WH announces dislocated worker proposal.

March 13, 2012

On March 12, the White House released preliminary details of a proposal to consolidate two major job training programs – the Dislocated Worker program under Title I of the Workforce Investment Act (WIA) and the Trade Adjustment Assistance (TAA) program – into a “Universal Dislocated Worker Program” that would provide job search assistance, training, and other benefits for up to million dislocated workers.

The announcement also includes a proposal to create an “American Job Center” network, an initiative to expand online and physical access to one-stop career centers and electronic workforce tools for jobseekers and employers. The initiative will include, among other things, the creation of a new website that will serve as a single point of access for a range of workforce data and services, and a $50 million investment to expand the one-stop system, particularly through satellite, virtual, and mobile centers.
 
President Obama hinted at the Universal Dislocated Worker (UDW) Program proposal in his January State of the Union address, suggesting that he wanted to provide dislocated workers with “one program, one website, and one place to go for all the information and help that they need.” The proposal was also referenced in the Fiscal Year (FY) 2013 budget request, although few details were provided at the time.

According to an administration press release, the new UDW program would adopt modified versions of at least some benefits currently available under TAA, which is generally considered one of the most robust federal training programs but which is only available to manufacturing and service sector workers who have lost employment due to foreign competition. The UDW would potentially expand eligibility beyond those categories, and would delegate responsibility for eligibility determinations to the local level. The administration estimates the consolidated program would serve up to one million dislocated workers per year, and would facilitate access to training for as many as 500,000 participants annually. No details are provided on funding levels, though budget documents released last month suggest that the administration is seeking as much as $2.8 billion in mandatory funding starting in FY 2014, which would be offset through other spending reductions or revenue increases.

While details are still limited, key features of the UDW proposal include:

Reemployment services for every displaced worker:  All displaced workers would receive job search assistance, including work-search plans and skills assessments. 

$4,000 training awards:  Displaced workers would be eligible for training awards of up to $4,000 per year for up to two years (for a total of up to $8,000). The administration notes that this will support workers who need to pursue longer-term training in technical fields to learn skills for new industries to do so. Workers would be referred to training based on assessments at local American Job Centers. Under current law, workers must petition the U.S. Department of Labor to be certified as eligible for TAA benefits. It is unclear from the proposal what kinds of training services would be eligible for coverage. 

Support to pursue training or look for work:  The program would provide a weekly stipend of $150 (ranging up to $300 for low-income workers) for childcare, transportation and other expenses for up to 78 weeks, in addition to 26 weeks of UI benefits. The program would also provide workers job search and relocation allowances of up to $1,250 each. TAA currently offers similar job search and relocation allowances, as well as cash assistance – known as trade readjustment allowances (TRAs) - to support participants in training once they have exhausted eligibility for regular unemployment insurance, though current law allows for up to 130 weeks of assistance under certain circumstances.  

Wage insurance for older workers:   Eligible workers age 50 or older who obtain new, full-time employment at wages of less than $50,000 would be eligible to receive wage insurance for up to two years to partially offset earnings losses in new jobs that pay less than their previous jobs. A similar program, known as Reemployment Trade Adjustment Assistance (RTAA), is available for older workers under TAA; it is unclear whether such workers would also be eligible to participate in training; an earlier version of RTAA did not permit training for individuals claiming this benefit.

The proposal also calls for increased investment in counseling and case management services to give participants better information about training program effectiveness; incentives and performance standards for both participants and training providers; and robust evaluation. It is unclear whether the proposal will include the health care tax credit assistance that is currently available to TAA participants.

Congress would need to pass legislation to enact the administration’s UDW proposal, a prospect that seems unlikely in the current fiscal and political climate. It is also unclear how the proposal may affect the administration’s position with regard to WIA reauthorization. National Skills Coalition will provide updates on this proposal – including an analysis of any legislative language – as new information becomes available.