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      The Road to WIRED
              Performance and Reporting Summit
                      September 18, 2007
                         Mesa, Arizona
                      Jennifer M. McNelly
       Office of Regional Innovation and Transformation
eta                  Overview

 • The workforce system and its evolution.
 • The changing economy and the importance of
   talent development.
 • ETA’s initiatives to transform the workforce
 • Using talent development as a driver of
   regional economic growth.
       The Birth of the Workforce
eta         System (1930s)

• The U.S. Employment Service and the
  Unemployment Insurance Program were
  created to assist unemployed workers in the
  industrial economy.

• These programs were statements of the
  government’s commitment to minimize the
  hardships of the unemployed and to facilitate
  their return to work.
       The Birth of the Workforce
eta         System (1930s)
• The economy of the day was industrial
  – Interchangeable labor
  – Cyclical layoff and hiring patterns
  – Work that required no more than a high
    school diploma.
• The system was termed “Employment
  Security” and its functions mirrored the
• 70 years later, the Employment Service
  remains virtually unchanged.
eta        Wagner-Peyser Act Structure



                                      State Agency

 State’s Local Office   State’s Local Office   State’s Local Office   State’s Local Office

• Local offices are staffed by state merit-staffed
• Today, Local offices frequently exist along
  side of One-Stop Career Centers, resulting in
        Expansion into Job Training
eta          (1960 – 1970s)
• An ever-growing job training system
  was built:
  – The Manpower Development and Training
    Act (MDTA) was enacted in 1962.
      • Described as a “careful treaty between the
        Employment Service and the vocational education
  – The Comprehensive Employment and
    Training Act (CETA) was enacted in 1973,
    replacing MDTA.
• Had little private sector involvement.
• Over 40% of the participants were
  engaged in subsidized employment.
eta                  CETA Structure

                    U.S. Department of Labor

  Prime Sponsor   Prime Sponsor   Prime Sponsor     Prime Sponsor
      (Local)         (Local)         (Local)     (Balance of State)

• Moved to a more decentralized system.
• “Prime sponsors” were direct recipients of
  Federal grants and had basic programmatic
• Cities and counties with populations of
  100,000 or more were prime sponsors &
  states were prime sponsor for all other areas.
• No state role where local served as prime
       First Steps toward Demand
eta      Driven (1980 – 1990s)
• The Job Training Partnership Act
  (JTPA) was enacted in 1982, replacing
  – President Reagan was concerned that “the
    government has trained thousands…in
    skills that...aren’t needed in their

• JTPA eliminated public sector
  employment and required that 70% of
  funds be used for “training.”
eta                    JTPA Structure

                   US Department of Labor

         State Council

                          State Agency

                                      Local Government
      Private Industry Council
                                    (Service Delivery Area)

                         Training Providers

• Established a more limited Federal role.
• Encouraged coordination with other job training
      1998 Workforce Investment
eta              Act

• The Workforce Investment Act (WIA)
  was designed to:

  – Streamline service delivery through One-
    Stop Career Centers;
  – Strengthen performance accountability;
  – Promote universal access to services;
  – Create business-led state and local boards;
  – Promote individual choice.

• Strong bi-partisan support.
eta                          WIA Structure

               Education                 DOL                     HHS


                      State Board

State Agency                          State Agency         State Agency

                                  Local Government

                       Local Fiscal            One-Stop Career
 Local Board                                                         Training Providers
                          Agent                    Center
eta            Common Themes

• In 1983, an expert wrote, “the major issues in
  the development of manpower programs…have
  been as much the power relationships among
  contending parties as the program’s substance

• Contending parties include states, local areas,
  community groups, worker advocates, and the
  business community.

• Twenty-two years later, little has changed.
          Workforce Investment
eta         System Spending
      Departments   FY06 Appropriations

         Labor         $9.89 billion

       Education       $4.40 billion

         HHS           $701 million

         HUD           $49.5 million

         Total         $15.04 billion
eta     Evolution of the Economy

• When the workforce system was first
  – United States was an industrial economy
    and labor was virtually interchangeable.
• We are now in a knowledge economy
  where specialized skills are needed.
  – 90% of the fastest growing jobs require
    education and training past high school.

  – 63% of all new jobs in the next decade will
    require a college degree; & only 30% of the
    population has a college degree.
eta           Evolution of the Economy

               Less  High   Some   Assoc. 4-Year
               than School College Degree Degree
               High  Grad                  and
              School                      Higher
               -129   87     177    380    723
 Average      $479      $660        $767       $812   $1,243
Unemploy-     8.5%      5.0%        4.5%       3.7%   2.7%

  Source: BLS Current Population Survey 2004
eta     Evolution of the Economy

• Today, individuals must be able to constantly
  update their skills and employers must have
  real-time access to needed talent.

• A fragmented, social service system was
  sufficient for the economy of the 20th
  Century, but can no longer meet the demands
  of the 21st Century global economy.
       Transforming the Workforce
eta             System
• Through the stages of evolution, the
  workforce system has always operated
  outside the economic structures of the
  – Little or no interaction with area employers.

  – Minimal contact with existing educational
    institutions; instead created its own cottage
    industry of job trainers.
  – No coordination with economic development.

• Each of these issues is now being addressed
  by national initiatives.
      Transforming the Workforce
eta            System
• President’s High Growth Job Training

  – Involved employers from leading sectors of
    the economy in the design and development
    of training programs.
  – Used existing education resources such as
    community colleges.
  – Invested over $220 million in 122 projects
    that develop education and training
    solutions to specific workforce challenges.
           Transforming the Workforce
eta                 System
• President’s Community-Based Job
  Training Grants

  – Experience with the High Growth Initiative
    showed that community colleges must
    improve their ability to develop talent

      •   Stronger relationships with employers
      •   Expanded and specialized faculty
      •   Improved facilities
      •   Up-to-date equipment

  – 70 grants totaling $125 million were
    recently awarded; new competition
eta       Economic Development

• Workforce development is more than training
  effectively for current jobs.

• Successful workforce investment leads to the
  creation of new jobs.

• Talent is an asset, bringing new businesses
  and industries into communities.

• Economic development is also experiencing a
  – Tax breaks and incentive packages are no longer
eta           Innovation Economy

• Economic development must now establish the
  conditions for innovation.

• The Council on Competitiveness’ Innovate
  America report identified three requirements
  for innovation:
  – Infrastructure (transportation, technology)
  – Investment (availability of capital)
  – Talent

• These conditions should be maximized at the
  regional level, where the forces of the economy
  combine to spur growth.
         Workforce Innovation in
eta   Regional Economic Development

• WIRED will focus on the talent development
  part of building a regional economy.

• The goal is to expand employment and
  advancement opportunities for workers while
  simultaneously catalyzing the creation of
  high-skill and high-wage jobs.
eta   WIRED Map
eta              WIRED Initiative

• $325 Million Invested in 39 Regional

• WIRED Principles and Framework are
  Drivers for the Entire System.
  Funding over 3 years.
  – Technical assistance
  – Data tool that incorporates economic,
    research & development, investment, and
    real-time job information.
      •Picture of regional economy and economic assets.
eta            WIRED Initiative
• Regional Activities:
  – Formation of a broad-based regional
    leadership team.
  – Assessment of region-wide assets and
    strengths, risks and weaknesses.
  – Development of a comprehensive
    implementation plan for the region
    identifying how WIRED and other resources
    support regional economic goals and
          Examples of Some Regional
eta           Strategies & Goals
• Northwest FL: known as a tourist destination,
  but now plans for a enlarged port, new
  international airport, and expanded military
  presence, they hope to build an new economy.
• West AL & East Miss.: have shared the struggle
  of so many rural areas. But by combining their
  resources, they hope to break the legacies of the
  past and provide the education and economic
  development needed to grow.
• North Central IN: manufacturing base and
  young people left the region. Reversing the trend
  by focusing on advanced materials and agri-
eta             Initiative Goals
• Strategy Development

  – Map existing economic landscape;
    understand region’s strengths and
    weaknesses and identify opportunities.

• Galvanize Regional Networks

  – Build a leadership team consisting of civic,
    business, investor, academic, entrepreneur,
    and philanthropic members.

  – Form consensus on action agenda and gain
    leadership commitment.
        Using Talent Development to
eta   Transform the Workforce System
• Legislative Proposals to Enhance Talent
  – WIA Reform Principles (WIA Reauthorization bill
    transmitted to Congress in April 2007)
  – TAA Reauthorization Principles

• Administrative Reforms to Promote Talent
  – 548 Approved WIA Waivers
  – New WIA State Plans
        Using Talent Development to
eta   Transform the Workforce System

• WIA Reform Principles

  - Strengthening workers’ ownership of their
  - Increasing post-secondary education &
    training opportunities.
  - Significantly increasing the number of
    workers trained.
  - Improving governance.
  - Promoting state and local flexibility.
  - Strengthening One-Stop Career Centers.
  - Improving Performance Accountability.
         Using Talent Development to
eta    Transform the Workforce System
• Trade Reauthorization Principles: The Department
  has identified four overarching priorities for

  – Trade-affected workers must have increased individual
    opportunity to “earn and learn” through the TAA program
    by having access to transitional benefits. Benefits under
    the program should include a menu of services that allows
    the worker to choose the option that best fits his or her
    individual needs.
  – Trade-affected workers must have improved access to
    education and training.

      • Reauthorization should ensure greater access to post-
        secondary education and training by providing “New Economy

  – Trade-affected workers must have access to education and
    training prior to layoff.
  – Trade-affected workers must be able to access services
    through a streamlined and efficient workforce investment
        Using Talent Development to
eta   Transform the Workforce System

• 548 Approved WIA Waivers
  – Funding Flexibility – waivers allow unlimited transfer
    between adult & dislocated worker funding streams.
    Also allows state/ local areas to use a portion of local
    funds or rapid response funds in the same manner as
    Governor’s reserve funds to conduct incumbent worker
    training and statewide activities.

  – Youth waivers have broadened the use of ITAs for

  – Expanded access to training.

  – Performance - whereby 20 states now have waivers to
    report only common measures & to reduce the
    participant data collection burden.
         Using Talent Development to
eta    Transform the Workforce System
• New WIA State Plans

  – States comprehensively addressed talent development in
    their Plans.

  – Plans addressed state governance structures and described
    actions to integrate systems and break down silos.

  – Some states are using real-time data in creative ways to
    not only identify growing industries, but also analyze
    states’ and regions’ strengths and weaknesses.

  – Several states described how the workforce investment
    system is partnering with economic development to
    support innovation economies in which entrepreneurs and
    small businesses flourish.

  – States have begun to critically assess the structure of
    workforce boards in order to regionally align the operation
    of their workforce investment system.
              Positioning ETA to Support
eta              Talent Development
ETA is transforming…
  Knowledge                                        Action Teams
   Sharing                   ETA Culture                          Strategy
                                                                  & Policy
Culture                      Performance                     Grants Mgt &
Change                                                       Performance
          Strategic Talent
           Development                     Communications

                  WIRED Framework
      Workforce System Transformational Principles
        Program Administration in
eta   Support of Talent Development

• Trade Adjustment Assistance
• Foreign Labor Certification
• Regional Innovation Grants
• Apprenticeship
eta          California Trade Impacts

                                Del Norte      Siskiyou
Trade Affected Workers within
   WIRED Regions                     Trinity     Shasta       Lassen

       - 12,935 Estimated                      Tehama
                                              Glenn              Sierra
                                              Colusa YubaNevada
                                            Lake     Sutter     Placer

Top Three Layoffs:                               Yolo       El Dorado

•   Boeing Company                                   Alameda
                                San Francisco
       - 1,951 Est. Workers                               Santa
                                      Santa Cruz

•   Maxtor Corporation
       - 1,048 Est. Workers

                                                              San Luis
•   Technicolor Home                                          Obispo           Kern

    Entertainment Services
                                                                                           San Bernardino
                                                              Santa Barbara      Los Angeles

       - 625 Est. Workers                                                                        Riverside
                                                                                           San Diego
                             Demand for Skilled Foreign
eta                                   Talent
                                           Permanent Labor Certifications, by State
                                                  80,029 Foreign Workers

              2,724                                                                                                                                                       252
                                                                                                                                                                    New Hampshire

                                            32                      65                                                                                       52                          145
                                           Montana                                    830                                                               Vermont                           Maine
                                                                North Dakota
        856                                                                          Minnesota
        Oregon                                                                                                                                                                                      2,332
                            226                                                                             563                                                        7,005                      Massachusetts
                            Idaho                                   67                                 Wisconsin
                                                 40             South Dakota
                                                                                                                                                                       New York
                                                                                                                               Michigan                                                                  Rhode Island
                                                                                          368                                                                  1,719
                                                                    212                    Iowa                                                               Pennsylvania                                1,296
                                                                   Nebraska                                                            1,477                                           5,545
                   273                                                                                                      536

                                    294                                                                      3,551                        Ohio
                                                                                                                                                                                       New Jersey

                                    Utah             771                                                        Illinois    Indiana
                                                     Colorado            466
                                                                                                                                                              3,120                           320
 21,438                                                                                          589                                  283
                                                                         Kansas                  Missouri                                                      Virginia
 California                                                                                                                       Kentucky
                                                                                                                                                             1,123                    1,925
                                                                                                                            41                           North Carolina

                            1,229                                              289                                         Tennessee

                                                 223                      Oklahoma               248                                                         384                        268
                                              New Mexico                                     Arkansas                                                     South
                                                                                                                                                         Carolina                 District of Columbia
                                                                                                                             358            1,789
                                                                                                                            Alabama          Georgia
                                                                5,909                             537        Mississippi
                                                                 Texas                           Louisiana
               Alaska                                                                                                                                                               0 to 200 workers
                                                                                                                                          5,099                                     200 to 500 workers
                                                                                                                                             Florida                                500 to 2,000 workers
                                               134                                                                                                                                  2,000 or more workers
               Demand for Skilled Foreign
eta                     Talent
 Total Foreign Talent
 •   27% (21,438) jobs representing     San Francisco Bay Area
     India, Philippines, South Korea,
     China, Mexico, and Taiwan

 Educated and Skilled Workforce
 •   73% possess a Bachelor’s or
     other advanced degree
 •   72% already working on H-1B
     visas in Advanced Manufacturing,
     Information Technology, and
     Health Care sectors

 Average Wage Offer
 •   $63,000 per annum

 Top Cities of Employment
 •   Los Angeles, San Jose, Santa
     Clara, Sunnyvale, San Diego, San
     Francisco, Freemont, Irvine, and
     Mountain View

 Top Employers
 •   Intel, Sun Microsystems, Oracle,       California WIRED Data, FY 2006
     Yahoo, Google, and Juniper
          Engaging Partners & Leveraging
eta            Resources for Talent
•   U.S. Department of Agriculture - Rural Development
•   U.S. Department of Commerce
    –   Economic Development Agency
    –   International Trade Agency
    –   National Institute of Standards and Technology
        (NIST)/Manufacturing Extension Partnership (MEP)

•   U.S. Department of Defense
•   U.S. Department of Energy
•   U.S. Department of Housing and Urban Development
•   U.S. Department of Transportation
•   Environmental Protection Agency
•   NASA
•   National Institutes of Health
•   National Science Foundation
         Engaging Post-Secondary
eta             Education
 • Advance DOL-NASULGC Partnership
   – DOL participation at NASULGC meetings
   – NASULGC participation at Workforce Innovations
 • Foster Interaction, Integration, and
   Activities Between DOL and NASULGC
 • Increase Access to Higher Education On-line
   Academic Programs in High-Growth Job
 • Increase NASULGC Response to Education
   and Training for Military Veterans and
         Engaging Post-Secondary
eta             Education
• The Community-Based Job Training Grants
  highlight the important role community
  colleges play in talent development. To
  date, we have awarded $250 million in
  grants to 140 colleges.
• Community colleges also play a key role in
  the High-Growth Job Training and WIRED
• Resources and tools are available on
      State Universities and Land
eta         Grant Colleges

                         1st Gen. WIRED Regions
                        2nd Gen. WIRED Regions

                        3rd Gen. WIRED Regions
eta               Looking Ahead!

• Transformation Forums in Fall 2007
• Helping Regions Transform
  –   Regional Innovation Grants (RIGs)
  –   BRAC Impacted Communities
  –   Economic Transformation
  –   Natural Disasters
• Strategic Response Activities
  – Resources
  – Technical Assistance
  – Strategic Action Teams

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