Creating Targeted Worker Investments for An Inclusive Economic Recovery

By The Seedco Policy Center for Work Wonk

March 12, 2009

Shovel-ready projects and other new workforce investments must target more than just work-ready individuals. In order to create opportunity for those greatest in need, the workforce system must systematically offer barrier alleviation, work supports, and career advancement services.

Leave No Worker Behind
Workers are facing one of the most challenging and competitive labor markets in decades: the economy shed 2.6 million jobs in 2008[1], and there are currently about 33 job seekers for every 10 open jobs in the United States.[2]  But if times are tough for the average worker, they are considerably more dismal for low-wage and disadvantaged workers, individuals whose attachment to the labor market was weak even in a strong economy.

The Obama administration and Congress have both signaled their intentions to repair workforce investment policies as a cornerstone of economic recovery efforts. The American Recovery and Reinvestment Act (ARRA) authorizes the creation of tens of thousands of public works, infrastructure, and green jobs and invests in a range of job training and worker education programs. Additionally, policymakers have begun to reexamine the Workforce Investment Act (WIA), the main federal workforce development funding stream that has largely guided workforce policy and programming since its enactment in 1998.

Projects that are shovel-ready will demand employees who are work-ready, those with a sufficient educational and work background and no unresolved barriers that could impede job performance. Unfortunately, this requirement will leave many workers on the sidelines—those who lack the skills and work experience to qualify for the newly created jobs. These prospective workers will find limited assistance in a disjointed workforce system that provides little more than job matching, skills training, and some basic education supports.

In order to ensure human capital investments produce sustainable and broad-reaching economic recovery, they must be inclusive. Gaps in existing workforce services should be filled to better serve disadvantaged workers by offer barrier-alleviation, benefits access, and advancement-oriented services.

Targeted Strategies for Diverse Populations
Workers access a range of labor market services from job matching to basic education to skills training and higher education. The addition of targeted workforce services would help to create a system in which no worker, even those with the least skills and experience, falls through the cracks.

Targeted Workforce Investments:

• Barrier Management. Current services do little for individuals with barriers to employment, such as those with severe educational deficits, criminal backgrounds, or mental health and substance abuse problems. The existing system’s focus on job-matching and job retention may be adequate for more experienced or self-directed job seekers but typically fails to address the long-term needs of individuals historically disconnected from the labor market.
• Economic Stability. Workforce services do little to help individuals find jobs paying family-sustaining wages. WIA providers, required to maintain strong outcomes, primarily focus their energy on producing high-volume rather than high-quality placements, and on short-term job retention.
• Career Advancement. Workforce programming offers little assistance for incumbent workers, many of whom have limited opportunity to advance to higher-wage and higher-quality jobs. Programs receive no additional payment for helping a placed worker find a better job, and so low-wage workers are left without services to help boost their earnings and advance their careers.

Targeted Workforce Investment in Practice: Seedco, a national nonprofit intermediary and the operator of one of New York City’s high-traffic One-Stops, the Upper Manhattan Workforce1 Career Center, has developed targeted programs through a citywide and regional partnership model to help individuals with different needs, resulting in significantly improved labor market outcomes.

• For individuals with employment barriers, Seedco has partnered with local community organizations to provide specialized services such as adult basic education, debt and credit counseling, and legal assistance.
• To boost the economic stability of workers in low-wage jobs, Seedco and its partners provide workers with streamlined and facilitated access to work supports. Low-wage workers who were screened for benefits like Supplemental Nutrition Assistance Program (SNAP, formerly referred to as Food Stamps) and public health insurance were 45 percent more likely to maintain continuous employment over a six-month period than low-wage workers who were not screened.
• To help incumbent workers move into higher-wage and higher-quality jobs, Seedco, with support from the New York City’s Department of Small Business Services and Center for Economic Opportunity, and in partnership with employers and community colleges, provides intensive, one-on-one career planning and coaching. Workers accessing these services have experienced a 39 percent increase in average weekly earnings.

Recommendations
It is critical that new human capital investments not leave out the poor and disadvantaged. Congress and the administration should seize the tandem opportunities of ARRA and WIA reauthorization to create inclusive worker investment policies.

Invest in barrier management services
Harder-to-serve jobseekers cannot be left behind while the job-ready benefit from new investments. Workforce services for those with barriers must be coupled with supportive services such as mental health services, legal services and basic education.

Integrate work supports into workforce development initiatives
Public benefits should be harnessed to help low-wage workers achieve income stability and strengthen their position in the labor market. Benefits screening and facilitated access services should be incorporated into workforce service delivery and employers should be encouraged to assist their workers in accessing these benefits.

Prioritize career advancement
One-Stops and other workforce programs should be resources for unemployed and incumbent workers alike, and should offer services for workers seeking a job or income upgrade. Improvements to existing workforce legislation should allocate investments in advancement services such as career coaching and education or training for incumbent workers.

____________________