Introduction

The Workforce Investment Act (WIA) of 1998 provides for a more coordinated, locally-driven workforce investment system intended to meet the needs of businesses and job seekers. This system is a partnership between state, local and federal stakeholders which gives states and localities increased authority to implement innovative workforce investment strategies to best serve the needs of the labor market. In contrast to its processor (JTPA), WIA considers both employers and job seekers to be “clients” served by the new system and gives the business community a prominent role in workforce investment activities at both the state and local levels.

Service Delivery under WIA

One-Stop Career Centers are the foundation of the WIA-based local workforce development system. One-stops offer workers ready access to the many workforce development, educational and other human resource services available in a local area rather than requiring individuals and employers to seek workforce information and services at several different locations, which is often costly, discouraging and confusing. More than a dozen federal programs are mandated or optional one-stop partners, including WIA-Title I Programs; WIA-Title II Programs for Adult Education and Literacy; Trade Adjustment Assistance (TAA) activities; Programs for re-employment services under the Wagner-Peyser Act, Vocational rehabilitation programs, Services to older Americans under the Older American Community Service Employment program; and programs for post-secondary vocational education activities under the Perkins Career and Technical Education Act.

One-stop centers may be public or private entities (not schools). They typically have trained staff who provide advice, skill assessments, referrals to programs and services and who help individuals through the system until they are prepared to enter employment. Centers also provide business services such as information about the labor market, customized training for employers, initial screening of job applicants, and assistance for employees who are downsized or laid off. Some One-Stop systems provide electronic linkages for both job seekers and employers to job databases and training resources.

Approximately 600 local workforce areas exist throughout the country and each has a local Workforce Investment Board (WIB) which administers local WIA activities. The WIB selects One-Stop Center operators, identifies eligible training providers, develops links with employers, creates a local plan and oversees the use of funds for employment and training activities. Local WIBs are appointed by chief local elected officials and include representatives from business (which must be the majority), local educational institutions, labor organizations, community-based organizations, economic development agencies and all One-Stop partners. Each state’s activities are directed by a State Workforce Investment Board, which oversees the activities of the local WIBs and assists the governor to monitor and develop the state plan. State WIB members are appointed by the governor and the majority must be composed of business representatives.

WIA funded services provided in One-Stops are organized into three sequential sets of services:

• Core services: These services are available to all job seekers, and include self-service access to job listings, information about careers and the local labor market; and limited staff assistance with job search activities.
• Intensive services: These services are available to people who have not obtained employment through core services. Intensive services include: life-skills workshops, case management, and comprehensive assessments leading to the development of an individual employment plan.
• Training services: These services are available to individuals who have not obtained or maintained viable employment through core and intensive services.

Although the workforce system follows this sequential service model, ARRA emphasizes the use of recovery funds for training services. Another modification under ARRA is that, while WIA typically requires that training services be provided through vouchers (known as Individual Training Accounts (ITAs)), ARRA modifies this requirement to allow WIBs to directly contract for training services with educational institutions and other training providers.

Funding Flows through WIA

Administered primarily by the U.S. Department of Labor (DOL), funding for the WIA public workforce investment system is channeled through a number of different titles and funding streams which are targeted to specific populations. The funds flow in two main ways — as formula funds and as discretionary funds.

WIA Formula Funds: These funds are allocated to each state based on a formula linked to the national distribution of unemployed individuals and disadvantaged adults. WIA formula funds are further subdivided into three main programs:

• WIA Title 1-B Adult funds are for adults aged 18 and up. This program addresses the needs of both employed (incumbent) workers who need assistance to obtain or retain better paying jobs, as well as unemployed entry-level workers, who do not classify as dislocated workers.
• WIA Title 1-B Dislocated Workers and Displaced Homemaker funds serve workers who are:
  1. terminated or about to be or laid off;
  2. eligible for or have exhausted unemployment insurance;
  3. demonstrate an appropriate attachment to the workforce, but are ineligible for unemployment insurance and unlikely to return to a previous industry or occupation;
  4. terminated or about to be laid off as a result of a permanent closure or substantial layoff;
  5. employed in a facility that has announced a facility closing within 180 days; or
  6. self-employed, but unemployed as a result of general economic conditions or natural disaster; or who are displaced homemakers (defined as a homemaker who is no longer supported by another family member).
• WIA Title I-B Youth funds serve low-income youth, ages 14-24, who face barriers to employment. Eligible youth include: school dropouts, homeless youth, runaways, foster children, pregnant or parenting youth, and offenders.

Formula funds may be transferred between funding streams (e.g., from Dislocated Worker to Adult), but explicit rules and restrictions apply. For example, up to 20 percent of the adult and dislocated worker funds allocated to a local area may, with the approval of the Governor, be transferred between programs, a provision that is continued under ARRA.

WIA Discretionary funds: At least 15 percent of local allocations from the WIA Adult, Dislocated and Youth funds to states are subject to a Governor’s reserve for discretionary statewide activities. In addition, up to 25 percent of the Dislocated Workers funds are subject to a Governor’s reserve for statewide rapid response activities to address layoffs and layoff aversions.

While discretionary set-aside funds are subject to some required and specified optional uses, states can typically use them to assist targeted populations, or to train workers in occupations where they anticipate a need for more workers. Discretionary funds can also be used to support incumbent workers looking to advance their skills and careers, making these funds particularly powerful in states efforts to better support low-wage working adults.

Further discretionary WIA grants are available at both the state and federal levels. The U.S. Secretary of Labor reserves 20 percent of the Dislocated Worker Fund before disbursement to states to be distributed through a competitive grants process. These funds can be used for dislocated worker technical assistance, demonstrations, and National Emergency Grants. In addition, there is a new ARRA funded discretionary program under WIA that makes competitive grants for high growth industries.

Performance and Accountability under WIA

WIA requires states to track and report performance on a variety of outcomes measures under each title program. Mandated outcome measures for adults, dislocated workers, and older youth (19 to 21 years old) include the following:

• Entry into unsubsidized employment
• Retention in unsubsidized employment six months after employment entry
• Earnings change six months after entry into unsubsidized employment (earnings replacement rate for dislocated workers)
• Credential rate among those who enter into unsubsidized employment

In addition, states also have to track and report on Common Measures of Performance introduced by the federal government in 2005 to tie outcomes across federal programs. These common measures include:

• Entered employment
• Employment retention
• Average earnings

In the past, local WIBs have tended to passed over direct-care jobs in their determination of high-priority occupations for receiving workforce investment dollars. This is because direct-care work is often viewed as consisting of “dead-end”, low-wage jobs that do not allow for family economic self-sufficiency or wage progression. However, a strong case can be made that direct-care jobs across the long-term care continuum should be considered high priority based on several key factors: their significance or dominance in the eldercare/disability services sector, the relative number of projected job openings, and evidence of worker or skill shortages. State and local WIB investments in these jobs can play an important role in improving job quality, leading to improvements in the quality and availability of training, the creation of career pathways, and ultimately improvements in average earnings.

Annual State Plans and Waiver Requests

To receive WIA funds, states must have a federally approved state WIA plan. The plans present the expected levels of performance negotiated by states and the federal government. States in turn, negotiate expected levels of performance for local areas, based on the levels negotiated with the federal government.

Three waivers under WIA give states and local areas some flexibility to renegotiate and improve performance, respond to changing economic conditions, or promote innovations in the workforce development system. Local areas may file waiver requests with the state, and states in turn must submit the waiver requests to the Secretary of Labor for approval.

Under AARA, states are required to submit a modification to their WIA State Plan to describe revised strategies that will allow them to meet the challenges of the economic downturn and use the additional funds provided under ARRA. States have the option of continuing to use the performance goals negotiated for PY 2008 or negotiating new goals for PY 2009.