[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]


 
                  MODERNIZING THE WORKFORCE INVESTMENT
               ACT: DEVELOPING AN EFFECTIVE JOB TRAINING
                    SYSTEM FOR WORKERS AND EMPLOYERS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON HIGHER EDUCATION
                         AND WORKFORCE TRAINING

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

            HEARING HELD IN WASHINGTON, DC, OCTOBER 4, 2011

                               __________

                           Serial No. 112-41

                               __________

  Printed for the use of the Committee on Education and the Workforce


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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Dale E. Kildee, Michigan
Judy Biggert, Illinois               Donald M. Payne, New Jersey
Todd Russell Platts, Pennsylvania    Robert E. Andrews, New Jersey
Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia
Bob Goodlatte, Virginia              Lynn C. Woolsey, California
Duncan Hunter, California            Ruben Hinojosa, Texas
David P. Roe, Tennessee              Carolyn McCarthy, New York
Glenn Thompson, Pennsylvania         John F. Tierney, Massachusetts
Tim Walberg, Michigan                Dennis J. Kucinich, Ohio
Scott DesJarlais, Tennessee          Rush D. Holt, New Jersey
Richard L. Hanna, New York           Susan A. Davis, California
Todd Rokita, Indiana                 Raul M. Grijalva, Arizona
Larry Bucshon, Indiana               Timothy H. Bishop, New York
Trey Gowdy, South Carolina           David Loebsack, Iowa
Lou Barletta, Pennsylvania           Mazie K. Hirono, Hawaii
Kristi L. Noem, South Dakota         Jason Altmire, Pennsylvania
Martha Roby, Alabama
Joseph J. Heck, Nevada
Dennis A. Ross, Florida
Mike Kelly, Pennsylvania

                      Barrett Karr, Staff Director
                 Jody Calemine, Minority Staff Director

        SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE TRAINING

               VIRGINIA FOXX, North Carolina, Chairwoman

John Kline, Minnesota                Ruben Hinojosa, Texas
Thomas E. Petri, Wisconsin             Ranking Minority Member
Howard P. ``Buck'' McKeon,           John F. Tierney, Massachusetts
    California                       Timothy H. Bishop, New York
Judy Biggert, Illinois               Robert E. Andrews, New Jersey
Todd Russell Platts, Pennsylvania    Susan A. Davis, California
David P. Roe, Tennessee              Raul M. Grijalva, Arizona
Glenn Thompson, Pennsylvania         David Loebsack, Iowa
Richard L. Hanna, New York           George Miller, California
Larry Bucshon, Indiana               Jason Altmire, Pennsylvania
Lou Barletta, Pennsylvania
Joseph J. Heck, Nevada


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on October 4, 2011..................................     1

Statement of Members:
    Foxx, Hon. Virginia, Chairwoman, Subcommittee on Higher 
      Education and Workforce Training...........................     1
        Prepared statement of....................................     3
    Hinojosa, Hon. Ruben, ranking minority member, Subcommittee 
      on Higher Education and Workforce Training.................     3
        Prepared statement of....................................     4

Statement of Witnesses:
    Cox, Kristen, executive director, Utah Department of 
      Workforce Services.........................................     6
        Prepared statement of....................................     8
    Fall, Jaime S., vice president, workforce and talent 
      development policy, HR Policy Association..................    26
        Prepared statement of....................................    28
    Herman, Bruce G., organizer and strategist, National Call to 
      Action.....................................................    18
        Prepared statement of....................................    20
    Larrea, Laurie Bouillion, president, Workforce Solutions 
      Greater Dallas.............................................    14
        Prepared statement of....................................    16

Additional Submissions:
    Mr. Hinojosa:
        Donnelly, Hon. Joe, a Representative in Congress from the 
          State of Indiana, prepared statement of................    51


                       MODERNIZING THE WORKFORCE
                     INVESTMENT ACT: DEVELOPING AN
                     EFFECTIVE JOB TRAINING SYSTEM
                       FOR WORKERS AND EMPLOYERS

                              ----------                              


                        Tuesday, October 4, 2011

                     U.S. House of Representatives

        Subcommittee on Higher Education and Workforce Training

                Committee on Education and the Workforce

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 10:04 a.m., in 
room 2175, Rayburn House Office Building, Hon. Virginia Foxx 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Foxx, Petri, Biggert, Roe, Hanna, 
Bucshon, Barletta, Heck, Hinojosa, and Loebsack.
    Staff present: Jennifer Allen, Press Secretary; Katherine 
Bathgate, Press Assistant/New Media Coordinator; Casey Buboltz, 
Coalitions and Member Services Coordinator; Heather Couri, 
Deputy Director of Education and Human Services Policy; Lindsay 
Fryer, Professional Staff Member; Rosemary Lahasky, 
Professional Staff Member; Brian Melnyk, Legislative Assistant; 
Krisann Pearce, General Counsel; Linda Stevens, Chief Clerk/
Assistant to the General Counsel; Alissa Strawcutter, Deputy 
Clerk; Kate Ahlgren, Minority Investigative Counsel; Aaron 
Albright, Minority Communications Director for Labor; Jody 
Calemine, Minority Staff Director; John D'Elia, Minority Staff 
Assistant; Livia Lam, Minority Senior Labor Policy Advisor; 
Brian Levin, Minority New Media Press Assistant; and Michele 
Varnhagen, Minority Chief Policy Advisor/Labor Policy Director.
    Chairwoman Foxx. Good morning. A quorum being present, the 
subcommittee will come to order. I want to welcome our 
witnesses. Some of them have traveled a great distance to 
participate in today's hearing, and we appreciate the 
opportunity to hear your thoughts about ways we can improve 
assistance for our nation's workers.
    This is the committee's fourth opportunity to example the 
challenges and successes of the federal job education system. 
For several months, we have been working to detect what a 21st 
century workforce investment system should look like, and 
identify the responsible reforms necessary to help get us 
there.
    As a result, we have gained a greater understanding of the 
changes that must be undertaken to build a stronger, more 
competitive workforce. One of the most important things we have 
learned through these hearings is that the status quo is no 
longer acceptable. Particularly in times of record debt and 
persistently high unemployment, we need a system that is 
efficient and effective.
    Wasting State and federal resources is a disservice to 
taxpayers and workers. Earlier this year, the Government 
Accountability Office identified 47 job programs administered 
across nine federal agencies at a cost of $18 billion. Forty-
four of these programs overlap, serving similar populations. 
Barely a handful have been reviewed for effectiveness.
    Clearly, there is a great opportunity to make the job 
training system leaner and more responsive. Fortunately, we 
have also learned there are a number of creative and successful 
reforms underway at the State and local levels that may serve 
as models for reform. An improved job education system must 
empower state leaders to pursue policies that best meet the 
needs of the local workforce.
    After all, officials in Clemmons, North Carolina and 
Edinburg, Texas have a greater understanding of the needs of 
their communities than do a roomful of Washington bureaucrats. 
Finally, we have learned that while there are differing views 
on how we move forward, there is agreement on both sides of the 
aisle that job education programs play an important role in the 
success of our workforce.
    In his latest stimulus plan, the president noted the 
importance of job training. However, his proposal to dedicate 
$4 billion in new spending to create two additional job 
training programs is questionable, particularly when one 
considers the dozens of existing programs identified by the 
GAO. I am concerned the president's proposal will layer more 
bureaucracy, more rules and more spending onto a job education 
system that is already overwhelmed by burdensome regulations 
and waster resources.
    With 14 million Americans unemployed, we simply cannot 
afford to double down on the failed policies of the past. 
Instead, we should focus our efforts on modernizing the 
Workforce Investment Act so it reflects the realities of 
today's economy, the needs of job-seekers, and the demands of 
employers. Ideas have already been laid on the table. 
Representative McKeon, former chairman of the full committee 
and champion of this program, has introduced his own proposal 
to reauthorize the Workforce Investment Act.
    I am grateful for his leadership, and look forward to 
working with him in the weeks and months ahead. I hope the 
president will soon send us his own plan to modernize an 
outdated job training system. Ultimately, American workers are 
looking for responsible policies that will help the economy 
grow and create new jobs.
    My Republican colleagues and I are eager to find common 
ground on solutions that will improve federal job education 
assistance on behalf of workers, employers, and taxpayers. 
Additionally, we are advancing our Plan for America's Job 
Creators, and pursuing a fall agenda that targets some of the 
most harmful regulatory roadblocks to job creation.
    Improving the nation's workforce investment system is an 
important part of Washington's efforts to put people back to 
work. I wish to thank our witnesses for contributing their 
views and experiences today and helping us ensure the final 
product reflects the positive state and local solutions already 
underway.
    Now I would like to recognize the distinguished ranking 
member, Mr. Hinojosa, for his comments.
    [The statement of Mrs. Foxx follows:]

         Prepared Statement of Hon. Virginia Foxx, Chairwoman,
        Subcommittee on Higher Education and Workforce Training

    Good morning and welcome to our witnesses. Some of you have 
traveled a great distance to participate in today's hearing, and we 
appreciate the opportunity to hear your thoughts about ways we can 
improve assistance for our nation's workers.
    This is the committee's fourth opportunity to examine the 
challenges and successes of the federal job training system. For 
several months, we have been working to determine what a twenty-first 
century workforce investment system should look like and identify the 
responsible reforms necessary to help us get there. As a result, we 
have gained a greater understanding of the changes that must be 
undertaken to build a stronger, more competitive workforce.
    One of the most important things we have learned through these 
hearings is that the status quo is no longer acceptable. Particularly 
in times of record debt and persistently high unemployment, we need a 
job training system that is efficient and effective. Wasting state and 
federal resources is a disservice to taxpayers and workers. Earlier 
this year, the Government Accountability Office identified 47 separate 
job training programs administered across 9 federal agencies at a cost 
of $18 billion. Forty-four of these programs overlap, serving similar 
populations. Barely a handful have been reviewed for effectiveness. 
Clearly, there is a great opportunity to make the job training system 
leaner and more responsive.
    Fortunately, we have also learned there are a number of creative 
and successful reforms underway at the state and local levels that may 
serve as models for reform. An improved job training system must 
empower state leaders to pursue policies that best meet the needs of 
the local workforce. After all, officials in Clemmons, North Carolina 
and Edinburg, Texas have a greater understanding of the needs of their 
communities than do a room full of Washington bureaucrats.
    Finally, we have learned that, while there are differing views on 
how we move forward, there is agreement on both sides of the aisle that 
job training programs play an important role in the success of our 
workforce. In his latest stimulus plan, the president noted the 
importance of job training. However, his proposal to dedicate $4 
billion in new spending to create two additional job training programs 
is questionable, particularly when one considers the dozens of existing 
programs identified by the GAO. I am concerned the president's proposal 
will layer more bureaucracy, more rules, and more spending onto a job 
training system that is already overwhelmed by burdensome regulations 
and wasted resources. With 14 million Americans unemployed, we simply 
cannot afford to double-down on the failed policies of the past.
    Instead, we should focus our efforts on modernizing the Workforce 
Investment Act so it reflects the realities of today's economy, the 
needs of job-seekers, and the demands of employers. Ideas have already 
been laid on the table. Representative McKeon, former chairman of the 
full committee and champion of job training assistance, has introduced 
his own proposal to reauthorize the Workforce Investment Act. I am 
grateful for his leadership and look forward to working with him in the 
weeks and months ahead. I hope the president will soon send up his own 
plan to modernize an outdated job training system.
    Ultimately, American workers are looking for responsible policies 
that will help the economy grow and create new jobs. My Republican 
colleagues and I are eager to find common ground on solutions that will 
improve federal job training assistance on behalf of workers, 
employers, and taxpayers. Additionally, we are advancing our Plan for 
America's Job Creators and pursuing a fall agenda that targets some of 
the most harmful regulatory roadblocks to job creation.
    Improving the nation's workforce investment system is an important 
part of Washington's efforts to help put people back to work. I wish to 
thank our witnesses for contributing their views and experiences today, 
and helping us ensure the final product reflects the positive state and 
local solutions already underway.
                                 ______
                                 
    Mr. Hinojosa. Thank you. Thank you, Chairwoman Foxx. I also 
want to welcome and thank our distinguished panel of witnesses 
for joining us today. Before we begin today's discussion on 
modernizing the Workforce Investment Act, better known as WIA, 
I would like to provide some context for today's hearing.
    As ranking member of this subcommittee, I believe that it 
is vitally important for us not to lose sight of the hardships 
that millions of American workers and families are facing in 
this economy. While our nation's economy is recovering, 
millions of American workers--both blue collar and white collar 
workers--continue to struggle to find good family-sustaining 
jobs.
    It is important to note that racial and ethnic minorities 
have been disproportionately impacted by this economic 
recession, with unemployment rates as high as 25 percent in 
some parts of our country according to the Economic Policy 
Institute. To make matters worse, a recent report issued by the 
Census Bureau shows that greater numbers of Americans are 
living in poverty.
    What is more, of the 46 million people who live in poverty 
in America in 2010, one in five were children. In fact, Latino 
children are now the largest group of children living in 
poverty, according to a study by the Pew Hispanic Center. It is 
imperative that Congress works to reverse these stark trends by 
creating good, family-sustaining jobs, and by strengthening our 
public workforce training and adult education system so that it 
can do more to serve the long-term unemployed and our most 
vulnerable populations.
    I am afraid that it is difficult for me to lead a 
substantive discussion on WIA without also addressing the issue 
of jobs and the unmet needs of today's 25 million unemployed 
and underemployed workers. Simply put, jobs must be our number 
one priority.
    I strongly agree with President Obama on the need to 
expedite the passage of the American Jobs Act, and I fully 
support Ranking Member George Miller's request to have hearings 
on this issue in this committee as soon as possible. 
Constitutes in my congressional district want Congress to act 
to make federal investments in infrastructure, in schools, 
businesses, and job training programs.
    While my colleagues on the other side of the aisle support 
the consolidation of WIA programs, and may argue that any 
savings should be used to reduce deficit, I can only support 
consolidation efforts and flexibility in the areas where it 
makes sense. Instead, our focus must be on improving the 
quality and accessibility of employment and job training 
services, not on eliminating WIA programs and weakening our 
public workforce training and adult education system.
    It is my hope that this committee can work in a bipartisan 
manner to move a jobs bill forward, and work closely with Labor 
Secretary Hilda Solis to reauthorize WIA.
    With that, Madam Chair, I thank you.
    [The statement of Mr. Hinojosa follows:]

  Prepared Statement of Hon. Ruben Hinojosa, Ranking Minority Member,
        Subcommittee on Higher Education and Workforce Training

    Thank you, Chairwoman Foxx.
    I also want to welcome and thank our distinguished panel of 
witnesses for joining us today.
    Before we begin today's discussion on modernizing the Workforce 
Investment Act (WIA), I would like to provide some context for today's 
hearing.
    As ranking member of this subcommittee, I believe that it's vitally 
important for us not to lose sight of the hardships that millions of 
Americans workers and families are facing in this economy. While our 
nation's economy is recovering, millions of American workers, both 
blue-collar and white-collar workers, continue to struggle to find 
good, family-sustaining jobs.
    It's important to note that racial and ethnic minorities have been 
disproportionately impacted by this economic recession, with 
unemployment rates as high as 25 percent in some parts of the country, 
according to the Economic Policy Institute.
    To make matters worse, a recent report issued by the Census Bureau 
showed that greater numbers of Americans are living g in poverty. 
What's more, of the 46.2 million people who lived in poverty in America 
in 2010, one in five were children. In fact, Latino children n are now 
the largest group of children living in n poverty, according to a study 
by the Pew Hispanic Center.
    It is imperative that Congress work to reverse these stark trends 
by creating good, family sustaining jobs and by strengthening our 
public workforce training and adult education system, so that it can do 
more to serve the long-term unemployed and our most vulnerable 
populations.
    I'm afraid that it's difficult for me e to lead a substantive 
discussion on WIA without also addressing the issue of jobs and the 
unmet needs of today's 25 million unemployed and underemployed workers. 
Simply put, jobs must be our number one priority.
    I strongly agree with President Obama on the need to expedite the 
passage of ``the American Jobs Act,'' and I fully support Ranking 
Member Miller's request to have hearings on this issue on this 
committee as soon as possible.
    Constituents in my congressional district want Congress to act, to 
make federal investments in infrastructure, schools, businesses, and 
job training programs.
    While my colleagues on the other side of the aisle support the 
consolidation of WIA programs and may argue that any savings should be 
used to reduce deficit, I can only support consolidation efforts and 
``flexibility'' in areas where it makes sense.
    Instead, our focus must be on improving the quality and 
accessibility of employment and job training services, not on 
eliminating WIA programs and weakening our public workforce training 
and adult education system.
    It is my hope that this committee can work in a bipartisan manner 
to move a jobs bill forward and work closely with Labor Secretary Hilda 
Solis to reauthorize WIA.
    Thank you.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Mr. Hinojosa. Pursuant to 
Committee Rule 7c, all subcommittee members will be permitted 
to submit written statements to be included in the permanent 
hearing record. And without objection, the hearing record will 
remain open for 14 days to allow statements, questions for the 
records, and other extraneous material referenced during the 
hearing to be submitted in the official hearing record.
    It is now my pleasure to introduce our distinguished panel 
of witnesses. Ms. Kristen Cox was appointed executive director 
of workforce services for the State of Utah in March 2007. In 
this capacity, Ms. Cox oversees the operation of 12 divisions 
encompassing federal and State programs, including workforce 
development. Prior to this appointment, Ms. Cox held positions 
in Maryland as secretary of the nation's first cabinet-level 
Department of Disabilities, and as the director of the 
Governor's Office for Individuals with Disabilities.
    Ms. Laurie Larrea has served as president of the Dallas 
County Workforce Development Board since 1996. She serves as 
executive director of the Private Industry Council of Dallas 
and on three other Texas workforce investment boards, including 
the director of programs for the Houston Job Training 
Partnership Council and director of the Southeast Texas 
Employment and Training programs.
    Mr. Bruce Herman is the principle organizer and strategist 
for National Call to Action, a voluntary coalition, including 
labor, business community, and public offices promoting a 
three-pronged pathway to economic revitalization to address the 
current employment crisis. Prior to NCTA, he served as the 
deputy commissioner of labor for Workforce Development, the New 
York State Department of Labor.
    Mr. Jaime Fall is vice president for workforce and talent 
development policy for the HR Policy Association in Washington, 
D.C. In this position, he leads the organization's efforts to 
equip workers to succeed in the rapidly-changing workplaces of 
America. Prior to joining HR Policy, Mr. Fall served for nearly 
7 years as deputy secretary, employment and workforce 
development for the California Labor and Workforce Development 
Agency.
    Again, we welcome all of you to be here. Before I recognize 
you to provide your testimony, let me briefly explain our 
lighting and sound system.
    You will have 5 minutes to present your testimony. When you 
begin, the light in front of you will turn green. And there 
will also be an audible signal. When 1 minute is left, the 
light will turn yellow. And when your time is expired the light 
will turn red, at which point I would ask that you wrap up your 
remarks as best you are able. After you have testified, members 
will each have 5 minutes to ask questions of the panel.
    I would now like to recognize Ms. Cox for 5 minutes.

         STATEMENT OF KRISTEN COX, EXECUTIVE DIRECTOR,
             UTAH DEPARTMENT OF WORKFORCE SERVICES

    Ms. Cox. Is it on? Okay. Thank you for the opportunity to 
be here today. It is certainly an honor. And for the record, my 
name is Kristen Cox, and I do run the Department of Workforce 
Services in Utah. And we come to this with, I think, a very 
unique and important perspective. Utah has a highly-integrated 
model, and we are also a Statewide workforce investment board.
    We administer everything from WIA to Wagner-Peyser and 
trade, to TANF and food stamps and eligibility for all public 
assistance programs, including Medicaid and CHIP. We have over 
90 different federal programs we administer. So we see what is 
working, and also many opportunities where we think it could be 
improved.
    So let me just highlight a couple principles that we think 
are important, and then I will highlight some of our 
recommendations. They are in my written testimony in much more 
detail. So I will just go through some of them. But some 
important principles we think are critical. One, that programs 
should be designed to maximize dollars that go to the customer.
    We need to eliminate bureaucracy and make sure all of our 
money gets pushed down to the job seekers and the people that 
need it. Second, we think we should focus more on results and 
less on process and compliance activities. WIA's highly, highly 
focused on compliance and process activities, which is a waste 
of taxpayer dollars.
    Third, we think States should have maximum flexibility. 
Governor Herbert's a huge proponent of this. As governor, I 
think he is the one to make the best decisions about what Utah 
needs, not people in D.C. We think, also, that innovation 
should be encouraged, and not penalized. And finally, we think 
it is critical that we look at operational excellence.
    We develop public policy in context of what it is going to 
take on the ground to make it work. In Utah, we have a huge 
focus on that so that we can make sure everything we do is 
efficient. Let me highlight some of our major recommendations. 
One, we think some major funding streams should be 
consolidated--dislocated worker fund, belt worker youth, and 
Wagner-Peyser.
    We serve common customers--we need to integrate those 
funds. Second, we think States should be given a waiver 
process, or waiver ability, to go and ask that even additional 
programs be integrated, such as trade, or food stamp employee 
in training programs, or adult basic education. Other programs 
really have similar purpose, and we want the waiver authority.
    We know that welfare reform occurred because States had the 
ability to create innovative processes. We want that same 
opportunity to demonstrate that we can make that happen. We 
also think in that process, if we can actually move towards 
more integrated model, we could have true unified planning. We 
spend hundreds of hours sending hundreds of pages to D.C. on 
planning efforts for different programs that all serve the 
common customer, and it is a waste of time.
    We also think that the idea of discretionary grants needs 
to go away, especially the administration's new proposal on the 
Workforce Innovation Fund. It is sweeping dollars from States, 
where we can get funds directly to customers quickly into a new 
discretionary grant program. That, plus other discretionary 
grant programs, forces us to chase money in ways that do not 
necessarily meet our needs.
    Next, we think that governors should have an ability to 
govern and set up their own governance structure. We should not 
have to ask permission, or mother may I, about how big our SWIB 
is, or if we want to change our SWIB, or what the local 
workforce enforcement boards will look like. We think it should 
be business-driven, for sure, but governors should not have to 
ask permission on those kinds of small process issue.
    A few other quick things that are really important. We 
believe common measures, and we will talk about this in more 
detail, hopefully, are as important. But we do think there 
should be some other measures around how we actually support 
businesses, cost per equivalent services, and other areas that 
could keep us accountable. We do agree that financial reporting 
needs to be looked at.
    We are always vulnerable in the system to recissions 
because of the way Congress treats obligations. We think that 
we should go from 1 year of obligation to 2 years of 
expenditures as compared to 3 years. But that would give us the 
opportunity to be transparent, but also avoid all these 
recissions that occur. It is very difficult to create a stable 
environment.
    Finally--the beep took me off my roll--a couple of our 
things, quickly. We have a high reporting burden in the 
Workforce Investment programs. I have looked at all the 
programs we have, including Medicaid to TANF. The reporting 
burden in the WIA programs is over 5 percent of our 
administrative costs, Wagner-Peyser 2.3 percent, where the rest 
of our costs are at 1 percent or less.
    The reporting burden is very interested in these programs, 
and we need to take a hard look at reducing those. And then 
finally, modernizing eligibility, cross-matching data sets, and 
having the ability to do online Social Security stuff that we 
can do with our public assistance programs that does not exist 
in WIA. We need to look at modernizing that.
    Those are just a few of many of our ideas that we have put 
on the table. But at the end of the day, it boils down to 
everything has to be on the table. In this economy, we need to 
make sure that every action, every step, every policy, every 
process is value-added. At the end of the day, the taxpayer and 
job seeker would say it is worth it, it is value-added and I am 
willing to pay for it, and businesses think we are relevant.
    I look forward to answering any questions. Thank you.
    [The statement of Ms. Cox follows:]

         Prepared Statement of Kristen Cox, Executive Director,
                 Utah Department of Workforce Services

    Mr. Chairman and Members of the House Education and the Workforce 
Subcommittee, I am Kristen Cox, the Executive Director of the Utah 
Department of Workforce Services. I appreciate the opportunity to 
provide you with an overview of my observations on the re-authorization 
of the Workforce Investment Act (WIA).
    The Utah Department of Workforce Services (DWS) believes the 
following core principles should guide all reform and reauthorization 
efforts focused on jobs, including the Workforce Investment Act:
    1. Programs should be structured in a manner that maximizes 
resources for participants;
    2. Requirements should be minimized and focused on developing a 
consistent and structured performance accountability system;
    3. States should be provided maximum flexibility to design the 
programs and initiatives best suited to its citizens, businesses, and 
workforce development partners;
    4. Budget streamlining should not just penalize the states--federal 
agencies should be examined and unnecessary bureaucracy and processes 
should be eliminated;
    5. Innovation and risk-taking in the design and delivery of 
employment and job training services should be encouraged rather than 
penalized;
    6. Programming should be data-driven and evidence-based with 
tangible accountability measures; and
    7. Congress must refrain from establishing parallel job training 
programs and/or discretionary grants that duplicate the existing 
workforce system.
    At the Utah Department of Workforce Services, our goal is simple--
to help unemployed Utah citizens find employment. Since my appointment 
as Executive Director in 2007, I have worked to create a culture in the 
agency that reflects my belief that government should spend as much 
time focusing on operations as on public policy. Accordingly, we 
administer our programs with a guiding principle that directs money for 
training programs to those programs and not on administrative 
bureaucracy.
    In Utah, we are employing an agency-wide strategy designed to align 
our entire department around a common goal--jobs. The strategy is based 
on our commitment to operational excellence, results, and to ensuring 
that Utah's economy continues to be among the best in the nation. The 
strategy is also grounded in our philosophy that ``people who can work 
do work'' and, to-date has saved Utah taxpayers $18 million while 
caseloads in our Eligibility Services Division have increased 
dramatically. This direction may sound simple, but it is not a given 
with many of the federal programs administered by our department. We 
need to look at WIA reauthorization as a perfect opportunity to focus 
on streamlining processes and programs. As we do, I can't help but 
point out that the United States Constitution is only four pages, so I 
believe we have the ability to simplify the hundreds of pages that 
comprise the Workforce Investment Act. When combined with the hundreds 
of pages in the Code of Federal Regulations and all of the policy 
guidance letters, the current Workforce Investment Act creates a system 
crushed under paperwork and compliance.
    The current design of the public workforce investment system is a 
maze of individual programs and funding streams with various mandates 
attached to each program. It is then the expectation of the states to 
manage through these mandates and bureaucracy and provide individuals 
and businesses with the employment and job training services needed, 
thus contributing to the improvement of the national economy. Just 
meeting individual program requirements, providing fiscal stewardship 
over each individual funding stream, tracking outcomes and results for 
individual programs, and implementing a business-friendly, customer-
centric model around targeted program mandates is extremely inefficient 
by diverting finite resources from actual employment and job training 
services.
    When properly aligned, program integrity efforts, re-employment 
initiatives, operational efficiencies, and trust fund management should 
ensure that limited resources are maximized and directed to those who 
are eligible for assistance and re-employment activities. Utah has an 
integrated model that captures over 90 different federal programs, 
giving us a unique and comprehensive perspective on employing 
individuals. In fact, a Government Accounting Office (GAO) report 
earlier this year singled out Utah for our consolidation efforts and 
noted that ``the consolidation allowed job seekers to apply for 
assistance they had not considered in the past.''
    In Utah, we are committed to assessing the quality of programs 
administered and are proactively reviewing services in order to ensure 
maximum value is provided to the public. Reauthorization of WIA should 
take the same approach. As a state agency charged with administering 
some of the largest public assistance programs under scrutiny due to 
current budget deficits, the effectiveness of job training programs--
specifically the effectiveness of the manner in which the services are 
rendered at the state level--is an issue of great concern to our 
stakeholders.
    Accordingly, DWS has conducted an extensive job training analysis 
for the purpose of guiding policy-makers in decisions pertaining to 
training services. For example, the report shows that Utahns who 
complete DWS-assisted degree programs are 5% more successful finding 
employment and earn an average of $9,600 more per year than those who 
do not. The full research report will be available on the web at http:/
/jobs.utah.gov/wi/trainingstudy later this week.
    Because of Utah's landmark approach, our experience in 
understanding and working within a framework of a myriad of federal 
laws and regulations provides us with a unique perspective in providing 
recommendations and viewpoints on various federal law reauthorizations.
    As the committee begins its important work, the State of Utah 
submits a comprehensive proposal for consideration that maximizes state 
flexibility and focuses on connecting job seekers with jobs.
Workforce Investment Act Structure and Governance
    In order to promote efficiency, better serve job seekers, workers, 
youth and employers, and maintain a level of services with fewer 
financial resources, the federal government should provide states with 
a new Workforce Investment Fund, which is an integrated grant to states 
that combines the following current individual formulaic grants:
     Workforce Investment Act Adult
     Workforce Investment Act Dislocated Worker
     Workforce Investment Act Youth
     Wagner-Peyser Employment Service
    These four funding streams provide the foundation for the Workforce 
Investment Fund because they provide the same or similar services, 
which could be enhanced to populations needing employment and training 
assistance.
    In addition, at the request of the Governor, through a new 
Innovation Waiver process, the following programs could be delivered 
through the Workforce Investment Fund:
     Adult Education
     Vocational Rehabilitation
     Trade Adjustment Assistance (training)
     Veterans Employment and Training
     Food Stamp Employment and Training
     Temporary Assistance for Needy Families (employment/
training)
    The Innovation Waiver process would involve the appropriate Cabinet 
Secretary in charge of the program and would provide a state with an 
opportunity to demonstrate how delivery of the program would promote 
efficiency and improved services for customers and set a common 
standard for participation. Waiver requests would need to be responded 
to within 30 days, or the waiver request would be automatically 
approved. In addition, the waiver process should also allow states to 
include strategies that would better integrate and align Unemployment 
Insurance (UI) customers into the broader workforce system. 
Traditionally, and even in the President's recent jobs bill, UI re-
employment efforts are isolated from the broader system and is often 
nonexistent in many states.
    Utah also believes that Congress should decrease the number and 
amount of discretionary grants overseen by DOL and opt for funds with 
clear accountability standards. State and local governments spend too 
much time and resources on ``chasing'' money in the form of grants that 
may not best be suited for their unique needs. With diminishing 
resources, it's unfortunate that state and local governments are 
increasingly faced with the dilemma of hiring full-time grant writers 
or bringing consultants on board who are well-versed in how to navigate 
the grant process. Consequently, grant awards can be made on how well 
the application is written rather than on the actual merits of the 
proposal. It has become its own cottage industry.
    In addition, grants require separate budgeting, monitoring, and 
reporting--all of which take away money from customers and expand 
administrative overhead. Grants can take too much time to approve and 
often end up being one-time programs with no prospects of 
sustainability. States need resources they can count on to develop 
meaningful programs that can measurably move the needle over time and 
quickly respond to structural changes.
    Discretionary grant programs such as the Workforce Innovation Fund 
would be eliminated in order to maximize funding to the states. Utah 
feels that directing any portion of federal funding currently set-aside 
as Statewide Activity funds for state-led innovations to a new 
federally dictated, controlled and prescribed program (such as the 
Innovation Fund) adds bureaucracy and defeats its intended purpose. I 
maintain that governors, not the federal government, are uniquely 
positioned to innovate and advance systemic workforce development 
initiatives. Washington, D.C. should not be determining what is or is 
not innovative in Utah--the decision should be made by Utah's Governor.
    National Emergency Grants should be maintained in order to fund 
unforeseen dislocation events. However, with excess monies historically 
existing year after year at the end of a program year, the 
authorization for funding would be capped at $100 million annually and 
grant requests would need to be responded to with 45 days of the 
receipt of the application. Other small programs that maintain a 
separate delivery system to serve special populations would be 
eliminated with services to these populations specifically authorized 
under the Workforce Investment Fund.
    Unified State Planning: The current state planning process is an 
exercise in frustration as there is no real purpose for the planning--
it is essentially a ``check the box'' exercise. Every year, Utah 
submits hundreds of pages of plans and I am uncertain as to whether or 
not they are ever reviewed by appropriate officials. Recent proposals 
seek to improve unified state planning by requiring lots of new 
reporting on the ``coordination'' of programs. This approach is flawed 
in that it increases the work and burden on states with no measureable 
positive impacts as programs and funding streams remain separate and 
delivered by a multitude of entities and delivery systems.
    As part of the Workforce Investment Fund implementation and 
Innovation Waiver process, a unified state plan would provide meaning 
and reason to the plan. The goal of a unified state plan should not be 
to provide lots of details on ``hoped for'' coordination; rather, it 
should be a meaningful document describing to the federal government 
and the public the types of services, methods of services, and goals 
and objectives of service delivery and integration. The Workforce 
Investment Fund unified state plan would be a guiding document 
promoting reform, improved services, and actual results.
    Local Workforce Investment Areas/State and Local Workforce 
Investment Boards: The current structure and responsibilities of state 
and local workforce investment boards are a legacy of the 1970s era 
Comprehensive Employment and Training Act (CETA). Because CETA funds 
flowed directly from the federal government to local cities and 
counties, local ``Private Industry Councils'' were formed, which 
continued through the 1980s and 1990s under the Job Training 
Partnership Act (JTPA). At the same time local job training funds were 
being appropriated to counties and cities, funds for the same or 
similar services were being provided to states through programs such as 
the Wagner-Peyser Employment Service and Trade Adjustment Assistance.
    The Workforce Investment Act of 1998 tried to balance this shared 
state-local employment and job training service provision 
responsibility by crafting responsibilities of local workforce 
investment boards in coordination with the state local workforce 
investment board. In conjunction with this, WIA provides very little 
flexibility to re-designate local workforce investment areas around 
economic regions or changing demographics due to a desire to protect 
the current system. A few states, such as Utah, have additional 
flexibility as ``single state workforce area,'' but this designation is 
authorized under a grandfathering provision, which allows few changes 
unless a state is willing to risk losing this special flexible 
designation.
    Reform of the workforce investment system needs to include fewer 
federal mandates around the state and local workforce investment boards 
and areas and more emphasis on allowing innovative design that improves 
services for customers and more efficient service delivery.
    States that are currently single state workforce areas should be 
allowed to remain and make modifications without the threat of losing 
the designation and additional states should be allowed to re-designate 
as single state workforce areas if doing so improves service delivery 
and efficiency. In addition, governors, through consultation with local 
stakeholders, should be able to re-designate local workforce investment 
areas and report the criteria and rationale for local workforce 
designation to the federal government. WIA should promote alignment of 
workforce investment areas around regional economic or other 
appropriate criteria and not around what is politically expedient.
    Finally, governors should have flexibility around who should be on 
the state workforce investment board, and should have options to 
designate a state economic development or other appropriate council to 
also serve as the state workforce investment board. Reform should 
promote the integration of state economic development, education and 
workforce development policies and service delivery, and should not 
maintain unnecessary barriers to this integration.
    Local workforce investment board membership should be decided 
through a negotiated process between the governor and local elected 
officials, and should not be mandated as part of a ``top down'' 
approach. Broad criteria could be put in a WIA reform bill with 
governor's reporting to the federal government the rationale behind 
state and local workforce investment board structure and membership.
    One-Stop Center Delivery System: The idea behind a ``one-stop'' 
delivery system is sound--workers, job seekers, employers and others 
can access a host of federally-funded employment and training services 
at one physical location or through a coordinated electronic delivery 
system. Unfortunately, due to the ``silo'' nature of the various 
programs and the incentive for those working for individual programs to 
protect their own infrastructure, the costs of maintaining physical and 
technological infrastructure has been borne mainly by the WIA-funded 
programs and Wagner-Peyser. As a result, service coordination has been 
inconsistent from local area to local area and WIA funds are rarely 
used for training services because a vast majority of the dollars are 
paying for personnel, building, utilities, and supplies.
    To strengthen the one-stop system and reduce duplicative, 
``siloed'' infrastructures, integrating funds into the Workforce 
Innovation Fund is the first step to solving the problem. However, the 
federal government should also provide governors with a mechanism to 
identify other employment and job training programs that could be 
delivered through the one-stop system and provide flexibility by: (1) 
allowing the ``pooling'' of administrative dollars for one-stop 
infrastructures; and (2) offering incentives to foster further 
integration. For instance, community colleges and other higher 
education partners maintain an extensive set of physical buildings 
throughout urban, suburban and rural communities. States that develop 
innovative solutions to service delivery by integrating higher 
education infrastructure with the one-stop system could be provided 
incentive funds for promoting efficiency and greater service access to 
customers.

Education and Training Services
    The United States economy has changed dramatically over the past 
two decades as a result of new technologies and globalization. As a 
result, successful attachment to the labor force to include good 
earnings requires access to skills and competencies gained through 
post-secondary education and job training. ``Light-touch,'' low-cost 
employment services do not provide everyone with the ability to compete 
well in the labor market.
    The Obama administration, along with a host of businesses, 
philanthropic foundations, and community-based organizations, have 
called on increasing the number of individuals receiving post-secondary 
credentials including industry-recognized certificates, associate's 
degrees and bachelor's degrees. Along with simply improving credential 
attainment, workforce investment system leaders and managers must also 
ensure that these credentials align with job and career opportunities 
within local and regional labor markets.
    The Workforce Investment Act of 1998, while trying to instill 
accountability for employment results and ensuring that training 
institutions provided skills for available jobs, created a number of 
requirements and mechanisms that have proven difficult to manage and 
have limited customer opportunities for post-secondary education and 
training. Along with system design changes detailed above, specific 
changes to education and training delivery should provide more 
opportunities for individuals to access high-quality post-secondary 
education and training.
    Eligible Training Provider Lists: In order to ensure that training 
participants were receiving quality training attached to labor markets 
outcomes, WIA created the Eligible Training Provider (ETP) lists, a set 
of post-secondary education and training providers maintained by 
states. WIA mandates a set of requirements for states to follow when 
designing and maintaining the ETP, which has only had the effect of 
keeping good providers away from serving WIA customers due to the 
onerous reporting and application burdens.
    To alleviate this challenge, an institution of higher education 
receiving regional accreditation from one of the recognized regional 
accrediting bodies should continue to be automatically eligible as a 
WIA provider. States can set additional criteria focused on programs 
and align eligible provider programs with jobs-in-demand. For post-
secondary institutions accredited through a national accrediting body, 
such as the American Council on Education, a streamlined approval 
process should be provided whereby states could provide expedited 
clearance based on a simple set of standards and business practices. 
For any institution not granted either regional or national 
accreditation, states could set a rigorous set of requirements tied to 
outcomes and accountability reporting.
    Contracting and Individual Training Accounts: More flexibility 
should be granted to states to utilize a training account mechanism 
and/or contracting mechanism when working with post-secondary partners 
on the provision of education and training. Appropriate customer choice 
in training tied to employment is an important principle and should be 
promoted. In addition, opportunities exist for cohort training whereby 
a group of similarly situated workers (sometimes dislocated) would 
benefit by entering a training program at a community college, other 
institution, or appropriate employer-sponsored and/or hosted training. 
States need flexibility to maximize both approaches in order to foster 
increased access to post-secondary education and training services.
    Eliminate Sequence of Services: Currently under WIA, a participant 
must first avail himself/herself to ``core'' and ``intensive'' services 
in order to access training. The premise behind this requirement was a 
promotion of employment as the main outcome of the workforce investment 
system; however, it has promoted a ``one-size-fits-all'' culture to the 
provision of services and has added unnecessary costs as a result of 
meeting the federal sequencing mandate.
    In designing services based on data, employer feedback, and 
industry needs, states should be given flexibility to provide a menu of 
services to participants accessing workforce investment services. 
States should also be encouraged to utilize appropriate assessments, 
up-front, to assist customers with the services most beneficial to them 
in obtaining good-paying jobs.
    Youth Programs: Although it is proposed that the WIA youth program 
be integrated into the Workforce Investment Fund, services to youth 
should be maintained. However, federal requirements should be limited 
to developing eligibility standards in serving the most vulnerable 
youth and should not dictate the manner or impose burdensome reporting 
criteria. A separate summer youth program should not be authorized and 
the focus of youth services should be on helping youth obtain a high 
school diploma and making a transition into a post-secondary program of 
study. A priority should be placed on supporting youth models with a 
proven record of results either through an impact evaluation or other 
recognized mechanism.

Performance and Financial Reporting
    Various employment and job training programs have a myriad of 
performance measures, program definitions, and rules around reporting 
performance as well as financial spending and reporting. The result is 
time-consuming and burdensome reporting requirements for states that do 
not provide a clear picture as to the true effectiveness of many of 
these programs. Changing and conflicting rules and expectations around 
financial spending and reporting have resulted in a lack of consistent 
reporting on obligations and expenditures, thus making the system 
vulnerable to rescissions and reduced appropriations.
    Core Indicators of Performance: The four adult indicators and four 
youth indicators of performance implemented as ``common measures'' 
should be codified in the Workforce Investment Act reauthorization as 
well as applied to all employment and job training related programs 
across the federal government, including Temporary Assistance to Needy 
Families, Carl Perkins, and other discretionary job training grant 
programs. In order to more efficiently report, limited access to the 
National Directory of New Hires should be authorized to efficiently 
obtain data needed on employment and wages while maintaining privacy 
protections.
    Common Definitions and Data Validation: Integrating programs will 
reduce the variety of definitions, but in addition, all employment, 
education, and job training programs should have a mandated use of 
common definitions such as ``entered employment'' or ``job retention.'' 
In addition, states should be given flexibility to define ``work 
engagement'' for purposes of common reporting on programs that require 
this standard. Efforts to validate data are important, but should be 
limited to only those elements and procedures that are absolutely 
necessary to ensure data integrity. In addition, methods for cross 
matching data across programs should be consistent--allowing states to 
modernize and streamline their data and performance systems.
    Financial Reporting: In order to resolve lingering issues around 
obligation and expenditures, WIA reauthorization should clarify that 
the Workforce Investment Fund would allow one year to obligate funds 
and two years to spend funds. Encumbrances should be considered as 
obligations. Limiting carry-over from three years to two years would 
resolve concerns about funds remaining unspent for a long period of 
time. This would streamline financial reporting and provide greater 
transparency for funds.

Administrative Issues
    The U.S. Department of Labor maintains an oversight and technical 
assistance support function that can be costly and may not always 
provide value-added services to the states. Streamlining of 
administrative processes should occur in order to ensure that the 
maximum amount of appropriations is provided to the states for services 
and that bureaucracy is not causing needless waste of state resources 
and staff time.
    Regional Offices: The U.S. Department of Labor, Employment and 
Training Administration currently maintain six regional offices--down 
from ten a decade ago. The responsibility of the six regional offices 
is to provide grant oversight for both formula and discretionary 
grants. State officials are to interface with their appropriate 
regional office and not Washington, D.C. headquarters.
    The regional office structure is a hold-over from pre-internet 
times, when access to affordable telecommunications and air travel was 
also difficult. The premise of this structure is that offices were 
needed close to the states in order to provide technical assistance and 
guidance on a number of programs. However, given that states can 
directly interface with program experts, administrators, and grant 
officers in Washington, D.C., the regional office function could be 
improved.
    Align WIA Reporting Burden: In Utah, the WIA program reporting 
burden as a percent of total administrative costs is five times that of 
other programs. The average cost of reporting for all Utah Department 
of Workforce Services programs is about 1.0 percent of total 
administration. However, WIA is at 5.2 percent and Wagner-Peyser is at 
2.3 percent. U.S. Department of Labor reporting and monitoring burdens 
are significantly higher while funding is significantly less than other 
employment and job training programs.
    Access to Electronic Verifications: Utah recommends that WIA 
reauthorization make provisions for an agreement with SSA for states to 
use the SOLQ/SVES files to verify SSNs and SSI benefits. Additionally, 
having access to VA data to more readily identify Veterans would help 
us serve employers and Veterans. Veterans are one of the nine groups of 
job seekers to qualify for the WOTC. In addition, having VA data would 
help us identify Veterans who are job seekers. The Administration for 
Children and Families and the VA have made this possible through the 
PARIS project for public assistance programs by allowing access to data 
from the VETNET system, so the VA has proven their willingness to work 
with agencies to supply data.
    Inspector General Oversight: The Inspector General plays an 
important role in assuring that grant and other funds are used 
appropriately and for program purposes. However, there are often more 
officials working on Inspector General reports and probes than there 
are federal program officials or state program officials who are tasked 
to maintain day-to-day operations. In addition, Inspector General staff 
are incentivized to ``find something wrong'' so even though there may 
not be an issue, they will still develop ``findings'' in order to 
justify the expenditure of dollars toward a report or investigation. 
Congress should investigate this issue and provide limitations on 
expenditures by the Inspector General when a legal issue (fraud or 
abuse) does not exist within the scope of a report or investigation.

Conclusion
    As our nation struggles with reducing its debt while providing 
critical services, we must ask ourselves how the taxpayer would define 
``value'' and if they would be willing to pay for it. I suggest that 
many of the procedural aspects of WIA could not pass this test. 
However, at its core, WIA provides significant value to the customer 
and to our nation as it elevates the competitiveness and economic 
prosperity of our workforce. WIA reauthorization should rest squarely 
on its core value and discard any efforts to weigh it down with non-
value added activities.
    The State of Utah stands ready to assist the Committee in its 
efforts to bring innovative policy answers that aggressively address 
the Workforce Investment Act. We believe that states are the 
appropriate starting point for re-authorization conversations and 
encourage you to maximize flexibility and allow states to focus on 
helping people find employment and then hold them accountable for doing 
so. Thank you for the opportunity to address the Committee and I look 
forward to answering any questions you may have.
                                 ______
                                 
    Chairwoman Foxx. What a great presentation. If every one of 
our witnesses came in and was as direct and specific as you we 
would be in a lot better situation on this committee.
    Now I would like to recognize Ms. Larrea for 5 minutes.

  STATEMENT OF LAURIE BOUILLION LARREA, PRESIDENT, WORKFORCE 
                    SOLUTIONS GREATER DALLAS

    Ms. Larrea. Thank you very much for having me this morning 
to present testimony. Thank you, members of the committee. I 
would like to offer greetings from Mayor Rawlings. Chair Foxx, 
we went with you and Chairman Kline recently, and was very 
pleased. So I'm extending those greetings from Dallas.
    The Dallas-Fort Worth-Arlington-North Central Texas area is 
where I am from. It is one of the largest regions in Texas, 
fastest-growing. Great economy, but workforce is a critical 
issue for us. The Dallas Workforce Board has, for many years, 
prided itself in having technology to remedy certain 
circumstances. We believe flexibility is critical in any 
reauthorization, but technological solutions should be 
paramount in our discussions.
    In Texas, we have the benefit of five major programs, much 
as Utah discussed--Temporary Assistance to Needy Families, 
Wagner-Peyser Employment Services, supply nutrition assistance, 
the Workforce Investment Act, and Child Care and Development 
Fund. And I bring that in as a very critical issue with 
infrastructure. It assists the families in working. I will say 
a little more of that in a minute.
    In Texas, we have a single authority. The Texas Workforce 
Commission buffers us at the local level from having all of the 
multiple reporting systems, audit systems, and counting 
systems. We have one financial authority, one financial report 
a month, and one critical report of 15 performance measures, 
some of which do measure our performance against service to 
businesses, which is, I think, something the fed should adopt, 
as well.
    The efforts to modernize and innovate the national 
workforce system will be successful if we learned from the 
efforts that we have made in these other States and other local 
areas. Two projects, three projects I would like to discuss 
with you quickly that we have had success in Dallas.
    We have got an in-home learning lab for welfare families. 
After 3,200 families in 10 years, we have discovered that we 
have the greatest return on investment for this process. Most 
families are off of welfare after one year of participation, 85 
percent. And it has the highest post program wage of any 
program we have ever tested.
    In addition, during the recession, we dabbled in programs, 
very non-traditional programs, helping the executives who had 
been displaced, high-level people who were displaced, and could 
not find a way to put themselves back to work. Over a thousand 
people went back to work, at less than $1,000 per customer. 
That was a really big success during the recession.
    The last thing we are doing that is very critical, an 
online workforce center. We know we can not do the brick and 
mortar. It is too costly. So we have an online workforce center 
for job seekers. We are seeing 4,000 a week in our online 
system. We have only kicked it off eight months ago. The next 
step will be to put an employer service page to that same 
website.
    What have we learned from the Workforce? Workforce 
development works best when it is outcome-based, not process. 
Please examine measures for process innuendo. We must look at 
outcomes. The marriage between employer and employee, that is 
what this is about. Everybody works. That is what this whole 
program should be about.
    Workforce development works best when the programs are 
planned, funded, and streamlined through one authority. We do 
not have multiple school districts in the same area, multiple 
water authorities. We have one authority. Workforce is a 
system. It is not the multiple programs that we see at this 
level. It is the system of assistance at the local level for 
employers and job seekers.
    Very importantly, the existing funds are not adequate for 
the volume of job seekers. All of the target funding needs to 
be recognized. In Texas, we do see that the funds identify the 
population for which they were intended. We are very careful to 
see that the monies go to the populations. But we have put it 
all under the same umbrella of workforce.
    The employers do not need to differentiate between the 
targets. Perhaps we do to see that people get their fair share, 
but we should be looking at this as an employer-driven system. 
And that is what Dallas sees as the most important issue. 
Workforce development is best when workforce becomes--the 
convener should be the private sector.
    Private sector majority workforce boards are critical for 
us. Strong conflict of interest and open meeting policies. I 
cannot stress this enough. We have no contracts with 
boardmembers in Dallas except public education. Workforce 
development works best when you work with Chambers of Commerce. 
We have a very strong regional workforce planning effort that 
supports aerospace, health care, infrastructure, logistics, and 
advanced technology.
    Those are the infrastructures that support our workforce. 
We support them. It also works best when you look at the 
infrastructure issue of child care. Child care is very critical 
in the Texas model, and a maximum amount of money is spent on 
the care and feeding of our children. But if a parent cannot 
see quality care for their child they cannot be present for 
work.
    It is very important. Lastly, I leave you with a comment 
from an employer. Primary customer, the employer. When asked 
how workforce development would work best, he had this to 
share. ``We often think of training as specific skills needed 
for the job, and that is true. However, as an employer I am 
seeing the need for broader training to create work-ready 
employees who are willing to work, and grow, and learn new 
knowledge.''
    He is the chairman-CEO of a manufacturing company, Micropac 
Industries, and said that our work was so important as a 
customer, he became a volunteer boardmember. I think that 
counts. I think it means something. We have a system that is 
important to employers if we make it the system they need. And 
they must drive it.
    I thank you for allowing me to speak today.
    [The statement of Ms. Larrea follows:]

       Prepared Statement of Laurie Bouillion Larrea, President,
                   Workforce Solutions Greater Dallas

    Thank you Chairwoman Foxx, Ranking Member Hinojosa and 
distinguished members of the subcommittee for allowing me to present 
testimony today. I am Laurie Bouillion Larrea, President of Workforce 
Solutions Greater Dallas, the workforce investment board serving the 
City of Dallas and Dallas County. Chair Foxx, let me also extend 
greetings on behalf of Mayor Rawlings. He enjoyed his recent 
opportunity to meet with you and Chairman Kline and sends his regards. 
Dallas--Fort Worth--Arlington, the North Central Texas region is one of 
the fastest growing areas in the US. Within Dallas County, a population 
of 2.3 million people, and an unemployment rate of 8.4%, workforce is a 
critical issue. The Dallas workforce system has a proud history of 
innovation and use of technology in reinventing services. Our Mission--
``achieving competitive solutions * * * for employers through quality 
people and for people through quality jobs.'' The primary customer in 
the Dallas workforce system is and always has been the employer 
customer.
    I have worked for the Dallas Board since 1989, and in that time, 
I've witnessed dramatic change and flexibility in state and local 
systems leading to improvements and efficiencies gained from the Texas 
delivery model. We are blessed in Texas with bipartisan legislation 
allowing that ``most'' of the federal employment and job training funds 
are implemented under the authority of the twenty-eight local workforce 
investment boards. Texas' 5 big programs--Temporary Assistance for 
Needy Families, Wagner-Peyser Employment Services, Supplemental 
Nutrition Assistance Program, Workforce Investment Act, and Child Care 
and Development Funds--are awarded to the Texas Workforce Commission--a 
single state authority. The state buffers multiple federal funding 
authorities, each requiring separate state plans, annual reports, 
monitoring, auditing and performance reporting. However, the Texas 
local workforce boards experience a single fund authority, one monthly 
financial report, one set of 15 significant performance measures, and 
uniform monitoring. The usual duplication and overlap of paperwork used 
to cost taxpayers millions of dollars every year. These are dollars 
that are better spent providing services directly to employers and job 
seekers.
    Efforts to modernize and innovate the national workforce 
development system will be successful if we study best practices and 
learn from past experiences. The system has been expanding and growing 
at the state and local levels driven by limited resources and increased 
demand for services. Workforce professionals have embraced change out 
of necessity. Greater need and fewer resources created a laboratory for 
workforce innovation. Over the past years in Dallas we have 
experimented with in-home learning systems for welfare families. After 
ten years and 3200 welfare households, we realize that this computer 
assisted in-home project yields the highest post program earnings for 
former welfare recipients (15% or greater), and the lowest recidivism 
of any welfare to work strategy we've measured (85% are removed from 
welfare). In the most recent three years, we have provided a unique 
assistance center to non-traditional customers--highly prepared and 
educated professionals who lacked the skill to replace themselves 
during the recession. The results were gratifying, (956 placed in 
employment--average wage $109,000 annually--less than $1000 cost per 
placement) and proved that the workforce system exists for every job 
seeker. In the past eight months, we kicked-off a virtual workforce 
center for job seekers. Our online workforce community is a vibrant 
package of self-help, self-assessment and whole community access for 
workforce information, access to Work in Texas (the Texas job bank), 
and daily updates for registered job seekers. We are currently seeing 
activity from nearly 4000 job seekers weekly. Our next step includes 
the development of a similar site for area employers.
    What else have we learned? Workforce development works best when 
performance is judged by outcomes, not process. The most important 
function of the workforce system is the successful marriage of 
employees and employers. There may be a variety of means to that end, 
but the end is the critical product of the system. We must prepare a 
workforce to meet the needs of area employers--in an effort to drive 
economic development and prosperity.
    Workforce development works best when the ``programs'' are planned, 
funded and implemented as a unified system--when the many federal and 
state programs, intended to develop the workforce, are all part of the 
general resources administered by the area workforce boards--multiple 
fund sources provide the opportunity to share costs for administration, 
oversight, and to provide workforce centers that are equipped with 
necessary technology. The system must also retain adequate dollars to 
meet employer driven objectives for job placement. Coalescing resources 
has resulted in economies in auditing, monitoring, and procurement.
    Workforce programs must be better aligned and streamlined to ease 
access and service delivery for both workers and employers. It is not 
the case, however, that there is duplication in the actual provision of 
services for the populations served by these individual programs. While 
the GAO finds that a number of programs offer similar services, it also 
notes that ``Even when programs overlap, the services they provide and 
the populations they serve may differ in meaningful ways.'' Alignment 
of multiple programs must occur without diluting the funds intended for 
the specified population. In Texas, we preserve the original purpose of 
the money and incorporate the targeted customer into our jobs strategy. 
The existing funds are not adequate for the volume of job seekers and 
employers seeking assistance. The resources have to be similar to those 
available to the variety of programs currently in existence to maximize 
the effectiveness. The alignment alone produces cost benefits in 
increasing direct services and better quality.
    Workforce development works best when the workforce board acts to 
convene community partners to lead a system of employer and job seeker 
services. Most importantly, boards must govern. A strong policy and 
oversight board is necessary for this very complex combination of 
services. In addition, board members cannot become mired in staff work. 
Boards in Texas are composed of diverse employer leadership; a majority 
of private sector employers, reflective of the key industries that 
comprise the areas workforce; and are subject to strong conflict of 
interest and open meeting requirements. The Dallas board allows no 
contracts to board members with the exception of public education.
    Workforce development works best in close coordination with 
economic development. The three workforce boards in the Dallas Fort 
Worth and North Central area joined forces with the three major 
Chambers of Commerce--Dallas Regional, Arlington and Fort Worth to form 
the Regional Workforce Leadership Council. Not just another 
organization, but a handshake and a commitment of the six entities to 
support industry sectors--Aerospace, Healthcare, Infrastructure, 
Logistics Manufacturing, and Advanced Technology. The partnership has 
been in existence for over nine years and is responsible for the 
conduct of current worker training, skills identification and 
curriculum development, K-12 programs to encourage the interest of the 
future workforce, and fulfill our shared mission--jobs for North Texas.
    Workforce development works best when we recognize the 
infrastructure necessary to sustain the American worker. In Texas, the 
legislature had the foresight to include Childcare funds as part of 
workforce. Childcare assistance is intended for working parents who 
lack adequate resources, and these resources become an essential part 
of the workers capacity to be present. For those of us who have been 
working parents and relied on the childcare system to enable us to 
work, we know the value of reliable, quality childcare for our 
children. Other than housing, there is no greater expense and 
responsibility for the working parent than to find a consistent, 
healthy and trustworthy environment for our children. The Texas model 
recognized and empowered local workforce boards to provide oversight of 
this significant ``workforce'' expenditure.
    In summary, I'd like to share the reflections of a primary 
customer--an employer. When asked how does workforce development work 
best, he had this to share.
    ``We often think of training as specific skills needed for the job, 
and that's true, however, as an employer, I'm seeing the need for 
broader training to create work ready employees who are willing to work 
and grow through an openness to learning ``new knowledge.'' Anything we 
can do to break down barriers for our potential employees, and enhance 
the connections * * * will have a high rate of return on investment in 
the training and workforce readiness that the Workforce Investment Act 
provides''. The employer is Mark King from Garland, TX. He is Chairman, 
CEO and President of Micropac Industries. He was our customer, and so 
believed in the work of the system, he became a Board member. It's a 
strong signal that the workforce system matters.
    Micropac Industries, Inc. provides microelectronic and 
optoelectronic components and modules along with contract electronic 
manufacturing services. The Company offers a wide range of products to 
the industrial, medical, military, aerospace and space markets. 
Micropac offers both custom and standard products from its ISO 9001 & 
2000 and AS9100:2004. Rev B qualified facilities. There products 
include custom hybrids, high temperature hybrids, power hybrids and 
multi-chip modules, optocouplers, LEDs, Hall Effect sensors and custom 
optoelectronic assemblies.
    Thank you again for this opportunity to speak with you today.
                                 ______
                                 
    Chairwoman Foxx. Thank you very much for your comments.
    Mr. Herman, I would like to recognize you for 5 minutes.

    STATEMENT OF BRUCE G. HERMAN, ORGANIZER AND STRATEGIST, 
                    NATIONAL CALL TO ACTION

    Mr. Herman. Good morning, and thank you for inviting me to 
testify at today's hearings. For the past 4 years I was the New 
York State deputy of labor for Workforce Development. I 
recently left State service in order to engage more directly in 
advocacy initiatives such as the National Call to Action that 
would better address the persistent job crisis that is 
devastating so many of our communities and America's working 
families.
    Today's hearing is focused on the specifics of the 
Workforce Investment Act. However, I would like to begin my 
comments by putting forward a broader framework inclusive of 
the Workforce Investment Act but not limited to WIA. The 
pervasive crisis that is upon us cannot adequately be addressed 
by WIA alone, no matter how much it can and should be improved.
    With 25 million Americans unemployed or underemployed, much 
needs to be done. And further delay will compound the crisis 
and further damage the American economy and society. As we all 
know, poverty is increasing in our nation and many Americans 
will not fully recover from the economic losses they have 
suffered through no fault of their own.
    It is in this context, the context of crisis, that the 
National Call to Action was created. The National Call to 
Action is a voluntary coalition, including labor, business, 
community, public officials. Over the past year-and-a-half, the 
National Call to Action has developed a three-pronged pathway--
retain, restore, and create jobs to revitalize the economy and 
address the lingering employment crisis.
    Reauthorization of the Workforce Investment Act is critical 
to carrying out this strategy. One of the allowable activities 
under WIA Rapid Response is layoff aversion. Layoff aversion 
has saved good, family-sustaining jobs at a fraction of the 
cost of job attraction deals. In early 2010, in New York, we 
launched the Assist-Stabilize-Secure-Empower Turnaround, ASSET, 
program, which assisted more than 100 businesses and benefited 
nearly 4,500 workers through out network partners.
    We found the cost per employee to save these jobs to be 
approximately $138, a clear savings. Layoff aversion, an 
allowable activity under the Workforce Investment Rapid 
Response, should be a mandatory activity. And a system of 
robust technical assistance should be created to build and 
expand best practice.
    Another important proven program that saves jobs and 
provides needed flexibility is Workshare, shared work. An 
alternative to full-time layoffs and the subsequent economic 
devastation far too many Americans have experienced, Workshare 
is truly a win-win-win proposition. At the peak of the 
recession, over 50,000 New Yorkers and 3,000 New York 
businesses accessed shared work for needed flexibility in 
dealing with economic distress.
    Employers value greatly an alternative to full-time layoff, 
knowing full well that finding new skilled employees is a very 
costly undertaking. Workers can manage a partial loss of income 
much more effectively than the economic train wreck of complete 
job loss. And results show that UI dollars are saved because of 
Workshare.
    President Obama's American Jobs Act creates a national 
Workshare program. So overall, much needs to be done to 
preserve good jobs. As that great former New York governor, 
Franklin Delano Roosevelt, once said, ``A job saved is a job 
created.'' Right on. In New York State, we invested heavily in 
on-the-job training, also an allowable activity under the 
Workforce Investment Act.
    In my opinion, one of the most effective, immediate efforts 
that would support businesses willing to hire, and Americans 
willing and able to work, is a robust national OJT project. In 
program year 2007, more than 86 percent of the individuals 
participating in WIA adult dislocated worker-funded OJT 
programs were still on the job 12 months after exiting the 
program.
    This is a much stronger incentive than tax credits which, 
in my experience, are accessed mostly after the hire decision 
has been made. Because New York State requires UI recipients to 
report to one-stops--and we have had a state-funded 
reemployment effort under way since 1998, and have pursued 
federal support to expand our reemployment programs--in 2009 we 
served nearly 306,000 workers.
    That is nearly 28 percent of the nation's participants in 
WIA Title 1-B. Key components of this reemployment effort are 
presented in my written testimony. Some WIA-specific points to 
close. It is not sufficient to just tweak WIA. Look at the 
synergies in combining WIA, TAA, TANF jobs program, a community 
college's workforce development efforts make a lot of sense to 
me.
    But better alignment cannot mean fewer resources. The U.S. 
continues to under-invest in its people, and our global 
competitive challenges reflect this. Flexibility is important, 
but flexibility without accountability to clear demonstrative 
program outcomes is anarchy. Too many workforce investment 
boards are not aligned with regional economies. More 
flexibility is needed to work across State borders.
    Regional economics does not stop at artificial political 
boundaries. Please get out of our way. It is certainly true 
that workforce programs could be better aligned, and 
streamlined to ease access and service delivery for both 
workers and employers. The solution, in my experience, is 
better coordination, some consolidation, aggressive sharing, 
and replication of best practice.
    A block grant approach is a tempting way to fill a budget 
gap in these very challenging fiscal times but would, I 
believe, lead to even more diminished resources available to 
support Americans' quest for better skills, and jobs that will 
sustain their families. Thank you.
    [The statement of Mr. Herman follows:]

    Prepared Statement of Bruce G. Herman, Organizer and Strategist,
                        National Call to Action

    Good morning Chairwoman Foxx and Ranking Member Hinojosa. Thank you 
for inviting me to testify at today's hearing. My name is Bruce Herman 
and for the past four years I was the New York State Deputy 
Commissioner of Labor for Workforce Development. I recently left state 
service in order to pursue new opportunities and engage more directly 
in advocacy initiatives that would better address the persistent jobs 
crisis that is devastating so many of our communities and America's 
working families. The National Call to Action (NCTA) is one of those 
initiatives and I am proud to be part of this effort that brings labor, 
business, community and government together to advocate for a three 
pronged pathway to economic revitalization focused on retaining, 
restoring and creating jobs.
    With 25 million Americans unemployed or underemployed, Congress 
must focus its efforts on policies that help create jobs and put people 
back to work. As we all know, poverty is increasing in our nation and 
many, many Americans will not fully recover from the economic losses 
they have suffered through no fault of their own. Workforce development 
alone can not adequately address the jobs crisis our nation confronts, 
but it is dangerously naive to believe that the American people will be 
successful in the global economy without the ability to access their 
tax dollars to support their just desires to improve their skills and 
connect with family sustaining jobs. We as a nation continue to under 
invest in our people and our global competitive challenges reflect 
this. The question remains--what can be done and what will be done?
    It is in this context, that we are here today to talk about job 
training and the importance of ensuring our nation has the skilled 
workforce necessary to sustain job growth, contribute to economic 
recovery, and lead the world in the 21st century economy.
Why Skills Matter
    There is little doubt that education and training are critical to 
enhancing the competitiveness of U.S. businesses in the global economy, 
and to ensuring that U.S. workers are able to obtain well-paying jobs 
and careers. A 2010 report from Georgetown University's Center on 
Education and the Workforce found that about 63 percent of all job 
openings between 2008 and 2018--nearly 30 million jobs overall--will 
require at least some form of postsecondary education and training,\1\ 
And the U.S. Bureau of Labor Statistics estimates that nineteen of the 
thirty fastest-growing occupations during that same timespan will 
require at least a postsecondary vocational award.\2\ Meeting the 
growing labor market demand for higher skills and credentials will be 
impossible without targeted and timely investments that expand access 
to education and training for workers at all levels.
    In particular, many emerging jobs in critical sectors such as 
health care, clean energy, and advanced manufacturing will be middle-
skill jobs, that is, jobs that require significant education and 
training beyond the high school level, but not a four-year college 
degree. In their 2007 report America's Forgotten Middle-Skill Jobs, 
economists Harry Holzer and Robert Lerman found that these occupations 
make up about half of all jobs in today's labor market, and will 
continue to be the single largest segment of the labor market well into 
the future.\3\ While federal policy can and should support increasing 
U.S. attainment of baccalaureate and advanced degrees, it must also 
support strategies that enable workers to earn associate's degrees, 
occupational certificates, and other industry-recognized credentials 
that prepare them for well-paying middle-skill jobs.
    While the imperative to increase job skills and credential 
attainment impacts all workers and businesses, the recent economic 
crisis has demonstrated that lower-skilled workers face greater 
obstacles entering and remaining in the labor market than average 
workers. For example, in December 2010 workers with less than a high 
school diploma experienced a national unemployment rate of 15.3 
percent, more than triple the rate for individuals with a bachelor's 
degree or higher (4.8 percent), and nearly double the rate for workers 
with at least some postsecondary education, including those with 
associate's degrees (8.1 percent).\4\ Younger workers entering the 
labor market--who often have relatively little formal education beyond 
the secondary level--also faced significant challenges during the 
economic downturn. Nearly a quarter of jobseekers between the ages of 
16-19 were out of work in December 2010.\5\
    Even workers with substantial work experience can be impacted by 
skills deficits. Two-thirds of workers participating in the federally-
funded Trade Adjustment Assistance (TAA) program--which provides 
training and other benefits to workers dislocated due to foreign 
trade--lack any postsecondary education credentials, with a quarter 
lacking even a high school diploma.\6\ A recent report from the 
Department of Labor indicates that workers in the top twenty declining 
occupations often have significant literacy issues, with 54 percent 
scoring ``basic'' or ``below basic'' in prose literacy, and 62 percent 
scoring basic or below in quantitative literacy.
Responding to the Jobs Crisis
    The challenges in putting people back to work in the current 
economy are enormous. Demand for services is skyrocketing--last year 
more than 9 million individuals received training and other employment 
services programs funded under Title I of the Workforce Investment Act 
(WIA), a 248 percent increase in participation in just two years--while 
federal funding is being slashed. Yet by capitalizing on the 
flexibility that already exists in the system, some states and local 
communities have been able to implement strategies that are making a 
difference.
    For example, in New York State, as we were hemorrhaging jobs during 
the height of the recent recession, we capitalized on the flexibility 
that currently exists under WIA to focus on layoff aversion strategies, 
an allowable activity under the WIA Rapid Response program that, where 
practiced well, has saved good family sustaining jobs at a fraction of 
the cost of trying to attract new jobs to replace those that are lost. 
In early 2010 we launched the ``Assist, Stabilize, Secure, Empower, 
Turnaround'' (ASSET) program. This pilot effort produced good results, 
since its inception in early 2010; NY ASSET has assisted more than 82 
businesses, benefitting roughly 4,456 employees through our network of 
partners. The NY ASSET turnaround team has provided assistance to 22 
businesses, helping 1,281 employees in those businesses. We have found 
that the cost per employee to be approximately $138. Importantly, we 
learned from what other states had already done--like Pennsylvania's 
Strategic Early Warning Network (SEWN), one of the country's most 
developed and successful layoff aversion programs--and were able to 
share our experience with other states, like Texas, so they could adapt 
our program to meet their needs. This would have been much easier, 
though, if layoff aversion were made mandatory under WIA and a system 
of robust technical assistance were created to build and expand best 
practice.
    In New York State we also invested heavily in on-the-job training 
(OJT), an allowable activity under WIA. OJT services may be funded 
using local formula dollars under the WIA Adult and Dislocated Worker 
funding streams, and must be provided through contracts between local 
workforce investment boards (WIBs) and employers in the public, private 
non-profit, or private sector. As part of an OJT agreement, employers 
must agree to hire or employ eligible individuals, provide them with 
skills training over a specific period of time, and pay wages at the 
same rate as similarly situated employees of the employer. In exchange, 
employers are eligible to receive a subsidy of the OJT employee's wages 
to cover the extraordinary costs of training. OJT activities may not 
lead to the full or partial displacement (including reduced hours or 
wages) of a currently employed individual, and cannot be provided if 
any other any other individual is on layoff from the same or 
substantially equivalent job. OJT activities may not impair an existing 
contract for services or a collective bargaining agreement, and any 
activities that would be inconsistent with the terms of a collective 
bargaining agreement must be approved in writing by the employer and 
the labor organization.
    OJT provides significant advantages for both businesses and 
workers. Employers are able minimize the upfront costs of training and 
supervision for new employees, ensure that training is aligned with 
actual skill requirements of the job, and realize immediate gains in 
productivity as workers learn on the job. Employees participating in 
OJT benefit because they are receiving a paycheck while acquiring the 
skills to perform effectively on the job and advance their careers 
beyond the lifespan of the training program. And evidence indicates 
that OJT can have a lasting impact: in PY 2007, more than 86 percent of 
individuals participating in WIA Adult and Dislocated Worker-funded OJT 
programs were still on the job twelve months after exiting the 
program.\9\
    Another strategy we adopted in New York State was to develop a 
robust reemployment program that is focused on improving alignment and 
connectivity between WIA, the Wagner-Peyser Employment Services, and 
the Unemployment Insurance (UI) program. Key components of this 
reemployment effort are:
     Front end skills based assessments
     Not just state inter-agency collaboration but strong Local 
Workforce Investment Board engagement (bias against UI recipients can 
be firmly planted in WIA world)
     Rapid Response and Trade Adjustment Assistance are key 
feeders
     Regional One Stop Business Services Teams to better 
connect w/employers
     Develop common case management system across all agencies 
with workforce development and employment programs.
    Because New York State requires UI recipients to report to One-Stop 
career centers, has had a state funded reemployment effort underway 
since 1998 and has pursued federal support to expand our reemployment 
program, we served nearly 28 percent of the nation's participants in 
WIA Title 1B in 2009 (305,924 dislocated workers) and still met our 
employment goals. I would stress that we were able to do this under 
current law by capitalizing on existing flexibility in the system. For 
us, these efforts were always a question of alignment, not 
consolidation.
    Another important, proven program that we adopted in New York is 
Work Share/Shared Work. An alternative to full time layoff and the 
subsequent economic devastation far too many Americans have 
experienced, Work Share is a truly win- win-win proposition. Employers 
value greatly an alternative to fulltime layoff knowing full well that 
finding new, skilled employees is a very costly undertaking. Workers 
can manage a partial loss of income much more effectively than the 
economic train wreck of complete job loss. And results show that UI 
dollars are saved because of Work Share. NYS's Shared Work program 
saved tens of thousands of jobs in the teeth of the worst economic 
crisis in our lifetime. At the peak of the crisis over 50,000 New 
Yorkers and 3,000 New York businesses accessed Shared Work for needed 
flexibility in dealing with economic distress. And while Work Share is 
primarily a UI program, because we align our UI and WIA programs in New 
York, we assure that workers participating in Work Share who could 
benefit from training are referred to the appropriate education and 
training services.
    Local communities in New York State have also developed a number of 
innovative sectoral programs to better engage employers, and ensure 
that job training is connected to real jobs.
     In 2007, the New York State Department of Labor launched 
its 13N Transformational Sectors Strategies initiative, a program to 
help local Workforce Investment Boards (WIBs) create and support 
regional sectoral initiatives throughout the state. By focusing on the 
workforce and education needs of industry sectors, these grants are 
helping to develop pipelines of workers with the middle-skill 
credentials needed to drive regional growth and competitiveness. For 
example, the Western New York Regional WIBs are using these grants to 
expand the growth of high-wage jobs in the advanced manufacturing and 
life sciences industries in the region, combining education, workforce 
and economic development strategies to create an educational pipeline 
to ensure these businesses have the skilled workforce they need to 
expand and compete. By creating demand-driven training on a 
regionalized but statewide basis, this innovative model is one example 
of how New York is taking initial steps toward creating more demand-
driven education and training opportunities for its workers.
     The Finger Lakes Advanced Manufacturers' Enterprise, or 
FAME, is an initiative of the Finger Lakes Workforce Investment Board 
and a collaborative public/private partnership of regional stakeholders 
working to attract and grow the workforce talent in advanced 
manufacturing in the Finger Lakes region. Through the Finger Lakes 
Community College, this unique, high-tech, hands-on degree program 
offers students an opportunity to learn the tools and techniques of 
emerging technologies which are crucial for designing, testing, 
manufacturing and quality control in industrial, commercial, medical 
and other settings.\10\
     For New York City residents interested in health care and 
seeking career advancement opportunities as a pathway out of poverty, 
NYC's Workforce1 Healthcare Career Center at La Guardia Community 
College offers training for individuals in several high-wage, high-
growth health care occupations. Providing a full range of training and 
job placement services to new jobseekers and incumbent workers, the 
Center is part of a sector-focused approach to career training that 
leads to higher wages for workers and better outcomes for businesses.
     Serving the Brooklyn community, Opportunities for a Better 
Tomorrow helps disadvantaged older youth and young adults advance 
towards self-sufficiency and financial security through job training, 
academic reinforcement, improved life skills, job placement, and 
support services. OBT's youth training model is an intensive 20-week 
program that includes GED classes (if needed), business math, business 
English, office procedures, computer classes, public speaking and 
communications, and a world-of-work module. With an overall job 
placement rate of 85 percent annually, OBT has helped over 5,000 young 
people and 2,500 adults improve their lives and the lives of their 
families since its founding in 1983.
     The New York City Department of Small Business Services 
partnered with the New York City Workforce Funders, a coalition of 
foundations that invest in local workforce development activities, on 
the New York City Sector Initiative (NYCSI), a multi-million dollar 
initiative that supported the development of career-track training and 
job placements for several hundred New Yorkers in a range of health 
care and biotechnology job titles. As public funding for job training 
and employment services continues to fall, new models for investment 
will be necessary to support services at a level commensurate with 
demand.
    For all of these initiatives we drew on WIA resources and 
infrastructure, capitalizing on existing flexibility in the system to 
develop innovative solutions to extremely difficult problems. And while 
WIA provided an important foundation for this work, too often we ran 
into obstacles under the law that we had to find ways around. There is 
no question there is room for improvement in the system, but in many 
ways we already know what is working on the ground. The challenge now 
is for federal policy to catch up with best practices in the field.
WIA Reauthorization
    I am extremely pleased by the committee's efforts to reauthorize 
WIA, the core of our nation's federal workforce development system. In 
1998, Congress established WIA as a framework for the nation's 
workforce development system. The law replaced multiple existing 
training programs with state formula grants, and created a nationwide 
network of locally administered ``one-stop career centers'' where both 
workers and employers could access training, employment, and support 
programs administered through the U.S. Department of Labor (DOL) and 
other agencies, such as the U.S. Departments of Education and Health 
and Human Services. Due to be reauthorized nearly a decade ago, WIA has 
failed to keep pace with changing economic conditions. The law's 
original emphasis on short-term training and rapid re-employment is 
increasingly inconsistent with growing demands for longer-term training 
aligned to high-growth and emerging industries.
    Failure to reauthorize this program will continue to leave federal 
job training programs vulnerable to funding cuts. Formula funding for 
WIA has declined by more than 30 percent since 2001, losing more than 
$300 million in formula funding in FY 2011 alone. Such cuts will not 
only lead to disruptions in services--including the likely closure 
onestop centers and training programs in communities across the 
country--and will impact the ability of our nation's employers to find 
the skilled workers they need to fill immediate job openings and plan 
for future growth.
    I know that some members of Congress have expressed concern about 
the effectiveness and efficiency of the current workforce development 
system, and I feel strongly that the best way to begin addressing these 
concerns is through the reauthorization process.
    An effective workforce development system should do three things: 
1) engage employers through sector partnerships to better ensure that 
training is connected to real jobs and that limited investments are 
effectively targeted in local and regional economies; 2) create career 
pathways to ensure training is readily available and easily accessible 
so that a diversity of workers can enter, persist, and succeed; and 3) 
hold the system accountable for credential attainment to ensure that 
limited federal investments result in the attainment of industry-
recognized credentials, vocational certificates, or degrees that have 
value in the labor market.
    Toward this end, I would make a number of specific recommendations 
for WIA reauthorization.

Specific Recommendations
            Title I--Workforce Systems for Adults, Dislocated Workers, 
                    and Youth
            Increase the Number of Individuals Receiving Training
    As Congress considers reauthorizing WIA Title I, policymakers 
should ensure that the program is supporting high quality education, 
training, and related services that provide a diversity of jobseekers 
with the necessary skills to obtain, retain, and advance in well-paying 
occupations and careers.
    Significantly strengthen focus on attainment of postsecondary 
degrees, certificates, and other industry-recognized credentials under 
WIA Title I. Establishing meaningful goals and performance measures for 
credential attainment would enable policymakers to determine how 
successful the public workforce system is in meeting the skill 
requirements of jobseekers and employers on a national, regional, and 
local basis, while allowing state and local workforce agencies to 
emphasize the kinds of longer-term training that leads to well-paying 
jobs and careers for participants, rather than focusing on rapid labor 
market attachment encouraged under current performance measures. 
Specifically, Congress and DOL should:
     Require that credential attainment be a core performance 
indicator under Title I;
     Set numeric goals for state and local Workforce Investment 
Boards (WIBs) to increase training and credential attainment, 
consistent with DOL's Employment and Training Administration's goal of 
increasing the number of individuals earning degrees, certificates, and 
other industry-recognized credentials by 10 percent by 2012;
     Require states to include the list of credentials offered 
by Eligible Training Providers (ETP) on state ETP lists;
     Incentivize collaboration between WIBs and education and 
training providers to develop and implement innovative training 
programs that increase credential attainment for low-skilled adults, 
including integrated education and training programs that combine adult 
education and occupational skills instruction; and
     Recognize and promote local or regional credentials 
developed through sector partnerships or other employer consortia 
within a specific industry or geographic area, and delivered by a 
qualified training provider.
    Support career pathways under WIA Title I. A number of states have 
begun to implement career pathways strategies which align adult 
education, job training, and higher education programs to allow 
participants to obtain progressive educational or occupational 
credentials even as they continue to work,\11\ but their efforts could 
be strengthened by:
     Requiring states and local areas to set and meet goals for 
co-enrollment of participants in WIA Title I and Title II programs, and 
require that co-enrollment percentages increase over time;
     Establishing performance measures for Title I that reward 
states and local areas for interim outcomes along career pathways, such 
as GED attainment or completion of postsecondary courses leading to an 
industry-recognized degree, certificate, or other credentials;
     Clarifying how WIA Title I funds may be used in 
conjunction with Pell Grants, and ensure that local workforce staff are 
trained to assist participants in accessing the full range of student 
assistance they need to succeed in training; and
     Providing states and local areas with flexibility to merge 
Title I and Title II funds as necessary to support integrated education 
and training programs and other innovative strategies that provide 
services through multiple education and training programs.
    Congress should also eliminate the current sequence of service 
requirements; increase overall formula funding for WIA programs to at 
least the level of combined spending under the American Recovery and 
Reinvestment Act and regular Fiscal Year (FY) 2009 appropriations bills 
to ensure that local WIBs and one-stops have the necessary resources to 
respond to heightened demand for services; create and fully fund a 
separate line item under DOL's budget to support one-stop 
administrative and infrastructure costs while requiring that a minimum 
percentage of WIA formula funds be used to directly support job 
training; and retain the Recovery Act provision that allows local WIBs 
to contract for training services for multiple participants where such 
practices do not limit consumer choice.

            Invest in Sector Partnerships to Effectively Target Scare 
                    Training Resources
    Sector partnerships are industry-led collaboratives between key 
stakeholders connected to a local or regional industry that optimize 
investments by carefully targeting training to local and regional 
employer skill needs. Recent research demonstrates that well-designed 
sector programs can have significant positive outcomes for low-income 
workers, including earnings gains, steadier employment, and increased 
access to health care and other benefits.\12\ In 2010, the House of 
Representatives passed legislation--the SECTORS Act (HR 1855)--that 
would have established designated capacity and funding to support 
sector partnerships under WIA;\13\ Congress should incorporate the 
language from this bill as part of a broader WIA reauthorization 
effort.

            Maintain and Improve the Public Workforce Infrastructure
    The public workforce system coordinates a range of federally-funded 
training programs and services that address the distinct and specific 
needs of different worker populations and industries. The state-
administered Employment Service\14\ provides critical job search, 
labor-market information, and other core services, while locally-
administered WIA Title I programs provide assessment, training and 
supportive services, and employment services to both jobseekers and 
employers. Prior reauthorization efforts have been stalled, in part, by 
attempts to merge WIA and the Employment Service, or to eliminate the 
Employment Service altogether. The resulting confusion, rather than 
achieving new efficiencies, would likely lead to further friction in 
the distribution of training funds, unemployment insurance, or sound 
labor market information to workers in need. Congress should reject any 
such efforts in the future and focus its efforts on increasing 
effective coordination between the two systems while also ensuring 
adequate funding for each program.

Title II--Adult Education and Family Literacy Act
            Increase Investments in Adult Basic Education
    Adult education programs are severely underfunded and are simply 
unable to provide the services and supports low-skilled individuals 
need. The Adult Education and Family Literacy Act (AEFLA) state grants 
have declined by more than 17 percent in inflation-adjusted terms 
between FY 2002-2009. Fewer than 3 million low-skilled individuals are 
served by federally-funded adult basic education programs each year, 
and those who do manage to get served see an average investment of just 
$645 per student annually.\17\ Congress should significantly increase 
funding for state adult basic education formula grants; maintain 
current state maintenance of effort (MOE) requirements; and consider 
additional funding for competitive grants to states and localities to 
support innovative service delivery strategies and systems alignment.

            Focus on Career and Postsecondary Success
    Under current law, federal adult education funds can be used to 
support a wide range of activities, such as family literacy programs, 
that are not directly related to enhancing participants' employment or 
educational prospects. Congress should set increasing career and 
postsecondary success for low-skilled individuals as the primary 
purpose of AEFLA, and limited federal resources should be devoted 
exclusively to helping those individuals who are pursuing adult 
education and literacy services as a means to succeed in the workplace 
or in postsecondary education and job training. State, local, or other 
funding sources should continue to be available to meet other literacy 
and adult education needs. Congress should modify the current 
performance accountability system to require that workforce outcomes be 
reported for all Title II participants, which would reduce current 
incentives for Title II providers to avoid discussing employment goals 
with participants at intake to reduce post-completion data collection. 
Congress should include measures of postsecondary success beyond 
enrollment--including attainment of industry-recognized credentials or 
completion of college-level coursework--to ensure that adult education 
programs are adequately preparing individuals to succeed in 
postsecondary training and education programs.

            Prepare More Workers for the 21st-Century Economy
    Between Program Year (PY) 2004--2007, the percentage of adults who 
exited WIA Title I who were also co-enrolled in adult basic education 
programs declined from about 0.7 percent to 0.2 percent.\18\ This 
suggests that many individuals seeking adult education services to 
enhance their career prospects are not taking advantage of the range of 
employment and supportive services--including child care and 
transportation assistance--that are available under Title I, and are 
enrolling in programs that may not be adequately aligned with entrance 
requirements for occupational training and postsecondary educational 
programs. Congress should explicitly permit activities offered under 
Title II to be provided before, or in combination with, work or 
postsecondary education and training activities. In particular, 
Congress should consider removing current restrictions on the use of 
Title II dollars to support occupational training if offered as part of 
an integrated education and training program or similar service 
delivery model. Congress should address ``creaming'' issues related to 
conflicting performance requirements by allowing programs offering 
services to dual-enrolled individuals to track a single set of 
performance outcomes for such participants, and should require states 
and local areas to set and meet annual co-enrollment goals between 
Title I and Title II.
    Congress should also consider providing grants to states to support 
program alignment efforts across state and local agencies, and 
authorizing state and local grants to support the development of 
innovative service delivery strategies leading to industry-recognized 
credentials along well-defined career pathways within key industries. 
Congress should consider separate performance measures for these 
programs, rather than holding them accountable for the current adult 
education performance measures, and conduct an evaluation of the impact 
of integrated programs on the rate at which students attain career and 
postsecondary success.
    WIA reauthorization is long overdue; it is an important tool to 
help address the economic challenges that surround us. Our nation is 
tethered to the global economy, which we have embraced, but not 
adequately understood or addressed in terms of its impact on America's 
working families. We must recognize that globalization impacts us all 
and impacts a large number of Americans in very negative ways. The time 
is long overdue to recognize this reality and move toward a system of 
Globalization Adjustment Assistance for All. It is the right thing to 
do with a piece of our tax dollars.

                                ENDNOTES

    \1\ http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/
FullReport.pdf.
    \2\ http://www.bls.gov/news.release/ecopro.t07.htm.
    \3\ http://www.nationalskillscoalition.org/assets/reports-/
americasforgottenmiddleskilljobs--2007-11.pdf.
    \4\ http://www.bls.gov/web/empsit/cpseea5.pdf.
    \5\ http://www.bls.gov/web/empsit/cpseea13.pdf.
    \6\ http://www.doleta.gov/tradeact/docs/AnnualReport10.pdf.
    \7\ http://wdr.doleta.gov/research/FullText--Documents/Workers--
in--Declining--Industries--Literacys--Role--in--Worker--
Transitions.pdf.
    \8\ http://www.bls.gov/news.release/pdf/empsit.pdf.
    \9\ http://www.doleta.gov/performance/results/pdf/PY2007--WIASRD--
Data--Book.pdf (see p. 92 for Adult retention rates, p. 176 for DW 
retention rates)
    \10\ For more information about the Finger Lakes Advanced 
Manufacturer's Enterprise, visit http://www.nyfame.org/about.asp.
    \11\ See, for example, the Joyce Foundation's Shifting Gears 
Initiative, which was launched in six Midwestern states in 2006. http:/
/www.shifting-gears.org/.
    \12\ http://www.ppv.org/ppv/publications/assets/325--
publication.pdf.
    \13\ HR 1855; see http://www.nationalskillscoalition.org/federal-
policies/sector-partnerships/ for additional information about the 
SECTORS Act and sector partnerships.
    \14\ Authorized under the Wagner-Peyser Act (WIA Title III).
    \15\ Calculations by National Skills Coalition based on Department 
of Education data.
    \16\ http://www.nationalcommissiononadultliteracy.org/
ReachHigherAmerica/ReachHigher.pdf, pg. v.
    \17\ http://www.nationalcommissiononadultliteracy.org/content/
strawnbriefrev101807.pdf.pdf, pg. ii.
    \18\ http://www.doleta.gov/performance/results/pdf/PY--2008--
WIASRD--Data--Book--FINAL--1192010.pdf.
                                 ______
                                 
    Chairwoman Foxx. Thank you very much. I want to compliment 
the first three of you for doing so well on the time. Thank you 
so much for doing that.
    Now I would like to recognize Mr. Fall for 5 minutes.

   STATEMENT OF JAIME S. FALL, VICE PRESIDENT, WORKFORCE AND 
        TALENT DEVELOPMENT POLICY, HR POLICY ASSOCIATION

    Mr. Fall. Chairwoman Foxx, Ranking Member Hinojosa, and 
honorable members of the subcommittee, on behalf of the HR 
Policy Association I want to thank you for the opportunity to 
appear before you today. Unfortunately, neither the chair of 
our workforce development committee, Eva Sage-Gavin of Gap, nor 
chair of our public policy committee, Sue Suver of the U.S. 
Steel Corporation, could be present today.
    I am pleased to appear in their place, and we appreciate 
the opportunity to discuss the views of chief human resource 
officers regarding the role of business in WIA programs. HR 
Policy Association is the lead organization of chief human 
resource officers of more than 330 of the largest corporations 
doing business in the U.S. and globally.
    These are people who make the hiring decisions for 
companies that employ more than 10 million workers in the 
United States, nearly 9 percent of the private sector 
workforce. I have worked in the workforce development arena 
since 1995, spending nearly 10 years here in Washington at the 
National Association of State Workforce Agencies and the U.S. 
Department of Labor's Employment and Training Administration.
    Most recently, I served as deputy secretary of the 
Employment and Workforce Development for Governor Arnold 
Schwarzenegger in California, where I had responsibility for 
workforce programs. As chronicled in the Association's 
Blueprint for Jobs in the 21st Century, HR Policy Association 
members believe the workforce system must be closely aligned 
with the nation's business community to ensure that training 
that is purchased with federal funds results in job 
opportunities for workers in a highly-skilled workforce for 
employers.
    Therefore, we make the following recommendations. The 
federally-funded workforce system must be employer-driven. The 
nation's workforce system can only be successful in building 
the skills of job seekers and helping them secure employment if 
it is closely linked with employers. State and local boards 
must continue to be led by business majorities and chaired by 
business leaders.
    In turn, those business leaders need to drive State and 
local boards to make the current and future skill needs of 
their region's business community the central focus of all the 
training decisions and investments made with these scarce 
resources. Industry-recognized credentials should be the focus 
of training funded through WIA. The value of training is 
measured in the quality of job opportunity it enables 
participants to receive.
    The best way to ensure training results in quality job 
opportunities is to invest in training that leads to industry-
recognized credential which certifies that job seekers have the 
skills in demand by employers and have mastered proficiency in 
those skills. The workforce investment system needs to be 
evaluated on how it meets the needs of employers.
    The effectiveness of the workforce system is currently 
measured on how it serves job seekers. However, a close, 
effective working partnership with employers is the foundation 
upon which these results depend. Therefore, as proposed in the 
Senate draft bill, a new performance measure should be 
developed to measure the effectiveness of the workforce system 
and its services to businesses.
    Access to services provided through the workforce system 
must be made easier for employers with facilities in multiple 
locations. The magnitude and complexity of forming partnerships 
with multiple local areas in one-stop centers discourages many, 
if not most, large national employers from participating in the 
workforce development system.
    More needs to be done to ensure that large national 
employers have easier access to services so job seekers can 
more easily be placed into available positions. Employers and 
local boards need more flexibility to negotiate training 
agreements. Although the workforce investment system was 
created to be a locally-designed and flexible system, barriers 
have developed over the life of the program that limit the 
flexibility employers and local boards have to negotiate 
training agreements that meet the needs of the local area.
    These agreements, generally aimed at preventing layoffs or 
upgrading the skills of existing workers, could help maximize 
highly effective and proven services to employers, such as 
incumbent worker training and on-the-job training. More 
flexibility should be given to employers and local boards to 
form the partnerships that are most beneficial to the regional 
economy.
    HR Policy Association encourages you to use this process to 
strengthen the connection between employers and the workforce 
system. Employers must be in a perpetual cycle of innovation to 
find better ways to do everything. If our job training system 
is to be successful it must do the same, with employers leading 
the way.
    In closing, although it is not directly related to our 
discussion here today, our members believe that career and 
technical education programs funded through the Perkins Act are 
a critical component of the overall national strategy to 
develop a skilled workforce. We encourage you to strongly 
support these programs as you discuss WIA, No Child Left 
Behind, and the Perkins Act.
    Thank you for the opportunity to appear before you today. I 
will be happy to take any questions. Thank you.
    [The statement of Mr. Fall follows:]

          Prepared Statement of Jaime S. Fall, Vice President,
     Workforce and Talent Development Policy, HR Policy Association

    Chairwoman Foxx, Ranking Member Hinojosa and honorable members of 
the subcommittee: On behalf of the members of the HR Policy 
Association, I want to thank you for the opportunity to appear before 
you today. Unfortunately, neither the Chair of our Workforce 
Development Committee, Eva Sage-Gavin, Executive Vice President, of 
Human Resources and Corporate Affairs for Gap, Inc. nor the Chair of 
our Public Policy Committee Sue Suver, Vice President, Human Resources, 
of the U.S. Steel Corporation could be with you here today due to 
longstanding prior commitments. I am very pleased to appear in their 
place and we appreciate the opportunity to be here to discuss the views 
of chief human resource officers regarding the role of business in 
federally funded Workforce Investment Act programs.
    HR Policy Association is the lead organization representing chief 
human resource officers of major employers. The Association consists of 
more than 330 of the largest corporations doing business in the United 
States and globally, and these employers are represented in the 
organization by their most senior human resource executive. 
Collectively, their companies employ more than ten million employees in 
the United States, nearly nine percent of the private sector workforce, 
and 20 million employees worldwide. They have a combined market 
capitalization of more than $7.5 trillion. These senior corporate 
officers participate in the Association because of their commitment to 
improving the direction of human resource policy. Their objective is to 
use the combined power of the membership to act as a positive influence 
to better public policy, the HR marketplace, and the human resource 
profession.
    By way of personal background, I started working in the workforce 
development system back in 1995. I've held positions in both large and 
small states. I've also spent about 10 years here in Washington working 
at the National Association of State Workforce Agencies and the
    U.S. Department of Labor's Employment and Training Administration. 
Most recently, I served as Deputy Secretary of Employment and Workforce 
Development for Governor Arnold Schwarzenegger where I had 
responsibility for workforce programs including our State Workforce 
Investment Board.
    As chronicled in the Association's Blueprint for Jobs in the 21st 
Century: A Vision for a Competitive Human Resource Policy for the 
American Workforce, HR Policy Association members believe America is 
experiencing fundamental long-term structural economic changes that 
require long-term policy changes to restore the nation's 
competitiveness. The 21st century has brought with it new global 
economic forces that are transforming the way work is done, where it is 
done, by whom it is done, and the skills needed to get it done.
    Caught in the middle of this transformation is the American worker, 
who is discovering that the skills and infrastructure that enabled 
success in the 20th century have fundamentally changed. Technology is 
being deployed at increasingly rapid rates, resulting in high 
productivity and less expensive products and services, but also lower 
employment levels. New products and services are born and then become 
obsolete in a matter of months, and the skills needed to produce, 
market, service, and sell them are in constant evolution. Americans are 
not being educated in sufficient numbers to meet the demands of today's 
highly technical work processes and products. Most importantly, there 
is not enough coordination between all the various institutions 
involved in generating economic opportunity--employers, educators, 
government, and employees--to take the steps necessary to restore 
America's competitiveness and provide employment security for today's 
workers.
    The members of HR Policy Association are the chief human resource 
officers responsible for employing more than ten million Americans. 
Most of their companies operate globally, and they have firsthand 
knowledge of government polices and economic systems that work as well 
as those that fail to provide employment security and job growth for 
their citizens. These are their unique perspectives on the role of 
employers in a newly redesigned workforce investment system to make the 
system stronger and more effective for employers and jobseekers alike.

The Federally Funded Workforce Development/Job Training System Must Be 
        Employer-Driven
            Background
    The authors of the Workforce Investment Act of 1998 crafted the 
legislation so that businesses would have a great deal of influence in 
how the programs funded under the law are carried out.\1\ The current 
law requires that state and local workforce investment boards that 
oversee the activities of the federally funded system be led by 
business majorities. The strong role of business was built into the law 
to ensure a close link between those who create jobs and hire workers 
and the job training programs funded to prepare workers with the skills 
they need for the jobs of today and the future.
            Status
    While some state and local workforce boards have flourished under 
strong business leadership, this has not been the case everywhere. 
Business leadership on some state and local boards has deteriorated to 
the point where the boards struggle to maintain the required business 
majority. Many ineffective state and local boards deteriorated through 
a cycle that saw the board dealing with administrative matters instead 
of key policy making decisions which resulted in the business 
representation being relegated to progressively less and less 
influential leaders in the business community. This, in turn, led to a 
further decline in the influence the business leaders had over the 
activities of the system. Though some might argue which factor 
contributed first or most to the cycle of decline, few would argue that 
strong and engaged business leadership has been one of the most 
critical elements present in effective state and local boards.
    One of the most effective efforts used by boards to connect the 
skill needs of employers to the workforce system is ``sector 
strategies.'' \2\ These partnerships bring together employers, 
education and training providers, community based organizations, and 
other key partners around a specific regional industry. Their goal is 
to develop strategies to meet the workforce needs of employers by 
aligning programs to meet those needs. Over the last decade, industry 
sector initiatives have developed in most of the major industries and 
in nearly every state.\3\
    However, in spite of the success of these initiatives developed by 
the business led state and local boards, under the discussion draft of 
the Workforce Investment Act reauthorization legislation released by 
the Senate Health, Education, Labor and Pensions Committee the employer 
majority led state boards would be replaced by boards consisting of 
one-third business, one-third employee representatives and one-third 
government program providers.
    HR Policy Association members believe it is critical to further 
strengthen the links between employers and job training programs and 
the proposal to weaken the role of business on state boards would be a 
grievous strategic error. This diminishment of the role of private 
sector employers in the programs would not only weaken their 
effectiveness but would be a tremendous disservice to those who rely on 
these programs to obtain the skills employers need to be competitive.
    If anything, the WIA Reauthorization process should strengthen the 
connection between employers and the workforce system. Employers are 
under even more intense competitive pressure than they were when WIA 
was passed in 1998. Employers have to be in a perpetual cycle of 
innovation to find better ways to do everything. If our job training 
system is to be successful, it has to be receiving real-time 
information from employers on the skills they need and adjusting 
training programs to meet those requirements.
            Position
    The federally funded workforce investment system must be employer 
driven. The nation's workforce investment system can only be successful 
in building the skills of jobseekers and helping them secure employment 
if it is closely linked with employers. State and local workforce 
investment boards must continue to be led by business majorities and be 
chaired by business leaders. For those boards to achieve their 
objectives, they will need to be driven by business leaders in order to 
make the current and future workforce/skill needs of their regions' 
business community the central focus of all the training decisions and 
investments made with these scarce resources. This will also receive 
greater engagement by employers in curriculum development, identifying 
needed credentials and implementing sector partnerships.

Industry Recognized Credentials Should Be the Focus of Training Funded 
        Through the Workforce Investment Act
            Background
    Congress designed the federally funded workforce investment system 
to provide employment and training opportunities for Americans to 
``meet the challenge of the changing workplace by enabling men and 
women to acquire the skills required to enter the workforce and to 
upgrade their skills throughout their careers.'' \4\ It was meant not 
just to help workers keep up, but to get ahead. However, as 
unemployment rose and hiring slowed during the recent recession, it 
became more challenging for the system to place unemployed jobseekers 
in jobs.
    There are approximately 5 unemployed Americans for every available 
job opening compared to less than 2 for every job opening in 2007.\5\ 
Moreover, there is a significant mismatch between what skills the 
unemployed have and where the job openings are. For example, in 2010, 
there were almost 25 unemployed construction workers for every job 
opening in the construction industry, 9 unemployed manufacturing 
workers for every job opening in manufacturing, and almost 7 unemployed 
transportation and utility workers for every job opening in those 
industries.\6\ On the other hand, in May 2011, professional and 
business services and the health care industry had the most job 
openings and relatively few unemployed workers with those skills 
looking for jobs.\7\
    The success of the workforce investment system rests on its ability 
to complete the very difficult challenge of assessing the skills of 
jobseekers, helping them quickly develop the skills that employers need 
and are currently looking for in the workplace, and then assisting the 
newly skilled jobseeker to secure employment.
            Status
    One proven and effective way to ensure the skills developed through 
job training programs meet the needs of employers is to fund more 
training resulting in employer recognized credentials that document 
skills. However, as the economy worsened, the ranks of the unemployed 
ballooned and demand for services skyrocketed, the training funded by 
the workforce investment system resulted in fewer credentials being 
received. In program year 2005, more than 75 percent of those who 
received training obtained a credential. But by program year 2008, that 
number had dropped to just over 66-percent.
    The U.S. Department of Labor has recognized the value in and the 
need for more credentialing and has made it an agency goal that by June 
2012, there will be an increase of 10 percent (to 220,000) in the 
number of people who receive training and attain a degree or 
certificate through programs funded through the Workforce Investment 
Act.\8\
    Some in Congress realize the importance of industry recognized 
credentials. Senator Kay Hagan, (D-NC) has introduced the American 
Manufacturing Efficiency and Retraining Investment Collaboration 
Achievement Works Act or AMERICA Works Act (S 1243) to amend the 
Workforce Investment Act of 1998 to require state and local workforce 
boards to give priority consideration to programs that lead to an 
industry-recognized and nationally portable credential.\9\ The bill 
also requires the Secretary of Labor to create a registry of skill 
credentials and to list in the registry credentials that are required 
by federal or state law for an occupation and all industry-recognized 
and nationally portable credentials.
    The President is also promoting industry recognized credentials and 
has gone so far as to announce a partnership with the Manufacturing 
Institute to credential 500,000 manufacturing workers by 2016.\10\ 
While not all industries are as advanced in identifying industry 
skills, developing curriculum to build those skills and creating the 
credentials that signify the skills have been obtained, business led 
state and local workforce boards are positioned to bring together the 
workforce training and education partners to complete the process 
required to develop these industry recognized credentials.
            Position
    Industry recognized credentials should be the focus of training 
funded through the Workforce Investment Act. The value of training is 
measured in the quality of job opportunity participants receive. The 
best way to ensure training results in quality job opportunities is to 
invest in training that leads to industry recognized credentials which 
certify that jobseekers have the skills in demand by employers and have 
mastered proficiency in those skills.

Access to the Services Provided through the Workforce Investment System 
        Must be Made Easier for Employers with Facilities in Multiple 
        Locations
            Background
    While the workforce investment system is funded by the federal 
government, nearly all of the services are provided at the state and 
local levels. Practically speaking, one of the predominant activities 
of the workforce system is to help match skilled local jobseekers with 
jobs in local businesses. For jobseekers, the system is easily 
accessible regardless of whether they are seeking work across the 
street or across the nation. In any case, all a jobseeker has to do is 
go online and search for jobs or register for services at one of the 
3,000 local career centers located near their home or near where they 
want to work.\11\
    Conversely, that same national network of 3,000 one stop career 
centers operated by more than 500 local workforce investment boards 
located across the 50 states presents a tremendous challenge for large 
national employers with facilities in multiple locations throughout the 
nation. Although, most hiring still happens at the local level, the 
sheer complexity of having to form relationships with such a vast, 
disconnected array of separate organizations causes the time and effort 
required to outweigh the benefit that can be gained by most large 
national employers.
            Status
    The U.S. Department of Labor has recognized the challenges of 
navigating the vast national network of one stop career centers and 
tried to take steps to ease the process. Under President Bill Clinton, 
the Department created America's Service Locator 
(www.servicelocator.org or 877US2-JOBS) to help jobseekers and 
businesses locate the one stop career center nearest them. Under 
President George W. Bush, the Department created a Business Relations 
Group (BRG) within the Employment and Training Administration to serve, 
in part, employers by creating partnerships between the workforce 
system and business. The mission of the BRG was to find innovative 
approaches to help large national employers better access the services 
of the state and local workforce investment system and to educate the 
public and the workforce system about the jobs in demand with career 
paths. Although the BRG served an important role, the small staff 
(approximately 20) was limited in the number of employers they could 
assist.
    Under the Obama Administration, the Employment and Training 
Administration (ETA) has continued the effort to find meaningful and 
effective ways to engage employers with the workforce development 
system. In October 2010, President Obama announced the launch of a new 
initiative called Skills for America's Future alongside five HR Policy 
Association member companies (Gap, PG&E, United Technologies 
Corporation, Accenture and McDonalds).\12\ The initiative is an effort 
to improve industry partnerships with community colleges to ensure that 
America's community college students are gaining the skills and 
knowledge they need to be successful in the workforce.
    The complex structure of workforce system has caused many large 
national employers with good jobs to choose not to participate in the 
programs. In a 2010 survey of the Association membership, 54 percent of 
companies reported not taking advantage of government training 
programs, 43 percent use them only modestly, while only three percent 
make strong use of them. Only nine percent of Association members 
reported being satisfied with the government programs that they use. 
More than 60 percent believe that federal, state, and local 
policymakers need to spend far more time ensuring that their training 
resources fit contemporary workforce needs. Two-thirds believe that 
there is too much red tape and bureaucracy in these programs, and 65 
percent believe employers should be given a far greater voice in the 
design of them.
            Position
    Access to the services provided through the workforce investment 
system must be made easier for employers with facilities in multiple 
locations. Employers with locations in multiple workforce investment 
areas are forced to complete multiple processes with multiple local 
boards in order to participate in the services offered. This problem is 
greatly amplified for employers who are located in multiple locations 
throughout the nation. The magnitude and complexity of forming 
partnerships with multiple workforce investment areas and one-stop 
career centers dissuades many large national employers from 
participation in the workforce development system. More needs to be 
done during the reauthorization process to ensure employers with 
facilities in multiple locations are able to access all of the services 
available so jobseekers can more easily be placed into available 
positions.

The Workforce Investment System Needs to be Evaluated on How It Meets 
        the Needs of Employers
            Background
    When Congress passed the Workforce Investment Act of 1998, its 
authors were intent on making sure the results of the system they were 
creating were carefully measured. They believed that by closely 
measuring the performance of the programs, the providers not meeting 
their measures could be sanctioned, and if necessary, defunded.\13\ In 
order to achieve this goal of thoroughly measuring the success of the 
system, program providers were required to report the outcomes of 100 
varying and incomparable performance measures.\14\ One of these 
measures was ``customer satisfaction'' of employers as measured by 
surveys of employers. However, by July 1, 2005, the Department of Labor 
had worked to simplify these very cumbersome measures into common 
measures that could help provide comparable data across various 
education and training programs.
            Status
    As the Senate Health, Education, Labor and Pensions Committee works 
to reauthorize the Workforce Investment Act, HR Policy Association is 
pleased to see the bipartisan draft legislation calls for the 
Performance Accountability System to include the creation of at least 
one yet to be identified measure to evaluate the effectiveness of the 
programs in serving employers.
    Specifically, the legislation gives the Secretaries of Labor and 
Education one year from the passage of the new law to work with 
representatives of ``States and political subdivisions, business and 
industry, employers, eligible providers of activities carried out 
through the core programs, educators, researchers, participants, the 
lead state agency officials with responsibility for the programs 
carried out through the core programs, individuals with expertise 
serving individuals with barriers to employment and other interested 
parties to develop the measure(s).''
    The Association is pleased to see renewed interest in measuring the 
effectiveness of how these programs serve employers. We hope this 
Committee, as well as the Departments of Labor and Education will 
consider us as a resource in this area. Our members would be more than 
happy to be engaged in the discussion of identifying meaning measures 
for employer services.
            Position
    The workforce investment system needs to be evaluated on how it 
meets the needs of employers. The effectiveness of the workforce 
investment system is currently measured on how it serves jobseekers. 
However, a close, effective working partnership with employers is the 
foundation upon which these results depend. Therefore, a new 
performance measure needs to be developed to help measure the 
effectiveness of the workforce system's services to businesses.

Employers and Local Boards Need More Flexibility to Negotiate Training 
        Agreements that Develop Skills That Are Connected to Real Jobs
            Background
    The Workforce Investment Act of 1998 was a bipartisan enactment 
passed with broad support from both parties in each chamber.\15\ It 
passed with the support of 343 members of the house and 91 members of 
the Senate. One reason the bill had such broad bipartisan support in 
both houses was because it was written to give each state and each 
local workforce investment area within the states the ability to design 
a workforce development system that would best meet the needs of that 
region as long as it met certain federal guidelines and performance 
measures.
    However, some safeguards have developed around the law that limit 
the flexibility of the local areas in certain cases. For example, while 
the legislation allows for on-the-job training and customized training, 
other legislative and regulatory guidelines generally limit flexibility 
at the local level by capping the percentage of the cost that could be 
paid using WIA funds depending on the program and the size of the 
employer.
    In addition, the law allows local areas to transfer funds between 
the Adult and Dislocated Worker programs but only if the Governor 
approves the transfer and only if the transfer does not exceed certain 
limits.\16\
            Status
    As employers and local boards work together to create training 
strategies to develop the skills of the workers in their region, they 
are sometimes frustrated by unnecessary restrictions. This lack of 
flexibility for employers and local boards to negotiate training 
agreements that work best in their local area has caused a 
proliferation of waiver requests to the Department of Labor. As of 
March 31, 2011 all 50 states, the District of Columbia and five 
territories have applied for and received waivers under certain 
provisions of the WIA legislation.\17\ Some of the most common waiver 
requests are to waive restrictions related to training agreements 
negotiated between employers and their local boards. Some of the most 
common waivers include:
     Waiver of the requirement for a 50 percent employer 
contribution for customized training, to permit a sliding scale 
contribution for small- and medium-sized businesses (27 states)
     Waiver to increase the employer reimbursement for on-the-
job training for small- and medium-sized businesses (32 states)
     Waiver to permit the use of a portion of local area 
formula allocation funds to provide incumbent worker training (30 
states)
     Waiver to permit a state to use a portion of rapid 
response funds to conduct incumbent worker training (25 states)
    Unfortunately, the waiver process is a poor substitute for the 
flexible system the authors of the legislation envisioned.
            Position
    Employers and local boards need more flexibility to negotiate 
training agreements that develop skills of the region's workforce that 
are relevant to employers' needs. Although the workforce investment 
system was created to be a locally designed and flexible system, 
barriers have developed over the life of the programs that limit the 
flexibility employers and local workforce investment boards have to 
negotiate training agreements that meet the needs of the local area. 
These agreements, generally aimed at preventing layoffs or upgrading 
the skills of existing workers, could help maximize highly effective 
and proven services to employers such as incumbent worker training and 
on-the-job training. Federal restrictions to these proven practices and 
others like them need to be removed and more flexibility given to 
employers and local workforce investment boards to form the 
partnerships that are most beneficial to the regional economy.

A Cross-Industry National Workforce Investment Board Made Up Solely of 
        Employers Should Be Created
            Background
    The authors of the Workforce Investment Act made it a priority to 
establish a ``strong and active role'' for business at both the state 
and local levels.\18\ It was their intent that business-led state and 
local boards would lead the efforts to design and implement the new 
training system established by the law. They believed a close link with 
employers was the best way to make sure the training provided to 
jobseekers is for the high-skill, high-wage jobs of the future in 
demand occupations.
    Under the law, business led State Workforce Investment Boards are 
responsible for advising the Governor on the creation, implementation 
and continuous improvement of the state's workforce development system. 
They create policy recommendations designed to make the system 
efficient, lead the strategic planning process and set priorities for 
the state's workforce investment strategic plan.
    Approximately 15,000 business leaders volunteer their time to serve 
on local workforce boards across the nation.\19\ It is the role of 
those business leaders on the Local Workforce Investment Boards to work 
with local Chief Elected Officials to oversee the delivery of workforce 
services to their local residents and businesses through their network 
of local one-stop career centers. These centers, through partnerships 
with other local, state and federal agencies and education and economic 
development organizations, provide access to jobs, skill development 
and business services vital to the economic health of their 
communities.
            Status
    Each year the U.S. Department of Labor's Employment and Training 
Administration (ETA) receives slightly less than $4 billion to fund 
employment and training related programs.\20\ While the vast majority 
of these funds are distributed directly by formula to states and then 
to local workforce investment boards, there is still a tremendous 
amount of funding awarded through national discretionary grant programs 
administered by the Department.
    For example, under the American Recovery and Reinvestment Act 
alone, ETA awarded approximately $742 million in competitive high-
growth job training grants in health care and green jobs.\21\ In FY 
2011, ETA requested nearly $350 million to fund a national innovation 
fund discretionary grant program and a Green Jobs Innovation Fund.\22\
    In addition to these important annual discretionary funding 
decisions, the Department is also continuously making policy decisions 
that greatly affect the state and local workforce development system 
and the services jobseekers and businesses receive. These policies 
influence what services are and are not provided, how they are 
provided, how they are funded and many of the fundamental practices 
within the system, yet they are made with little or no up-front input 
from those who create and fill jobs.
            Position
    A cross-industry national workforce investment board made up solely 
of employers should be created. There are employer led local workforce 
investment boards to guide investments and service delivery strategies 
at the local level, and state workforce investment boards to guide 
investments and service delivery strategies at the state level, but 
there is no such similar business voice at the federal level to help 
advise the secretary of labor on state and local service delivery 
policy and strategies and investments at the federal level. The HR 
Policy Association believes this is a critically important voice that 
is missing from the WIA system.

Conclusion
    We recognize there are many important administrative facets of the 
law unmentioned in this discussion that do not directly relate to the 
role of business. We will continue to monitor the debate to reauthorize 
WIA as it moves forward and will weigh in on these issues when the 
business perspective is important. Our objective in providing these 
recommendations is to help articulate, from our unique perspective, the 
role business can and should play in the general oversight and 
direction of the nation's publically funded workforce investment 
system.
    Thank you for this opportunity to share with you our views of the 
role of business in federally funded Workforce Investment Act programs. 
I'll be happy to take any questions you might have.

                                ENDNOTES

    \1\ Workforce Investment Act of 1998--Conference Report, Senate--
July 30, 1998, Page S9489, http://thomas.loc.gov/cgi-bin/query/
F?r105:25:./temp/?r105We9kFl:e0.
    \2\ Sheila Maguire, Joshua Freely, Carol Clymer, Maureen Conway, 
and Deena Schwartz, Tuning Into Local Labor Markets: Findings from The 
Sectoral Employment Impact Study, Public/Private Ventures (2010), 
http://www.ppv.org/ppv/publications/assets/325--publication.pdf.
    \3\ Summary of State Sector Activity, Corporation for a Skilled 
Workforce, (October 2010), available at: http://
www.sectorstrategies.org/library/2010/snapshot-state-sector-activity.
    \4\ Workforce Investment Act of 1998--Conference Report, Senate--
July 30, 1998, Page 9490.
    \5\ Bureau of Labor Statistics, Job Openings and Labor Turnover, 
May 2011, and The Employment Situation, May 2011, available at 
www.bls.gov.
    \6\ Id.
    \7\ Id.
    \8\ U.S. Department of Labor Training and Employment Guidance 
Letter Number 15-10, December 15, 2010, Available at: http://
wdr.doleta.gov/directives/corr--doc.cfm?DOCN=2967.
    \9\ America Works Act, Senator Kay Hagan.
    \10\ Remarks by the President at a Skills for America's Future 
Manufacturing Event, June 8, 2011, Available at: http://
www.whitehouse.gov/the-press-office/2011/06/08/remarks-president-
skills-americas-future manufacturing-event.
    \11\ The Public Workforce System, U.S. Department of Labor, 
available at: http://www.doleta.gov/business/pws.cfm.
    \12\ President Obama to Announce Launch of Skills for America's 
Future, October 4, 2010, Available at: http://www.whitehouse.gov/the-
press-office/2010/10/04/president-obama-announce-launch-skillsamerica-
s-future.
    \13\ Workforce Investment Act of 1998--Conference Report, Senate, 
July 30, 1998, Congressional Record, Page S9490.
    \14\ National Governor's Association Testimony to Congress, July 
26, 2007, available at: http://www.nga.org/cms/home/federal-relations/
nga-testimony/page--2007/col2-content/main-contentlist/july-26-2007-
testimony---competi.html.
    \15\ Bill Summary & Status, 105th Congress (1997--1998), H.R.1385, 
Major Congressional Actions, the Library of Congress.
    \16\ The Workforce Investment Act of 1998, page 55, available at: 
http://www.gpo.gov/fdsys/pkg/PLAW105publ220/pdf/PLAW-105publ220.pdf.
    \17\ Workforce Investment Act (WIA) Waiver Summary Report, Program 
Year 2010 (July 1, 2010-June 30, 2011), Available at: http://
www.doleta.gov/waivers/pdf/WIA-summary-waiver-report-03-3111.pdf.
    \18\ Congressional Record 105th Congress, Conference Report on H.R. 
1385, Workforce Investment Act of 1998, House of Representatives, July 
31, 1998.
    \19\ National Association of Workforce Boards, available at: http:/
/www.nawb.org/i/About/History/c/About/History.aspx?hkey=bf134769-15ec-
457d-b4f62396d9b27a5a.
    \20\ FY 2011 U.S. Department of Labor Budget in Brief, Page 8 
available at: http://www.doleta.gov/budget/docs/11ETA--BIB.pdf.
    \21\ American Recovery and Reinvestment Act of 2009, Excerpts 
Pertaining to the Employment and Training Administration, HR- 1, Page 
59, available at: http://www.doleta.gov/budget/docs/09Rapptxt.pdf.
    \22\ FY 2011 U.S. Department of Labor Budget in Brief, Page 8 
available at: http://www.doleta.gov/budget/docs/11ETA--BIB.pdf.
                                 ______
                                 
    Chairwoman Foxx. No, thank you, Mr. Fall, very much. Again, 
I want to thank the panelists who are here today for your very 
succinct comments. And now, each one of us will have the 
opportunity to use 5 minutes to ask you some questions. And I 
will start with Ms. Cox, if I might.
    What do you think should be the overall mission for this 
system as we look for reauthorization? And there are a couple 
of different parts to this. And some of you have said, I think, 
should it focus on workers, unemployed workers underemployed 
workers, low-income workers, or serve all workers?
    Ms. Cox. That is a great question. We have talked a lot 
about that internally, as well. In my mind, the workforce 
investment system, not just WIA but the system, should be about 
helping businesses become competitive and getting them 
connected with good workers that are qualified.
    And I am strongly in favor of a business-driven system 
because businesses are the ones that create the jobs. And then 
we need to make sure our workers can get the skills so they can 
actually get the jobs. But we deal with folks on unemployment 
insurance and dislocated workers and adults. I think there are 
about three categories of folks you serve.
    You serve folks that are low-income, or maybe struggle, or 
just detached from the mainstream system and have a hard time 
and need more intensive help getting back to work. That is 
certainly a population. You have folks that have trained. They 
have lost their job, maybe, in construction, which we have seen 
a lot in Utah.
    They know how to work the system, but they just need some 
new skills. And then you have folks that are very light-touch 
that know how to work the system. They know how to network. 
They just need leads. They need to know how to maybe use the 
new online tools. So there are different categories.
    What is challenging for me in the workforce investment 
system is that we so often leave out unemployment insurance 
customers. Even the present jobs bill focuses on unemployment 
UI customers as if they are separate and apart from the 
workforce system. I know Texas and Utah, we have been 
aggressive in trying to work with getting the administration 
and our policy to say that UI customers make up thousands of 
individuals that need to be integrated and pulled into the 
Workforce Investment Act system.
    We do not need stand-alone systems. We need an integrated 
model so that we can serve these different populations. But at 
the end of the day we have to be competitive. We know we are 
coming up against people in China or India. We all know about 
the global economy. And we have got to let businesses tell us 
what they need so we can respond quickly and get people back to 
work.
    And I think the system can do it if people get out of our 
way.
    Chairwoman Foxx [continuing]. Than other local workforce 
investment boards have across the country.
    Ms. Larrea. We have had great success, as I mentioned, with 
working with Chambers of Commerce. And we have such amazing 
Chambers through the Dallas regional and Arlington and Fort 
Worth Chambers. Making access to employers is very critical. 
But it is only good if we can deliver on that promise.
    Getting the introduction is one thing. Then producing 
results is very critical. So our regional workforce leadership 
has been amazing. We have had businesspeople come together who 
are not part of an organization, not part of any workforce 
board. It goes beyond the borders.
    A gentleman said earlier, employers do not look at regional 
boundaries. They do not look at State confines, city confines. 
You have to be able to work with them wherever they reside. So 
you have the Lockheeds, you have the TIs, we have massive 
organizations that need us to respond. And what we have done is 
said, ``Okay, what do you need?'' ``What do you got?'' ``What 
do you need?''
    We go through this exercise with employers because they are 
not sure what a public program can do for them. And that is 
something that we have to be critical about. What can we do for 
you that is meaningful? Getting input from on the front end is 
the most important part, but also building the pipeline. That 
is what they have told us. ``Build kids who have an interest in 
my work because we need people to come into the jobs as jobs 
become available. Make them prepared.''
    Chairwoman Foxx. Thank you all very much.
    Mr. Hinojosa?
    Mr. Hinojosa. Thank you. Ms. Larrea, I have heard a great 
deal from policymakers and researchers about the value of these 
programs and whether or not the federal government should 
invest in training and employment services for America's 
workers. And in your opening statement you said that we did not 
have enough money, enough funds, to get the job done.
    But here is what we know. According to the latest 
performance information from the Department of Labor, over 9 
million job seekers used these programs in the past year. That 
is a 248 percent increase in participation rates compared to 
two years ago. Despite the fact that there are four-and-a-half 
job seekers nationally for every available job, over half of 
WIA participants find a job.
    From your experience running these programs, what impact 
have they had on the workers and employers in your respected 
communities in Texas?
    Ms. Larrea. Yes, sir. Many of the facts and figures are so 
pertinent to us. As you mentioned earlier, there is higher 
poverty. That is true for the Dallas community. We have seen a 
huge growth in poverty. So our system is breaking at the seams. 
That is why we have gone to an online system to get people an 
access point that does not mean walking into one of the stable 
centers.
    What we do see with employers is, they are afraid to open 
new jobs. And will a tax credit do it? Probably not. They need 
capital, and they need assurance that someone wants their goods 
and services. That is the only way that we will see job 
creation, and I do not know how to give them that assurance.
    Job-sharing has been very critical in our community. We 
have shut down a few places that said, ``Oh, I have got to lay 
off a thousand people.'' And we said, ``Please do not, please 
do not. Broker this. See that they each work 20 hours a week.'' 
That is asking a lot of families, but they would rather do that 
than be on an unemployment check.
    Mr. Hinojosa. Obviously, you believe WIA funding is 
valuable. So what would happen if WIA funding is drastically 
reduced or eliminated with the talk that is going on on how to 
reach the $4 trillion worth of cuts?
    Ms. Larrea. I am committed to workforce. It is 33 years of 
my career. And seeing many laws come and go, and seeing many 
funding patterns. I believe if the programs were not available, 
if money were not available to help people, I think the 
desperation in our communities would heighten. I see people 
every day coming to us for answers and counseling.
    ``Just talk me through it. Just keep me from going over the 
edge.''
    Mr. Hinojosa. I agree with you. I agree with you, and time 
is short. So I want to ask the next question of Mr. Bruce 
Herman. The Latino jobless rate is higher than the national 
average of unemployment. Despite the vast majority of workers 
still hurting from the recession, including Hispanic families 
in my region, earlier this year the majority proposed effective 
elimination of these programs at HRI.
    What would occur if they were eliminated?
    Mr. Herman. Well, you are right to point out that the 
Latino community and other communities of color have been even 
more dramatically impacted by the recession. We see that, of 
course, in New York State, particularly, you know, in New York 
City. If you look at the Bronx, the large Latino community has 
more than double the official State rate of unemployment.
    So the lack of resources to address these challenges will 
be devastating. There is one program that I would cite that New 
York State had put forward that I think is relevant to address 
the needs of this population. It is our 599 program, where the 
State dedicates $20 million in New York State taxpayer money to 
address the skills gap for low-income, low-skilled workers.
    Originally, this program was designed to forego job school 
for UI recipients that would not readily find employment. We 
tweaked that, and we identified that we have a lot of low-skill 
workers that need communication skills, ESL, other basic 
locational skills to find better employment.
    And it is not a matter of if you were, for example, a bus 
person or a dishwasher in a restaurant and you lose the job. Of 
course, those jobs are rather readily available but they are 
not family-sustaining. We need opportunities and support to 
help people get the skills and raise their incomes and find 
access to better jobs.
    Mr. Hinojosa. I understand. What would be the impact on 
workers and our businesses in your community in the absence of 
any federal investment in these job services you are 
describing?
    Mr. Herman. I think it would be devastating, and more 
individuals would find themselves falling below the poverty 
line. And we would be dealing with large, even larger, numbers 
of individual Americans in poverty and it would have a 
devastating impact on our communities.
    Mr. Hinojosa. Thank you all for answering our questions.
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    Mrs. Biggert?
    Mrs. Biggert. Thank you, Madam Chairman, and thank you for 
holding this hearing. Ms. Cox, in your testimony you recommend 
that we allow 1 year to obligate funds and 2 years to spend 
funds and to resolve lingering issues around the obligation and 
expenditures.
    Can you explain what specific problems are caused by the 
current system, and how do you suggest to improve it?
    Ms. Cox. It seems that Congress struggles with this idea of 
carry-in for 3 years. And also what happens in the system, 
somebody comes in to our system they need training. And 
training often goes beyond just 1 year. So we obligate those 
funds for 2 to 3 years.
    But it makes those funds very vulnerable for recission. So 
Congress will look at it, and say, ``Oh, you have expended this 
much, but you have encumbered $2 million. We are going to cut 
that because it has not been actually expended.'' So it becomes 
very difficult to create sustainable training programs for 
individuals, and we are constantly in flux trying. Do we hold 
back the money in case we do not get some next year, do we 
spend it?
    What we suggest, that may create a little more 
transparency, is that we have a year to obligate and then 2 
years for expenditure. So that that 3-year period may not be as 
difficult for Congress to manage. And that we have 2 years to 
spend those funds may create a little transparency, and make 
the system a little more sustainable and predictable.
    Mrs. Biggert. Thank you.
    And then Ms. Larrea?
    Ms. Larrea. Larrea.
    Mrs. Biggert. Larrea? Thank you. You talked about the 
online learning and the learning lab. And then you spoke about 
you want make sure that the job seekers are work-ready and 
learn new knowledge. When you do an online training, how do you 
make sure? How do you focus on what skills, then, that they 
should learn?
    And if you really want to get into, you know, the 21st 
century and the skills, how do you decide what skills would be 
offered to individuals?
    Ms. Larrea. That is a very good question. I think most of 
the work we are not concentrating on is proper assessment of 
the customer and proper acknowledgment of what the employer's 
really requesting of us. And often times, those two do not 
intersect, leading to a lot of people trained and frustrated 
who cannot find work.
    Proper assessment tools are hard to come by, and they are 
expensive, and we have been looking to minimize those costs. 
Also another thing is people like to be guided. They really 
come in and say, ``Oh, I want to do this'' because they know 
someone who has done that job. But, in fact, if we cannot find 
them the work, and we can not find the money to support their 
size of family, we strongly discourage people from picking the 
wrong choice, making the wrong choice.
    Communities need information on jobs. Employers need to 
share that information. ``What do you really need my son to 
study, what do you need my daughter to study, to get a 
meaningful career in our community?'' And without the workforce 
boards, that convening would not occur where there is enough 
community information going on. So assessment of the customer 
in detail, and all ascribing to good assessment tools.
    Honest counseling has to go on, and good information about 
what the training is producing. I think that is critical.
    Mrs. Biggert. Thank you.
    And then Mr. Fall, from an employer's perspective, what can 
be done to ensure the workforce training programs prepare not 
only for the current labor demands, but also the 21st century, 
the global economy?
    Mr. Fall. Sure. Thank you. We believe the key really is 
focusing training funds on industry-recognized credentials that 
allows employers to really define the skill needs that they are 
looking for. And to lay out what curriculum is needed in order 
to develop those skills allows those programs to be provided 
through local training providers.
    And then at the end, the job seeker has a credential that 
they can take to an employer and show that they have mastery of 
a skill.
    Mrs. Biggert. Do those employers go to WIA, or does WIA go 
to the employers? I mean, is there a dialogue that is happening 
right now? I mean, it sounds like a huge undertaking.
    Mr. Fall. It is a huge undertaking. Several things are 
happening on that front. The U.S. Department of Labor has 
raised the goal, and asked State and local areas to spend more 
of their funds on industry-recognized credentials. So we have a 
push going from that level, which we appreciate. And you have 
15,000 employers who are involved in State and local workforce 
investment boards to help try to provide that input on what is 
needed in employers.
    And frankly, in some areas it is working very well, and in 
some areas it is not working very well.
    Mrs. Biggert. Thank you. I yield back.
    Chairwoman Foxx. Thank you, Mrs. Biggert.
    Mr. Loebsack, from Iowa?
    Mr. Loebsack. Thank you, Madam Chairwoman. And I do thank 
you for calling this hearing today--a very important hearing. 
And thank you for talking with me about these issues previous 
to the hearing, as well, about a month or so ago.
    There really is not, I think, a better time to be talking 
about the reauthorization of WIA than now, with the 
unemployment rate being what it is. And, you know, over 14 
million at least officially unemployed, 6 million people out of 
work for 27 weeks or more. We are in dire straits, there is no 
doubt about it.
    I think the last thing we should be doing, probably, as a 
Congress is pulling back from the unemployed. So I am very 
happy to hear the testimony today from all of you. I think 
Congress needs to do something on the economy. We have got to 
focus on job creation. And this is actually what I have been 
hearing from Iowans in recent years, and this is my fifth year 
in office. And I have taken a strong interest in job creation.
    I have taken a strong interest in sector development, in 
particular. I noticed that at least a couple of you mentioned 
that in your testimony, and I really appreciate that. I have 
been around the district. I am home just about every weekend, 
and I have done a lot of visits to employers during the time 
that I have been in Congress.
    And over the last couple of years, after I introduced my 
own sectors act companion piece, a bill over on the Senate side 
that Chair Brown has introduced, of course. What I hear over 
and over again from these employers in many of these situations 
where mid-skill jobs are at stake, is that it seems 
counterintuitive. But at a time of 9 percent unemployment--
admittedly it is better in Iowa, but still it is 6 percent--
they simply can not find people for these jobs.
    It does not make any sense but it is, in fact, the case. 
And what I am finding is that they cannot find people who are 
properly trained. Every time I go to an employer I ask them, 
``Are you okay? Can you find people to do the jobs?'' And much 
more often than not they are telling me they cannot find people 
who are trained.
    Now, there are a lot of different places around this 
country, including Iowa, where people have used innovative 
sector-based approaches. Community colleges are important, 
workforce investment is important, employers are all important, 
of course, on this. Labor unions, in cases where they have 
apprenticeship programs, can be very important.
    But I would like to ask Mr. Herman, and Mr. Fall in 
particular, if you could speak to that issue. Because I know 
that you mentioned it in your testimony, Mr. Herman. I think 
Mr. Fall might have referred to it, as well. Go ahead, if you 
would.
    Mr. Herman. Certainly. And I want to thank you, 
Representative, for your leadership in pushing and promoting 
this very practical approach to achieve business engagement. 
Which is one of the challenges in the workforce system overall. 
We know from experience that sector partnerships, industry 
partnerships, create engagement for the long term. That they 
leverage business support, as well as private sector 
investment.
    That they help inform the broad workforce and education 
system to better address employers' needs. I have been active 
in this sector field since the early 1990s, when I was 
president of the Garment Industry Development Corporation in 
New York City, one of the early recognized sector initiatives. 
And what we found is that if we really want to get businesses 
involved we cannot just go to them episodically and ask them to 
employ the people that we need to get jobs.
    We have to have a deep, ongoing engagement to address 
multiple needs simultaneously. Sometimes it is incumbent worker 
needs, the need to train and up-skill their workforce so they 
can create more entry level positions. Sometimes it is trying 
to assist them during economic distress. And there is where our 
Workshare program has proved so effective.
    But the key engagement tool, the key component, is that 
sector initiative. It saves money, it leverages private sector 
resources. And in States like yours, but also Pennsylvania 
where industry partnerships are the cornerstone not only of 
their workforce system but their economic development system, 
we see that State and local resources are also accessed to 
support these partnerships.
    This is a very important tool to achieve substantive 
business engagement.
    Mr. Loebsack. Mr. Fall. Then I will ask Ms. Larrea, too, to 
respond because she has been nodding her head quite a bit.
    Go ahead, Mr. Fall.
    Mr. Fall. Yes. Thank you. I would just support your comment 
that the employers that we speak to do have a perpetual 
difficulty in finding skilled workers right now. And it does 
seem almost unthinkable with such a high unemployment rate. But 
specifically around skilled trades seems to be an area that we 
are hearing from our members more than perhaps any other that 
just finding the workers with the skills and the ability that 
they need to be successful in the workplace is, in fact, 
becoming more and more of a challenge.
    Mr. Loebsack. Thank you, Mr. Fall.
    Ms. Larrea?
    Ms. Larrea. Yes, sir. We have practiced the regional 
workforce leadership with sector concentration for more than 9 
years. And it yields great results. The community college 
benefits, this ISD's benefit. And in the Dallas region that is 
a huge number of people being affected by these industries. We 
support them because they support us. That is where the jobs 
are.
    They give of their time. They are not just sitting on 
workforce boards. They actually come and participate in general 
sessions on describing the workforce they need because it is so 
critical to find important people. Women in engineering became 
a huge issue for TI. Not enough women pursuing engineering. You 
can get the visas and get them here from other countries, but 
we are not training them here.
    Those are the kinds of issues that a workforce system must 
know to function.
    Mr. Loebsack. I still have you, and I appreciate your 
indulgence, Madam Chair. And I should just say one last thing. 
This is a very bipartisan approach, and I appreciate that. 
Thank you.
    Chairwoman Foxx. Thank you, Mr. Loebsack.
    Dr. Roe?
    Mr. Roe. Thank you. And thank you all for being here. It 
has been a great hearing, and I have learned certainly a lot. I 
know my good friend, Mr. Hinojosa, did not get a plug in, but I 
want to get a plug in for the adult education literacy. I think 
that is so basic that if you cannot read and communicate 
properly you will never have a job. So I think that goes 
without saying. And I know he has been very supportive, as I 
have, in adult literacy.
    What I heard in the very beginning, and I think this is the 
critical point, is what, Ms. Larrea, you started out with. I 
will give you an example about how a job is created in my 
business. If I go to church on Sunday, and someone says, ``Dr. 
Roe, I have been trying to get an appointment with your for 4 
months and I cannot get in.'' And then I go back to my front 
desk, and I find that all the doctors do not have an 
appointment for 4 months. It is time to hire another doctor, 
and hire some people.
    So we have a demand for our services. And that is one 
thing. And then I have to have the capital there to be able to 
expand my office or whatever. And that is what I think people 
are facing now is that very thing. That very issue is critical. 
For you to put somebody there, there has to be a demand for the 
product or service that you are trying to place them into.
    And that is a far bigger question, I think. I heard this 
from all four of you, and correct me if I am wrong. Any of you 
can jump in here at any time. That WIA is working, but could 
work better if there were more consolidation, employer-driven, 
I heard. And then boards, director-led by local businesspeople, 
to identify exactly what needs are.
    And then I think, Mr. Herman, you clearly pointed out that 
borders should not matter. I know I live in a rural area in 
east Tennessee, but people do not care. They would go to the 
job. If they live in one county, they will be glad to drive to 
another county or across the state line. I am very near 
Virginia, so people driving back and forth across that State 
line all the time.
    And we need to forget those borders. I could not agree 
more. What could we do--and any of you can jump in here--to 
help make our dollars go further? And I think one of the 
things, Ms. Cox, I heard you say was just the bureaucracy of 
filling out all of the paperwork that does not create any value 
to your customer, which is the person coming looking for a job, 
or employment.
    Ms. Cox. Yes, thank you, and I will make a couple comments 
on this. One, there is just a high reporting burden. And in my 
mind, before you cut any dollars to the customer you have got 
to cut down the bureaucracy. And we have very specific things, 
both in the written testimony and the position paper we have 
taken of how we think that can happen.
    One thing we think we need to also look at, not just 
putting all of the burden on the feds, but at our State and 
local levels of efficiency. Not only are we highly integrated, 
but we are a State-wide workforce investment board. We do not 
have local boards. And so we have a lot of flexibility to shift 
those around.
    We do not have to negotiate with local boards, the local 
board. If there is a state-wide employer we can work State-
wide. We have a lot of flexibility. If we ever wanted to change 
the makeup, however, of our State workforce board we would 
actually have to get permission from DOL. And there is a 
grandfather position, that we could lose that if we changed it.
    I do not think they would ever take that away from us. But 
I think that is an important model. And I am all for local 
control. And I am going to say this with all due respect. If 
you system's run by just hundreds, I think we probably have 
200, 300 local workforce boards in our system. Each one of 
those takes an administrative cost to run.
    And so I think we cannot just put the entire burden on the 
feds. We have to look State and local to see where we can 
reduce administrative costs, pool funding through admin., have 
similar technology. Texas does that. All States do not. And so 
you end up having just hundreds of individual admin costs 
across the country. And so I think it is a political issue.
    It is a difficult one to touch, but I think governors need 
that flexibility to design it in a way that provides maximum 
benefit to the user, not just to us running the system.
    Mr. Roe. And I agree with Mr. Fall. I am going to go very 
quickly. There is a piston plant, Molly Piston Company. And 10 
years ago, they had 16 people on a line. Today they have two, 
and these two are producing the same number of pistons that 16 
were because it is a very highly technical job.
    Welders. We cannot get enough welders, even in a down 
economy. We cannot get each other people trained. And I think 
that is the problem. Many times we are training people and the 
jobs are not there. We are not training people for the jobs 
that are here, now, in today's economy. And we have got to 
retrain.
    I 100 percent agree with that, and I will stop and let you 
comment. My time is about to expire.
    Mr. Fall. Thank you. Certainly, welders are another area 
where we have heard a tremendous shortage of our members. And 
it is impacting work and how much work can be done. So it is 
something that we really need to focus on.
    I appreciate your comments, and that is something that we 
would love to work with you on trying to resolve and improve.
    Mr. Roe. Thank you. I yield back. Thank you.
    Chairwoman Foxx. Thank you, Dr. Roe.
    I will go next to Mr. Hanna.
    Mr. Hanna. Thank you, Madam Chairwoman.
    Mr. Herman, I heard you say something about that job tax 
credits do not work. And I saw Ms. Larrea nod her head yes. How 
could that money be better spent, and what is it about them 
that? I mean, I have had hundreds of employees in my life. I do 
not think they work.
    But aside from that, what does work? What would you like to 
see differently with those same tax dollars?
    Mr. Herman. Thank you for that question. I think it is a 
very important one. Just to sort of maybe highlight, further 
explain, in my experience, why I do not think they work. For 
the most part we see, you know, tax credits being accessed 
after a hire has already taken place. Particularly large 
employers that have accountants who scrub their books, and say, 
``Hey, guess what? You hired 100 people, and 20 of them are 
eligible for a tax credit.''
    I think what we need now is a much stronger front end 
incentive. And also to address the skills mismatch that has 
been raised throughout the hearing. OJT, in our experience--on-
the-job training--is a much better front-end incentive. It 
provides a concrete financial incentive for employers to hire 
now rather than defer hiring.
    But it also requires a formal training plan to address that 
skills mismatch. So an individual that has most of the basic 
skills that employers are looking for, but not the specific 
skills they need in terms of their process to deliver the 
services they provide, through a period of OJT they are trained 
to be productive, value-added employees.
    And I think we see a return on that investment, too, 
because the individuals are employed. So that front-end 
investment of the system is recouped through payroll taxes, 
recouped through income taxes. So I think that is a much more 
effective program. Particularly in this time, where we know 
employers are hesitant to hire--in part because of market 
conditions, but nonetheless are looking, in many situations, 
for skilled employees.
    I think that would be a much more effective use of our 
taxpayer dollars than the tax credit approach which, as I 
mentioned before, I do not think it is a strong enough front 
end incentive.
    Mr. Hanna. Ms. Larrea?
    Ms. Larrea. Yes, sir. In Texas, there is also the Texas 
Back to Work. We do on-the-job training. It is a very difficult 
program to administer, but we do do that in the Dallas area, as 
well. The Texas Back to Work program makes a direct correlation 
for the employer between an unemployed person and the cash back 
within a 4-month period.
    We have had great results. I know that Georgia, several 
States, have some of these projects. It happens better, I 
think, at the State level than it does at the federal level. I 
do not know that the incentive can be applied, early enough to 
create a job, from the federal authority. I think that is the 
difference. You are too far apart from the employer.
    But by and large, we are not going to have good jobs until, 
as the doctor acknowledged, you know there is a need for your 
services. You do not want make-work. We want real jobs, people 
want real jobs. It is how we define ourselves in this country--
``What do you do?'' It is one of the first questions we ask 
someone.
    And if we cannot give people real work I think we are 
faltering. So I am worried about making it a real job, not just 
something for the money.
    Ms. Cox. Can I make one quick comments on this, too? I 
always become a little nervous when we have specific programs 
that we are going to mandate. We tend to create programs rather 
than solving problems. And in each State--New York, Texas, 
Utah--there is all great things most States across the country 
are doing. So we get a good idea, and then we want to mandate 
it. And then you create a new monitoring compliance, training 
program, data validation system.
    And you lose focus. What would be optimal in 
reauthorization is maybe a menu of things that a state could 
do. Not mandatory, but hold us accountable for results. Tell me 
my entered employment, my retentions numbers, earned income. 
How am I really being relevant to business in terms of 
supplying the demand they need--turnaround time, training time.
    Hold me accountable for those, but do not mandate a lot of 
programs. Give me a menu, and then hold my feet to the fire. 
But when we start talking wanting to mandate a program I get 
very concerned.
    Mr. Hanna. I think, Ms. Larrea, you said that unemployment 
insurance and the people on unemployment need to be integrated 
into those people. Was it your, Mr. Herman? How would you 
propose to do that? Because it seems so common sensical. Either 
one.
    Mr. Herman. Well, like Texas and Utah, New York State co-
enrolls. You are recipients. As soon as they apply for 
unemployment insurance they are in our WIA system. And that is 
a very important front end measure, to make sure that the UI 
recipient is also a WIA customer. So that is very important. We 
call them in and we do an initial assessment, and we determine 
that some are more readily employable than others.
    Those that are not then, receive services and training 
assistance, with training and education to re-skill themselves. 
But we do not wait for that UI recipient that is often long 
into their UI tenure to kind of walk in our one-stop doors. We 
require that they come in, and if they do not they are 
sanctioned in terms of their UI support.
    Mr. Hanna. Thank you for your testimony.
    Chairwoman Foxx. Thank you very much, Mr. Hanna.
    Dr. Heck?
    Mr. Heck. Thank you, Madam Chair. And thanks, all of you, 
for your testimony here today. This is really a critical issue 
for my district. I represent southern Nevada, which has the 
highest unemployment rates in the nation right now. So much so 
that we actually conducted a field hearing on WIA in my 
district over the August work period.
    And during that--we have heard a lot of discussion this 
morning about flexibility--one of the pieces of we received 
from Dr. Metty-Burns, who is the executive director of the 
Division of Workforce and Economic Development at the College 
of Southern Nevada. And she stated that within their workforce 
programs they had mixed results with an ability to access and 
utilize WIA funds, continue to find it challenging and 
frequently frustrating to provide the training and education 
that local workforce needs when confined to the limitations 
that come with WIA funds.
    So much so that they have, at times, opted out of 
requesting funds because of the cumbersome process involved. 
Stated that the certificate and degree programs at the college 
are not even eligible for WIA funds, as the time frame exceeds 
what WIA will allow even a more in-depth educational approach 
may be the more appropriate pathway for job placement, a higher 
wage, or long-term success.
    In the time remaining I want to ask each of you, if you 
were going to write this reauthorization bill what is the one 
thing you would either eliminate or seek to implement. And if 
we could just go right down the panel, and have each of you 
give what your top priority would be.
    Ms. Cox?
    Ms. Cox. Gosh, that is so hard to choose. There is so many. 
The top two ones, for me, would be the ability to ask for 
waiver authority to really integrate the programs. So that you 
can do some of the things you are talking about, so that we can 
turn around and OJT in a meaningful way, so that we can have 
common definitions about what we are doing, and pool our funds 
to really meet the needs of employers and individuals.
    And if we had that waiver authority, I think we could do 
some amazing things that were new and innovative, and that 
would break us out of the system we are in and take us to, 
really, a whole new level. That would be one of the most 
important things that I could see coming out of the bill.
    Mr. Heck. Thank you.
    Ms. Larrea?
    Ms. Larrea. The most important thing, I think is, I agree 
it is hard to choose. But the coalescing of funds, the 
identification of all resources on the front end, and putting 
everything in the same resource basket, again without 
eliminating, or diluting, those resources. But I think having a 
separate project sitting over at HUD and a separate project 
sitting over at HHS all directed at employing people should go 
through an employment authority, something where we are looking 
at being consistent, judging all programs against the same 
criteria.
    And I think it also, then, will recognize what resources we 
have that go beyond those walls. The Pell Grants, Perkins, and 
those other things in education we should not be duplicating. I 
think that is the most critical in this. Why are we duplicating 
so much of our effort? So streamlining administration would 
occur. It has in Texas.
    Mr. Heck. Thank you.
    Mr. Herman.
    Mr. Herman. A much stronger engagement and connection with 
community colleges overall. In my experience in New York State, 
some of our best outcomes, our best one-stops, are housed in 
the community college system. Where educational attainment is 
one of the primary missions of the community college is fully 
supported. And then the workforce dollars can focus on 
employment engagement.
    I think that kind of integration is very positive, and will 
leverage resources and produce better outcomes.
    Mr. Heck. Thank you.
    And Mr. Fall?
    Mr. Fall. Thank you. We would like to see, really, more 
employer input at the front end of this whole process. Too 
often, what happens is employers are consulted after the 
process is well down the track. We really believe that 
employer's voice at the very beginning of the design of the 
programs, at the beginning of the curriculum development on 
what skills are needed, that is where it is really critical.
    You know, if we could accomplish anything through this 
system it would be a way to create some sort of feedback so the 
system was receiving real-time labor market information from 
employers so they really knew what skills were in demand that 
day, and what skills were going to be needed in the future.
    Mr. Heck. Thank you. Thank you all very much for your 
testimony again. Thank you, Madam Chair. I yield back.
    Chairwoman Foxx. You get the prize for using the least 
time.
    Mr. Barletta?
    Mr. Barletta. Thank you, Madam Chair.
    As a former mayor and a former businessman, I understand 
very well that the workforce investment boards provide a great 
service to our communities. In my district, the Luzerne-
Schuylkill Workforce Investment board is responsible for the 
oversight of public workforce programs.
    After the devastating floods that hit northeastern 
Pennsylvania, the board offered valuable assistance to 
individuals in Luzerne and Schuylkill Counties who were out of 
work because of the flooding. They set up hotlines where 
individuals could call because they had lost their job due to 
the floods. And that was very, very important.
    There is also a program that I want to talk about. It is 
called Partners in Education. ``PIE'' is the term we use. And 
what it does is, it brings together educators, students, and 
local employers to the table. And it provides the students with 
an opportunity to see first-hand what opportunities are there, 
what jobs are there in the local community. Sometimes our young 
people may not realize that these jobs even occur.
    At the same time, it provides the employers an opportunity 
to talk about the basic work skills that are needed for their 
particular businesses. And the educators tweak the curriculum 
to teach those work skills. So we are actually providing a farm 
system for employees, future employees, for the local 
businesses that try to keep people at home.
    The point I am trying to get at is, I just think that State 
and local officials are far more knowledgeable than any of the 
bureaucrats here in Washington. So my question is to Ms. 
Larrea. In your opinion, what would some of the benefits of 
reforming the Workforce Investment Act to give more flexibility 
to the State and local workforce investment boards to do some 
of the things that I talked about?
    Ms. Larrea. ``Flexibility'' is the key word, the key word I 
think. Every one of us, you notice the consensus here, 
business-led, flexible money, less federal activity about this. 
It cannot be done from Washington. It has to be done by 
business leaders. And our new mayor is also a businessman. 
Often times, those are the multiple hats in the community that 
can make a difference. Education is strongly aligned with 
everything we do.
    The flexibility that exists in workforce--and as I say, I 
have been in the program for years and years and years, in the 
system and we have gotten better and better with each 
iteration--this is the time to make something really special 
happen. This particular reiteration of workforce, I think, 
stands to set us apart from where we have failed in the past. 
Making sure that we are looking to business to lead us, but we 
are not losing sight of the fact many people are not ready for 
work.
    And I think that flexibility is missing. One thing we do 
not have in the system right now is a program for college 
graduates to get to work. If you notice, we talk to youth. We 
talk about drop-out youth, underprivileged youth. We do not 
talk about college grads who are sitting on the steps now 
because they cannot get to work. They have a great education; 
they have to get to work.
    That flexibility could be imported at a local level where 
it means something to us, where those are the kids I see. I 
mentioned a program for executives. That is hardly ever talked 
about in workforce investment. But when that is what is needed 
in your community, you should be able to come to the table and 
make that happen.
    Mr. Barletta. I think the mindset here right now in 
Washington is, it is a yes or a no mindset. You know, either we 
give money or we take it away. Would you believe that possibly 
if we gave that flexibility to you, you might be able to take 
the money and use it towards programs that are really working 
and make those decisions down at the local level, rather than 
people here in Washington.
    Ms. Larrea. Absolutely. And as Ms. Cox says, hold our feet 
to the fire on outcomes. Not the means, but the ends. Hold us 
accountable.
    Mr. Barletta. Ms. Cox?
    Ms. Cox. Yes. What is so frustrating in this is, you know, 
the few funds we had to be innovative around projects like what 
she is talking about--college grads or the governor's set-aside 
funds. The few funds we had to do that, the administration came 
and swept all those funds and created, now, a new Workforce 
Innovation Fund. So now we have to apply for, and go through an 
entire bureaucracy to do the things we were already doing.
    It creates a new cost to the system to run it. And now 
States are going to spend months trying to apply for the grant 
and get the grant. Six months more before you can get something 
on the ground, where before we could get something on the 
ground, if we are aggressive, in two to four weeks.
    So it is just going in the wrong direction, and I just 
absolutely cannot understand the rationale for that kind of 
direction in a program. It undermines everything that we have 
been talking about today.
    Mr. Barletta. Thank you. I want to thank you all for what 
you are doing. Thank you, Madam Chair.
    Chairwoman Foxx. Thank you very much, Mr. Barletta.
    Dr. Bucshon?
    Mr. Bucshon. Madam Chairman, I yield my time to Mr. Hanna.
    Chairwoman Foxx. Mr. Hanna is recognized.
    Mr. Hanna. Thank you, Madam Chair. Thank you.
    Ms. Larrea, you said that often times you can provide 
skills to employers. And they will come back to you, and they 
will say that the employees still do not have the total set of 
skills that they need. I wonder if all you might have some idea 
that that is true, or not, and if you could elaborate.
    Ms. Larrea. Yes. I will just kick it off, two things that 
we have looked at recently where we perhaps missed the mark. 
Two years ago the cry was green jobs. Everybody said hurry up 
and train people, there will be green jobs. But what we found 
out is, there was a greening of the workforce. There are no 
green jobs, per se.
    Did we ask employers before we spent money on that 
training? Not as many questions as we should have asked. The 
new one now, health information technology. Do we need people 
in training? I met with Baylor yesterday. They do not need new 
workers. They need workers trained who already work for them. 
They need the technological skills.
    So creating jobs sometimes, we tend to get off on the wrong 
foot. We need to know from employers exactly what is going to 
build to the new job.
    Mr. Fall. I would just add that what we see is jobs are 
just becoming far more complex these days. The pace of change 
within the workplace has really accelerated and the use of 
technology has accelerated. So even if a local workforce board 
does an adequate job of developing the skills for a job that 
existed the last year, that skill requirement could change. And 
that pace is, like I said, greatly accelerating.
    And that is something that we have got to find a way to 
help the workforce system keep up with.
    Mr. Herman. And I think it is all true that the pace of 
change is accelerating. And it is difficult to anticipate what 
employers need. And I think that is why we need a more 
effective system of employer engagement in our workforce 
system. And why this sectors act, the sector approach, the 
industry partnership is a vehicle whereby to achieve that.
    Again, it is a long-term engagement that is not just about 
what I need today. But yes, help me with what I need today. But 
now, a year or two down the road I am going to need some other 
things. It is also the way to achieve that engagement with the 
youth. What some of my experience in New York State is, through 
sector partnerships we have been able to introduce young people 
more effectively to the world of work while they are still in 
an academic environment.
    But engage them, and introduce them to the world of work so 
they know better, first-hand, what it requires in terms of the 
skills they have. And also the discipline needed to be 
effective workers. I think this is the approach that is really 
going to bear fruit. If we have that long-term engagement with 
employers through a sector industry, a partnership approach, we 
will be getting that continuous feedback that is required from 
our employer community so we can better address their needs and 
better utilize the resources available.
    Ms. Cox. Just one more point. When we say ``industry,'' it 
is such a broad field. So what we are trying to do in Utah is 
be a little more selective and focused using data to select 
what industry partners we can partner where we see growth. And 
what we see. What industries need help today?
    And we cannot help all industry. So we need to have to say 
what are our growing clusters--aerospace, biotech, advanced 
manufacturing, health care? We have to be very selective even 
in that area. Which ones are we going to target in aerospace? 
So using data to make those decisions is critical.
    And it cannot just be sitting down and talking to 
employers, and getting feedback from everyone. You do have to 
be selective because we have very limited resources. But I do 
believe it has to be data-driven to determine if you are going 
to use a sector, a cluster, approach which ones are you going 
to actually select, and industry understands why or why not you 
did do that. And then that is the beginning. That is the 
beginning.
    Mr. Hanna. So to paraphrase the four of you, then, we need 
a more demand-driven model?
    Ms. Cox. Absolutely, yes.
    Mr. Hanna. Thank you. I yield back.
    Chairwoman Foxx. Well, thank you very much. I am going to 
take the prerogative of the chair since Mr. Hanna had about a 
minute left, and make a couple of closing comments.
    I want to thank all of you all for coming today. I think 
your comments have been extremely enlightening. I think the 
fact that the members have been very engaged, and have picked 
up on the things that you have said and checked them out with 
you, has been a great thing to have happened.
    And I think Mr. Loebsack is right. This is a very 
bipartisan concern, and we want to do something to make the 
system better. I want to compliment you on using the term 
``customer.'' All of you used that term, and it caught my ear. 
I think because we are serving customers, and I think that it 
is important that in government programs we understand that.
    I want to tell you, I spoke recently with a very large 
employer in my district who told me the horrors of using the 
tax credit system, Mr. Herman. She said she decides she would 
do it because it was out there, people were saying do it. And 
she said it was an absolute nightmare, the amount of paperwork 
that was required after the fact, after the fact. All the 
things that she was asked to provide to the federal government 
after these people had been employed.
    She knew nothing about it to begin with. It cost her more 
money to be able to provide the data than she got from the tax 
credit, and she will never use it again. The third thing I 
wanted to say is I appreciate you mentioning community 
colleges. As a community college person--and Mr. Loebsack is an 
education person, also--I know we appreciate the comments.
    I have always felt the community colleges are under-
appreciated and underutilized. And I think it is high time that 
they be integrated into all of these programs. And then the 
last thing I want to say is--and I will submit this to you for 
the record--I want to ask you, and again, I will ask you to put 
it in writing afterwards--if you see any value at all that is 
added to this process by the federal bureaucracy.
    Mr. Loebsack, you have some comments you would like to 
make.
    Mr. Loebsack. Just a few. Thank you, Madam Chair. I really 
do appreciate the opportunity to be here today, and I really 
appreciate your putting this panel together. I think it was a 
great panel, a lot of great insights and recommendations. And I 
thank all of you.
    Just a few things, too. I liked the comments in response to 
Dr. Heck. You know, certainly streamlining the bureaucracy is 
absolutely critical, something we can do in every federal 
program, probably every governmental program that has ever 
existed. So I think that makes a lot of sense.
    Also, I want to reiterate the importance of community 
colleges, as Mrs. Foxx did and as the chair did and as Mr. 
Herman did. I think everybody here probably agrees how critical 
community colleges are. I have my own saying. As a former 
college professor, I would give credit if I thought credit was 
due. But I think I came up with it. Community colleges are the 
principle intersections between education and workforce 
development.
    Not the only, but the principle intersection, I believe. 
And I think the way public colleges, public universities, or 
private colleges, but community colleges play that role better, 
I think, than any others. Fulfill that role better than any 
others. And the employer involvement. I think that is 
absolutely critical, especially when it comes to sectors.
    Again, just want to reiterate that. To be clear, there is 
no doubt that creating jobs must be our top priority. American 
workers need our help to acquire good jobs, and the education, 
training, and counseling and guidance to reenter the workforce. 
And we must never lose sight of this.
    With that, I look forward to working with my colleagues in 
a bipartisan manner, as was mentioned here. I think we are off 
to a good start. We have to make sure that we strengthen and 
adequately fund our nation's public workforce training and 
adult education system. And I look forward to more hearings on 
the part of this subcommittee, and the larger committee, to 
address what really is a jobs crisis in America today.
    So thank you. And thank you, again, Madam Chairwoman.
    Chairwoman Foxx. Thank you all very much. I hope that your 
trips back home are very successful. And we thank you once 
again for coming and sharing your ideas with us. It has been a 
very, very useful day.
    The meeting is adjourned.
    [Additional submission of Mr. Hinojosa follows:]

      Prepared Statement of Hon. Joe Donnelly, a Representative in
                   Congress From the State of Indiana

    This House Education and the Workforce Committee hearing on the 
Workforce Investment Act (WIA) and job training could not come at a 
more appropriate time. With many companies struggling to compete in an 
increasingly global marketplace and other countries continuing to 
invest more in their workers' skills and education, it is clearer than 
ever that the United States must make more efficient use of its 
workforce training dollars. I look forward to learning what conclusions 
the committee ultimately draws from today's hearing and witness 
testimonies.
    Like the committee, I have also reached out in search of good ideas 
that will benefit our workforce and, in turn, the economy. That is why 
in March of this year I held a manufacturing summit at Ivy Tech 
Community College in Indianapolis to discuss issues facing the 
manufacturing industry and its workers. Representatives in education, 
business, and labor came from every corner of the state to present 
their views and participate in a conversation on how we can restore 
vitality and growth in the manufacturing sector and ensure that it 
remains a robust source of good jobs in the future.
    During my summit, one common theme was the difficulty many 
employers are having trying to find workers with the necessary skills 
to fill open positions. When positions sit empty, American companies 
fall behind. We need to do a better job of matching skilled workers 
with those looking to hire them.
    With this in mind, I worked with the National Association of 
Manufacturers and Reps. Todd Russell Platts and Dan Boren to introduce 
H.R. 1325, The AMERICA Works Act. The goal of this bipartisan 
legislation is to better prepare American workers and keep our 
manufacturers competitive in the global marketplace by ensuring that 
workforce training programs, like those under WIA, are teaching to the 
needs of our employers and are issuing recognized, portable 
credentials. Additionally, the bill addresses the need for a more 
streamlined way of categorizing and credentialing specific skills so 
that we can more efficiently connect skilled job seekers with the 
employers who need them.
    The federal government invests billions into workforce training 
programs annually to help workers obtain the skills they need to land a 
good paying job and to help companies find workers with the right skill 
sets. AMERICA Works does not take this funding away or even increase 
it; instead it prioritizes existing WIA funds, as well as Trade 
Adjustment Assistance and Perkins Vocation-Technical Education Act 
funds, for programs that teach toward nationally portable, industry 
recognized skill credentials. Encouraging education centers to offer 
programs teaching in-demand skills would help ensure our companies can 
find workers equipped to compete in today's global economy. Likewise, 
this emphasis on in-demand, portable credentials would help those 
workers who already have these skills or are training for them to more 
easily gain and keep good jobs.
    To make certain that the credentials being awarded are what 
employers are looking for, AMERICA Works would require the Department 
of Labor to establish a registry of skills credentials. This registry 
would list credentials that are required by federal or state law for an 
occupation, are from the Manufacturing Institute-Endorsed Manufacturing 
Skills Certification System, or are industry-recognized and nationally 
portable credentials. The registry enables education centers to be sure 
that they are offering relevant and desired skills.
    I would like to thank the Education and the Workforce Committee for 
conducting this hearing. The current economic crisis is the toughest we 
have faced since the Great Depression, and no one idea is going to 
solve the problem. However, simple and innovative ideas like AMERICA 
Works--which passed the House of Representatives last year by a vote of 
412 to 10--that enable American workers and American small businesses 
to grow and compete represent solid steps in the right direction. I 
urge members of this committee to support this bipartisan bill.
                                 ______
                                 
    [Whereupon, at 11:25 p.m., the subcommittee was adjourned.]