A disconnect between the skills in demand by employers and those available among the unemployed and recent graduates. Insufficient labour market data to tell those entering training programs what skills they should pursue. A need to get employers more involved in the training system.

Sound familiar?

While Canadian federal and provincial policy-makers debate how best to resolve these major labour market challenges, the US government has just furnished some potentially interesting solutions with the recently adopted Workforce Innovation and Opportunity Act (WIOA). Not only is the legislation a major overhaul of the U.S. job training system, but its adoption last month marked a rare case of sweeping bipartisan consensus in Washington. Having passed both the House and Senate with more than 95% of members in favour, it stands as one of the few pieces of major domestic policy President Obama has successfully moved through Congress since the re-emergence of divided government after the 2010 midterm elections.

So it’s particularly curious that WIOA has failed to register much attention in Canada. Several ideas stand out as potentially relevant in confronting similar issues here, even if the Act’s mandate is comparatively smaller than the nearly $3 billion transferred annually by Ottawa to provinces and territories for training and employment supports.

The design of WIOA is both old and new at the same time. It starts by re-authorizing parts of the program architecture established under the Clinton-era Workforce Investment Act, and increasing total appropriations which had been declining in real terms over the last number of years (in the middle of the economic recovery, no less).

This is not, however, another example of a party in power re-asserting its old ideas. There’s a good reason the bill’s title substitutes the word « Investment » for « Innovation »: at its core is a very different concept about public service delivery than that of its predecessor.

In language similar to that invoked by our own federal government in its 2013 announcement of the now-infamous Canada Job Grant (a potentially promising model, in my opinion, that can be refined), the intent of WIOA and other related actions undertaken by the White House is to bring a much closer focus to matching training programs to skills in demand.

But WIOA’s focus is much broader than the Canada Job Grant. The WIOA’s ambitious goal is a redesign of the training system at all levels, from the way information is collected to how it is used for informing evaluation and program design; the way employers are engaged in planning at the local level; and in the need for national expertise and innovation in « what works. »

Think about this: as part of the Act, the U.S. government will now compel states and regional training authorities to consistently report on the outcomes of programs, to evaluate with employers how well programs and graduates are responding to skill needs, and to arm workers with information on program outcomes before someone selects a training provider. Workers will be in a better position to make decisions about what to pursue, and policy-makers will know more about how effective these investments actually are at achieving labour market outcomes.

Of equal importance, the bill also streamlines programming by removing 15 of the previous 47 programs under WIA. While a number of these programs had been running unfunded in recent years due to stagnant appropriations, this move is designed to remove some of the significant duplication and inefficiency identified in 2011 by the Government Accountability Office. The challenge may not be as severe here as in the United States, but our own provincial and federal governments would be well served to look at reform not as an opportunity to tinker at the margins but to build the system we want from the ground up.

As part of this push for greater innovation and efficiency, states and regional authorities will be required to carry out long-term planning with employers to understand what skills and occupations training programs should concentrate on, and to continuously improve programs over the long-term in light of evaluation. That last point is critical – simply measuring performance is not enough. There must be clear requirements to reorganize the system in light of evidence, as Cliff Halliwell outlined in a paper for us late last year.

Employers will also have an enhanced governance role in these regional bodies, giving them real say into how investments and partnerships are fostered.

At the national level, the Department of Labour will take a lead role in working with states to use the new information architecture and other datasets to analyze local programs and interventions. The aim is to better understand « what works » for different client and employment contexts. What makes one training program more successful than another in dealing with youth, older workers or people with disabilities? What is the best way to develop certain skill sets? What programs do best in long run at matching a client’s skillset with available jobs? How effective are wage subsidies for different kinds of clients?

Answering those questions with deep program and client level information is key to getting better value for money and to improving outcomes for job seekers, especially the long-term unemployed.

Nor is it an example of one-size-fits-all federalism. States will have flexibility under WIOA to determine how funding is aligned to outcomes. Rather than simply subsidizing training entities based on whether someone is enrolled in a program, policy-makers will also be able to increase the portion of funds which are allocated to experimental programs and initiatives whose funding is contingent on outcomes.

For Canadian policy-makers always mindful to guard against the use of the federal spending power and defer to local authority, the U.S. example of WIOA offers a hopeful example for both federal and provincial interests.

In some tentative ways, the Canadian debate already touches upon many of the elements in WIOA, in particular the need to bring employers into the picture. What we don’t have is a framework of common purpose, something that makes it clear how the system as a whole is supposed to function. The new labour market agreements with the provinces may solve part of this but, as Don Drummond has argued, the governance links are still missing.

The success of WIOA still remains to be determined in its implementation. But it has the makings of a grand bargain, a framework in which we can find a way to achieve national objectives like improved data and evidence-based investments, while still letting states and provinces determine how best to manage the programs.

Here at home, we still fiddle over whether it’s appropriate to let a federal minister into a room with provincial officials talking about « education. » If the U.S., with its political extremes, can get its act together in a hurry over job training, perhaps our own problems run deeper than we think.

Tyler Meredith
Tyler Meredith was formerly the research director for IRPP's research in pension reform and labour market policy.

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