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Statement of Raymond L. Bramucci Assistant Secretary for Employment and Training Administration



DEPARTMENT OF LABOR
Statement by
Raymond L. Bramucci
Assistant Secretary for the Employment and Training Administration
on
Fiscal Year 2001 Budget Request for
the Employment and Training Administration

March 23, 2000


Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to appear before you today to discuss the Administration's Fiscal Year 2001 budget request for workforce preparation and employment services. Since I last appeared before you, we have a new Employment and Training Administration and a new way of doing business that I will discuss in a moment. I would like to pay special tribute to Chairman Porter who is retiring at the end of the 106th Congress. I am glad that we had the opportunity to work together. You have my good wishes.

Our request totals $10.9 billion under current authority -- an increase of $870 million from the comparable amount appropriated in FY 2000. It includes $10.1 billion for discretionary programs and $841.6 million for mandatory programs. It builds on previous initiatives -- including the enactment and implementation of the bi-partisan Workforce Investment Act of 1998 -- to develop a revitalized, customer-focused system that provides workers with the information, advice, job search assistance, education, training, and support they need to get and keep good jobs, and that provide employers with skilled workers. Our request supports the Department of Labor's three cross-cutting strategic goals in the Department of Labor's Annual Performance Plan: a prepared workforce, a secure workforce, and quality workplaces.

ETA ACCOMPLISHMENTS IN THE PAST YEAR

Mr. Chairman, Secretary Herman has eloquently described to this Subcommittee her vision for the Department and how that vision relates to the Department's strategic goals and FY 2001 budget request. Today I would like to report to you about some of our major accomplishments over the past year and then, discuss with you key challenges and opportunities we see for American workers and their families and explain how our budget request responds to these challenges and opportunities. Then I want to highlight our request and say a few words about GPRA and program performance.

Implementation of the Workforce Investment Act The implementation of the Workforce Investment Act (that replaces the Job Training Partnership Act) has been my priority over the past year. This legislation has been described in a New York Times article as "one of the best, but most under reported, bipartisan achievements of the Clinton era." We are working as partners to help States and local communities think expansively and succeed in designing a customer-focused, comprehensive one-stop delivery system under the new law. We issued streamlined regulations that are user-friendly, in plain English, and only about half as long as the regulations they will replace. We issued unified planning guidelines with other Federal agencies to encourage States to take an integrated approach to workforce development. I am very proud that each of our implementation activities has been conducted in open consultation with our local, State and Federal partners, involving countless meetings, consultations and town halls. One of our partners, the Interstate Conference of Employment Security Agencies, wrote to us, stating that "this has been an open, flexible, effective process that the State administrators have appreciated." We believe we have tackled the tough issues and resolved them in a manner that will help States and localities implement the new law. The job is not done, though. We will continue to work hard to ensure that all States submit approvable plans so they can start operating the new, reformed system on July 1.

Youth Opportunity The Youth Opportunity Movement is a national effort to call attention to the importance of meeting the education and job training needs of American youth is the most intensive effort to reach young people in our Department's history. One component of the Youth Opportunity Movement is Youth Opportunity Grants that are authorized under WIA. We had an impressive number of strong applications from communities across the nation, exemplifying the interest in and real need for these grants. On February 19, Secretary Herman announced the first round of Youth Opportunity Grants to 36 communities across the country. I cannot imagine a more rigorous process than was used to select these grantees. This process was informed by our Youth Opportunity pilot projects, which we call Kulick grants, and we utilized outside experts to review the proposals. The Youth Opportunity Grants target high-poverty urban, rural and Native American communities with sufficient resources to cause a substantial drop in youth unemployment in these communities. Our goal is that 70% of Youth Opportunity Grant participants placed in employment will be retained at six months. These programs offer hope and resources to help young people acquire the skills and experiences needed to grow into successful adults and good citizens. Decreasing joblessness and idleness in high-poverty neighborhoods has the potential to help communities and taxpayers in several other ways -- by reducing crime, illegal drug use, and welfare dependency.

Improved Customer Service ETA has continued to make progress in improving services to our customers, utilizing electronic tools like the Internet, and toll-free telephone lines to provide information and answer questions. Last year I told you about America's Career Kit, a group of Internet tools that help American workers and employers navigate the labor market, exercise informed choice in their workforce decisions and make training decisions linked to occupations that are experiencing skill shortages. America's Job Bank -- the Internet "heart" of the labor exchange -- provides the public with access to 1.7 million job vacancies on a daily basis and is still by far the largest job bank on the Internet. We are flattered that our pioneering success has prompted the development of many other Internet job banks.

The Department has established the toll-free number 1-877-US-2JOBS to provide services initially for dislocated workers in a limited number of States. We established a national call center in Chantilly, Virginia that began operations in July 1999. Ten States have enlisted to participate in the toll-free system -- initially with a dislocated worker focus. Partnerships are being established with more than two dozen additional States and jurisdictions which will join the system over the next several months. Later this year, we expect virtually all dislocated workers will have access to toll-free information. Subsequently, we expect to broaden the information and assistance available to cover all customers served by the Workforce Investment Act.

Welfare-to-Work In 1997, we launched the Welfare-to-Work initiative designed to move the hardest-to-serve welfare recipients into unsubsidized jobs and economic self-sufficiency. We have made significant progress. We find that individuals on welfare are eager to work, and that employers recognize that they are an important addition to the workforce. I am convinced that we have turned around thousands of lives and dramatically changed the perspective of employers. The Welfare-to-Work program is particularly important because even though welfare caseloads are at their lowest level in 30 years, the individuals remaining on the welfare rolls face very difficult challenges. Getting them a job is only the beginning; the job of remediation must continue after employment. Welfare-to-Work funds grants to States and local communities for job creation, job placement and job retention efforts such as wage subsidies and other critical post-employment support services. It targets those who have the hardest time moving from welfare to work: those who are long-term recipients with poor work histories, have the poorest skills, or drug or alcohol problems. The program also serves noncustodial parents with barriers to employment whose children are long term welfare recipients. The enactment of amendments to Welfare-to-Work late last year will allow grantees to more effectively serve both long-term welfare recipients and non-custodial parents of low-income children, and to streamline reporting requirements.

Workforce Excellence When I appeared before you last year, I described several initiatives we undertook with State, local, and association partners to ensure that services provided by our delivery system are high quality and continue to improve. I am pleased to report that we have consolidated these continuous improvement initiatives and launched a Workforce Excellence Board which held its first meeting on Friday, February 25. The 35-member Board will play a critical role in building the high performing workforce investment system of the future, as envisioned under the WIA. The Board is a partnership and the Chairman represents business. A third of the members are from the private sector -- from for-profit and non-profit organizations, including schools, community-based, and labor organizations. Other members represent the local, State, and federal levels of the workforce investment system. The Departments of Labor, Education, and Health and Human Services are represented to support the Board's work to help implement the seamless integration of services accessed through the One-Stop system. The vision -- simply stated -- is for the Workforce Excellence Board to help the workforce investment system better answer to the needs of employers and job seekers in the rapidly changing world economy.

Another element of excellence is knowledge and recognition by the public of the quality services that are available through our workforce investment system. Last July Secretary Herman announced a brand name, "America's Jobs Network." It is used throughout the Employment and Training Administration and adorns every letter that leaves the agency. This "branding" will let our customers know how and where to easily access the information and services for which you have provided funding.

ETA Reorganization We also are a new ETA. On August 8, 1999, as required by WIA, the Employment and Training Administration reorganized to align its functions and organization with the requirements of the new Act. Reorganizations are never easy, but I am very proud of the inclusive way we approached this. We engaged front-line workers in designing the new ETA and included our labor partners in the national office and field in every step of decision- making about the new organization. ETA now has major offices responsible for adult services, youth services, and workforce security. The new organizational structure also reflects the evolution of the Federal role in workforce development programs, with an emphasis on serving our customers, coaching our partners for success, and eliminating program "silos."

CHALLENGES AND OPPORTUNITIES

Secretary Herman spoke of two major workforce challenges we face. Many businesses report difficulty in filling vacancies, while at the same time, millions of Americans -- including many young people, dislocated workers and people with disabilities -- are having a difficult time getting jobs despite this period of unprecedented economic expansion. As she put it, we do not have a worker shortage, but a skills shortage. Through the initiatives in the FY 2001 budget request, we can help provide the business community with the skilled workforce it needs to be competitive in this dynamic economy while bringing prosperity to individuals and communities that have been left behind. Let me highlight these initiatives for you.

Youth We ask for an increase of $125 million for Youth Opportunity Grants to address skills training and job placement in the poorest urban and rural areas and Indian reservations in America. Our first grant competition yielded more high quality application than we could fund. We were able to fund about 25 percent of the 170 eligible communities that put together broad partnerships and developed comprehensive plans and submitted applications. These additional dollars will allow us to reach about 12-15 more of America's poorest urban neighborhoods and rural communities. While the youth formula program provides funds to every area in the country, Youth Opportunity Grants concentrate a large amount of funds in targeted, high-poverty urban, rural and Native American communities where the need is the greatest. We know that the needs are great in all the communities that applied, and these additional funds will take us a few steps closer to reaching these communities.

Secretary Herman spoke of the shockingly high rates of incarceration in our Nation today and the need to provide positive alternatives and second chances -- particularly for young offenders. Responsible Reintegration for Young Offenders is a $75 million pilot and demonstration initiative, developed in partnership with the Department of Justice, that will test new approaches to bringing young offenders into the workplace through job training and placement by creating partnerships between the criminal justice system and our workforce development system. We hope that by developing models showing how we can work effectively with the criminal justice system, we can expand services to the young offender population through our State and local mainstream workforce delivery systems. Active intervention for young offenders can help raise employment and decrease crime and recidivism and thus, reduce their costs to society. Even a small percentage reduction in recidivism can result in large cost savings to society. At the same time, the employed ex-offender becomes a productive, tax-paying member of society. The $4,000 cost of assisting an young offender to reconnect to the mainstream economy is far less than the more than $20,000 it costs to incarcerate a young offender for a year. With the establishment of the new workforce investment system and the presence of a strong economy resulting in labor shortages, the time is right to address reentry of young offenders into their communities and local economies.

Safe Schools/Healthy Students is an ongoing collaboration among the Departments of Education, Health and Human Services, and Justice to promote healthy childhood development and to prevent school violence and the abuse of alcohol and other drugs. We believe the Department of Labor has something to contribute to this interagency initiative and have proposed $40 million to join in this initiative and enrich the connections among secondary and postsecondary schools, alternative schools, out-of-school youth programs, and work-based learning. Some of these funds also will help strengthen local partnerships among the new youth councils under WIA, business, community-based organizations, and schools to improve opportunities for at-risk youth.

Universal Reemployment Although the American economy is exceptionally robust and the unemployment rate is very low, there is considerable churning in the job market. Dislocated workers are a higher proportion of the unemployed population than at any time over the past 10 years. In fact, this last year States completed nearly 4,000 rapid response visits to plants facing dislocations around the country. A significant portion of these permanently laid-off workers have little opportunity to return to their previous occupation or industry and they need help to adjust to the new labor market with rapid reemployment and minimal loss of earnings. The new job opportunities for these workers frequently demand more skills than the jobs they lost.

Two years ago the President set an ambitious goal of "Universal Reemployment." The budget requests an increase of $275 million above FY 2000 to continue the second year of the President's initiative which will ensure that by 2004: (1) all dislocated workers will have access to the training and employment services they want and need; (2) all unemployment insurance claimants who have been profiled as unlikely to return to work quickly will get the reemployment services they need to return to work; and (3) all Americans will have access to the information and services of One-Stop Career Centers.

Fathers Work/Families Win To reward work and responsibility and to ensure that all families benefit from the booming economy, the President's 2001 budget includes $255 million for a Fathers Work/Families Win initiative operated under the Workforce Investment Act. Unlike the Temporary Assistance for Needy Families (TANF) and Welfare-to-Work (WtW) efforts, whose combined impacts already have helped welfare caseloads to decline by 44 percent since 1996, Fathers Work/Families Win is not intended to serve only welfare recipients. It will focus on helping poor noncustodial parents and working poor families reach long-lasting employment with decent wages. Of the total request, $125 million would support competitive grants for Fathers Work to help 40,000 non-custodial parents, mainly fathers, obtain or retain employment and progress up career ladders, including upgrading their skills so they can support their children. The remaining $120 million is for Families Win, providing competitive grants to finance care management and skill training for low-income families to help about 40,000 parents stay in jobs, move up career ladders, and stay off cash assistance. $10 million of the total will be available for Indian and Native workforce agencies.

Incumbent Workers We also are concerned about the skill levels of currently employed workers. That's why our budget requests $30 million to allow States to demonstrate innovative approaches to train and upgrade the skills of non-management workers so they can progress on career ladders. Approaches that work will be shared throughout America's Jobs Network. Grants would be awarded only to assist firms where a demonstrated risk of large imminent layoffs or plant closure exists because of trade, competition, the widespread introduction of new technology, or where firms propose to create "career ladders" through lifelong learning. By helping others advance up the career ladder, these grants also have the added benefit of creating entry level opportunities for unemployed and low wage workers. The grants would require matches of State and employer money and would be dispersed through State and local Workforce Investment Boards.

Unemployment Insurance Reform Just as the Congress, the Administration and other parties successfully negotiated reforms to the job training system with the Workforce Investment Act, we are working with the States, employers, and workers' representatives on proposals to reform and strengthen the Unemployment Insurance and One-Stop/Employment Service (ES) programs -- known collectively as the employment security system. Our aim is to ensure that this system continues to meet the needs of a dynamic American economy.We believe that this is the right economy and the right time to make these reforms. It is good government and needs to be done. Among the issues we are exploring are: helping part-time and low-wage workers receive the benefits they have earned when they are laid off, just as other workers do; aiding employers by making it easier to file FUTA taxes, cutting taxes, and helping workers get jobs faster to reduce their time on unemployment benefits; making sure the UI program is responsive to any future economic downturns by improving the extended benefit program; and reforming the Federal-State administration of these programs by providing adequate funding, needed flexibility, and new tools to prevent fraud and abuse and promote reemployment.

Trade Adjustment Assistance Last year the Congress passed a two-year extension of the Trade Adjustment Assistance (TAA) and NAFTA-TAA programs, which provide adjustment assistance to workers adversely affected by imported products or by their firms moving to Canada or Mexico. The number of worker group certifications under TAA increased 78 percent in FY 1999, and TAA petitions are at the highest level they have been since 1989. The Administration continues to seek legislation that would consolidate and reform these two programs. Such reforms would include extending the eligibility for TAA to individuals who lose their jobs due to shifts in production anywhere abroad. The consolidated program would harmonize existing requirements linking training and income support and would provide supportive services as needed. The proposal would expand eligibility for TAA benefits to cover workers who lose jobs when plants or production shifts abroad (coverage which is now limited to shifts to Canada or Mexico). It would also raise the statutory cap on training expenses, provide for supportive services, harmonize the rules of the two programs, and bring the consolidated trade program closer in line with the one-stop delivery system envisioned by the Workforce Investment Act.

OTHER HIGHLIGHTS OF FY 2001 BUDGET REQUEST

Youth Programs The Department administers a variety of service interventions to address basic and intensive education, training, career preparation and job needs of primarily disadvantaged and low-income youth. We also serve youth who are still in school who need to prepare themselves for the world of work. The goal of these interventions is to help young people get jobs that will provide a career path, to help them to complete or advance their education, or to provide job and work-readiness skills that prepare them for the rapidly changing labor market. The request for programs serving this population totals $2.905 billion -- an increase of $241.8 million above FY 2000. The budget requests $1.022 billion for youth formula grants under the Workforce Investment Act. We are requesting an increase of $21.5 million above FY 2000 for this consolidated youth program that provides comprehensive services and summer job opportunities to disadvantaged youth. This increase will serve an additional 13,000 youth under the new WIA program design. As previously discussed, we request, for Youth Opportunity Grants, $375 million, an increase of $125 million above FY 2000.

We request $1.393 billion for Job Corps -- a net increase of $35.2 million over FY 2000. This request will provide for an enrollment level of 73,200 new students. The request helps Job Corps maintain high quality services by including an increase of $12.9 million for salary increases for academic and vocational instructors, counselors, residential advisors and recreation leaders. This increase, along with the increase Congress provided last year, will help greatly in reducing turnover and retaining qualified staff at competitive wages. The Job Corps request also includes an inflation increase, operating costs for two new centers and a reduction of $13.5 million for one-time construction funding.

I already have addressed the budget requests for two new initiatives: Responsible Reintegration of Young Offenders ($75 million) and Safe Schools/Healthy Students ($40 million).

Our budget reflects a planned decrease of $55 million for School-to-Work, as federal funding commitments for the School-to-Work system are completed in FY 2000. The School-to-Work Opportunities Act sunsets on October 1, 2001. However, States will continue to expend previously-awarded funds in 2001, and National Activities funds for projects that support the sustainability of School-to-Work also will be spent in FY 2001.

Adult Programs The budget request for adult programs under the WIA and under the Older Americans Act is $3.575 billion - an increase of $463.3 million over FY 2000. The budget reflects the continuation of the advance appropriations enacted by Congress in the FY 2000 appropriations for the Adult and Dislocated Workers programs that is necessary to stay within spending caps.

Adult Employment and Training

The request for Adult grants under WIA is $950 million, the same level as for FY 2000. The Workforce Investment Act puts demands on States and local communities to build a customer-focused service and information network that is characterized by high quality and continuous improvement. All adults can receive core employment-related services, with intensive and training services targeted to those who need additional help to obtain and retain employment. These funds enable the new workforce investment system to serve approximately 380,000 adults. The request for Dislocated Workers employment and training is $1.770 billion, an increase of $181.5 million over FY 2000, which will assist 984,000 dislocated workers. This request is part of the President's Universal Reemployment Initiative.

The FY 2001 Budget also includes $440 million for programs authorized under Title V of the Older Americans Act. The Community Service Employment for Older Americans Program will support 92,000 subsidized part-time jobs for low income older Americans in 2001.

The request also includes two other initiatives for adults that have been discussed: Fathers Work/Families Win ($255 million) and competitive grants to serve Incumbent Workers ($30 million).

National Programs For the Indian and Native American program, the budget includes a request of $155 million -- $3.4 million below the FY 1999 appropriation. The difference reflects an increase to the base Native American Program to bring funding up to the WIA statutory minimum level of $55 million, and a decrease of $5 million reflecting the elimination of one-time funding provided in FY 2000 to complete construction of an employment and training facility for American Samoans in Hawaii.

For the Migrant and Seasonal Farmworker Program, the budget requests $74.4 million -- an increase of $250,000 from FY 2000. The request also includes $5 million in Pilots, Demonstration and Research funds to continue the Migrant Child Labor initiative that was funded in FY 2000. In addition, $15 million for migrant youth activities authorized by WIA is requested as part of the $375 million request for Youth Opportunity Grants.

The Workforce Investment Act authorizes certain activities to help States and local communities succeed in building the workforce investment system. A total of $62 million is requested for technical assistance, State incentive grants, evaluations, and pilots, demonstrations and research. These activities are vital to strengthen and improve the new workforce investment system - demonstrating new approaches to solving problems related to the workforce, conducting research, and evaluating what works. Included in the total is an increase of $10 million for incentive grants to reward good performance in FY 2001, the first year in which these awards will be made.

Federal Unemployment Benefits and Allowances This account provides funding for the Trade Adjustment Assistance and NAFTA-TAA programs of income support and training for workers adversely affected by imports from anywhere in the world and shifts of production to Canada and Mexico. The request is $406.6 million in FY 2001 under current authority -- $8.6 million below FY 2000. I already talked about our legislative proposal to reform and consolidate the two programs.

Workforce Security Programs The State Unemployment Insurance and Employment Service programs play a vital role in this country's economy by providing temporary income support to unemployed workers while they seek new employment or return to their previous jobs, and by facilitating the match of workers seeking jobs with employers seeking workers. The request of $3.389 billion for State Unemployment Insurance and Employment Service Operations is a net increase of $175.4 million over the comparable FY 2000 funding level.

The FY 2001 request for State unemployment insurance administration totals $2.359 billion - an increase of $92.9 million from FY 2000. The request proposes to restructure UI administrative funding to reflect today's service delivery systems that rely heavily on information technology and telecommunications-based infrastructures. A larger share of each states' funds would be provided at the beginning of the year, giving states more certainty about their funding for the year and improved ability to plan efficient utilization of resources. The proposed increase would provide increased funding for fixed costs related to state technology/telecommunications infrastructures and for increases in the number of employers and workers covered by state UI laws.

The request for the One-Stop Employment Service is $1.03 billion - an increase of $82.5 million above the comparable FY 2000 level. Included in this request is an additional $50 million for Reemployment Services grants that is part of the Universal Reemployment Initiative and that will be distributed to States to provide reemployment services to unemployment insurance claimants who have been profiled as unlikely to return to work. Getting these individuals back to work faster will reduce UI benefit costs.

The FY 2001 includes $154 million for new methods of providing employment and related information through a One-Stop Career Centers and America's Labor Market Information System (ALMIS). Although a net increase of $34 million over the amount appropriated for FY 2000, the real program increase is $64 million which underscores how important we believe these programs are. For FY 2001, $30 million in the base is being redirected to on-going One Stop and ALMIS activities. This amount is comprised of the last year of one-stop implementation grants ($20 million) and $10 million for labor statistics that is being requested in the Bureau of Labor Statistics. These investments support our efforts to provide more timely, universally accessible quality information through the One-Stop system to our customers -- American workers and employers - through the core employment statistics program, including support for and promotion of the electronic labor exchange and lifelong learning, and to underwrite the measurement and display of performance information under the Workforce Investment Act. The additional funds will be used for a Nationwide Toll-Free number for the workforce development system, mobile one-stop vans, access to the Internet for people with disabilities, America's Job Bank, America's Talent Bank, America's InfoNet, and the Occupational Information Network (O*Net).

Our request also provides direct Department of Labor support for the Administration's "Access America" initiative, a single Internet-based contact for American workers to a wide range of services, information and transactions, and includes $10 million for America's Agricultural Labor Network (Ag-Net) -- an Internet-based tool that will facilitate the recruitment of agricultural workers by growers and the movement of agricultural workers to areas with employment needs.

Work Incentive GrantsWe propose to continue Work Incentive Grants at the FY 2000 level of $20 million. These are competitive grants to partnerships of organizations in each State that help one-stops and the WIA system provide the full range of employment and training services to people with disabilities. This is seed money to coordinate services.

Foreign Labor CertificationThe budget proposes a significant change in the administration and funding of the Foreign Labor Certification program at both the State and Federal levels. By 2001 ETA will have implemented a streamlined Foreign Labor Certification program and fewer resources will be needed at the State level. Thus, the funding request for State Foreign Labor Certification programs is $20.6 million, a decrease of $9.6 million from the FY 2000 comparable level.

The Administration is proposing a user fee of $1,500 on employers for the certification of foreign workers under the permanent certification program -- consistent with the 1995 recommendations of the Commission on Immigration Reform. It is estimated that $137 million could be collected in FY 2001 that would be used for (1) training and employment services in the Dislocated Worker program, (2) administration of the State program in 2001, (3) Federal staff to administer the program, and (4) funding for BLS for the Occupational Employment Statistics program. Pending enactment of the user fee legislation, the Department's budget requests budget authority for these activities.

Program Administration Finally, our budget requests $159.3 million for ETA Program Administration. This represents less than 1.5 percent of our total request and is important to protect the taxpayers' investment in the Federal government's employment and training programs. The request is 19 FTE above FY 2000 and will provide staff to support expanded program responsibilities for such activities as the Universal Reemployment initiative, the Youth Opportunity Movement, Job Corps oversight, UI oversight, technology, and for increased apprenticeship employment and training services, with an emphasis on women in apprenticeship.

PROGRAM PERFORMANCE AND GPRA

Performance under the Job Training Partnership Act program continued with strong outcomes for all major programs in employment, wages and retention in Program Year (PY)1998 - the period from July 1, 1997 through June 30, 1999.

In PY 1998, just over 69 percent of disadvantaged adults who received services under the JTPA Title IIA program were employed 13 weeks after completing program participation with weekly earnings of $338 -- exceeding the performance goals of 64 percent employed with earnings of $292. At the same time, employment rates for youth under Title IIC were almost 60 percent as compared to 55 percent in PY 1997. The overall rate of employment combined with education or the attainment of advanced job skills to meet the goal of "assisting youth in making the transition to work" was over 84 percent, up from 77 percent in PY 1997. The JTPA Title III dislocated worker program contributes to secure workplaces by "providing worker retraining". In PY 1998, the dislocated worker program met its goals of employment and wage replacement at termination: 74 percent of those leaving the program were employed; the wage replacement goal of 93 percent was exceeded by 6 percentage points, providing workers wages at 99 percent of their prior wages. Thirteen weeks later, 76 percent of the dislocated workers remained employed with earnings at 102 percent of their prior wage, exceeding the goal of 97 percent.

We also continue to be pleased with Job Corps performance in PY 1998. A little over 82 percent (82.4) of Job Corps students were placed in jobs, the military, or pursued further education. For those placed in jobs, the average wage was $6.87 per hour. The PY 1998 performance compares favorably with the PY 1997 performance when 75 percent of Job Corps terminees got jobs or pursued education; those with jobs in PY 1997 had an average wage of $5.98 and met or exceeded the performance goals for the program (75 percent and $6.50 respectively).

ETA is revising its annual performance goals for FY 2000 and 2001 to reflect the transition to the Workforce Investment Act. These changes reflect the purposes of WIA and its statutory performance indicators by looking to longer-term outcomes of employment 6 months after exiting WIA services and earnings gains that reflect a comparison between earnings 6 months after exit with earnings of a comparable pre-program period. During this period, ETA will also continue the development of a data validity system to provide better quality assurance of the outcomes data reported under WIA.

CONCLUSION

Mr. Chairman, in conclusion, I want to emphasize the importance of the investments we have been discussing. President Clinton, in his State of the Union Message, spoke of the extraordinary state of our economy, but he also noted that our prosperity is not universally shared among all Americans. He called for a 21st Century revolution of opportunity, responsibility and community. The Department of Labor has an important role to play in expanding opportunity to all our citizens.

In recent testimony to the New York City Council, John Twomey, a leader in New York State workforce development, spoke of the need for the Workforce Investment Act:

"The economy has changed. Lester Thurow, Dean of the Sloan School at MIT in Massachusetts has said that he believes only 50% of the workers in the United States have the skills to be knowledge workers, but 85% of new jobs require knowledge workers."

As Secretary Herman stated, the initiatives we have put forward are important because they are not just numbers or words on paper, but are about helping real people, with real talents to develop, and real challenges to overcome.


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