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Photo: DOL
Displaced workers are being
retrained to positions, such as those requiring computer-based skills, that
offer a greater likelihood of employment in today’s economy. |
Overview
The national unemployment rate reached 5.6 percent in September of
2002, an increase of 0.6 percentage point over September 2001. In August 2002,
the Bureau of Labor Statistics reported the results of the biennial displaced
worker survey that is funded by the Employment and Training Administration. For
the period January 1999 through December 2001, the Bureau reported that four
million persons who had worked for their employer for three or more years were
displaced. Another six million persons were displaced from jobs they had held
for less than three years. Combining these short and long-tenured groups, the
number of displaced workers totaled 9.9 million, up from 7.6 million in the
previous biennial survey. The aftermath of economic dislocation as a result of
the September 11, 2001 terrorist attacks and the sluggish economy continue to
further exacerbate the loss of jobs
Declines in the economy’s performance often precede a significant
increase in the demand for reemployment and retraining services. For these
workers, the workforce development system serves as a resource to aid them in
developing the skills demanded by technological change and to overcome barriers
to employment, such as basic skills deficiencies and low levels of English
language proficiency.
Many workers are dislocated from their jobs due to foreign trade and
other economic factors. They are being retrained to positions requiring skills
that offer a greater likelihood of reemployment in today’s economy. These
services are made available through “rapid response” of the workforce
system to major layoffs and plant closings or through the One-Stop Career
Centers.
Serving the Public
The Department’s Employment and Training Administration provides
worker retraining through two major programs: the Workforce Investment Act
(WIA) program and the Trade Adjustment Assistance (TAA) program. The framework
for delivering WIA services emphasizes preventing unemployment, where possible;
maximizing job placement and wage replacement; early intervention following the
notification of a plant closing or loss of jobs; effective service and
outreach; and partnerships with employers, employees’ representatives,
faith and community based organizations, and other stakeholders. In 2002,
President George W. Bush signed into law the Trade Adjustment Assistance Reform
Act of 2002. This law provides for quicker delivery of services to
trade-affected dislocated workers, as well as expanded services. Implementation
of the changes to the law will emphasize quicker reemployment for affected
workers, greater integration with WIA, and utilization of One-Stop Career
Centers and fiscal integrity. All of the Department’s programs serving
dislocated workers provide occupational and on-the-job training, job search
assistance, relocation assistance, and income support for eligible workers in
training. Services are delivered through local One-Stop Career Centers.
Program Costs
Spending for dislocated worker programs increased substantially in FY
2002 with the current downturn in the economy, as more unemployed workers
exhausted their unemployment benefits and became more proactive in seeking
training as a means to new employment.
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DOL Challenges for the Future
A key Secretarial area of emphasis continues to be re-orienting the
Department’s programs to meet the needs of the 21st Century workforce and
ensuring effective, results oriented job-training programs. In today’s
unpredictable world of instant economic change and sudden security threats, the
need for an agile workforce investment system is increasing. Design of the
Workforce Investment Act of 1998 acknowledged this well before the events of
September 11th by putting decision-making in State hands and allowing a
significant portion of each State’s adult and dislocated worker formula
grant funds to be used for Rapid Response — the information-sharing and
assistance that offers immediate, often on-site, help and access to resources
for employers and workers experiencing a plant closing or layoff.
Adult and dislocated worker programs will be challenged to act even
more quickly and effectively to provide high quality services and to implement
new and more urgent ways to share information for use in local decision-making
that result in jobs and economic security for American workers. The nationwide
cooperative venture among Federal, State, and local workforce investment
partners with the Transportation Security Administration for recruiting new
airport security screeners and re-employing those who lost their jobs provides
a working example. The 2003 reauthorization of the Workforce Investment Act
offers an opportunity to imbed into law the lessons of the last five years and
the local flexibility needed to be instantly responsive.
The new Trade Adjustment Assistance program will emphasize quicker
delivery of services to affected workers — including alternative
assistance for older workers — with a view to helping workers back to
reemployment faster. The Department and its State partners will be challenged
to implement several of the new provisions of the Trade Adjustment Assistance
Reform Act of 2002. Petition investigations will be completed in 40 days rather
than 60 days. The Department will implement the enhanced Act with assistance
available under the TAA program, including assistance in covering the cost of
health insurance — primarily through a federal tax credit administered by
the IRS and available for qualified health insurance costs incurred as early as
December 2002. The Act establishes an additional mechanism authorizing the use
of National Emergency Grant (NEG) funds under the WIA to pay the costs of
certain health coverage and to support the development of infrastructure needed
by the States in carrying out their responsibilities related to the health
insurance tax credit.
Jobs for Dislocated Workers
In Program Year 2001, of those registered under the WIA dislocated
worker program, 73% will be employed in the first quarter after program exit,
and 83% will be employed in the third quarter after program exit with 91% of
pre-dislocation earnings.
Results: The Department achieved its goal. The program achieved
an entered employment rate of 79.2 percent a six-month retention rate of 86.6
percent and an , earnings replacement rate of 101 percent.
Program Description: The dislocated worker program aims to
improve the quality of the workforce, reduce welfare dependence, and enhance
the productivity and competitiveness of the nation’s economy. The
Workforce Investment Act (WIA) authorizes employment and training assistance to
eligible dislocated workers. The Department allocates 80 percent of the funds
by formula to the States. The Secretary may use the remaining 20 percent for
discretionary activities specified in WIA, including assistance to localities
that suffer plant closings, mass layoffs or job losses due to natural
disasters.
Analysis of Result: The Department achieved the Program Year
2001 performance targets, which DOL developed through negotiations with the
State agencies. The results reflect performance reported by 53 States and
jurisdictions for Program Year 2001, ending June 30, 2002. Performance for all
3 indicators improved over the prior year, when 75 percent of those registered
in the dislocated worker program entered employment and 83 percent remained
employed after 6 months with an earnings replacement rate of 95 percent.
States and local areas use the Unemployment Insurance wage record
reporting system as the performance reporting data source. The Department
considers this source reliable, and has undertaken a data validation project in
order to further assure that the data effectively support the problem analysis,
management decision-making, and continuous improvement elements of State and
Federal oversight.
Strategies: The Department continues its analysis of WIA
implementation as a follow up to the WIA “Readiness Reviews”
conducted in Program Year 2001. The Department has also undertaken various
strategies in partnership with States and localities to improve the results
realized by dislocated workers who participate in the program, including
providing specific help in areas where it is needed and special outreach tools,
as follows:
- The Department has undertaken special technical assistance focused on
States and localities that are experiencing difficulties in achieving their
negotiated performance standards.
- To strengthen the capability of States to assist more difficult to
serve populations, the Department will prepare and release a number of customer
service strategies and tools that can be adapted by State and local programs in
developing services for individuals with limited English proficiency (LEP). The
strategies will focus on successful Asian (Chinese, Khmer, Vietnamese, and
Thai) and Hispanic outreach initiatives.
Audits and Program Evaluations: In a September 2002
report,Workforce Investment Act Performance Outcomes Reporting Oversight, the
Office of Inspector General raised concerns about whether the third party data
reported by States for WIA performance were accurate and supportable. The
Department generally agreed with the concerns raised by the Office of Inspector
General and indicated that it believed that the concerns would be addressed
with the deployment of a data validity and verification policy and tools that
have been under development and are scheduled to be deployed in 2003. See
Appendix 3 for more information.
Goal Assessment and Future Plans: Through negotiations with the States,
the Department continues to raise the targets for the outcomes achieved on
behalf of dislocated workers. In Program Year 2003, of those registered under
the WIA dislocated worker program, 80 percent will be employed in the first
quarter after program exit, and 88 percent will be employed in the third
quarter after program exit with 98 percent of pre-dislocation earnings. n
(Goal 2.3A — FY 2001 Annual Performance Plan)
Help Trade-Affected Workers Find New Jobs
Increase the employment, retention, and earnings replacement of
workers dislocated in important part because of trade and who receive trade
adjustment assistance benefits.
- 78% will be employed in the first quarter after program exit;
- 88% of those employed in the first quarter after program exit will
be employed in the third quarter after program exit; and
- Those who are employed in the third quarter after program exit will
earn, on average, 90% of their pre - separation earnings
Results: The goal was not achieved. Based on preliminary data
covering the first three quarters of FY 2002, 66 percent of participants were
employed in the first quarter after program exit, and 89 percent of those were
still employed in the third quarter after program exit, with 81 percent of
pre-dislocation wages.
Program Description: DOL’s Trade Adjustment Assistance (TAA)
program provides readjustment services to dislocated workers who lose their
jobs in important part because of increased imports from any foreign country.
DOL’s North American Free Trade Agreement – Trade Adjustment
Assistance (NAFTA-TAA) program provides readjustment services to dislocated
workers who lose their jobs in important part because of increased United
States imports from, or because of a shift of production to, Canada and Mexico.
The readjustment services and benefits offered by both programs include
occupational, on-the-job, and remedial training, job search and relocation
assistance, and income support for workers in training.
During FY 2002, DOL issued certifications of eligibility for Trade
Adjustment Assistance covering an estimated 231,700 workers and NAFTA-TAA
certifications for approximately 112,100 additional workers affected by
increased imports or shifts in trade or production.
Analysis of Results: The Department’s current data cover
the first three quarters of FY 2002, and represent data from States reporting
under the Trade Act Participant Report (TAPR) system. While the Department uses
the data for management purposes, DOL has observed issues of accuracy and
reliability of data among the States. The Department is addressing these issues
in two ways: first, by onsite monitoring of States; and second, by the
development and testing of a data validation system for State reports to be
implemented in FY 2003.
Preliminary results for program participants employed in the first
quarter after exit and the wage replacement earnings measures fell below the
targeted performance levels. This could be due, in part, to the slowdown in the
economy and the lack of fourth quarter program data. The particularly large
number of workers enrolled from the steel industry — an industry with high
wages and benefits — contributed significantly to the inability to attain
program performance goals. The economic circumstances in the communities in
which these workers were impacted and the general deterioration of the economy,
have made it difficult to attain targets for entered employment. Similar
economic factors (though not high wages) have had an impact upon workers in the
garment and textile industries in the South. Where the program finds employment
for workers, they generally remain employed at earnings comparable to previous
jobs since these are workers with some attachment to the labor market.
Strategies: During FY 2002, the TAA program focused on enhanced
monitoring and oversight of the States’ administration of the TAA program
by conducting State reviews
Beginning in FY 2002, the Department also increased assessment and
analysis of the labor market to better ensure a successful match between
workers and occupations in the community. This strategy is designed to ensure
that workers avail themselves of training offerings that will lead to
employment because real job prospects exist either in the community or in an
area to which the participant is willing to relocate. As part of this approach,
the Department directs the States to use employment opportunities as the
principle criterion for approving training programs for trade-impacted
workers.
The Trade Adjustment Assistance Reform Act, passed by Congress in
August 2002, repeals the NAFTA-TAA program and consolidates elements of it into
the reformed TAA program. A major reform to the program requires State agencies
to provide rapid response to individuals for whom a petition for TAA assistance
has been filed. This requirement supports the Department’s goal to further
integrate this program into the Workforce Investment Act program —
facilitating greater access to an array of reemployment services aimed at
assisting individuals in need of training and providing job search assistance
for individuals considered job ready.
Goal Assessment and Future Plans: Notwithstanding the inability
to meet the employment indicator, the Department raised the targeted
performance levels for this goal for FY 2003, and will assess the implications
of the new legislation on the measures for workers who lose employment as a
result of trade patterns. The performance expectations for the Trade program
should closely track those of the Workforce Investment Act program for
dislocated workers, and the Department will work closely with the States to
this end.
(Goal 2.3B — FY 2002 Annual Performance Plan)
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