By Shannon Holmes
May 24, 2004

In response to President Bush's spotlight on the local workforce system, Rockford (IL) Mayor Douglas P. Scott, with other principals from the Local Coalition, met with Assistant Secretary Emily Stover DeRocco of the Employment and Training Administration to express concerns about the Administration's proposal to consolidate the local workforce system and to give control to governors.

Representing the Local Coalition were Mayor Scott, Chair of the Standing Committees on Workforce Development for The U.S. Conference of Mayors; Jeffrey Howe, Senior Vice President of First Indiana Bank, Board Chair of the National Association of Workforce Boards; George Davis, Senior Vice President of Lincoln Financial and Chair of the Philadelphia WIB; Harry Van Sickle, County Commissioner in Union County, Pennsylvania, Chair of the Labor and Employment Steering Committee of the National Association of Counties; David Capperalla, Co-Owner of Capperalla Furniture and Chair of the Central Pennsylvania WIB; and Alan Longstreth, Human Resource Manager at Morton Salt and Chair of the Employment Source WIB in Canton, Ohio. The Local Coalition, comprised of the National Association of Counties, the National Association of Workforce Boards, the National Workforce Association and The U.S. Conference of Mayors, represents the nation's locally based workforce investment system. The collective membership includes 13,000 local business representatives, over 25,000 local elected officials, and 350 local workforce agencies.

In a recent speech at Piedmont Community College, President Bush said the reforms included in the "Better Training for Better Jobs" proposal would double the amount of job training that occurs through the Workforce Investment Act (WIA) programs without any additional funding. An April 5 White House Fact Sheet suggests this action would be accomplished by: consolidating the current "confusing hodgepodge of programs"; increasing the flexibility of the Governors to design "their own workforce training programs"; reducing overhead costs by $300 million; and transferring $250 million from WIA and related programs to a new community college training initiative.

As elected officials and private sector Workforce Investment Board Chairs who lead the nation's public workforce efforts on behalf of local communities, Scott and the principals informed DeRocco that they respectfully disagree with the Administration's methods for achieving this objective. They also stressed that a balanced picture of the current system would result in different reforms to achieve shared objectives. DeRocco expressed a commitment to continue an open dialogue into the future. She also indicated her willingness to suspend any movement on the redefinition of the administrative costs until the legitimate costs of the local workforce system are understood.

The Local Coalition is extremely disappointed that the Administration has continued to imply to the press and public that $4 billion is spent annually on the workforce system, resulting only in 206,000 individuals trained with these funds. In remarks to the American Association of Community Colleges Convention April 25 President Bush reiterated that claim. Such representation implies that the only services provided under WIA are training, and that per person training costs run in the neighborhood of $20,000 per participant. This is not the case. Linking these numbers without discussion of all the services provided through the workforce investment system is not an accurate way to portray how the WIA funds are utilized or what the system is mandated to do. Without this background, training figures can be easily misinterpreted. From the Local Coalition perspective, fairer numbers would reflect:

• the number of low-income adults and dislocated workers who were still enrolled, but who had not yet completed training;
• the number of youth who received training (88,000), education, or work experience, especially since $1 billion in youth funding was included in the $4 billion proposal for the "Better Training for Better Jobs Initiative";
• the 40,000 individuals who received training under the H-1B grant last year and those individuals trained under the Migrant and Seasonal Farmer Worker programs, as such training is often provided through the public workforce system; and
• the 16 million individuals who received a variety of employment-related services and short-term employability training through the One'stop Centers, to help them secure good jobs as quickly as possible.

Inclusion of youth in the proposed consolidated block grant, which would go to governors combined with Adult, Dislocated Workers, and Wagner-Peyser (the Employment Service) is of grave concern. Currently the allocation for youth is $1 billion dollars. Over the past few years there have been cuts made to youth funding with an ever-increasing demand for services. During program year 2002 alone there were 88,000 youth trained with DOL funding. With the inclusion of youth into the consolidated funding proposal, it is feared that youth will be left behind in order to serve adults and dislocated workers. Funding and services must be kept separately and at the local level to effectively serve youth and ensure they become active members of the workforce.

Scott and the other principals also expressed concern about the action to shift more program design and decision-making to the Governors from the local business-led workforce investment boards and locally elected officials. Decisions about the design and delivery of local workforce systems — that are genuinely responsive to business demands and economic development needs — must occur at the local level, the coalition stressed.

The Local Coalition is also very concerned about that part of the President's message which described workforce investment boards as part of the problem of bureaucracy and excessive costs in the system. The proposed changes would almost certainly prevent local workforce investment boards from carrying out their federally envisioned role of designing and overseeing locally driven workforce systems.

Finally, the Coalition is troubled by both the characterization that there is currently $300 million in unnecessary bureaucratic and administrative spending in the nation's workforce investment system, and of a potentially new definition being considered for administrative costs under WIA. The President cited 35 percent as being currently spent on administrative costs. This number is not consistent with what is currently seen in the system. Most local systems are within the 10 percent cap set forth in the Workforce Investment Act of 1998.

The Local Coalition also indicated that they had worked closely with Congress over the past year and a half to develop a WIA reauthorization proposal that would address many of the concerns raised by the Administration's recent announcement. The Coalition hopes that a conference agreement on WIA reauthorization can still be reached and signed into law this year. Both the House and Senate bills contain important improvements to an evolving system that is positioned well to serve American workers and employers.