Why Is the House of Representatives Seeking to Dismantle the Nation’s Workforce Development System?

April 1, 2013

By Neil Bomberg

This article is the second in a series of four designed to educate NLC members about the Workforce Investment Act.

On March 15, the House of Representatives passed, by a very narrow partisan majority, the "Supporting Knowledge and Investing in Lifelong Skills" or SKILLS Act (H.R. 803). If the SKILLS Act becomes law, the workforce development system, as we know it, would come to an end, and a new, state-driven system would emerge. Ultimately, the SKILLS Act would not improve or modernize WIA, as claimed, but would do away with the program as a federally-sponsored and federally -run program.

Here is why.

The SKILLS Act would cap funding for the next seven years at $6 billion for all workforce development programs including WIA, Job Corps, and Trade Adjustment Assistance; substantially less than is required to run an effective national workforce development system, and an amount that could not even be adjusted for inflation.

Moreover, H.R. 803 would block grant funds to governors and would allow governors and state workforce boards to operate workforce development programs without local input, thereby eliminating any role for local elected officials, a role that in the past has ensured the program is responsive to local needs and local business activities. And like all block grant programs, the workforce development system would be more vulnerable to funding cuts and give states more discretion to pick participants according to the ideological predispositions of their governors, rather than on the basis of need.
So the arguments that are being put forward-that WIA has been a failure and is in need of a complete revamping-are only designed to cover-up a larger goal of dismantling the system.

How do we know this? We know this, in part, because the arguments being presented in favor of the SKILLS Act are simply not true. As last week's article on WIA demonstrated, the workforce development system has had a very successful placement record, especially in light of the Great Recession and the difficulties that most Americans faced finding work. And while there is no doubt that some local individual workforce development programs are more successful than others, the system as a whole has demonstrated its ability to respond to an economic crisis and to utilize the funds appropriated to generate positive employment outcomes.

We also know this, in part, because the arguments given in support of the changes the SKILLS Act would make to WIA are not always supportable. While the bill's supporters argue that the bill would eliminate and streamline 35 duplicative and ineffective employment and training programs; replace the current maze of programs with a flexible Workforce Investment Fund at the state level that could be used to provide workers, employers, and job seekers one simple source of support for employment and training services; establish common performance measures by which all programs would be measured; require an independent evaluation of programs at least once every five years to improve accountability; and require local workforce investment leaders to outline the strategies they would implement to serve at-risk youth, individuals with disabilities, veterans, and other workers with unique barriers to employment, there is no evidence that these changes would actually improve the nation's workforce development system.

Many of the programs that were slated to be consolidated or eliminated are not duplicative and eliminating or consolidating them would not necessarily streamline the system. Some, including veteran's employment and training programs, were not consolidated because the constituencies assisted by those programs mounted a strong campaign to maintain their independent status. Other programs that came under the jurisdiction of other House committees were not allowed to be eliminated or consolidated by the committee chairmen who claimed to support the broader goals of the legislation, but not consolidation or elimination of their own employment and training programs.

More importantly, there is strong evidence that consolidation and elimination of some programs could have a deleterious effect on the delivery of program services by making it more difficult for migrant workers, youth and older workers, and other severely disadvantaged populations, to obtain the kinds of training and employment services they need that would meet their specific needs. And if streamlining means giving governors authority over the program so that program activities are determined at the state level in a way that would eliminate local elected official and business leader involvement, the Skills Act is unlikely to meet the local needs of the communities these programs are designed to serve, and the businesses and individuals who need workers, or are searching for work.

There can be little doubt that thoughtful consolidation of programs that are shown to overlap would streamline administration of the program by allowing governors to create a state level administrative entity. But the concern remains: at what programmatic cost? After all, one of WIA's core principles is a belief that economic activity and growth take place at the local level within economic regions or labor market areas and that local elected officials working with business leaders are best able to determine how to respond those needs.

In contrast, the SKILLS Act presumes that such activities can be addressed economically, and successfully, from the state level. However, more and more evidence is pointing to the fact that cities and their metropolitan areas are becoming the engines of economic growth, and that efforts to address economic growth by regions is far more effective than policies based on state boundaries.

So if the SKILLS Act were passed into law, where would we end up five years from now? With a severely reduced workforce development system, relying on scarcer federal dollars, that would be able to assist fewer and fewer workers and employers at a time when the nation will continue to struggle in an ever changing and very competitive global market.

Next week: Why is H.R. 803 bad public policy?