5/93 Re-Employment Training

FOIA Number: 2006-0466-F FOIA MARKER This is not a textual record. This is used as an administrative marker by the William J. Clinton Presidential Library Staff. Collection/Record Group: Clinton Presidential Records Subgroup/Office of Origin: Speechwriting Series/Staff Member: Jonathan Prince Subseries: OA/ID Number: 10440 FolderID: Folder Title: 5/93 Re-Employment/Training Stack: Row: Section: Shelf: Position: S 91 7 1 2 May 14, 1993 MEMORANDUM FOR DAVID DREYER JONATHAN PRINCE FROM: BONNIE DEANE SUBJECT: PRESIDENT'S TRAINING INITIATIVES I. NEW TRAINING INITIATIVES Youth Apprenticeship: A comprehensive system for helping the majority of American youth to make a smooth transition from high school to productive lives of skilled employment and further learning. This program will support a period of bold experimentation with states and local communities taking the lead and the federal government playing a catalytic role. This program has New Democrat all over it. It's based on partnerships within the government (Labor and Ed) and with industry. It capitalizes on local creativity. Key Features:-- $270 million in 1994, $500 m in 1997. Four year total: $1.2 billion. -- Immediate planning grants and technical assistance to all states. -- Since it is likely to be challenge grant based, we cannot estimate funding for CA. -- "Work based learning" is new. Although we have vocational education in schools and work experience for credit, we do not have programs that 1) integrate school and work experience or 2) ensure learning takes place in work based settings. Background: Labor representatives are sensitive about using the term "apprenticeships" as well as the possibility of replacing their employees with subsidized wage youth. The project team has been calling it "School to Work" rather than Youth Apprenticeships. The President may prefer the latter, regardless. National Service: Educational awards of up to $5,000 per year for Americans who make a substantial commitment to service. Support for service extends from elementary students to senior citizens and includes everything from part-time volunteer activities to full time public service jobs. In addition, the student loan system will be overhauled to cut costs, reduce defaults and make public service possible for those that do not work for the government. Key Features: --$400 million in 1994, $7.4 billion over 4 years. --Two parts: government jobs + student loan reform. --Will save $4 billion and lower rates that students pay by cutting subsidies to banks. --Non-government service jobs. Flexible payment options, eg. as a percentage of -2- income, allow people to take any low paying service job without defaulting on loans. Background: There are concerns about elitism. However, the program applies to training programs and proprietary schools as well as 4 year colleges. Other concerns include creating make-work jobs and crowding out private sector or volunteer workers. Dislocated Workers Program: A comprehensive program to assist workers permanently displaced from their jobs regardless of the cause. The program will provide basic assistance and training to help workers get a new job: interview skills, resume prep and job search training. In addition, assessment, long term training and income maintenance will be available to those that need to make more fundamental career changes. Key Features: -- $1.9 billion in 1994 rises to 2.7 billion in 1995-96. --Almost four times the funding currently available for displaced workers under the Economic Dislocation and Worker Adjustment Assistance Act (EDWAA) ($517 M). --Assists workers impacted by defense downsizing, NAFTA, environmental regulation, technical change or any other reason for permanent job loss. --Cuts red tape and administrative overheads by combining several programs. Currently months are wasted are wasted filling out paper work to determine eligibility for one of several narrowly defined programs. --An Inter-agency Task Force will report to the President by June 1. Background: Proponents of TAA (Trade Adjustment Act), namely unions and key members of Congress, are sensitive about combining this with other programs if it reduces the benefit levels. Currently there is a compromise to extend TAA for 3 years while building adequate income maintenance levels in the comprehensive program. One Stop Shopping: A system of franchised, retail outlets that provide easy access to self-help job assistance as well as a clearinghouse for additional government and private assistance. This system will provide help to all Americans to take charge of their careers and attain lifelong advancement through lifelong learning. Key Features: --$900 million over 4 years. --Starts with smaller experiments. Builds nationwide system from local experience. --An access point for information about: careers, training programs, financial aid, etc. --Creates linkages between disperse programs such as JTPA, EDWAA, JOBS, etc. --Builds a national career opportunity system utilizing the "Information Highway." Background: Very New Democrat, but very sensitive because of governance issues. At one extreme, it can be viewed as a privatization of the Employment Service. Note: Welfare Reform should also provide extensive new training opportunities. -3- II. INCREASED FUNDING FOR EXISTING PROGRAMS Summer Youth Employment and Training Program (SYETP): Offers economically disadvantaged youth from 14 to 21 work experience in minimum wage jobs in public and non-profit agencies during the summer months. It includes an enriched program of work experience, basic skills training, testing and counseling and closer coordination with schools. Key Features: -- $2 billion over 4 years. $625 million in 1997. -- 2 million additional summer youth jobs. -- 90 hours of academic enrichment. Background: The stimulus filibuster resulted in a loss of $ 1 billion for extra jobs for summer 93. Currently, House Democrats are considering new ways to get the summer jobs money through. Job Corps Expansion and Maintenance: Finance 50 new residential centers and renovate the 110 existing centers for severely disadvantaged youth training. Job Corps provides remedial education, occupational skills training, supportive and job placement services. Key Features: -- $450 million over 4 years. -- Raise the number of participants from 70,000 to 104,000. -- Returns at least $1 for every dollar spent. III. APPENDIX: SUPPORTING RESOURCES The following material is attached for your reference: Preliminary Thinking on the School to Work Initiative. 3pp. (Document used in consultations with hill and outside groups) Draft of President's Congressional Speech on National Service. 3pp. Backgrounder on President's National Service Initiative. (Factual, one page summary) Memo requesting formation of a Displaced Worker's Task Force. 2pp. (Outlines broad themes of dislocated worker policy) Talking Points on Worker Adjustment Initiative. 3pp. (Until task force reports, it's the only public statement) -4- - - III. APPENDIX: SUPPORTING RESOURCES The following material is attached for your reference: Preliminary Thinking on the School to Work Initiative. 3pp. (Document used in consultations with hill and outside groups) Draft of President's Congressional Speech on National Service. 3pp. Backgrounder on President's National Service Initiative. (Factual, one page summary) Memo requesting formation of a Displaced Worker's Task Force. 2pp. (Outlines broad themes of dislocated worker policy) Talking Points on Worker Adjustment Initiative. 3pp. (Until task force reports, it's the only public statement) Preliminary Thinking on the School-to-Work Transition Initiative The Challenge Many of our competitor nations have long understood the importance of creating a diverse set of structured career routes for their young people. In many countries, after youth complete an academically rigorous compulsory education-at around sixteen years of age-they begin a period of structured career preparation that combines work experience and classroom learning. They receive an opportunity to learn by doing and to develop maturity and expertise at work under the tutelage of skilled supervisors. By age 19 or 20, they have had several years of work experience and training and are equipped with the knowledge and skills they need to be productive workers and lifelong learners. The challenge for this nation is to create a comprehensive system for helping the majority of American youth make a smooth transition from high school to productive lives of skilled employment and further learning. Meeting this challenge will require significant changes in the way we structure relationships between school and work and technical and academic learning. It will require a period of creative experimentation and system-building, with states and local communities taking the lead and the federal government playing a catalytic and supportive role. Proposed Guiding Principles of the Initiative For the nation to move aggressively toward a comprehensive, coherent school-to- work transition system, revolutionary changes in the structure of secondary schools are required. It will also require new and closer partnerships between schools and employers. And it will require government at the state, local, and federal levels to work with the private sector to create new occupational skill standards, governance structures, and guidelines for local programs. However this initiative does not need to start from scratch. There are a range of promising school-to-work transition programs such as youth apprenticeships, tech prep, career academies, and co-op education that a new system can build on. This initiative should enrich and expand these promising strategies so that all students have the opportunity to participate in high quality programs. Six basic principles should guide this initiative: o All students must be prepared both for work and further learning. High schools therefore need to be restructured to afford all students the opportunity to learn in "real-world" contexts, i.e., worksites and communities, as well as in classrooms. 0 All students should be expected to meet high academic standards and occupational skill standards. Students should be given every opportunity to meet these standards. The school-to-work transition initiative must be integrated with strategies for the reform of secondary education, workforce preparation, and work reorganization. The nation does not need another separate program; it needs a coherent system that helps all people make informed career choices and prepares them for continued learning and career advancement. A national youth apprenticeship initiative needs to be embedded in a more universal system designed to help all young Americans make a smoother transition from school to work. States and local communities must build on a range of promising school-to-work transition strategies that would eventually share a set of core program elements. Employers and workers must have substantial ownership of and participation in this system: far more than is the case in most school-business relationships today. Employers and workers will need to take the lead in several areas where they currently play limited roles: defining skill standards in broad occupational areas; designing local programs; and coaching and mentoring America's youth. 0 States and local communities must be given substantial flexibility and discretion in shaping school-to-work transition systems to insure that they fit with the realities of local labor markets, existing state and local efforts and institutions, and community needs. The appropriate federal role will be catalytic: assisting and linking state and local efforts through the development of skill standards, research and evaluation, dissemination of best practices, and technical assistance. Possible Core Components of the New School-to-Work System While state and local flexibility and diversity must be at the heart of this initiative, there are some basic components that all states and communities should be expected to share: o Restructured high schools in which the current general and vocational tracks are replaced by a program of career-oriented majors, offered to most students in their junior and senior years. Some key features of these high schools might be: Diagnostic assessments at the 10th grade to identify academic strengths and weakness of students. Intensive career counseling throughout a high school student's career. - Integration of academic and vocational education. Structured learning in the workplace, where students are provided high quality opportunities to learn skills and knowledge in a work site that 2 complements and enhances classroom instruction. 0 Postsecondary connections which would enable students to obtain an industry-recognized certificate in their chosen field typically at the end of a 13th year, and/or to advance in a college degree program. Voluntary national skill standards, developed in broad occupational areas and certified by a National Skills Standards Board, that will guide curricula, assessments, and certification in this new system. State and local governance structures that will give representatives of business, education, labor, government, and communities responsibility for overseeing the design and direction of the system, insuring responsiveness to regional labor market needs, and monitoring program performance. The Workplace TRAINING dations have initiated similar efforts that today include just 2,000 or SO students at some 250 companies, according to Jobs for the Future, a Boston clearing- house for apprenticeship programs. Clin- FROM HIGH SCHOOLS ton's program will encourage experi- ments to see what works best in TO HIGH SKILLS different schools and labor markets. "Be- cause local needs make one approach more feasible than others, the Adminis- A national apprenticeship program is starting to take shape tration must focus on a broad range of school-to-work programs, not just on ap- he racket is deafening as machinist workers and the economy. It boosts un- prenticeships," says Robert J. Ivry, a T Jeff Himes helps his 11th-grade pu- employment, lowers wages, and leaves training expert at Manpower Demon- pil, Chad Yoder, bore holes in a employers with applicants who are in- stration Research Corp., a New York truck engine exhaust manifold. This two- creasingly ill-equipped for even entry- group that analyzes training programs. day-a-week tutorial in applying math level jobs. The solution, many experts FLEXIBILITY IS KEY. Even with that kind and computer skills to production isn't say, is an apprentice system like Ger- of flexibility, creating a national pro- part of a machine-shop class. Himes and many's, which fuses the last years of gram will entail solving a host of prob- Yoder are on the floor of Donsco Inc.'s high school and the first years of work. lems that Washington is just beginning foundry in Wrightsville, Pa. And the President Clinton ran on a platform lesson is far from academic. If all goes that called for just that, and now the well, when Yoder, 17, finishes his train- outlines of what he will do are emerg- SCHOOL-TO-WORK PLAN over five Create with to employers than as MIMES (RIGHT) TEACHING YODER work apprentices high Combine judge these Create skill to school standards a certificates job college degree either and applicant's the to help for students skill companies ting level TO RUN A MEASURING or a technical AACHINE DATA: BUSINESS WEEK ing and his regular schoolwork, which ing. Given tight federal bud- has been redesigned to fit into three get constraints, his proposed program to days a week, a job will be waiting for is modest: $270 million in fiscal 1994, confront. For in- him at Donsco or another plant that rising to $500 million after that. Still, stance, a German-style system for the 6 needs sophisticated metalworking skills. the Administration hopes to leverage million U.S. teens who don't go to col- PHOTOGRAPH BY STEPHEN SHAMES/MATED: BLUSTRATION BY USA KNOUSE BRAIMAN/BW "I never got the opportunity these guys these funds by using them as seed mon- lege annually could cost at least $12 bil- are getting," says Himes. ey for getting states and school districts lion a year, estimates Anthony P. Carne- Twenty years ago, a non-college-bound to set up local programs with employers vale, chief economist at the American student such as Yoder wouldn't have and industry groups (table). Officials at Society for Training & Development, a needed a helping hand to land a well- the Labor and Education Depts., which trade group in Alexandria, Va. What's paying assembly-line job. But as technol- are jointly responsible for the program, more, for the apprentice concept to be- ogy and global competition drive up skill hope to develop such efforts into a pro- come widely accepted, proponents must levels, a high school diploma won't get gram of national proportions by 2000. convince students and parents that kids many young workers onto a career lad- The Administration's plan will start won't be shuttled permanently into blue- der anymore. Today, many of the 20 by expanding experiments similar to collar vocations that rule out a white-col- million 16-to-24-year-olds who skip col- Donsco's, which the Pennsylvania Com- lar career-a typical complaint about the lege bounce from one dead-end job to merce Dept. launched in 1990 with local German system. "The German approach another until they hit their mid- to late school districts. In the past few years, a perpetuates a class system," says Eileen 20s. This is a big drain on both U.S. dozen states and several nonprofit foun- Appelbaum, an economist at the Eco- 110 BUSINESS WEEK/APRIL 26, 1993 THE WORKPLACE 05/01/93 12:06 OMB LPD/LWP 003 ID: MAY 04:93 9:44 Nu 011 F.02 DRAFT TO THE CONGRESS OF THE UNITED STATES: I am pleased to transmit today for your immodiate consideration and anactment the "National Service Trust Act of 1993" and the "Student Loan Reform Act. of 1993.' These Acts represent innovative public policy founded on traditional American values: offering educational opportunity, rewarding personal responsibility, and building the American community. In affirming these values, the Acts rejects wasteful bureaucracy -- instead reinventing Government to unleash the ideas and initiative of the American poople. Throughout the presidential campaign last year, Americans of all backgrounds and political persuasions responded to the idea of national service like few others. The reasons are clear. Higher oducation is fundamental to the American Dream, but complex procedures and inflexible repayment plans have created serious problems for many students with education loans to pay back. It 18 a basic American principle that individuals ought LO pay back what they borrow, but today too many students default -- leaving taxpayers to foot the Bill. And finally, Americans today are yearning to reaffirm an American community that transcends race, region or religion -- and to tackle the problems that threaten our shared future. The two Acts are designed to meet these basic American needs. The "National Service Trust Act. of 1993" establishes a domestic Peace Corps, offering hundreds of thousands of young people the opportunity to pay for school by doing work our country needs. The "student Loan Reform Act of 1993" overhaula the student loan system. Through One-Stop Direct Student Luans, the Act will save taxpayers billions of dollars, lower interest rates, and simply tho system for students. And through new EXCEL Accounts and new repayment options, it will offer borrowers greater choice and lower monthly payments while the chance of defaults. The "National Service TIUSL Act" establishes a definition of national service that is clear but broad. National service is work that addresses unmet educational, environmental, human, or public safety needs. It enhances the experience of those who serve, instilling the ethic of civic responsibility that is essential to our democracy. And national service does not displace or duplicate the functions of existing workers. Building on the National and Community Service Act of 1990 and the flourishing national service programs of nonprofit organizations and States, the initiative rejects a Federal bureaucracy in favor of locally driven programs. And in the spirit of reinventing government, the Act will empower those with the greatest expertise and incentives to succeed in their work. The "National Service Trust Act of 1993" establishes broad categories of eligibility and requirements for the use of educational awards; but it lets citizens of all backgrounds serve and use their awards where they 800 fit. While many 05/04/93 12:07 OMB LRD.LWP 004 1D: MAY 04:93 9:44 Nu.011 P.03 participants will be recent college graduates, Americans will be eligible to enter the program at any time in their adult líves. Both full-time and part-time service will be encouraged. And whatever their education level, those who complete a term of service will receive an award of $5,000. The award will be payable toward past, present, or future educational expenses in four- and two-year colleges, training programs, and graduate and professional schools. The Act demands that programs meet tough guidelines for excellence, and requires measurable performance goals and independent evaluations. Within these limits, nowever, the ACL enables the people who run programs to design them. The smallest community based organizations and largest Federal agencies will be able to compete for funding. A variety of program models will be eligible, ranging from youth corps that enable at-risk youth to meet community needs, to pre professional programs that give college students ROTC-like training and then placements in specific problem areas, to diverse community corps that involve Americans of all backgrounds in meeting common goals. With the economic market as a model, there is competition at every level of the system: programs compete for State approval, States compete for Federal approval, and programs at the national level compete against each other and States for Federal approval. To build public/private partnerships that earn support far beyond government, the Act requires programs to make a cash match and to seek support from beyond Government as time passes. The Act aims to reduce waste and promote an entrepreneurial Government culture. At the Federal level, the Act establishes a new Government Corporation for National Service that combines two existing independent agencies, the Commission on National and Community Service and ACTION. with flexible personnel policies and a small, bipartisan Doard sharing power with a Chairperson, the Corporation will operate as much like a lean nonprofit corporation as a Government agency. The State level will mirror the Federal level and build a strong partnership between the two. Bipartisan State commissions on national service will be responsible for selecting programs to be funded by States. To ensure genuine Federal/State cooperation, a representative of the Corporation will sit on State commissions, and a representative of the States on the Corporation Board. In its efforts to build community, the "National Service Trust Act of 1993" encourages Americans to Juin Logether and serve our country -- at all ages and in all forms. The Act enhances the Serve-America program for school-age youth; extends and improves the VISTA and Older American Volunteer Programs authorized under the Domestic Volunteer Service Act; and pulls these efforts under the new Corporation. The Act will help instill an ethic of service in elementary and sccondary school students, encourage them to serve in their college years, and give them further opportunities later in their lives. 05/01/93 12:08 OMB LRD/LWP 005 ID: MAY 04'93 9:45 No.011 P.04 The "Student Loan Reform Act of 1993" will also take an important first step toward comprehensive reform of the student financial aid system. It will save money, make loan repayment more affordable, and hold students more accountable. The measures will in no way replace the Pell Grant program, which will remain the cornerstone of financial aid for millions of students. The Administration has requested an nearly $2 billion to fund the Pell shortfall in an amendment to the fiscal year 1994 budget. The ACL replaces the current Federal Family Education Loan program with the One-Stop Direct Student Loan Program over a four year period. By eliminating subsidies to private lenders and making loans directly to students, direct lending will save taxpayers more than G4 billion and still allow interest rates to drop for student borrowers. The reform will simplify the system for many students, enabling most to receive all their aid through "one-stop shopping" at their institutions' financial aid office. The lending reform will expand choice and reduce burdone for all student borrowers by offoring A variety of repayment plans -- including fixed, extended, graduated, and income contingont schedules. In the same way that multiple financing options help homeowners, these plans will offer real choice to all and lower monthly payments to those who want them. Income contingent repayments -- the new EXCEL Accounts -- will also encourage service by students who do not participate in the domestic Peace Corps portion of the Act. without large monthly paymenta, more students will be ablo to take jobs that pay less but do more for their communities, without risking default. And whatever plan they first choose, students will be able to change their repayment schedule as their circumstances change The Act will also reduce default rates. By clecting income- contingent repayment schedules, students with lower incomes will be able to repay their loans on a manageable plan, as a small percentage of their income over time. Through cooperation with the IRS, the Act will improve collection and monitoring of student loans. And for those who are able to pay but do not, the Act will give the Secretary of Education authority to requiro payment with IRS participation. Opportunity, responsibility, and community go beyond politics. They are basic American ideals. Enactment of these LWO Acts will express the Nation's commitment to these ideals and to our shared future. 1 urge the Congress to give the legislation prompt and favorable consideration. WILLIAM J. CLINTON SENT BY:Xerox Telecopier 7020 : 3- 2-93 ; 18:47 ; The White House- 202 456 1605:# 2 ID: FEB 28'93 19:34 No.006 P.02 NATIONAL SERVICE GENERAL TALKING POINTS National Service as an American Ethic: # Americans have a new sense of determination. They're saying: We want our country back. And they're ready to do something about it. That's why they're supporting the President's economic plan. And that's why they balieve in national service, * The President deeply believes in service, and he's going to use the tremendous resources at his disposal to support it. But those resources are worth nothing compared to the resourcefulnodo of the American people. * We have 8 responsibility to fight our country's problems -- "we" the government, but more importantly, we the people, & So today, we are challenging you, as the President has challenged his administration, to lift up your calves and lift up your country through service. I challenge you to [specific examples) ... I challenge you to ... As Martin Luther King said: "Everyone can be great because everyone can serve." The President's National Service Initiative: * The President's initiative will encourage our people to serva. It's an investment in our future -- and here's the return: - We'll rebuild our communities - We'll send thousands of Americans to college - We'll lift our country up and bring our people together. & The Presidont's program consists of two main components: - The first part will help young people take low-paying public service jobs. Graduates will be able to pay off their loans as a small percontage of their income over time; we call it "pay as you grow." - The second part will create thousands of opportunities for young people to pay for sollego by serving our country -- fighting crime, teaching young people, giving immunizations, or cleaning up pollution and wasts. The President's Summer of Service It Because the President doesn't want service to wait, he's going to make this summer a Summer of Service -- eight intense wooks for at least 1,000 young leadors from all backgrounds. They'll serve by getting children at risk ready for school .. with tutoring, DO they've got better skillo; with mentering, so they want to stay out of gange and in class; and with immunizations and lead poisoning detection, so kids aren't sick. SENT BY:Xerox ielecopier 7020 ; 3- 2-93 18:47 ine wnite House- 202 456 1605:# 3 ID: FEB 28'93 19:35 No.006 P.03 BACKGROUNDER ON PRESIDENT'S NATIONAL SERVICE INITIATIVE Timing. The President will submit his legislation to congress soon. Two parts. The legislation has two parts. One part will enable young people to pay back their student loans as a small percentage of their income over time, helping them take essential but low-paying public service jobs. The other part will create opportunities for young people to serve our country and help pay for college in return. Funding. The President has requested $7.4 billion over the next four years for the second part of the national service initiative. The funding level rises each year, to $3.4 billion in 1997, because this initiative aims to support the growing work of America's communities -- not overwhelm it. Funding starts at $400 million next year. Number of Participants, The numbers will reflact the enthusiasm of the American people and the ingenuity of our communities in developing solid ways to put our people's energy to work. By 1997, we believe there could be more than 100,000 young people paying for post-secondary education by serving their country, and hundreds of thousands more doing low-paying public service work because loans no longer block the way. Eligibility and benefits. Students before, during and after college will be eligible to serve for a year or two, and in return get a small stipend, health and child care benefits where necessary, and an educational benefit to pay for college or job training. [Note: This is the service-for-benefits option; anyone who needs an income-contingent loan will be eligible to get it.] Activities. The program aims to meet unmet needs in critical areas. It is not job training. Young people will be able to serve as teachers in schools where kids need extra help; in clinics in areas where people need medical care; in the police force, keeping oriminals off the streets and kids out of gangs; and in an environmental corps, recycling waste and stopping pollution. Administration. The program will be non-bureaucratic, using venture capital to support entrepreneurs and public-private partnerships to support growing programs. States and local organisations will be given the opportunity to design innovative ways to meet identified national priorities. Nondisplacement. The legislation will include strict nondisplacement and nonduplication provisions. National service will only meet needs that are not otherwise being met. SENT BY:OFFICE OF SECRETARY : 5-10-93 : 2:04PM : DOL- 202 456 2223:# 2/ 3 MEMORANDUM TO: Bo Cutter FROM: Larry Katz DATE: January 28, 1993 RE: An Inter-Agency Working Group on Dislocated Workers and Managing Change I propose that you form an inter-agency working group to coordinate work on the development of a comprehensive dislocated worker transition program and other policies to assit communities and businesses adjust to major structural economic changes. I think these issues form a natural locus for interagency interaction within the stucture of the NEC Deputies Committee. Such a working group would also complement a Cabinet-level, inter-agency task force being proposed to the President by Robert Reich and Robert Rubin. More than two million Americans lose their jobs each year to plant closings, workplace restructurings, or production cuts. While most displaced workers manage to find new jobs within three months, a large fraction (roughly one-fifth) suffer more than half a year of joblessness. Even once re-employed the typical displaced worker faces more than a 15 percent decline in earnings, and many end up in jobs without health care and other benefits. Job losses tend to be geographically concentrated, and a major plant closing or mass layoff can undermine a community's economy and culture. Structural economic change has probably accelerated in recent years, and with it, the pace of worker dislocation. In fact, the relatively "mild" recession of 1990-91 saw a higher rate of permanent job loss than the deeper 1982-83 recession. Major causes of labor displacement include increased international competition, the tide of technological change driven by the computer revolution, and major corporate restructuring. These forces are far likelier to strengthen than to abate in the next few years. We should also add to these the structural changes likely to attend najor policy initiatives such as NAFTA, defense conversion and base closings, and strengthened environmental protection. The policies we inherit are inadequate to sucessfully orchestrate adjustment. Current dislocated worker programs are fragmented (different programs, authorized by different committees, run by different agencies), administratively inconsistent (with widely varying procedures, eligibility standards, and benefits), and conceptually incoherent (with an ambiguous balance between easing adjustment and compensating losses.) The inadequacy of the workforce adjustment system imperils the Clinton agenda. Change is the Administration's watchword. But change brings with it disruption and uncertainty for workers and communities. Without a collective commitment to share the risks SENT BY:OFFICE OF SECRETARY : 5-10-93 : 2:04PM DOL- 202 456 2223 3/ 3 and buffer the shocks of change--and without reliable institutions to deliver on that commitment--those Americans most threatened by change will struggle to block it. They will frequently succeed; those seeking to derail change enjoy tactical advantages in our political system. Bolstering our institutions for redeploying dislocated workers is the right thing to do. It is also essential to avoid creating an atmosphere of vulnerability and defensiveness that smothers the Clinton agenda for reinventing America. A window of opportunity presents itself. The heightened visibility of defense conversion, environmental law reform, and (especially) NAFTA provide an occasion for transforming the current system into a comprehensive, coherent worker adjustment program. An inter-agency work group should assemble to help coordinate the design of a universal system to address the needs of all dislocated workers--regardless of the immediate cause of dislocation--and to offer predictable access to transition assistance, training, and support services. Complementary programs that aid distressed communities or try to prevent some 2displacements could also be considered. The development of such a system--and the reconfiguration of existing programs, each with its own network of sponsors, defenders, and beneficiaries--will require the involvement of the Labor Department, the Defense Department, and the Office of the U.S. Trade Representative. It may also be useful to involve the Domestic Policy Council and the Departments of Commerce and Education. A broader inter-agency group on human capital issues would also need to include HHS and HUD. FY1 Talking Points Administration's Initiative on Worker Adjustment The Goal: To establish a comprehensive program to address the needs of all dislocated workers, regardless of the cause of dislocation, and to ensure access of dislocated workers to an enriched array of services including job search assistance, retraining, income support and other transitional re-employment assistance. Current Programs: Assistance is currently available to dislocated workers through two major programs with differing approaches to the provision of services. The largest program, the Economic Dislocation and Worker Adjustment Assistance Act (EDWAA), will serve some 330,000 dislocated workers in the current program year (under an and appropriation of $517 million). Eighty percent of the funds are distributed by formula to the states, which provide services dep. on directly and through a network of substate grantees. Among the and services provided are: rapid response activities at the site of lim. major layoffs and/or plant closures; basic readjustment services such as counseling, job search assistance, placement and relocation assistance; retraining services, including basic skills and remedial education and occupational skills training. Needs related payments are authorized, but seldom used, and funds available are not sufficient to serve all eligible dislocated workers who need/desire training. The second major program is the Trade Adjustment Assistance (TAA) Program. TAA provides job search assistance, training, income support and relocation assistance to workers who lose their jobs (or whose hours/wages are significantly reduced) due to increased imports. Department of Labor certification is required before a group of workers is deemed eligible for trade adjustment assistance, but once a certification is made, TAA functions as an entitlement program. The program is capped at $80 million and this year, approximately 50,100 persons will receive TAA services. There are also a number of smaller programs available to dislocated workers in selected industries including: the Defense Conversion Adjustment Program, the Defense Diversification Program, and the Clean Air Employment Transition Program. The Need: In today's dynamic global economy, developing and maintaining the skills of our workforce is essential. We also know that structural economic changes -- no matter what the cause -- will require a comprehensive strategy to assist workers who are faced with finding new jobs. A number of events will have a particularly significant impact on this: O continued reductions in defense spending will increase the need to help workers and businesses make the adjustment to a civilian economy; O the ongoing restructuring of America's large corporations and mid- and small-sized companies will continue to impact a wide variety of worker with different backgrounds, skills and needs; O technological changes will continue to affect skilled and semi-skilled workers as their skills rapidly become obsolete; o environmental concerns will continue to impact on certain industries in ways which affect the workplace and may cause job dislocations in certain geographic areas; O changes in trade agreements such as the GATT and/or the signing of NAFTA, while benefitting the economy as a whole, will have impacts on some segments of our workforce and increase the demand for re-employment services. The Clinton Administration is committed to meeting these new challenges, but wants to do so in a coordinated fashion, with an enhanced package of services made available without the administratively cumbersome certification process. This approach should both increase resources to dislocated workers and increase the speed with which services are delivered. Basic Elements: The President will propose legislation to supersede and build on the successful components of the Trade Adjustment Assistance and Economic Dislocation and Worker Adjustment Assistance programs. The basic elements of the President's proposal will be: O broad coverage regardless of the cause of dislocation and without the need for administratively cumbersome certifications; O increased emphasis on rapid response and early intervention as soon as layoffs are announced and, when possible, before the workers lose their jobs; 2 O linkage to Unemployment Insurance profiling to ensure early identification and referral of laid off workers who need these services; O a flexible array of training and support services linked to assessment; O assistance to dislocated workers in meeting the costs of skills training, designed in a way which provides greater client choice in the selection of training programs; o income support to ensure that workers who have exhausted UI and who need assistance can complete training; O increased industry participation to advise on broad workforce issues; O demonstrations to serve workers whose jobs may be at risk so as to avoid dislocation; and O national discretionary funds for demonstration programs and targeted responses to specific industries or large impact areas. 3