Fixing the Workforce System

Critics say a bill to update the federal workforce system could create more problems than it solves. Also, a report says AI could threaten Black workers without degrees, a reader survey, and Work Shift highlights from 2023.

Nothingburger or a Good First Step?

A bipartisan bill to update the federal government’s primary workforce training system is drawing bipartisan criticism, with several underwhelmed experts saying it wouldn’t fix the system’s many problems.

The U.S. House Education and Workforce Committee last week advanced the bill to reauthorize the Workforce Innovation and Opportunity Act for the first time in nearly a decade. The badly fragmented system and its 75K eligible programs would remain underfunded, according to many sources, with the legislation authorizing $3.3B in annual spending.

As Work Shift wrote last week, the bill seeks to boost efficiency and decrease overhead, with a requirement for localities to spend at least half of WIOA funds on training. It also includes more of a focus on incumbent worker training, the use of real-time labor market data, and skills-based hiring. Overall, the legislation pushes for more accountability, through the use of employment metrics, and more flexibility for states.

Influential business groups back the bill, as do the Society for Human Resource Management and a cross-sector coalition. The overall response to the legislation has been muted, however, and observers generally agree it stops short of the fundamental overhaul many think is needed. That view seems to have only grown over the past week as people have digested the bill.

Problems with the public workforce system are not new, including poor performance and little accountability, says John Pallasch, a consultant who was an assistant secretary in the U.S. Department of Labor during the Trump administration.

“Jobseekers and employers end up paying the price for these dynamics,” he says. “This legislation makes edits around the edges but leaves the most important—and most dysfunctional—parts of the system mostly untouched.”

What’s worse, Pallasch says, is that the legislation could do more harm than good. That’s partially because he says the workforce system likely would “freeze in place” while Congress mulls the bill and the Labor Department spends years issuing rules and regulations.

As evidence of how slow the department can move, Pallasch points to an August notice it issued to delay imposing sanctions over certain performance indicators. The department said that action was to give programs time for the “orderly transition” away from previous requirements—which were created in 1998 and replaced in 2014.

Likewise, he says the bill’s attempt to raise the cap on incumbent worker participants (to 30% from 20%) means little when just 2,336 such workers were trained in a recent year, far below the cap. And while legislation seeks to add flexibility for states, much of WIOA’s existing wiggle room goes unused.

“Rather than doing a thing, the Labor Department and Congress should create an environment that fosters innovation,” says Pallasch, “while highlighting and crediting states already tackling the reforms that this legislation is designed to implement.”

Lacking Specifics: Also criticizing the bill was a former department official who served during a Democratic administration. That expert, who asked to remain anonymous, raised different concerns than Pallasch, and pointed to some positives in the bill, but came to a similar conclusion that the legislation makes no real changes to WIOA’s structure or governance.

The former official said the bill talks up skills-based hiring and real-time labor market data, but fails to define what those approaches are, or how they should be used. It also doesn’t mention registered apprenticeships or job quality, while sticking with a voucher system that would steer more WIOA funding to training providers.

The vague language means “a lot of money can seep through the cracks,” the expert said.

Compromise and Progress: A different take comes from Steve Taylor, a director and senior fellow with Stand Together Trust. The bipartisan legislation is a “signaling bill” that has a decent chance of getting passed by the House and taken up in the Senate—no small feat in Washington.

“It’s a really good first step,” says Taylor, who believes that the current system is broken. He praises the emphasis on outcomes, rather than inputs, and the push for more efficiency in WIOA spending. And he argues that the bill “is pretty clear about the spirit and intent” of its accountability measures.

In particular, Taylor says he’s excited about a provision that would allow several states and local workforce boards to receive WIOA funding as a consolidated grant for five years. The demonstration authority is designed to give a handful of states flexibility to restructure their workforce system.

While Taylor says the bill isn’t transformative, it’s a strong move in the right direction.

The Kicker: “You’ve got to compromise to get good, if not great,” he says.

Reader Survey

The education+work beat continues to be busy. Our plan going into next year is for Work Shift to ramp up the volume and depth of its coverage. This newsletter will continue to arrive in your inbox each week. But it will be part of an expanded mothership publication, with the bulk of the reporting coming from Work Shift and a growing number of contributors (including me).

Our main reporting areas will continue to include community colleges, apprenticeships, short-term credentials, skills-based hiring, employer behavior, and state and federal policy, all with an underlying focus on social and economic mobility.

Joining that coverage, will be exploration of AI’s impact on work and careers, and what that means for education and job training. More details to follow next year. For now, please share your thoughts via this short reader survey. And please consider supporting our work with a gift.

Speaking of AI …

With automation already transforming the workforce, a new McKinsey & Company report warns that the rise of generative AI threatens Black workers in high-mobility jobs who don’t have four-year degrees.

The company’s Institute for Black Economic Mobility estimates that between 2030 and 2060, gen AI could be performing half of all “gateway” roles and next-level “target” jobs open to Americans without degrees. 

Employers face a gen AI tipping point, according to the report: “They can apply it in a manner that promotes inclusion, fairness, and opportunity, or they can let it evolve without particular attention to equity and societal implications.”

Read full coverage by reporter Margaret Moffett over at Work Shift.

Some ‘23 Highlights from Work Shift

Open Tabs

Registered Apprenticeship
The U.S. Department of Labor has proposed changes to the registered apprenticeship system—including new regulations to make training more portable, increase alignment with higher education, and provide better performance data. The rules also would create a new apprenticeship model, the Registered Career and Technical Education Apprenticeship, to make it easier for full-time high school and community college students to participate. The department will host a webinar on the proposed rule changes next month.

The nonprofit Apprenticeships for America has put out a summary of the 700-plus page draft rules and will host a webinar tomorrow.

AI and Higher Ed
A team based at Southern New Hampshire University, led by Paul LeBlanc and AI expert George Siemens, is building a new learning platform and a global data consortium, both powered by AI. The bigger picture, LeBlanc told EdSurge, is to rethink what human-centered education should look like in the age of AI. LeBlanc is stepping down as president of SNHU this summer to work on these projects full-time.

To help students unlock the full potential of AI for their lives and careers, universities need to double down on fostering creativity and critical thinking, Marvin Krislov, president of Pace University, writes in Forbes. “Those are the skills that AI will never have, the skills that will make our graduates stand out in the marketplace, and the skills that will enable them to use AI to their advantage,” he writes.

College ROI
The labor market woes of recent college graduates have been overstated in formulaic media coverage aimed at stoking the anxieties of well-educated readers, New America’s Kevin Carey writes in The Atlantic. “The issue is not that graduates are doing worse; it’s that the job market for workers without degrees has been so extraordinary,” he writes, noting that graduates fare better on virtually any measure of prosperity and stability.

Child Care
Michigan’s Tri-Share program is a cost-sharing approach to child care, where the state, employer, and worker each chip in one-third of the price, reports EdSurge’s Emily Tate Sullivan. More than 169 employers participate in the public-private partnership, which Michigan created with bipartisan support in early 2021. The program’s enrollment numbers have been small. But advocates tout its growth and well-paced, prudent rollout.

K-12 and Careers
Indiana is making career skills a major focus in its high schools, including through more internships, apprenticeships, and career credentials, Patrick O’Donnell reports for The 74. The state has created $5K career scholarship accounts that high school students can use for career training. Indiana also is mulling graduation requirements around work and skills, including potentially requiring students to earn career credentials

Job Moves
Heather McKay is the new senior vice president of employer engagement at Strada Education Foundation and the executive director of the Strada Institute for the Future of Work. McKay moves from the Virginia Office of Education Economics, where she was the inaugural executive director.

Sara Custer has been named editor-in-chief of Inside Higher Ed. Custer currently is an editor at Times Higher Education, which acquired IHE last year. She has been editor of THE Campus since 2020.

Thanks for reading. Happy holidays! —PF