Testimony of John Twomey
President
National Workforce Association
House Subcommittee on 21^st Century Competitiveness

March 11, 2003

Introduction

Chairman McKeon, Mr. Kildee and the other distinguished members of this Subcommittee, my name is John Twomey and I am the president of the National Workforce Association (NWA). In my other life, I am the CEO of New York’s workforce association, NYATEP.

In my testimony today, I will provide a very brief update, from NWA’s perspective, on the status of implementation of the workforce investment system. I will then discuss NWA’s reauthorization positions. We hope that this information will be helpful to the Subcommittee as you develop your Reauthorization bill.

Before I go further with my formal testimony, I would like to take this opportunity to applaud your efforts, Chairman McKeon and Mr. Kildee, in authoring the Workforce Investment Act (WIA). It was a significant effort to move from 40 years of supply-side federal workforce policy focused only on the jobseeker, adding a demand-driven employer customer, to a locally designed and delivered workforce investment system.

As you prepare for reauthorization, I strongly urge that you build upon the locally-driven, private sector-led vision established in the Workforce Investment Act, taking care to make only those changes to current law that strengthen the capacity of local areas to build comprehensive and relevant workforce investment systems.

In this increasingly global and changing economy, preparing a highly skilled workforce is the only way the United States can successfully compete in the future. The National Workforce Association believes that the establishment of a comprehensive workforce investment system, overseen by strong local workforce boards with services provided through a one-stop delivery infrastructure, was and continues to be a visionary way to address the economic challenges we face as we move further into the 21^st Century. This is more important than ever before as we continue to see record numbers of workers who are losing their jobs, while employers in certain sectors of the economy continue to have serious problems in finding skilled workers.

NWA believes that the reforms brought about through WIA have resulted in significant progress in the nation’s workforce investment system. Reforms envisioned in WIA were bold, and as a result some states and localities have been slower to implement than others. As a whole however, the workforce investment system is progressing well. In many states, but particularly in many local areas, innovative programs and strategies have blossomed as a result of the changed focus and flexibility provided in WIA to meet the needs of business and local economies in workforce areas, as well as the related needs of workers. As a result, we strongly believe that modest changes not a dramatic overhaul are needed in reauthorization. Reauthorization should result in necessary improvements and/or "fixes," and in the removal of barriers to program integration and innovation. Most importantly however, reauthorization should allow the positive evolution that is underway at the state and local levels to continue, building upon the private sector partnerships at the local level.

One-Stop Service Delivery. One-Stop delivery of services has taken hold in states and localities since the enactment of WIA. The vision established for the one-stops in WIA was for a fully integrated workforce investment system, with comprehensive services delivered seamlessly through a system that is easily accessible, recognizable, customer friendly, and that offers a broad array of services. Many one-stop career centers have become better known in their local communities and are providing workers and employers with a wide array of services. While the integration of services through the one-stops has improved, challenges still face workforce boards and one-stop operators, particularly around the negotiation of partner agreements and resource contributions for operation of the one-stops. As such, changes in reauthorization that would aid local communities in facilitating such partnerships and resources contributions would be welcome. Finally, while many one-stops are progressing in the provision of services to businesses, progress must continue in helping one-stops to understand the value of the workforce investment system to employers in the local community, refocusing on promising and innovative strategies to better meet the needs of business and local economic development concerns.

It must be noted that in early implementation States like Massachusetts, Texas, Michigan, and Florida, local workforce administrators reported that it often took them 3 years to get the kinks out and really begin to show positive results in the integration and delivery of services. In many areas across the country, we are just now hitting that timeframe.

Services for Business. Under the Workforce Investment Act, business was assigned two very important roles: as leaders and as customers of the system. Since enactment, many promising practices have been identified and implemented with the goal of preparing the American workforce with the skills needed by U.S. employers. Innovative programs such as incumbent worker training, sectoral strategies, and career ladder programs have grown, and show great promise for workers and for employers. Any reauthorization proposal should encourage continued development and implementation of such strategies that are built around critical industry clusters, and result in worker training that leads to careers with advancement opportunities and better pay.

A good example of this is in the area of incumbent worker training where great strides have been made in upgrading the skills of existing workers. In my State of New York, the Governor successfully used State [15%] WIA funds to augment the skills of incumbent manufacturing workers, increasing the global competitiveness of their firms. High Tech firms were aided. Local workforce areas received funds to conduct local skills gap analyses, followed by a second round of funding to address the deficiencies identified. In other States across the nation, similar progress has been reported. Career ladders have been built in critical local industry clusters in a number of areas around the country. This has led to workers being upgraded to better paying jobs that are critical to their cities and counties, and new workers replacing them through back filling.

In WIA, local workforce boards were expected to become "boards of directors" over comprehensive workforce investment systems with authority for policy development, strategic planning, selection of one-stop and other service providers, and oversight over the local system. Reauthorization should build on this authority vested in local workforce boards, and look for ways to strengthen the role of business leadership in the system.

Training. For the U.S. workforce investment system to meet the skill requirements of American employers, we have to increase the system’s focus on helping workers access the training they will need today and in the future. When WIA was first enacted, there was confusion in its initial implementation that the new law required an exclusively "work-first" approach to services, where training should be provided only as a last resort. Another unintended problem that resulted from the legislation was a reduction in training due to overly burdensome training provider reporting requirements. As a result, we saw a reduction in the provision of training services in initial implementation. While training is increasingly being provided to adults and dislocated workers in need of such services, more needs to be done to help the system provide expanded access to these vital services. Incentives should be provided to local communities for training that is provided through or in combination with funding from sources other than through Title I of WIA. Relaxation of the WIA reporting requirements for training providers will also help in encouraging more training in the system.

Youth Programs. The economic downturn has hit young workers harder than the rest of the population. According to the Center for Labor Market Studies at Northeastern University, young workers are six times more likely to lose their jobs than older workers during this economic slowdown, with nearly half of the overall job losses during this downturn having occurred among youth and young adults under the age of 25.

Youth programming varies significantly from locality to locality. Some cities focus most of their resources on out-of-school youth, but most local programs focus far more resources on providing services for at-risk, in-school youth. At a time of such economic crisis for young workers, it is more important than ever for local communities to have the flexibility to determine priorities in serving disadvantaged and at-risk youth, both in-school and out-of-school. As part of the Administration’s and the Congress’ policy of "leaving no child behind," we must allow local communities to develop comprehensive programs for youth that guard against allowing disadvantaged youth from falling between the cracks. And for those young people who have already fallen, WIA Youth programs are an essential solution to picking them back up.

The NWA has six major areas we would like to bring to your attention. I will summarize these positions here; the actual 6 one-page summaries are attached as an appendix.

1. Funding. In order to fulfill the vision in WIA to build a world-class workforce and strengthen U. S. businesses, sufficient funds to support local workforce investment boards and One-Stop system costs must be appropriated to accompany WIA Reauthorization. NWA support the authorization and appropriation of an additional $1 billion for the One-Stop delivery system (further explained in position #4).

2. Expenditures vs. Obligations. Because no accurate assessment of WIA spending can fairly rely on expenditures exclusively, WIA reauthorization should require USDOL to utilize some combination of expenditures, accrued expenditures, and legal obligations in determining spending for the system. Congress may want to consider using either "accrued expenditures" or "legal obligations" (encumbrances) in determining the redistribution of "unspent" funds, in reporting to Congress on spending levels, and in determining funding recommendations. These terms should be clearly defined in the Act, and DOL should be required to collect this information from states and local area and utilize such data. Subsequently, technical assistance should be promptly provided to States and local workforce areas by USDOL. NWA’s recommendations are consistent with the recent GAO study and findings on expenditures and obligations.

3. Authority of Local Workforce Boards. In order to fulfill the broad strategic vision Congress articulated with the passage of WIA, NWA recommends that:

The private sector influence on the local WIBs should be bolstered by requiring local WIBs to include at least 60% private sector representatives. Only public sector representatives with optimum decision-making authority should be allowed to serve on WIBs.

WIBs should be given greater direct control over resources and programs beyond WIA I-B. The system should allow rural, isolated and non-metropolitan areas of any state to have more discretion on how services are delivered. This would allow these areas the flexibility to respond to their particular labor market needs without being forced into inappropriate "one-size fits all" approaches.

Monetary incentives should be provided to local Boards who achieve exemplary results through innovative activities such as: strategic plan development, community audits, partnership with economic development entities, leveraging of local workforce and economic development funds, identification and adoption of innovative business strategies such as sectoral, incumbent worker, and career ladder pathways.

4. One-Stop Delivery System. NWA agrees with the GAO that One-Stops are reducing duplication and increasing cost efficiency of the Federal workforce investment and partner programs.

NWA recommends that One-Stops be authorized in a separate, new title of WIA, to reinforce the fact that One-Stops are the primary infrastructure through which to access services in a comprehensive workforce investment system. NWA further recommends that a separate, new authorization be provided at $1 billion to support the operations of the One-stops. An alternative to this authorization would be the requirement that an appropriate percentage of relevant Partner Programs’ federal funding be set-aside for the One- Stop Delivery System consistent with the Department of Labor’s Whitepaper. Such funding would be allotted to states and local workforce areas by the formula currently utilized to distribute funding under the Adult funding stream in WIA.

Performance Measurement. NWA recommends that the following four actions be taken to bring WIA performance into alignment with the legislative intent of the Act:

Require that local workforce areas use technology such as swipe card systems so that usage and repeat usage of one stop centers can be readily available for Workforce Boards in determining performance in real time for the workforce investment system;

Adopt a regression model for calculations of cost and wage gain measures to reflect the local economy and characteristics of populations receiving services;

Acknowledge customer satisfaction as a fundamental tenet of WIA and include it with OMB common measures; and

Develop a self-sufficiency measure and incorporate it into the wage gain measure

State Role. The State Role in WIA should include: System Building activities; oversight and management of WIA; Labor Market Information and Regional Initiatives; and States should only directly administer programs that are statewide or cover multiple workforce areas, and projects funded in one (or several) workforce areas should be competitively procured and subject to consent of the local WIB. While States should be able to set quality parameters for One-Stop systems, the right to designate and charter local One-Stops must remain a local WIB function.

For many years Workforce Development has been an area of great bipartisan agreement in the Congress. The National Workforce Association believes that there are immense benefits to the developing system that can be derived by fine-tuning WIA in reauthorization. In these critical economic times, we hope that the Committee on Education and the Workforce, and the House will build on WIA’s growing successes rather than making radical changes to a system that has just begun to see major improvements. The Workforce Investment Act has indeed moved the nation forward toward the goal of having a single, comprehensive, and customer-friendly system where all American worker and employers can receive the information and services they need to succeed in today’s ever changing labor market.

After WIA was enacted, but before we began its implementation in New York, I attended a focus group being conducted with fifteen 18 year olds in Syracuse, New York. They were asked "What would you value in a true workforce development system?" Their answers were simple, yet cut to the heart of the matter that day, and still ring true.

Overwhelmingly, what these young people in central New York wanted were five things:

1. "Tell us what jobs are out there";

2. "Tell us what are realistic salaries";

3. "Tell us what skills they require";

4. "Tell us if we have them"; and

5. "If not, tell us where we can get them; and at what cost."

Isn’t this still the challenge to our emerging workforce investment system?

NWA stands ready to work with you and the committee staff as reauthorization moves forward. Chairman McKeon that concludes my remarks. I want to thank you again for this opportunity to testify before the Subcommittee. I welcome any questions that you may have.