Innovation Is in the Details

The American Recovery and Reinvestment Act has the potential to transform the Workforce Development System, writes Louis Soares.

To position the United States for the future, substantial investments are needed in research, infrastructure, and education. The most important of these areas to address, however, is education, as the overwhelming economic evidence points to education—and human capital investments, generally—as the key drivers of economic competitiveness in the long term. (iStockphoto)
To position the United States for the future, substantial investments are needed in research, infrastructure, and education. The most important of these areas to address, however, is education, as the overwhelming economic evidence points to education—and human capital investments, generally—as the key drivers of economic competitiveness in the long term. (iStockphoto)

The American Recovery and Reinvestment Act, or ARRA, may be the best thing that has ever happened to the nation’s workforce development system. The act will boost federal investment in the system by $4 billion over two years, and, perhaps even more importantly, provide the opportunity to apply lessons learned in real-time to the emerging public dialogue on reauthorizing the Workforce Investment Act, or WIA.

The Workforce Investment Act, enacted in 1998, is a key piece of legislation through which the federal government invests in the skills training of working Americans and young people who have not successfully made the transition out of secondary education to college or the workforce. WIA’s current budget hovers at around $4 billion and has been declining since the legislation was enacted. Further, WIA, which is overdue for its five-year reauthorization, can benefit from a much needed overhaul.

As is so often the case, the economic crisis has created an opportunity for innovation in workforce development. Unemployment has topped 12 percent in some parts of Michigan and Ohio, highlighting the plight of working Americans in the recession. Lower-skill workers who lack a postsecondary credential are experiencing the highest unemployment rates, and recognizing this, Congress and the Obama administration have included investments in worker training as part of the recovery package. The ARRA budget increases by 50 percent the resources available to train workers for the next two years. Further, the president’s historic goal of moving every American toward at least one year of postsecondary education creates a leadership imperative for taking our workforce development systems to a new level of performance.

When it comes to spending taxpayer money, innovation (or lack thereof) is definitely in the details. The U.S. Department of Labor recently issued regulatory guidance for the $4 billion in ARRA funds devoted to workforce development, and the department seems to be encouraging the kind of flexibility and experimentation that can inform the growing debate in Congress about WIA and what a reauthorization should entail.

On March 19, the U.S. Department of Labor released a Training and Employment Guidance Letter, or TEGL, which sets the rules for how state and local workforce investment boards—the on-the-ground organizations that actually connect workers with training and other services—can spend their ARRA funds.

The TEGL, keeping with the spirit of transparency of the ARRA, emphasizes four principles for implementation:

  • Transparency and accountability in the use of Recovery Act funding.
  • Timely spending of the funds and implementation of activities.
  • Increasing workforce system capacity and service levels.
  • Using data and workforce information to guide strategic planning and service delivery.

These principles will help ensure that taxpayer money is spent well and helps train Americans for jobs that will pay a family-sustaining wage. The principles can also help the workforce system to ramp up its own performance reporting systems. A 2005 Government Accountability Office report that indicated that while metrics are in place, there is still scant information on how much money is being invested in workforce training and what skills and credentials program participants obtain. The rigor of real-time accountability embodied in the ARRA can help the nation’s 650 local workforce investment boards and 1,600 One-Stop Employment Centers learn to better use program data to drive performance.

Local WIBs and One-Stops can take lessons from data-driven initiatives in municipal and state management such as the CitiStat program in Baltimore or the Government Management Accountability and Performance program in Washington state. The Center for American Progress highlighted the benefits of programs like these in a recent report, "The CitiStat Model: How Data-Driven Government Can Increase Efficiency and Effectiveness."

Steps such as reviewing the number of completed trainings and credentials received across a region can improve efficiency in contracting and even training vendor quality. For such initiatives to be successful, political leaders such as governors must support public program managers as they continually review and apply data to identify areas in need of improvement, drive institutional change, and achieve goals for government performance.

The U.S. Department of Labor can also encourage this type of innovation by reviving long-dormant regional offices as “centers of excellence” designed to foster not only best practices at the state level but also to speed up federal rule changes that lead to transformation.

The TEGL also contains a Strategic Vision for Implementation section that sets the stage for transformational change. Many in the higher education and workforce training sector have been waiting for Workforce Investment Act reauthorization so that they can advocate for best practices from the field to inform WIA, and for them the TEGL does not disappoint. The TEGL states, “In a stronger, more comprehensive One-Stop system:

  • Adults move easily between the labor market and further education and training in order to advance their careers.
  • Adult education, job training, postsecondary education, registered apprenticeship, career advancement activities, and supportive services are fully aligned with economic and community development strategies.
  • Seamless career pathways are developed and offered, and support services and needs-based payments are available.
  • Sector Strategies for renewable energy, broadband and telecommunications, health care, and advanced manufacturing should become an integral part of comprehensive approaches to workforce development and regional growth.”
  • Each of these statements challenges the rigidity of the current formula funds model for the Workforce Investment Act while being based on real-world experimentation and what works for both workers and employers out in the field.

Real-world experimentation leads to innovation, and the changes to the workforce development system spurred by the ARRA and Department of Labor can be a catalyst for change. The TEGL includes more flexible contracting rules, making it easier to contract for training service and design effective training systems. It will also allow for the kinds of on-the-ground partnerships that lead to coordination across workforce training and adult and higher education.

CAP has also argued for this type of flexibility as a key to promoting postsecondary success for working Americans in its paper "College Ready Students, Student Ready Colleges."

The Department of Labor and Congress will also need to do some real-time learning. With Workforce Investment Act reauthorization on the horizon, it is important for both institutions to acknowledge what they know and don’t know about how to effectively manage the sprawling, decentralized workforce system.

Data-driven management accompanied by broad national goals for postsecondary credentials and local autonomy for implementation will allow the federal government to break out of its traditional role as a rulemaker and program funder to be a catalyst for workforce systems change. This would mean allowing real-world practice to inform the debate on WIA reauthorization and might even suggest allowing ARRA implementation to have time to scale up and produce results in the workforce system and build new legislation from what we know works.

The TEGL is a good start, but innovation is hard and won’t necessarily come from simple legislative and regulatory action. Workforce development advocates will be closely watching how the federal government uses the opportunity of the ARRA to promote success for U.S. workers.

Louis Soares is the Director of the Economic Mobility Program at the Center for American Progress. For more on the Center’s education proposals please visit the Education page of our website.

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Louis Soares