Issue Brief: The Workforce Investment Act (WIA)

Background

In 1998, Congress passed the Workforce Investment Act (WIA) to reform, consolidate, streamline, and better coordinate the nation's job training system. WIA consolidated and integrated employment and training services at the local level into unified workforce development system. The Act authorized the appropriation of funds from FY 1999-2003. Effective July 1, 2000, WIA repealed the Job Training Partnership Act (JTPA), and created three funding streams, 1) Adult Employment and Training for ages 18 or over; 2) Dislocated Workers; and 3) Youth Development Services. These services are directed by local Workforce Investment Boards (WIBs).

Youth Development Services

WIA authorizes funds for services for youth (14-21 years of age) who face barriers to school completion or employment. Youth served are prepared for postsecondary educational opportunities or employment, and must receive at least one year of guidance and counseling, and follow-up services. In addition, WIA requires individual skills and service needs assessment, service strategy availability of basic, occupational, and work maturity skills training and work experience, and supportive services.

By combining the Summer Youth Employment and Training Program and its year-round youth program, WIA moved from a system mostly characterized by one-time and short-term interventions to a systematic offering of services connected to individual goals for youth. The Act requires that youth services should incorporate ten core elements including mentoring, community service, leadership development, peer-centered activities, and long-term follow-up and supports.

While 95 percent of the funds must be used to serve low-income youth, 5 percent may be used to serve youth who do not meet the income requirement, yet face the same barriers to employment or are 1) at least one grade level behind in school; 2) are disabled or have a learning disability; or 3) face a serious barrier to employment as identified by the local WIB.

Barriers

• School dropout
• Basic literacy skills deficiency
• Homeless, runaway, or foster child
• Pregnant of a parent
• An offender
• Need help completing an education program or securing and holding a job

Funding

Funding is allocated through a formula (based on youth population, poverty, and unemployment rates) to states, which in turn use the same formula to distribute funds to local WIBS. Of the Youth Formula funds, 85 percent is allocated to local areas, while the remaining 15 percent are reserved for statewide activities. The 15 percent state set-aside funds may be used to fund state activities for youth, adults, or dislocated workers, or (vice versa, meaning 15 percent set-asides funds from adult services or dislocated workers can be used for youth state activities.)

The Act also requires 30 percent of the WIA youth formula funds to be spent on out-of-school youth. The WIA definition of out-of-school youth includes dropouts and youth who have graduated from high school or hold a GED but are deficient in basic skills, unemployed or underemployed. WIA prohibits spending the out-of-school funds on youth who are enrolled in any school or alternative educational programs at the time or registration, although the youth may be placed in an educational program (such as a GED program or alternative school) as part of their service strategy.

Youth Opportunity (YO!) Grant Program

WIA also authorizes $250 million for the Youth Opportunity Program, a competitive grant program (currently in 36 communities, 24 urban + 6 rural + 6 Native American). The Act stipulates that, up to $250 million of appropriated WIA youth funds in excess of $1 billion are to be used to fund YO, which targets and concentrates its funds in high-poverty communities (Empowerment Zones and Enterprise Communities). If a youth lives in a targeted community, the youth is eligible to receive YO services.

Accountability

There are different core indicators used to measure services for younger (age 14-18) and older (ages 19-21) youth. The Secretary of Labor is authorized to negotiate the expected performance levels for each indicator with each state. States then negotiate expected performance levels with each local area. Negotiations are to consider special economic an demographic factors, while technical assistance, sanctions, and federal incentive funds are tied to whether states meet the expected levels of performance.

Younger Youth Indicators

• Basic skills and occupational skills (as appropriate) attainment;
• High school diplomas;
• Placement and retention in postsecondary education, advanced training, or employment; and
• Customer satisfaction for both participating youth and their employers.

Older Youth Indicators

• Entry into subsidized employment; 
• Retention in unsubsidized employment 6 months after entry into the employment; 
• Earning received in unsubsidized employment after entry in the employment;
• Attainment of recognized credential relating to the achievement of educational skills, which may include attainment of a secondary school diploma or its recognized equivalent, or occupational skills; and 
• Customer satisfaction for both participating youth and their employers.

Local Governance

Local WIBs, in partnership with local elected officials, are responsible for planning and overseeing the local program. The WIB is also responsible for developing the local plan for submission to the Governor for approval; designating local "One-Stop" operators, service providers; negotiating local performance measures; and assisting in developing an employment statistics program. WIBs must have a majority of business representatives and include representatives of education providers, labor organizations, community-based organizations, economic development agencies, and each of the "One-Stop" partners. The involvement of other representatives is left to the discretion of local elected officials.

WIA also requires the establishment of local Youth Councils as a subgroup of the WIB to develop parts of the local plan for youth, recommend services providers for youth programs, and coordinate area youth activities. Required members of Youth Councils are local WIB members, representatives of youth service agencies (including juvenile justice and local law enforcement agencies), representatives of local public housing authorities, parents of eligible youth, individuals (including former participants) and representatives of organizations that have experience relating to youth activities; and representatives of the Job Corps.

One Stops

WIA promotes the establishment of a One-Stop service delivery system that connects the broad range of available services to youth and adults in a local area and often serves as a place for youth to begin to navigate their way into the workforce. One-stops conduct individual assessments and strategy with the individuals. Eligible youth may access various one-stops and after they reach 18, may participate in adult services as well as youth programs, depending on the youth's needs assessment.