Funding for the War on Poverty? It seems to have disappeared – Virginia Hamilton, US Department of Labor

I started my career in workforce development in 1978 in Stockton California, at a local “employment office.” My job was to call employers to see if they had job openings, and transcribe those job openings by pen on to a piece of paper posted in the lobby. Unemployed people stood in front of the “job board,” and if they saw a job they thought they might qualify for, they would ask to talk to a job placement specialist like me, to see if they could be referred to the employer.  I could also refer them to job training to gain skills, or to Public Service Employment, to gain work experience.

Workforce programs at that time were designed for three purposes – to match people with jobs, to train disadvantaged unemployed people for jobs in the local economy, and/or provide job experience to make them competitive in the labor market while earning a living. In addition, workforce professionals by necessity, developed deep connections into the business community, fueled by personal relationships, to facilitate effective job matching. The policy agenda was relatively focused, built around a national understanding of how the economy worked, what skills were needed, and how jobs were structured. In 1978, politicians, academics, and economists were all largely in agreement, and there was shared bipartisan support for investment in job training. Funding for the Comprehensive Employment Training Administration was around $9.5 billion.

Now to the present. Labor force participation right now is at its lowest since  (guess when) 1978. The current California unemployment rate is 8.8 percent (7 percent in 1978); funding for the Workforce Investment Act is $3.4 billion. So there are more unemployed and the lowest labor force participation rate in 35 years. And according to the BLS, the same investment of $9.5 billion in 1978 equates to $35 billion today. Funding for the War on Poverty? It seems to have disappeared.

Part of the issue seems to be that the consensus around the mission, goals, policy frameworks and expectations for the public workforce system has deteriorated. In recent years, passage of the reauthorization of the Workforce Investment Act has stalled purely along partisan lines.  Equally important, consensus around the structure of the labor market, the common assertion that 80 percent of future jobs don’t even exist right now, and an increasingly complex workplace requiring substantially more education, have made workforce policy a much more complex and vexing issue.

What disturbs me, and others who have been at this a long time, is that we appear to have made little progress on some of the most important issues. There are still substantial numbers of people who need help to rise out of poverty. They are not lazy; it is not because people don’t want to work. There are significant structural issues in the economy, including racism and biases against the unemployed. Young black men still have the highest rates of unemployment. They are also disproportionately incarcerated, which exacerbates biases, as they are now also ex-offenders. Evidence about programs that seem to work for young men of color and other at-risk populations demonstrate that given the right set of interventions and connections to the labor market, these young people can and will succeed in the workplace, but it takes way more money than virtually any publicly funded program can afford. There is similar bias, and evidence of success for people with disabilities. The work that REDF does in promoting social enterprise is a great example of tackling this issue. Ironically, at the other end of the spectrum, employers are explicitly recruiting only people who are currently working; unemployment is not a class for whom it is illegal to discriminate against. Older skilled workers are, after the great recession, having similar issues of being shut out of the labor market. These are workers who may not need training, but need ways to translate prior skills into new occupations.

At the same time that certain segments of the labor market need help in access and skill development, there are thousands of employment opportunities in certain industry sectors of the economy. Many policy makers and innovators are now focusing funding on industry-led regional sectoral strategies, in which funding is targeted towards deeply understanding the skill needs of business, so that training can more effectively lead to jobs. The use of both public and philanthropic funding to develop relationships with industry sectors, aligning resources across a broad range of stakeholders in regions, and take strategic approaches to industry sectors with good jobs has gained traction in the field of workforce development. And the best of these efforts combine this strategic approach with development of career pathways for those who need help in accessing education and training.

It may take discrete investments at both ends of the problem: invest more money in programs proven to work with the most at-risk populations, and invest explicitly in the development of robust sectoral initiatives in regions. Right now, policy makers have too little funding to bring either of these approaches to scale; they need to be implemented together as part of a larger strategy.

President Obama’s call for a review of the nation’s job training system, informed by employers, stakeholders, job seekers, and service providers comes at a critical time. We must look at what has worked in the past, what is working now, and build a new consensus about the purpose of goals of our public workforce system.

Virginia Hamilton is currently the Regional Administrator for the Employment and Training Administration, Region 6, for the US Department of Labor. She founded and ran the California Workforce Association for 15 years, and has done consulting both throughout the United States, for the OECD and in Europe. She worked for the Employment Development Department where she designed and implemented the One-Stop Career Center system, and administered JTPA for the Governor of California.

This post is part of the War on Poverty blog series from REDF.