Below is the “Executive Summary” and “Conclusion” of Ms. Jacobs’ research paper. For the full text of the publication, go to http://www.brookings.edu/research/papers/2013/12/04-reforming-workforce-development-us-human-capital-policies.

Executive Summary

Human capital development strategies that embrace a life-long approach to learning are critical to the economic success of a nation. Yet, despite historic levels of long-term unemployment and concern about the gap between the skills demanded by employers and the skills profile of the available supply of workers, the United States has an under-developed and confused vision when it comes to workforce development. This paper provides an overview of status quo federal job training policy, and offers a review of the historical evolution of the policy field as a way of understanding how the contemporary landscape developed. It then offers a set of principles for future federal involvement in workforce development policy, in order to provide a framework for a muscular government role that moves America toward a human capital strategy well-suited to a globally competitive future.

Conclusion

The rapidly evolving global marketplace for labor has made the need for a national human capital development strategy all the more critical. Yet the United States continues to operate in a policy atmosphere characterized by multiple contradictions and inefficiencies, particularly in the field of workforce development beyond the traditional K-12 education system. On the one hand, multiple programs with competing definitions of “successful outcomes” populate the policy space, suggesting a bloated system in need of streamlining for greater efficacy. On the other hand, virtually no program has received the funding necessary to meet the demand for training it seeks to address, and existing institutions have neither the authority nor the
financial capacity to serve the critical role of coordinating across the myriad stakeholders involved in the workforce development policy space.

The history of government involvement with workforce development policy in the United States offers little optimism for those interested in seeing an American system that mirrors successful government-business-labor partnerships such as the oft-cited example of Germany. Federal labor market policy in the United States has gradually narrowed in scope over the course of the last half century, rather than broadening to meet the rising challenges
faced by an increasingly open and competitive global economic climate. Active labor market policies, including workforce development efforts, are rarely integrated into discussions of the management of the national economy as a whole, and generally focus on supply-side approaches rather than efforts to shape both labor supply and labor demand. Job training policies are historically linked to “remedial” social policy efforts aimed at providing opportunity to disenfranchised, low-income Americans, and their policy legacy is intertwined with that of the racialized War on Poverty. And, as noted above, the policy landscape that has evolved over the course of the last half-century is highly fragmented, spread across multiple agencies, with multiple funding streams – none of which is sufficient to meet programs’ stated goals. As it currently stands, the policy field is essentially designed for failure.

If the United States is to move forward to a next generation policy that begins to speak more directly to a strategic vision for talent development, then more clarity is needed on the broad goals for federal involvement. By providing a set of principles for guiding how and why the federal government ought to be involved in the business of workforce development, this paper offers guidance to policy makers with a stake in creating and sustaining a dynamic American labor market that is not only economically competitive on the global stage, but also provides economic security and opportunities for upward mobility to American workers. To review, the federal government ought to address these six basic principles in rethinking workforce development policy:

1. Government involvement in workforce development policy is necessary to correct for basic market failures. While the private sector has an important role to play, government is a necessary partner.
2. The federal government ought to coordinate across multiple institutional stakeholders in the workforce development policy arena.
3. The federal government must protect against the tyranny of the majority by targeting the disadvantaged, in the context of policy universalism.
4. The federal government must generate useful data on “what works.”
5. The federal government should serve as an honest broker for stakeholders in the workforce development system, making data easily accessible and allowing employers, workers, and others to put that data to practical use in order to make the most efficient and effective choices regarding training decisions.
6. The federal government should encourage the aggressive replication of best practices in the field.

Congress faces a historic opportunity to reshape the federal role in workforce development, and in turn to begin the process of forging a strategic vision for human capital development in the United States. Both the House and Senate have made significant progress toward reauthorizing the main legislative vehicle for workforce development policy, the 1998 Workforce Investment Act. Yet a great deal of work remains to move forward with a final bill that encompasses the principles outlined above.

Given the demand for training programs and the need for policy reform, policymakers would do well to make the effort to capitalize on the work that has already been done, and to find common ground to push a reauthorized Workforce Investment Act over the finish line before lawmakers are forced to start all over again when the 113th Congress adjourns. A busy legislative calendar, the history of inaction, the wide gap between the priorities of the existing House and Senate bill, and polarization not only between the parties but also amongst Republicans all mean that lawmakers should expect that this process will be neither easy nor particularly quick – and the clock is ticking for the American economy.