Session 1 Overview of Labor Exchange Policies and Services: New Developments

1. Session 1Overview of Labor Exchange Policies and Services: New Developments Randall W. Eberts W.E. Upjohn Institute for Employment Research Flexwork Research Conference 2013 Amsterdam, October 24-25, 2013

2. Wagner-Peyser Employment Service • Wagner-Peyser Act created the employment service in 1933 • Today, 22 million job seekers and 200,000 employers use the ES each year • Among unemployed job seekers, about 19% use the ES—double the percentage using private employment agencies • ES users are more likely to be African Americans, have only a high school education, from mid-size cities, and lower income • Among employers, 30% use the ES; adding non-profits brings the share using ES to 50% • Large employers (>500) are twice as likely to recruit from ES than small business (1-20) • W-P ES financing comes from FUTA, discretionary appropriation from Congress, and State-finance supplement

3. Other Eligible Applicants W-P ES UI Eligibles Received Some Reportable Staff Assisted Service/Job Search Activities Referred to WIA Services Career Guidance Job Search Service Referred to Employment interview Flows of Participants through the Employment Service 10.7 19.6 11.8 1.6 8.9 3.4 6.2 5.1 Numbers are expressed in millions for the period 2010Q4-2011Q3.

4. ES Services Job Seekers • job search assistance • placement assistance • job fairs • labor market information. Employers • labor market information • employee recruitment • job fairs • development of job descriptions • assistance during layoffs and closings. In nearly all states, W-P ES is delivered through the 3,000 One-Stop Career Centers, now known as American Job Centers

5. ES Funding • Three sources: • Federal Unemployment Tax Act revenue (80% of a 0.8 percent tax on payroll up to $7,000) • Congressional appropriation (63% based on share of labor force, 33% share of unemployment) • State-financed supplement • Since 1984, funding has been around $750 million a year, which today with 20 million participants equals about $37 per participant • Funding has declined by over 50% in real terms since 1984, due to inflation

6. Effectiveness of ES Services The Wagner-Peyser Act and U.S. Employment Service: Seventy-Five Years of Matching Job Seekers and Employers ,Christopher J. O'Leary and Randall W. Eberts, W.E. Upjohn Institute, 2008

7. ES and Great Recession • Placed significant burden on the W-P ES to provide services to the massive influx of unemployed, leading to a 60% increase in participants • Introduced several new services and administrative innovations • The Recovery Act added $390 million over two years compared to an annual appropriation of $700 million in 2009 • Much of the additional funds were for specific purposes, such as reinstituting the Reemployment Services (RES) program and providing funds to states for improving admin infrastructure and developing innovative services • ES emerged from the recession with a new vision and transformational elements

8. ES and the Great Recession Layoffs peaked in 2009Q1, followed immediately by a spike in initial claims and first payments. ES enrollment gradually increased by 60% during the recovery. Blue shading: recession; red shading: Recovery Act funding period.

9. ES funding during the Great Recession The addition of ARRA funding increased total expenditures above pre-recession levels… but average expenditures per participant were lower due to the influx of participants. Blue shading: recession; red shading: Recovery Act funding period.

10. ES Services during the Great Recession Low-cost services—orientations and assessments—received the largest increases in enrollments; the more intensive and expensive services received the smallest increases. Blue shading: recession; red shading: Recovery Act funding period.

11. National Vision • The workforce system and the UI system are one single comprehensive, integrated workforce system with UI as one of the core critical elements • UI claimants are customers of the integrated workforce system and are inherently job seekers needing access to the full array of services

12. Transformational Elements • The comprehensive system has a “common front door” supported by integrated registration/customer records • Real Time Triage – Integrated information driving service delivery at all points in the service delivery cycle • Focus on Skills Transferability • Social Media Used for Outreach & Service Delivery

13. Integrated Records State implementations-- • Created a website to provide an online orientation option for UI claimants and job seekers to access available services through the workforce development/one-stop system • Created a website for UI claimants and jobseekers whichprovides a holistic overview of services available (e.g., help with housing, food, life aspects as well as getting a job). • Made LMI tools (e.g., “Help Wanted” technology) more user friendly and connected with job-posting sites • Marketed to employers to encourage posting of new job openings • Developed web-crawling tools to obtain real-time job postings and career pathways models • These technology upgrades have increased the capacity of the ES to serve more job seekers and claimants, especially by making unassisted services more readily available to claimants and jobseekers

14. Triage and Skill Transferability Several States implemented programs to assist in determining customer skills, knowledge, and abilities for career counseling and job placement • WorkKeys: a three-step assessment and training program matching individuals to jobs and training. • TORQ: the Transferable Occupation Relationship Quotient is a single measurement that defines "transferability" of an individual’s skills between occupations. The tool links occupations based on the abilities, skills, and knowledge required by workers in occupations using the O*NET database. • Smart 2010: artificial intelligence software used in New York that analyzes a customer’s resume for skills, work experience, and related talents. • Job Zone: an online resource that includes a career exploration section, a self-assessment section, and resume preparation assistance. The user may view occupations, training program information, and information on colleges.

15. Workforce Data Quality Initiative • The WDQI enables state workforce agencies to build longitudinal data systems that merge workforce information with education data • Tracks individuals as they progress through the education system and into the workforce • Provides information on performance of education and workforce development programs and training providers and integrates workforce administrative data • WDQI basis for a Frontline Decision Support System • Evaluations show statistical referral systems to be cost effective

16. Expanded Use of Social Media • Recovery Act funds provided additional resources (mainly in the form of staffing) to push state and local areas to increasingly use “social media” -- such as Facebook, Twitter, and LinkedIn • Social media used to better connect job seekers with ES services and American Job Centers and to make additional services more readily available to customers • Local workforce staff can now make announcements to training and job opportunities available to job seekers instantaneously via Twitter • Facebookis being used to disseminate information on job orders and create a virtual job club environment • Workforce centers have also conducted workshops on how to use Facebook and LinkedIn as an effective job search tool

17. Dedicated RES Funding • Recovery Act funding allowed state and local areas to reinstitute RES and deliver more integrated reemployment services to UI claimants referred by the WPRS, on a larger scale, than they had since the start of the WIA program • Through the Worker Profiling and Reemployment Services (WPRS) system, states have developed a range of statistical models and other approaches to identify specific groups of UI claimants to target for Reemployment Services. • Targeted claimants were required to participate in REA activities, • developing a reemployment plan (rather than work-search plan) • completing work search activities (e.g., accessing services at a One-Stop center, attending an orientation, registering with the state job bank).

18. RES Strategies • Increased collaboration among the ES, UI, and labor market information (LMI) offices at the state and local level • Provide access to a full array of Recovery Act services including activities funded by WIA, such as job clubs, targeted job development, identification of transferrable skills, development of individualized reemployment plans, and soft skills training

19. Net Impact of REA/RES • A study for ETA found that “the Nevada REA program was more effective in reducing claimant UI duration and generating greater savings for the UI Trust Fund than the REA program in other states examined.” • The average cost per participant for integrated REA/RES was $201 • On average, claimant duration was reduced by 3.13 weeks and total benefit amounts received was reduced by $873, yielding average UI regular savings of greater than two times cost, and average total UI savings of greater than four times cost • A key feature of the Nevada program was that REA and RES services were delivered by the same staff person to a claimant in one meeting

20. Summary of New Developments • Funding to provide the services ES is supposed to provide • IT innovations, such as integrated records, algorithms for real-time triage, web searches for job postings and career ladder models, and use of social media • Assessment tools • Fuller integration into the workforce system and greater collaboration with other programs