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Since 1999, 235,000 would-be workers have entered the New York City workforce. The city has lost 240,000 jobs since 2000. As a result, at least half a million New Yorkers could have used help in getting a job since the Workforce Investment Act was passed in 1998. Instead, the law has expired without making a dent in the city’s economic problems, in part because the city dragged its feet on job training and employment services until Rudolph Giuliani left office in 2002.

New York City’s “wildly inconsistent policy swings have given ammunition to critics of job training across the country,” according to the Center for an Urban Future (in pdf format). Until last year, New York City had only a single “one-stop center” located in Queens. Unlike other cities, our Workforce Investment Board plays a minimal role in determining the use of federal job training funds, which are tightly controlled by the mayor.

Congress is about to pass a new version of the Workforce Investment Act, after separate bills already passed by the House and Senate are reconciled in conference. The decisions embodied in the final reauthorization bill could change the lives of New Yorkers who lose their jobs or move from welfare to work, young people trying to find their first jobs, and employers dealing with staff turnover or the need for workers with scarce skills.

What The Workforce Investment Act Was Supposed to Do

The 1998 law was meant to centralize access to employment and training services in “one-stop centers” where jobseekers could find all the services they needed, and to make sure that training matched the needs of employers by giving business a strong role in shaping it. Certain eligible clients could choose an educational or training program, with advice from a career counselor, and the government would pay their tuition.

How The Workforce Investment Act Has Played Out in New York City

In 2002, New York City spent about $97 million in federal workforce development funds. Its Workforce1 program offers 97 career centers, of which three are full-service one-stop centers. In April of 2002, the city launched an advertising campaign to publicize the centers and their career services. The city also operates a hotline (1-866-JOBS-NYC) and website for job hunters and employers.

These efforts have been hampered by the economic downturn accentuated by the World Trade Center disaster. The unemployment rate for the five-borough area averaged 7.7 percent from July 2001 through June 2003, meaning that in any given month between 200,000 and 300,000 residents were unemployed. During the same two-year period, the city’s Department of Employment enrolled 21,644 new adults in its dislocated worker program, and placed 10,042 participants in jobs. Over one-fourth of the participants hired had lost their jobs within three months.

Sequential Eligibility Limits Training For Experienced Workers

Under current law, participants in one-stop activities must exhaust job placement possibilities before they can receive training. This policy encourages jobseekers to take low-paying jobs requiring minimal skills rather than upgrade their skills to qualify for better jobs. Neither the House nor the Senate explicitly eliminated “sequential eligibility,” in their reauthorization bills, but each of them modified the language of the bill to allow a broader interpretation of which clients can be approved for training services.

Workforce Investment Boards Have Not Been Guiding Employment Service Decisions

Members of these boards have found themselves bogged down in administrative details, and thus unable to concentrate on substantive policy decisions, which are instead made by government officials. The House and Senate bills do not address this issue, except in reducing the number of mandatory members who must be represented on local boards. Eliminating one-stop partner agencies as voting members may reduce the amount of time that boards devote to discussing day-to-day operations.

One-Stop Centers Do Not Get Their Own Funding

Each center has to negotiate written agreements with 17 mandatory partners, such as trade organizations, colleges, and community organizations, that they will provide money or other resources to support the center’s activities. Potential partners are not always willing or able to commit resources to one-stop centers.

Both the House and the Senate have addressed funding for the one-stop centers by giving governors power to redirect funds from partner agencies to one-stop centers. The Senate bill also gives localities the option to negotiate agreements with partner agencies spelling out their financial commitments, as long as agreements are signed by July 2004.

Reporting Requirements Keep Competent Providers Out Of The System

To be certified to receive funding from the Workforce Investment Act, education and training providers must collect a bewildering array of data about their students. If tuition for one student in a program is paid for by the law, a school must report on all students in that program, including those not funded by the law. This is a costly process, which includes following up on graduates months after they have left the program. For some organizations, such reporting also violates their students’ right to privacy.

The Senate bill relieves trainers of the responsibility for tracking outcomes for program participants who are not funded by the Workforce Investment Act. Both the House and the Senate bills reduce the number of mandatory performance indicators that must be collected, and modify their use by taking into account economic conditions and characteristics of participants that might hold them back from finding good jobs.

The House bill uses an efficiency measure—the average cost of serving each participant—as a factor in certification of training providers. Unless cost measures take into account the varying needs of clients, they may shut out trainers serving the very people who require the most assistance to get and retain jobs. The Senate bill does not consider cost efficiency in the certification process.

Employers Are Not Using The System To Hire Or Train Staff

The U.S. Chamber of Commerce found that only 35 percent of small businesses knew about their local One-Stop center, and four out of five employers surveyed by the Chamber of Commerce had not used the system in the previous year. The majority of the same employers reported that they had a hard time finding qualified people to hire.

The Senate bill requires a dedicated business liaison at each One-Stop center; this was one of the practices recommended by the General Accounting Office in a study of successful centers. Both the House and the Senate bills would allow centers to place more emphasis on services aimed specifically at businesses, such as training for their existing staff.

The Block Grant Threats Funding Levels

The White House sought to combine three workforce development funding streams into a single block grant. Opponents argue that block granting these funds would make it easier to quietly reduce them in future years, and would set the target populations of the three programs in competition with one another. The House bill incorporated the block grant proposal, while the Senate bill preserved separate funding streams for the 5-year life of the bill.

Will Extended Unemployment Benefits Be Renewed?

Even before the Workforce Investment Act is reauthorized, New York’s Senator Hillary Clinton has pledged to bring before Congress an issue of more immediate concern to her unemployed constituents. The Temporary Extended Unemployment Compensation program expired on December 31, 2003, meaning that continued benefits are no longer available to job hunters still unemployed after 26 weeks. Clinton is urging Congress to authorize an additional 26 weeks of unemployment benefits, but is also supporting a bill that would limit the extension of benefits to 13 weeks.

Linda Ostreicher, a former budget analyst for the New York City Council, is a freelance writer and consultant to nonprofits.

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