Thanks to the persistence of social entrepreneurs across the country, every day we see strategies that are working and delivering results in a rapidly changing world. This Evidence in Action blog series highlights the voices of the more than 70 social innovation organizations that make up the America Forward Coalition, the results-driven solutions our community has to our country’s most pressing social problems, and the evidence-based federal programs that are critical to scaling the impact of this work. Today America Forward Government Affairs Director Nicole Truhe kicks off a week of Workforce Development #EvidenceinAction posts with a piece detailing the innovative and evidence-based provisions of the Workforce Innovation and Opportunity Act (WIOA).
In our nation known as ‘the land of opportunity,’ the number of people moving from poverty to the middle class has been on the decline notwithstanding the recent good news from the Census Bureau about the progress made in reducing the poverty rate. Additionally, despite the assertion by economists that the current unemployment rate of less than five percent means that the U.S. is basically at full employment, 16 percent of working-age men are not attached to the labor market and nearly a fifth of nonelderly household heads in the bottom third of the income distribution did not work at all in 2014. [i] [ii] Additionally, almost six million youth and young adults are not in school or working, a group referred to as “opportunity youth,” and are costing taxpayers $93 billion annually and $1.6 trillion over their lifetimes in lost revenues and increased social services.[iii]
Though the employment rate has gone in the right direction, wages have not followed a similar positive path. Typically, when the economy is at full employment, wages grow at roughly three to three and a half percent a year but wages have instead grown at a more meager two and a half percent.[iv] And unemployment figures also do not fully capture the number of Americans that are working but in part-time jobs when they want full-time employment. These jobs are not only less stable they also yield lower wages and few to any benefits.[v] These realities and the inability of many individuals to find their way to productive work takes an unacceptable toll on our economy.
At the same time, many U.S. employers say that a shortage of qualified workers is their biggest obstacle to growth.[vi] Employers indicate they are unable to find qualified workers for an estimated five million U.S. jobs and, based on the current pace, the U.S. will produce only slightly more than half of the degrees and credentials needed to fill these jobs of the future.[vii] By 2020, 65 percent of all American jobs will require post-secondary education and training beyond high school.[viii] But our nation is not preparing its citizens to meet these workforce demands, wasting the extraordinary human potential represented by Americans trapped in poverty.
Even given these economic realities, our federal workforce policies, until recently, remained outdated and misaligned with the needs of job seekers and employers alike. Prior to 2014, the core of the federally-supported workforce development system was the Department of Labor administered Workforce Investment Act (WIA), which authorized a nationwide system of state and local/regional workforce planning boards and three job training block grants that they administered. WIA also supported important national grant programs for youth, farmworkers, people with disabilities, Native Americans, and reintegrating offenders, among others.
The federal workforce development system established under WIA persisted for over 15 years virtually unchanged because the law was never reauthorized. Fortunately, in July 2014, on a bipartisan basis, Congress was able to pass a reauthorized workforce development law, the Workforce Innovation and Opportunity Act (WIOA). This transformative and innovative piece of legislation made significant changes to our federal workforce and job training programs that were in many ways outdated and inefficient.
WIOA stands as an example of a bipartisan Congressional effort to update an important federal system with a focus on incentivizing and supporting innovation, evidence, and what works. It also serves as an important example of evidence-based policymaking in action. WIOA made a myriad of changes to the federal workforce and job training system that ranged from new authorizations for the use of workforce funding, to the reallocation of resources to target populations, and both the addition and elimination of processes and procedures based on data and impact. Some of the most important changes made by WIOA include:
- Pay for performance provisions in Governor’s Reserve and Local workforce funding streams: WIOA created a permanent authority within all three WIA formula funding streams (Adult, Youth, and Dislocated Workers) for Pay for Performance as an eligible use of up the full 15 percent of the allowable use of the Governor’s Reserve funding for statewide workforce activities as well as up to 10 percent of the Adult and Dislocated Worker and Youth formula funding streams in local workforce board funding priorities.
- Disconnected youth/out-of-school youth reallocation: WIOA directs more resources towards programs that support disconnected/opportunity youth (out-of-school, not employed or in vocational training) by requiring 75 percent of all youth funding be directed to support this population.
- Focus on transitional jobs: Up to 10 percent of WIOA Adult and Dislocated Worker funds can be used for transitional jobs (time-limited subsidized work experiences) for individuals who are chronically unemployed and have barriers to employment.
- Prioritizes and supports career pathways strategies: This change enables local boards and providers to develop holistic strategies that can train workers and job seekers for in-demand careers and build stronger connections between job training programs and local employer needs.
- Emphasizes work-based learning strategies: Prior to WIOA, low-skilled and other incumbent workers were not eligible for assistance and on-the-job training for eligible trainees was limited. WIOA increases the ability to use on-the-job training, such as internships for youth, incumbent working training, and customized training through increased reimbursement rates and allowable use of local funds.
- Utilization of prior learning assessments: Under WIOA, the use of prior learning assessments was authorized for students, workers, and job seekers to demonstrate mastery of specific skills through assessment.
- Combined state plans: WIOA provides authority for workforce systems to develop a combined state plan that includes core workforce programs as well as one or more additional programs with a workforce component such as Career and Technical Education, Supplemental Nutrition Assistance Program Employment and Training, Community Development Block Grant, Community Services Block Grant, and Temporary Assistance for Needy Families. This authority will allow states to develop and implement workforce strategies that address the social, educational, and economic needs of those in their communities.
- Effective statistical techniques: WIOA incorporates more effective statistical techniques, such as regression analyses, that can help minimize disincentives for delivering services to populations who face more significant barriers to employment.
Any effort to change the circumstances of those now left out of the economic mainstream – and reverse the negative impact on our overall economy – demands that we rethink the way we invest public resources, as well as learn from and expand proven programs and practices that work to enable students, youth, and adults from all backgrounds to succeed economically. Policies like the Workforce Innovation and Opportunity Act, created and authorized by policymakers on both sides of the aisle, showcase the possibility of making decisions about policies and funding levels that are based on data, outcomes, and that have the greatest ability to meaningfully improve the lives of all Americans.
This post is part of America Forward’s Evidence in Action blog series. Follow along on Twitter with #EvidenceinAction and catch up on the series here.
 Full employment is the condition in which virtually all who are willing and able to work are employed
[iii] C.R Belfield, H.M. Levin and R. Rosen. “Economic Value of Opportunity Youth,” January 2012, www.civicenterprises.net/MediaLibrary/Docs/econ_value_opportunity_youth.pdf; https://opportunitynation.org/latest-news/5-6-million-youths-school-work/
[vi] High Growth Entrepreneurs Plan to Continue Growing,” Kauffman Foundation, http://www.kauffman.org/newsroom/high-growth-entrepreneurs-plan-to-continue-growing.aspx
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