Policy Ideas for a Workforce Development and WIOA Reauthorization

The most prominent piece of legislation covering the country’s workforce development system is currently up for reauthorization. The Workforce Innovation and Opportunity Act (WIOA) impacts a wide range of services and programs, including job training for adults and youth, in addition to operating the country’s network of approximately 3,000 American Job Centers (AJCs), physical locations where workers and jobseekers can access a range of employment services.¹ 

WIOA’s last series of reforms were intended to improve coordination across the workforce system’s core programs, which include adult and dislocated worker services, youth programs, adult education, vocational rehabilitation, and the Employment Service program. With a stronger and better coordinated system, WIOA would be able to better align workforce strategy within states, improve the AJC system, and support key workforce goals such as expanding the registered apprenticeship network and better serving low-income and underrepresented populations. 

In spite of these improvements, there remain persistent shortfalls within WIOA’s structure and service delivery. A consistent decline in workforce funding over the span of two decades, for example, has gutted state programs, leaving thousands of workers without vital job-related services and workforce systems unable to efficiently respond to labor market needs.² 

WIOA’s scheduled reauthorization comes at a critical yet opportune time that has featured an incredibly tight labor market, one exacerbated by several circumstances including a pandemic-stricken economy and a shortage of skilled workers. This presents lawmakers with an indispensable opportunity to strengthen our workforce development system—an effort that will help the economic recovery and better prepare workers so that they can succeed in the current and future economy.

Below are a series of recommendations for Congress to consider as policymakers deliberate the next round of WIOA reforms. These recommendations have been consolidated from past Third Way products written by multiple authors and compiled to better inform lawmakers and workforce stakeholders as they navigate WIOA’s reauthorization. Recommendations have been divided into three areas: 1) expanding employer-based training, 2) guaranteeing universal access to supportive services, and 3) guaranteeing universal access to career services.

Expand Employer-Based Training

Employer-provided training can be a vital tool to help workers learn new skills and evolve within their company or industry. Beyond helping workers gain new skills, increased employer engagement would help the workforce system expand access to new industries and occupations as well as increase credibility of training in the business community. The ability to get training and skills at work provides a huge advantage to workers looking to upskill more easily and quickly.

Unfortunately, not enough is done to support this kind of training in the United States, and the employer-provided training opportunities are not equally available to all workers. For example, training is more common at larger firms, for workers with higher levels of educational attainment, and for non-minority employees. To significantly expand employer-based training, Third Way recommends the following reforms:   

Create a 21st Century Training Fund. Congress should make a major, long-term investment to help every state in the nation have a robust employer-provided training program. Specifically, Congress should create a new source of dedicated funding for employer-provided training within the US Department of Labor so states can plan and make long-term commitments. This could also be done through a state allocation formula as the National Skills Coalition has recommended. States would use these dedicated resources to fund training partnerships, help existing workers advance within a company, or ensure new hires can gain skills needed to succeed in their new industry.

Give states flexibility on how they use funding. States should be given flexibility in how they use federal funds. For example, some states may want to use their funds to create their own versions of California’s Employment Training Panel, which reimburses employers that invest in approved training. Other states may want to use their funds to help small businesses identify and partner with training providers or band together to establish joint training programs. Regardless of how states decide to structure their programs, they should prioritize partnering with small and midsized businesses who have less ability to provide or coordinate training on their own. States should also ensure these training opportunities lead to high-quality jobs and are available to workers in lower-paid positions, workers with lower levels of formal education, workers of color, people with disabilities, and others who have traditionally been left out of employer-provided training.

Help states create high-quality programs. States may need guidance on how best to maximize federal funding—particularly if they are building a program from scratch. Congress should direct the US Department of Labor to analyze existing state incumbent worker training programs, identify best practices, and provide technical assistance to help states create or expand their programs. The Bureau of Labor Statistics should regularly collect and share data on employer-based training to support evaluation of these programs and build a deeper understanding of what works.

Lift WIOA’s incumbent worker training cap. Currently, local workforce boards may not use more than 20% of allocated funds towards training incumbent workers.³ Instead, lawmakers should give local boards greater flexibility to provide technical assistance and training support to employers, particularly small and midsized employers or employers engaged in sector partnerships. This recommendation would best pair with significant new funding to make employer-provided training a robust part of our workforce development system.

Create dedicated funding for sector partnerships. Sector partnership programs serve as platforms that help coordinate workforce efforts across employers, identify growing industries, and help support and train workers for in-demand, high-wage jobs, matching worker demand with local needs. These programs have been shown to increase education, through training and credential programs, and living standards, through higher-wage jobs. Although WIOA includes provisions requiring local workforce development boards to establish sector partnerships, it lacks a dedicated funding stream to finance their creation and implementation.

Guarantee universal access to supportive services.

Workers face a number of barriers to completing training programs, and expenses play a big part of that. From transportation and child care, to work clothes and supplies, expenses often hinder participation in programs and overall career progress. For example, female apprentices report lack of affordable child care as a main reason holding back their career development.⁴ The federal government should ensure that anyone in a training program has access to supportive services in order to complete their education. To do that, Third Way recommends the following reforms:

Create an Apprenticeship Support Voucher program. Such a program will help offset the financial hurdles that prevent many workers from participating and succeeding in apprenticeship programs. To address this, funding could be provided to apprenticeship sponsors to purchase necessities on behalf of workers. Alternatively, Congress could distribute funds directly to apprentices through flexible spending account debit cards that would cover qualifying expenses such as those mentioned above.

Make child care free for all parents enrolled in job training and apprenticeship programs. This idea, which slightly overlaps with proposed provisions in the Build Back Better Act, would either subsidize or eliminate child care costs for current apprentices and individuals completing job training and credential programs through WIOA.

Create Supportive Services Formula Grants Within WIOA. Congress should provide dedicated funding to state and local workforce boards to increase access to supportive services for people in training programs. Lawmakers could give boards a range of options for how to use this funding, including:

• Providing supportive services directly to workers;
• Paying job training providers to provide services directly;
• Creating or strengthening partnerships between stakeholders in the job training system and supportive service providers to enable more referrals;
• Training providers to better understand what resources are already available and improve coordination and referrals; and
• Working with partner organizations to develop supportive services where they are currently lacking.

Create Trainee Success Stipends. Lawmakers could also make stipends available to people enrolled in eligible training programs. Recipients could receive their stipend in the form of a pre-paid debit card that can only be used for eligible expenses, similar to flexible spending accounts. Stipend amounts could be dependent on the mix of supportive services each trainee needs and could be discussed ahead of time with case managers at American Job Centers. For example, a trainee who only needs help paying rent while in training may need a smaller stipend than a trainee who also needs help with transportation and child care. These stipends could be integrated to work through the Individual Training Accounts (ITA) that AJC’s already use to fund trainees who participate in partner programs.

Guarantee universal access to career services

Over two decades ago, the federal government created American Job Centers—offices throughout the country intended to be a one-stop-shop that provide crucial services to jobseekers, from job search assistance and career counseling to referrals and job training programs. Nearly 3,000 AJCs exist across the United States, and together they provided services to nearly 15.6 million Americans from mid-2019 to mid-2020.⁵

The problem is that AJC services aren’t available to enough Americans. As WIOA funding has eroded over time, AJCs have received less resources to deliver help to those who need it. Take, for example, one-on-one career counseling and development of individual employment plans. Credential Engine recently found that there are nearly 1 million unique credentials for learners to choose from—a figure that has grown each year since Credential Engine began counting.⁶ Sorting through those options is a daunting task for anyone. That’s why it’s critical to have career counselors in AJCs who can provide tailored guidance to help people identify the career paths, skills, training programs, and credentials that are right for them given their career aspirations. In 2019, only about 44% of participants in Adult, Dislocated worker, and Wagner-Peyser programs received individualized career services, or just 1.8 million Americans.⁷

Congress can do more to invest in American Job Centers, transforming them into career centers for all Americans. Services should be available to people who are out of work as well as those who want to upgrade their skills to keep up with the changing demands of their job and those who want to change industries entirely. To do that, Third Way recommends the following reforms:

Provide flexible funding to expand and modernize AJC services. Congress should inject a significant amount of new funding into the WIOA system and should require this funding to go towards making AJCs more accessible and increasing the capacity of AJCs to deliver services to more Americans. For example, lawmakers could specify that these funds can be used to expand one-on-one career counseling, offer digital skills training, provide supportive services like child care and transportation for jobseekers, partner with other community centers (e.g., libraries), and more.

New funding should also allow AJCs to modernize their operations, provide virtual services, and expand their reach. Before the pandemic, jobseekers often had to physically visit AJCs to access services, costing workers time and money across both rural and urban regions. As a result of the pandemic, many AJCs have pivoted to delivering services virtually. A boost in funding would allow AJCs to strengthen and expand these changes so they become a permanent part of how AJCs operate and reach more geographically diverse workers.

Increase WIOA funding for prison-based training. Congress should increase federal funding to modernize the prison-based apprenticeship and skills system. Without adequate funding, lawmakers will miss an invaluable opportunity to reinvigorate the country’s workforce system and the different demographics that depend on it, including the nation’s justice-involved individuals.

• WIOA funds would also help finance the numerous grant programs administered by the US Department of Labor, including pilot programs that strive to reimagine the suite of supportive services provided by the federal government for justice-involved youth and adults.
• Congress should help establish a network of prison-based American Job Centers across the country’s justice system to better connect inmates with prospective employers.⁸ Pilot programs, such as the current reentry projects being implemented, use evidence-based research to test interventions that improve employment outcomes, with a focus on high-poverty, crime-stricken communities across urban and rural areas alike. First temporarily enacted in 2015 and now lapsed, the Linking to Employment Activities Pre-Release (LEAP) program created jail-based AJCs that aimed to increase inmate’s employment readiness for the labor market and to better streamline cooperation between workforce and corrections agencies.⁹ The program provided evidence of the feasibility and effectiveness of jail-based AJCs and how they could help the more than 600,000 individuals released from the incarceration system each year.¹⁰