New Bill Would Provide Much-Needed Investments in Employment and Training Activities in Response to COVID-19

On May 1st, House Committee on Education and Labor Chairman Bobby Scott (D-VA) and Senate Committee on Health, Education, Labor, and Pensions Ranking Member Patty Murray (D-WA) introduced a stimulus bill that authorizes $15 billion for the nation’s public workforce system. The injection of funds would help local job centers connect the growing population of unemployed Americans to employment opportunities, as well as education, training, and other services to help them weather the economic impact of the COVID-19 crisis. If passed, the Relaunching America’s Workforce Act (RAWA) would provide more than twice the amount that the American Reinvestment and Recovery Act (ARRA) invested in the public workforce system in response to the Great Recession. With one of every ten American workers out of a job and much uncertainty around how long it will take employers to return to pre-COVID-19 employment levels, a large federal investment in employment and training services is urgently needed. Unemployed workers will need help accessing benefits and other supports, acquiring new skills and credentials, and finding new jobs. Below, is a brief analysis of each of the major investments in the bill.

Dislocated Worker Grants

The legislation authorizes $500 million for national dislocated worker grants, discretionary funding from the Secretary of Labor to states and communities to support individuals who have either been laid off or have received notice of employment termination, or are self-employed but out of work due to the economic downturn brought on by the coronavirus. At least half of this funding must support training and temporary employment to respond to the COVID-19 national emergency, such as direct care, as well as layoff response activities in local areas.

Additionally, RAWA calls for $2.5 billion in direct formula funding to states to support dislocated worker response activities aimed at avoiding further layoffs, work suspensions, or reductions in employment and providing assistance to the recently unemployed and employers facing layoffs due to the impacts of COVID–19. Funding can be used for things like career navigation and support services, and training for in-demand industry sectors and occupations. Furthermore, state dislocated worker funds can be used to provide short-term training that prepares adults for the health and direct care positions that the COVID crisis requires.

Adult Employment and Training Activities

RAWA also authorizes $2.5 billion for adult employment and training activities in response to the COVID-19 crisis, five times the amount Congress appropriated during the Great Recession. These funds would go to states via formula and can be used to provide career and training services to adults adversely impacted by COVID-19, including the underemployed and people at risk of becoming unemployed, and assist employers facing economic hardship. States must submit a plan to the Secretary of Labor for how they will use this funding to respond to the COVID-19 national emergency. RAWA places requirements on local recipients of funds as well. For example, local workforce development boards must allocate at least a third of these funds for incumbent worker training, on-the-job training, customized training, and employee retention strategies.

The bill also waives certain provisions under Title I of the Workforce Innovation and Opportunity Act (WIOA) in order to direct more services to disadvantaged workers. For instance, local boards can increase the percentage of WIOA adult employment and training funds that can be used for incumbent worker training from 20 percent to 40 percent, so long as this additional funding assists low-wage workers in employment retention and advancement. Subsidizing incumbent worker training has been shown to help with layoff aversion, and that is the goal behind this provision.

RAWA also expands the authority of local workforce boards to create “transitional jobs”, which are time-limited, subsidized work experiences, by increasing the amount of funding they can use to subsidize wages (from 10 to 40 percent of their total allotment). Subsidized employment is a proven strategy for helping individuals, particularly those with barriers to employment, find work, build an employment history, and gain self-sufficiency. In response to the Great Recession, the U.S. invested $1.3 billion in ARRA funds into 260,000 subsidized jobs for recipients of Temporary Assistance for Needy Families (TANF) support and justice-involved populations, which had a significant positive impact on low-income job seekers’ employment and earnings. Enabling the public workforce system to invest more in incumbent worker training and transitional jobs might help mitigate the economic hardship often experienced by low-wage workers and other individuals at risk of underemployment and unemployment during recessions.

Youth Workforce Investment Activities

The bill includes $2.5 billion in much-needed funding for youth workforce investment activities in response to the COVID-19 crisis. With the Great Recession and other economic downturns of the past, youth have been the hardest hit. They are more likely to have higher rates of unemployment for longer and face a reduction to their lifetime earning potential, which can have an intergenerational impact. RAWA requires that at least half of youth workforce funding be used to support summer and year-round employment for both in-school and out-of-school youth up to age 24. Consistent with WIOA, priority must be given to out-of-school youth and those with barriers to employment. The bill also permits the use of funding for career navigation and support services, career pathway programs, and work-based learning opportunities, including youth apprenticeships. Local boards may subsidize employment for youth under RAWA but employers are required to pay at least 25 percent of wages unless an employer is facing financial hardship due to COVID-19.

Registered Apprenticeship

While adult employment and training funds can be used to support registered apprenticeship programs, the bill carves out an additional $500 million for this proven employment and training model. Apprenticeship is a particularly promising recovery strategy since it can get people back to work (or in the labor market for the first time) with a living wage and protections. Apprentices sign a contract with employers, which guarantees a period of employment (usually 2-4 years) and incremental pay increases commensurate with skill gain. Not to mention, apprenticeship offers access to affordable education and training and could help people ride out the next couple of years of sluggish economic growth.

RAWA clarifies that the Department of Labor cannot use this stimulus funding for untested industry-recognized apprenticeship programs or the standard recognition entities to which the Trump administration plans delegate program approval and quality assurance responsibilities, which could hinder bipartisan support for the bill.

Community College and Industry Partnership Grants

Beyond the immediate workforce shortages, it is critical to invest in the skills of adults to support our eventual economic recovery. RAWA proposes a $2 billion investment in the capacity of community colleges to develop and deliver industry-relevant training, much like the $2 billion the Trade Adjustment Assistance Community College and Career Training (TAACCCT) grant program under ARRA. New America’s evaluation of the TAACCCT program found that participants were nearly twice as likely to complete a program and earn a credential, and almost 30 percent more likely to have positive labor market outcomes than comparison students.

Consistent with New America’s blueprint for community college training, RAWA’s Community College and Industry Partnership grants include several improvements over its predecessor, including a strong role for the state to ensure the sustainability of programs developed under the grant.

The working-age adults hardest hit by the COVID-19 crisis are those in retail, hospitality, and service jobs that don’t require a college education or advanced degree. And if the Great Recession was any indication, post-COVID jobs will likely require more education and training than the jobs that existed before the crisis. These Community College and Industry Partnership Grants will be critical to building the capacity of colleges to offer postsecondary training and credentials to adult learners.

Other Labor Programs

RAWA authorizes more funding for several WIOA programs, including the Job Corps ($500 million), YouthBuild ($250 million), and Wagner-Peyser Employment Services ($1 billion), which connects jobseekers to employers looking to fill positions.

Programs designed for specific vulnerable populations, which were not funded during the Great Recession, would get a boost under RAWA, including Native Americans ($150 million), Migrant and Seasonal Farmworker ($150 million), and Reentry Employment Opportunities ($350 million) programs.

Department of Education Programs

If passed, RAWA would provide $1 billion for adult education and family literacy activities under Title II of WIOA in order to build the capacity of the adult education system to enable virtual learning. The coronavirus and subsequent government social distancing guidelines have created a new dependency on online and virtual learning formats. However, many adult learners might struggle to access this form of education. Data from the Program for the International Assessment of Adult Competencies (PIAAC) reveal that 32 million adults ages 16 to 74 lack digital literacy skills. With the coronavirus likely to amplify the pace and intensity of automation, investments in digital literacy programs will be critical to making sure that working adults can thrive in technology-rich environments. RAWA also encouraged funding be used for integrated education and training (IET) models that deliver adult education and literacy activities concurrently and contextually with workforce preparation activities and workforce training for a specific occupation. IET is a particularly powerful model for preparing healthcare workers, with half of providers relying on IET to prepare certified nursing assistants and roughly a third of providers training medical assistants. While IET is already an allowable use of funds under Title II of WIOA, there is no dedicated federal funding for these programs. RAWA itself does not require IET investments but perhaps the sizable funding increase through this stimulus bill might prompt the local development of more IET programs that help low-skilled adults impacted by the economic downturn access education and training that will make them competitive in the post-COVID labor market.

Building on the Education Stabilization Fund under the CARES Act, RAWA would also dedicate $1 billion for secondary and postsecondary career and technical education programs under the Perkins Act. This funding can be used to help schools and colleges build up their physical and digital learning infrastructure and incentivize employer and student participation in work-based learning. RAWA would also give local programs the flexibility to roll-over funds from the past school year for use in the next school year and pool funding to better assist students whose learning was disrupted by the coronavirus transition into further training or employment.

The COVID-19 public health crisis has had a sudden and severe impact on our labor market unlike anything in recent history. With approximately 30 million Americans seeking unemployment compensation and many others reporting a reduction in hours and wages since the start of the COVID-19 crisis, a federal workforce investment can’t come soon enough. This workforce stimulus bill would provide critical resources for an education and training system that has been historically underfunded and that will be more important than ever in our nation’s recovery.

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