The Federal Government Shutdown: Its Impact on Employment

As the second full week of the federal government shutdown comes to an end, the impact is being felt.

Government workers, for example, are not the only workers being affected. Many more people, many in the private sector, are now finding themselves unemployed.

Private sector government contractors including the consulting giant Booz-Allen and the engineering and aerospace giant Lockheed-Martin are laying off staff.

The North Carolina Department of Health and Human Services furloughed 337 workers whose salaries are paid from federal grants.

The National Institutes of Health reports that new research grants to scientists nationwide will not be made during the shutdown, which is likely to be another cause for temporary or permanent layoffs.

USA Today is reporting that construction companies that build courthouses, dredge rivers and renovate U.S. Park facilities are preparing to lay off thousands of construction workers.

Moody’s is predicting that these layoffs, coupled with an overall downturn in spending, will shave fourth quarter growth by two-tenths of a percent, a large amount during this very sluggish economic recovery.

And the irony here is that we may not know the extent of the impact on employment for some time because the shutdown has stopped the Bureau of Labor Statistics from collecting unemployment and other economic data needed to determine the impact of the shutdown on the economy.

Cities across America are feeling the impact of this shutdown as federal, state, local and private sector employees are laid off from their jobs, or required to work without pay.  If we are to continue to expand our economy, strengthen the middle class, help people make ends meet, and ensure that we do not experience another recession, we must end this manufactured crisis, which puts the safety, health, nutrition, and education of residents across the country at risk.

Please contact your Representative today by phone, email or Twitter, and let them know that you support the passage of a clean continuing resolution for fiscal year 2014 so that people impacted by this shutdown can get back to work.

Neil Bomberg

About the author: Neil Bomberg is NLC’s Program Director for Human Development. Through Federal Advocacy, he lobbies on behalf of cities around education, workforce development, health care, welfare, and pensions. Follow Neil on Twitter at @neilbomberg.

Facebook, Jobs and the U.S. Department of Labor

Facebook, Jobs and the U.S. Department of Labor

By Neil Bomberg

City elected officials have an important new job search tool to share with their constituents who are searching for a job.  In addition to the local Workforce Investment Act (WIA) one stops and career centers, the U.S. Department of Labor (DOL) has embarked on an exciting new initiative that is making searching for a job even more user friendly and accessible to anyone with a computer or smartphone,

Working with Facebook, the National Association of Colleges and Employers (NACE), the DirectEmployers Association (DE), and the National Association of State Workforce Agencies (NASWA), DOL developed and launched the “Social Jobs Partnership” last week.  The goal of the Partnership is to help America’s jobless find work through the use of social networks.

Knowing that tens of millions of Americans actively engage with one another on Facebook every day, it became clear that a resource like Facebook could provide a very effective way to connect unemployed workers with jobs in their communities and elsewhere.

Before launching its Facebook page, the Partnership conducted a series of in-depth surveys to determine how job seekers, college career centers, and workforce recruiters using the social web to find employment.  The Partnership learned that Facebook is an important part of the hiring process, Facebook is saving resources for recruiters, and Facebook is a resource for job seekers.

With this information in hand, the Partnership developed and launched a central page on Facebook that is hosting specialized resources and content designed to help job seekers and employers, including information about government programs to assist job hunters, and educational materials for job recruiters on how to use the social web to recruit job seekers and work with government programs (http://www.facebook.com/socialjobs).

Most importantly, the Facebook page includes more than 1.7 million job postings that can be searched by anyone using a Facebook application, at no cost to employers or job seekers (https://www.facebook.com/socialjobs/app_417814418282098).

Having launched only last week, it is too early to know how successful the social web page will be.  But if the number of hits is any indication, since its launch more than 54,000 individuals have “liked” the page.

Why the Workforce Investment Act Matters — Part III

This is the third in a series on the Workforce Investment Act (WIA) and NLC’s belief that Congress must reauthorize and modernize the Act to ensure that it meets the needs of today’s workers and employers. In this third blog we will explore how these locally-based job training programs have translated into real world outcomes that have benefited unemployed, underemployed and economically disadvantaged adults and youth throughout the United States.

Why the Workforce Investment Act Matters — Part III

By Neil Bomberg

Having looked at the ways in which the Workforce Investment Act (WIA) is structured and operated, it is now worth asking how has the nation’s Workforce Investment Act system performed?

A review of national data suggests that it has performed very well. Overall outcomes are extremely good, especially when one considers that many WIA participants are among the most difficult to help find work.

According to the U.S. Department of Labor, 81 percent of all participants and 80 percent of all employers who participated in the WIA system said they were satisfied with the assistance they received.

Among low-income adults who participated in WIA programs:

• Fifty-five percent obtained employment. While this number is lower than it should be (the goal was 72 percent) it is significantly higher than the placement rate for non-WIA individuals, which is less than 25 percent.
• Eighty percent of those who obtained employment remained on the job after six months and 72 percent found a job which matched their skills levels.
• Seventy percent who received job training entered employment and 87 percent of those remained on the job more than six months.

Among dislocated workers who participated in WIA programs:

• Fifty-seven percent obtained employment as a result of their participation in WIA. Like the adult figure, this is lower than it should have been (the goal was 77 percent) but it more than twice the placement rate for non-WIA individuals which is 25 percent.
• Eighty-eight percent of those dislocated workers who obtained employment remained on the job after six months.
• Of those dislocated workers who received job training services 78 percent entered employment and 90 percent of those remained on the job after six months.

Among youth aged 19 to 24, 63 percent entered employment or returned to school, 57 percent obtained a degree or certificate, and 38 percent made measurable literacy and numeracy gains. Among youth aged 14 to 18, 87 reached their desired skills attainment levels and 67 percent obtained a diploma or its equivalent.

Why the Workforce Act Matters — Part I

This is the first in a series on the Workforce Investment Act (WIA) and the belief by the National League of Cities (NLC) that Congress must reauthorize and modernize the Act to ensure that it meets the needs of today’s workers and employers. In this first blog we will explore the foundation of the program, which is commonly referred to as the local public-private partnership (which includes local business leaders and local city and county elected officials), the one-stop system, and how these translate programmatically at the local level.

Over the next five weeks, NLC will publish other blogs that will address the kinds of job training that WIA programs offer, the impact that these programs have on workers and employers, some examples of effective programs, the kinds of changes to WIA NLC can and cannot support, and what members of the Human Development Committee are doing to ensure that the Congress is aware of city elected officials legislative wants and concerns.

Why the Workforce Investment Act Matters — Part I

By Neil Bomberg

Every year, the federal government invests billions of dollars in the nation’s workforce development system. Among the programs funded is the Workforce Investment Act (WIA) which provides training and employment services to millions of unemployed, underemployed and disadvantaged Americans through a national network of one-stop career centers that are governed by local workforce investment boards and city and county elected officials.

When WIA became law in 1998 it included a completely new and innovative approach to delivering workforce development services. One-stop career centers have become the backbone of a seamless employment-services delivery system in every state. These one stops are operated and governed at the local level by local workforce boards, comprised of business leaders, and city and county elected officials. They make up the public-private partnership for which this program is known.

The one-stops have provided workers and employers alike with access to the full range of employment services that have included job placement assistance, training, credentialing, unemployment benefits and career guidance, as well as access to other relevant government services, including 17 types of federal training and education programs. Over the past several years, these one-stop centers have successfully provided upwards of nine million Americans per year with employment assistance and millions of employers with skilled workers.

Most of the nine million Americans who enter the WIA system receive “core services” which are generally described as job search and job placement assistance, labor-market information, workplace counseling, and preliminary skills assessments. Others receive “intensive services” which are generally described as comprehensive skills assessments, group counseling, individual career counseling, case management, and short-term pre-vocational services, such as how to write a résumé and prepare for an interview. Both of these services are designed to help those looking for work and who have employable skills, find a job quickly. A smaller number receive “job training services.” These are designed to provide WIA clients with industry-recognized skills so that they may obtain employment, especially after core and intensive services do not result in finding a job.

New Report Highlights Challenges for Veterans

Last week, Paycheck to Paycheck was released by the National Housing Conference and the Center for Housing Policy. The report looked at the cost of housing in more than 200 metropolitan areas and the incomes earned for 74 jobs, including five jobs “targeted by training programs sponsored by the Department of Labor in partnership with the military and other organizations: carpenters, dental assistants, electricians, firefighters and truck drivers.”

The report found that housing costs remain a challenge for many veterans even with employment. With an unemployment rate of 30.2% among post-9/11 veterans ages 18 to 24, these findings are even more troublesome.

Where are younger veterans living? Data from the National Center for Veterans Analysis and Statistics show the top 5 counties with the largest population of veterans younger than 44 are the counties around San Diego, CA; Los Angeles, CA; Phoenix, AZ; San Antonio, TX; and Chicago, IL.

For Los Angeles and San Diego, the report shows that none of the jobs targeted by training programs provide incomes that would make renting a two-bedroom apartment affordable. In Phoenix and Chicago, dental assistants don’t earn enough but other occupations fair better. Other occupations such as retail sales people and security guards also don’t pay enough.

The findings underscore a key point for elected officials and municipal leaders – skills learned during military service do not automatically translate into civilian jobs that pay a livable wage. There are many explanations for this, but instead of looking at those, city leaders can bring focus and leadership to solutions.

Connecting veterans to their education benefits and opportunities in the community is an important step. Coordination between local community colleges, vocational training programs and universities with reserve and National Guard units, as well as any nearby military installations can help ensure veterans know what programs are available. Understanding and preparing veterans for the local job market is also important. The Department of Labor’s “One Stop Career Centers” can be helpful, but partnerships with community leaders are critical.

Since March 2011, the U.S. Chamber of Commerce has been promoting their Hiring Our Heroes campaign to help veterans and military spouses find employment. Working with their network of 1,600 state and local chambers, Hiring Our Heroes has hosted more than 210 hiring fairs in 48 states, Puerto Rico, and the District of Columbia, with more than 10,000 veterans receiving jobs. This year, local and state chambers are hosting hiring fairs in 400 communities.

By bringing together the local chamber, veterans service organizations, educational institutions, government and military leaders, communities can ensure that services are not duplicated, information is shared and connections are made. No one organization can do this alone. Collective, coordinated and concerted action is required.

Let us know how your community is helping veterans find work in the comments below and join NLC members in our ongoing work to better serve veterans by contacting me at harig-blaine@nlc.org.

The Latest in Economic Development

This week’s The Latest in Economic Development explores worker skills mismatch, a new H-1B visa report, a variety of activities in city economic development, and some upcoming economic development events. Have things to add, contact me at mcconnell@nlc.org.

Get the last edition of “The Latest in Economic Development” here.

Lately there’s been a lot of chatter about the paradox of lots of vacant jobs and also lots of unemployed people, causing some to point to a “skills mismatch”.  But recent research by The Federal Reserve Bank of Chicago found limited evidence of such a mismatch. If one does exist, according to the Chicago Fed, it’s for middle skill workers.  “…Occupations that require a moderate amount of skill have not experienced the employment gains, despite the fact that the data from online ads suggest that their skills are in the greatest demand.” Further, Chicago Magazine’s commentary on this research discusses “jobless recoveries” which suffer from the loss of middle skilled jobs that never return.  And Inc. adds another couple of reasons to the mix, including risk averse companies and picky employers and workers.

Highlighting the U.S.’s thirst for high-skilled talent, Brookings Metropolitan Policy Program released a new report on H-1B visas, which “allows employers to hire foreigners to work in specialty occupations on a temporary basis.”  The report states that almost two-thirds of the requests for H-1B visas are for occupations in science, technology, engineering, and mathematics (STEM), with requests for H-1B visas coming from various sectors depending on the metropolitan region. “Demand in corporate metro areas (such as Columbus, IN and Seattle, WA) comes predominately from private employers…while in research metros (such as Durham, NC and Ann Arbor, MI) the demand is driven by universities and other research institutions.” Brookings calls on the federal government to “adjust the cap for H-1B visa applicants based on local employer skills needs and regional economic indicators.” And to “channel H-1B visa fees to skills training in areas that are currently being filled by H-1B workers at the metropolitan level.”

In other economic development news….. the mayors of San Diego and Phoenix, both areas with large defense industries, express their concerns about looming federal budget cuts (Christian Science Monitor via Governing). The mayor of Denver is working to increase small businesses’ access to capital and simplify regulations and permitting by bringing them online (Denver Business Journal). Kansas City’s microlending programs grows to almost 1.5 million (Kansas City Star). And the city of Saint Paul gets props for supporting small business (Star Tribune).

Last but not least, there are a couple of upcoming economic development opportunities. On July 26th, NLC (shameless plug) will host a webinar on the innovative and ambitious Evergreen Cooperatives, which have been getting a lot of positive buzz lately (see recent Atlantic Cities article). Register here.

The folks at ICIC and CEOs for Cities have put out a call for case studies on “what’s working” in cities in the areas of sector-led workforce development, city and anchor economic development collaborations, and efforts to create jobs and build businesses in food clusters. Selected case studies will have the chance to present at their 2012 Inner City Economic Summit. More information here.

Congress Should Not Follow Paul Ryan’s Plan and Cut or Eliminate Job Training and Pell Grant Programs

By Neil Bomberg, Program Director

It is hard to understand, when one looks at the program outcomes for the Pell Grant program and the Workforce Investment Act (WIA), why House Budget Chairman Paul Ryan wants to cut or eliminate their funding.  Both appear to be helping Americans obtain the job skills and education they need for the 21st century workplace.

The U.S. Department of Labor reports that there is great demand for job training and job placement services.  Last year, more than nine million Americans received training and related services through the federally-supported workforce investment system – an increase of nearly 250 percent over the previous two years – and more than half of those individuals found employment in one of the toughest labor markets in history, in large part because of the assistance they received.

According to the U.S. Department of Education, nearly 10 million individuals relied on Pell grants last year, including many who were attending school while continuing to work full-time to support their families.

Critics argue that the outcomes for WIA participants and Pell Grant recipients — slightly more than half of WIA participants find jobs as a result of their participation in the WIA system, and 40 percent of Pell Grant recipients graduate from four year colleges after six years of study – are not sufficient to justify continued funding.  However, I would argue that these numbers are actually impressive when taken in context.

Fewer than 30 percent of all unemployed Americans can expect to find a job in the first month of unemployment, and that number decreases rapidly to less than 20 percent when one is unemployed for more than six months, according to the Brookings Institution.  Equally compelling is the fact that there is only one job opening for every four unemployed individuals, according to the Economic Policy Institute, suggesting that a placement rate greater than 25 percent is exceptional.  Yet WIA’s placement rate exceeds 50 percent.

Though the difference in graduation rates after six years for Pell and non-Pell students who enter four year institutions is significant – 55 v. 40 percent – the difference is explainable.  Pell Grant recipients are among the poorest students, and face significant financial challenges while in school.  Many cannot afford to complete their educations because of these financial challenges.  They are likely to be older than most students, which generally means that they have family and related obligations that non-Pell students do not have, thereby making it more difficult to complete college.  They are more likely to be first generation post-secondary students and come from families with very low academic achievement.  According to Inside Higher Ed more than 40 percent of Pell recipients come from families with a high school diploma or less as compared with non-Pell students where the rate is only 20 percent.  Conversely, 61 percent of non-Pell students come from families with a bachelor’s degrees or higher, as compared with 36 percent for Pell recipients.

Finally, if our goal is to ensure that more people than not have access to a post-secondary education, in large part so that they can compete in the 21st century economy, then Pell Grants are succeeding.  Over the past five years, the number of community college students receiving Pell Grants nearly doubled, according to the American Association of Community Colleges (AACC), and in the past academic year, the number of recipients increased by 21 percent.

From where I sit, these data suggest that the Workforce Investment Act and the Pell Grant program have, in very different ways, made significant impacts on the populations they are designed to serve, and from NLC’s perspective, warrant continued support.