BILL ANALYSIS �
SB 118
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Date of Hearing: June 12, 2013
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hern�ndez, Chair
SB 118 (Lieu) - As Introduced: January 17, 2013
SENATE VOTE : 35-3
SUBJECT : Unemployment insurance: education and workforce
investment systems.
SUMMARY : Requires the California Workforce Investment Board
(CWIB) to incorporate specific principles into the state's
strategic plan that align the education and workforce investment
systems of the state to promote a well-educated and highly
skilled workforce to meet our workforce needs. Specifically,
this bill :
1)Defines "sector strategy" as methods of prioritizing
investments in competitive and emerging industry sectors and
industry clusters on the basis of the labor market and other
economic data indicating strategic growth potential,
especially with regards to jobs and income, as specified.
2)Requires the state to develop a California Industry Sector
Initiative to serve as the cornerstone of the CWIB and provide
a framework for the state workforce investments and support
for sector strategies.
3)Defines "industry sector" as those firms that produce similar
products or provide similar services using somewhat similar
business processes, and are closely linked by workforce needs,
within a regional labor market.
4)Defines "industry clusters" as a geographic concentration or
emerging concentration of independent industries with direct
service, supplier, and research relationships, or independent
industries that share common resources in a given regional
economy or labor market, as specified.
5)Requires CWIB to work collaboratively with state and local
partners to identify ways to eliminate statewide barriers and
better align and leverage federal, state, and local Workforce
Investment Act (WIA) funding streams, as specified. Further
requires the California Workforce Investment Act (CWIA) to do
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the following to meet this requirement:
a) Annually identify industry sectors and industry clusters
that have a competitive economic advantage and demonstrated
economic importance to the state and its regional
economies, as specified.
b) Annually identify new dynamic emergent industry sectors
and industry clusters with substantial potential to
generate new jobs and income growth for the state and its
regional economies.
c) Provide an annual skills gap analysis enumerating
occupational and skills shortages in the industry sectors
and clusters identified as having strategic importance to
the state's economy and its regional economies.
d) Establish eligibility criteria for the federal WIA
eligible training provider list (ETPL) that effectively
directs training resources into training programs leading
to employment in high-demand, high-priority, and
occupations that provide economic security, as specified.
Further specifies criteria, to the extent feasible, measure
provider performance, including program completion and
employment placement and retention.
6)Specifies the division of labor for making initial and
subsequent eligibility determinations for the ETPL shall be
modeled on federal law and include input from local workforce
investment boards and other stakeholders, as specified. Local
boards shall have the authority to place and retain training
providers on the list, as specified.
7)Makes other related changes.
EXISTING LAW :
1)Establishes the CWIB, comprised of members appointed by the
Governor and the appropriate presiding officers of each house
of the Legislature, and specifies that the executive director
of the CWIB report to the Secretary of the California Labor
and Workforce Development Agency. The CWIB is responsible for
assisting the state in meeting the requirements of the federal
Workforce Investment Act of 1998, as well as assisting the
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Governor in the development, oversight, and continuous
improvement of California's workforce investment system.
2)Requires each local workforce investment board throughout the
state, 49 in all, to establish at least one full service
one-stop career center in the local workforce investment area.
One-Stop career centers are required to include a specified
group of job search related entities and provide jobseekers
with integrated employment, education, training, and job
search services. Employers can also be provided with access
to career and labor market information, job placement
assistance, and other such services as businesses in the
community may require.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : There is broad consensus that better educated and
trained workers are more productive and more successful in labor
markets. However, targeting these efforts towards the jobs
sectors that are best positioned to make gains if investments
are made is essential and requires the use of current economic
and labor market data to determine what those sectors are.
"Sector strategies" are policy initiatives designed to promote
the economic growth and development of a state's competitive
industries using strategic workforce investments to boost labor
productivity. The strategic focus of sectors is on prioritizing
investments where overall economic returns are likely to be
highest, specifically in those sectors that will generate
significant gains in terms of jobs and income or in industries
facing a shortage of skilled workers.
When done successfully, sector strategies can lead to mutually
beneficial outcomes for business, labor, and the state by
increasing competitiveness and growth, improving worker
employability and income, and reducing the need for social
services while also bolstering government revenues generated by
both business and workers. According to a 2010 study of three
sector focused training programs in Wisconsin, Massachusetts,
and New York, it was found that participants in the relevant
training programs earned more and were employed at higher rates
than were members of the study's control group. (Tuning Into
Local Labor Markets: Findings from the Sectoral Employment
Impact Study, Public/Private Ventures, 2010) Sector strategies
have been adopted in several states, including Pennsylvania,
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Michigan, Washington and Massachusetts.
In California, we have taken initial steps to adopt sector
strategies by directing portion of discretionary funds to job
training programs for nurses and workers in allied health
fields. Additionally, the CWIB has also taken steps to
incorporate sector strategies into their State Strategic Plan.
California State Auditor Report on Federal Workforce Investment
Act :
A March 2012 report, "Federal Workforce Investment Act: More
Effective State Planning and Oversight Is Necessary to Better
Help California's Job Seekers Find Employment," evaluated the
state's administration of WIA funding.
Among its finding, the audit revealed that:
a)More than five years after state law required the CWIB to
develop a strategic workforce plan to serve as a framework for
public policy, fiscal investment, and state labor programs to
address workforce needs; it has failed to do so and thus, has
not provided sufficient guidance to its workforce development
partners.
b)Both the Employment Development Department (EDD) and the CWIB
can do more to assess the quality of services - neither has a
mechanism to evaluate whether an appropriate match exists
between a participant's skills, education, and experience and
the employment the participant attains.
c)Although the CWIB is building partnerships with various
entities to coordinate workforce investment planning, it has
done little to ensure that the one-stop delivery system does
not duplicate services for program participants.
The State auditor made several recommendations in the Report,
including one that the Legislature should consider establishing
a due date for the CWIB to develop a strategic workforce plan,
and clarify the roles and responsibilities of the CWIB and the
EDD. The State auditor also made recommendations to the CWIB
aimed at developing, overseeing, and continuously improving
California's workforce investment system by collaborating with
state and local workforce partners and clearly defining
terminology and identifying state-specific performance measures.
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According to the Report, the Labor and Workforce Development
Agency, the CWIB, and the EDD agreed with the recommendations.
In 2012, the CWIB went through many changes, including the
introduction of new membership on its board. The State WIB has
taken various steps to address the concerns raised by the audit,
including incorporating some of the requirements included in
this bill.
The author believes it is important to update the
responsibilities of the CWIB to address our changing economy and
encourage a more strategic approach to training for future
workforce needs. Furthermore, this bill would help address some
of the concerns raised by the State Auditor's office in the 2012
audit of the federal WIA.
This bill is double-referred to Assembly Jobs and Economic
Development Committee upon passage out of this Committee.
ARGUMENTS IN SUPPORT :
The EDGE Coalition, a coalition of business, labor, education
and social justice organizations, believes this bill would
better target limited resources and improve the effectiveness of
California's workforce investments.
California Pipe Trades Council and other supporters state this
bill will greatly enhance and strengthen our job training
infrastructure and also measurably improve job prospects and
training outcomes for California's unemployed workers.
The Jewish Vocational Service of San Francisco argues that with
the passage of this bill California's workforce system will be
stronger and more effective with the alignment of employer
demands and employee skill building.
Prior Legislation :
SB 1401 (Lieu) of 2012 was nearly identical to this bill. SB
1401 was subsequently held under submission in Assembly
Appropriations Committee.
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SB 698 (Lieu) Chapter 497, Statutes of 2011, required the
Governor to establish, through the CWIB, standards for
certification of high-performance local WIBs, in accordance with
specified criteria.
SB 734 (DeSaulnier) Chapter 498, Statutes of 2011, required
local WIBs to spend a certain percentage of available WIA funds
(25% now and increased to 30% in 2016) on workforce training
programs. A Local WIB that does not meet the expenditure must
provide the EDD with a corrective action plan.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Healthcare Districts
California Hospital Association
California Labor Federation, AFL-CIO
California Manufacturers & Technology Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Workforce Association
Council of California Goodwill Industries
EDGE Coalition
Career Ladders Project for the California Community Colleges
National Council of La Raza
Policy Link
Jewish Vocational Services of San Francisco
Mayor Bob Foster, City of Long Beach
National Skills Coalition
Palos Verdes Peninsula Chamber of Commerce
South Bay Association of Chambers of Commerce
State Building and Construction Trades Council
Torrance Area Chamber of Commerce
Western States Council of Sheet Metal Workers
Opposition
None on file.
Analysis Prepared by : Lorie Alvarez/ L. & E. / (916) 319-2091
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