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- Skills Mismatch
Today, the Workforce Investment Act (WIA) turns 15 years old and faces challenges and opportunities ahead, including continued funding cuts and reauthorization.
WIA is the single largest source of federal funding for workforce development activities to address the needs of adult job seekers, dislocated workers and youth. Under the law, a national network of one-stop centers administered through state and local Workforce Investment Boards (WIBs) provide universal access to employment and training programs. More than eight million people received WIA-funded services in fiscal year (FY) 2010.
Currently there are 12 million unemployed people in the U.S. who could benefit from WIA-funded employment and training services. However, WIA funding has been cut by a half billion dollars since FY 2010 and will face another decade’s worth of cuts under budget caps and the sequester put in place by Congress in 2011. And the program—along with countless other federally-funded workforce development programs—faces even further cuts if some in Congress have their way. Cuts proposed in the House-passed budget would reduce federal investments in WIA by another half billion dollars in just FY 2014, a total loss of one billion dollars (about one-third of total WIA funding) for the largest single source of workforce development funding over a four year period.
WIA faces other challenges besides continued funding cuts; the 1998 law has never been reauthorized, and is now more than a decade overdue for consideration by Congress. As a result of this inaction, WIA has failed to keep pace to changing economic conditions—in August 1998 the U.S. unemployment rate was just 4.5 percent with 6.2 million unemployed people, about half as many people as today—and does not reflect that significant advances that have been made by the field over the last 15 years. The law’s original emphasis on short-term training and rapid re-employment, an artifact of the “work-first” philosophy that originally shaped WIA, is increasingly inconsistent with growing demands for longer-term training aligned to high-growth and emerging industries.
There is some chance that WIA may be reauthorized this Congress, with both the House and Senate taking steps to advance (albeit radically different) reauthorization bills. Most recently, the Senate Committee on Health, Education, Labor & Pensions (HELP) voted out a bill to reauthorize WIA. During mark-up, Senator Bob Casey (D-PA) offered and withdrew an amendment to include in the bill the Strengthening Employment Clusters to Organize Regional Success (SECTORS) Act, which would create new capacity to support sector partnerships that align the skills of workers with the needs of businesses by bringing together employers and other stakeholders connected to key local and regional industries to address immediate skill shortages, while developing workforce pipelines to ensure the future of that industry.
National Skills Coalition strongly supports the SECTORS Act (S. 1226), which was introduced earlier this year by Senators Brown (D-OH) and Collins (R-ME). While the HELP Committee failed to adopt the amendment during mark-up, we hope to see the SECTORS Act incorporated into the Senate WIA bill when it comes to the floor.
Sector partnerships are widely regarded as a workforce development best practice. In the fifteen years since WIA was first created, more than 1,000 sector partnerships have been created and are operating across the country. These partnerships improve employment opportunities for workers and to increase their wages once on the job. Employers report increases in productivity, reductions in customer complaints, and declines in staff turnover, all of which reduce costs and improve the competitiveness of their companies. Yet, for the most part, these partnerships operate largely without significant federal funding and states and local communities receive no recognition or credit under current law for this type of work—despite rigorous evaluations proving the effectiveness of sector-based approaches. It’s time for Congress to catch up to the field and pass a WIA reauthorization bill that better reflects the expertise that the field has built during the last 15 years.
Now that WIA turns 15 years old, what could be its birthday wish? For Congress to find a balanced approach to deficit reduction that doesn’t continue to cut WIA funding and to provide support for well-known best practices, such as sector partnerships to better align job training programs with the skills employers need that provide workers good-paying jobs.