Unemployment Insurance Innovations

1. International Association of Workforce Professionals 2010 Conference Unemployment Insurance Innovations Session Topics: Workforce Development Policy Drivers Unemployment Insurance and Change... Program Impact Services Impact What’s New Around the Country? Presented by Melanie Arthur, Greg Newton Associates

2. Unemployment Insurance Innovations • Six Seismic System Shifts! • Envision a “Good Jobs for All” Workforce System • Redefine Unemployment Insurance As a Time to Skill-Up, Not Just for Work Search • Increase the Number of Center Customers Converting to Training Services • Invigorate Workforce and Education Partnerships for Ever-Upward Career Pathways • Redesign and Repurpose Business, Employer Services • Prepare to Meet New Performance Expectations

3. Unemployment Insurance Innovations Seismic System Shift One: Envision a “Good Jobs for All” Workforce System 1990’s: 2010’s: “All Jobs Are Good Jobs” “Good Jobs for All” “Work First” Paradigm Help individuals train for good jobs with middle-class, family-supporting wages Strategic Implications All workforce development staff must value both training and jobs and be organized to help customers easily access and achieve both

4. Unemployment Insurance Innovations Seismic System Shift Two: Redefine Unemployment Insurance As a Time to Skill-Up, Not Just for Work Search “Reemployment Insurance”: Income, Training, and Jobs

5. Unemployment Insurance Innovations President Obama says the goal is to “…change unemployment from ‘wait and see’ to a chance for our workers to train and seek the next opportunity…” “The idea here is to fundamentally change our approach to unemployment in this country, so that it's no longer just a time to look for a new job, but is also a time to prepare yourself for a better job. That's what our unemployment system should be -- not just a safety net, but a stepping stone to a new future. It should offer folks educational opportunities they wouldn't otherwise have, giving them the measurable and differentiated skills they need just -- not just to get through hard times, but to get ahead when the economy comes back.” Source: THE WHITE HOUSE, Office of the Press Secretary May 8, 2009

6. Unemployment Insurance Innovations • Outreach to UI claimants with services and information including training resources such as the Pell Grant and WIA • Ensure staff are aware of “approved training” policies and procedures in relation to continued receipt of UI benefits • Provide training and resources so that all Center and UI staff can help claimants apply for financial aid and training programs • Partner with financial aid officers at postsecondary institutions

7. Unemployment Insurance Innovations Environmental Scan...

8. Unemployment Insurance Innovations Seismic System Shift Three: Increase the Number of Center Customers Converting to Training Services • Training: a “preferred” Center customer path • WIA reauthorization: minimum % on training • ARRA reporting: numbers in training, not just expenditures • 1990’s legacy “sequence of service” strategy eliminated

9. Unemployment Insurance Innovations Unemployment Insurance…and Change Program Impacts • Worker Profiling (WPRS), RES and REA • Self-Employment Option • Personal Reemployment Accounts • UI Performance and Quality • Private Unemployment Insurance

10. Unemployment Insurance Innovations Worker Profiling, Reemployment Services • Significant ARRA investment including $500 million in UI Administration; ES, and RES funding for: technology, job matching and capacity building. • For technology: • Major ARRA achievements : • RES program of improved UI/Workforce partnership (46%) • ES Recovery Funds: • RES to UI claimants (83% • of states) • Integration of ES and UI info. technology to better serve UI claimants (40%) • Update the state’s UI profiling model • Improve data sharing & transfer between • UI, ES & WIA • Upgrade hardware and software in local One-Stops for staff and customers • Upgrade websites and labor exchange sites • Invest in social media capabilities

11. Unemployment Insurance Innovations Source: NASWA States’ Survey, Early ARRA Implementation, May 2010

12. Unemployment Insurance Innovations • Integrating UI & ES technology • Up # of claimants recv’ing on-site help • Improve UI exhaustion models • Enhanced work test oversight Source: NASWA States’ Survey, Early ARRA Implementation, May 2010

13. Unemployment Insurance Innovations Source: NASWA States’ Survey, Early ARRA Implementation, May 2010

14. Unemployment Insurance Innovations

15. Unemployment Insurance Innovations Self-Employment Option • Two demonstrations test viability of self-employment during early 90s: SEED, WA; Enterprise Project, MA • Two key components: • 1) Financial assistance (lump sums in WA, bi-weekly in MA) • 2) Micro-enterprise development services (entrepreneurial • training, business counseling, and technical assistance) • WA $ source: research funds; MA $ source: UI Trust Fund; sums equal to UI benefits entitlement…”self-employment allowances in lieu of unemployment benefits • Business starts: primarily services in MA; services and retail in WA with some micro-manufacturing and construction

16. Unemployment Insurance Innovations Self-Employment Option • Demonstration projects prove “self-employment” as a beneficial option – creating “jobs” for participants: increased likelihood of employment and accelerated timing of entry into employment • Earnings from self-employment: no significant effect in MA; treatment group earned more WA • Total earnings impact: MA had positive impact; WA demonstration had no impact • Unemployment spell reduced in both demonstrations; both reduced UI benefits receipt (however, WA model included a lump sum payments that increased total payments) • Services increased duration of self-employment • Many interested and eligible claimants, with relatively few pursuing the opportunity: WA – 37% of participants from profession, technical and managerial occupations; 45% from same in MA

17. Unemployment Insurance Innovations Self-Employment Option • Direct result of demonstrations led to Congress enacting authorizing legislation to allow states to establish self-employment assistance programs for unemployed workers as part of their UI programs. • Additional states: New York, Oregon, Maine, Delaware, New Jersey, California, Maryland, Pennsylvania • Ongoing findings: • High rates of self-employment are achieved • Participants are likely to have higher levels of education; higher pre-unemployment wages; a previous professional, technical, or managerial occupation; and to have been male in comparison to non-participants • Participants are 4 times more likely to have obtained employment (of any kind – either self-employment or wage/salary)

18. Unemployment Insurance Innovations Personal Reemployment Accounts (PRAs) Strategy intended to help unemployed workers build job skills and find work through a self-managedaccount. Demonstration Objectives: (1) Give job seekers choice in and control over the type and timing of services they received (2) Encourage and support rapid return to the labor market -- shortening the unemployment spell (3) Promote job retention. • Most likely to exhaust UI benefits • $3,000 to choose how and when to spend funds from account • Purchase reemployment services, supportive services and training • May also elect to receive funds as cash reemployment bonuses for reentering the workforce (60% of PRA balance if employed within 13 weeks) and keeping a job (for 6 months -- 40% of balance )

19. Unemployment Insurance Innovations Personal Reemployment Accounts (PRAs) • Seven states volunteer: Florida, Idaho, Minnesota, Mississippi, Montana, Texas, and West Virginia, Hawaii joins • 4,480 unemployed workers; in six of the seven original states, the majority of individuals offered a PRA accepted • Employment entry bonus among all recipients was 31% • Majority of PRA recipients in ID, MN, MT and TX used the PRA to purchase supportive services; (3 to 4%) did so in MS and WV • 12% purchased training; averaging more than $1,000 each in MS, TX, and WV, and between $500 - $1,000 in the other states • No intensive services purchased in ID, MS or MT; 2% or less in MN, TX and WV; in Florida -- 16%

20. Unemployment Insurance Innovations Personal Reemployment Accounts (PRAs) • Average rate of benefit exhaustion at 40% (although “profiled” to be at 52%); collect an average of 17 weeks—about one month shorter than full period of eligibility • Average rate of benefit exhaustion at 40%; collect an average of 17 weeks—about one month shorter than full period of eligibility • Half of recipients were employed in the quarter following PRA entry; 59 percent who earn the first employment bonus also earn the job retention bonus; just over 20 percent of PRA recipients earned the retention bonus

21. Unemployment Insurance Innovations Unemployment Insurance…and Change Service Delivery Impacts • Internet • Call Centers • Virtual Services • Debit Cards • UI and One-stop Connections • UI and Training

22. Unemployment Insurance Innovations Unemployment Insurance…and Change Service Delivery Impacts • Position unemployment insurance as "reemployment insurance" • Improve the "rapid response" meeting, presentations, processes and documents • Turn "claimants" into job seekers or training participants ASAP • Design and (re)launch services for the professionals, along with improved reemployment services for entry-level workers

23. Unemployment Insurance Innovations Unemployment Insurance…and Change Service Delivery Impacts…cont. • Strategically redesign worker profiling processes, requirements and services to target reduction in weeks claimed, not just reduction in exhaustees • Use "high volume" traffic in centers to once and for all move beyond (just) the "unemployment office" to recognition as a true Career Center • Position with employers:  this economy means you alone have an "unequaled talent bank" since UI is the "first to know when quality workers lose their jobs"

24. Unemployment Insurance Innovations Unemployment Insurance…and Change Service Delivery Impacts…cont. • Overhaul bureaucratic UI "notices" to promote reemployment services, while not diminishing communication of required information • Process improvement strategies between and among customers, one-stop centers and UI call centers or Internet sites • Making sure the unemployed who are denied unemployment benefits know you can help with employment and training services • And more!

25. Unemployment Insurance Innovations • References and everything you ever wanted to know about unemployment insurance… • www.ows.doleta.gov • reemploymentworks.workforce3one.org: • TEN 11 -09: Supporting Claimant Needs in the One-Stop Centers • TEGL 2-09: State Approved Training • TEGL 2-08: Pell Grant Info • www.workforceatm.org; for NASWA survey on ARRA activities, RES learnings webinar Your seminar leader... Along with her colleagues at Greg NewtonAssociates, Melanie Arthur is helping states and communities across the country operate successful workforce investment centers.