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Workforce Planning: Aging and Employment Module 11: Unemployment and Public

Transition Assistance Barbara McIntosh, Ph.D., SPHR • 2014

The development of this content was made possible through the support from a grant from the Alfred P. Sloan Foundation.

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Involuntarily Unemployed

Recession’s impact on older workers:> Employers are more willing to retain older workers in a downturn, but

they are less likely to hire them.

> Individuals would like to work longer, but that option may not be available.

> Forced to draw Social Security earlier than anticipated.• In 2009, at the height of the recession, claims made at age 62 were up 2%.• Average age of retirement in 2012 was 64; average age of retirement in 1998

was 63.

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Older and Unemployed

• The average duration of unemployment for workers ages 55 to 64 was 11 months in 2013 (DOL). Three months longer than the average for 25- to 36-year-olds (Schindler, 2014).

• The median duration of unemployment for 55- to 64-year-olds was 22.3 weeks in July 2013 (BLS).

(Median duration of joblessness for all age groups: 13.8 weeks).

• The unemployment rate for workers ages 55 and over was 5% in July 2013 (BLS). (Higher than historical averages, but it is much lower than the overall unemployment rate of 7.4%, and below the unemployment rate for any younger group of workers).

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Consequences of Unemployment

• Salary losses. When workers ages 62 and older do find jobs, they often suffer the

greatest salary losses (36% below their previous median wage) because most were at peak salary before being laid off (Johnson and Mommaerts, 2011).

Men who experienced long-term unemployment found that even four years later they were still making less (Rothstein, 2013).

• Higher rates of suicide. • Higher rates of cancer (especially among men). • Higher rates of divorce.

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Consequences of Unemployment (continued)

• Compounding these difficulties, the length of time candidates had been out of work mattered more to employers than their job experience.

• Businesses would rather hire somebody with no relevant experience than hire a person who has been unemployed for a long time (Ghayad & Dickens, 2012).

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Reasons for Older Workers’ Long-Term Unemployment

• Many of the well-paying jobs that once existed have been automated or outsourced.

• Younger workers may have an advantage. > They are less likely to have spent decades honing specialized skills.> They may have more flexibility to go back to school to learn new skills.

• Employees late in their careers may not have years to retrain.

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Unemployment Experience: Differences by Race

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Laws with Older Worker Training and Labor Market Assistance Provisions

• Older Americans Act—OAA (1965).> Authorization expired in 2011.> Appropriations each year since, $1.9 billion in 2014.

• Workforce Investment Act—WIA (1998).> Title III incorporates Wagner-Peyser (1933). > Employment Service (ES) now “one-stop” (Title 1 of WIA).> In 2009, 12.6% of participants were 55+ ~ 200,000 people.

• Alternative Trade Adjustment Assistance—ATAA (2011).> Provides workers 50+ with a wage subsidy if find job in < 26 weeks at a lower wage (and under

$50,000).> 6,352 served in 2006 (latest data available).

• National Older Worker Career Center—NOWCC (1997).• Executive Initiatives (2014).

As reported by the Senate Committee on Health, Education, Labor, and Pensions on January 6, 2014.

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Older Americans Act

• Title III State and Community Grants—Older Americans Act (OAA):> Supportive services and senior centers.> Nutrition services (congregate, home-delivered, school-based).> In-home frail assistance.> Needs for special assistance.> Disease prevention and health promotion.> Supportive activities for caretakers.

• Title IV Training.

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Older Americans Act (continued)

• Title V: Senior Community Service Employment Program (SCSEP).

• Title VI: Grants for Native Americans.

• Title VII: Vulnerable Elder Rights Protection.> Prevention of elder abuse, neglect and exploitation.> Elder rights and legal assistance.

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Senior Community Service Employment Program (SCSEP): Title V

• The Senior Community Service Employment Program (SCSEP) is a community service- and work-based training program.

> Provides subsidized, service-based training for low-income persons ages 55 and older who are unemployed and have poor employment prospects and whose family income is no more than 125% of the federal poverty level.

> Serves approximately 100,000 people/yr, about 1% of eligible population (GAO, 2008).

• Participants have access to both SCSEP services and other employment assistance through American Job Centers, formerly known as One-Stop Career Centers.

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SCSEP Goal

• Participants work an average of 20 hours a week and are paid the highest of federal, state or local minimum wage.

• Participants are placed in a wide variety of community service activities at nonprofit and public facilities, including day care centers, senior centers, schools and hospitals.

• Community service training serves as a bridge to unsubsidized employment opportunities

• SCSEP’s goal is to place 30% of its authorized positions into unsubsidized employment annually.

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SCSEP Services

• Community services. The program provides over 40 million community service hours to public and nonprofit agencies, allowing them to enhance and provide needed services. The SCSEP is “a value to states and communities estimated at over $1 billion,” said Howard Bedlin, vice president of public policy at the National Council of Aging (Kaufmann, 2013).

• Participant services. Individual Employment Plan (IEP) development, orientation, community service placement, training specific to community service assignment, other training as identified in the IEP, supportive services, wages, fringe benefits, annual physicals, assistance in securing unsubsidized employment, and access to local American Job Centers or One-Stop Career Centers.

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SCSEP Funding

• Program Funding: 2013 (PY) $424,804,974.> 5% decrease from PY 2012. > 22% of the funds are allocated among the states and territories by formula. > 78% are provided to national organizations that compete to provide services.

Grantees must provide a 10% nonfederal match. • Grantees:

> 71 grantees. • 15 national nonprofit organizations. • 56 units of state and territorial governments.

> States often sub-grant with Area Agencies on Aging or community-based organizations to operate local projects.

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SCSEP Performance Data

Performance data for PY 2011 (ending June 30, 2012)

•Total number of enrolled participants: 76,864.•Unsubsidized placement: 44.1%.•Service rate: 172.4%.•Female: 65.3%.•Minorities: 46.9%.•At or below poverty level: 87.4%

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Older Americans Act Status

• S1562 Older Americans Reauthorization Act of 2014: Introduced: 9/30/2013, Sen. B. Sanders (I-VT) with 8 co-sponsors. Action: Committee on Health, Education, Labor and Pensions (1/6/2014).

• HR 4122 Older Americans Act Reauthorization Act of 2014: Introduced: 2/28/2014, Rep. S. Bonamici (D-OR) with 9 cosponsors. Action: referred to House Committee on Education and the Workforce

(2/28/2014).

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Workforce Investment Act (WIA) 1998

• The Workforce Investment Act of 1998 (WIA):> Supersedes the Job Training Partnership Act (JTPA). > Amends the Wagner-Peyser Act.> Contains the Adult Education and Family Literacy Act (Title II). > Contains the Rehabilitation Act Amendments of 1998 (Title IV).

• WIA reforms federal job training programs and creates a new, comprehensive workforce investment system.

> Customer-focused. > Helps Americans access the tools they need to manage their careers through

information and high-quality services. > Helps U.S. employers find skilled workers.

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State Workforce Investment Boards: Composition

• Governor.• Two members of each chamber of the state legislature.• Representatives appointed by the governor, including: Business (which must be a majority). Chief elected officials. Labor organizations. State agency heads. Individuals with related experience. Others as the governor may designate.

• Existing boards can be grandfathered.

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State Workforce Investment Boards: Duties

Assist the governor in:

•Developing a 5-year strategic plan.•Continuously improving the system.•Commenting on the Vocational Education State Plan.•Designating local workforce investment areas.•Developing allocation formulas.•Developing state performance measures.•Preparing an annual report.•Developing statewide employment statistics systems.•Applying for incentive grants.

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Local Workforce Investment Boards: Composition• Established in each local workforce investment area.• Appointed by chief local elected officials (LEOs) using criteria

established by the governor and state board.• Chair must represent private sector/business.• Membership includes representatives of:

> Businesses (which must be a majority).> Local education entities.> Labor organizations.> Community-based organizations.> Economic development agencies.> All One-Stop partners.> Other entities as determined by local officials.

• Existing boards can be grandfathered.20

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Local Workforce Investment Board: Functions• Develop and submit 5-year local plan.• Select local One-Stop operators.• Identify eligible providers of training services, youth activities and

intensive services.• Oversight.• Negotiate local performance measures with local elected officials

and governor.• Assist in developing statewide employment statistics system.• Ensure effective connecting, brokering and coaching activities to

assist employers.• Coordinate activities with economic development and employers.

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WIA (Wagner-Peyser Related) Services and Participants

Approximately 22.4 million individuals served PY 2009: 63.3% received staff-assisted services.34.4% performed job search activities.25.9% were referred to employment.

7.6% were referred for WIA services.

Individuals participating in Wagner-Peyser funded services in PY 2009:47.7% were unemployment insurance-eligible claimants.8.6% were dislocated workers.7.5% were veterans.2.7% were individuals with disabilities.

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WIA/Wagner Peyser Funding

• The Wagner-Peyser program is funded through employer payroll taxes under the Federal Unemployment Tax Act (FUTA).

• Appropriations for state employment service (ES) activities were roughly $702.2 million in FY 2011.

• Essentially level with FY 2010 funding but representing a decline of more than 45% (in inflation-adjusted terms) since FY 2001.

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National Older Worker Career Center (NOWCC)

The NOWCC operates two employment programs for older workers: the Environmental Protection Agency (EPA) Senior Environmental Employment (SEE) Program and the Natural Resources Conservation Service (NRCS) of the U.S. Department of Agriculture (USDA).

SEEThe SEE Program, established by Congress in 1984 with the passage of the Environmental Programs Assistance Act of 1984 (PL 98-313), authorized the EPA to make or enter into cooperative agreements with private nonprofit organizations to place individuals ages 55 and older in assignments in EPA offices around the country.

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National Older Worker Career Center (NOWCC, continued)

Natural Resources Conservation Service (NRCS)

The USDA-NRCS Agriculture Conservation Experienced Services (ACES) Program, as authorized by Congress with the passage of the 2008 Farm Bill (Food, Conservation and Energy Act of 2008; PL 110-234), enabled NRCS to establish an older worker employment program (ages 55+) to provide technical assistance for conservation operations around the country.

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American Job Training Executive Actions (2014)

• Partnering local businesses with community colleges to put Americans back to work through a nearly $500 million job training competition. This program is a part of the Trade Adjustment Assistance and Community College and Career Training (TAA-CCCT) competitive grant program.

• Expanding Apprenticeships for Good Middle Class Jobs. The Department of Labor is making $100 million in existing H-1B funds available for American Apprenticeship Grants to reward partnerships that help more workers participate in apprenticeships.

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American Job Training Executive Actions (2014, continued)

• Making apprenticeships work for more Americans.> Streamlining GI Bill benefits for apprentices”> Connecting apprentices with college credit.

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Business and Philanthropic Investments in Job-Driven Training

• The President’s Advanced Manufacturing Partnership (AMP) is developing scalable apprenticeship models in high-need advanced manufacturing.

• The United Auto Workers, in partnership with employers such as Ford, General Motors, Chrysler, John Deere and many others, plans to add nearly 2,000 apprentices.

• UPS will add 2,000 new apprentices, including drivers and apprentices in new programs like IT, operations, and automotive repair.

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Business and Philanthropic Investments in Job-Driven Training (continued)

• The SEIU Healthcare Northwest Training Partnership (Training Partnership), in partnership with its employers ResCare, Addus, Chesterfield, the State of Washington, and others, is expanding its novel apprenticeship program for home care aides to train 3,000 apprentices a year.

• North America’s Building Trades Unions pledge to add 25,000

new apprentices over the next five years.

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Voluntary Unemployment: Transitions

Emerging perspectives on the last third of life and productive activity•Freedman, M. (2007). Encore: Finding work that matters in the second half of life. New York, NY: PublicAffairs.•Encore.org, Civic Ventures and Experience Corps (http://www.aarp.org/experience-corps/)•AARP Recareering: http://www.aarp.org/work/working-after-retirement/•PBS: Next Avenue: http://www.nextavenue.org/

Lessons and networkingGrassroots nonprofit organizations:• The Transition Network: www.thetransitionnetwork.org• Women Venture: www.womenventure.org• Search in local community. Start your own!