Ohio can do more for unemployed workers

Hillsboro Times-Gazette - April 22, 2008

by Dr. Jon Honeck, in The Hillsboro Times-Gazette 

For an economy in transition, retraining workers who have lost their jobs is one of the most important and promising roles government can play.

A retrained workforce helps companies find the right employees, allows workers to be productive, and families to stay in the middle class. But, for the past eight years, Ohio’s retraining program has not adequately fulfilled its promise.

Ohio’s most important retraining program distributes federal funding from the Workforce Investment Act (WIA) to local boards that run the program.

Ohio’s WIA program does not serve as many unemployed workers as it should and does not spend all of its resources. Over 3,100 people completed Ohio’s program after receiving training or other intensive services in the most recent program year, compared to 5,700 in Pennsylvania and 4,600 in Wisconsin, a state that has half of our population.

The program has two challenges: improving outreach and recruitment, and removing barriers to training. Local areas are responsible for outreach through the delivery of “rapid response” services at workplaces that face a large layoff.

At a minimum, these services include informational sessions about unemployment compensation and WIA one-stop services.

Unfortunately, most rapid response services in Ohio do not exceed the minimum required by law. More labor-intensive and effective techniques are seldom used.

With a cooperative employer, rapid response could establish a transition center at the worksite to help workers plan their job searches or develop a training plan; create workforce transition committees with employees, management, and community representation; and train individuals as advocates and counselors to help their fellow workers get the assistance they need.

This lack of extra effort and creativity in rapid response is the single greatest contributor to a buildup of unspent program funds. The latest federal budget proposal will recapture unspent WIA funds from Ohio and other states.

The state will have to give back $20 million to the federal government, even as 78,000 Ohioans used up their six months of unemployment benefits last year without finding another job.

It is essential that the Ohio Department of Job and Family Services move forward with key administrative reforms that would make the system work better in the short run.

First, the agency needs to set minimum numerical targets for the number of unemployed workers participating in services in each local area. These targets could be based on measures of unemployment and announced layoffs.

Areas that do not meet minimum targets should prepare a corrective action plan and ultimately face sanctions if they fail to raise their service levels. Second, the system should remove unnecessary barriers to training by streamlining the procedures that local boards use to determine eligibility for tuition support.

In the long run, Ohio will need to bring its dislocated worker program up to par with those of other states. Unemployed workers are often reluctant to enter training programs that last longer than the duration of unemployment benefits.

This prevents them from taking more intensive training courses that provide a significant boost in the labor market.

Many states that have greater success in moving unemployed workers into training find ways to extend income support for trainees and supplement WIA training funds with other revenues.

The odds of a successful transition to a new job are increased when workers have more time to adjust, but federal plant closing notification law is full of loopholes and weakly enforced.

Some states, including Illinois, Wisconsin, and California, improved on federal policy by passing layoff notice legislation that covers smaller layoffs and creates penalties for non-complying employers.

Although state dislocated workers policy reform must start from within the WIA system, it must involve all stakeholders in order to be successful.

Employers, organized labor, higher education institutions, and community groups all have a stake in improving outcomes for dislocated workers. Many states are experimenting with innovative ways to better connect employers with training institutions and create career ladders for workers to move up.

Employers, even in manufacturing, find that they are facing skills shortages that will become worse with the retirement of the baby boom generation.

A successful retraining program for unemployed workers is critical to ensuring that they contribute to the economy, use their skills, and have the means to support themselves and their families.

Dr. Jon Honeck is the senior researcher for Policy Matters Ohio, a non-partisan policy research institute.

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