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strategy is both unwarranted and unwise.

The President’s FY 2007 budget proposal cuts U.S. Department of Labor funding for workforce development by fifteen percent when compared to FY 2006 levels and continues a five-year trend that will leave workforce development programs $1 billion below FY 2000 funding levels. Workforce Investment Act funds are critical at the local level to sustain basic services for job seekers and to provide customized training services to the business sector, whose demand for highly skilled workers continues to grow. However, if the President’s budget is enacted, the nation’s local workforce investment areas will have $597 million less in WIA formula funds with which to prepare current and future American workers for high-growth occupations in the global economy. Maryland’s federal WIA allocations have already dropped by as much as sixty-five percent in some local workforce investment areas and by nearly forty percent overall since 2003. If the President’s budget is enacted, Maryland’s local areas will be forced to close many of their one-stops, and key business services would be curtailed if not entirely eliminated.

Equally disturbing to MWDA is the fact that the President’s proposal would combine the presently separate WIA Adult, Dislocated Worker and Youth formula programs into a state block grant to support CAAs for workers, an entirely untested workforce development strategy. The Department of Labor would require states to use seventy-five percent of their block grants to provide CAAs to individuals in need of employment assistance, including low-income adults, dislocated and incumbent workers, and out-of-school youth. Individuals would use their accounts to pay for expenses directly related to education and training. This would leave only twenty-five percent of the funds to support all basic employment and labor exchange services, with only three percent allowable to cover administrative costs.

The impacts of the CAA proposal are hard to ignore. It does not fully take into account the cost of educating and upgrading the skills of the nation’s existing and emerging (youth) workforce. Further, it overlooks local economic and workforce development realities and does not take into consideration the characteristics of the populations that one-stops are obliged to serve.

A $3,000 CAA will not cover the cost of most entry-level skill certification courses, such as Certified Nursing Assistant or Geriatric Nursing Aide, much less the cost of a college education or incumbent worker skills upgrade training. Additionally, CAAs are self-managed accounts that do not address the need that many low-wage job seekers and dislocated workers have for a network of support services to be delivered concurrent to training. As well, the CAA proposal presumes that the reading and math skill levels of America’s job seekers and workers are proficient, which is contrary to recent data on U.S. adult literacy rates.

Additionally, the CAA proposal would effectively eliminate youth workforce development from the local workforce development arena. Since there will be no separate Youth funding stream, CAAs will be the training venue for developing future workers. While some young people may benefit from a CAA, it is very unlikely that our most at risk, out-of-school, out-of-work youth will succeed without a more comprehensive menu of wrap around support services. This also holds true for low-wage, low-literacy, low-skilled adults.

Without professional career assessment, employment and workplace counseling job readiness/soft skills training, and job retention guidance, many adult and youth CAA participants will, quite simply, fail to gain a training credential. In short, given the demographic and educational characteristics of the populations that one-stops are obligated to serve, it is hard to grasp how self-managed CAAs “will enable America’s current and future workers to gain the skills needed to successfully enter, navigate and advance in 21st century jobs”, their declared purpose.

In summary, the President’s plan replaces locally designed, demand driven workforce systems comprised of comprehensive one-stop career centers, employer focused training services and business-led advisory boards with vouchers. Thousands of Maryland job seekers will be left behind. This does not make any sense. The impact of this proposal and its associated budget will devastate Maryland’s workforce system, forcing the closure of many one-stops across the state and seriously inhibiting the ability of local areas to target declining federal resources on services specifically crafted to meet the demand needs of their businesses and citizens.

For additional information, contact:

Karen L. Sitnick

President

Maryland Workforce Development Association

410/396-1910

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9801 Broken Land Parkway l Suite 105 l Columbia, Maryland 21046
(410) 290-9072 www.mwda.org