Grubb, W. N., Badway, N., Bell, D., Chi, B., King, C., Herr, J., Prince, H., Kazis, R., Hicks, L., & Taylor, J. C. (1999). Toward order from chaos: State efforts to reform workforce development systems (MDS-1249). Berkeley: National Center for Research in Vocational Education, University of California.

SECTION  8

THE IMPLICATIONS FOR STATE AND FEDERAL POLICY

      By now we can see that, even as states are moving in the direction of more coherent workforce development systems (albeit slowly and fitfully), their policies and practices vary enormously. We expect that this pattern will continue--and rightfully so, given the differences among states in the economic issues they face, the institutions they have developed, and the structure and culture of local and state governments. If states continue to become more active in shaping their own systems, then the uniformity imposed in federal programs like JTPA and JOBS will give way to greater variety in how state and federal funds are planned, combined, and used. In this situation, it is inappropriate to make fixed recommendations, or to decide that the approach of a particular state is the right one for others to follow. Instead, we outline a series of issues that, based on the experiences of these ten states, should probably be considered by all states as they attempt to reshape their workforce development systems. We then examine federal policy briefly, to make three points about policies that are helpful to state efforts in varying degrees.

      Finally, we return to the questions we raised at the beginning of this report. It is impossible to forecast whether workforce development systems will continue in the direction of greater coordination and rationalization, as the education system has over the past two centuries; however, the analogy is a useful one, since it can alert us to both the benefits and some of the pitfalls of system-building.

Considerations for State Policy

      The local-state structure that most states have developed--that is, establishing a state agency by combining or consolidating a variety of programs, together with local or regional counterparts closer to local labor markets--is both logical and flexible. However, states must explicitly consider the following dilemmas or their efforts will simply add another layer of bureaucracy without affecting programs:

• The powers of local and state agencies must be carefully considered. Administrative agencies are much more powerful than planning agencies, and voluntary efforts (as in Oklahoma) seem to reach only the most committed local areas. The extent of state authority in consolidated agencies involves a simple kind of tradeoff: More powerful state agencies are better able to ensure uniformity from region to region; but certain kinds of uniformity are counterproductive and create such resistance from local programs that very little is changed. In contrast, the policy of "state guidance, local direction," particularly in the more gentle forms that Oklahoma and Oregon have taken, create less resistance but also allow much more variation in the response of regional boards. Whether such efforts can, over time, change the culture of how local programs operate--as states like Oklahoma and Oregon hope--remains to be seen, but the consensus elsewhere is that there has to be some energy put into the state system in the form of either administrative power, funding, or political influence before coordination takes place: "unless you apply an input of energy, the system is not naturally integrated."
  
  
• In many states, the state's vision is more powerful than its implementation. In many cases, implementation has failed because of familiar problems: poor choices in leadership, slow developments at the state level, inconsistent state practices, resistance from various providers or from local officials, and/or the continued restrictions of federal programs (all reviewed in Section II). But we are particularly impressed with the importance of having stable and continuous state policies, support from a series of governors, and bipartisan support so that policies can continue to develop over time--as has been most true in Florida, North Carolina, and Oregon. Where new governors have taken a different position, or workforce programs have become pawns in partisan politics, or an activist governor has been succeeded by one who does not care about education and training, progress has been unsteady and often reversed.
  
  
• The inclusiveness of state boards or planning councils, and then of their local counterparts, is a crucial decision. Most often, these decisions have left in place a divide between education programs, on the one hand, and other job training programs and related services (like information and counseling or one-stop centers) on the other--a split created in the early 1960s which continues to reflect differences in purpose, in institutional norms and practices, and in political resistance. However, we have argued (particularly in Section VII) that such a division is counterproductive to creating more effective systems--systems in which different programs can learn from one another and create appropriate linkages--and, therefore, states need to consider the alternatives they have to reintegrate education and training.
  
  
• Many states are moving toward systems that are more holistic, in the sense that they include a variety of potential clients or students, and more flexible and responsive services determined by individual assessments and labor market information. This approach replaces, on both dimensions, the approach of fragmented categorical programs providing fixed services (or a lock-step progression of services, as in "work first") to a specific clientele without much sense of local employment conditions. While there is not yet "evidence" of the conventional statistical sort about the effectiveness of such holistic and flexible approaches, they are superior for many a priorireasons: They move away from tiered and stigmatizing approaches, they adhere to many of the principles of program quality outlined in Box VI.2, and they provide a clear goal for a state's reforms. Therefore, the purpose of coordination and consolidation is not simply to move programs around an organization chart in the hopes that good things will result. The purpose is to create more effective local programs and a system that is holistic, flexible, and responsive in these particular ways.
  
  
• As states begin to develop more coherent workforce development systems, the "quality agenda"--the enhancement of the effectiveness of individual programs--becomes more prominent. Other programs do not want to coordinate with low-quality programs, particularly (in most states) adult education and the ES; conversely, high-quality programs (like community colleges in North Carolina or adult education in Massachusetts) are more likely to play active roles in creating state systems. But states need to consider carefully how to enhance quality: Performance measures and accountability systems may be valuable in creating more information about effectiveness, but in the absence of the ability and will to change they may not be sufficient. The slogan we presented in Section I--"no funding without accountability; no accountability without technical assistance"--may be overly simple, but it does at least highlight the fact that states have several different approaches to quality, and may need to consider approaches that they are not now using.
  
  
• As part of the quality agenda, states need to recognize the potential disjunction between their goals for a high-quality workforce and the reality of low-level training(see Section VI). In some kinds of training--for example, upgrade training for specific employers--this may not be a problem, since employers can specify the requirements of production. But for remedial training and some re-training, it may be a serious issue, and it is unlikely that conventional programs can bring individuals lacking basic education to the levels appropriate for a high-skilled workforce all at once. Therefore, states need to consider how to create a series of programs, or a ladder of opportunities, so that individuals can over time develop the competencies necessary for skilled work.
  
  
• Many localities and states have come to recognize the importance of engaging employers in creating workforce development programs, at the very least by paying greater attention to the structure of demand and job growth. However, there are several more ways to engage employers, particularly in providing work-based placements complementary to school-based learning, in a variety of education and training efforts; and in helping design the curriculum of programs, certainly in cases of customized training but in other forms as well. As experience with STW programs has clarified, creating these linkages also requires stable efforts, over long periods of time, with attention to the mutual interests of employers, students or clients, and education and training providers.
  
  
• The practices associated with "work first," particularly in their more extreme form, violate many of the developments states have been trying. They undermine the provision of education and training and, therefore, undermine the quality agenda; they replace holistic and responsive programs with categorical and rigid approaches; they distract state policymakers from the stable development of their own workforce development visions; and they have alienated employers. States need to consider carefully the costs of welfare "reform" and "work first" for the rest of their workforce systems, and may need to develop more moderate versions (as Iowa and Oregon have).
  
  
• It is encouraging to see the emergence of economic development policies,since these have the potential of matching supply-side policies in education and training with demand-side policies to enhance employment. However, the effectiveness of state economic development efforts has not been widely assessed, and many policies--especially "smokestack chasing"--need to be more carefully considered. And while a few states have developed mechanisms of coordinating economic development with workforce development, as outlined in Section I, this is by no means universal. Over the long run, states might consider how to combine effective policies, enhancing state employment with high-quality education and training.

Considerations for Federal Policy

      In many ways, federal policies have created the problems that state efforts at coordination seek to redress. The accumulation of categorical problems with numerous and conflicting regulations have contributed to the sense of chaos, duplication, and ineffectiveness that, in turn, have generated both state and federal efforts at reform. The question for the federal government, then, is how it can be most helpful as states begin their own reforms. The experiences in these ten states suggest at least three considerations:

1.	Federal efforts that bring various education and training providers together have been generally helpful.Ten years ago, for example, local and state officials generally praised the requirements for information sharing and joint membership on governing boards; and although the 7% funds for coordination between JTPA and vocational education were often poorly spent, they were also central to many local innovations. Currently, the efforts to create one-stop centers have been helpful in bringing many participants to the table. While many efforts so far have not gone beyond information-sharing, many centers have grander plans for the future, and some centers have served as a forum to create more substantial coordination and even consolidation. Similarly, STW programs have been generally praised as mechanisms for getting various education and training providers together, even though in some areas they have not yet changed how high schools work (Hershey, Hudis, Silverberg, & Haimson, 1997). Thus, federal policy should in the future seek out opportunities to provide certain programs and services through joint delivery mechanisms, and current requirements for information-sharing and joint memberships should be continued.
2.	Federal regulations continue to be a thorn in the side of state reforms and local programs. There are, however, a variety of approaches the federal government might take:
Expanded use of waivers, especially in the efforts extended to several states like Workflex, is one way for the federal government to encourage greater effectiveness and coordination. The federal government could embark on a project to review its regulations, with an eye to eliminating unnecessary restrictions, coordinating requirements among federal departments (e.g., among the Departments of Labor, Education, and Health and Human Services), and creating definitive interpretations of regulations in place of the current inconsistency and uncertainty among regional and national offices. While we do not think this is likely,[50] it does at least clarify that there are alternatives. Consolidation of vocational education, job training, and adult education programs would presumably eliminate most federal programs. The local and state officials we interviewed are ambivalent in their view of consolidation, however. Some expect it would clear away a thicket of unnecessary regulations, while others fear it would dilute the commitment to certain populations--welfare recipients, the underemployed, the disabled, or dislocated workers, for example--who are now protected in some measure by these regulations. Furthermore, in some states, officials fear that governors hell-bent on "work first" would use all federal funds for welfare recipients, leaving nothing for a greater variety of participants and employers. Consolidation seems to be a bold stroke, then, but in cutting the Gordian knot of federal regulations, it might also cause the workforce development systems in some states to unravel.
3.	Welfare "reform" and "work first" have been overwhelmingly detrimental to workforce development systems,and, by extension, any subsequent federal legislation that imposed categorical and inflexible approaches to education and training would be similarly detrimental to workforce development systems. For the moment, the obvious recommendation is that federal legislation should undo the most damaging aspects of welfare reform; although we do not anticipate that this will be politically possible, given the ideological positions on welfare and the near impossibility of political consensus on any changes.[51] For the future, however, the Congress and the executive branch could at least take the Hippocratic oath of "do no harm," and avoid new programs and regulations that make state reforms more difficult.

The Potential Role of the Workforce Investment Act of 1998

      The latest revision of federal legislation came in August 1998, when the Workforce Investment Act (WIA) was signed into law. This legislation is not the massive consolidation contemplated in 1996, which would have combined federal funding for job training, vocational education, and adult education. The WIA maintains separate titles for job training, adult education, Wagner-Peyser (the ES), and vocational rehabilitation, and funds for vocational education will come in separate legislation. In addition, the legislation maintains separate funding for adults, for dislocated workers, and for youth, preventing states from making their own judgments about priorities. However, in many other ways, the WIA contains the following provisions that should enhance coordination and the development of coherent systems:

• It continues the local-state structure that many states have already adopted, with a state Workforce Investment Board required to develop a five-year plan, and local Workforce Investment Boards responsible for planning and overseeing local programs. The WIA allows states that have already moved decisively to reform their systems to "grandfather" these changes in over several years. Conversely, other states (like Oklahoma) that have taken a more gradual and voluntary approach will find it more difficult to implement WIA.
  
  
• It encourages states to submit unified plans for up to 14 federal programs in order to ensure their coordination and avoid duplication of workforce development activities.
  
  
• It strengthens the role of one-stop centers, principally by establishing them as the access point for employment-related training and other services. Since one-stop centers have been helpful in convening different programs and getting them to work more closely together--despite the resurgence of turf battles in some localities--this should further the coordination of programs at the local level.
  
  
• It provides further incentives to improve the quality of programs, particularly by requiring indicators of performance and establishing incentive grants starting in the year 2000 to states with above-average performance. Since the low quality and unresponsiveness of programs is one factor preventing their coordination with others--for example, in the reluctance of many providers to work with adult education in some states--the improvement of quality should enhance the willingness of programs to coordinate with one another.
  
  The WIA requires four core indicators each for adults, dislocated workers, and youth, and specifies that these must be negotiated between governors and the DOL, and then between governors and the local workforce boards. On the one hand, the process of negotiation may mean that governors must take this effort at accountability more seriously. On the other hand, the negotiation mechanisms may lead to a proliferation of compliance-oriented mechanisms (rather than those intended to enhance effectiveness) and the development of too many measures across the 50 states to be practical. It will take some time to determine the effects of these required indicators.
  
  
• It appears to place less emphasis on federal rules and regulations, authorizing them only to the extent necessary and extending the eligibility for Work-Flex waiver provisions to all states (rather than just six). In addition, certain state plans are automatically approved within 90 days unless the DOL determines they are inconsistent with legislation, placing the burden on the DOL to prove noncompliance rather than on states to prove their compliance. Since federal regulations and uncertainty about their interpretation have been barriers to local and state coordination, this should also facilitate the development of more coherent workforce development systems.

      On the one hand, the WIA places new emphasis on Individual Training Accounts (ITAs), in which participants choose among providers, and de-emphasizes the provision of training through contracts with specific providers. This means that states like Florida, which has already moved in the direction of choice and other market-like mechanisms, should find it easier to continue their developments. On the other hand, states like Oregon, which have preferred an institutional approach to its workforce development, may find it more difficult to switch to ITAs. More generally, when individualsare the principal decisionmakers, rather than program administrators,they may or may not decide to enroll in programs that are well-coordinated with others. It is difficult to compel providers to coordinate if they can attract enough students without such reforms, and consumer "choice" may be influenced by many factors (like proximity and convenience) other than the quality of programs, the comprehensiveness of services, and the links to other providers.

      There are several possible developments for ITAs. If these are implemented like pure vouchers, then--like the youth training vouchers adopted in Great Britain (Grubb & Finkelstein, 1998)--they may result in no expansion of consumer choice and low-quality training. If, instead, they are implemented like the "individual referral" model used in Texas--with full assessment and counseling about training options and implications--then the outcomes could be much different, with consumers much better informed and low-quality programs being eliminated from the system.[52]

      The WIA is, therefore, somewhat ambiguous in its influences, and it will no doubt take some time for its effects to become evident. On the whole, however, it appears to facilitate the kind of coordination and cooperation that the most active states have pursued in developing more coherent workforce development systems.

The Future of Workforce Development Systems?

      We began this report with an analogy between the education system, developed over the past two centuries, and the considerably shorter trajectory of workforce development programs. The developments in education have resulted in a relatively clear progression among its components--that is, from the lower grades to high school, from high school to college. Where these transitions are uncertain, we see considerable effort to make them smoother--for example, in Tech Prep programs to help high school students move into community colleges, or mechanisms intended to smooth transfers among public colleges (both two- and four-year). The education system also includes relatively well-known institutions with predictable characteristics--like the high school, the community college, the liberal arts college, and the research university--despite variation among localities and states in the specifics and quality of such institutions. This uniformity has its costs, of course--distinctive institutions are hard to find, and innovation is often difficult--but it does contribute to the regularity and transparency of the educational system. Issues of quality remain, and have been among the most resistant problems--particularly in urban areas, and for low-income students. In addition, the articulation of the education system with employment is sometimes imprecise--not typically at the baccalaureate level, where education is usually a prerequisite to employment, but at the sub-baccalaureate level where, unlike better-codified systems like those of Germany,[53] there are many equivalent ways into employment.

      If the analogy between the better-developed education system and the fledgling workforce development system is appropriate, then we might anticipate certain developments--and, indeed, we can see that these are underway in the ten relatively active states we observed. One is the continued effort to eliminate redundant, ineffective, or overly specialized programs--to eliminate "waste and duplication." The pressures for consolidation, the imposition of performance measures that can detect low-performing institutions, the beginnings of performance-based funding in Florida, and the incorporation of several programs into comprehensive community colleges in some areas are all part of this trend. In education, this has tended to eliminate secondary schools and specialized colleges; in workforce development, this suggests that holistic programs are likely to replace more specialized categorical programs.

      A second characteristic of the education system is the growth of relatively clear ways of moving among levels of the system--replacing, for example, the many different ways of getting into college typical of the 19th century with a well-established, if still controversial, process of application and admissions with standardized tests and grades. This feature of system-building suggests that free-standing programs unconnected to any others--15-week job training, for example, or independent adult schools of short duration--are likely to develop linkages to other programs (or simply to be subsumed in other programs, as when community colleges take over adult education). In workforce development systems, this appears to be happening slowly, but it is emerging in a few areas where one-stop centers have encouraged greater coordination, and where local consolidation and integrated service delivery are starting to take place. Indeed, the process we described in Section VI as moving up the hierarchy of coordination efforts, moves toward creating such linkages. And we can anticipate that, if and when local boards are established and become more inclusive--of education providers as well as training, for example--more of this will take place.

      A third obvious parallel between the education system and the emerging workforce development system is the problem with quality. It has been quite difficult for localities and states to define for themselves what high-quality programs are. Performance measures have provided some dimensions of outcomes that programs can aim at, but their effects have been uneven, sometimes even counterproductive. Consistently, the same patterns of differences in quality evident in education also emerge in workforce development: The "Brahmins" get access to high-quality training in firm-based efforts and high subsidies in public universities, while the "untouchables" receive low-quality "work first" programs and low-cost community colleges.

      Another parallel involves the roles of institutional versus market-like mechanisms. In the education system, dimensions of choice have always been important in postsecondary programs, where the major funding mechanism--grants and loans--is essentially a voucher system. In K-12 education, choice mechanisms stressing aspects of markets--like charter schools and vouchers--have become increasingly popular, though their effects on equity and quality are highly contested. So, too, in the workforce development system, market-like mechanisms are becoming increasingly popular in a number of states. While Florida is the best example of a market-driven approach, many states have combined institutional and market-like methods (as we illustrated in Figure 1).

      Other features of the education system are more difficult to detect in workforce development. One feature of the education system from the mid-19th century was the development of bureaucratic mechanisms; teacher credentialing; rigid hierarchies of control at the school, district, and state levels; and governing mechanisms at district and state levels--all with their own justification, but which are generally viewed as stifling innovation, creativity, and flexibility. There are, of course, many complaints about inflexibility in workforce development programs, but the bureaucratic controls in this system are nowhere near the complexity of the regulations in education. The goals of flexibility and responsiveness to changing labor market conditions have been more important for workforce development than for education, and we presume that difference will persist.

      We do not mean to suggest that there is anything inevitable about workforce development going the way of education. As we have stressed throughout this report, states have run into considerable problems trying to implement their visions. Many have taken giant steps backward, particularly with changes of governors and changes of direction; and there is a great deal of skepticism that greater coordination is worth its costs. Instead, we have outlined the analogy between the workforce development system and the education system in order to pose the most fundamental question: What do we as citizens, employees, policymakers, and employers want of our public systems?It is then possible to outline numerous possibilities:

• If we want transparency to potential clients and employers, then simplification and better information are necessary.
  
  
• If we believe in the ideals of "lifelong learning," with individuals able to access education and training at various stages in their lives, and, thus, able to continue developing their abilities, then linkages among programs are necessary in addition to transparency.
  
  
• If we are serious about creating "a workforce for the 21st century," then the difficult issues of quality must be addressed more consistently than they have been.
  
  
• If we value flexibility and responsiveness, then certain mechanisms of accountability are too ponderous; if we want accountability above all else, we may impose mechanisms that limit both flexibility and quality unless they are carefully developed.
  
  
• If we prize equity, then we must revise the priorities in a system that provides the least to the most needy among us--for example, welfare recipients who are relegated to "work first."

      As states move to develop more coherent systems, these questions and the potential answers to them become clearer. The question in the years ahead is whether localities and states--and the federal government, in many ways responsible for the creation of workforce development programs--address these questions forthrightly, or whether they answer them indirectly, through the policies they enact without thought or principle.

[50] The implementation of the School-to-Work Opportunities Act, which is jointly administered by the Departments of Education and Labor, has been a bureaucratic nightmare (see Hershey et al., 1997). If cooperation between two departments on new and relatively simple legislation is difficult, cooperation among several departments on legislation that has been in place for several decades, and that is much more complex, seems unreachable. In addition, the political power that would be necessary to force such cooperation would be unlikely to come from either the Congress or the executive branch since the benefits are intangible and prospective while the costs are evident and present, and would be instantly expressed by multiple interest groups. This is a good example of Lowi's (1969) contention that democracies based on interest group liberalism cannot be planned rationally.

[51] Welfare policy illustrates Lowi's (1969) other contention about democracies based on interest group liberalism--that they cannot achieve equity.

[52] See again Barnow and King (1996) and their review of the literature on vouchers.

[53] In international comparisons, the American educational system is usually viewed as not being particularly transparent, at least compared to German-type dual systems, because of the loose articulation of education with employment.

Grubb, W. N., Badway, N., Bell, D., Chi, B., King, C., Herr, J., Prince, H., Kazis, R., Hicks, L., & Taylor, J. C. (1999). Toward order from chaos: State efforts to reform workforce development systems (MDS-1249). Berkeley: National Center for Research in Vocational Education, University of California.