We need a ‘no results, no funding’ workforce policy

Marissa Warren decided to go back into the workforce after being out for a decade. She went to her local one-stop American Job Center and signed up for a three-month training course to become a medical billing clerk. Only after successfully completing the program did she learn that the only employers that were hiring in her area wanted applicants with previous experience.

She would look for a job for the next two years—until an upstart company finally took a chance on her. 

Warren is among the 1 in 12 Americans who use the public work system for reskilling. This system invests nearly $14 billion annually to help dislocated workers train for, and find new jobs — and to help economically disadvantaged Americans learn skills with which they can move into the workforce. Unfortunately, little attention is paid to the wage and employment outcomes of these investments. 

In fact, less than 1 percent of government funding is tied to results-oriented workforce training programs. This is an urgent problem. Very few federal dollars go to programs with strong evidence of increased employment and wages. This has a direct and harmful impact on Americans like Warren who turn to these programs—endorsed by the federal government—to find living-wage employment.

That’s not to say that programs with strong evidence don’t exist. There’s a growing list of workforce development and education programs that have been shown by rigorous evaluations to sustainably increase wages and unlock opportunities. 

Year Up, one of the most successful programs that has achieved increased wages and opportunity for disconnected youth over the last 20 years, receives virtually no public funding, despite its graduates experiencing annual gains of nearly $8,000 in average earnings — gains that have persisted for five years. 

A Texas-based organization called Project Quest is another terrific example. It focuses on upskilling Latinx learners in the health care sector and recently completed a nine-year randomized evaluation showing wage gains of over 20 percent that persisted into the ninth year. The project is largely funded by private and philanthropic dollars, including a grant from New Profit’s Postsecondary Innovation for Equity Initiative, which supports organizations in building evidence about new approaches that connect young adults from low-income communities with upwardly mobile careers.

But, despite its proven success, Project Quest is not accessing public funding at scale outside of its home base of San Antonio. Without federal funding to support these evidence-based programs, they are constrained from growing—while millions of workers and learners miss an opportunity at upward mobility.

The Expanding Pathways to Employment Act is our chance to change this. The bipartisan bill puts a stake in the ground for proven approaches to economic mobility. The legislation would provide grant funding to help states invest in evidence-based workforce development and postsecondary education programs—with a strong focus on equity and directing resources to families and communities historically held furthest from economic opportunity. The ‘strategic match incentive’ included in the bill would encourage state and local governments to gradually shift federal funding into effective, equitable programs.

Since the bill was introduced, a coalition of 70+ organizations signed a letter endorsing the act, calling it “evidence-driven, equity-oriented legislation.” Many of these supporters include Coalition members of America Forward, New Profit’s policy and advocacy initiative, along with organizations within the Future of Work Grand Challenge, a multimillion-dollar effort to rapidly reskill workers. The 15 entrepreneurial teams participating in the challenge are working in six regions across the country to bring the essence of this bill to life. They are rigorously monitoring results and working with public workforce infrastructure to understand how to deliver innovation at scale.

With the Expanding Pathways to Employment Act in the House—and hopefully, a bipartisan Senate bill to follow soon—we are at a critical inflection point to drive transformational change in workforce development. We owe it to communities who depend on the workforce system for career advice and upskilling to ensure that we are investing public dollars in programs that show proof of leading to employment. 

Billions of dollars are at stake as Congress and the states look to power an equitable recovery. The country can’t afford to keep investing in programs that, however well-meaning, don’t work. Workers like Marissa Warren certainly can’t afford it. 

Angela Jackson is a managing partner at New Profit, a venture philanthropy fund, where she leads investments around the ‘future of work’ and economic advancement.

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