Updated: July 6, 2010
Workforce Development Initiatives in the American Recovery and Reinvestment Act of 2009
On February 17, 2009 the President signed P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA). This $787 billion plan includes a combination of federal tax cuts and incentives, social entitlement spending, and funding for agency-awarded contracts, grants, and loans. Included in this package is $4.81 billion in support for workforce development programs administered by the U.S. Department of Labor (DOL).
The ARRA provides added funds to many of the current formula grant funded programs authorized in the Workforce Investment Act (WIA) and the Wagner-Peyser Act. Statutory formulas for state allotments under these programs can be found here. WIA and Wagner-Peyser programs are administered by the DOL through the Employment and Training Administration (ETA). According to ETA guidance, this additional money is intended to supplement annual appropriations to current programs, not replace state or local dollars already dedicated to workforce development initiatives, in order to increase the number of people served and trained in the existing framework. WIA dollars in the ARRA are considered Program Year (PY) 2008 funds and must be spent by the end of PY 2010 (June 30, 2011). Funding for Wagner-Peyser under ARRA is available for obligation by the states through September 30, 2010, and also must be spent by the end of PY 2010.
The Workforce Investment Act (WIA)
The Workforce Investment Act of 1998 (P.L. 105-220) provides employment services and job training to unemployed and underemployed individuals through a system of One-Stop Career Centers. The WIA authorizes numerous job training programs, funded through state formula grants for Youth, Adult, and Dislocated Workers and Training Activities.
Wagner-Peyser Act/Employment Services
The Wagner-Peyser Act of 1933 created the Employment Service, a national system of public employment offices. The Act was amended in the Workforce Investment Act of 1998 creating the present day “One-Stop” services delivery system. These One Stop Career Centers provide services to job seekers, employees, and employers.
NCSL is tracking the distribution of funding and implementation of programs authorized under the WIA and Wagner-Peyser Act, in addition to the allocation of DOL discretionary grants for worker training and placement in high growth and emerging industry sectors. A DOL breakdown of ARRA funding for the aforementioned programs by state can be accessed here.
The ARRA added $500 million to supplement annual appropriations for Adult programs under the WIA. This money, distributed by ETA to the states through the current formula, is available to states to deliver employment and training services to adults using the current One-Stop system. Fifteen percent of the funding is reserved for statewide activities to be used for incentive grants, technical assistance, management information systems, evaluation, and One-Stop system building. A breakdown of the funding for each state can be found here.
States and local areas are required to prioritize use of WIA Adult formula funds under ARRA for services to public assistance recipients and low-income individuals. In conjunction, state and local areas must also prioritize services for veterans and eligible spouses.
The ARRA included an extra $1.2 billion to supplement annual appropriations for WIA Youth activities. This money, also distributed by ETA to the states through the current formula, is available to states for youth activities in accordance with requirements outlined in the WIA. Though not explicit in the language of ARRA, an explanatory statement accompanying the Act points out Congressional interest in the funding being used to establish summer employment opportunities for youth. Examples of Summer Youth activities funded with ARRA dollars are available on DOL's website. The ARRA also increases the age eligibility for youth activities to 24 years old. The existing requirement that local areas spend at least 30 percent of funds on out-of-school youth is applicable to ARRA dollars. A breakdown of the funding for each state can be found here.
The ARRA added $1.25 billion to the WIA Dislocated Worker formula program. This money, also distributed by ETA to the states through the current formula, is available to states to provide employment and training services to dislocated workers using the current One-Stop system in order to support their eventual reentry to the job market. A breakdown of the funding for each state can be found here.
Related programs for dislocated workers granted supplementary funding in the ARRA includes employment service operations and Reemployment Services (RES) created under the Wagner-Peyser Act. The ARRA provides an additional $150 million in appropriations under the Wagner-Peyser Act for Employment Services Operations. This money, again distributed by ETA to the states through the current formula, is available to states to aid those seeking job search assistance and skills assessment through a One-Stop Career Center, in addition to providing market information to employers and potential employees.
Approximately $250 million in additional funding for Reemployment Services (RES) is included in the ARRA. Like the other formula grant dollars in ARRA, these funds are distributed to states using the existing formula under Wagner-Peyser, and are to be used to augment current RES for UI recipients and assist in the integration of the information technology for UI and Employment Services to better serve claimants. A breakdown of the funding for each state can be found here.
The ARRA provided an additional $200 million for National Emergency Grants (NEG) as well. These discretionary grants, dispensed by the Secretary of Labor, are primarily used to respond to significant dislocation events, such as a plant closing, by providing funds to expand existing service capabilities that cannot otherwise be handled under the WIA Dislocated Worker program. While maintaining the fundamental components of the program outlined in the WIA, ETA modified NEG policy and guidance to better adhere to the requirements and purposes of the ARRA. Information related to these changes, including applicant eligibility and acceptable use of formula funds, can be found here.
Transformation and Innovation (Green Jobs)
The ARRA provides $750 million for a competitive grant program for worker training and placement in high growth and emerging industry sectors. Of this total, roughly $500 million is set aside for discretionary grants distributed by the DOL for research, labor exchange, and job training projects that prepare workers for careers in energy efficiency and renewable energy. More than $225 million is available to states for health care and high growth training grants. The Department of Labor announced the grant recipients on February 12, 2010.
On June 24, 2009 Secretary of Labor Hilda Solis announced
the creation of the following five grant competitions to distribute these funds. Four of the grants focus on training. The remaining is geared towards research and labor exchange.
Accountability and Transparency
In addition to the reporting mandates outlined in Section 1512 of the ARRA cataloged here, ETA required states to submit a State Plan modification for Program Year 2009 in accordance with WIA regulations calling for State Plan revisions following a significant state or federal policy change that alters the suppositions of the existing plan. The revised plans, found here, detail how states have refocused workforce development initiatives following the implementation of the ARRA.