Cuts to the Left of Us, Reductions to the Right

Residents of the District of Columbia – particularly those who are part of the DC advocacy community – are awaiting anxiously the Friday, April 1, release of Mayor Vincent Gray’s proposed budget for FY2012. The budget is expected to be challenging. With the District facing a projected shortfall of $322 million, no program is likely to be spared completely. That includes workforce development, job readiness, adult literacy, and related supportive services.

The FY2011 budget for the DC Department of Employment Services (DOES) includes a total of $75 million in general (non-federal) funds. Of that, approximately $41 million is dedicated to workforce development, which includes adult job training, the Summer Youth Employment Program, year-round youth job training and placement programs, and other related services. From that $41 million total, rumor has it that DOES was required to cut more than $5.2 million for the FY2012 budget – a cut of more than 10 percent. While not catastrophic all by itself, this cut will be painful.

Unfortunately, the bad news does not end there.

As you may remember, the US House of Representatives passed HR 1 in February, which proposed drastic cuts to a broad range of federal program. HR 1 cut federal funding for job training in the current fiscal year – FY2011 – to zero. The continuing resolutions passed since HR 1, while slightly less draconian, also slash spending for job training.

The US Senate is expected propose a lower level of cuts to job training, but it is clear that the final picture will be grim.

In the District of Columbia, as in many other jurisdictions, federal funding supports One-Stop Career Centers, probably the single most accessible source of assistance for people who need to file for unemployment, find jobs, and connect with job training programs. The DC Works! Career Centers – our One-Stops -- are funded entirely with federal monies. If the federal cuts are as large as it appears they may be, that resource will become much less available to DC residents as soon as July.

To recap -- we are facing federal funding cuts to job training programs for the balance of FY2011 – cuts which will likely extend through FY2012. Those cuts will be followed by significant cuts to local funding for job training for FY2012.

If you’re scared, you are not alone. But you are not powerless. You have a voice regarding the District’s budget.

The Council of the District of Columbia will hold hearings to address the Mayor’s budget beginning in early April. The hearing on the DOES budget is set for Tuesday, April 12, at 1:00 pm, before the Committee on Housing & Workforce Development. The committee will meet in Room 500 of the John A. Wilson Building, 1350 Pennsylvania Ave NW. If you wish to testify, please contact Drew Hubbard, Clerk of the Committee, at dhubbard (at) dccouncil.us or (202) 724-8198. While you will be limited to 3 minutes of oral testimony, your written testimony becomes part of the official record in full.

With an unemployment rate in excess of 9 percent in the District, It is critical that we preserve and strengthen our city’s workforce development system. A strong system will ensure the long-term viability of the District’s economy, and help ensure that all of its citizens have the opportunity to participate. With sufficient resources devoted to job training, workforce readiness, adult literacy, and supportive services, we can, in a sense, create tens of thousands of taxpayers. These taxpayers, in turn, will contribute to the District’s coffers and those of their neighborhoods, climb the ladder to self-sufficiency, and help prepare themselves and their children for good jobs in a growing economy.

We’ll see you at the hearing on April 12.

First, Let’s Fix First Source

Here is an interesting fact to ponder: approximately 70 percent of jobs in the District are held by people who do not live in the District.

This imbalance is problematic. One reason it is problematic is that the income earned by that 70 percent goes home to be taxed in Maryland or Virginia. The District's Chief Financial Officer has estimated the lost revenues at $34 out of every $100 earned.

In a time of tight budgets, we need to address this leakage of potential revenue from DC into the suburbs.

But how do we change the percentage? How do we get DC residents back to work?

The answer to that question is complex. We need to help long-term unemployed residents address many of the serious challenges and barriers they face. But we also need to ensure that qualified DC residents have access to job opportunities.

One tool to help ensure such access is the First Source law.

Our tax dollars support many projects that create jobs. Look around the city – there is a good chance that the building going up in the construction site across from your office is partially funded by the taxpayer-funded DC government.

Support can be direct – in the form of a contract to erect a building for a District agency, for example, or to provide job training or some other service. It can also be indirect. DC, like every other city in the nation, offers businesses a variety of tax and other incentives to encourage them to build buildings or open stores and restaurants here.

The District's First Source Act is intended to ensure that when our taxpayer dollars are invested in these projects, they increase employment opportunities for District residents.

The law requires nearly all employers that receive contracts or other forms of government assistance worth $100,000 or more to give priority for new jobs and apprenticeship opportunities to residents of the District.

Priority here means that employers must use the DC Department of Employment Services (DOES) as the "first source" for recruitment, referrals and placements for projects in which District taxpayers have made some kind of investment, financial or otherwise.

This process is supposed to result in the hiring of DC residents for at least 51 percent of all new jobs created by the publicly-supported project and at least 35 percent of apprenticeship hours.

Unfortunately, the First Source law has not been terribly successful in generating jobs for DC residents.

There are two primary reasons the law has not worked well.

First, the First Source law has not been effectively enforced. Last year, the DC Auditor reported that only one-fourth of the projects reviewed met the 51 percent goal, mainly because DOES was not sufficiently staffed to monitor them appropriately. As a result, the District and its residents lost more than $14 million in job revenues.

And last year was not an anomaly. There is no record of any employer ever having been fined for noncompliance with the First Source law. And it was enacted in 1984.

A second equally important reason is that the First Source law has major weaknesses that allow District contractors to legally avoid compliance with the law. For example, they can comply with the law by proving they made a "good faith effort" to hire DC residents, but were unable to find suitable candidates.

This may seem reasonable, but the law sets the bar pretty low in defining what constitutes "good faith." All employers have to do is show that they ran an ad in the classified section of the paper of record (in DC, that’s the Washington Post) and posted a notice on the District's online career center.

A broad coalition of local organizations, including the DC Jobs Council, recently produced a brief that recommended a new structure to address these weaknesses. It offers an alternative to the current DOES referral process—an independent "workforce intermediary" that would serve as a broker between covered employers and local training providers.

With a workforce intermediary to complement current First Source requirements, job seekers would get training tailored specifically to jobs the employer expects to create. The employer would get qualified candidates who had been pre-screened and directly referred by the intermediary.

And the District would have more residents working in good jobs—and paying taxes.

DC Council Chairman Kwame Brown, joined by Councilmembers Michael Brown and Harry Thomas, Jr., has introduced a bill – the “District of Columbia Workforce Intermediary Establishment and Reform of First Source and Living Wage Amendment Act of 2011” -- that would establish such an intermediary. Among other provisions, the bill also closes – at least partially -- some of the loopholes that allow employers to comply with the letter, but not the spirit of the law.

The bill is no silver bullet, and we believe it could be improved in several specific ways, but it is a good start.

I will be presenting testimony on the bill at a hearing of the Council of the District of Columbia’s Committee on Housing and Workforce Development on Monday, March 14, beginning at 10:00 am. My testimony will be posted on the DC Jobs Council website by COB on Monday.

In addition, I am scheduled tentatively to talk with News Talk host Bruce DePuyt on Friday, March 11 at 10:00 am. You can watch it on News Channel 8 or online at www.tbd.com/tv. The show reruns at 4:00 pm and again at 6:00 pm.

Working Together to Get People to Work

One of the biggest challenges to the effective functioning of the District of Columbia’s workforce development system is that it really isn’t a system at all.

Let me explain.

Workforce development activities in the District are funded by no fewer than eight different federal and local funding streams. Each one of these funding streams comes with its own set of goals – and its own set of restrictions.

For example, the District’s One-Stops are funded with federal money available under the Workforce Investment Act (WIA).[1] To utilize that funding, the District – through the DC Department of Employment Services (DOES) – has to agree to achieve certain performance measures in a given year. These performance measures include placing a certain percentage of adults in employment, ensuring a certain percentage of those placed stay in those jobs for at least six months, and ensuring those placed earn wages above a certain level. These performance measures are subject to approval by the US Department of Labor.

The DC Jobs Council is very supportive of performance measures in principle. We believe that anyone receiving taxpayers’ money should be accountable for how it is used.

The problem is that, in order to achieve the negotiated performance standards, the One-Stops assist only the clients most likely to succeed – a practice called “creaming.” This approach appears perfectly rational: when you have limited resources, and set goals, you are going to deploy those resources in a manner that ensures you meet your goals.

But while it may appear rational, it may not be in the best interests of those District residents most in need of assistance. Tens of thousands of the District’s unemployed residents need assistance with job searches, job training, and overcoming barriers. WIA funding only helps to meet some of those needs.

But is there money somewhere to meet the other critical needs of those facing the highest barriers?

One of those barriers is literacy – or, more accurately, the lack thereof, a barrier faced by about one-third of our neighbors. Federal money for that purpose comes largely through Title II of the Workforce Investment Act, and the funding is distributed in the District via the Office of the State Superintended of Education’s Office of Adult and Family Education.

Another barrier faced by unemployed single parents is the lack of the resources to pay for basic needs while looking for a job or pursuing training. In some cases, the Temporary Aid to Needy Families (TANF) Employment Program can provide access to training for those parents who receive TANF, along with the cash assistance available to custodial parents through TANF. TANF is distributed to the District via the DC Department of Human Services’ (DHS) Income Maintenance Administration (IMA).

There are others, but you get the point. The District has access to a lot of sources of funding to facilitate workforce development, each with its own rules and regulations – and each coming through its own silo.

The DC Jobs Council has long advocated for some kind of mechanism within the District government to, at the very least, maintain a bird’s eye view of all of the activities in all of the workforce development silos. Even better would be an individual – or a group – who could actually have an impact on how the programs in these silos interact and – potentially – cooperate.

That’s why we were thrilled when Councilmember Michael A. Brown, chairman of the Committee on Housing and Workforce Development, convened a workgroup to discuss just how to facilitate this kind of cooperation – to start the work necessary to break down the silos. Brown and his staff invited representatives from advocacy organizations, think tanks, philanthropy, and service providers to meet and talk candidly about the silos.

Brown and his staff also invited representatives from the District agencies whose work has an impact on workforce development – DOES, DHS IMA, and OSSE’s Office of Adult and Family Education. But not one agency representative showed up. One agency representative had intended to join the meeting, but was told at the last minute she should not attend. One agency staffer simply refused, while another did not respond to the invitation. (However, to give credit where it is due, a representative from the Community College of the District of Columbia did attend.)

The workgroup will meet again in the near future. It is our understanding that agency representatives will be invited again. We hope they will attend.

Working together is the only way to ensure we can get every District resident back to work.

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[1] By statute, the District’s Workforce Investment Council (WIC) is responsible for overseeing how DC spends its WIA funding. However, the DC WIC is not designed to oversee or coordinate programs funded by other sources. We will address the WIC in more detail in a future blog post.

Five Not-So-Easy Barriers

One of the biggest stories in the media today is the high unemployment rate. This story resonates across the country. But here in the District of Columbia, the 9.8 percent unemployment rate means something a bit different because we are talking about our friends and neighbors. Everyone knows someone – or several someones – struggling to find work, sometimes for a year or more. In Wards 7 and 8, circumstances are even worse. By some estimates, the unemployment rate in Ward 8 may exceed 30 percent.

Many District residents, especially those living in the eastern part of the city, are particularly challenged to find employment because they face barriers that appear almost insurmountable. Even if folks do find work, they are challenged to keep jobs because of these barriers. Here, in no particular order, are five of the barriers to employment DC residents encounter most frequently.

1. Literacy – According to the National Center for Education Statistics (NCES), approximately 37 percent of DC adults score at the “below basic” level of literacy. This means that more than one-third of our neighbors have difficulty reading well enough to complete an employment application, or doing math well enough to measure out a pound of turkey on a scale in the deli department of the local supermarket. Add to this a lack of computer literacy and it is clear why so many are having trouble finding employment.

2. Criminal Record – The District welcomes more than 2,500 individuals home from incarceration each year, and the overwhelming majority face employment challenges. In many cases, the simple presence of a criminal record is enough to disqualify someone from consideration for a job. Even convictions unrelated to the job – for felony intent to distribute narcotics by someone seeking a position in the stockroom of a big box store, for example – often knock otherwise-qualified individuals out of contention.

3. Lack of “Soft” Skills – We hear this from employers all the time: bring us people who will show up on time, work well with co-workers, and accept supervision, and we will train them for specific jobs. But so many of the District’s unemployed residents lack these so-called “soft” skills, either because people were never taught these skills in the first place, or because they lack the work history which might have sharpened them. The children of those adults whom the DC public school system has failed over the last several decades are particularly vulnerable; their parents never learned these skills themselves, and are therefore unable to teach their children.

4. Child Care – Affordable, quality child care is difficult to find in the District, even for parents with means. The market rate for child care in DC has doubled over the past five years. Consider this: according to Wider Opportunities for Women’s forthcoming Basic Economic Security Tables Index, a single person can be economically secure throughout his or lifetime with an income of approximately $31,656 a year. But to be economically secure, the single parent of one infant needs to earn more than $57,000 a year. The difference in those amounts is largely due to the cost of child care and taxes paid on the extra income devoted to childcare. Quality and accessibility are also challenges, especially in neighborhoods on the eastern side of the District, and for those parents who work hours other than 9-to-5.

5. Transportation – While WMATA boasts – and correctly – that more than 90 percent of addresses in the District are served by at least one bus line, the transportation system in the District remains a barrier to employment, particularly for residents in Wards 7 and 8. Many entry-level, low-barrier jobs – in construction or hospitality, for example – require employees to arrive at work very early, or to work late. Bus schedules are not always accommodating of non-standard hours. Recent increases in Metro and bus fares make transportation an even greater challenge for low-income residents. And car ownership is often out of reach for low-income residents; even a donated car must be filled with gas and insured.

It is clear that job training alone is not sufficient to fully address the unemployment challenges faced by our most vulnerable neighbors. Supportive services can help ensure unemployed residents can find and keep jobs. Creative and cooperative efforts among businesses, the District and federal governments, and nonprofits can reduce the impact of these barriers. Such efforts can, in essence, turn tens of thousands of unemployed citizens into taxpayers. These taxpayers, in turn, will contribute to the District’s coffers and those of their neighborhoods, climb the ladder to self-sufficiency, and help prepare themselves and their children for good jobs in a growing economy.

The DC Jobs Council is part of Defeat Poverty DC, a is a coalition of organizations and residents in the District of Columbia working to bring greater focus during the 2010 election season and beyond to the damaging effects of poverty on our entire city. DCJC embraces Defeat Poverty’s three-pronged approach to ending poverty: (1) make work possible; (2) make work pay; and (3) make basic needs affordable.

DC's $4.6M Local Adult Job Training Money -- What's the Status?

Welcome to WORK IN THE CITY, the blog of the DC Jobs Council!

In this, our first post, we thought we’d tell you a story. It is not a terribly happy story, and it is complicated – but it is important this story be told. We hope that you can help us write the ending.

In May 2009, Councilmember Marion Barry, then chairman of the Council of the District of Columbia’s Committee on Housing and Workforce Development (CHWFD), moved approximately $5.4M in local funds from the DC Department of Employment Services’ (DOES) budget to support job training programs offered by community-based organizations to those adults facing the highest barriers to employment. This funding would be used to train more than the 50,000 underemployed or unemployed DC residents who struggle every day to make ends meet. Language in the FY2010 Budget Support Act of 2009 specified how that funding was to be distributed and spent – on programs that trained hard-to-employ District adults for good, career-ladder jobs in industries with strong prospects for growth.

Finally, we thought, those who needed the most help were going to get it. Like most jurisdictions around the country, the District was going to put its own money into training its own residents for jobs. We hoped this effort would help address the unemployment rate, but also help us begin to change this statistic: more than 70 percent of jobs in the District are held by those who live outside of Washington.

With the horse-trading that is part of any District budget process, the amount that eventually made its way into the DOES budget for adult job training was $4.6M. That money was available to spend as of October 1, 2009.

It is now the beginning of August 2010. And none of the money has been spent. According to CFO$ource, the money is still sitting – unencumbered – in DOES’ account. No RFPs, asking for proposals from organizations that provide job training to District adults, have been issued.

When questioned by the current CHWFD chairman, Michael A. Brown, in May 2010, DOES Director Joseph P. Walsh promised that the $4.6M would be spent as intended – on job training for those adults facing the highest barriers. He explained that the local funds had not been spent yet because DOES was concentrating on spending federal funds allocated to the District through the American Recovery and Reinvestment Act (ARRA) – funds which had an earlier expiration date. But he assured Councilmember Brown that the local funds would be spent by fiscal year end, and as directed.

That was nearly five months ago. While DOES has issued grants based on four RFPs funded with federal money, we are still waiting for one RFP using local money.

This delay has not gone unnoticed.

During negotiations regarding the FY2011 District budget, several Councilmembers asked about the $4.6M. When informed that it had not yet been spent –and that DOES had not even indicated how or when it might be spent --two Councilmembers sprang into action.

Councilmember Kwame Brown, for example, proposed that DOES issue an RFP so narrowly drawn that only one nonprofit in the District is eligible for the funding. (This is not an uncommon practice in the post-Council-earmark era. We’ll leave a discussion of the pros and cons for another post.)

But the problem remains. Even a narrowly-drawn RFP has to be issued and proposals reviewed before even the $2.25M can be spent. And that has not happened.

And if the remaining money -- which could be as much as $2.35M -- is not spent, Councilmember Barry has plans for that. He has proposed to allocate the remaining funds to the Community College of the District of Columbia. While we welcome the institution – a very necessary component of a strong workforce development system -- a community college cannot substitute for a community-based job training provider for those District adults who need training most – those facing the highest barriers to employment, including low literacy levels, criminal records, and physical and mental health challenges. The Community College is not designed to meet the needs of these most challenged residents.

It is now the beginning of August 2010. Despite repeated requests to DOES, neither the DC Jobs Council nor several of its members have received any concrete answers as to plans for the $4.6M.

If a process is not implemented immediately, it is possible – even likely -- that funds set aside to help move the most vulnerable of DC residents into jobs will either disappear or be diverted.

The fiscal year ends in roughly 60 days. What do you think we should do next? How can we ensure a happy ending to this story for those who need resources the most?