BILL ANALYSIS Ó
AJR 46
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ASSEMBLY THIRD READING
AJR
46 (Bonta)
As Amended August 23, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Jobs |5-0 |Eduardo Garcia, | |
| | |Brown, Chu, Gipson, | |
| | |Irwin | |
| | | | |
| | | | |
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SUMMARY: Memorializes the California Legislature's appeal to
the United States (U.S.) Congress to include unemployment rates
by race and ethnicity within the criteria used to make funding
allotments to state's under the federal Workforce Innovation
Opportunity Act (WIOA). Specifically, this bill:
1)Makes legislative findings, including, but not limited to:
a) California's economy has significantly improved since
the Great Recession, with unemployment rates down to 5.4%
in March 2016 and that California has added 2.1 million
jobs since the recovery began in February 2010;
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b) California has had an uneven economic recovery, with the
coastal regions rebounding with more economic vigor
relative to inland areas of the state. At the city level,
however, employment disparities continue to persist even in
areas that report overall high rates of economic and job
growth;
c) Data shows that as a region, the San Francisco Bay Area
is closest to closing the employment gap since 2007.
County averages, however, continue to hide persistent
unemployment among certain populations. In Alameda County,
where March 2016 unemployment dropped to 4.3%,
African-American and Latino unemployment in the City of
Oakland is still high at 18% and 16%, respectively;
d) The Legislature recommends that the U.S. Congress
implement a racial equity lens when structuring WIOA
investment proposal requirements to ensure that
unemployment rates are analyzed from multiple perspectives
and not only average unemployment rates at the aggregate
population level; and
e) For every $1.00 of wealth a median Caucasian household
has, a median Asian household has about 81[, a median
Hispanic family has 7[, and a median African-American
family has 6[. The disparity in employment exists not just
by region in California, but also by race.
2)Petitions the U.S. Congress to include unemployment rates by
race and ethnicity within the WIOA state allotment formula.
In making this request, the resolution states, it is the
intent of the Legislature to provide funding to states that
better reflects the employment conditions in states that are
experiencing high level of income inequality.
3)Provides that copies of the resolution be transmitted to U.S.
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President and U.S. Vice President, Speaker of the House of
Representatives, to the Majority Leader of the U.S. Senate,
and to each U.S. Senator and U.S. Representative from
California, as specified.
FEDERAL EXISTING LAW
1)Authorizes WIOA for the purpose, among other things, of:
a) Increasing access to and opportunities for the
employment, education, training, and support services
needed to succeed in the labor market, particularly for
those individuals with barriers to employment.
b) Improving the quality and labor market relevance of
workforce investment, education, and economic development
efforts to provide America's workers with the skills and
credentials necessary to secure and advance in employment
with family-sustaining wages, and to provide America's
employers with the skilled workers the employers needed to
succeed in a global economy.
c) Promoting improvement in the structure of and delivery
of services through the U.S. workforce development system
to better address the employment and skill needs of
workers, jobseekers, and employers.
2)Sets a three part formula for making general state allotments
of WIOA funds for youth, adult, and dislocated workers, as
follows:
a) 33S% of each state's allotment is based on the relative
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number of unemployed individuals in areas of substantial
unemployment in the state, as compared to the total number
of unemployed individuals in areas of substantial
unemployment in all states;
b) 33S% of each state's allotment is based on the relative
excess number of unemployed individuals in the state, as
compared to the total number of excess unemployed
individuals in all states;
c) 33S% of each state's allotment is based on the relative
number of disadvantaged individuals in each state, as
compared to the total number of disadvantage youth/adults
in all states. Disadvantaged individuals are separately
calculated for youth and adult for their allotments.
3)Defines "area of substantial unemployment" as an area of
sufficient size and scope to sustain a program of workforce
investment activities, as specified, that has an average
unemployment rate in the most recent 12 months of at or above
6.5%.
4)Defines "disadvantaged youth" and "disadvantaged adult" as
individuals within the youth or adult age group with a
household income at or below the poverty line or 70% of lower
living standard income, as specified.
5)Defines "excess number" to mean the number of individuals that
represent the number of unemployed individuals that are in
excess of a 4.5% unemployed civilian workforce in the whole
state or in areas of substantial unemployment, whichever is
higher.
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FISCAL EFFECT: Unknown. The purpose of this resolution is to
increase funding to California's most economically distressed
communities.
COMMENTS: WIOA provides states with federal funding for job
training and employment investment activities, including work
incentive and employment training outreach programs. There are
three primary programs and funding streams, including Adult,
Youth, and Dislocated Worker. Distribution of the funds is
based on a set formula which includes specified economic and
demographic data.
California received approximately $401 million for program year
2015-16, with $321.5 million being allocated to local workforce
development boards to provide services for adults, laid-off
workers, and youth, and $80.5 million remaining at the
state-level for program oversight and discretionary programs.
Income Inequality and Disparity in Economic Opportunity:
California's overall economic growth and increase in jobs has
outpaced the U.S. in general, often ranking the state within the
top five states in terms of its economic condition. This
success, however, has not been consistent throughout the state
with many regions and certain population groups still
experiencing recession-related poor economic conditions.
According to the U.S. Census Bureau, California's poverty rate
is 16.4% as compared to a national rate of 15.6%. It is
estimated that nearly a quarter of California children (22.7%)
are living in households with annual incomes below the federal
poverty line. Contributing factors to these poverty rates
include stagnate wage rates, an increasing concentration of
annual income among the highest income individuals, and
differing job opportunities in the post-recession economy. A
review of the most recent unemployment numbers (chart below)
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illustrates this expanding pattern of economic disparity between
regions and population groups in California.
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| California Unemployment June 2016 (not seasonally adjusted) |
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|----------------+---------------+-+--------------+---------------|
| Employment | Unemployment | | Employment | Unemployment |
| Category | Rate | | Category |Rate |
|----------------+---------------+-+--------------+---------------|
|California | 5.7% | |California | 5.7% |
|----------------+---------------+-+--------------+---------------|
|Alameda County | 4.7% | |Blacks | 9.8% |
|----------------+---------------+-+--------------+---------------|
|Imperial County | 23.7% | |Hispanics | 7.0% |
|----------------+---------------+-+--------------+---------------|
|Los Angeles | 5.2% | |Whites | 5.5% |
|County | | | | |
|----------------+---------------+-+--------------+---------------|
|Orange County | 4.4% | |16 to 19 | 18.8% |
| | | |years olds | |
|----------------+---------------+-+--------------+---------------|
|Riverside | 6.7% | |20 to 24 | 9.6% |
|County | | |years olds | |
|----------------+---------------+-+--------------+---------------|
|San Bernardino | 6.4% | |Blacks 20 to | 14.9% |
|County | | |24 years old | |
|----------------+---------------+-+--------------+---------------|
|San Mateo | 3.3% | |Hispanics 20 | 9.8% |
|County | | |to 24 years | |
| | | |olds | |
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|Tulare County | 10.8% | |Source: California |
| | | |Employment Development |
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| | | |Department |
|----------------+---------------+-+------------------------------|
|Ventura County | 5.4% | | |
| | | | |
| | | | |
| | | | |
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While the state's unemployment rate for June 2016 (not
seasonally adjusted) was 5.7%, some areas of the state had lower
rates, while others were considerably higher. San Mateo County
recorded the lowest at 3.3% and Imperial County experienced the
highest unemployment rate at 23.7%. Inland areas generally
reported unemployment rates above the statewide average. As the
chart above shows, Tulare County's unemployment rate was 10.8%
and Riverside County was recorded as 6.7%. Coastal areas
overall had lower rates than the state average, with Orange
County at 4.4%, and Ventura County at 5.4%. Even densely
populated and economically diverse areas like Los Angeles County
reported a June 2016 unemployment rate of 5.2%.
Looking more specifically at different population groups, the
chart also shows the great discrepancies between the statewide
rate and key subgroups, including unemployment among Blacks and
Hispanics being 9.8% and 7.0% respectively. For the youngest
members of the workforce obtaining quality jobs remains a
significant issue with unemployment among 16 to 24 year olds
being well above the state average, ranging from 9.5% to 18.8%.
In other words, one-in-five of California's next generation of
workers is unemployed.
Funding under the WIOA Formula: Unemployment rates play a
significant role in WIOA state allotments, especially in Parts
One and Two. The three-part formula applies to WIOA Youth,
Adult, and Dislocated Worker programs, as follows:
1)Part One: A comparison of the relative number of unemployed
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individuals in areas with unemployment over 6.5% to that of
all states;
2)Part Two: A comparison of the relative number of excess
unemployed individuals (over 4.5%) in the state, as compared
to the total excess unemployed in all states;
3)Part Three: A comparison of the number of disadvantaged
individuals in the state to the total number in all states.
Funding for the three programs is substantially the same under
the Workforce Investment Act, the previous workforce development
law, and WIOA. Funding levels do change between years based on
total funding available and the underlying employment conditions
within states, as compared to other states. Over the past few
years, California's comparative funding allotment has been
increasing, while other states like Colorado and Pennsylvania
have had measurable drops. This trend continued in federal
fiscal year 2016 allocations. The chart below shows a
comparison of select states by funding stream.
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| Comparison of State WIOA Allocations 2014 through 2016 |
| |
| |
---------------------------------------------------------------
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
| | Percent | Percent | Percent | Percent | Percent | Percent |
| | Change in | Change in | Change in | Change in | Change in | Change in |
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| | Youth | Youth | Adult | Adult | Dislocated | Dislocated |
| | Allotments | Allotments | Allotments | Allotments | Workers | Workers |
| | 2014 to 2015 | 2015 to 2016 | 2014 to 2015 | 2015 to 2016 | Allotments | Allotments |
| | | | | | 2014 to 2015 | 2015 to 2016 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
| Arkansas | 12.92 | 1.89 | 12.73 | 1.85 | 3.04 | -3.66 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|California | 1.33 | 6.69 | 1.25 | 6.60 | 4.25 | 3.40 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Colorado | -4.67 | 5.51 | -4.85 | -5.51 | -13.91 | -9.54 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Minnesota | -8.74 | 5.51 | -8.75 | 5.51 | -11.85 | 9.54 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|New Mexico | 13.49 | 17.48 | 13.19 | 17.21 | 29.17 | 18.61 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|New York | 0.22 | 3.60 | 0.16 | 3.56 | 2.49 | 9.54 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Pennsylvania | -7.54 | 4.30 | -7.91 | 4.72 | -13.72 | 1.60 |
| | | | | | | |
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Texas | 4.61 | 5.51 | 4.51 | 5.51 | -4.13 | 9.54 |
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| Source: U.S. Department of Labor Advisory 4/27/2015/Federal |
| Register 04/18/2016|
| |
| |
| |
| |
| |
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The funding formula also results in changes in allotments
between local board allotments. The California Workforce
Association evaluated the differences between the 2015 and 2016
local allotments. The chart below displays the aggregated
numbers for the Youth, Adult, and Dislocated Worker funding.
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| Workforce | Total | | Workforce | Total |
| Development | Difference | | Development | Difference |
| Boards |Between federal | | Boards | Between |
| |funding in 2015 | | | federal |
| | and 2016 | | | funding in |
| | | | | 2015 and |
| | | | | 2016 |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Alameda | -1.99% | |Marin | -7.05% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
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|Anaheim City | -4.85% | |Mendocino | -2.41% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Contra Costa | -4.35% | |Merced | 5.63% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Foothill | 8.64% | |Monterey | 4.23% |
|(Pasadena) | | | | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Fresno | 4.96% | |Mother Lode | -5.57% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Golden Sierra | -7.21% | |Napa-Lake | -5.13% |
|(Placer, El | | | | |
|Dorado, Alpine) | | | | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Humboldt | -6.61% | |NCC (4 Counties | 1.90% |
| | | |North of Sac) | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Imperial | 17.59% | |NorTEC (11 | -2.56% |
| | | |Northern | |
| | | |Counties) | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Kern, Inyo, Mono | 7.39% | |NOVA | 120.53% |
| | | |(Sunnyvale) | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
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|Kings | 2.80% | |Oakland City | -9.13% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Los Angeles City | 0.14% | |Orange | -5.70% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Los Angeles | 1.44% | |Pacific Gateway | 2.93% |
|County | | |(Long Beach) | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Madera | 7.57% | |Richmond City | -10.20% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Riverside | -3.29% | |Santa Barbara | -0.73% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Sacramento | -4.44% | |Santa Cruz | 2.61% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Benito | 1.50% | |SELACO | 2.36% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Bernardino | -7.52% | |Solano | -3.87% |
|City | | | | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Bernardino | -4.28% | |Sonoma | -6.69% |
|County | | | | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
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|San Diego | -6.00% | |South Bay - LA | 3.71% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Francisco | -7.03% | |Stanislaus | 1.89% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Joaquin | 0.35% | |Tulare | 7.54% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Jose - | -7.34% | |Ventura | -2.80% |
|Silicon Valley | | | | |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Luis Obispo | -6.24% | |Verdugo | 2.87% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|San Mateo | -100.00% | |Yolo | -1.85% |
| | | | | |
| | | | | |
|------------------+----------------+-+----------------+-------------|
|Santa Ana City | -9.89% | | | |
| | | | | |
| | | | | |
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Federal funding formulas can be challenging to adjust.
Amendments taken in the policy committee further clarify the
purpose of the proposed change in order to ensure that
California is advocating for more overall statewide funding and
that it is not intended to result in individual areas of the
state receiving less funding.
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Analysis Prepared by:
Toni Symonds / J., E.D., & E. / (916) 319-2090
FN:
0004820