FACTS ABOUT

The Workforce Re-Investment and Adult Education Act

H.R. 1261

Workers are suffering continuing economic hardship and record long-term joblessness. They need help - not budget cuts and block grants

• The national economy has fallen into its worst hiring slump in almost 20 years with a loss of more than two million jobs since the recession began in March 2001.
• Nationally there are 8.5 million workers unemployed and an additional 1.6 million workers have dropped out of the labor force since last summer, neither working nor looking for a job.
• Almost 2 million workers have been unemployed for more than 6 months putting long- term unemployment at its highest level since February 1993. DOL reports that 21.8% of the jobless are long-term unemployed – the largest such proportion in a decade.
• In New York nearly 600,000 people are unemployed and the unemployment rate has been over six percent for more than a year.

Now is the time to fully fund the Workforce Investment Act and Employment Security programs

• The Bush Administration has cut funding for training and employment programs over the past two years. Budget authority for training and employment has declined, from $7.333 billion in 2002 to $6.840 billion as proposed in FY 2004 - an overall decrease in training and employment funding of 7 percent since 2002.
• The proposals for the Workforce Investment Act and Personal Reemployment Accounts will further destabilize our nation’s workforce investment system.

Strengthen, do not eliminate, the United States Employment Service

• The administration proposes to eliminate the 60-year-old United States Employment Service (ES), a federal-state partnership that maintains a nationwide, free, publicly administered labor exchange matching job seekers and employers.
• The $800 million appropriation from the Federal UI Trust Fund for the ES would end.  The WIA reauthorization legislation repeals the ES and "block grants" it with the adult and dislocated worker programs.  The new block grant would be financed with general revenue. 
• It is not clear how the ES ensures that hiring preferences for veterans and individuals and with disabilities and state management of the labor market information are fulfilled, especially if it is replaced by a voucherized Personal Reemployment Account system.
• The President claims he supports ES and yet he carries out this attack.  According to the President's budget documents "[The Employment Service] is the essential labor market infrastructure for the One Stop System.  ES provides no-fee services to individuals seeking employment and to employers seeking workers."

Preserve, do not consolidate, WIA adult and dislocated worker programs

• A historic function of federal job training funding is to target dollars to areas and individuals of greatest need.
• The adult WIA program allocates funding according to poverty levels to help communities with large numbers of economically disadvantaged workers.
• Dislocated worker funding is targeted to communities with high unemployment, and it also provides for state Rapid Response programs to intervene early with help for workers and companies in trouble. 
• The formula proposed in the House bill directs funds away from areas with concentrations of disadvantaged workers and to areas with high unemployment.
• The proposed block grants will eliminate discrete programs that provide vital services to groups with special needs and could pit welfare recipients against unemployed workers in competition for limited funds.
• States have also not used the current flexibility afforded them to transfer funds between adult and dislocated worker programs.

Do not expand state waivers or “work-flex” authority

·         The Administration proposes expansion of WIA waivers and broad authority for the Governor to further block grant programs within the state.

·         Further block grants will means less information on who is served and how. It will further reduce public accountability.

·         Current WIA waivers ensure that important statutory and regulatory provisions are not undermined. These provisions include wage and labor standards, grievance procedures and judicial review, non-discrimination, participant eligibility as well as worker rights, participation and protection.

·         The House bill makes it easier for all states to secure waivers. Current waiver authority and the requirements for submission and approval should be retained and not expanded.

Labor organizations have a critical role in workforce development

·         As the voice of workers in the system unions can help transform WIA into an instrument for developing high wage, high skill jobs.

·         WIA reauthorization must provide for expanded labor participation on workforce investment boards and in the development of high road sectoral partnerships with employers to help train and place workers in living wage jobs.

Personal Reemployment Accounts are the wrong answer

• There is a proposal to spend $3.6 billion in new money over two years to fund a system of Personal Reemployment Accounts (PRAs), to be administered by the states. 

• In an economy with 4 unemployed workers for every job opening, no amount of financial incentive will enable unemployed workers to find non-existent jobs.

• PRAs would restrict rather than expand services and benefits for unemployed workers. 

• Workers who use PRAs would be denied access to WIA job training and intensive reemployment services for one year after exhausting their PRA accounts and would have to use their PRAs to pay for WIA services they now get for free.

Funding for PRAs should instead support the one million jobless workers who have exhausted federal unemployment benefits; extend and expand the Temporary Extended Unemployment Compensation program beyond May 2003; expand job training access through WIA; and expand training, income support and health care for trade-impacted unemployed workers under the TAA program.