The Workforce Innovation and Opportunity Act—the primary federal initiative that pays for short-term workforce training across the country—is a frustrating piece of legislation. A new analysis from the Project on Workforce at Harvard University finds that WIOA funding—about $500 million annually—is essentially a mile wide and an inch deep. More than 7,000 potential training providers offer a maze of 75,000 eligible programs in more than 700 occupational fields.
In 2019, 220,000 adult and dislocated workers received training vouchers from WIOA. But these aspiring workers have difficulty navigating a fragmented system where it’s impossible to differentiate between strong and weak programs. Worse, 40% of those participating in WIOA programs end up in jobs that pay less than $25,000 a year. Many of these learners have nothing to show for the investment of their time and taxpayer dollars because providers aren’t required to award workforce-oriented credentials. As it stands, WIOA and its funding appear to benefit the training bureaucracy and providers more than individuals needing to upskill or reskill.
WIOA’s limitations and misaligned incentives have left states in a bind. To equip workers with skills that employers need so their businesses and state economies can grow, many states have set up parallel workforce systems using state funding. But this approach duplicates federal efforts, wastes money that could be better spent elsewhere, and fails to close an ever-widening skills gap. WIOA is ripe for a complete overhaul. Unfortunately, there seems to be no appetite in Congress to do so.
But WIOA reform is possible. An immediate step is to allow governors and legislatures to target WIOA funding to training programs for high-growth and talent-starved sectors such as health care, information technology, and construction. The efficient and flexible WIOA system in Utah can serve as a national model for states looking to integrate workforce, training, and employment programs.
Like many other states, Utah had numerous employment programs scattered among multiple state agencies. Since 1997, Utah has operated under single-state area status, which means it isn’t carved into multiple workforce districts with entrenched political interests that compete for resources. This designation allowed Utah to move forward with a clear and ambitious plan to consolidate major human services and employment programs into a single state agency that allows one-stop shopping for residents who need jobs and employers who need workers.
The Utah Department of Workforce Services provides consistent delivery of services to every corner of the state. Because it integrates labor market information with local flexibility, it empowers better decision-making. The state’s existing nine workforce boards serve in an advisory role, which helps state leaders in Salt Lake City identify employer and worker needs and direct funding where it can have the greatest impact. The department also administers a streamlined and innovative system for allocating costs among the numerous state and federal programs.
Congress should permit states to adopt single-state area status—something currently prohibited under WIOA. Utah’s arrangement was grandfathered in when the law changed a decade ago, and that time has shown it should be the norm, not the exception. The onus should be on the federal government to demonstrate that a state isn’t deserving of a waiver rather than a state having to prove it’s worthy. If WIOA’s mission is to add more Americans to the workforce, Congress must abandon top-down approaches and empower bottom-up solutions that enable states to adopt proven models.
States don’t have to wait for Congress to rethink their workforce structures and investments. In March, Virginia’s governor signed into law a massive reorganization of the state’s 1,500 workforce programs. Starting in 2024, a single new state agency will coordinate these programs to give Virginia’s residents and businesses better results. The state’s community colleges, meanwhile, are leading the FastForward short-term career training initiative to prepare state residents for in-demand jobs in seven industries. Notably, these efforts have had bipartisan support in the state, and were begun under a Democratic governor and continue with a Republican one today.
Idaho lawmakers earlier this year agreed to invest up to $8,000 in each high school graduate to pursue short-term industry-aligned credentials that lead to careers in high-demand sectors. Idaho lawmakers will be watching the reformatted Idaho Launch program closely to see which programs participants enroll in and the outcomes they produce. There are concerns that new taxpayer subsidies for workforce programs could drive costs higher, but the watchword here is flexibility in terms of how state dollars are spent and on which credentialing pathways.
Other options for states include creating the conditions for apprenticeship models driven by technology and artificial intelligence—not laborious and time-consuming bureaucratic approvals—that can respond to dynamic shifts in labor markets. States also should remove occupational licensing red tape that restricts individuals with relevant skills, qualifications, and licenses from other states or abroad from working in their state.
Federal lawmakers are beginning to take note of state-level developments. The American Workforce Act filed last fall by Arkansas Sen. Tom Cotton would enable high school graduates to work full time while enrolled in employer-designed training and education programs that lead to permanent employment. This bill puts employers—the ones who best know the available jobs and the skills required—at the nexus of workforce training efforts. It also gives Americans without college degrees a direct on-ramp to careers that pay family-sustaining wages.
Congress and the White House ultimately will have to wrestle with WIOA, whose promise has been squashed by bureaucracy and inefficiency. Until that day comes, federal lawmakers should allow states willing and able to blaze their own workforce development trails the freedom to go on ahead.