifically oppose this concept, we want to ensure that the

portion of the funds provided for infrastructure costs remains a small percentage of

each partner program’s overall funding and that it is proportionate to the program’s

use of the one-stop system. Our concerns were addressed by a House bill amendment offered by Representative Kline.

The House bill also anticipates the consolidation of the three adult funding

streams—WIA adult and dislocated worker funding streams and the Wagner-Peyser
95

labor exchange (Employment Service) funding stream. Under this arrangement, all

former Employment Service functions would be maintained through the provision of

core services within the one-stop delivery system. Under current law, both WIA and

the Wagner-Peyser Act provide funds for services to connect job seekers with available jobs. All adults are eligible to receive these services. Such WIA activities are

called ’core services’ and under Wagner-Peyser they are ’labor exchange services.’

But the services are very similar and, in many States, are offered through a coordinated or fully integrated local delivery system. The House would give governors the

option of either providing the funds to the local areas or utilizing State employees

to provide the services locally in the one-stop centers. Under Wagner-Peyser, but not

WIA, there is a regulatory requirement that labor exchange services be provided by

State merit staff employees.

Some IAPES members feel that consolidation of these funding streams is consistent with the program delivery coordination that their States have pursued and,

therefore, is appropriate. Based upon the comments we have received from our

membership and the legislative outreach to the membership that we have undertaken, it is clear however that the majority of IAPES members strongly believe that

the separate identification of labor exchange resources has been very valuable to

their State’s job seekers and employers. Also, Mr. Chairman, virtually all of our

IAPES members appreciate that merit service requirements in many public programs grew out of patronage abuses that harmed public service capabilities. We feel

the protections provided to vital public services through a merit service requirement

remain extremely important. But many of our members feel this is not the only criterion that should be considered in deciding how to improve the workforce delivery

system. However, all of our IAPES members are concerned about the availability

of adequate Federal resources for the workforce system to serve employers and, particularly in difficult economic times such as these, job seekers. Frankly, Mr. Chairman, this latter concern of our membership is the strongest reason we feel it may

not be prudent at this time to consider the consolidation proposed by the House.

Since there are so few national organizations that focus on the ‘‘employment security’’ side of employment and training programs—including UI, ES and labor market

information—and so few who also focus on VETS and services to individuals with

disabilities, and since our Membership was historically concentrated in these areas,

our organization has tended to focus here. In the past few years, Federal funding

for employment and training programs has declined, in total, by significant

amounts—in spite of rising joblessness and unemployment duration. We worked

very hard during this period to preserve Federal resources for UI administration,

the Wagner-Peyser labor exchange, ALMIS, VETS and WIA disabilities activities.

For fiscal year 2003, Congress, for the most part, protected these programs. At the

same time however, the administration proposed (and continues to propose) large

cuts in employment and training programs. The Congress responded last year by

cutting other WIA programs by more than $600 million. We think this approach by

the Congress is due, in part, to the historic commitment Congress has had to the

UI and ES programs. Facing more Federal cuts for at least as long as these massive, renewed Federal deficits endure—which could be many more years, we think

it is probably wiser to face our chances in the bruising annual Federal appropriations process with the limited leverage of a separate Wagner-Peyser funding stream

still in place. We think, unfortunately, WIA programs will be cut again this year—

and probably more in the years ahead. We think, on balance, it would be better if

we had a shot at trying to protect labor exchange resources under Wagner-Peyser.

Finally, Mr. Chairman, let me say a word about a program we were not so successful in defending in the appropriations process last year. America’s Labor Market

Information System is central to effective Federal, State and local policy making in

the workforce system. And it is critical to the millions of individual decisions job

seekers and employers make every year as well. Yet we, as a system, tend to ignore

the essential services it provides when we make our funding decisions or consider

legislative changes. I would therefore ask, Mr. Chairman, that we have the opportunity to continue discussing ALMIS issues as you work through the WIA reauthorization this year.

Again, Mr. Chairman, thank you for offering IAPES this opportunity to submit

this testimony.

PREPARED STATEMENT OF STEVE H. PERDUE

On behalf of the Board of Directors for the American Congress of Community Support and Employment Services (ACCSES), I welcome the opportunity to provide

comment on the reauthorization of the Workforce Investment Act of 1998. ACCSES

is a national, nonprofit organization of providers of vocational rehabilitation and
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community supports committed to maximizing employment opportunities and independent living for individuals with disabilities.

As the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on

Employment, Safety, and Training considers reauthorizing legislation for the nation’s workforce development and public vocational rehabilitation systems, ACCSES

appreciates the opportunity to share with you its recommendations. Earlier this

year on April 24, ACCSES sent each of you a letter encouraging your subcommittee

to pursue a more deliberative path on reauthorization of the Workforce Investment

Act (hereafter referred to as WIA) and Rehabilitation Act (hereafter referred to as

Rehab Act) by seeking greater public input from stakeholders. The public hearing

convened on June 18 was a step in the right direction and hopefully additional hearings will follow.

WIA was intended to provide displaced workers with the information, training,

and resources necessary to obtain and retain employment through the design and

implementation of the One-Stop Delivery System (hereafter referred to as the OneStops). By establishing the One-Stops, the previously fragmented employment and

training system was replaced with an integrated, enhanced system of services and

supports corresponding to needs of a competitive labor market.

WIA also recognized that individuals with disabilities often required more specialized services and supports and, therefore, authorized certain mandatory partners

participation, such as the Vocational Rehabilitation (VR) program. By mandating

the State VR Agencies participation, individuals with disabilities were given physical, programmatic, and systematic accessibility to the workforce investment system.

ACCSES contends that the following recommendations shall serve to improve the

existing workforce development and public vocational rehabilitation system.

UTILIZING COMMUNITY-BASED PROVIDERS IN THE ONE-STOP SYSTEM

Community-based providers represented by ACCSES play a pivotal role in integrating individuals with disabilities into their communities, and providing the skills

necessary to lead more productive lives. Community-based providers offer a wide

array of services and supports, including vocational rehabilitation, employment

skills, residential services, mental health services, substance abuse services, transportation, case management, day treatment, counseling, and family services. All of

these services and supports represent a sound public investment because they assist

individuals with disabilities become self-sufficient, tax-paying citizens.

ACCSES believes that the ability of community-based providers to assist individuals with disabilities obtain and retain employment largely depends on a strong,

comprehensive workforce development system. Therefore, it is critical that the necessary steps be taken during reauthorization to ensure that continued improvements are made to the WIA’s infrastructure, along with the allocation of appropriate

resources. One of the most significant improvements involves greater utilization of

community-based providers in the One-Stop system.

Challenge Industries, Inc. located in Ithaca, New York (Tompkins County) provides an excellent example of a community-based provider being included as an integral component in a successful One-Stop system. Challenge is a vocational rehabilitation agency, serving over 500 job seekers per year comprised of individuals with

disabilities and job seekers transitioning from public assistance.

Although many areas in New York State report continued failure to widen participation in the local One-Stop infrastructure, Tompkins Workforce New York OneStop system has achieved success, in part, by its inclusion of community-based providers. Where other One-Stops have been unable to achieve the overall goals set

forth in WIA, Challenge’s involvement in Tompkins Workforce New York One-Stop

has helped to eliminate duplication of services.

Some unique features, which have resulted from the inclusion of community-based

providers in the Tompkins Workforce New York One-Stop system, include:

• Co-location of agencies serving job seekers with barriers, resulting in more effective networking and supports for job seekers (including, but not limited to, housing, transportation, child-care, financial planning, etc.)

• Active participation in One-Stop planning including marketing the ‘‘system,’’

rather than approaching the business community as several distinct agencies

• Greater support systems and individualized training opportunities for job seekers (have been able to tap into WIA funds, when VR is unable to financially assist)

• Shared staffing in the One-Stop Center which includes direct staff from community based agencies who specialize in serving individuals with disabilities

• Increased participation with AOSOS which has improved the reportable outcomes representing successful job placements of individuals with disabilities
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1 New Jersey Division of Vocational Rehabilitation Services, ‘‘Fiscal Year 2002 Report on Activity to Senators Frank Lautenberg and Jon Corzine,’’ 2003.

• Disability expertise in the One-Stop system (accessibility, accommodations,

workplace disclosure, social security advisement, tax credits and other work incentives)

Community based providers have long histories of established relationships with

the business community that have resulted in growing placement rates for job seekers with disabilities. In short, the success of the public VR system depends on its

ability to collaborate, partner and include community-based agencies in serving individuals with disabilities in the One-Stop system.

UTILIZING COMMUNITY-BASED PROVIDERS IN THE STATE VR SYSTEM

ACCSES also contends that reauthorization should include comprehensive language that encourages State VR Agencies to utilize the services and supports provided by community-based programs. Considering the U.S. Supreme Court’s 1999

Olmstead decision, President Bush’s New Freedom Initiative, and subsequent Executive Order Number 13217, the success of the public VR program will depend, in

large part, on its ability to collaborate and partner with other agencies, both public

and private, in providing services and supports to individuals with disabilities. Since

many States are focusing on Olmstead implementation, community-based programs

will continue to play an increasing role in assisting individuals to obtain work.

For instance, in Florida the total amount of VR expenditures spent in 2002 on

private, community-based providers was approximately 8.3 percent (total VR expenditures was $125,176,210 and $10,485,380 was spent on private providers). Yet,

the private, community-based providers in the State produced almost four times as

many successful closures (22.8 percent). There were 10,013 total employment outcomes defined as 26 closures and private, community-based providers closed 2,284

cases.

Likewise, the State VR Agency in Illinois spent approximately $24 million of its

$84 million budget on private, community-based providers (27 percent). The total

number of successful outcomes achieved in Illinois last year was an estimated 6,600

and private providers closed 42 percent of the cases (2,801). In Florida and Illinois,

private, community-based providers have demonstrated their value to the VR program by successfully working with individuals with disabilities to obtain and retain

employment.

State VR Agencies and community-based providers, alike, need additional training

on the needs and best practices in employment services for individuals with severe

and persistent mental illness. Based on some estimates, the unemployment rate

among this fragile population continues to remain around 90 percent. Therefore, increased resources for community-based demonstration projects for supported employment and supported educational services are needed.

INCREASING COORDINATION AND ACCESSIBILITY

For almost 30 years, the cornerstone of Title I of the Rehab Act has consistently

been to provide individuals with disabilities with customized vocational rehabilitation, employment services, and other supports. More importantly though, Title I has

represented the commitment of the Federal Government to empower individuals

with disabilities to take control of their own lives by becoming more independent.

ACCSES strongly believes that the reauthorization process needs to maintain this

commitment by strengthening not weakening the public VR system.

Clearly individuals with disabilities who access services and supports from the

public VR system stand to benefit by becoming more self-sufficient and less dependent on the public doles. For example, according to the New Jersey Division Vocational Rehabilitation Services (NJDVRS) there were 3,788 recipients of NJDVRS

services in New Jersey successfully rehabilitated and placed in jobs in fiscal year

2002. For those individuals placed successfully the average weekly wage at

achievement of employment was $417 compared with an average weekly

wage at the time of referral to NJDVRS of $74. This demonstrates considerable

growth in the earning capacities of those who were successfully placed after

NJDVRS services.1

In addition the long-held belief that vocational rehabilitation saves tax dollars

was supported by data on public support recipients from New Jersey who were referred for NJDVRS services and placed successfully. At the time of their referral,

30 percent were receiving some type of public support (SSDI, SSI, Public
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2 ‘‘Fiscal Year 2002 Report on Activity to Senators Frank Lautenberg and Jon Corzine,’’ 2003.

3 United States General Accounting Office, GAO-02-72, ‘‘Workforce Investment Act: Better

Guidance Needed to Address Concerns Over New Requirements,’’ October 2001, p. 15. 4GAO-02-72, p. 18.

5 United States General Accounting Office, GAO-02-72, ‘‘Workforce Investment Act Better

Guidance Needed to Address Concerns Over New Requirements,’’ October 2001, p. 16.

Assistance), while at the successful completion of their program and subsequent placement, 12 percent continued to receive public support.2

Protecting the integrity of Title I and State VR Agencies must remain a priority

to insure proper services for individuals with disabilities. Keeping the current program infrastructure and funding separate from other employment and training programs will best achieve this objective. During the 1998 reauthorization of the Rehab

Act, attempts were made to consolidate VR programs into one funding source—this

was avoided because advocates successfully demonstrated that the One-Stops could

not effectively work for all individuals with disabilities needing services. The same

holds true today. Despite keeping the program infrastructure and funding separate,

there has been little technical guidance on how best to effectively coordinate the

services available at the One-Stops and its mandatory partners.

A study completed in October 2001 by the General Accounting Office (GAO) determined that mandated partners were concerned that their participation may lead to

serving ineligible clients. Specifically, State VR Agencies expressed apprehension

that changes to their traditional service-delivery system was forcing them to serve

individuals outside their target populations. Since many individuals who enter the

system seeking services and supports are not disabled, GAO found that VR was reluctant to provide core services to these individuals. Yet, without VR’s active participation and presence, the One-Stops are often ill-equipped to serve individuals with

disabilities who require more specialized services and supports.3

The Rehab Act mandates that State VR Agencies must serve individuals with the

most severe disabilities based on an Order-of-Selection if they do not have the funding to serve all. Local VR counselors have expressed programmatic concerns over

serving non-disabled individuals entering the One-Stops (i.e. providing initial intakes or making referrals). In response to their concerns, the U.S. Department of

Education (DOE) has indicated that such services are permitted, and also in compliance with their WIA participation.4 Although DOE has attempted to provide clarification, the GAO study concluded, ‘‘the lack of explicit direction leads to continued

confusion and a general hesitancy to conduct activities not normally provided in

their existing offices.’’ The current 2003 reauthorization provides an excellent opportunity to clarify the ongoing confusion.5 Since resources available to individuals

with disabilities are already limited, the need for clarification on delivery methods

is essential to the One-Stops being able to successfully serve these individuals. In

order to improve accessibility at the One-Stops, mandatory partners need additional

technical guidance and resources to provide for local and regional planning. Congress and Federal agencies need to modify the authorizing legislation and regulations, respectively, to make them more uniform with the One-Stops.

Also, incentives need to be given to mandatory partners for relocation to the OneStops. One-Stops that have the physical presence of their mandatory partners are

better able to serve their targeted populations seeking services and supports. Individuals with disabilities often have difficulties finding adequate and accessible

transportation, therefore having a centralized location offering the desired information, training, and resources would help to alleviate this dilemma. In the GAO

study, staff reported cases where individuals with disabilities were referred from

one location to another in order to receive services.

As previously mentioned, limited resources often create barriers to employment by

complicating the ability of individuals with disabilities to access services. Mandatory

partners participating in the One-Stops should be allocated additional funds for

costs associated with their participation. Fiscal restraints placed on mandatory partners’ ability to collocate with the One-Stops, while maintaining their existing locations, has made it hard to assign additional staff to the One-Stops. Providing additional funding to link existing offices with the One-Stops would encourage greater

participation. It would also grant individuals with disabilities options when attempting to access services.

Better coordination between the One-Stops and its mandatory partners is also

consistent with congressional intent to make the workforce development system

physically and programmatically accessible to people with disabilities. The American

with Disabilities Act (ADA) and Sections 504 and 508 of the Rehab Act also mandate that the One-Stops include physical and programmatic accessibility standards.

In many cases these standards have not been achieved by the One-Stops.
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Although ACCSES contends that improving the One-Stops accessibility is an essential piece of reauthorization, it should not come at the expense of the mandatory

partners existing obligations. Many of the mandatory partners, such as VR, are already severely under-funded having to place people on waiting lists for services and

supports. In fact, currently 37 State VR Agencies are operating under an Order-ofSelection. Funds appropriated to the VR system should not be re-directed for purposes other than the ones mandated by the Rehab Act. The Rehab Act clearly outlines accountability criteria for VR-related funds, which includes prohibiting the

transfer of funds. Section 16(a) of the Rehab Act reads, ‘‘No funds appropriated

under this Act for any program or activity may be used for any purpose other than

that for which the funds were specifically authorized.’’ Therefore, ACCSES is strongly opposed to siphoning such funds for administrative and infrastructure development of the One-Stops.

MAINTAINING DEDICATED PROGRAMS AND FUNDING

It is widely recognized that individuals with disabilities require varying services

and supports depending on the severity of their physical or cognitive impairment.

In response to these differences, Congress authorized several smaller, specialized

programs designed to address specific service needs of individuals with disabilities.

The Rehab Act specifically includes four dedicated programs Supported Employment

State Grant program, Projects With Industries (PWI), Migrant and Seasonal Farm

workers, and Recreation Projects whose distinct tasks are better served separate

from the larger State VR grants.

The President’s fiscal year (FY) 2004 budget proposes to fold these four smaller

programs funded through Title VI of the Rehab Act into the larger VR State grant

program. The President’s budget argues that these programs are redundant and

should have the same funding source. By consolidating these programs, individuals

with disabilities will have less choices made available to them because many States

would opt not to fund smaller programs as part of their core VR services, costing

jobs and opportunities. Each of these programs is proven to be highly successful programs complimenting the basic State grants, despite being level funded year after

year.

The Projects with Industry (PWI) program provides an excellent example. PWI

has a proven track record over more than 30 years of placing persons with disabilities into competitive jobs in the community. It has proven to be a most effective

means of involving the business community in the rehabilitation process. PWI provides a bridge between the private business community and government supports

for people with disabilities. In every nationwide PWI competition conducted during

the last 15 to 20 years, the number of qualified applications has far exceeded the

available funding.

ACCSES believes additional funding should be made available so that more individuals with disabilities can be placed through PWI projects. Since this program

serves a very important role as adjuncts to the VR services authorized under Title

I of the Rehabilitation Act, ACCSES cannot support the President’s request to consolidate these separate funding streams into the Title I State VR grant. ACCSES

recommends that the Projects with Industry program maintained in the Rehab Act

as part of WIA and be funded at $50 million for fiscal year 2004.

Rather than eliminate the structural integrity of these successful programs, Congress should concentrate on improved coordination not only between intra-agency

programs, but also on a larger scale between the One-Stops and its mandatory partners. Even more troubling is that the President also wants to consolidate three

adult training programs administered under DOL.

According to DOL’s own website, ‘‘The purpose of Adult programs under Title I

of the Workforce Investment Act (WIA) is to provide workforce investment activities

that increase the employment retention and earnings of participants, and increase

occupational skill attainment by the participants. This program aims to improve the

quality of the workforce, reduce welfare dependency, and enhance the productivity

and competitiveness of the nation’s economy.’’ These objectives can be best attained

by dedicated programs that tailor to the specific needs of workers with and without

disabilities.

ACCSES fears that the employment needs of individuals with disabilities trying

to obtain employment and training skills will be harder to access under a consolidated One-Stop system. There are already enough barriers to employment facing

this fragile population that is underserved by the One-Stops. The current law that

provides dedicated funding for WIA adult, dislocated worker, and Wagner-Peyser

State grants programs must be maintained.
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PROVIDING FOR YOUTH-IN-TRANSITION

In its 18th Annual Report to Congress on the implementation of the Individuals

with Disabilities Education Act (IDEA), DOE’s Office of Special Education Programs

(OSEP) recognized that while all IDEA requirements are important, some of its requirements have a more direct relationship to student results than others. OSEP

placed the highest priority on compliance with those IDEA requirements that have

the strongest relationship with improved services and results for students with disabilities and their families. The first priority indicated was the statement of needed

transition services for students with disabilities beginning no later than age 16

(and younger if appropriate).

ACCSES supports that the full array of transition begins by age 14. The statement of needed transition services is the required link to the community; the drop

out rate of youth with disabilities prior to the requirements in the current law necessitates its implementation prior to age 16. Using community based organizations

in transition planning will assist students to be better prepared by providing them

with opportunities to apply skills necessary for employment.

In addition, ACCSES supports the proposed legislation with Senate Bill 1248 for

IDEA reauthorization, which amends the Rehab Act to include language specific to

VR counselors providing transition assistance for youth with disabilities. However,

with 37 States already in an order of selection, the resources necessary to carry out

this provision must be included. Under funding this provision will put an overwhelming burden on a system that is already lacking resources necessary to fulfill

its current requirements. Also, the public VR system was designed to promote employment and training for individuals with disabilities. Their role in transition planning must be specific to these areas only.

CONCLUSION

The ongoing reauthorization provides your Subcommittee the opportunity to remedy some of the inconsistencies that exist under the workforce development system

that result in severe barriers to accomplishing the purpose of these programs, i.e.

to further the education, employment, and independence of persons with disabilities.

These barriers need to be removed. ACCSES believes that individuals with disabilities would be better served by a seamless service delivery system, whereby the

Workforce Investment Act, Individuals with Disabilities Education Act, Rehabilitation Act, and Ticket to Work and Work Incentives Improvement Act coordinate and

use identical language to foster smooth transition and cooperative services.

PREPARED STATEMENT OF DIANE D. RATH

As Chair of the Texas Workforce Commission and the Commissioner Representing

the Public, I appreciate this opportunity to submit a statement for the record regarding the reauthorization of the Workforce Investment Act (WIA). This landmark

legislation brings together employers and workers in a system that meets the needs

of both groups. By matching job seekers with targeted occupations in a particular

area, Congress eliminated prior programs that provided training without consideration to the needs of employers, resulting in well-trained but unemployable individuals.

The WIA is an essential part of our system in Texas. Through the foresight of

then-Governor George W. Bush and the Texas Legislature in 1995, we instituted

services similar to those available through WIA, a full 3 years before WIA became

law. The Texas Workforce Network, consisting of TWC and local workforce boards,

offers a seamless delivery system for all employers and job seekers, regardless of

their background or job status. If you go into one of the more than 270 workforce

centers and satellite offices throughout the State, you will not see unemployed people, welfare recipients, veterans, ex-offenders or employers, although all of those

people are present. You will just see people being served through an integrated system. About 1.5 million job seekers receive employment services through our local

workforce centers each year.

Texas is one of the few States in the country with such a consolidated system,

and it has been a tremendous success. We bring together clients seeking work under

several Federal programs, including WIA, Temporary Assistance for Needy Families, Food Stamp Employment and Training, Trade Adjustment Assistance, WagnerPeyser Employment Services, veterans assistance, and child care. We have received

three consecutive WIA Incentive awards from the Secretary of Labor. We also have

an outstanding record of placing adult TANF recipients in jobs, and Texas has received high performance bonuses from the U.S. Department of Health and Human

Services in each of the past 3 years.
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Reauthorization of WIA presents us with the opportunity to build on these successes by providing increased flexibility to States and Governors. Our experience

since 1998 has revealed the limitations of the current law, and certain changes are

necessary to ensure that States can realize the full potential of the WIA system.

CONSOLIDATION OF FUNDING

The States need additional flexibility in WIA funding to help employers recover

and workers regain jobs. The limited transferability among WIA funding streams

and the separation of WIA and Wagner-Peyser activities restricts the assistance

that States and local workforce boards can provide. Our 1995 State law would block

grant funds for Wagner-Peyser Employment Services (ES) to local areas, but the

U.S. Department of Labor has not allowed Texas to implement that provision. We

therefore strongly support the consolidation of WIA Adult, WIA Dislocated Worker,

and Wagner-Peyser ES funds into a single funding stream. In addition to allowing

us finally to conform to our State law, this consolidation will help eliminate inefficiency and duplication, as well as provide for greater integration of services to all

customers.

In a State as large and diverse as Texas, one size does not fit all and the current

separation of Adult and Dislocated Worker funds does not meet local needs. In the

Rio Grande Valley, the unemployment rate in the McAllen-Edinburg-Mission MSA

stood at 11.4 percent in May 2003, the State’s highest. Despite this high rate, the

area does not need additional Dislocated Worker funding, but could use funding to

upgrade the skills of Adult residents in the area to enable them to meet employers’

needs. Similarly in the Dallas area, with unemployment at 7.0 percent, the local

workforce area does not need Adult funds, but it desperately needs Dislocated Worker funding in order to respond to the needs of the employers and residents in the

area.

Consolidation of these funding streams, along with ES funds, would ensure that

ample resources are available to meet the unique workforce needs of all our local

communities. The Governor should have complete discretion over the State’s share

of the consolidated funding grant to ensure that funds can be targeted where they

are most needed.

BLOCK GRANTS AND WAIVERS

We strongly support providing the Governor expanded block grant and waiver authority. The Governor is in a uniquely strategic position to identify the emerging

needs of all regions of the State. The Governor therefore should have as much flexibility as possible to respond to those local needs.

Block grant authority would enable the Governor to determine sub-state funding

and governance structures. The Governor would also be able to design and administer WIA Title I formula programs, both Adult and Youth, to meet the needs of employers and job seekers. As we have seen during this period of economic slowdown,

those needs vary not only from region to region, but also from week to week and

month to month. Waiting for the annual planning cycle to evaluate needs fails to

take into account the volatile situation many areas are now experiencing, where employers are desperately trying to sustain their businesses but need the skills of their

current workforce upgraded to stabilize the company and the community. This flexibility is limited under current law. States have this flexibility in TANF, and we

need it under WIA.

In addition, Texas has aggressively applied for and successfully used waivers

under current law to develop innovative workforce development solutions and respond appropriately to employers’ needs. Each of the waivers granted to us will improve our services for the affected populations, allow the Texas boards to respond

to local economic conditions, and facilitate matching employers with job seekers. We

urge you to continue and expand the Department of Labor’s authority to grant waivers during reauthorization.

INFRASTRUCTURE FUNDING

Partner programs in the one-stop system should be expected to share some of the

costs of running the one-stop centers. This is an issue of fundamental fairness.

Without the involvement of partner programs, infrastructure costs must be paid

solely out of WIA funds, draining the resources available for the delivery of services.

Texas has been proactive in developing cost allocation agreements with our onestop partners. Accordingly, reauthorization should give States broad discretion in

how to structure and administer infrastructure cost-sharing among partner programs. Most importantly, any new provisions addressing this issue should take care
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not to disrupt or undermine the innovative solutions that States are already implementing.

LOCAL AREA DESIGNATION

Texas seeks the ability to maintain its current local workforce area designations,

which reflect several local labor and economic markets within the State. The Governor should be able to design the geographic areas that best represent the distinctive characteristics of our large State. Local area designation should remain a Statelevel decision, and a local area’s ability to appeal to the Secretary of Labor should

be eliminated.

YOUTH

All Federal youth programs should focus on a strong educational background that

would result in long-term attachment to the workforce and lifelong learning. We

need to improve the activities that connect our youth with the local job market and

promote youth development. There must be increased coordination among all programs serving youth. One integrated coherent strategy with meaningful outcomes

is an overarching necessity.

In addition, local workforce boards should be allowed to use the Eligible Training

Provider system to secure training providers for youth activities, eliminating the requirement to competitively procure training providers for youth separately from the

ETP system. This reform will improve the access youth have to services through

workforce centers and expedite the process of providing those services.

PERFORMANCE MEASURES

Our system is a success because businesses and industries view the Network as

a viable solution to workforce needs. Because business is a primary customer of our

system, performance measures should therefore evaluate how we serve employers.

The system must focus on outcome, not process, measurements. We must be able

to listen to the customer and design our services to meet those needs. We need to

establish a core set of common performance measures such as employment, retention, and earnings that would apply across all partner programs. We also need to

create common definitions and reporting formats that encourage common State and

local reporting systems for one-stop partner programs. We need to encourage co-enrollment among programs to maximize available training and related resources.

As a further step, the workforce development system could be greatly improved

by the increased integration of Federal programs. Different definitions for common

populations, different funding cycles, and different performance measures result in

competing priorities at the local level. The lack of integration causes administrative

complexity, increased administrative costs, and diverts the focus from providing

quality services to the employers and residents.

EDUCATION ISSUES

Another example of the need for improved integration among Federal programs

relates to the adult education program under Title II of WIA. Thousands of garment

workers have been affected along the Texas-Mexico border as the textile industry

has moved to other countries. The workers left behind may receive assistance under

the Trade Act, but the adult education services provided are intended only to help

the worker get his or her high school GED without consideration of workplace skills.

The result is a worker that may have improved English skills but is still unemployable. While this is a Texas-specific example, other States may have similar situations. Adult education programs should prepare a worker to go to work, to continue

to be self-sufficient, instead of leaving that person better educated but still unemployed.

Another challenge has arisen with changing interpretations by educational agencies of the Family Educational Rights and Privacy Act (FERPA), which deals with

the confidentiality of student enrollment data. As you may know, WIA called for increased accountability by education and training providers, and directed States to

set up performance reporting systems that evaluate graduates’ outcomes in the

workforce. To do this, workforce agencies compare the wage records reported by employers quarterly with the enrollment and graduation records at educational institutions to determine whether the student was employed in the field for which he was

trained. This disclosure—for reporting to oversight Federal agencies and to the Congress, not for public disclosure—is one of the hallmarks of WIA, to instill accountability in the use of taxpayer dollars for training purposes. No longer are public

funds used to pay for training where jobs don’t exist. Training can be provided with
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WIA funds if it meets the requirements of employers within industries and for occupations and jobs in demand that have been targeted by the local workforce board

in its annual plan.

The information provided via student records is not intended to reveal how an individual student performed in class, but rather to disclose how effective the training

provider was in preparing students for the world of work. The reluctance of our education partners to share this data with workforce agencies makes it difficult to assess the effectiveness of WIA funding within the country’s higher education system,

and challenges the procedures by which Congress can assess the effectiveness of the

entire workforce investment system.

The accountability provisions of WIA have strengthened the performance outcomes relative to the use of our WIA training funds. However, the reporting requirements are so burdensome that we are losing some of our State’s most valuable training providers—our community colleges. While we want to ensure that WIA participants receive training for jobs that exist, we must also ensure that participants can

choose from a broad array of programs and providers. Granting States increased authority to determine standards for training providers would be welcome to these important partners.

CLOSING

I appreciate the opportunity to submit comments to the subcommittee and hope

you can see why we are proud of our accomplishments in Texas. We believe we have

built a strong foundation for our reformed workforce system and look forward to

new opportunities to build programs that will serve Texans better.

PREPARED STATEMENT OF C.W. VAN VALKENBURGH

Thank you, Mr. Chairman and Members of the Subcommittee for this opportunity

to testify on the reauthorization of the Workforce Investment Act (WIA). I serve as

CEO of Rappahannock Goodwill Industries in Fredericksburg, VA, and am testifying

today on behalf of Goodwill Industries International, Inc.

As you know, Goodwill Industries is a major player in the employment and training provision arena.

Goodwill Industries may be best known for its retail thrift stores. We have a presence in nearly 95 percent of counties in the United States and are among the top

25 retailers in the United States based on the number of stores that we operate.

What many people don’t know is that Goodwill Industries is also the largest provider of job training and career services in the nation, serving individuals with significant barriers to work. In 2002, we helped more than 583,000 individuals in the

United States and Canada obtain job training, build career ladders, obtain worksupports such as childcare and transportation, and find the employment they need

to become self-sufficient. More than 100,000 of those individuals were placed into

good jobs in their communities.

This is what Goodwill has been doing for more than 100 years. While our origins

were faith based, we operate now as independent, not-for-profit, community-based

organizations in 23 countries worldwide. Collectively, we are the seventh largest

nonprofit organization in the United States.

Yet, it is our business model that distinguishes us from many other nonprofits

and charities. Goodwills operate as autonomous organizations, run by highly-trained

CEOs, generating their own revenue streams in each of the 166 Goodwill territories

throughout this nation. In aggregate, Goodwill Industries’ revenues in 2002 totaled

more than $2.06 billion.

Almost 75 percent of those revenues were derived from our retail operations selling used clothing or other goods that were donated by generous individuals in our

communities including, I imagine, many of the members of this committee. The useable items are then resold and more than 85 percent of those revenues are pumped

directly back into serving people in our communities. The remainder of our revenues

is derived largely from contracts and services that we provide to businesses and

public-sector entities. We are best described as highly efficient businesses whose

fundamental mission is to enhance the quality and dignity of life for individuals,

families, and communities.

Mr. Chairman, it is this unique perspective as operators of businesses, our strong

connections in local communities, and our unrivaled level of service to the hardestto-serve populations that makes us a vitally important thread in this nation’s safety

net for the most disadvantaged persons.

Our programmatic knowledge and experience with communities of all sizes and

compositions compels us to offer this feedback about the Federal employment and

training system, authorized in 1998 by the Workforce Investment Act (WIA).
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Goodwills operated career resource centers in communities long before WIA was

passed. Many of these centers are now operating as official one-stop centers in dozens of communities throughout the nation. In the vast majority of our 166 territories

in the United States, we serve as a direct service provider of vocational training or

job readiness programs. In 2002, nearly 198,000 of the total clients we served were

referred to Goodwills by one-stop centers and we continue to strengthen our partnerships within the national system. We serve on local and State workforce investment boards in many communities; in some cases in seats reserved for communitybased organizations and in other areas servings as a business partner.

Mr. Chairman, the wisdom of the WIA system as Congress constructed it in 1998

is that it creates a framework for local communities to connect many dissociated

programs into a cohesive network of specialized service providers and gives the client the power to build his or her own career opportunities with professional guidance. While initial steps have been taken to deploy that vision nationally, we believe

that this system must be given the time and resources to reach its potential. Since

the system has had less than three full years to transition to the new framework,

we believe that only modest changes to the system would be prudent at this time.

However, there are several recommendations that we urge the committee to consider when reauthorizing the Act. Central to each of these points is the need to dramatically improve access to training and work opportunities that lead to self-sufficiency.

First, Mr. Chairman, despite the fact that Goodwills are serving many individuals

through work with our local workforce boards, we believe that much more should

be done to truly integrate the voluntary partners, particularly community-based organizations, into the system.

The success of WIA’s demand-driven one-stop delivery system depends on the effectiveness of partnerships between service and training providers, including community-based organizations (CBOs), which often provide highly successful programs

to assist individuals with specific needs and often seriously disadvantaging conditions.

However, the Department of Labor has found that both community-based organizations and faith-based organizations often are not fully utilized as partners in the

workforce investment system. In many areas, community-based organizations running effective, successful programs may be listed as eligible training providers, but

receive few referrals from one-stop operators.

We hope that the committee will take steps in the reauthorization to encourage

workforce areas to further utilize the wide range of eligible providers offering various types of training and job-readiness services and fully leverage the collective capacity of these organizations on behalf of job seekers. If the system is to truly become a demand-driven system, then clients—our—customers must be given sufficient, real-time information about the availability and outcomes of all eligible service providers.

Second, the WIA system needs far more resources to serve the tremendous number of individuals who need skills training or employment assistance, yet are falling

through the cracks of the system every day. Workforce areas simply do not have the

resources to provide intensive training services to every eligible individual walking

through the door. Neither do they have the resources to help the vast numbers of

individuals working at poverty-level wages upgrade their skills and begin building

career ladders.

In light of this persistent inability to serve everyone that needs assistance, it is

critical that we continue to emphasize and prioritize funds for those with the most

significant barriers to work: chronically unemployed individuals, individuals with

disabilities, displaced homemakers, new entrants to the workforce, those for whom

English is not the first language or who need literacy training, or individuals with

substance abuse problems.

As you know, current law requires that State plans detail how States will serve

low-income individuals, persons seeking nontraditional employment, and others

with multiple barriers to employment. WIA also required local areas with limited

‘‘adult stream’’ funds to give public assistance recipients and low-income individuals

priority for intensive and training services. This is a vitally important component

of the law that must be maintained, regardless of how the funding streams are

structured in the reauthorized legislation. Individuals with barriers to work should

not be relegated to a ‘‘second tier’’ priority.

Third, many of the reauthorization proposals that have been widely discussed

have involved some provisions for streamlining the performance measurement protocols required by the Act. The system is and should be set up to encourage and reward positive outcomes. Accountability for performance is critical to maximizing our
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resources. However, some measures, such as the proposed cost per client ‘‘efficiency’’

measure, fail to fairly characterize the fundamental differences between the populations each provider serves. Serving populations with greater disadvantages often

incurs a higher cost per participant and may require more time for successful placements.

To ensure that programs are not disincentivized from serving ‘‘hard to serve’’ individuals, the common outcome measures established by reauthorization legislation

should include a ‘‘weighting’’ mechanism to provide greater clarity on how localities

and providers are performing. Congress should provide greater incentives for serving individuals with barriers to work, and certainly should not inadvertently discourage it.

We also believe that, to be truly effective in holding localities accountable for performance within the context of a customer-driven system, Congress should retain

the measure of ‘‘customer satisfaction’’ already in use for both job seekers and the

business community.

Fourth, we believe that the legislation must prioritize the systemic elimination of

barriers faced by disabled individuals, those with limited English proficiency, and

those with other barriers to work in accessing one-stop services. Sections 501 and

504 of the Rehabilitation Act of 1973 require Federal agencies to provide reasonable

accommodation to employees and applicants for employment who have disabilities.

However, individuals seeking employment and training services through our nation’s one-stop system too often encounter physical or systemic barriers to accessing

those services. Congress must demand that one-stop facilities funded and developed

under the Workforce Investment Act system be made fully accessible in terms of

programs and services to all persons with barriers to work.

Finally, the legislation must strive to leverage existing relationships between

businesses and community-based organizations that match employer demands with

job seekers to move chronically unemployed individuals into the workforce and to

create incumbent worker training opportunities that prioritize retention and advancement of low-wage workers into career ladders leading to higher-wage job opportunities.

Already, many intermediary organizations such as Goodwill Industries have

strong partnerships with members of the business community to train and employ

workers in high-demand fields. Goodwill is fortunate to work nationally with companies such as Bank of America training individuals for jobs in the financial industry

and CVS for opportunities in the retail, pharmacy, and photo technician fields.

These are but two illustrative examples of partnerships between Goodwills or other

CBOs and businesses in localities, and the legislation should facilitate and encourage such promising practices.

Mr. Chairman and Members of the Subcommittee, I understand that it is often

difficult from where you are sitting to see the changes that these programs make

in people’s lives. Those of us that actually run programs and provide services are

occasionally uplifted by the infinitely rewarding smiles or words of gratitude from

our graduating clients. We get to hear the inspiring words of people like Rose

Hunter, our 2002 graduate of the year, who had a history of mental illness, suffered

for more than 15 years in an abusive marriage, and lived in poverty-level conditions

before coming to Goodwill.

Today, Hunter works as a respected counselor in the psychiatric ward of Elmhurst

Hospital in New York. She organizes group discussions, advocates for patient rights

and counsels patients who are experiencing similar difficulties to what she endured.

She has reached financial independence and no longer relies on government assistance. Speaking of her experience with Goodwill, she stated that its Creative Recovery Program ‘‘helped me grow in many ways, by opening so many doors I couldn’t

open myself.’’

The story of Janice Armstrong from Saint Petersburg, FL, was similar. She explains it profoundly:

‘‘When I moved back to Tampa in 1999 after leaving an abusive marriage of 17

years, I was like a big plot of rich quality land, but without seed and tools to farm

it, it wasn’t very valuable. Then I went to Goodwill for help. Goodwill told me ‘we

can give you the seeds and the tools to work the land, but you have to do the work.’

I thought, ‘This is a pretty good deal. They help me, they back me, and I get an

education and career out of this.’ Last January I started working at Tampa General

as a surgical tech in the cardiac OR. I graduated from school last March. Though

I work in Cardiac O.R., the Life Link surgeons are who I usually scrub with. Life

Link deals in organ transplants. Before I went to Goodwill I was much like someone

needing an organ transplant. I was living, but the quality of life wasn’t there. Now,

I have a whole new life. I’m self-sufficient. I will receive my first raise now in January; I have great benefits and a wonderful life. But, but, but none of this would have
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been possible without my parents, my family, my friends and Goodwill. I had the

best team support anyone could have. I can truly say that I am blessed.’’

The stories are echoed by thousands of individuals who come to us every day for

vocational training or other assistance in finding or preparing for work. These are

the voices that the WIA system must be adequately prepared to nurture, and these

are the individuals who most need the limited help that our Federal system can provide. Thus, we hope that you will do everything possible to improve access to training for individuals with barriers to work and help build bridges to self-sufficiency

for those who face disadvantaging conditions as you consider provisions to include

in reauthorization legislation.

Again, thank you for this opportunity to provide testimony. We hope that you will

consider Goodwill Industries International as an ongoing resource on issues affecting those individuals who we serve and look forward to answering any questions

that you may have.

PREPARED STATEMENT OF THE INDIAN AND NATIVE AMERICAN EMPLOYMENT AND

TRAINING COALITION

SECTION 166: THE CORNERSTONE FOR NATIVE AMERICAN SERVICES

The Native American programs authorized under Section 166 have a unique status within the Workforce Investment Act (WIA). The purposes of this Section include a community focus, unlike that of all the other programs under the Act. The

service population for the Section 166 programs consists of Native Americans—

American Indians, Alaska Natives and Native Hawaiians—with a special relationship to the United States government established in the Constitution, treaties and

numerous statutes. Native American people suffer from the most severe unemployment and poverty rates of any group in the country. And the Section 166 programs

are to be administered in a way consistent with basic Federal Indian policy, of

which they are an important element.

The special status of the Section 166 programs and the support provided for them

under WIA are central to the relationship between Native American people and

their institutions and the rest of the federally-funded workforce system. The provisions of Section 166 of the current law must be retained and strengthened in any

WIA reauthorization measure. In this regard:

• Native American programs must remain separate and distinct, with their own

purposes and governing policy retained from Section 166 of WIA.

• The flexibility of the current Section 166 programs must be continued and

strengthened, governed by requirements which are specifically appropriate for Native American programs.

• The funding for the Section 166 Comprehensive Services and Supplemental

Youth Services programs must be increased significantly.

The Indian and Native American Employment and Training Coalition shares the

commitment of leaders of the Senate Subcommittee on Employment, Safety and

Training that the reauthorization of WIA should:

• Improve the ability of WIA to operate effectively in rural areas. Most Indian

reservations and Alaska Native villages are very rural.

• Support economic development. Many of the problems of Native American people are directly or indirectly related to the lack of jobs in Native American communities. • Further the flexibility permitted by the WIA law. Many Native American communities face labor market conditions very different from those of prosperous metro

areas. The only way services can be effective is if there is an ability to tailor the

delivery of workforce services to local conditions.

REAUTHORIZATION ISSUES AND NATIVE AMERICAN PROGRAMS

Pending proposals for the reauthorization of WIA would continue Native American programs under Section 166 as special, nationally-administered programs, providing funding directly to Indian tribes, Alaska Native and Native Hawaiian organizations and Indian-controlled organizations serving Native people in off-reservation

areas. However, several features of H.R. 1261, intended to address issues in the

State-administered programs, would have very serious adverse consequences for the

Section 166 programs. The provisions relate to:

• The financing of one-stop centers. H.R. 1261 and other proposals would give

Governors and local Workforce Investment Boards the authority to take Federal

funds appropriated for services for Native American people away from Native grantees to use to fund the State’s one-stop centers and their services for non-Native people.
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Native grantees and the Coalition strongly oppose these provisions. Onestop centers are often geographically inaccessible to Native people, especially those

in rural areas. They do not provide the special services relevant to Native people

and available through their own tribal and off-reservation organizations. Diverting

Federal funds appropriated to serve Indian and other Native American needs to the

States to be used for services to non-Native people would set a very serious precedent in Federal-Indian relations. Moreover, Native WIA programs, funded at a level

of approximately $70 million per year cannot make any significant difference in the

financial base of the State’s one-stop centers, whose partners collectively receive

nearly $32 billion per year (including TANF funds).

The distribution of youth funding. Indian tribes and other grantees receiving

Section 166 Supplemental Youth Services funds are currently allocated 1.5 percent

of the approximately $1 billion provided for basic WIA youth services. H.R. 1261

would reduce the base on which the reservation of Section 166 Supplemental Youth

Services funds is calculated by 25 percent.

Native grantees and the Coalition strongly urge the Congress to retain

and increase the current funding level for the Section 166 Supplemental

Youth Services program. Native grantees funded under this program should receive not less than $15 million per year. The first contact with a work environment

for many youth in reservation areas is through this program. Over the years it has

enabled thousands of Native youth to establish a permanent, productive attachment

to the workforce. In addition, Section 166 grantees serving off-reservation areas

need support from the proposed Youth Challenge grant program and through the

pilot and demonstration program account to assist the Native youth they serve to

enter the workforce.

In addition, the responsibilities of the Native American Employment and

Training Council are at stake in reauthorization. Under current law, these responsibilities include assisting the Labor Department in identifying highly qualified

candidates to lead the Native programs Division within DOL. Native grantees and

the Coalition oppose the provision in H.R. 1261 which would eliminate this responsibility, depriving the Department of valuable expertise in selecting persons for this

position.

The Coalition would like to thank the Committee for the opportunity to discuss

WIA reauthorization issues of concern to the Native American community.

PREPARED STATEMENT OF THE NATIONAL COMMUNITY PROVIDER COALITION (NCPC)

The National Community Provider Coalition (NCPC) is a newly-formed coalition

of national organizations working to promote and enhance the employment, community living, economic self-sufficiency, and inclusion of individuals with disabilities by

supporting community provider organizations offering employment, vocational, and

related services and supports.

As representatives of community providers across the nation, we believe that individuals with disabilities want to work and are able to do so, given the appropriate

supports and services. The Workforce Investment Act of 1998 (WIA) and other employment programs authorized under the Act, hold the promise of assisting many

individuals with disabilities who want to work in obtaining and maintaining employment within their communities. While WIA was intended to create a comprehensive, seamless workforce development system for all job-seekers, individuals

with disabilities have faced numerous barriers when attempting to access the system. Further, community providers who want to participate in the system and assist

individuals with disabilities to gain and retain employment have also faced numerous challenges.

The NCPC believes that reauthorization of WIA, which includes reauthorization

of the Rehabilitation Act of 1973, as amended, (the Rehabilitation Act), presents an

opportunity to strengthen the nation’s workforce system for individuals with disabilities and assist community providers in becoming true partners in the system. A

major overhaul of current law is not warranted at this time. Yet, improvements can

be made.

As the Senate considers reauthorization of WIA, and the programs authorized

under the Rehabilitation Act, we offer these recommendations to ensure WIA fulfills

the promise to individuals with disabilities, creates true partnership with community providers, and establishes the comprehensive, seamless system envisioned by

Congress. We maintain WIA reauthorization must:

• Increase physical and programmatic access to One-Stops;

• Utilize performance measures that account for serving individuals with disabilities;

• Improve transition services to youth with disabilities;
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• Strengthen the role of community providers in One-Stops and on State and local

Workforce Investment Boards;

• Ensure separate, adequate funding for WIA programs and provide dedicated

funding for One-Stop infrastructure; and

• Strengthen programs and partnerships authorized under the Rehabilitation Act.

I. FULFILLING THE PROMISE TO INDIVIDUALS WITH DISABILITIES

In February 2001, President Bush noted that the unemployment rate for people

with disabilities hovers at 70 percent, and pledged to increase the ability of Americans with disabilities to integrate into the workforce. Individuals with disabilities

want to work, and as community providers have long demonstrated, they can work

when provided with appropriate supports and services. Local One-Stop Centers

could provide vital employment and training services to many individuals who are

not being served by the Vocational Rehabilitation system (VR) to increase their employment, retention, and earnings capacity. However, the workforce development

system cannot assist individuals in achieving successful employment if individuals

with disabilities cannot get through the door or cannot access needed supports and

services once inside.

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

Universal access is one of the underlying principles of WIA. For more than 25

years, Section 504 of the Rehabilitation Act has mandated that Federal programs,

or programs that receive Federal funds, are to be physically and programmatically

accessible to people with disabilities. For more than 13 years, the Americans with

Disabilities Act has required States to make programs under their jurisdiction physically and programmatically accessible to people with disabilities. In 1998, Congress

required the Federal agencies to make their electronic and information technology

accessible to people with disabilities under Section 508 of the Rehabilitation Act. Together, these provisions are the driving force behind universal accessibility at the

One-Stop system.

Reasonable accommodations are necessary to ensure the meaningful participation

of many individuals with disabilities in the services and programs available at the

One-Stops. Unfortunately, despite the provisions in WIA that require One-Stops to

be universally accessible, far too many fail to provide reasonable accommodations;

too many individuals with disabilities are prevented from entering the centers, let

alone utilizing the programs and services.

Individuals with disabilities often need a broad array of individualized supports

and services to assist them in obtaining and retaining employment. Unfortunately,

too many One-Stops do not offer the array of supports and services necessary to assist individuals with mental retardation, cerebral palsy, and other significant disabilities. While it is already difficult to physically access many One-Stops, obtaining

necessary services should not be further complicated by requiring individuals with

disabilities—many of whom lack direct access to transportation or live in areas

without accessible public transportation—to go somewhere else, some other time, on

some other day for services that should be readily available.

WIA’s ‘‘work-first approach’’ has also hampered the ability of individuals with disabilities to access needed services and supports and, in particular, training. The

‘‘work-first approach’’ promotes employment at any job as soon as it can be found,

without consideration of an individual’s interests or capabilities, and without consideration of multiple and complex supports needed to obtain or sustain employment.

Individuals with significant disabilities may need a comprehensive array of training

supports and services before they begin working, as well as on-going or post-employment supports and training.

Recommendations

NCPC recommends that the Senate take action necessary to ensure compliance

with current requirements for universally accessible services. State and local workforce boards must recognize this obligation and guarantee both physical access and

programmatic access at the One-Stops for individuals with disabilities, including individuals with significant disabilities. Specifically, NCPC makes the following recommendations:

• State and local workforce plans must reflect a commitment to assure that individuals with disabilities have physical and programmatic access to the workforce investment system;

• State and local workforce boards must increase the capacity of the workforce

system to serve people with disabilities in outreach, intake, assessments, and service delivery;
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• State and local workforce boards must demonstrate a commitment to training

the One-Stop staff in serving individuals with disabilities; • Delivery of One-Stop services must be flexible so that individuals with disabilities can access individualized training as appropriate; and • States should require that their workforce investment systems comply with Section 508 of the Rehabilitation Act.

B. Performance Measures

NCPC maintains the current performance measurement system is flawed. According to testimony provided by the Government Accounting Office (GAO) to this Subcommittee, the need for One-Stops to meet current performance measures is often

the driving factor in deciding who receives WIA services. In order to meet current

performance measurements, One-Stop staff is often reluctant to serve clients who

may be less likely to find employment or experience earnings increases. Accordingly,

some clients are denied services. The need to meet specific performance measures

creates a disincentive to provide services to harder-to-serve populations. NCPC believes that the effect of this flawed system significantly impacts the ability of individuals with disabilities to receive appropriate training and employment services.

However, the application of the Office of Management and Budget’s fourth proposed measure of efficiency (annual cost per participant) to all One-Stop partners

is not the answer. This application would create additional disincentives to serving

people with disabilities, many of whom require more costly services over a longer

period of time. If performance measures are truly intended to rate performance accountability, it is important to ensure that we are measuring the effectiveness of

the services provided, and not the cost.

Recommendations

Accordingly, NCPC makes the following recommendations:

• Performance measures must be tailored to acknowledge the differences in populations being served, recognizing and crediting provision of services to harder-toserve populations; and • Congress should direct the Department of Labor to develop measures that more

clearly represent the individualized needs of participants, including individuals with

disabilities, and that provide incentives to serve individuals with significant barriers

to employment, such as individuals with disabilities.

C. Transition Services

Youth with disabilities require proactive support from the workforce development,

vocational rehabilitation, social security, education, and other systems to successfully gain the experience, education, and skills to achieve and sustain employment.

They confront many challenges in making the transition from school to adult life,

but with appropriate supports can succeed in securing jobs, accessing post-secondary

education, living independently, and fully participating in their communities. NCPC

appreciates efforts to strengthen access to transition services through the reauthorization of IDEA, and recommends that comparable improvements be advanced

through the reauthorization of WIA as well.

The transition from high school to post-secondary education, employment, and

independent living must begin early, or at least by 14 years of age (OSEP Report,

2001). Ideally, it is at this point that young persons with disabilities, their families,

and education, rehabilitation, workforce development, and other agencies initiate

planning, services, and experiences that support future education and foster basic

work skills development and employment, in order to develop essential skills for

independent living. This dialogue should be inclusive and tailored to the unique

needs and interests of each participating youth.

The workforce development system should play a crucial role in helping youth

with disabilities transition out of high-school into employment. Unfortunately, however, the percentage of students with disabilities currently participating in comprehensive transition programs through WIA is very low, and students with significant disabilities are being served at even lower rates. We believe that there are a

number of factors for this low rate of engagement: lack of awareness and understanding of the needs of youth with disabilities by the local workforce boards; uncertainties regarding eligibility of youth with disabilities, particularly those students

receiving SSI benefits; outcome measures that work to create disincentives to serving youth with disabilities, particularly youth with significant disabilities; the lack

of training of One-Stop staff in serving youth with disabilities; the failure to work

with the local schools in developing effective transition programs; and the complete

lack of outreach to youth with disabilities, particularly youth with significant disabilities. Proposals that significantly limit funding for in-school youth would only exacerbate the challenges an already underserved group of children face.
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Recommendations

NCPC believes that this reauthorization presents an important opportunity to improve transition services, and thus, employment outcomes, for youth with disabilities, and makes the following recommendations:

• State and local workforce boards should place greater priority on serving youth

with disabilities, particularly youth with significant disabilities, and should demonstrate this commitment in State and local plans;

• Local One-Stop staff must receive better training on how to serve and provide

reasonable accommodations to youth with disabilities;

• Performance indicators should measure functional skills related to employment,

such as handling money, making change, recognizing common symbols, getting to

work on time, or dressing for work appropriately, as well as unpaid work experience, such as community service;

• Planning and implementing successful transition services for youth with disabilities must include and support families of youth with disabilities;

• State and local workforce boards should recognize the role of nonprofit community providers and utilize the expertise in providing transition services to youth

with disabilities and their families through partnerships, grants, or contracts; and

• The local workforce boards must create a system—a collaboration among agencies—particularly education, in order to assure that youth with disabilities have successful post-secondary outcomes.

II. CREATING TRUE PARTNERSHIPS WITH COMMUNITY PROVIDERS

Under WIA, Congress established a public-private partnership from which all jobseekers could benefit. Actively involving all stakeholders in the system is critical to

the success of this public-private partnership. WIA job seekers in general, and individuals with disabilities in particular, could benefit from the WIA-envisioned, public-private partnerships between the One-Stops and community-based providers that

current practice now impedes. Unfortunately, State and local workforce investment

boards (WIBs) and local One-Stops have failed to adequately and effectively involve

an essential partner: community organizations with experience in providing employment supports and services to individuals with disabilities (community employment

providers).

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

Community employment providers continuously demonstrate that individuals

with disabilities can work and be productive members of the community. Community providers have a long history of working with employers; they have demonstrated the benefits of hiring individuals with disabilities to local businesses, as

well as to local, State and the Federal government. They have experience in tailoring jobs for individuals who were previously unseen as potential employees. They

are employers themselves, many of whom are experiencing shortages of well-trained

workers. In short, community providers have a first-hand understanding of the local

workforce needs. All too often, local One-Stops do not recognize the value of

partnering with private community employment providers.

Community providers are excellent and appropriate—yet, often overlooked—resources for One-Stops. Community providers have proven to be cost-effective in delivering skills development and training. Community providers can assist One-Stops

in serving job-seekers with disabilities by offering the missing training, employment

services, and needed wrap-around supports to sustain successful employment of people with disabilities. Being on the front lines each and every day, they have developed creative approaches to jobs and job-training options that enable individuals

with disabilities—and in particular, those with the most significant disabilities—to

become productive employees.

As employers themselves, community providers can also assist One-Stops in training and other employment services to job-seekers without disabilities. Community

providers have experience in assisting individuals who may have numerous barriers

to employment; these same providers may also have the experience and staff resources necessary to assist other job seekers.

There are many examples of successful partnerships between One-Stops and community providers. One example is Challenge Industries, Inc. located in Ithaca, New

York. Challenge is a vocational rehabilitation agency, serving over 500 job seekers

per year and is comprised of individuals with disabilities and job seekers

transitioning from public assistance. The program is an integral component in the

successful Tompkins (County) Workforce New York One-Stop system.

Although many areas in New York State report continued failure to widen participation in the local One-Stop system, Tompkins Workforce New York One-Stop sys-
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tem has achieved success, in part, by its inclusion of community providers. Where

other One-Stops have been unable to achieve the overall goals set forth in WIA,

Challenge’s involvement in Tompkins Workforce New York One-Stop has helped to

eliminate duplication of services. Some unique features, which have resulted from

the inclusion of community providers in the Tompkins Workforce New York OneStop system, include: • Co-location of agencies serving job seekers with barriers, resulting in more effective networking and supports for job seekers (including, but not limited to, housing, transportation, child-care, financial planning, etc.); • Active participation in One-Stop planning, including marketing the ‘‘system,’’

rather than approaching the business community as several distinct agencies; • Greater support systems and individualized training opportunities for job seekers (have been able to tap into WIA funds, when VR is unable to financially assist); • Shared staffing in the One-Stop center, which includes direct staff from community based agencies who specialize in serving individuals with disabilities; • Increased participation with America’s One-Stop Operating System has improved the reportable outcomes representing successful job placements of individuals with disabilities; and • Disability expertise in the One-Stop system (accessibility, accommodations,

workplace disclosure, social security advisement, tax credits and other work incentives).

In order to better serve individuals with disabilities seeking One-Stop services, examples like the one above must become the rule, not the exception. One-Stops must

draw upon community providers as partners—not as competitors in the One-Stop

system.

Recommendations:

• One-Stops must actively reach to and partner with community providers serving individuals with disabilities. • The Department of Labor and State workforce boards should create incentives

to encourage One-Stops to serve individuals with disabilities and partner with community providers.

B. Ensuring Representation of Disability Interest—Including Community

Providers—on State and Local WIBs

Congress understood the important role that community employment providers

play in assisting job-seekers with disabilities and included provisions in WIA that

community organizations be represented on both State WIBs and local WIBs. To address the needs of individuals with disabilities, Section 111(b)(1)(C)(v) of the Act

provides that State WIBs shall include representatives . . . of organizations that

have experience and expertise in the delivery of workforce investment activities, including . . . community organizations within the State [emphasis added]. Section

117(b)(2)(A)(iv) states that membership of each local WIB shall include representatives of community organizations, including organizations representing individuals

with disabilities for a local area in which such organizations are present [emphasis

added].

Nearly 5 years after implementation of the WIA, many State and local boards do

not fully understand the need to involve community employment providers. State

WIBs are attempting to address the employment needs of individuals with disabilities by including a representative of the State vocational rehabilitation program

(VR) on the State WIB, as required by WIA. However, all too often, VR is represented by the head of the umbrella agency housing the Designated State Unit administering the VR program, rather than the director of the VR program. In addition, some States—based on the grandfather clause in Title I of WIA—use previously existing boards to operate as the State WIB and may not have anyone at

all representing VR.

Community providers have also had limited success in becoming members of local

WIBs. Currently, WIA requires local WIBs to include representatives of local community-based organizations. As a result, many WIBs include representatives of the

public VR program and individuals with disabilities. Across the country, however,

providers have offered differing experiences of serving on local boards. Although

some excellent relationships have been established between local boards, VR, people

with disabilities, and community-based providers, other regions are sorely lacking

such relationships and have expressed concerns over the inability to establish such

relationships.

Recommendations

• States and the One-Stops should take additional steps to get more representation from the disability community in the WIA system by ensuring direct represen-
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tation of Vocational Rehabilitation (VR), community-based providers, and people

with disabilities on State WIBs.

• Section 111(b)(1)(C)(v) should be amended to read as follows (proposed language

is bold type):

(v) representatives of individuals and organizations that have experience and expertise in the delivery of workforce investment activities, including chief executive

officers of community colleges and community-based organizations within the State

(including organizations representing and providing employment service to

individuals with disabilities);

• NCPC believes each State WIB must also include in its membership the State’s

VR director, i.e., the person who is responsible for overseeing the administration of

the State plan for VR services, or an individual designated by the VR director. In

States where the law has established a separate State VR agency to serve individuals who are blind and visually impaired, the director of that specific VR program

should also be a voting member of the State WIB.

To accomplish this recommendation, Section 111(b)(1)(C)(vi)(II) should be amended to read as follows:

Section 111(b)(1)(C)(vi)(II):

(vi)(II) in the case of the public Vocational Rehabilitation program authorized under Title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et

seq.), the Vocational Rehabilitation director employed by the Designated

State Unit or the Vocational Rehabilitation directors in States that have a

separate State entity that is responsible for the rehabilitation of individuals who are blind and visually impaired; and

Redesignate current subsection (vi)(II) as (vi)(III).

• With respect to local WIBs, Section 117(b)(2)(A)(iv) must be strengthened to ensure that the interests of people with disabilities continue to remain a part of local

WIA implementation by making specific reference to a representative of the public

VR program, a representative of community-based providers, and at least one individual with a disability.

III. ESTABLISHING THE COMPREHENSIVE, SEAMLESS WORKFORCE SYSTEM

To ensure the comprehensive, seamless One-Stop system that WIA set to create,

One-Stops and their public and private partners must have adequate funding to deliver the services and supports required by all job-seekers, including individuals

with disabilities.

To date, funding levels for One-Stops and their services have not kept pace with

the demand. WIA adult, dislocated worker, and youth training programs all received

less funding from fiscal year 2002 to 2003, and again the President’s fiscal year

2004 budget request. Just last week, the House and Senate Appropriations Committees approved WIA funding levels for fiscal year 2004 that, in general, are equal

to fiscal year 2003 amounts. Given inflation and current demands on the system,

this equates to a funding cut. Better alternatives than simply cutting WIA funding

must be identified and implemented. As the nation’s economy fails to rebound as

quickly as hoped, as State budget deficits continue to grow, and as more individuals

find themselves struggling in today’s economy, it is imperative that the nation’s

workforce investment system has appropriate funding to support the demands on

the system.

An important funding issue that WIA reauthorization must address is the lack

of One-Stop infrastructure funding. Currently, no funding source exists to support

One-Stop infrastructure. Yet, a sound infrastructure is critical to the success of OneStops—to increase physical and programmatic access and improve services available

to all participants, and particularly individuals with disabilities.

As a recent GAO report found, paying for the costs associated with operating OneStops without a dedicated funding stream has been an on-going challenge. Lack of

infrastructure funding has contributed to the physical and programmatic inaccessibility on many One-Stops for many individuals with disabilities. The lack of specific infrastructure dollars often results in funding being diverted from WIA programs and services and from mandatory partners. As a result, funding is taken from

service delivery and precludes job-seekers from obtaining necessary services. In particular, individuals with disabilities cannot receive the individualized supports and

services to obtain and maintain employment. Providing infrastructure funding will

allow WIA program and other partner program funding to be directed to delivering

services to job-seekers and will help offset reductions in Federal appropriations for

WIA programs. Therefore, a separate line-item for infrastructure funding must be

authorized so that other WIA programs—as well as other partner programs such as

vocational rehabilitation—are not raided.
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The NCPC is also concerned with the Administration’s proposal that was incorporated into the House-passed WIA reauthorization legislation (H.R. 1261) that

would consolidate funding for all three of the WIA Title I adult programs—adults,

dislocated workers, and the Wagner-Peyser State grants into one single grant. While

the intent is to free-up funding that would have been dedicated for administrative

purposes, the NCPC believes that, by consolidating funding streams into one single

fund, dislocated workers will be able to access a disproportionate amount of funding,

crowding out individuals with disabilities seeking individualized supports and services as adult workers.

Recommendations

• Adequate funding must be provided for WIA programs to support current demands on the system; • Separate, dedicated funding must be authorized in order to support physically

and programmatically accessible infrastructures of One-Stops; and • Separate funding for WIA adult, dislocated worker, and Wagner-Peyser grants

programs must be maintained.

IV. STRENGTHENING THE REHABILITATION ACT

While reauthorization of WIA and its programs offers the opportunity to strengthen partnerships between the workforce investment system and community providers, attention must also be paid to strengthening partnerships among programs authorized by the Rehabilitation Act of 1973, as amended (Rehab Act), and community

providers.

A. Reconnecting Partnership between JWOD & Fed/State VR

The Rehab Act should acknowledge that individuals with disabilities may benefit

from other Federal and State job training and rehabilitation related programs, including the Javits-Wagner-O’Day Program (JWOD). The Rehab Act must require

State VR agencies to collaborate and cooperate with these programs to ensure the

full participation of individuals with disabilities in the benefits of these State and

Federal programs. State VR agencies must only provide the technical assistance

needed to assist and facilitate the physical and programmatic accessibility of all job

training and rehabilitation related programs for persons with physical, mental, sensory and cognitive disabilities.

The VR program and the JWOD program must work cooperatively to create employment opportunities for people with severe disabilities and to prepare them to

succeed. Policies, practices, and events of recent times have limited the cooperation

of these two venerable programs. Common ground should be identified on which the

employment of people with severe disabilities can once again be the focus of their

cooperative efforts.

Recommendations:

• Add State plan requirements for State agencies to:

1. Describe the manner in which cooperative agreements with private nonprofit

vocational rehabilitation service providers will be established; and

2. Identify the needs and utilization of community rehabilitation programs under

the Act commonly known as the Javits-Wagner-O’Day Act.

B. Defining Extended Employment

Currently, the Rehab Act does not have a definition of extended employment.

NCPC believes a definition of extended employment is needed.

Recommendation

• Add a definition of extended employment to the Rehab Act that defines extended employment to mean work in a non-integrated or sheltered setting for a public or private nonprofit agency or organization that provides compensation in accordance with Section 14(c) of the Fair Labor Standards Act and any needed support

services to an individual with a disability to enable the individual to continue to

train or otherwise prepare for competitive employment, unless the individual

through informed choice chooses to remain in extended employment.

C. Ensuring Effective Implementation of the Ticket to Work Program

Through the Rehab Act

The Ticket to Work and Work Incentives Improvement Act of 1999 (TTWWIIA)

created the Ticket to Work and Self-Sufficiency Program (Ticket Program). Two significant goals of TTWWIIA are to increase the universe of private providers who will

assist Social Security Disability Income (SSDI) and Supplemental Security Income

(SSI) beneficiaries with disabilities in obtaining employment and increase the em-
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ployment rate of people with disabilities, reducing their reliance on Social Security

benefits. The Social Security Administration (SSA) began rollout of the Ticket Program in early 2002 and the Ticket Program will be nation-wide by 2004. Eligible

beneficiaries receiving a ticket to work will be able to deposit their Ticket with an

Employment Network (EN) or the State VR program and receive services and supports to obtain or regain employment.

The Rehab Act must ensure that individuals with a Ticket who are also eligible

for VR services choose when and where to deposit their Ticket. Local community

employment providers serving as ENs and the VR program must work together, as

necessary, to ensure that individuals with severe disabilities receive necessary services and supports to be successful under the Ticket Program and can reach their

employment goals.

Recommendations

• The Rehab Act must ensure that the Rehabilitation Services Administration

(RSA), the SSA, and the Department of Labor (DoL) work cooperatively for effective

implementation of the Ticket to Work Program across the nation. • The Rehab Act must require RSA, SSA, and DoL to work cooperatively to provide outreach to eligible individuals receiving Tickets and potential ENs about the

Ticket Program. • The Rehab Act must encourage RSA and SSA to work together to ensure that

individuals receiving VR services who receive a Ticket have real choice when selecting an EN and that there is no auto-assignment of tickets to VR.

D. Dedicated Funding Must Remain for Supported Employment, Projects

With Industry, Migrant and Seasonal Farmworkers, and Recreation Projects

The Rehabilitation Act includes a number of smaller, specialized programs designed to address specific service needs of individuals with disabilities. NCPC

strongly supports the balance that is struck with these dedicated programs and

urges their continuation in the pending reauthorization of the Rehabilitation Act.

Since these programs serve a very important role as adjuncts to the VR services authorized under Title I of the Rehabilitation Act, NCPC cannot support the President’s request to consolidate these separate funding streams into the Title I State

VR grant.

Recommendation

• The Supported Employment State Grant program, Projects With Industries

(PWI), Migrant and Seasonal Farmworkers, and Recreation Projects must continue

to exist as distinct programs within the Rehabilitation Act.

PREPARED STATEMENT OF THE SOCIETY OF THE PLASTICS INDUSTRY, INC.

The Society of the Plastics Industry, Inc. (SPI) is pleased to have the opportunity

to submit comments to the Senate Committee on Health, Education, Labor, and

Pensions Subcommittee on Employment, Safety, and Training for its June 18, 2003,

hearing on the Workforce Investment Act (WIA) reauthorization.

Founded in 1937, SPI is the primary plastics industry trade association representing the entire plastics industry supply chain which includes plastics products processors, manufacturers of machines and molds, and raw material (resin) suppliers.

The plastics industry represents the fourth largest manufacturing sector in this

country, employing 1.5 million workers and providing $330 billion in annual shipments.

SPI SUPPORTS WIA REAUTHORIZATION

SPI supports the reauthorization of WIA. It has made a significant contribution

to the needed training and education of incumbent workers in the plastics industry.

Even though manufacturing industries in the U.S., including the plastics industry,

have experienced a serious economic downturn and resulting layoffs, there still exists a shortfall of skilled employees. Workers in manufacturing need to be much

more skilled than 20 years ago. The WIA has demonstrated that it can play a significant role meeting this need that is critical to ensuring the competitiveness of

U.S. manufacturing.

Further, SPI supports the reauthorization of WIA because Federal monies are

subsidizing training and certification that businesses could not otherwise afford. The

training and certification programs have been shown to reduce operating expenses

and increase profits; thereby, making the businesses more competitive.

Finally, without the Federal assistance, today most companies cannot afford training and certification. Training budgets have been drastically reduced in most compa-
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nies, especially smaller to mid-sized companies, which comprise a large part of the

U.S. plastics industry. State funded customized training programs through community colleges and technical colleges have been cut also.

SECTOR-BASED TRAINING UNDER WIA

SPI has been able to help the plastics industry utilize training opportunities

under the WIA and hopes to significantly expand such opportunities. Further in the

testimony are summaries of two workforce training projects that SPI conducted with

the States of Florida and North Carolina. Both of these projects were fully funded

with WIA dollars, at a cost of $700 per person in Florida (2001) and $800 per person

in North Carolina (2002–2003). WIA monies subsidized the cost of both training and

certification testing.

SPI has conducted operator training and certification testing in injection molding

and extrusion in FL, NC, SC, GA, PA, CA, OH, MI, WI, NH, NY, KY, AR, MD, LA,

KS. In NY, FL, NC, SC, and CA, companies received 100 percent funding through

their local Workforce Investment Board (WIB) or a State-funded program. PA and

KY offered a 50 percent reimbursement through State funded programs. The other

States did not offer funding for IWT or funding was not available because their IWT

program was under development. In some cases, partial funding was available

through either local or State programs but funds were obligated for the agent’s fiscal year or companies chose not to apply for partial funding due to the ‘‘red tape’’

involved. In instances where SPI or a company receives funding, training is coupled

with the respective certification exam. Companies can elect to participate in the National Certification in Plastics Program (NCP) exam without participating in the

training program. In most cases, if a company participates only in the NCP, the

company pays for the testing.

The National Certification in Plastics Program is conducted under the auspices

of SPI. The NCP program was implemented in 1998 and the training program for

operators was implemented in 2000. Approximately 150 companies have participated in either SPI’s testing or training programs. Between 1998 and 2003, SPI administered Internet-based certification exams in injection molding, extrusion, blow

molding or thermoforming to 642 workers. Of the 642, approximately 92 percent or

590 workers have passed one of the exams and become certified operators. In addition to these 642 workers, SPI has tested an additional 1,066 workers in injection

molding or extrusion following their completion of SPI’s 28-hour training course. Of

the 1,066 workers, approximately 85 percent or 906 workers have earned their certification as plastics operators.

In addition to operator training delivered via SPI’s Plastics Learning Network

(PLN), SPI has partnered with Paulson Training, Inc. to conduct technician level

training in injection molding troubleshooting. Approximately 157 technicians in FL,

NC, SC, NY, and NH have participated in this 2-day seminar. 127 of the 157 received 100 percent funding for the training subsidized with WIA dollars by local

workforce boards. This training did not result in certification, but companies viewed

it as important technical training.

RECOMMENDATIONS TO STREAMLINE AND FINE TUNE WIA TO INCREASE EFFECTIVENESS

Some State programs are more effective than others because they have streamlined the process for companies. Thus far, Florida has been the most customerfriendly for SPI because there is one point person at the State Workforce Investment Board (WIB) level rather than multiple contacts at the local WIB level.

For reporting purposes, SPI has one report to submit to the State rather than one

report per WIB. From the company’s perspective, the application is not cumbersome

and can be submitted by the Internet.

SPI and Florida’s point person divide the responsibilities and communicate frequently when funding grants are involved. Reporting by the company is minimal

and all forms are web-friendly. On the other hand, when IWT programs are administered at the local level, SPI develops a relationship with more people, and is more

involved in building local training partnerships. This type of collaboration has proven valuable for the community/technical college system, economic and workforce development agencies, and the participating companies.

Simplicity is the key to State programs working more effectively. Keep the IWT

application short, simple, and ask only for necessary information (info that is needed for tracking standard outcomes). Also, timely turn-around time for application

approval is important. IWT application review committees should work to expedite

the evaluation and approval process.
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WIA SHOULD BE MORE DEMAND DRIVEN

SPI has found that States that identify ‘‘high-skills’’ targeted industries are more

responsive to employers and their current and future workforce needs. In these

States, local boards have a sense of direction and support from the State, and can

focus on serving growth industries.

WIA SHOULD BE MORE FLEXIBLE

WIA should be flexible in order to be able to adjust to an ever-changing economy

and resultant changing needs of workers. SPI recently hosted a focus group for evaluating its current training and certification programs, and also for assessing future

training and certification needs. This effort resulted in recommendations to develop

technical level training and technical certifications for the plastics industry.

PROVIDE MORE DEFINITION FOR INCUMBENT WORKER TRAINING

SPI thinks that the training of the unemployed, underemployed, welfare recipients, and dislocated workers is very important; however, SPI thinks that the training of incumbent workers is equally important. Companies that remain sufficiently

competitive to be able to create jobs are those that continuously upgrade the skills

of their workforce.

WIA funds should be allocated at the local level depending on current and projected workforce needs. In areas where there have been numerous closures and layoffs, awards of WIA funds should reflect the need for re-training and education of

dislocated workers.

Also, awards of WIA funds should reflect the current and future needs of incumbent workers in high-skills and growth sectors, thus providing upward mobility for

incumbents, and at the same time, providing entry level jobs for the unemployed

and underemployed.

SPI thinks that the WIA should provide more definition for IWT. This would be

especially valuable because IWT training is a growing trend with local and State

WIB’s. WIA says little about IWT. There are few guidelines mentioned. Because of

this, local and State workforce boards create their own guidelines. Many guidelines

require too much work and documentation for the participating companies.

Several local WIB’s with which SPI has worked created requirements much like

those in other funded programs. For instance, one local board created an employee

information sheet that was two pages long. Questions about drug abuse, pregnancy,

etc. were included, much like the standard WIA application. Initially, the board

asked employers for two forms of ID on each student along with a copy of their I9 form. In addition, the application had so many performance and monthly reporting

requirements that several of the companies lost interest. One company said, ‘‘Forget

it, I don’t have the time for this bureaucracy.’’

COMPOSITION OF STATE BOARDS

Board membership at the State and local levels needs to be at least 51 percent

business representation and chaired by business in order to be more effective. Inclusion of economic and workforce agencies is also important, along with representation

from educational institutions. Legislative representation and labor union representation should be encouraged but not made a requirement.

WORKFORCE INVESTMENT IS ECONOMIC DEVELOPMENT

Workforce investment goes hand in hand with economic development. Human capital is any company’s most valuable resource. Targeted and ‘‘growth’’ occupations

should get greater consideration for WIA funds.

WIA SHOULD PROVIDE GUIDANCE ON HOW TO MEASURE OUTCOMES

While there is significant focus on outcomes, there is not a system in place to educate and train companies on how to measure outcomes. It is easy to measure retention or wage increase within 6 months but it is more difficult to measure turnover

rate, quality improvements, decrease in worker’s compensation costs, machine down

time, etc. all of which affect a company’s bottom line. Similarly, SPI is not aware

of any system for measuring delivery effectiveness other than the standard job retention and wage increase metrics.

A customer satisfaction indicator for both employers and individuals should be

maintained, and One Stop Center performance must be measured towards customer

satisfaction. The best One-Stop Centers are those that gather customer service input
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from employers and individuals and then use the information productively. To be

a ‘‘Certified One-Stop’’, a customer service indicator should be a requirement.

NATIONAL ASSOCIATION OF WORKFORCE BOARDS PARTNERSHIP

SPI thinks that the Act’s support of sector-based training alliances across the nation is very important and is working to more effectively utilize such alliances. On

June 24, SPI announced a strategic alliance with the National Association of Workforce Boards (NAWB) for the purpose of educating State and local workforce boards

about the plastics industry and enlisting their assistance and resources in creating

training partnerships.

SPI is targeting State and local WIB’s in the top 20 plastics employment States.

NAWB is also targeting/educating State and local WIB’s in the top 10 plastics employment States. This effort has just begun and more time is needed to ascertain

the effectiveness of the combined efforts of SPI and NAWB.

Working with NAWB should allow SPI to more effectively target training for plastics companies. SPI has already targeted regions within States that have a high

density of plastics companies. Working with NAWB will allow SPI to reach the other

half of the equation . . . the local boards. WIA allows clients and companies the

flexibility of choosing their training providers.

SPI hopes that the partnership will facilitate communication among local boards,

companies, community agencies, educational institutions, and SPI. SPI thinks that

a more informed audience will result in boards and companies that have interest

in collaborative training projects that may utilize WIA funds. The alliance will provide information aimed at helping plastics manufacturing companies in the regions

to upgrade the skills of the current and future plastics industry workforce.

EXAMPLES OF SPI’S WORK WITH STATE WORKFORCE BOARDS

Following are two models, one in Florida and one in North Carolina, that illustrate how SPI has worked with State Workforce Boards.

FLORIDA INCUMBENT WORKER PLASTICS TRAINING PROJECT

The Consortium

The Florida Plastics Learning Consortium was a partnership between Workforce

Florida, Inc. (WFI) and SPI that conducted the Florida Incumbent Worker Plastics

Training Project between March 13 and July 27, 2001. This innovative project

brought together a State Workforce Development Board, a national trade association, a State broadcasting network, a manufacturing extension research and training program, 33 Florida plastics manufacturing companies, and 9 educational institutions to train and certify incumbent workers as plastics operators. In addition to

the broad stakeholder involvement, the project was unique because it utilized WIA

dollars to fund the industry-specific training and testing.

The Service Providers

The Plastics Learning Network (PLN) and the National Certification in Plastics

(NCP) programs, administered by SPI, provided both the training and certification

testing services. The NCP was developed by the industry in collaboration with the

Educational Testing Service’s Chauncey Group to provide an independent, third

party evaluation of employee skills resulting in a portable national credential. The

PLN is a consortium of the SPI, the Polymers Center of Excellence (PCE) and South

Carolina Education Television (SCETV), which broadcasts plastics training nationwide.

Background and Goals

In 1999, the State Workforce Development Board, Workforce Florida, Inc., in conjunction with Enterprise Florida, Inc., the State economic development entity, identified a need for skills upgrade training for existing workers in the plastics industry.

The plastics industry sector is considered a ‘‘targeted industry’’ in Florida, offering

‘‘high skill/high wage’’ jobs.

The goal of WFI was to assist employers in upgrading the skills of their workers,

thus providing an avenue for advancement and retention. A secondary goal of WFI

was to pilot a multi-employer training project utilizing an alternative delivery method for use as a model for future projects in other industries.

To achieve this goal, WFI and SPI, through a State Incumbent Worker Training

Program grant award, created a partnership whereby WFI fully funded the PLN

certification training and testing for qualified Florida companies, a value of $700 per

worker. SPI provided the live, interactive training via satellite to designated
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downlink sites in Florida and subsequent testing of participants at designated testing centers utilizing Florida’s educational system.

Several partners made additional cash and in-kind contributions to the training project. For example: SPI contributed an estimated $149,000 in marketing efforts

and staff time, PCE contributed $18,000 in-kind for instructor training and course

development, SCETV contributed $8,000 in-kind for staff time, and many of the participating employers paid their employees wages while in training as well as associated travel expenses.

When asked how Command Medical Products, Inc., Ormond Beach, Florida, compensated their employees for participating, Brad Harris, VP of Operations, responded:

All hourly participants were paid their normal wage rate during the training sessions. Our training goal was to increase company knowledge in extrusion while providing a foundation for new and incumbent extruder operator learning.

The potential financial gain for all participants was the promotional opportunity

that would result from business growth. New extrusion operators could also benefit

from the knowledge gained through PLN since their wage progression is based on

demonstrated skill. Two employees have received increases based on these criteria.

Incumbent Worker Plastics Training Project

The Florida Incumbent Worker Plastics Training Project was well received by employers and employees because the training was: State funded, conveniently delivered, live and interactive, short-term in length, and resulted in a national credential

for the workers. David Outlaw, Plant Manager of Precise Technology, St. Petersburg, Florida observed:

The PLN courses are useful for all departments within a plastics operation because

they remove the mystery usually confined to the manufacturing floor and help administrative, manufacturing, design, mold-building and maintenance people understand the fundamentals of the business.

Because of this project, I have become more involved in workforce development on

a local and State level. Overall, we have brought people and organizations together

who want to work toward improving the lives of our workers and the Florida economy.

Program Delivery

To deliver the training, PLN utilized SCETV for broadcasting and the renowned

Polymers Center of Excellence in Charlotte, NC, for instruction. PLN contracted

with 10 Florida downlink sites equipped with distance-learning classrooms. These

sites included seven community colleges, one technical college, one plant facility and

one middle school.

Incumbent workers enrolled in either ‘‘Preparation for National Certification in

Injection Molding’’ or ‘‘Preparation for National Certification in Extrusion.’’ Classes

were held at the sites 2 times per week, from 4–6 p.m. for 7 weeks. After completion

of training, workers took the National Certification in Plastics exam at their local

community college, with college personnel serving as proctors. The exam was administered through Net Certification, an on-line testing vendor.

Outcomes

Through this collaborative partnership, 210 of the 230 incumbent workers (91.3

percent) completed the training and passed the NCP exam, thereby receiving a nationally recognized, portable credential as either an injection molding or extrusion

operator.

The incumbent workers that participated were from 33 companies located across

two Florida counties in both rural and urban areas. This training project produced

more highly skilled and knowledgeable workers resulting in 33 promotions at an average wage increase of $.59/hour (ranging from $.25/hour to $.97/hour) at 8 of the

33 companies. Other companies plan to consider wage increases at the time of employee performance evaluations.

Conclusion

The Florida Plastics Learning Consortium is an excellent example of how an innovative, collaborative training partnership can leverage multiple resources to serve

employers throughout a State, resulting in benefits for the incumbent worker, the

employer, the local community, and the State. In 2002, the NAWB recognized WFI’s

and SPI’s partnership with a prestigious Theodore E. Small Workforce Partnership

Award.

Workforce Florida, Inc., the State’s workforce board, has supported SPI’s training

initiatives in Florida since the spring of 2001. SPI has completed its third training

contract with Workforce Florida who has said that ‘‘SPI is Florida’s poster child’’ for
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successful incumbent worker training. The 2001 grant greatly influenced the two

additional grants that SPI received. In the fall of 2001, SPI received a grant through

The Agency for Workforce Innovation, which is under the umbrella of Workforce

Florida. This grant ended in fall 2002 and was for operator training and certification.

In the spring of 2003, SPI received a grant through Workforce Florida’s Incumbent Worker Training Program. As in the spring of 2001, this grant was for technician training. Workforce Florida reported at the recent SPI/NAWB Alliance Luncheon that 84 percent of the trainees in the spring 2001 project are still employed in

the plastics industry and have averaged a wage increase of $1.00/hour.
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NORTH CAROLINA PLASTICS INCUMBENT WORKER DEMONSTRATION PROJECT

About The Consortium

The North Carolina Plastics Incumbent Worker Demonstration Project, a partnership among United Southern Industries, Inc. (USI), Isothermal Planning and Development Commission and the Region C Workforce Development Board, the North

Carolina Department of Commerce Commission on Workforce Development, and

SPI, served as one of the models for the State’s Incumbent Workforce Development

Program (IWP) implemented statewide in March 2003. The project was unique because it utilized WIA dollars to fund the industry-specific training and certification

testing.

The Service Providers

SPI’s Plastics Learning Network (PLN) and the National Certification in PlasticsΤΜ (NCP) program provided both the training and certification services. PLN is
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a consortium comprised of SPI, the Polymers Center of Excellence (PCE) and South

Carolina Educational Television (SCETV) that broadcasts PLN’s training courses

nationwide. The NCP was developed by the plastics industry in collaboration with

the Educational Testing Service’s Chauncey Group to provide a portable national

credential. Net Certification, Inc. manages the NCP exam via the Internet.

Background and Goals

North Carolina is the ninth largest State in the nation in terms of plastics em- ployment and shipments. In 2001, it provided 57,200 jobs and generated $11.4 billion in shipments. With the decline of textile and furniture manufacturing in the

State, thousands of manufacturing jobs have been lost to foreign competition. In the

spring of 2002, continuing education and customized training staff of North Carolina’s Community College System met with SPI to discuss the implementation of a

pilot training project to evaluate the viability of distance training via PLN with

Internet-based certification testing. Blue Ridge and Isothermal Community Colleges

provided technology and staff support services for the project that served six injection molding companies and one blow molding company from Western North Carolina.

The project was a success, with 20 of 23 students earning their NCP. The continuing education departments of both colleges subsidized the course tuition, provided

distance-learning classrooms and served as testing centers delivering training in injection molding live via satellite February–April 2002.

United Southern Industries, Inc. (USI) participated in the pilot project, training

and certifying 16 production workers. Todd Bennett, USI vice president, saw the

positive impact that the IWT program had on his company, and wrote a letter in

response to Roger Shackleford, Executive Director of NC’s Commission on Workforce

Development, asking the State to consider implementing a State-wide incumbent

worker training program.

With an IWP not yet finalized and available, the Region C Planning Commission

approached USI about participating in an incumbent worker demonstration project.

For this project, USI submitted a proposal to Region C to train and certify production workers at a cost of $800 per worker via SPI’s Plastics Learning Network. The goal of the demonstration project was to train 60 USI production workers and

certify ninety percent, or 54 of the 60 workers. USI selected material handlers, quality inspectors, machine operators and technicians to participate. The goal of the

State was to provide financial assistance for upgrading the skills of USI’s workers

and to evaluate the benefits of incumbent worker training.

The North Carolina Plastics Incumbent Worker Training Demonstration

Project

Joe Bennett—President & CEO United Southern Industries, Inc. said of the

project:

The Incumbent Worker Training pilot program has helped USI meet many of our

goals in employee growth and development. SPI’s National Certification in Plastics

program has offered our company a standardized method of training production

workers. Consequently, we’ve seen reductions in employee turnover, improved product

quality to our customers, decreases in employee accidents and increases in production.

Our employees realize personal, professional, and financial rewards and recognition for completion of the training and certification programs that USI and the State

workforce system make available to them. Value from training extends beyond our

employees and their families to our community and to our State by maintaining

healthy businesses and keeping manufacturing jobs on U.S. soil.

Program Delivery

PLN used two instructors from the Polymers Center of Excellence in Charlotte,

NC, and broadcast from SCETV’s studio in Rock Hill, SC. SPI contracted with Isothermal Community College in Spindale, NC, to provide the downlink and distance

learning classroom. USI chose to train some employees in the fall of 2002 and others

in the spring of 2003. USI employees attended ‘‘Preparation for National Certification in Injection Molding’’ classes at the college on Monday and Wednesday evenings for seven weeks. Twenty-nine of 32 workers passed the NCP exam. In June

2003, USI begins training 27 more workers via in-house instruction by a PLN instructor, followed by certification testing.

Outcomes

Through this collaborative partnership, USI has trained and certified 29 of 32 employees, or 90.6 percent of participants. The certified workers received a nationally

recognized, portable credential as an injection molding operator and a 50 cents per
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hour wage increase. It is noteworthy that three of the certified workers spoke

English as a second language and received additional tutoring in math and reading,

provided by USI employees.

USI realized an immediate reduction in turnover after it began training and certifying employees via PLN courses and the NCPΤΜ exam in 2000. The company

also has documented savings from scrap reduction, improved quality, and reductions

in cycle time, machine downtime, absenteeism, returns, rejects, and workers compensation claims.

In 2001, USI implemented an ROTC (Recruitment, Orientation, Training, and

Certification) program aimed to recruit, orient, train, and certify new production

workers in a systematic manner. Since implementation, USI has drastically reduced

employee turnover which has resulted in a cost savings for the company. Prior to

implementation, USI’s turnover rate was 471 employees in 2000. In contrast, the

company only lost 24 employees in the first 7 months of USI’s fiscal year 2003. At

an estimated $5,000 per employee turnover, that is a reduction from $2.3 million

to $120,000, or a savings of $2.24 million. Additionally, in keeping with a commitment made in the grant proposal, USI has hired six employees through the local

JobLink Career Center, North Carolina’s One-Stop System.

Conclusion

North Carolina’s Plastics Incumbent Worker Training Demonstration Project is an

excellent example of how incumbent worker training can be industry-driven at the

local level and can create win-win partnerships with local workforce boards and educational institutions. This project has already provided direction and incentives for

other incumbent worker training partnerships in North Carolina. According to Todd

Bennett—Vice President & General Manager for United Southern Industries, Inc.:

In my assessment, the only way to implement continuous change and remain competitive in the global economy is to provide all the players on the team with an abundance of training. I am certain that exercising repetition dramatically increases the

execution rate. Training is simply exposure to new and or proven techniques, theories,

practices or concepts. In order to see these benefits you must practice new ways of

doing things and that involves continuous training.

SPI appreciates the opportunity to present its view on the Workforce Investment

Act reauthorization, and we would be happy to further discuss any issues contained

in this statement, or any related issues.

(For Further Information Contact: Maureen A. Healey, Vice President of Government Affairs, The Society of the Plastics Industry, Inc., 801 K St., NW, Suite 600K,

Washington, DC 20006, Phone: 202–974–5219, E-mail: mhealey@socplas.org.)

PREPARED STATEMENT OF WIDER OPPORTUNITIES FOR WOMEN

REGARDING ‘‘SELF-SUFFICIENCY’’ VERSUS ‘‘SUITABLE’’ EMPLOYMENT AS CRITERIA FOR

INTENSIVE AND TRAINING SERVICES

Wider Opportunities for Women (WOW) works nationally and in its home community of Washington, D.C. to achieve economic independence and equality of opportunity for women and girls. For more than 38 years, WOW has helped women learn

to earn, with programs emphasizing literacy, technical and nontraditional skills, the

welfare-to-work transition, and career development. Since 1964, WOW has trained

more than 10,000 women for well-paid work. WOW is recognized nationally for its

skills training models, technical assistance, advocacy for women workers, and nationwide work in developing and implementing the Self-Sufficiency Standard.

We represent a national network of women’s employment organizations and 35

State-level coalitions working to provide greater economic opportunity to low-income

families across the country. Through WOW’s Family Economic Self-Sufficiency

project, our State-level coalitions have been working over the past 7 years to put

tools and resources in the hands of State-level policymakers, advocates and direct

service providers to improve programs and policies that effect low-income families.

On behalf of these organizations and our own, we thank you for the opportunity

to submit comments on the changes the Senate should make to the Workforce Investment Act (WIA), focusing specifically on the importance of retaining ‘‘self-sufficiency’’ as a goal in WIA and as the criteria for eligibility for services.

What Does Current Law Say About Eligibility for Intensive and Training

Services?

One of the criteria for individuals to have access to intensive services—which,

under current law, is the gateway to training services—is being employed, but in

need of intensive services to obtain or retain employment that allows for self-sufficiency. The Federal regulations clarify that State or Local Boards must set the cri-
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teria for determining whether employment leads to self-sufficiency. At a minimum,

such criteria must provide that self-sufficiency means employment that pays at least

the lower living standard income level, as defined in WIA section 101(24). Self-sufficiency for a dislocated worker may be defined in relation to a percentage of the layoff wage. Implicitly, if an employed worker (who qualifies for and uses any Intensive

Service) needs additional training in order to improve their earnings towards ‘‘selfsufficiency,’’ then they are eligible for Training Services.

Why Is Defining Eligibility for Services in Relation to ‘‘Self-Sufficiency’’ Important?

Title I of WIA establishes the following principles of purpose: ‘‘increase the employment, retention, and earnings of participants, and increase occupational skill attainment by participants, and, as a result, improve the quality of the workforce, reduce welfare dependency, and enhance the productivity and competitiveness of the

Nation.’’ Simply put, the Workforce Investment Act invests, and should continue to

invest, in people and their skills. Without self-sufficiency language, WIA will become

little more than a job placement entity.

The current language gives low-income workers, who do not earn enough to support their families, access much needed services. These services—including ESL

training, career planning and job training—give workers the tools to build the skills

necessary to find work that will allow them to provide for themselves and their families. In the current system, an industrious worker who is employed but still unable

to cover basic costs can meet with an employment specialist in a One-Stop to develop a career plan that would help them move their family toward self-sufficiency.

If that worker needs particular training or other services to achieve that goal, the

current system can invest in that worker to help them achieve it. These are also

the services that can keep individuals in the workforce and reduce the likelihood

they will need to rely on welfare in the future. The House bill, H.R. 1261, would

block that worker from having access to those services through the One-Stop.

‘‘Suitable Employment’’ Suits Neither the Worker nor the Economy

In the House bill, the term ‘‘suitable employment’’ would replace ‘‘employment

that allows for self-sufficiency.’’ Although the governors would be given the power

to define the term ‘‘suitable employment,’’ it already has currency in the unemployment system.

The term generally refers to moving an unemployed worker back into the workforce at a level that is comparable to his or her previous wage in work that is suitable for their current skill set—regardless of whether that work would provide

enough income for the worker to become self-reliant. In contrast to a standard based

on real costs of living and working in a given community, ‘‘suitable employment’’

is often based on what an individual is already earning, and the skills the individual

already possesses or does not possess, regardless of need.

This philosophy suggests that an individual’s current skill set is appropriate, both

for the worker and the economy—which is often not the case. Census data and reports from the Chamber of Commerce make clear that the jobs of yesterday are not

the ones that employers are trying to fill today and certainly not tomorrow. Indeed

the Chamber projects that 70 percent of employers in the next 10 years will require

more highly skilled workers. In using a definition like suitable employment, the

One-Stops are fated to lead workers to those jobs in which they will stagnate rather

than in which they can grow and respond to the changing demands of the labor

market.

What Should the Senate Do Instead?

• Reject the provision to change the focus of WIA from ‘‘self-sufficiency’’

to ‘‘suitable’’ jobs in H.R. 1261. The definition of ‘‘suitable employment’’ is completely contrary to the current intent of WIA, which is to help workers advance. Instead, the House proposal would stop workers dead in their tracks. • Retain self-sufficiency as a mission of WIA and as a criteria for receiving services. Removing the implicit and explicit goal of self-sufficiency, will deter

low-wage workers from upgrading their skills and moving towards employment that

would make them less dependent on the public system for support. H.R. 1261 does

take the positive step of aligning eligibility criteria for unemployed and employed

workers; however, that eligibility criteria must be self-sufficiency for both groups. • Strengthen the law by moving definition of self-sufficiency from the

regulations into legislation. In 1998, Congress articulated a vision that workers

be served if they were not on a path to self-sufficiency. Congress left it to the Administration to articulate how ‘‘self-sufficiency’’ was defined. A 2003 survey of local

workforce investment boards by the National Association for Workforce Boards and

Wider Opportunities for Women showed that almost half of responding local boards
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1 According to the Department of Labor, nontraditional jobs for women are those in which less

than 25 percent of the workers are female. Increasing women’s access to these jobs is a compelling strategy for achieving family economic self-sufficiency. These jobs offer good benefits and

wages that are between 20 to 30 percent higher than jobs where women are traditionally clustered.

defined self-sufficiency higher than the Federal regulatory requirements, and that

more than a third of those used the Self-Sufficiency Standard as the definition. The

Senate should codify the definition of self-sufficiency in the reauthorization of WIA.

Background on the Self-Sufficiency Standard

The Self-Sufficiency Standard is a measure of how much income families need to

cover their basic costs, depending on where they live and who is in their family. It

is useful for workforce policymakers at the local, State and Federal levels because

it is both geographically-specific down to the county level—making it useful for local

workforce boards—and is calculated using a consistent methodology—allowing for

State and Federal policymakers to make comparisons outcomes across the State or

across the country. The Standard has been calculated for 35 States, and used in a

variety of ways in State policy. The Workforce Investment Act currently authorizes

demonstration and pilot projects to assist local areas in developing and implementing local self-sufficiency standards to evaluate the degree to which participants are

achieving self-sufficiency.

Other Applications of the Self-Sufficiency Standard in WIA

In addition to maintaining the focus on self-sufficiency through eligibility criteria,

the self-sufficiency standard should be adopted in two other areas of WIA.

The Senate must:

• Insist on accountability by measuring outcomes. To understand the impact of WIA on different groups of job seekers, Congress must have data on demographics of who is served, the jobs they enter and whether they are nontraditional

for women.1 In addition, Congress must have information about actual wages, set

in a context of local cost of living, i.e., the self-sufficiency standard.

• Make comprehensive information and career planning fully accessible.

One-stops have done a poor job of ensuring that job seekers have full information

about the services available; career options; cost of living and skills necessary to

compete for jobs. Job seekers need complete information on several fronts:

• all services available through the one-stop system;

• local cost of living and how much income a family needs to be economically selfsufficient;

• high-skill, high-wage, locally-demanded career options, including those that are

nontraditional; and

• how a job seeker’s skills align with labor market needs.

Additional WIA Recommendations

Wider Opportunities for Women believes that a workforce development system

that responds to and respects the particular needs of a diverse workforce is one that

ultimately benefits all workers and employers, and is prepared to address the

emerging challenges of the 21st century workforce. To that end, we also urge the

Senate to:

• Reject the block grant consolidation of Adult, Dislocated Worker and

Employment Service programs and funds.

• Restore workforce funding to adequate levels.

• Encourage training for and placement in high-wage, high-demand jobs,

with a special emphasis on nontraditional jobs for women.

• Target services to the needs of job seekers.

• Improve performance measurements instead of simplifying them.

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

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