National Governors Association

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Moving Up A Demand-Led Approach To Advancing
Low-Wage Workers

• National Governors Association
• Delivering a Quality Workforce for the
  Knowledge-Based Economy
• November 28, 2000
• Jack Mills
• Jobs for the FutureBoston, Massachusetts

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About Jobs for the Future

• National non-profit organization--founded 1983
• Mission To promote innovative workforce
  development solutions that help people combine
  work and learning for success in the new economy

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Public Opinion Strongly Supports Moving Low-Wage
Workers Up

• 94 of Americans agree that , As a country, we
  should make sure that people who work full-time
  should be able to earn enough to keep their
  families out of poverty. 80 strongly
  agree.
• 69 of Americans say it takes double the federal
  poverty limit for a family of four to make ends
  meet.
• Results of a national telephone survey of 1,001
  Americans, 4/00
• by Lake, Snell, Perry Assoc.
• Margin of error is 3

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Initiatives to Move Workers Up Need Job Quality
Benchmarks

• 17 of American families with working adults have
  family incomes of less than double the federal
  poverty limit
• In about 66 of these families, the primary wage
  earner works fulltime, year round . . . as much
  as higher income families
• Even if all adult family members worked
  full-time, 47 of these families incomes would
  be less than double the federal poverty limit. An
  any job is a good job strategy doesnt solve
  this problem.
• Acs, Phillips, McKenzie, 2000 (based on NSAF 1997
  data)

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Job Quality Benchmarks Focus Workforce and
Economic Development

• Good Jobs Benchmark
• High demand/emerging occupation
• Good wages/benefits
• Education/training leading to advancement
• Supportive HR policies (work, life,
  education/training)
• Connect good jobs benchmark to dual goals
• Increase low-wage workers opportunities for good
  jobs
• Build skill supply pipeline for employers with
  good jobs

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A Focus on Good JobsTwo Effective Strategies

• Significant skill development tied to good jobs
• Skill pipelines/career pathways leading to good
  jobs
• Requirements
• Dual customer (employer program participant),
  employer-led approach
• Pre-employment activities that meet employer
  specifications
• Post-employment activities integrated with work

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These Strategies Require Partnerships of Firms
and Providers
Pre-EmploymentActivities
Post-EmploymentActivities
Retention
Advancement
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System-Level Steps to Build Skill
Pipelines/Career Paths

• Assess regional economic/workforce development
  resources
• Convene employers, identify skills
• Work from employers skills specifications to
  create demand-driven training system
• Identify providers of high-quality education,
  training, and support services
• Coordinate relationships among firms and
  providers of education, training and support
  services

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System Level Building Blocks

• Target good jobs and/or career paths
• Dual customer focus
• Demand-led strategy
• Partnerships/networks of employers and workforce
  development service providers
• Alignment of employers HR policies and
  providers services
• Skill certification
• Public agencies in sync

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Policies to Support Effective Programs and
Systems

• Incentives
• Performance Improvement
• Capacity Building
• Competition/Consumer Choice
• Public Agencies in Sync

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Changing the Incentives in the Workforce System

• For Service Providers
• Reward high performance
• Reward success with hard-to-employ
• Make sharing credit for outcomes possible
• For Employers
• Reduce risks, costs of participation
• Make employers partners and customers
• For Job Seekers
• Provide opportunities for good jobs career
  paths
• Provide choices high quality information on
  outcomes

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Performance Improvement Policy Issues

• Set performance standards and tie funding to
  performance job quality, retention, and wage
  increases (not just placement)
• Support provider innovation and improvement
• Pursue policies that promote employer demand
• In general, strengthen steering role
• Build managed competition across agencies
• Watch out for unintended consequences (e.g.,
  creaming, effect on small providers)

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Capacity BuildingPolicy Issues

• Promote innovation pilot programs venture funds
• Build organizational capacity to improve quality
• Expand system capacity to support quality
  providers and employer participation
• Labor market information/technology
• Technical assistance/learning networks
• Intermediaries
• Standards, materials, tools
• Expand number of providers who can respond to
  labor market needs

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Encouraging Greater Competition and Consumer
Choice

• Avoid set-asides
• Increase of workforce development service
  providers
• Use the market! Leverage employer investment in
  low-wage workers.
• Publicize clearly measurable quality and outcome
  information for both employers and individuals
• Use industry-recognized skill certification and
  provide college credit

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Bringing Public Agencies into Sync

• Leadership customer focus, not agency turf focus
• Alignment of goals
• Key outcome measures shared
• Incentives/sanctions tied to outcome measures
• Structures/processes to build communication and
  collaboration
• Capacity-building to change agency culture

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The Target a Virtuous Cycle
Quality and Reliable Service
Increased Staff Morale and Public Support
Increased Use of the System by Better Employers
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Related JFF Publications

• Overview -- Toward a "Demand-Led" Workforce
  Development System
• Using Outcome-Focused Performance Measures to
  Drive Change and Improve Performance
• Building Organizational and System Capacity How
  Government Can Support "Demand-Led" Reform
• From Stakeholders to Partners
• Available at www.jff.org/whatsnew.html