Understanding the New Workforce Innovation and Opportunity Act

The Workforce Innovation and Opportunity Act (WIOA), the reauthorization of the Workforce Investment Act of 1998 (WIA), was signed into law this past July 22. While the law does not take effect until July 1, 2015, workforce development agencies are studying changes in the law and reacting to how their program fits WIOA's goals. The legislation funds the public workforce development system, which provides job training and placement services across the country. The workforce development system is an important partner to the community and economic development fields because it can help residents and workers upgrade their skills or reenter the workforce. Many organizations are hopeful that the legislation will help support innovative practices and foster greater collaboration.

The law identifies several important changes in the functioning of the federally funded workforce development system. Many of the changes aim to align better the funding system with effective training practices. Sectoral training programs and employer involvement in training programs have been tested and identified as effective ways to train job seekers and place them into in-demand positions. The WIOA defines four important goals that will better link employers to workforce development programs. Specifically, under the new legislation, local workforce development entities will (see the U.S. Department of Labor WIOA FAQs Adobe PDF file format):

  1. Develop plans that describe their strategies and services for employers, especially small employers and employers from in-demand industries and occupations
  2. Describe how they will meet the needs of local employers
  3. Detail how they will better coordinate efforts with economic development organizations
  4. Specify how they will support workers through incumbent worker training programs, on-the-job training, career pathway initiatives, the use of business intermediaries, and other strategies that support employers.

Strengthening the connection between employers and training providers is an important step in the development of a workforce development system for the 21st-century economy. As part of its engagement efforts, the Atlanta Fed's community and economic development staff have been discussing changes in the WIOA legislation with stakeholders across the Sixth District. Workforce providers in the District have welcomed these programmatic changes to help strengthen ties to the business and economic development community. Many of the workforce development organizations that had been involved in the WIA-funded system had moved toward models like the new legislation, and they hope there will be fewer administrative barriers to and greater recognition of these types of programming.

Some workforce development providers in the Southeast that have not traditionally worked within the federal workforce development system are hopeful that the new legislation may open up opportunities for program and training funding. At the metro level, organizations are starting to think about how they can coordinate among the business community, economic development agencies, and workforce development organizations and providers. In Atlanta, a group of business leaders, workforce development program managers, state government officials, philanthropies, and nonprofits has collaborated to identify how these organizations can work together to meet the requirements of the new legislation effectively. A collaborative in Nashville is creating a network of training providers, which includes social service and community development organizations in addition to the traditional groups.

The new legislation does present challenges, however. While most organizations welcome the changes and felt they were already moving in the direction the law incentivizes, some groups are concerned about decreases in funding for "in-school youth." While decreases in funding for youth job training did not occur, WIOA requires that 75 percent of all youth training funds are spent on "out-of-school youth." Under WIA, that number was 30 percent.

Out-of-school youth are students who have dropped out of high school, have been in the criminal justice system, or had another life event that took them out of the traditional K–12 system. Out-of-school youth need specialized training that adapts to their life circumstances. Some providers suggest that by working with in-school youth, they could help young people avoid these life events that negatively affect their job prospects. Some providers estimate that they will be able to serve only a third of the total number of youth they did under WIA.

Identifying synergies between the workforce development system, newly created business and training alliances, and the educational system to serve in-school youth and fill this gap will be a key future step in ensuring that those students are able to maintain career services and training, even if those services are not part of a college preparatory curriculum. These challenges come in an environment where many youth training and apprenticeship programs report difficultly linking into federal workforce development funding.

Changes to legislation always create challenges and opportunities for those affected. Stakeholders suggest that WIOA will help them create or support existing locally relevant and meaningful partnerships with the business community and economic development agencies. Serving youth will be more challenging under the new WIOA guidelines, but potentially some of the new and existing training, economic development, and workforce development relationships will find creative ways to fill the gap. As the law moves toward implementation, there may be new revelations and details about the law's intricacies that will affect programming. Workforce development agencies in the Southeast are searching for ways to be more proactive, and early assessments of WIOA suggest that it helps these efforts by creating an environment that supports many of their existing industry partnerships in a more formal way and challenges them by limiting how youth programming is developed and whom it can serve.

By Stuart Andreason, CED adviser, Human Capital and Workforce Development