01/07/2013 06:51 pm ET Updated Mar 09, 2013

How to Improve Outcomes for Opportunity Youth: Engage Employers to Invest in What Works - part 3

Immediate Steps to Improve Outcomes

We're clear the federal government has a critical role to play in the economic recovery by investing in workforce training programs that work. We need to be more strategic about how and where we make these investments for maximum impact. In our preceding blog entry we outlined four principles to guide workforce training reform and to ensure that positive outcomes are created for young people, businesses, and the public.

There are also some immediate steps that can be taken to improve outcomes, and they are as follows:

1. Bring Business Leaders to the Table -- In its final report in June of 2012, the White House Council for Community Solutions laid out four strategies to improve outcomes for Opportunity Youth, and called for cross-sector coordination, communication, and leadership. America's leading employers have an important role to play in fulfilling these strategies, and can help build the framework for cross-sector, outcomes-focused reform. The White House should convene a similar body of employer advisors to carry forward the work of the WHCCS, one that will ensure that business leaders are a part of the solution, and that the important recommendations of the Council become a reality.

2. Pay for Performance -- Senator Rob Portman, together with Senator Michael Bennet, has recently proposed implementation of a pilot program (the CAREER Act (S. 3599) in at least five states that will utilize pay-for-performance funding to ensure accountability in the workforce training system. Under this model, providers will raise private capital to fund their operations, and will be paid by the state only upon achieving a predetermined metric of success. The Pay for Performance model has already met with great success in Minnesota, and initiatives to harness its potential are underway in New York and Massachusetts.

Congressman John Kline, Chairman of the House Committee on Education and the Workforce, has already included Pay-for-Performance mechanisms as a priority for all of WIA block grant funding in his WIA reauthorization bill. The CAREER Act, and its Pay for Performance model, is just the first step on the bipartisan path toward a more accountable and impactful workforce training system.

3. Reauthorize and Reform to Improve CTE -- The next Congress will consider reauthorization of the Perkins Career and Technical Education Act, the Workforce Investment Act, the Elementary and Secondary Education Act, and other education and workforce legislation. These reauthorizations are long overdue, but have stalled in past sessions because of partisan gridlock on Capitol Hill. The administration has a leadership role to play to help Congress pass bipartisan reauthorizations that reenvision and accelerate Career and Technical Education by improving collaboration among secondary schools, postsecondary education, and industry, and by aligning programs with regional and state workforce needs. Given continued partisan gridlock, as well as the backup of education bills that are overdue, these reauthorizations are unlikely without committed presidential leadership.

4. Incentivize the Creation of Enterprising Pathways for Young People -- The Work Opportunity Tax Credit is one of the most successful and cost effective federal employment programs because it effectively incentivizes private investment in training and hiring. In 2011, more than 1.1 million people found work through WOTC, at an average public cost of just $1,300 -- a figure that does not include the substantial offsetting savings associated with moving a person out of poverty and into independence.

In 2009, a Disconnected Youth category was created within WOTC to encourage the expansion of employment pathways for young adults. Unfortunately, many of the 6.7 million Opportunity Youth who are out of school and out of work do not qualify for the WOTC under the currently inflexible definition of "disconnected." As a result, many employers who are looking to fill open positions are less likely to invest their time and money in the training of a young person.

An expansive and flexible Disconnected Youth Tax Credit would facilitate private sector investment in on-the-job training, which our experience has proven to be the most successful and cost-effective. Given the demonstrated high cost of doing nothing, such a credit would be mutually beneficial for both the public and the company (and would pay for itself), and most importantly for the young person in search of an opportunity.

For more information, contact:
Shawn Bohen, National Director of Strategic Growth & Impact at Year Up,
Elyse Rosenblum, Senior Consultant to Corporate Voices for Working Families,