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© Copyright 1998 by the Wyoming Department of Employment, Research & Planning

On July 30th and 31st the House and Senate passed, and on August 7th the president signed, the Workforce Investment Act of 1998 (P.L. 105-220), an overhaul of federal job training programs that began its legislative career back in 1993. In the weeks since passage of the new act, commentators have reviewed and applauded its provisions for a streamlined and state-based system of workforce development services. Most analysts have missed, however, what may well be the most significant and far-reaching change brought about by the legislation: under the caption "Employment Statistics" the act sets forth a charter for a nationwide system of labor market information (LMI) and, in doing so, lays out a new model for federalism. As the chief sponsor of this legislation in the previous Congress and as chair of the committee that guided it through this Congress, I take pride in the fact that our vision for a unified and accountable LMI system is finally law.

What impelled me and others in Congress to tackle the issue of LMI? The impetus was simple: we recognized that the labor market of the late 20th century has changed dramatically and that Congress--as well as employers, workers, educators and others--must have valid and reliable national, state, and local data in order to understand these new labor market developments and to implement policies that reflect current trends. Added to that recognition was the awareness that our LMI "system" was not a system at all, but a gerrymandered assemblage--a scattering of seemingly unrelated programs, multiple small pots of funding, and myriad agencies and committees in which governance was fragmented and accountability to Congress was impossible. In addition, we had agencies jumping in and out of the LMI field as the policy priorities of administrations shifted. How could we hope for improved data--especially to illuminate state and local conditions--in this situation of confusion and fractured responsibility! We concluded the key to better labor market information was not for Congress to try to enact new data programs, but rather for us to institute a thoughtful reform of LMI governance.

The governance structure for LMI laid out in the Workforce Investment Act can be summed up easily: one federal agency, one state agency, and one funding stream. Add to these a new system of federal-state cooperative management and a clear line of accountability to Congress for LMI. What does this simple formula mean in practice?

One Federal Agency

At the federal level, the Bureau of Labor Statistics (BLS) is the federal government's lead agency for labor market information. The law says so in its phrase "The Secretary of Labor, working through the Bureau of Labor Statistics. . ." (emphasis added).

Congress chose to place responsibility for the LMI system in BLS for two reasons. First, BLS has a historic mission in data development, collection, analysis, and dissemination. This mandate is not subject to the changing policy priorities of successive administrations and, indeed, is independent of them--a quality necessary in statistical agencies. Second, BLS does not administer any service programs. This point deserves some explanation and emphasis. I see a great potential for LMI to be the driving force for integration among all the different agencies and programs that deliver education and training services, such as schools, vocational-technical institutions, community colleges, and community-based organizations. For years, Congress has been mandating cooperation and creating structures to try to bring about coordination among these different agents without much success. One of the reasons for the poor record has been the lack of a common language for planning and program evaluation. I see LMI as that language. If it is to play that significant role, however, then LMI itself cannot be identified with any particular program or delivery agent--it must stand above them all if it is to be viewed as objective and unbiased. BLS meets those requirements.

To say that one agency is in the lead at the federal level is not to say that other agencies will not be involved. Nor is it to say that work done in the name of LMI in the past few years by other parts of the Department of Labor is not important. The legislation directs the Secretary of Labor to rationalize responsibilities within the department. To understand the new system, one must examine the legislation's definition of what constitutes labor market information. In reviewing the legislative language, the reader will be struck by the emphasis on words and phrases such as statistical and administrative data, valid and reliable data, standardization, aggregation, and additivity of data. In short, LMI is characterized as being systematic. In contrast, job listings, resume banks, and automated job search resources are important elements of an electronic labor exchange. The Employment and Training Administration and the state employment security agencies must continue to develop and use these tools that help employers and jobseekers to find each other. Likewise, the funding for these activities should continue, albeit separately from the new unified LMI funding stream.

One State Agency

Just as the law consolidates LMI responsibilities at the federal level, we also sought to consolidate them at the state level. The ". . .single state agency. . ." requirement is simple: the governor of each state will designate one agency to be responsible for LMI in the state. The only point for comment here is the need for governors to review closely the duties of this agency in making the selection. The agency must have technical statistical skill and access to confidential unemployment insurance data in order to carry out the existing BLS cooperative statistical programs. These programs are the heart of LMI; they form the foundation for the system of LMI envisioned in the law.

One Unified Funding Stream

The unified funding stream mandated by the new law has implications for present ways of doing business in the Department of Labor (DOL). Two things are obvious from Congress's review of the LMI field: there are too many small, unstable pots of funds and too much horizontal shifting of money within DOL, with the result that Congress is unable to keep track of who's doing what. Under the new law, the secretary will consolidate monies spent on LMI by various parts of DOL and assign these funds to the BLS budget.

The single funding stream for LMI means that we in Congress can look forward to a rational reckoning of how much we are spending on LMI and to what effect. The clear line of accountability that has been lacking to date is now in effect.

Federal-State Cooperative Management

Along with enlarging BLS' responsibilities, especially for state and local data, the new law also creates a new management structure for that agency's LMI programs. This is not another federal advisory committee mechanism. Instead, the states will participate with BLS as true partners in joint governance of the LMI system. The means for achieving this joint governance is the annual planning process specified in the law, which parallels the BLS budget development process and sets out priorities for the next five years. Tired of pro forma planning, Congress means this process to be real, and the new law contains requirements to ensure this outcome. It specifies that the persons who will work with BLS in this process will be state LMI directors: they have the technical knowledge to speak BLS' language, and they also have intimate familiarity with needs for LMI from their day-to-day contacts with users. Both kinds of knowledge will be necessary in order to make substantive contributions to the BLS planning process by developing and pursuing viable options. Also, the new law limits participation in the process to ten state representatives--one state LMI director per DOL region: planning meetings are to be roll-up-the-sleeves working sessions where everyone can fit around one table. They are not to be mini-conferences of 50 passive listeners. Finally, the law made the ten directors subject to peer election, not secretarial or gubernatorial appointment: they are to represent the ideas of their fellow state directors as these have been formulated from the needs expressed by employers, workers and other data users. Peer election makes the planning process substantive, legitimate, and real. We expect it also may well offer a new model for federalism.

One Line of Accountability

The purpose of this new governance structure is better data--more timely, more detailed, more localized but still valid and reliable (note the law's definition of "local area" as the "smallest geographical area for which data can be produced with statistical reliability"), more relevant to the needs of users in a changing labor market (including one of the primary users of LMI--Congress itself). I am hopeful that BLS will take advantage of this opportunity to establish the kind of cooperative working relationship with its authorizing and appropriating committees (including mine) that the agency traditionally has pursued with the Joint Economic Committee.

Implementation

The first step in implementation is for BLS to conduct the required peer elections. The new law directs that the first planning session between BLS and the ten elected state LMI directors should take place within the calendar quarter in which the legislation is enacted--i.e., by September 30, 1998. Meeting this deadline is critical: already federal agencies, including BLS, are finalizing budget plans for fiscal 2000--unless the election process takes place in September, it may well be fiscal 2001 before we can expect any state contribution to the planning process.

In addition, because the Workforce Investment Act goes into effect in July 1999, the Department of Labor's fiscal 2000 budget request needs to be organized to encompass the required single LMI funding stream, the forward-funded program year, and BLS' new responsibilities. BLS must bring states into the process of designing this budget request as soon as possible in order to maintain continuity in ongoing data operations while shifting them into the single funding stream.

Finally, the annual plan for LMI required by the law is prospective--it covers the coming year and five succeeding years. Therefore, unless the process begins now, we will be far into the next millennium before its fruits ripen.

The new LMI system has already been five years in the making. Let's not delay now.

Senator Jim Jeffords (R-VT) is chairman of the Senate Labor and Human Resources Committee and co-chair of the Northeast-Midwest Senate Coalition. This article is reprinted from The Northeast-Midwest Economic Review, September/October 1998.

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