Workforce Development and Welfare Reform Reauthorization

Background

By 2010 the labor force will fall short of meeting the demands of an estimated 58 million job openings by more than 4.8 million workers. In addition, over the next 15 years 40 million workers will be retiring. Employers are faced with the challenges of future tight labor markets and increasing demands for higher skill levels. The key to business success is hiring and retaining qualified workers. The question is however, where will employers find these workers?

We supported the restructuring of the welfare system in 1996. A key element of that support was that the welfare system help recipients transition into work, not serve as an ongoing support system. The restructured welfare-to-work program has successfully opened a new source of workers for employers. With consideration by Congerss of the 1996 welfare reform law, employer involvement is critical because only employers can advise the workforce development system about their labor market needs. They know what kinds of workers they need and the qualifications necessary for success.

U.S. Chamber Position

The 2002 reauthorization of the welfare reform act should build upon the positive impacts of the 1996 law. Changes to the law should continue to focus on workforce development and productive employment for welfare recipients and include the following elements:

Focused goal of productive employment leading to family self-sufficiency
Waivers to provide flexibility where performance has been demonstrated successfully but that do not lead to wholesale exemption of the work requirements
Availability of support services to assist welfare recipients transition into jobs but that do not create disincentives to accepting reasonable employment
Recognition given to the role of employers as customers of the program
Post-employment, on-site services and support to assist employers retain and advance former welfare recipients
Pre-placement services for individuals identified as having serious barriers to work
Required employer involvement in the establishment of work readiness standards
Improved coordination and cooperation among federal and state programs designed to promote work

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