eta The Road to WIRED

Performance and Reporting Summit September 18, 2007 Mesa, Arizona Jennifer M. McNelly Administrator Office of Regional Innovation and Transformation

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Overview

• The workforce system and its evolution. • The changing economy and the importance of talent development. • ETA’s initiatives to transform the workforce system. • Using talent development as a driver of regional economic growth.

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The Birth of the Workforce System (1930s)

• The U.S. Employment Service and the Unemployment Insurance Program were created to assist unemployed workers in the industrial economy. • These programs were statements of the government’s commitment to minimize the hardships of the unemployed and to facilitate their return to work.

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The Birth of the Workforce System (1930s)

• The economy of the day was industrial with:
Interchangeable labor Cyclical layoff and hiring patterns Work that required no more than a high school diploma.

• The system was termed “Employment Security” and its functions mirrored the name. • 70 years later, the Employment Service remains virtually unchanged.

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Wagner-Peyser Act Structure
DOL
Governor State Agency

State’s Local Office State’s Local Office State’s Local Office State’s Local Office

• Local offices are staffed by state merit-staffed employees. • Today, Local offices frequently exist along side of One-Stop Career Centers, resulting in duplication.

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Expansion into Job Training (1960 – 1970s)

• An ever-growing job training system was built:
– The Manpower Development and Training Act (MDTA) was enacted in 1962.
• Described as a “careful treaty between the Employment Service and the vocational education system.”

– The Comprehensive Employment and Training Act (CETA) was enacted in 1973, replacing MDTA.

• Had little private sector involvement. • Over 40% of the participants were engaged in subsidized employment.

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Prime Sponsor (Local)

CETA Structure
U.S. Department of Labor
Prime Sponsor (Local) Prime Sponsor (Local) Prime Sponsor (Balance of State)

• Moved to a more decentralized system. • “Prime sponsors” were direct recipients of Federal grants and had basic programmatic responsibilities. • Cities and counties with populations of 100,000 or more were prime sponsors & states were prime sponsor for all other areas. • No state role where local served as prime sponsor.

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First Steps toward Demand Driven (1980 – 1990s)

• The Job Training Partnership Act (JTPA) was enacted in 1982, replacing CETA.
– President Reagan was concerned that “the government has trained thousands…in skills that...aren’t needed in their communities.”

• JTPA eliminated public sector employment and required that 70% of funds be used for “training.”

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JTPA Structure
US Department of Labor State Council State Agency Local Government (Service Delivery Area)

Private Industry Council

Training Providers

• Established a more limited Federal role. • Encouraged coordination with other job training programs.

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1998 Workforce Investment Act

• The Workforce Investment Act (WIA) was designed to:
– Streamline service delivery through OneStop Career Centers; – Strengthen performance accountability; – Promote universal access to services; – Create business-led state and local boards; – Promote individual choice.

• Strong bi-partisan support.

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Education

WIA Structure
DOL HHS

Governor State Board State Agency State Agency Local Government Local Board Local Fiscal Agent One-Stop Career Center Training Providers State Agency

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Common Themes

• In 1983, an expert wrote, “the major issues in the development of manpower programs…have been as much the power relationships among contending parties as the program’s substance itself.” • Contending parties include states, local areas, community groups, worker advocates, and the business community. • Twenty-two years later, little has changed.

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Workforce Investment System Spending
Departments Labor Education HHS HUD Total FY06 Appropriations $9.89 billion $4.40 billion $701 million $49.5 million $15.04 billion

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Evolution of the Economy

• When the workforce system was first created:
– United States was an industrial economy and labor was virtually interchangeable.

• We are now in a knowledge economy where specialized skills are needed.
– 90% of the fastest growing jobs require education and training past high school. – 63% of all new jobs in the next decade will require a college degree; & only 30% of the population has a college degree.

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Evolution of the Economy
Less High Some Assoc. 4-Year than School College Degree Degree High Grad and School Higher -129 87 177 380 723 $479 8.5% $660 5.0% $767 4.5% $812 3.7% $1,243 2.7%

Employment Growth (thousands)

Average Weekly Earnings Unemployment Rate

Source: BLS Current Population Survey 2004

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Evolution of the Economy

• Today, individuals must be able to constantly update their skills and employers must have real-time access to needed talent. • A fragmented, social service system was sufficient for the economy of the 20th Century, but can no longer meet the demands of the 21st Century global economy.

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Transforming the Workforce System

• Through the stages of evolution, the workforce system has always operated outside the economic structures of the community.
– Little or no interaction with area employers. – Minimal contact with existing educational institutions; instead created its own cottage industry of job trainers. – No coordination with economic development.

• Each of these issues is now being addressed by national initiatives.

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Transforming the Workforce System

• President’s High Growth Job Training Initiative
– Involved employers from leading sectors of the economy in the design and development of training programs. – Used existing education resources such as community colleges. – Invested over $220 million in 122 projects that develop education and training solutions to specific workforce challenges.

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Transforming the Workforce System

• President’s Community-Based Job Training Grants
– Experience with the High Growth Initiative showed that community colleges must improve their ability to develop talent through:
• • • • Stronger relationships with employers Expanded and specialized faculty Improved facilities Up-to-date equipment

– 70 grants totaling $125 million were recently awarded; new competition announced.

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Economic Development

• Workforce development is more than training effectively for current jobs. • Successful workforce investment leads to the creation of new jobs. • Talent is an asset, bringing new businesses and industries into communities. • Economic development is also experiencing a transformation.
– Tax breaks and incentive packages are no longer enough.

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Innovation Economy

• Economic development must now establish the conditions for innovation. • The Council on Competitiveness’ Innovate America report identified three requirements for innovation:
– – – Infrastructure (transportation, technology) Investment (availability of capital) Talent

• These conditions should be maximized at the regional level, where the forces of the economy combine to spur growth.

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Workforce Innovation in Regional Economic Development

• WIRED will focus on the talent development part of building a regional economy. • The goal is to expand employment and advancement opportunities for workers while simultaneously catalyzing the creation of high-skill and high-wage jobs.

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WIRED Map

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WIRED Initiative

• $325 Million Invested in 39 Regional Economies • WIRED Principles and Framework are Drivers for the Entire System.
Funding over 3 years. – Technical assistance – Data tool that incorporates economic, research & development, investment, and real-time job information.
•Picture of regional economy and economic assets.

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WIRED Initiative

• Regional Activities:
– Formation of a broad-based regional leadership team. – Assessment of region-wide assets and strengths, risks and weaknesses. – Development of a comprehensive implementation plan for the region identifying how WIRED and other resources support regional economic goals and strategies.

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Examples of Some Regional Strategies & Goals

• Northwest FL: known as a tourist destination, but now plans for a enlarged port, new international airport, and expanded military presence, they hope to build an new economy. • West AL & East Miss.: have shared the struggle of so many rural areas. But by combining their resources, they hope to break the legacies of the past and provide the education and economic development needed to grow. • North Central IN: manufacturing base and young people left the region. Reversing the trend by focusing on advanced materials and agribusiness.

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Initiative Goals

• Strategy Development – Map existing economic landscape; understand region’s strengths and weaknesses and identify opportunities. • Galvanize Regional Networks – Build a leadership team consisting of civic, business, investor, academic, entrepreneur, and philanthropic members. – Form consensus on action agenda and gain leadership commitment.

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Using Talent Development to Transform the Workforce System

• Legislative Proposals to Enhance Talent Development
– WIA Reform Principles (WIA Reauthorization bill
transmitted to Congress in April 2007)

– TAA Reauthorization Principles

• Administrative Reforms to Promote Talent Development
– 548 Approved WIA Waivers – New WIA State Plans

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Using Talent Development to Transform the Workforce System

• WIA Reform Principles
- Strengthening workers’ ownership of their careers. - Increasing post-secondary education & training opportunities. - Significantly increasing the number of workers trained. - Improving governance. - Promoting state and local flexibility. - Strengthening One-Stop Career Centers. - Improving Performance Accountability.

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Using Talent Development to Transform the Workforce System

• Trade Reauthorization Principles: The Department
has identified four overarching priorities for reauthorization.

– Trade-affected workers must have increased individual opportunity to “earn and learn” through the TAA program by having access to transitional benefits. Benefits under the program should include a menu of services that allows the worker to choose the option that best fits his or her individual needs. – Trade-affected workers must have improved access to education and training.
• Reauthorization should ensure greater access to post-secondary education and training by providing “New Economy Scholarships.”

– Trade-affected workers must have access to education and training prior to layoff. – Trade-affected workers must be able to access services through a streamlined and efficient workforce investment system.

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Using Talent Development to Transform the Workforce System

• 548 Approved WIA Waivers
– Funding Flexibility – waivers allow unlimited transfer between adult & dislocated worker funding streams. Also allows state/ local areas to use a portion of local funds or rapid response funds in the same manner as Governor’s reserve funds to conduct incumbent worker training and statewide activities. – Youth waivers have broadened the use of ITAs for youth. – Expanded access to training. – Performance - whereby 20 states now have waivers to report only common measures & to reduce the participant data collection burden.

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Using Talent Development to Transform the Workforce System

• New WIA State Plans
– States comprehensively addressed talent development in their Plans. – Plans addressed state governance structures and described actions to integrate systems and break down silos. – Some states are using real-time data in creative ways to not only identify growing industries, but also analyze states’ and regions’ strengths and weaknesses. – Several states described how the workforce investment system is partnering with economic development to support innovation economies in which entrepreneurs and small businesses flourish. – States have begun to critically assess the structure of workforce boards in order to regionally align the operation of their workforce investment system.

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Knowledge Sharing

Positioning ETA to Support Talent Development
Strategic Action Teams Strategy & Policy

ETA is transforming…
ETA Culture

Culture Change

Strategic Talent Development

Learning Innovation Teamwork Performan ce Communications

Grants Mgt & Performance

WIRED Framework Workforce System Transformational Principles

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Program Administration in Support of Talent Development

• Trade Adjustment Assistance • Foreign Labor Certification • Regional Innovation Grants • Apprenticeship

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California Trade Impacts
Del Norte Siskiyou Modoc Trinity Shasta Tehama Lassen

Trade Affected Workers within WIRED Regions - 12,935 Estimated Top Three Layoffs: • • • Boeing Company - 1,951 Est. Workers Maxtor Corporation - 1,048 Est. Workers Technicolor Home Entertainment Services - 625 Est. Workers

Plumas

Glenn Sierra Colusa YubaNevada Placer Lake Sutter El Dorado Yolo Alpine

Butte

San Francisco Santa Cruz

Alameda Santa Clara

Monterey San Luis Obispo Kern San Bernardino Los Angeles

Santa Barbara Ventura

Orange

Riverside San Diego

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2,724
Washington

Demand for Skilled Foreign Talent
Permanent Labor Certifications, by State 80,029 Foreign Workers
252
New Hampshire

32 856
Oregon Montana

65
North Dakota

830
Minnesota

52
Vermont

145
Maine

226
Idaho

40
Wyoming

67
South Dakota

563
Wisconsin

2,332 7,005 2,106
Michigan New York Massachusetts

127
Rhode Island

212 273
Nevada Nebraska

368
Iowa

1,719
Pennsylvania

294
Utah

771
Colorado

3,551 466
Kansas Illinois

536
Indiana

1,477
Ohio

5,545
New Jersey

1,296
Connecticut

79
West Virginia

21,438
California

589
Missouri

283
Kentucky Tennessee

3,120
Virginia

320
Delaware

1,229
Arizona

223
New Mexico

289
Oklahoma

41

1,123
North Carolina South Carolina

1,925
Maryland

248
Arkansas

384

268
District of Columbia

358 5,909 42
Alaska Texas

137 537
Louisiana Mississippi

Alabama

1,789
Georgia

5,099 134
Hawaii Florida

0 to 200 workers 200 to 500 workers 500 to 2,000 workers 2,000 or more workers

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Demand for Skilled Foreign Talent
San Francisco Bay Area

Total Foreign Talent (Permanent)
27% (21,438) jobs representing India, Philippines, South Korea, China, Mexico, and Taiwan 73% possess a Bachelor’s or other advanced degree 72% already working on H-1B visas in Advanced Manufacturing, Information Technology, and Health Care sectors $63,000 per annum

Educated and Skilled Workforce
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Average Wage Offer

Top Cities of Employment
• Los Angeles, San Jose, Santa Clara, Sunnyvale, San Diego, San Francisco, Freemont, Irvine, and Mountain View

Top Employers
• Intel, Sun Microsystems, Oracle, Yahoo, Google, and Juniper

California WIRED Data, FY 2006

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Engaging Partners & Leveraging Resources for Talent Development
Economic Development Agency International Trade Agency National Institute of Standards and Technology (NIST)/Manufacturing Extension Partnership (MEP)

U.S. Department of Agriculture - Rural Development U.S. Department of Commerce

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U.S. Department of Defense U.S. Department of Energy U.S. Department of Housing and Urban Development U.S. Department of Transportation Environmental Protection Agency NASA National Institutes of Health National Science Foundation

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Engaging Post-Secondary Education

• Advance DOL-NASULGC Partnership
– DOL participation at NASULGC meetings – NASULGC participation at Workforce Innovations Conference

• Foster Interaction, Integration, and Activities Between DOL and NASULGC Institutions • Increase Access to Higher Education On-line Academic Programs in High-Growth Job Areas • Increase NASULGC Response to Education and Training for Military Veterans and Spouses

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Engaging Post-Secondary Education

• The Community-Based Job Training Grants highlight the important role community colleges play in talent development. To date, we have awarded $250 million in grants to 140 colleges. • Community colleges also play a key role in the High-Growth Job Training and WIRED initiatives. • Resources and tools are available on workforce3one.org.

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State Universities and Land Grant Colleges

1st Gen. WIRED Regions 2nd Gen. WIRED Regions 3rd Gen. WIRED Regions

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Looking Ahead!

• Transformation Forums in Fall 2007 • Helping Regions Transform
Regional Innovation Grants (RIGs) BRAC Impacted Communities Economic Transformation Natural Disasters

• Strategic Response Activities
– Resources – Technical Assistance – Strategic Action Teams