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Regional administrators and staff of the Department of Labor:
Thank you for this opportunity to comment on what changes the Administration should propose for the reauthorization of the Workforce Investment Act and on how to improve coordination between WIA and the Temporary Assistance for Needy Families (TANF) program. I am John A. Foster-Bey, a Senior Associate and director of the Program on Regional Economic Opportunity, at the Urban Institute. The Institute is a non-participant, non-profit, policy research organization. The Institute has a long history in undertaking research on workforce development and welfare reform. Much of that work has related to assessing the impact of different reform strategies on the operation and outcomes of workforce and welfare programs. The Institute has also engaged in efforts aimed at implementing programs at the state and local levels intended to improve welfare recipients and other low-income job seekers access and connection to the labor market.
I am also a member of the advisory committee for the National Network of Sector Partners, a nationwide network of workforce and economic development organizations working on sector initiatives. My comments today reflect both insights gained from my research and the research of colleagues and the experiences of sector practitioners across the United States.
Background on NNSP and Sector Initiatives
First let me explain what sector initiatives are. Sector initiatives are industry-specific workforce development approaches that promote the economic well-being of a targeted industry and improve the wages, benefits and opportunities for low-income workers. Sector initiatives have four defining characteristics: (1) they target and focus deeply on the needs in a single industry, building partnerships between multiple employers and community players to build an effective bridge to the jobs in the industry; (2) they target low income or low wage workers to improve their relationships to the industry and create pathways to skilled employment; (3) they are led by strategic intermediaries, whose role is to build and sustain the partnerships needed and to achieve a "win/win" for the industry, workers, and community; and (4) they achieve changes in the industry — whether in improved human resource policies, improved competitiveness, or expanded career ladders — along with skill and support service gains for workers. The Institute through the Program on Regional Economic Opportunity (PREO) has done research in identifying target industries in several locations around the country. Through that work we have undertaken research in the construction, healthcare and manufacturing sectors. This work has been done in both urban and rural settings. PREO is also completing a research project on the potential impact on wages and job quality of using a targeted industry strategy such as sector-employment to assist welfare recipients seeking work.
The National Network of Sector Partners links these employer/community partnerships nationwide. NNSP, a project of the National Economic Development & Law Center in Oakland, CA, acts as the catalyst and clearinghouse for the more than 200 sector initiatives which have developed over the last decade. These initiatives are being carried out in more than 15 key industries and in more than 150 communities around the country.
What are the connections between WIA, TANF, and Sector Initiatives?
Those of us doing sector work are paying close attention to the WIA and TANF Reauthorization process. We share common goals with WIA of increasing job placement and retention, increasing the earnings and skills of workers, and decreasing welfare dependency. In fact, the Department of Labor is already exploring sector initiatives as a workforce development strategy that can be useful in a WIA setting. Thirty-nine workforce investment boards across the country were funded by the Employment and Training Administration last year to plan or implement sector programs in a wide variety of industries, including healthcare, bioscience, entertainment, hospitality, manufacturing, and information technology. NNSP was invited by the Department of Labor to provide training to these WIBs at their orientation in Washington DC last August.
More recently, NNSP, in collaboration with the Aspen Institute, conducted an assessment of the progress of this demonstration, with funding provided from the Ford Foundation. We learned that sector strategies can be valuable tools to help WIBs and One Stop Career Centers play the strategic policy role that WIA envisioned and to engage employers in ways that few WIBs have been found to do in recent evaluations of the program.
But sector projects nationally have not found it easy to work with the current system. The funding of these efforts decreased over the past several years, while the number of sector efforts has grown tremendously. Our members report difficulties becoming partners in the One Stops, gaining access to ITAs, and gaining support for their targeted industry training. For those working to coordinate with the TANF system, many have reported difficulty in gaining access to the supportive services needed by their TANF clients, pressure on clients to leave effective training for lower waged jobs, and caseworkers steering clients away from what have been proven to be excellent programs.
Sector Initiatives Work
We hope DOL will strengthen the connection between sector efforts, WIA and TANF as you plan for the reauthorization. We ask for your continued support because the bottom line is that sector initiatives work. Sector initiatives can significantly improve the economic outcomes for their participants, including welfare recipients. Here are the results that have been documented as part of a three year study being conducted by the Aspen Institute in its Sectoral Employment Development Learning Project (SEDLP). In evaluating the impact of six sector initiatives over a three year period, the Aspen Institute's first set of survey results conducted one year after the end of training showed that participants (25% of whom are TANF or GA recipients) had achieved higher annual earnings and earnings per hour; higher employment rates; increased hours of work; and improved job satisfaction and job quality. This all in the span of only one year after completing the training programs.
Participants' earnings showed dramatic improvement because of increases in both hours worked during the year and earnings per hour. Overall, participants reported an average increase of $7,203 in their annual earnings just one year after training. Twenty-one percent of survey participants moved out of poverty on the basis of earnings alone. The number of hours that participants worked increased by an average of 601 hours per year. Average earnings per hour at their main job increased by 20 percent ($1.72 per hour) during the year after training, compared to the previous year. Additionally, more participants reported having worked during the year with 59 percent of employed participants having worked year round at their jobs (compared to 32 percent before the start of training).
Participants also had access to better benefits packages through their post-training employment. When asked about their main job, the job that is their primary source of earnings, 78 percent reported they had access to employer-provided health insurance (compared to 50 percent before training) and 73 percent of jobs provided paid vacation (compared to 44 percent before training).
These are the kind of results that can make a difference in strengthening our workforce and achieving economic self-sufficiency for workers and their families. They also make substantial contributions to the industries and employers in the fields they target. These are the kind of achievements that the President has been seeking as he assesses whether programs should be continued and receive federal support. With the support of WIA and TANF, the success of sector initiatives can be even greater and more widespread.
Recommendations:
- DOL should actively work to expand the use of sector initiatives within WIA and TANF, utilizing the demonstration, national technical assistance, and planning provisions of the law — and the budget to do so.
Specifically, we would like to see:
- Expanded second year funding, technical assistance and evaluation in the DOL national sector demonstration project;
- Dissemination of evaluation findings from the first year of the national sector demonstration project.
- Monies earmarked for this expansion in the DOL budget.
- Provisions in the reauthorization of WIA that would reduce the barriers toward the financing of training and the number of steps clients must go through before accessing needed training.
- Language in the planning provisions of the reauthorized WIA which addresses the need to analyze and provide customer information about jobs in key sectors of the economy, wages, career advancement opportunities. State and local boards should be required to share these responsibilities to help them move more directly into the strategic role that they can play, working with both employers and workers in need of assistance.
- In TANF, we seek greater flexibility and encouragement for education and training as the welfare bill is reauthorized and a greater focus on gaining self-sufficiency, not caseload reduction. This emphasis would re-orient the system to a greater impact for both clients and employers.
- Finally, we ask the Department to encourage the local creativity and flexibility that allows either TANF or WIA to pay for training, supportive services, and career advancement services, so that individuals can get the intensive support they need to move to well-paid jobs and employers gain access to workers who can succeed and thrive in their workplaces.
Currently, the Administration and Congress are discussing reducing investments in both WIA and TANF training dollars and legislative incentives for training. NNSP, programs like mine, and both the clients and employers they serve ask you to rethink this direction. The nation needs the workforce and the workplace that can succeed, providing productive competitive industries, and well-paid, skilled workers. We ask you to take leadership in moving both TANF and WIA in this direction.
Again, we thank you for this opportunity to participate in the process of improving WIA and the coordination with TANF. We hope that together we can build a stronger, more inclusive economy by providing workers and their families with the opportunities and support to succeed.
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