Policy Recommendations for Reauthorizing and Reforming our Workforce Development System

Congress has a very full plate these days, with much attention being paid on Capitol Hill to the Biden Administration’s American Jobs Plan and American Families Plan, budget reconciliation, and an emerging bipartisan proposal on physical infrastructure. Given this busy legislative calendar, the Center on Education and Labor at New America (CELNA) is heartened that lawmakers on the House Education and Labor Committee and Senate Health, Education, Labor, and Pensions Committee are considering reauthorizing the Workforce Innovation and Opportunity Act (WIOA). The law, which was last reauthorized in 2014, establishes the nation’s public workforce development system and authorizes funding for American Job Center operations as well as career services for jobseekers. As the nation begins to recover from the pandemic, rethinking WIOA and making investments in our public workforce system will allow us to harness this moment and, moving forward, allow everyone to obtain good jobs and participate fully in our economy. CELNA offers these five recommendations to guide lawmakers’ thinking and efforts on reauthorization:

Our public workforce system suffered from underinvestment and lack of resources for years before the pandemic. In fiscal year 2021, WIOA Title I funding for Adults, Dislocated Workers, and Youth totaled $2.8 billion, and funding for WIOA as a whole was just $10 billion. Moreover, as the chart below shows, funding for the Adult, Dislocated Worker, and Youth programs has been eroded over time by inflation. This translates into less funding for training as well as vital services like career counseling, which research has shown to be particularly effective in helping jobseekers.

As we begin to recover from the pandemic, many workers may want and need access to these kinds of career services to help them chart a path forward, yet our workforce development system is currently poorly positioned to meet this need. We must invest new resources into the system.

Career services and training are not substitutes for full-employment policies that encourage employers to raise pay and otherwise improve job quality. However, by investing in career counselors and high-quality training, we can enable all workers to pursue their long-term career goals, whether they want to return to a previous industry, advance within an industry, or change industries altogether.

Employers can and should play a greater role in ensuring incumbent workers and new hires have the requisite skills and training to be successful in their jobs. By having employers play a larger role in providing or coordinating training, we can tie training more closely to employer skill needs and avoid a “train and pray” approach. Yet while many larger employers have the resources to establish and administer their own internal upskilling programs, small and mid-sized businesses often struggle with lack of resources and partner with community colleges and other organizations to provide training. Exacerbating this disparity is the fact that community colleges, much like the rest of our workforce development system, have been under-resourced for years despite the important role they play as training providers.

As part of WIOA reauthorization, lawmakers should consider creating a pool of funding for small and mid-sized businesses to provide training for their employees or form partnerships with training providers and educational institutions. To access funding, employers could be required to pay their incumbent workers and new hires a living wage and offer benefits and career advancement opportunities. By creating a pool of funding for employer-sponsored training, lawmakers can ensure smaller employers are not at a disadvantage compared to larger companies in providing training and career advancement opportunities for employees. This, in turn, provides employees at smaller businesses with access to training opportunities they might not otherwise have.

Currently, our workforce development system focuses more on getting people into jobs than whether those jobs are high-quality—that is, whether those jobs pay a living wage, offer benefits and stable, sufficient hours, provide career advancement opportunities, and give workers a voice in their workplaces. WIOA-funded training programs do not necessarily lead people to obtain high-quality jobs, and women and people of color who participate in WIOA go on to earn particularly low median earnings. Some of the most common training programs are for nursing assistants, with median earnings of $20,000 a year, medical assistants, with median earnings of $23,261 a year, and dental assistants, with median earnings of $21,120. A single adult with no children would struggle to live on these earnings in every state, let alone a working parent.

A recent study of short-term training programs (15 weeks or less) in Washington found that the typical short-term training program graduate earns less than a high school graduate. Graduates of short-term programs like early childhood education and nursing assistant programs go on to earn particularly low wages, and these programs also tend to be predominantly female and racially diverse. Additionally, graduates of nearly all short-term training programs typically do not earn enough to support a family. Web design and automotive mechanics graduates, for example, would struggle to support just one child, even with a partner earning a dual income.

Lawmakers reauthorizing WIOA should strive to build a workforce development system that prioritizes connecting people to high-quality employment. They can achieve this in part by investing sufficient resources in the system so career services staff and training providers have the capacity to focus on job quality. It could also require more nuanced and long-range performance metrics that take into account whether someone is earning a living wage and has access to benefits and career advancement opportunities in their new job. In many states, more resources and attention may be needed to improve labor market data so high-quality occupations and pathways are easily identifiable. It could also require incentives and guardrails to ensure WIOA-funded training leads to high-quality jobs.

The Better Employment and Training Strategies Taskforce has recommended an all-of-government approach to improving job quality, by embedding a focus on high-quality jobs into all aspects of federal spending, investment, and employment. The Taskforce’s recommendations can serve as a resource and roadmap for ensuring our workforce development system prioritizes job quality.

Research conducted by the National Association of State Workforce Agencies (NASWA) and the National Association of Workforce Boards (NAWB) highlights the serious data issues facing workforce boards and American Job Center staff as they try to serve jobseekers. While WIOA called for greater use of data and technology to improve service provision to jobseekers, the research shows this vision is far from reality, and that American Job Center staff are often doing their best to “make it work” despite the significant data hurdles they face. State agencies, workforce boards, and American Job Center staff report using an average of 3-5 separate workforce systems, tools, and data sources each day. Staff may have to access multiple systems just to serve the same jobseeker, and then often must enter the same data across multiple platforms. Workforce staff also spend a significant amount of time compiling and aggregating data manually to meet performance reporting requirements. This cuts into the time they can spend on providing services to jobseekers like one-on-one career counseling.

More funding is needed for states and local governments to pursue data integration efforts as well as hire and retain IT staff. NASWA and NAWB offer other policy recommendations as well, such as creating national standards and supporting common data definitions. Policymakers should also provide state and local governments with best practices for technology procurement and encourage their adoption. This will help prevent wasteful procurement and maximize the value of every dollar. Finally, policymakers should enable states and local governments to easily learn from one another.

Another data issue concerns UI wage records, which workforce staff use to report and assess outcomes for jobseekers. UI wage record reporting is inefficient; employers find it burdensome to report this data and, on the flipside, the data is low-quality because employers must enter it manually. The data also includes few elements, limiting the insights we can glean from it. The T3 Innovation Network is currently working toward streamlining data collection from employers, and federal policymakers should aim to support these efforts. Additionally, UI wage records leave many workers out, including gig workers and people who are self-employed, which makes it more difficult for the workforce system to serve these workers. Policymakers should seek to improve employment and earnings data so it reflects the changing nature of work and the diversity of our workforce.

Funding formulas for WIOA’s Adult, Dislocated Worker, and Wagner-Peyser programs are based on relative population, meaning rural areas with lower populations are effectively penalized despite facing significant challenges in delivering WIOA services. Federal policymakers can address this issue by reforming funding formulas to take these rural challenges into account and lessen funding disparities between lower-population and higher-population areas. Alternatively, policymakers could create a “rural top-off” that provides rural workforce areas with additional funding on top of their normal allocations.

The pandemic has impacted many workers, particularly low-income workers, workers in the service sector, and workers of color. It has also tested and strained our workforce development system. As we emerge from the pandemic, we must create an inclusive economy and economic recovery that allows everyone to fulfill their career aspirations and obtain high-quality jobs. This requires a multi-pronged policy effort, but it must include ensuring that career services and access to high-quality career and educational pathways are available to all who want them. At the same time, we need to center job quality in our workforce development system so everyone has the opportunity to thrive and live with dignity. Reauthorizing and reforming the Workforce Innovation and Opportunity Act will be key to achieving this vision.

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