Can’t Stand Still:
Issues and Ideas
for Workforce
Governance
in Arizona
Prepared for
Governor’s Council on Workforce Policy
MORRISON INSTITUTE
F O R P U B L I C P O L I C Y
Prepared for
Governor’s Council on Workforce Policy
Nancy Welch
David Berman
March 2004
vernor’s Prepared by
with assistance from
Rebecca Gau
Bill Hart
Gene Slechta
Suzanne Taylor
Walter Valdivia
Morrison Institute for Public Policy
Acknowledgements
The assistance of Rob Melnick, Karen Leland, Cherylene Schick, Nielle McCammon, and Alice Willey are
acknowledged gratefully. Also many workforce and business professionals provided valuable input and
insights. Their time and expertise are appreciated.
Can’t Stand Still:
Issues and Ideas for
Workforce Governance in Arizona
MORRISON INSTITUTE
F O R P U B L I C P O L I C Y
© 2004 by the Arizona Board of Regents for and on behalf of Arizona State University and its Morrison Institute for Public Policy
Contents
Executive Summary ................................................................................................ i
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona .............. 1
One Phrase: Multiple Meanings ................................................................... 3
A Broader View ................................................................................... 5
Workforce Investment Act Now Front and Center ......................................... 6
Workforce Movements Prior to WIA ..................................................... 7
Not a New Interest in Workforce — Economic Development ................ 8
But A New Context of Urgency ............................................................. 8
The Reauthorization Variable ............................................................ 11
Outlooks and Issues ............................................................................................ 13
Leadership and Participation ..................................................................... 14
Who’s Who at the State Level? ......................................................... 14
Limited State-Level Leadership ........................................................ 15
Some Frustration with Engaging and Serving Business,
But Positive Signs Also ................................................................ 16
Local Governance Has Strengths ...................................................... 17
Looking Beyond Basic Performance Measures ................................. 19
Puzzles and Realities ................................................................................. 21
Workforce Investment Areas Are Not
Synonymous with Economic Regions .......................................... 21
Significant State Totals May Not Mean a Lot of Money Locally .......... 21
The Double Edge of Long Experience ................................................ 22
The Potentially Grand Scale of Workforce and
Economic Development .............................................................. 23
Workforce Development is Economic Development:
Arizona’s Hollow Mantra ............................................................. 24
Still Four Arizonas: Urban, Rural, Border, and Reservation ............... 26
Perception of Low Priority for a High-Impact Issue ............................ 26
Dissatisfaction with Data ................................................................. 26
A Communication Gap in the Face of Substantial Interest ................ 27
Stuck With the Status Quo ......................................................................... 29
Governance Ideas Across the U.S. ....................................................................... 31
Governance Ideas for Arizona .............................................................................. 41
Govern to Achieve Economic Growth,
Organize to Ensure Great Information and Easy Access .................... 41
Recommendation: Establish the Arizona Economic Summit Group ........... 42
Governance of Workforce Development:
Better Coordination or New Structures? ........................................... 42
Choice: Continue to Improve Coordination Among the
Main Workforce Agencies ................................................................. 43
Choice: Consolidate Programs in an Arizona
Department of Employment and Economic Growth .......................... 43
Choice: Create an Independent Public-Private
Partnership for Workforce and Economic Development ............................. 44
Starting That Sense of Momentum ............................................................ 45
Endnotes ............................................................................................................. 46
Selected Sources ................................................................................................ 47
Appendices .......................................................................................................... 49
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
EXECUTIVE SUMMARY
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Morrison Institute for Public Policy
When President Franklin Roosevelt’s Secretary of Labor advocated for
a program to match workers with employers, she knew the time was
right to alleviate the hardships of the Great Depression. Frances
Perkins could not have foreseen the issues of the next information
age: the specter of software jobs moving offshore or the shortage of
skills in a technological workplace. As pundits and publications have
explained so often, ideas and technology drive this economy, so the
jobs of tomorrow will look nothing like even those of today. It’s no
wonder then that skills matter more than ever before or that ongoing
training has gained prominence as an individual necessity and
workforce development has emerged as a collective priority.
Anyone who has ever nodded in agreement when a conference
presenter warned of the effects of the speed of economic change, new
ways of competing, or brain gains versus brain drains understands
the need to bridge the traditional gap between workforce
development and economic development and to use the resources at
hand to change the fact that, as one Arizona official said, “We don’t
have the workforce for the jobs we want.” The question in 2004 is not
what to do, but how to make a coherent, cohesive workforce and
economic development package out of what is still largely a jumble of
opportunities. With high-wage jobs the common cause and
integrating workforce and economic development a matter of
common sense, the next step is to determine the best way for Arizona
to proceed. And, time is of the essence, considering the pressures of
the economy and the reauthorization of key federal workforce
statutes.
Because of the urgency of workforce issues and the desire to begin a
statewide discussion aout workforce goals and choices, the
Governor’s Council on Workforce Policy wanted to understand if, and
how, program governance and organization are hampering progress
and what changes might be beneficial. The council asked Morrison
Institute for Public Policy (School of Public Affairs, College of Public
Programs, Arizona State University) to:
! Explore the strengths and weaknesses of the organization of
Arizona’s workforce system, particularly at the state level
! Review how other states have revamped their systems and
connected workforce and economic development
! Recommend options for improving Arizona’s system
During the second half of 2003, Morrison Institute for Public Policy
talked with more than 60 workforce professionals, business people,
Truly Changing Work
The nature of work in the United
States is changing dramatically as a
result of globalization, increased
competition and the transition from an
industrial to an information- and
service-based economy. Higher levels
of education and training are
increasingly becoming the prerequisite
for not only high-wage jobs but also
those that pay just a living wage.
Source: The Adult Learning Gap, October 2003.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
and workforce board members across Arizona either individually or in
small groups, researched other states’ approaches through interviews
with officials in other states and national organizations, analyzed
responses to an online survey of selected local workforce investment
board members, and reviewed a wide variety of materials on
economic, workforce, and community development.
This report is the first of many steps for Arizona to reflect and act on
workforce development governance and its system, because as
Thurgood Marshall said, “You can’t stand still. You must move, and if you
don’t move, they will run over you.”
Workforce development may be a topic of great interest and importance,
but multiple meanings also make it confusing. For example, as noted in
the recent volume A Nation at Work: The Heldrich Guide to the American
Workforce, “the publicly funded patchwork of education and training
programs and providers commonly known as the workforce development
system” is just one of three “massive clusters of programs and
organizations” that “dominate the supply chain for the education and
training of America’s workforce.”
In Arizona that public amalgam of efforts includes programs under the
umbrellas of the Workforce Investment Act, Carl Perkins Act for Career
and Technical Education, Wagner-Peyser Act (including Job Service and
unemployment compensation), Vocational Rehabilitation, the Personal
Responsibility and Work Opportunity Act, and Arizona’s state-funded
programs.
Workforce development also refers to the overarching process of creating
and improving the local talent pool to serve businesses’ present and
future needs. Or in the words of one advocate: workforce development is
where education, employment, and economic development come
together. From that viewpoint, activities are best understood in five
interrelated categories: Pipeline, Renewal, Incumbent, Retraining, and
Entrepreneurial.
The most prominent part of the publicly supported cluster now is the
Workforce Investment Act (WIA). Passed in 1998 and up for
reauthorization now, WIA is the latest federal statute intended to help
states and communities match the labor force’s skills and capacities
with economic realities. With an emphasis on leadership from governors,
the landmark legislation took steps to coordinate a myriad of programs
and create systems from far-flung efforts. The statute began to bring
together public-sector “partners” to create One-Stop Career Centers to
serve all workers, and looked, even more than other statutes, to
businesses to identify skills in demand and make coordination and
collaboration a reality.
Although Arizona began developing One-Stop centers through
demonstration funding in the mid-1990s, formal implementation of
Governor’s Priorities for
Workforce Development
Economic Development — funding
for programs that link workforce
development with economic
development to make Arizona a state
that is prosperous for employers and
employees alike
Education — funding for programs
that use education as a tool to promote
economic development and improve
workforce development around the
state
Source: Governor’s Council on Workforce Policy,
July 2003.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
the law’s components dates to July 2000. Arizona’s WIA structure
put the Governor’s Council on Workforce Policy in charge of advising
the governor on all workforce activities and coordinating programs to
create the desired streamlined system. In addition, the state’s
governing structure set the Arizona Department of Commerce to
managing workforce policy and staffing the council, while the Arizona
Department of Economic Security played a policy and program
development role in addition to fiscal administration and operations.
The Arizona Department of Education managed the new list of
eligible training providers, in addition to its traditional career and
technical education programs and adult education.
The Workforce Investment Act came about as Arizona was already
revamping workforce development to support the goals and plans
made during the community-based process of the Arizona Strategic
Plan for Economic Development (later the Governor’s Strategic Plan
for Economic Development). Arizona’s Workforce Development
System Comprehensive Plan acknowledged the consensus that the
time was right to streamline workforce programs and put them in the
service of economic development. The document noted the
���overriding purpose” to enhance “the economic growth and
competitiveness of the state’s industry clusters and develop the
capacity of the foundations which support them.”
Considering its many players and connections to other issues,
workforce development is nothing if not dynamic. In fact, much has
taken place just within this project’s short span. However, as evident
throughout this project, much more remains to
be done to fulfill the promise of employment-related
programs and the expectation that
economic and workforce development truly are,
as one economic development administrator
said they should be, “two sides of the same
coin.” Themes drawn from interviews,
observations, and materials are presented
under the headings Leadership and
Participation and Puzzles and Realities.
Leadership and Participation
Who’s Who at the State Level?
In recent years, the Arizona Department of
Economic Security (DES), the Arizona
Department of Commerce, and the Arizona
Department of Education have been assigned
various responsibilities in workforce
development that were intended to “take
advantage of what the agencies do best.”
However, the roles and responsibilities of each
and the reasons behind the structure are
Source: A Nation at Work, Heldrich Center for
Workforce Development, 2003.
Workforce
development
system
Public & private K-12
schools, colleges,
technical schools, &
universities
Employer-sponsored
training
Three Major Sources of
Education and Training for
U.S. Workers
Workforce Development Can be
Understood as Five Categories of Activity
Category Description
Pipeline Education, training, and services at public and
private schools, colleges, and universities — the
P-20* “pipeline”
Renewal Education, training, and services for those who
face skills and employment challenges for any
reason
Incumbent Education, training, and services for current
employees
Retraining Education, training, and services for those who
need or want to upgrade skills or change careers
Entrepreneurial Education, training, and services to support
business formation and growth
*P-20 = education from preschool through graduate school.
Source: Morrison Institute for Public Policy, 2003.
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Morrison Institute for Public Policy
unclear to many who work in or contribute their time to workforce
programs.
Limited State-Level Leadership
WIA should be as important at the state level as it is at the local
level, according to one long-time administrator. Limited state-level
leadership — in addition to lack of visibility and clarity for programs—
ranked as one of the most important issues in Arizona. Strong state
leadership in such areas as visibility, equity, access, resources, return
on investment measures, incentives, technical assistance, and
economic benchmarks would be welcomed, according to some, as
would assistance with career ladders in targeted clusters and job
forecasting. Initiatives for workforce credentials and upgrading, in the
minds of some, could be the first steps in building career ladders and
should start at the state level.
Frustration with Engaging and Serving Business, But Positive Signs Also
The perceived difficulty of engaging the private sector in using One-
Stop services and other programs has been as frustrating for
committed business people as it has been for workforce professionals.
But, since workforce development is often a greater concern in good
economic times, the current poor economic climate was just one
explanation given for lackluster levels of business involvement. Other
reasons varied from lack of time to being turned off by a still-daunting
bureaucracy or the lingering perception that only unskilled and, thus
undesirable, workers make use of government programs. A simple
lack of awareness, made worse by multiple programs marketing
various services, was cited as the most critical problem. Another facet
of concern was the type and level of business involvement in
governance. In short, not all businesses have the same knowledge of
and clout in the economy. If those with the most influence on and
strongest ties to economic development pass on or are unaware of
opportunities for participation, programs can, according to some,
continue only with their traditional activities.
Local Governance Has Some Strengths
Morrison Institute surveyed selected Arizona local workforce
investment board members to get their views on how well their
boards are doing. The survey underscores the strong possibilities for
substantial business leadership while pointing out changes needed
for greater efficiency and knowledge on a range of workforce issues.
Respondents were generally upbeat about the activities of their
boards, but also sometimes felt limited in what they could
accomplish.
Lack of Vision and Goals Beyond Basic Performance Measures
Arizona’s top-line workforce issues are readily identified. Initiatives of
various types are underway to address Arizona’s needs in terms of
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
workforce programs, though many noted that Arizona has not gone
far enough. In particular, Arizona has not agreed on measurable
goals for its system besides federal items. A number of those
interviewed expressed interest in ways to determine Arizona’s overall
progress and “return on investment” from publicly supported
workforce programs. Others simply sought to ensure that programs
could be proven, or not, to be addressing the state’s workforce ills
and supporting its economic progress. In other words, are programs
helping to raise education or income levels? Are workers able to certify
their skills to employers? Is Arizona using its programs to move
steadily toward leadership in a knowledge-based economy? Are
workers gaining necessary measures and skills? Arizona has followed
the mandates of federal workforce programs rather than devising its
own course and then applying federal resources. Given today’s
economic challenges and the desire for high-wage jobs, many of those
interviewed favored a sharper focus on Arizona’s needs and how
program governance can ensure they are met.
Puzzles and Realities
Significant State Totals May Not Mean a Lot of Money Locally
The significant dollar totals in workforce programs may not translate
to easy use for state initiatives or adequate resources at the local
level. At the same time, state-level policies have not emphasized
allowing local boards control over more than WIA funds. Many
suggested public and private dollars from many sources should
augment the workforce system. Real financial stability and innovation
will come from requiring that all One-Stop partners share in the cost
of operations and then augmenting public funds with other dollars.
Arizona Board Members Tend To Be More Positive Than Those Nationally
Arizona National
Agree the board well understands the workforce development needs of the community 59% 33%
Agree the board contributes much to meeting the workforce needs of the community 57% 43%
Agree the board making a unique contribution 60% 60%
Agree it is difficult or very difficult to recruit business members for the board 29% 52%
Agree the board is well known in the community 12% 14%
Agree the board has inadequate resources and funding 50% ND
Source: Morrison Institute for Public Policy, 2003.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
The Double Edge of Long Experience
In Arizona, long experience provides valuable continuity, but according
to some, it also creates a barrier to change. On the other hand, a
history of false starts at the state level has bred deep skepticism
among some in the field.
This is not to say that much has not changed notably in recent years.
In places large and small, various entities have made substantial
progress toward the realization of the One-Stop concept and:
! manage multiple programs well
! deal creatively with people, businesses, and community
issues
! bring notable assistance to high tech and other employers
! provide strong models in a variety of areas
! combine efforts with economic development professionals
and industry associations
Workforce Development is Economic Development: Arizona’s Hollow Mantra
Except for the state’s job training program, economic development
and workforce development at the state level mostly have functioned
independently of one another. Images of workforce programs as mere
social services remain current in some quarters, as do perceptions in
others of economic development as a process of unwarranted
giveaways. The differences in the two fields’ cultures are an
important issue.
Perception of Low Priority for a High-Impact Issue
“Workforce development has been a stepchild in Arizona.” Many of
those interviewed echoed this dramatic statement and voiced
frustration with the “lip service” given to an issue that is critical to
economic competitiveness. The programs and expertise available to
improve the labor force reportedly have long been undervalued
despite workforce and economic trends that call for attention.
Dissatisfaction with Data
Information about jobs, firms, and skills is fundamental to workforce
programs, but widespread dissatisfaction was evident with Arizona’s
traditional labor market research capacity.In addition, there was
frustration about program performace reporting.
Stuck With The Status Quo
Taken as a whole, the state’s workforce development system can best
be described as stuck in transition. If workforce development is to be
the powerful economic tool it needs to be, changes in governance will
have to address:
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
! frustration with what should be compared to what is
! shortcomings of state-level structures
! hunger for innovation
Governance Ideas Across the U.S.
Leaders and workforce professionals wrestled for years with whether
workforce development should be organized around services for
people or assistance to employers and economic development.
Today’s economic environment, of course, has laid that debate to rest
and put a premium on structures that work like the economy does.
However, researchers have noted that no one governance model has
emerged as the way. University of Texas labor economist Christopher
King, who has written extensively about state structures, notes six
current approaches to updating workforce efforts, including:
! Enhanced Coordination
Institutional Restructuring
Consumer-Driven Strategies
Blended Strategies
Service-Based Strategies
Other Strategies
— Encouraging or requiring greater
service coordination (as seen in the 1993 Texas legislation)
! — Eliminating agencies and
consolidating programs (Florida, Oregon, Texas, and Utah)
! — Empowering customers,
enhancing market forces, labor market information (Michigan)
! — Restructured agencies, consolidating
programs, mandating greater coordination (Florida)
! — More seamless, functionally
oriented services; web-based, self-directed services (Utah)
! — More pro-active, creative use of such
options “work-flex” provisions and waivers (Texas)
Arizona long ago chose “enhanced coordination.” Across the country,
though, states have implemented a combination of ideas or started
with coordination and evolved over time. The experimentation
spotlights three questions at the heart of governance:
! What is best for workforce and economic development
customers?
! How can programs contribute to employer services and
complement other efforts?
! What principles and structures will support high-quality local
services that meet employer and community needs and work
hand-in-hand with the entire state’s economic priorities?
Governance trends now clearly favor four types of actions:
! Consolidation of agencies and activities
! Development of state measurements of success
! Concentrating on creating systems that increase the skills of
the overall workforce and serve specific employers and
industry sectors
! High-level advisor (usually a governor’s assistant) to oversee
new efforts and changes
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Governance Recommendations for Arizona
A state’s workforce — its quality, its flexibility, its capacity to learn —
now ranks as one of the major sources of competitive advantage or
disadvantage. This stark reality establishes workforce development as
one of the most powerful tools a state has for promoting economic
growth and prosperity.
Summary of Arizona’s Current Workforce System Issues
Issue Impact
Frustration With What Should Be Compared To What Is
Workforce Development is Economic
Development: Arizona’s Hollow Mantra
! Workforce development will be more
marginalized
! Resources underutilized
! Prosperity suffers
Low Priority for a High-Impact Issue ! Workforce not a player in economic growth
! Frustration among state and local players
! Less collaborative project development
Frustration Engaging Business ! Limits system and services, especially in
emerging areas
! Limits resource development
! Reduces emphasis on workforce programs
as economic development
! Businesses involved will burn out
Hunger for Innovation
Lack of Vision and Goals Beyond Basic
Performance Measures
! Arizona needs organizing principles as first
step to revamped governance
Shortcomings of State-Level Structure
Who’s Who at the State Level? ! Reduces outcomes for people, businesses,
and governments
! Time spent relearning instead of innovating
Limited State-Level Leadership ! Opportunities missed
! Continuous improvement not a reality
! Arizona serves federal programs, not the
other way around
Workforce Regions Not Synonymous with
Economic Regions
! Workforce areas may be left out of
economic development plans
! Multiple sets of boundaries create artificial
barriers
Dissatisfaction with Data ! Employment trends and opportunities go
untapped
! Lack of information becomes a barrier
Source: Morrison Institute for Public Policy, 2003.
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But, the question remains, what will make this tool operate at peak
performance for the greatest number of Arizona workers and
businesses? As so many others have noticed, the sprawling
workforce field does not lend itself to quick fixes or overnight
transformations. There are countless issues that deserve in-depth
discussion. This section is intended to add some “big ideas” and
“starter” suggestions to that conversation.
Arizona, of course, needs governance that is clear and focused on
communication, solving problems, and supporting the state’s
economy. And, Arizona’s governance structure must give the private
sector a dominant voice and strong role without overwhelming it with
arcane administration and without leaving any part of the workforce
behind.
In addition, however, three more “organizers” will help Arizona to
develop and govern its system.
Govern to Achieve Economic Growth,
Organize to Ensure Great Information and Easy Access
The success of Arizona’s workforce development system should be
measured by the degree to which it helps fulfill state, local, and
individual economic goals and stimulates economic growth. But, this
can only be accomplished on a statewide basis if Arizona has a
coherent, up-to-date economic growth strategy based on the most
current data and a strong sense of direction for the future. In short,
Arizona’s workforce system should be governed to ensure:
! economic growth for individuals, businesses, and the state
! ease of access to programs and services at all ages and
stages of business and careers
! timely, in-depth information about the economy and the
workforce
Recommendation: Establish the Arizona Economic Summit Group
Arizona already has a number of councils and entities that advise the
governor on workforce and economic strategy and growth. In addition,
economic development organizations across the state have notable
strategies and experience that should inform state actions. Bringing all
of this expertise together regularly would allow greater coordination
across many issues, while making each body more aware of, and
perhaps accountable to, the others. For example, this “summit” group
could meet bi-annually and include the chairs of: the Governor’s
Council for Innovation and Technology, Governor’s Workforce Policy
Council, the Arizona Industrial Commission, the Commerce and
Economic Development Commission, the Arizona Chamber of
Commerce, the Greater Phoenix Economic Council, Greater Tucson
Economic Council, Greater Yuma Economic Council, Greater Flagstaff
Economic Council, and Arizona Technology Council and the Southern
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
Arizona Technology Council. This group would help to ensure that
Arizona’s workforce system matched the state’s economic strategy and
adapted programs to the needs of businesses and people.
Governance of Workforce Development: Better Coordination or New
Structures?
Arizona should decide if it wants to continue trying to “coordinate” its
way to workforce and economic success, or consider a more dramatic
change in governance of its workforce development system.
Choice: Continue to Improve Coordination
Among the Main Workforce Agencies
Arizona’s current structure remains viable and could continue to be
improved.
Choice: Consolidate Programs in an Arizona Department of Employment and
Economic Growth
This choice would bring all career, training, and economic
development efforts together.
Choice: Create an Independent Public-Private Partnership for Workforce
and Economic Development
Arizona has a tradition of public-private solutions. A public-private
body closely related to state government would oversee workforce
development, economic development, economic research, and career
education.
In general, these choices would not require new authority or
resources, but they would show how serious Arizona is about change
and action. Arizona should wait no longer to create the governance
structure and system needed to foster the state’s economic growth
through workforce development.
Five First Actions for Workforce
and Governance Momentum
1. Agree that the time to move ahead is
here.
2. Launch the debate on workforce and
economic goals and the choices for an
Arizona structure.
3. Adopt the organizing principles.
4. Bridge the gap between workforce and
economic development professionals.
5. Determine to bring the benefit of such
efforts as the High-Growth Job
Training Initiative and others to
Arizona.
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
When President Franklin Roosevelt’s Secretary of Labor advocated
for a program to match workers with employers, she knew the time
was right to alleviate the hardships of the Great Depression.
Frances Perkins could not have foreseen the issues of the next
information age: the specter of software jobs moving offshore or the
shortage of skills in a technological workplace. The knowledge
economy of 2004 is light years from the industrial past and moving
farther away all the time. As pundits and publications have
explained so often, ideas and technology drive this economy, so the
jobs of tomorrow will look nothing like even those of today. It’s no
wonder then that skills matter more than ever before or that
ongoing training has gained prominence as an individual necessity
and workforce development has emerged as a collective priority.
But two past themes still ring true:
1. The time is always right to focus on skills and jobs,
especially high-wage, high-value positions.
2. Public resources, used in conjunction with the private
sector, play an important part in helping people and
businesses adjust to changing economic times and prepare
for the future. Now that workforce talent is considered a
“make or break” factor in states’ economic growth, few
issues are more important, yet as complex and sprawling.
Anyone who has ever nodded in agreement when a conference
presenter warned of the effects of the speed of economic change,
new ways of competing, or brain gains versus brain drains
understands the need to bridge the traditional gap between
workforce development and economic development and to use the
resources at hand to change the fact that, as one Arizona official
said, “We don’t have the workforce for the jobs we want.” The
question in 2004 is not what to do, but how to make a coherent,
cohesive workforce and economic development package out of what
is still largely a jumble of opportunities. With high-wage jobs the
common cause and integrating workforce and economic
development a matter of common sense, the next step is to
CAN’T STAND STILL:
ISSUES AND IDEAS FOR WORKFORCE
GOVERNANCE IN ARIZONA
Governor’s Priorities for
Workforce Development
Economic Development — funding
for programs that link workforce
development with economic
development to make Arizona a state
that is prosperous for employers and
employees alike
Education — funding for programs
that use education as a tool to promote
economic development and improve
workforce development around the
state
Source: Governor’s Council on Workforce Policy,
July 2003.
Truly Changing Work
The nature of work in the United
States is changing dramatically as a
result of globalization, increased
competition and the transition from an
industrial to an information- and
service-based economy. Higher levels
of education and training are
increasingly becoming the prerequisite
for not only high-wage jobs but also
those that pay just a living wage.
Source: The Adult Learning Gap, October 2003.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
2
Morrison Institute for Public Policy
determine the best way for Arizona to proceed. And, time is of the
essence. As shown in the following pages, reauthorization of core
statutes and economic realities are pushing the state to tune up
what one expert called the “most powerful tool” for promoting state
prosperity: workforce development.
Arizona has started to create the “integrated, high quality workforce
development system,”1 but the state is by no means finished.
Because of the urgency of workforce issues, the Governor’s Council
on Workforce Policy wanted to understand if, and how, program
governance and organization are hampering progress and what
changes might be beneficial. In addition, the council sought to help
start a statewide discussion about governance and workforce goals
and choices. The council asked Morrison Institute for Public Policy
(School of Public Affairs, College of Public Programs, Arizona State
University) to:
! Explore the strengths and weaknesses of the organization
of Arizona’s workforce system, particularly at the state level
! Review how other states have revamped their systems and
connected workforce and economic development
! Recommend options for improving Arizona’s system
During the second half of 2003, Morrison Institute for Public Policy
talked with more than 60 workforce professionals, business people,
and workforce board members across Arizona either individually or
in small groups, researched other states’ approaches through
interviews with officials in other states and national organizations,
analyzed responses to an online survey of selected local workforce
investment board members, and reviewed a wide variety of
materials on economic, workforce, and community development.
The results of the effort are presented in three sections:
! Outlooks and Issues
! Governance Ideas Across the U.S.
! Governance Ideas for Arizona
Arizona is not alone in reexamining how residents are prepared for
ever-changing jobs in a churning economy and how businesses can
more readily meet their skill needs. Every state’s concern for its
workforce and economic growth is on the upswing. The idea is now
accepted in nearly every quarter that, far more than a good social
idea, workforce development is integral to creating economic
opportunity for everyone and supporting a competitive knowledge
economy. This report is the first of many steps for Arizona to reflect
and act on workforce development and governance because as
Thurgood Marshall said, “You can’t stand still. You must move, and
if you don’t move, they will run over you.”
Source: A Nation at Work, Heldrich Center for
Workforce Development, 2003.
Workforce
development
system
Public & private K-12
schools, colleges,
technical schools, &
universities
Employer-sponsored
training
Figure 1.
Three Major Sources of
Education and Training for
U.S. Workers
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
One Phrase: Multiple Meanings
Workforce development may be a topic of great interest and
importance, but multiple meanings also make it confusing. For
example, as noted in the recent volume A Nation at Work: The
Heldrich Guide to the American Workforce, “the publicly funded
patchwork of education and training programs and providers
commonly known as the workforce development system” is just one of
three “massive clusters of programs and organizations” that
“dominate the supply chain for the education and training of
America’s workforce.”2
Primarily the subject of this report, in Arizona that public amalgam
of efforts includes programs under the umbrellas of the Workforce
Investment Act, Carl Perkins Act for Career and Technical Education,
Wagner-Peyser Act (including Job Service and unemployment
compensation), Vocational Rehabilitation, the Personal
Responsibility and Work Opportunity Act, and Arizona’s state-funded
programs. This complete combination puts at least $265 million
state and federal dollars in play and annually touches nearly as
many Arizonans as live in Tempe and Chandler. Leaders and staff in
5 state agencies, 15 counties, all tribes, and most cities, community
college districts, and school districts, as well as scores of nonprofit
and for-profit service providers, pay close attention to what happens
in these deeply rooted programs.
Viewed in this way, the workforce development system can best be
characterized as:
! Referring in Arizona to as many as 32
ongoing state or federal programs
administered by 5 state agencies,
plus 3 federal programs that go to
tribes and 13 sources for multi-year,
competitive local grants (See
Appendices for all programs. See
Figure 4 for significant programs in 3
major state agencies.)
! Dependent mostly on federal funds
from the U.S. Departments of
Education, Labor, and Health and
Human Services, although some
programs require state funds also
(See Appendices.)
! With the federal programs, generally
giving the governor authority to
provide direction and make decisions,
while state programs have been
developed with and approved by the
legislature
Figure 2.
Major Programs Mean Major Dollars for Arizona
Source: Morrison Institute for Public Policy, 2003.
Workforce Investment Act
of 1998, Title 1-B
$50,368,066
JOBS Program
$45,945,400
Vocational Rehabilitation
Services Program
$55,934,832
Carl Perkins - Title I
Assistance to the States
$20,178,519
Wagner-Peyser Job
Service Program
$11,647,788
Arizona Secondary
Vocational Education
Program
$11,123,600
Arizona Job
Training Program
$12,000,000
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
! Complex and multi-faceted with services provided by a wide
variety of collaborative and contractual relationships
! Descended from continuing “labor exchange” and later
“employment and training” efforts, which often targeted
disadvantaged adults and youth for assistance
! Driven by data in terms of dollars, performance, and
economics
! Dependent on a wide variety of public and private sector
inputs and actions
! Providing similar services such as job search, skill training,
labor market information, and support services to different
types of people, i.e. youth, older workers, veterans, public
assistance recipients
! Walking a fine line between human services and business
services
Table 1.
Publicly Supported Programs Relate to People and Businesses
Purposes Examples of Public Programs
Supporting People as Workers and Entrepreneurs
! Help people acquire skills and credentials.
! Connect people with jobs.
! Increase individuals’ knowledge to make positive job choices.
! Expand access to job opportunities.
! Identify economic and employment trends.
! Provide workplace foundations.
• Learning to learn
• Capacity and commitment to reskill
• Technological literacy and competencies
• Work habits and soft skills
Arizona Workforce Connection One-Stops
Career and Technical Education
Community colleges’ Skill Centers and degree programs
Virtual One Stop
Job Service
JOBS
Arizona Workforce Informer
Job Corps
Adult Education
Pima County High Wage High Skill Initiative
Vocational Rehabilitation
Veterans’ Programs
“Growing” Businesses and Expanding the Economy
! Help employers enhance their competitiveness by matching
people and services such as hiring, retention, screening, and
training to their needs.
! Support the development of industry clusters.
! Develop training and upgrading programs.
! Communicate skills needed by employers to education and
training institutions.
! Administer incentives for recruitment and retention of high-wage
jobs.
Arizona Workforce Connection One-Stops
H-1B Grants
Maricopa Community Colleges Center for Workforce
Development
Arizona State Job Training Program
Information Technology Tax Credit
Phoenix Information Technology Training Grant
Source: Morrison Institute for Public Policy, 2003.
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
! Evolving into employer-driven, market-ready players in
economic growth, instead of only sources of social support
and second chances
As shown in Table 1, the publicly supported workforce development
system is intended to benefit individuals, businesses, and, indirectly,
Arizona.
A Broader View
Workforce development also refers to the overarching process of
creating and improving the state’s talent pool to serve businesses’
present and future needs. Or in the words of one advocate:
workforce development is where education, employment, and
economic development come together. For those who see the topic
from this broader perspective, the phrase workforce development
encompasses all three of the Heldrich Center’s clusters. From that
viewpoint, activities are best understood in five interrelated
categories: Pipeline, Renewal, Incumbent, Retraining, and
Entrepreneurial (See Table 2). These five categories acknowledge
that workforce development has both to do with the ages and
stages of careers and how they apply to jobs in one sector or
another. Workforce development provides the skills, access, and
options primarily to support “growth” jobs in targeted high-wage
sectors, but also those throughout the economy. Even if every
worker does not have a strictly “high tech” job, each needs the
support and capacity to adjust to technological and economic
changes.
Proof Positive for
Workforce and
Economic Change
Nanotechnology, microscale medicine,
virtual manufacturing — these rapidly
expanding frontiers are proof positive
that Arizona is competing in an era in
which great wealth comes to those who
innovate, especially in science and
technology. Arizona’s “traditional
industries” will certainly continue to
matter to the state’s economy, but if we
want to win our fair share of “new
economy” prosperity and high-wage
jobs, our economic portfolio must be
reconfigured. It needs to feature brave
new knowledge industries.a
High-technology activities accounted
for 22% of employment, 25% of value
added (gross state product), and 28%
of earnings in Maricopa County in 2001.
In Pima County, high tech accounted for
19% of employment, 23% of value
added and 27% of earnings.” However,
in other counties, such activity is not
more than 6% of employment or 8%
of earnings.b
a. Seeds of Prosperity: Public Investment in Science
and Technology Research, Morrison Institute for
Public Policy, April 2003.
b. High Technology Activities in Arizona, ASU Center for
Business Research, November 2003.
Workforce Development Can be
Understood as Five Categories of Activity
Category Description
Pipeline Education, training, and services at public and
private schools, colleges, and universities — the
P-20* “pipeline”
Renewal Education, training, and services for those who
face skills and employment challenges for any
reason
Incumbent Education, training, and services for current
employees
Retraining Education, training, and services for those who
need or want to upgrade skills or change careers
Entrepreneurial Education, training, and services to support
business formation and growth
*P-20 = education from preschool through graduate school.
Source: Morrison Institute for Public Policy, 2003.
Table 2.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Workforce Investment Act Now Front and Center
The most prominent part of the publicly supported cluster now is
the Workforce Investment Act (WIA). Passed in 1998 and up for
reauthorization now, WIA is the latest federal statute intended to
help states and communities match the labor force’s skills and
capacities with economic realities. With an emphasis on leadership
from governors, the landmark legislation took steps to coordinate a
myriad of programs and create systems from far-flung efforts. The
statute began to bring together public-sector “partners” to create
One-Stop Career Centers to serve all workers, and looked, even more
than previous statutes, to businesses to identify skills in demand
and make coordination and collaboration a reality.
Although Arizona began developing One-Stop centers through
demonstration funding in the mid-1990s, formal implementation of
the law’s components dates to July 2000. As developed by the
Interagency Working Team with input from across the state,
Arizona’s WIA structure put the Governor’s Council on Workforce
Workforce Investment Act
Partner Programs
WIA — Adults
WIA — Youth
WIA — Dislocated Workers
Job Corps
Migrant and Seasonal Farmworkers
Programs
Native American Programs
Veterans’ Programs
Wagner-Peyser Employment Security
Programs
Adult Education and Literacy
Carl Perkins Act Post-Secondary Career
and Technical Education
Vocational Rehabilitation
Welfare to Work
Older Workers Programs
HUD Employment and Training
Community Services Block Grant
Employment and Training
Source: Arizona’s Economy, Fall 2003.
8.6
10.9
29.2
32.2
41.5
45.2
48.5
51.0
66.1
87.9
92.2
139.6
156.3
178.8
213.0
272.0
297.6
319.6
108.9
35.7
Professional & Business Services
State & Local Government
Retail Trade
Healthcare & Social Assistance
Construction
Food Services & Drinking Places
Durable Goods Manufacturing
Finance & Insurance
Other Services
Wholesale Trade
Transportation & Warehousing
Federal Government
Information
Real Estate, Rental, & Leasing
Accommodation
Educational Services
Non-Durable Goods Manufacturing
Arts, Entertainment, & Recreation
Utilities
Natural Resources & Mining
0 50 100 150 200 250 300 350
Figure 3.
More Arizona Employees Work in Professional and Business
Services Than In Any Other Sector
Arizona Employees on Nonagricultural Payrolls, July 2003 (000’s)
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
Policy in charge of advising the governor on all workforce activities
and coordinating programs to create the desired streamlined
system. In addition, the state’s governing structure set the Arizona
Department of Commerce to managing workforce policy and staffing
the council, while the Arizona Department of Economic Security
headed fiscal administration and operations and the Arizona
Department of Education managed the new list of eligible training
providers, in addition to its traditional career and technical
education programs and adult education. Arizona approved 16
Local Workforce Investment Boards to continue to develop the
fledgling One-Stop concept. These boards, whose territories mirrored
the Job Training Partnership Act’s service delivery areas, accepted
the challenge of creating comprehensive local workforce systems
capable of meeting businesses’ needs for workers and coordinating
with the state’s separate economic development system. The
required five-year state plan, which focused on supporting Arizona’s
economic development strategy of industry “clusters,” sought to put
into practice ideas that had circulated for some time.
Workforce Movements Prior to WIA
The Workforce Investment Act came about as Arizona was already
revamping workforce development to support the goals and plans
made during the community-based process of the Arizona Strategic
Plan for Economic Development (later the Governor’s Strategic Plan
for Economic Development). Arizona’s Workforce Development
System Comprehensive Plan acknowledged the consensus that the
time was right to streamline workforce programs and put them in
the service of economic development. The document noted the
“overriding purpose” to enhance “the economic growth and
competitiveness of the state’s industry clusters and develop the
capacity of the foundations which support them.” The
comprehensive plan voiced support for old employment and training
programs — which served their purposes well in the past — while
transitioning to and creating new workforce investment systems —
which will serve new purposes in the future.3 Arizona’s
comprehensive plan, and hence the state’s WIA plan, called for:
! Enhancing existing and/or developing new training
programs and service delivery systems to better meet
industry’s short, intermediate, and long-term needs
! Forecasting labor market demand by Governor’s Strategic
Plan for Economic Development clusters and foundations
at state and regional/county levels
! Streamlining access to and/or administration of workforce
development programs
! Providing a self-sustaining system of governance,
management, and oversight for Arizona’s Workforce
Development System
Workforce Investment Act
Principles
Streamlined services
Individual empowerment
Universal access
Increased accountability
A strengthened role for workforce
boards and the private sector
Enhanced state and local flexibility
Improved youth programs
Source: Rockefeller Institute of Government
Common Perceptions of Roles of
Major Arizona Workforce Agencies
Education serves students.
Economic Security serves people.
Commerce serves business.
This shorthand view is incomplete,
however. Each agency deals with
employers and residents in a variety of
ways. They are responding to different
programs with different purposes.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Not a New Interest in Workforce — Economic Development
Some readers will see this information as history that need not be
revisited. However, the background reflects Arizona’s long-standing,
state-level interest in workforce and economic development
coordination. In fact, even as far back as the late 1970s, the
Governor’s Manpower Office, which administered the Governor’s
Comprehensive Employment and Training Act set-aside fund from
the Office of Economic Planning and Development (the precursor of
the Arizona Department of Commerce), had begun to act on the
notion that workforce programs should support economic priorities.
Again in 1993, then-Governor Fife Symington looked to update
workforce development in line with the trends of the day by creating
a new office for workforce leadership. With members from business,
state agencies, the Arizona Legislature, and economic development,
education, and employment and training organizations, an
Implementation Task Force laid out its best suggestions for a
workforce system that would see programs and services as “the
means to the end” of helping “customers,” whether workers or
employers. This office evolved into the Office of Workforce
Development in the Arizona Department of Commerce. Most
recently, the Governor’s Council on Workforce Policy restated its
desire for a strong, integrated workforce system capable of serving
the state’s economic interests. (See Table 3.)
But A New Context of Urgency
While interest in joining workforce and economic development is not
new, the current context for the combination of the two fields is
different. In even the short time since WIA implementation, much
has happened in Arizona and across the country that affects
attitudes towards the workforce and the economy. Most important,
the economy has become ever-more global, skill-driven, and
competitive. In addition, recession and budget shortfalls have
rocked the state and refocused attention on: 1) making the best
use of increasingly scarce resources; 2) coping with reemployment
as well as addressing skill shortages; 3) keeping and creating high-wage
jobs; and 4) diversifying the economy. In 2000, Arizona voters
approved a monumental investment in the state’s economic future.
Proceeds from Proposition 301, which authorized an increase in the
state sales tax for 20 years, will be spent on improving K-12
education, fostering science and technology research at public
universities, and augmenting community colleges’ already
substantial capacity for workforce training. A once-per-decade study
of Arizona’s economy showed an uneven, often lagging economy
across the state, while high-profile public and private biotech
investments were launched with great fanfare. Against the
backdrop of a combination of biotech energy, bad economic news,
and unflattering comparisons between Arizona and other states,
leaders in a variety of local and state institutions reenergized the
sense of possibility for Arizona, encouraging new calls for early
Community Colleges for
Arizona’s Workforce
In Arizona, community colleges serve
as a major source of workforce
information, advice, and education for
employers and workers. For example,
the Maricopa district’s Center for
Workforce Development uses the ten
colleges and two skill centers to meet
job-training needs throughout metro
Phoenix. Today’s effort is rooted in the
district’s Center for Occupational
Education, established in 1980. Over
time the colleges developed
agreements with numerous large and
small firms to train and certify
prospective employees. The colleges
are the largest provider of such
training in Arizona, and one of the
largest in the country. Deeply involved
in Arizona Workforce Connection, the
colleges’ Center for Workforce
Development is focusing efforts on five
widely-recognized priority industry
clusters that will drive regional
economic development: aerospace;
bioindustry; advanced business and
financial services; high-tech; and
software. Additional priority areas
identified by the center are public
safety; plastics; transportation,
warehousing and logistics; and tourism.
The Center for Workforce Development
also spearheaded preparation of the
recent Arizona Biosciences Workforce
Strategy.
Source: Center for Workforce Development.
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
Arizona Has a Long-standing, Interest in Enhancing
Workforce Programs and Connecting to Economic Development
Purposes and Goals from Three Documents, 1993-2001
Creating the Governor’s Office of
Employment and Training
August 1993
Arizona Strategic Five-Year State
Workforce Investment Plan
July 2000
Governor’s Council on Workforce Policy
Resolution 24
November 2001
“With the decision to create the
Governor’s Office of Employment and
Training, Arizona joins the ranks of
states that are committed to workforce
development now and in the future.”
“Arizona’s vision over the next five years is
to prepare quality workers whose skills
match those in demand created as a result
of economic development.”
“The passing of GCWP resolution #24 by
the Governor of Arizona marks our
State’s conscious decision to enter a
phase of stabilization and continuous
improvement. This phase will be marked
with: efforts to align planning with key
business processes and outcome
measures, organizational self-assessment,
customer service
improvements, and better and faster
access to services, real or virtual.”
! Concentrate on streamlining and
integrating programs and services
! Enhancing existing and/or developing
new training programs and service
delivery systems to better meet
industry’s short, intermediate, and
long-term needs
! Requirements include the
integrated system:
• Be customer-driven
• Measure results and be
accountable throughout
! Focus on programs and a “system”
only as they serve Arizona’s citizens
and employers
! Forecasting labor market demand by
Governor’s Strategic Plan for Economic
Development clusters and foundations
at state and regional/county levels
! Simplify governance and operation of
programs
! Be state-based with local input on
design and delivery
! Emphasize the continuous
improvement of the state’s
workforce
! Streamlining access to and/or
administration of workforce
development programs
! [Promote] Private sector leadership
and direct involvement at all levels
! [Have] Continuous improvement
! Understand Arizona’s current and
future employment and training
needs
! Providing a self-sustaining system of
governance, management, and
oversight for Arizona’s Workforce
Development System
! [Insist] Training and education be
market-driven
! [Supply] Funding levels
commensurate with need
Source: Creating the Governor’s Office of Employment and Training: Report of the Implementation Task Force, August 1993. Arizona Strategic Five-Year State
Workforce Investment Plan July 2000. Arizona Workforce Connection Draft.
Table 3.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Arizona Department
of Economic Security
Employment Administration
$ Alien Employment Certification Program
$ Trade Adjustment Assistance
$ Veterans Services Program
$ Wagner-Peyser Job Service Program
$ Work Opportunity Tax Credit/Welfare to
Work Tax Credit Program
$ Unemployment Insurance
$ Jobs
$ Food Stamp Employment and Training
Program
$ WIA Title I-B
Rehabilitation Services Administration
$ Employment Support Services Program
$ Supported Employment Program
$ Vocational Rehabilitation Services
Community Services Administration
$ Community Action Programs
$ Refugee Resettlement Program
Aging and Adult Administration
$ Senior Community Service Employment
Research Administration
$ Population Statistics Unit
$ Labor Market Information
Arizona Department
of Education
Career and Technical Education
$ Carl Perkins Title 1 C Assistance to the
States
$ Carl Perkins Title 2 C Tech Prep Education
$ Secondary Vocational Education Program
Division of Adult Education
$ Adult Education Program C WIA
Arizona Department
of Commerce
Office of Workforce Development
$ Arizona's Apprenticeship System
$ Arizona Job Training Program
$ Information Technology Tax Credit
$ Workforce Policy
$ Pre-Apprenticeship Training Program
Figure 4.
The Arizona Department of Economic Security Today
Administers the Lion’s Share of Workforce Programs
Location of State and Federal Public Employment-related and Workforce Programs
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
childhood education, decreasing the number of school drop outs,
and enhancing “P-20” learning. Workforce development, of course,
fits right in. At once, optimism about economic momentum and fear
about a lack of competitiveness have heightened awareness of the
inter-relationships of education, employment, and economic
development and the urgency to do more and do it better.
The Reauthorization Variable
As with the passage of WIA, Arizona is once more considering its
workforce governance while Washington debates legislation that
could affect the flow and requirements of federal funds. Major
pieces of employment-related legislation, including Workforce
Investment Act, Personal Responsibility and Work Opportunity Act
(the source of funds for public assistance recipients), and the Carl
D. Perkins Vocational and Technical Education Act (aka Perkins III)
are now in the process of being reauthorized. The U.S. House and
Senate have each passed a WIA bill. Congressional observers expect
a conference committee to take up the legislation early in 2004.
The important messages thus far from the deliberations include:
continuing gubernatorial leadership; ongoing business input with
the possibility of even greater private-sector influence; stronger
emphasis on matching workforce development to economic
development; increased opportunities for “out-of-school” youth and
incumbent workers; and renewed commitment to the collaborative
actions needed to strengthen the One-Stop network. Arguments
about the extent of required “consolidation” and youth guidelines
appear to be sticking points now.
For the Perkins legislation, the traditional roles of secondary and
post-secondary career and vocational education could be changed
substantially by two directions: 1) To connect Perkins more to No
Child Left Behind; and 2) To integrate services better with business.
Action is expected on Perkins and the Personal Responsibility and
Work Opportunity Act in 2004.
Without question, the reauthorization of WIA and Perkins will force
all states to change their systems and redirect their efforts. The
question is how Arizona can turn this uncertain time to its
advantage. One answer is by seeing how the state can use such
efforts as the U.S. Department fo Labors’ High-Growth Job Training
Initiative, as a vehicle for trying new ideas. While negotiating
reauthorization, the U.S. Department of Labor also has created a
High-Growth Job Training Initiative and other business-oriented
programs to provide examples of “market-driven” systems. Together,
these processes and programs will push change and provide
opportunities for pilot programs for Arizona. One long-time
Congressional tracker noted that today’s uncertainty makes this
period conducive to experimentation and consideration of new
state-level initiatives and structures.
U.S. Department of Labor
Initiatives Target
High-Growth Industries
Business and workforce officials agree
that the demands of the 21st century
economy require a market-driven
approach to workforce development.
This means focusing on job and skill
needs articulated by executives in high-growth
fields. Nationally the U.S.
Department of Labor’s Employment and
Training Administration (ETA) provides
an example with its High-Growth Job
Training Initiative. This strategic effort
to improve the public workforce
system’s responsiveness is building
collaborations among employers,
industry leaders, business associations,
educators, trainers, community colleges,
and the entire workforce development
system. The networks will then create
models that demonstrate how a
demand-driven workforce system can
better serve both businesses and
workers. Targeted industries include:
Automotive, Biotechnology, Health Care,
Information Technology, and Geospatial.
Source: U.S. Department of Labor.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Considering its many players, plans, and connections, workforce
development is nothing if not dynamic. In fact, much has taken
place just within this project’s short span. For example:
! The Governor’s Council on Workforce Policy reorganized its
committee structure to further its vision of “a quality
workforce system through the Arizona Workforce
Connection.” The committees include a Technology Steering
Committee, plus others for Performance Measures,
Workforce System Building, Economic Development,
Apprenticeship, and Education.
! The Virtual One Stop system, the online Arizona Workforce
Connections portal for One-Stop program operations, is
operating and tracking WIA client services. By July 2004,
the “labor exchange” information currently held in the Job
Service system will be integrated into Arizona���s Virtual One
Stop. Under discussion and development over the past five
years, Virtual One Stop began in Pima County. In operation
in Maricopa County as well, the package is viewed as the
way to make the promise of technology a reality.
! The Arizona Workforce Informer, a web site which
centralizes information, analysis, and data from a wide
variety of research programs on the economy and
employers, made its debut. The site is part of a multi-state
collaborative development effort.
! The administrator of the Arizona Department of Economic
Security’s Division of Employment and Rehabilitation
Services announced the consolidation of the Jobs
(employment service for public assistance recipients)
Administration, the Employment Security Administration,
and the Workforce Development Administration into one
Employment Administration. The first priority for this
substantial change is to bring Jobs programs and Job
Service together. With this reorganization, the department
has made “co-location” in One-Stop Centers a priority. “We
want to be with One-Stop partners whenever we can,”
according to the DES administrator. But how that comes
about will be determined “town by town, county by county
as opportunities come up.” 4
! Arizona met all of the 17 federal performance standards
under WIA for the current reporting year. Worries had been
OUTLOOKS AND ISSUES
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
high about the possibility of a second consecutive year of
not measuring up, and, thus, a reduction in future funds.
! New streamlined reporting and planning rules have been
proposed for the Arizona Job Training Program in response
to businesses’ concerns and suggestions. While the
guidelines are under the required administrative review,
expanded marketing and communication efforts will get
underway, particularly in the state’s rural counties.
! The Arizona Bioscience Workforce Strategy was announced
with the proposition that “Arizona has an opportunity to
establish a next generation workforce development
approach that aligns, in a more fundamental and
sustainable manner, the demand for bioscience workers
across the spectrum of educational and training
providers.”5
! Arizona’s Career and Technical Education system has been
reviewing its future as well. Results from a study of how to
improve that delivery system were presented in summer
2003. Recommendations encouraged action on vision,
mission, and highlighting industry-determined skill and
learning competencies that span grade levels into
postsecondary education.
! The Arizona Department of Commerce hired economic
developers for “job-poor” rural areas of the state. This
action may provide more focus to the workforce
development in these areas.
However, as evident throughout this project, much more remains to
be done to fulfill the promise of employment-related programs and
the expectation that economic and workforce development truly are,
as one economic development administrator said they should be,
“two sides of the same coin.” Themes drawn from interviews,
observations, and materials are presented below under the
headings Leadership and Participation and Puzzles and Realities.
Opinions touch on organization as well as aspects of service delivery
that governance will have to address.
Leadership and Participation
Who’s Who at the State Level?
In recent years, the Arizona Department of Economic Security (DES),
the Arizona Department of Commerce, and the Arizona Department of
Education have been assigned various responsibilities in workforce
development that were intended to “take advantage of what the
agencies do best.” However, the roles and responsibilities of each and
the reasons behind the structure are unclear to many who work in or
contribute their time to workforce programs. Economic Security’s and
Commerce’s activities were described as seeming “duplicative,” while
Education’s influence appears to have faded. Commerce has more
Training As An Economic
Development Incentive in Arizona
Aerospace, optics, plastics, and
software – these and other Arizona
industries are demanding skilled
employees, and the Arizona Job
Training Program is helping supply
them. Created as an economic
development incentive by the Arizona
Legislature in 1993, the program
grants money to qualified businesses to
help train new and existing employees.
The funds must be matched and spread
among large and small businesses in
urban and rural areas. Today a small
portion of the unemployment tax
generates the training dollars.
Thus, Mesa Airlines receives $620,000
– and contributes its own $356,000 –
to create 580 net new jobs and train
148 existing employees. Cascade Tissue
Group in Kingman gets $282,857 – and
adds $94,286 – to create 60 new jobs.
The program awarded 67 grants in
fiscal year 2003, totaling more than
$12 million, to train a projected 20,654
new and existing workers. New
employees averaged $32,175 a year,
while existing employees earned an
average of $43,953.
Source: Arizona Department of Commerce.
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
capacity for innovation and effectiveness, in part because of less
bureaucracy and greater private sector connection, but is hampered by
less experience with program administration. DES, in contrast, has the
background, but too little drive for the changes needed to create a
workforce system that is responsive to the private sector and economic
development. The coordination of the three agencies, reportedly, has
not met expectations among numerous workforce professionals and
business volunteers. Moreover, confidence is low in the structure ever
working well, because of long-held ways of working and being “stuck in
the past.” As more than one observer noted, when the Job Training
Partnership Act was replaced by the Workforce Investment Act, nothing
changed but the name.
Limited State-Level Leadership
WIA should be as important at the state level as it is at the local
level, according to one long-time administrator. Limited state-level
leadership — in addition to lack of visibility and clarity for programs
— ranked as one of the most important issues in Arizona. For
example, DES has depended on interim Workforce Development
Administration directors for some time, while Commerce has
expected staff new to workforce development to master a
complicated field quickly. In addition, concerns were voiced about
on-again, off-again state-local relationships, limited communication
among the three agencies, lost opportunities to generate new
funds, and, most important, a lack of vision.
Overall, as reported by those interviewed, the leadership structure
at the state level has not yet overcome the traditional fragmentation
of publicly supported workforce programs. Strong state leadership in
such areas as visibility, equity, access, resources, return on
investment measures, incentives, technical assistance, and
economic benchmarks would be welcomed, according to some, as
would assistance with career ladders in targeted clusters and job
forecasting. Initiatives for workforce credentials and upgrading, in
the minds of some, could be the first steps in building career
ladders and should start at the state level. In addition, it was
suggested that state job training funds and other sources be used
to forge a new type of partnership between the state and local
levels. “Strings” on dollars would be acceptable, if each piece of
funding were tied to a solid high-wage economy plan and local
flexibility.
The final concern for state leadership stems from the fact that
employment does not stand on its own. Rather, the capacity for
many Arizonans to obtain and retain sustaining work has as much
to do with such items as health care and affordable housing as it
does with skills. Workforce development, to be effective in the minds
of many, is only part of a commitment to quality communities with
strong support systems for employment and economic development.
More than one community-based workforce professional reiterated
Southern Arizona Institute for
Advanced Technology
Some Arizona communities are already
responding to the need for new
approaches to training workers in high-tech
skills. One such response is the
Southern Arizona Institute of Advanced
Technology (SAIAT), formed in 2000 by
Pima County, the City of Tucson, Pima
Community College, the Pima Workforce
Investment Board, and local industry
leaders. SAIAT’s High Tech High Wage
Program seeks to deliver fast-track,
customized workforce training to both
new workers and incumbent
employees. Participants are mostly
working in entry-level occupations such
as call centers, fast-food, and retail.
The aim is to upgrade their skills so
they can enter higher-paying jobs,
either at their current firms or
elsewhere. The two-year program,
taught by adjunct instructors at Pima
Community College, follows curricula
customized to meet needs identified by
major area employers. Instruction is
offered in basic skill areas such as
math, reading, electronics, optics, and
IT as well as in corporate training
subjects such as leadership,
management, team building and
customer service. Of the first group of
graduates from the Electronics
Program, all are employed at an
average wage of $17 per hour.
Source: Southern Arizona Institute of Advanced
Technology.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
16
Morrison Institute for Public Policy
that public programs have a role in ensuring opportunity for those
who have not fared well in the economy. Remedial academics and
basic skills, such as computer training, are the greatest needs.
Everyone wants training to be ahead of the next economic wave,
but many in the population have too many basic needs to ignore.
The desire for “equity, development, and inclusiveness” through
“social support, training, and P-20 learning,” thus, should be a
priority to many advocates.
Some Frustration with Engaging and
Serving Business, But Positive Signs Also
The perceived difficulty of engaging the private sector in using One-Stop
services and other programs has been as frustrating for committed
business people as it has been for workforce professionals. But, since
workforce development is often a greater concern in good economic
times, the current poor economic climate was just one explanation
given for the reportedly lackluster levels of business involvement. Other
reasons varied from lack of time to being turned off by a still-daunting
bureaucracy or the lingering perception that only unskilled and, thus
undesirable, workers make use of government programs. A simple lack
of awareness, made worse by multiple programs marketing various
services, was cited as the most critical problem.
For example, several human resources professionals from urban
businesses noted how little they and their peers know about
programs that could be of benefit to their firms. When every
enterprise is seeking to economize, free or low-cost help in the
human resources areas for which businesses usually pay dearly
prompted several to wonder why they had not heard about them.
One predicted substantial interest in her industry “if it is quality.”
Also, because Arizona has not measured and communicated
program quality and the benefits of participation, some speculated
that business leaders and entrepreneurs fail to see that
involvement will help their companies. In addition, the private sector
often is still asked to do “duplicative” tasks to work with the system.
One example was registering jobs with Job Service. However, this
should be alleviated when the Virtual One Stop system incorporates
labor exchange information. That change is expected in July 2004.
Interviewees suggested several ways of increasing business
involvement in services and governance, including:
! Training staff members and reorganizing structures to have
single contacts from whom businesses can learn about all
programs’ opportunities
! Communication of a clear-cut vision and system that is
readily understandable to “outsiders”
! Developing a One-Stop center just for businesses instead of
operating services for them out of the existing offices
National Research Shares Three
Models of Employer Services
The U.S. General Accounting Office
released the results of research with
14 model one-stop centers. All of these
centers used at least one of three
methods to engage employers –
dedicating specialized staff to work
with employers or industries, working
with employers through intermediaries
such as chambers of commerce or
economic development entities, or
tailoring services to meet specific
employers’ needs. In these centers,
expert staff served as a primary point
of contact for all the employers’ needs.
Several centers assigned staff to
industry clusters. Partnerships with
other economic development groups
facilitated industry-specific training
programs, networking events, and
matching of job seekers with openings.
Source: One-Stop Innovations: Leading Charge
Under the One-Stop System, 2002.
DES Employer Advisory
Committee Offers
More Business Connections
A broad Employer Advisory Committee
helps keep the Arizona Department of
Economic Security abreast of
conditions and changes. The EAC
supports employer initiatives and plans
job fairs, including the state’s largest at
the Arizona Fairgrounds each March.
Source: Arizona Department of Economic Security
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
! Looking to ArizonaBusinessLINC.com, which identifies sales
opportunities for businesses and centralizes information,
as a model for marketing workforce assistance
! Increasing the practice of assigning workforce staff to
specific industries or clusters
! Creating a single source of information about high
technology and knowledge worker sectors and jobs
Another facet of concern was the type and level of business
involvement in governance. In short, not all businesses have the
same knowledge of and clout in the economy. If those with the most
influence on and strongest ties to economic development pass on or
are unaware of opportunities for participation, programs may simply
continue their traditional activities.
On the positive side, numerous businesses reported that workforce
development services had been of great value to them and their
time contributing to workforce development had been well spent. A
number of business representatives interviewed swore by the
assistance they had received through Rapid Response, One-Stops,
State Job Training, and other programs and wondered why other
firms had not taken advantage of the many opportunities. However,
as one business leader noted, each aspect of his multi-faceted
involvement in workforce and cluster development must be good for
his firm. If the benefits fade, his commitment will too. Arizona’s
state-funded training and information technology tax credit enjoyed
positive reputations among users and administrators. The training
dollars, however, could be more effective with changes to the
planning requirements, while firms suggested that there should be
more certainty to obtaining the tax credit. Currently, as it was
described, firms must apply for the credit at the beginning of the
year and may or may not receive it based on demand.
Local Governance Has Strengths
Morrison Institute surveyed selected Arizona local workforce
investment board members to get their views on how well their
boards are doing. Some of the questions asked were identical or
very similar to those asked in a national survey of 170 board
members two years ago by the National Association of Workforce
Boards.6 For the Arizona survey, local workforce directors were
asked to provide e-mail addresses for Board members in their
areas. The survey was sent only to those boards for which addresses
were received. However, this included approximately 150 people
from throughout Arizona.
Sixty-nine people responded to the survey. Respondents came from
various parts of the state, rural and urban. A majority of the
respondents were in their fifties. Fifty-five percent of the
respondents were male, 45% were female and approximately three-
Engagement is Business Related
The fact that business was generally
more engaged when boards were
pursuing sectoral and related
strategies with potentially greater
value suggests that what businesses
are asked to do and how valuable their
contribution is perceived to be may be
more important than how many of
them are asked to serve as members.
Source: The Workforce Investment Act in Eight
States, 2003.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
quarters were white, non-Hispanic. Forty percent had post-graduate
or professional degrees. About a third had been a board member
for more than three years, and 21 had served on their board’s
executive committee. Thirty-one respondents, or 45% of the total,
represented the business community. The remainder came from
education, economic development, labor, One-Stop partner,
community-based, and other organizations.
Respondents on the whole appeared to be enthusiastic about their
board work. Most (68%) indicated they initially agreed to serve on their
workforce board, at least in part, because they felt strongly about
workforce issues. Most (76%) indicated their willingness to spend
another term on the board, and 64% felt board meetings were very
interesting.
Respondents also were generally upbeat about the activities of their
boards. Most of them saw:
! helping unemployed residents find jobs
! training people young people for local jobs
! assisting residents to get better jobs
! improving the overall quality of the local workforce
! integrating workforce and economic development efforts
! assisting specific employers with their workforce needs
! developing the One-Stop centers
as important or very important to their boards. Among these
objectives, respondents generally viewed their boards as giving
particularly strong emphasis to the goal of training young people for
local jobs. Assisting specific employers with their workforce needs —
often considered important in an absolute sense — was seen by the
respondents to be of less relative importance to their boards than the
other objectives.
When it came to rating their board’s understanding of workforce
development needs, 57% of respondents gave their board a high or
very high rating, a percentage much higher than the 33% in the
national study. Ratings on this question were higher from members of
the more urban boards than the more rural ones.
Arizona boards generally also did better than those in the national
study when it came to the question: How well would you say the
board’s mission and activities contribute to meeting the workforce
development needs of your community? Fifty-seven percent of Arizona
respondents gave their boards high rankings, compared to 43%
nationally. Board rankings on this dimension, however, varied widely
from an 80% ranking in one rural area to 46% in an urban area. As in
the national study, 60% of the Arizona board members agreed or
strongly agreed with the statement that their board was making a
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
unique contribution, solving issues that no other group in the
community could address well. Once again, though, there was a wide
range between boards, with rural boards receiving the highest
rankings.
Compared to the national study, Arizona respondents saw less of a
problem in recruiting private sector representatives to serve on the
board. Only 29% in this survey felt it was difficult to recruit such people,
while 52% felt that way in the national study. On this issue, however,
there was considerable difference of opinion between business
members and non-business members, the former feeling the problem
of recruitment was much more difficult.
Respondents here, like those in the national study, overwhelmingly
agreed that their board lacked visibility in the community. Half of the
respondents also indicated that their boards suffered from inadequate
resources and funding. Complaints about boards acting too slowly and
having low interest from members may be related to size since
respondents from the larger boards tended to be more critical. Some
respondents gave their boards high marks for understanding workforce
issues, but not for effective problem solving or making a unique
contribution.
Breaking down the responses between business and non-business
members, business members emerged as more enthusiastic and
supportive of their boards on a wide variety of questions — more likely
to see them as focusing on a number of important workforce issues
and more likely to give them higher rankings in regard to achievement.
Business people, however, were also more likely to see weaknesses in
regard to such matters as the lack of resources, slow-acting boards,
and the impact of local political influences. They too, seemed more
aware of the difficulties business people had when it came to
volunteering their services. As noted above, they were far more likely
than non-business members to see recruiting business people for
board service as a major problem.
The survey underscores the strong possibilities for substantial business
leadership while pointing out changes needed for greater efficiency
and knowledge on a range of workforce issues.
Looking Beyond Basic Performance Measures
Arizona’s top-line workforce issues are readily identified: generally
low skill and education levels. Initiatives of various types are
underway to address Arizona’s needs, but, in terms of workforce
programs, many noted that Arizona has not gone far enough to
identify measurable goals for workforce improvement in addition to
workforce program performance. A number of those interviewed
expressed interest in ways to determine Arizona’s overall progress
and “return on investment” from publicly supported workforce
programs. Others simply sought to ensure that programs could be
Arizona Career Pathways from
Classroom to Jobs
Career Pathways is the structure used to
deliver Career and Technical Education in
Arizona’s high schools. The career pathway
concept is a familiar one with 16 career
clusters designated by the U.S. Department of
Education’s Division of Adult Education and
U.S. Department of Labor. Arizona’s 30 career
and technical education programs are linked
with some national competencies and
performance elements. Labor market
projections determine Arizona’s programs and
schools choose which ones to implement
based on local business needs, staff
availability, student interest, and community
college opportunities. ADE funds school
programs based on student enrollment. HB
2001, currently under consideration, seeks to
focus more on placement and outcomes.
Arizona’s 30 career programs are broadly
aligned to Arizona academic standards.
Fifteeen programs thus far have been
explicitly “cross-walked” with ADE’s content
standards for math, reading and writing.
Work on the other 15 is in process. A recent
strategic planning report recommended
changes for career education in Arizona,
including creating a vision and mission. The
State Board of Education will consider this
early in 2004. Then implementation of
technical professional assessments for each
program will begin.
Source: Arizona Department of Education.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
20
Morrison Institute for Public Policy
proven, or not, to be addressing the state’s workforce ills and
supporting its economic progress. In other words, are programs
helping to raise education or income levels? Are workers able to
certify their skills to employers? Is Arizona using its programs to
move steadily toward leadership in a knowledge-based economy?
Are workers gaining necessary measures and skills?
Arizona has followed the mandates of federal workforce programs
rather than devising its own course and then applying federal
Business and Non-Business Representatives Have Different
Outlooks on the Board’s Contributions and Member Recruitment
Business
Members
Other
Members
Agree the board well understands the workforce development needs of the community 65% 51%
Agree the board contributes much to meeting the workforce needs of the community 61% 51%
Agree the board making a unique contribution 74% 46%
Agree the board’s goals are clear 65% 41%
Agree the board has inadequate resources and funding 45% 14%
Agree the board moves too slowly in getting things done 35% 19%
Agree that local politics interferes with the work of the board 38% 27%
Agree it is difficult or very difficult to recruit business members for the board 45% 14%
Are willing to serve another term on the board 68% 81%
Source: Morrison Institute for Public Policy, 2003.
Table 5.
Arizona Board Members Tend To Be More Positive Than Those Nationally
Arizona National
Agree the board well understands the workforce development needs of the community 59% 33%
Agree the board contributes much to meeting the workforce needs of the community 57% 43%
Agree the board making a unique contribution 60% 60%
Agree it is difficult or very difficult to recruit business members for the board 29% 52%
Agree the board is well known in the community 12% 14%
Agree the board has inadequate resources and funding 50% ND
Source: Morrison Institute for Public Policy, 2003.
Table 4.
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
National and Arizona
Findings Agree: Businesses
Want Responsiveness and
Central Contacts
A recent national survey by Workforce
Innovations Networks (WINs) showed
how One-Stop centers are viewed by
employers and what can be done to
improve employer services. The
research with mostly small businesses
found that employers’ awareness is low
and that those who use the services
are frequently dissatisfied.
Businesses want:
Responsive staff that treat
employers as customers and develop
long-term relationships with them
Greater customization of services
Increased worker training and
greater flexibility in using public
funds for training
Assistance with identification of
skills requirements for available
jobs
Job retention services
Information about tax benefits for
companies and their employees
Help redesigning human resources
practices to improve recruitment,
retention, and skills development
Linkages between economic
development and workforce
development
Employer engagement in strategic
decision-making of workforce
development system
Source: Reauthorizing the Workforce Investment
Act: What Employers Say about Workforce
Development, 2003.
resources. Given today’s economic challenges and the desire for
high-wage jobs, many of those interviewed favored a sharper focus
on Arizona’s needs and how program governance can ensure they
are met.
Puzzles and Realities
Workforce Investment Areas Are Not Synonymous With Economic Regions
Findings from Arizona’s Statewide Economic Study began to be
released in 2002. Primarily an “economic base” study that is
expected to guide training choices and programs also, the data and
analyses have much to say about workforce development —
especially that, while it is viewed as a priority, many local leaders
know little about it. However, one item especially relates to
leadership and participation. In the Public Outreach and Plan
Integration phase, Elliott D. Pollack and Company and Practical
Solutions led meetings across the state to discuss the findings and
proposed 11 economic regions. These sometimes follow county or
municipal boundaries, but not always. In contrast, Arizona’s
114,006 square miles have been divided into 16 workforce areas,
which follow county lines except for the Nineteen Tribal Nations and
the city of Phoenix. Many suggested having workforce and economic
regions share boundaries.
Significant State Totals May Not Mean a Lot of Money Locally
Workforce programs total more than $265 million in state and
federal funds. However, the significant totals may not translate to
easy use for state initiatives or adequate resources at the local level.
In addition, not all of the funds can be used to develop the One-Stop
system. At the same time, state-level policies have not emphasized
allowing local boards control over more than WIA funds. This is a
problem for both the state and local areas, according to some. As one
workforce professional put it, “One-Stops are expensive to run.”
Because of the cost, federal WIA funds are not enough, but other
program dollars have not been required. In addition, because boards
at the state and local levels reportedly have focused almost entirely
on WIA dollars, the possibilities of integration have not yet been
realized. To make matters worse, many programs and agencies have
been affected by the state’s own budget crisis.
Many suggested public and private dollars from many sources
should augment the workforce system. For these commentators,
real financial stability and innovation will come from requiring that
all One-Stop partners share in the cost of operations and
augmenting public funds with other dollars. A good first step would
be to require cost sharing among partners and to model that
through the use of state-level “memoranda of understanding,”
rather than solving the same issue in each of 16 areas.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
The Double Edge of Long Experience
While the Workforce Investment Act is the umbrella for employment
programs now, it is just one of a long line of federal statutes. Many
of Arizona’s workforce professionals, local officials, and education
leaders know the history of employment programs well because a
sizeable number of them have worked in the field for many years.
They recall the ups and downs of CETA and the shift to business
leadership under the Job Training Partnership Act. Many remember
clearly how the Private Industry Councils that oversaw JTPA locally
(with the state-level Arizona Employment and Training Council)
devoted their attention to training in a human services context. In
Arizona, long experience provides valuable continuity, but according
to some, it also creates a barrier to innovation. On the other hand,
a history of false starts at the state level has bred deep skepticism
among some in the field.
PAGE
SPRINGERVILLE
CLIFTON
DOUGLAS
NORTH RIVER
SOUTH RIVER
PIMA
COCONINO
MOHAVE
NAVAJO APACHE
GILA
YUMA
YAVAPAI
MARICOPA
COCHISE
LA PAZ
GRAHAM
GREENLEE
SANTA CRUZ
MINING
PLATEAU
MOUNTAIN
YAVAPAI
CANYON
SOUTHERN
SOUTHEAST
GLOBE
PEORIA
TUCSON
KINGMAN
SAFFORD
NOGALES
SHOW LOW
SIERRA VISTA
MOHAVE VALLEY
01020 40 60 80
Miles
NAVAJO/HOPI
YUMA
PARKER
CENTRAL
FLAGSTAFF
COTTONWOOD
PINAL
GILBERT
PHOENIX
Source: Arizona Department of Economic Security &
Arizona Workforce Connection Directory
Figure 5.
Workforce Development Must Cope
With Arizona’s Wide-Open Spaces
Comprehensive One-Stop Locations and Proposed Economic Regions
Tucson-Pima
Workforce Innovation
“She knows everything that is going
on.” This assertion seemed absolutely
true for the PimaWorks Rapid Response
manager who was already working a
substantial lay off in Tucson that had
just hit the papers. Rapid Response
describes the package of
reemployment, training, and support
services available through the One-
Stop centers. The Tucson program has
developed a reputation for integrity
and quality services that have made
many employers believers in the
program.
In fact, workforce development in the
area has worked hard to:
Bring a private sector perspective to
the public sector
Pursue outside funding for such
efforts as those for the Plastics
cluster, H1 B training, and Youth
Opportunities
Expand business linkages to connect
employers from designated sectors
in weekly events
Streamline forms, processes, and
structures
Apply Pima County’s Continuous
Quality Improvement program
Combine many functions across
adult and youth services
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Morrison Institute for Public Policy
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
This is not to say that much has not changed notably in recent years.
In places large and small, various entities have made substantial
progress toward the realization of the One-Stop concept and:
! manage multiple programs well
! deal creatively with people, businesses, and community
issues
! bring notable assistance to high tech and other employers
! provide strong models in a variety of areas
! combine efforts with economic development professionals
and industry associations
The Potentially Grand Scale of Workforce and Economic Development
In terms of usage, workforce programs traditionally have been like
Head Start — both serve only a fraction of those eligible. Now, the
concept of “universal” service, development of online services, and
the changing nature of work have increased the scale at which
leaders and staff members must think and operate. Obviously not
every Arizona worker or student will participate in a workforce
program at the same time. But the substantial potential demand
underscores the need for sufficient resources and a coherent,
cohesive system of programs and services. Consider:
! Arizona’s civilian labor force includes 2.6 million residents.
! Approximately 124,000 Arizonans are unemployed.
! Job Service counts more than 100,000 registrants.
! Unemployment insurance processed more than 250,000
initial and continuing claims for benefits in 2002.7
Remade into Phoenix
Workforce Connection
What began as a Job Service office is
now a Phoenix Workforce Connection
facility. Located in the heart of
Maryvale, an area struggling to
reinvent itself, the Phoenix Workforce
Connection delivers on the One-Stop
concept in an assistance-minded
atmosphere. With a well-stocked
resource center, Job Service, WIA,
Veterans, and Older Workers, and a
lobby phone line connected directly to
UI. Staff greet the mostly job-seeker
users with a friendly “how can we help
you.” This office also is a hub of
activity for employers. The only
drawback is that the JOBS office is
down the street. Of course, developing
the welcoming space and the
cooperative relationships has taken
time and leadership from staff
members who have spent much of their
careers in stand-alone employment
programs. Managed by a Phoenix
Workforce Connection employee who
has many more plans for the future,
this office works for people and
businesses.
WIA Allocations to Local Areas Range from a Lot of Dollars to Few
FY 2003/FY 2004 WIA Allocations
Workforce Areas WIA Allocations Workforce Areas WIA Allocations
Apache County $95,065 Navajo County $369,207
Cochise County $975,683 Navajo Nation $3,082,213
Coconino County $836,850 City of Phoenix $11,078,393
Gila/Pinal Counties $1,694,279 Pima County $5,273,568
Graham County $261,152 Santa Cruz County $986,412
Greenlee County $132,337 Yavapai County $579,625
Maricopa County $7,714,657 Yuma County $8,766,596
Mohave/LaPaz Counties $954,318 Tribal $2,355,750
Source: Governor’s Council on Workforce Policy, 2003.
Table 6.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
24
Morrison Institute for Public Policy
Economic development also operates on a substantial scale in the
state. For example, as listed in the Local Government Directory,
scores of cities and towns have economic development directors.
The Arizona Association for Economic Development, which bills itself
as “the leading advocate for responsible economic development for
all of Arizona”8 counts more than 400 members across the state.
Public-private partnerships, such as the Greater Phoenix Economic
Council, for economic development have become the norm for
regional action. The 2002 Arizona Statewide Economic Study —
Public Involvement referred to “85 economic development-related
documents, including 29 general plans, 49 general economic
development documents (such as Focused Future and economic
development strategies) and 7 Native American economic
development documents.”9
Workforce Development is Economic Development:
Arizona’s Hollow Mantra
Except for the state’s job training program, economic development and
workforce development at the state level mostly have functioned
independently of one another. Images of workforce programs as mere
social services remain current in some quarters, as do perceptions in
others of economic development as a process of unwarranted
giveaways. In addition, at other levels, understudy of each field is
limitedAn informal survey of economic development professionals by
workforce professionals, reported in December 2003 at the Governor’s
Council on Workforce Policy, confirmed the outlook that economic
development is largely unaware of what the workforce development
system is and what it has to
offer. The state’s first plan for
the Workforce Investment Act
envisioned the integration of
workforce and economic
development, but its
implementation failed to bridge
the gap between the two. As an
experienced advocate reported,
the forward-looking document
simply sat on the shelf.
The story at the local level,
though, has sometimes been
different. As one local economic
development professional noted,
bringing workforce and economic
development together is one of
the “best ways to ensure that
community residents get the first
shot at new jobs,” especially
those in targeted fields. To his
One Workforce
Connection for Employers
Employers have said again and again
that they want one contact. Programs
matter far less to them than results
and benefits. Considering that Phoenix
and Maricopa County both operate
One-Stop centers and seek to work
with employers, this could be a problem
in one labor market that crosses the
local government boundaries. A team
approach has prevented difficulties
however. Working together behind the
scenes, the Phoenix and Maricopa
Workforce Connections and
representatives from Job Service in the
Arizona Department of Economic
Security determine how best to fill an
employer’s needs. Although the team
has not worked extensively as yet with
formal economic development
initiatives, their one-team, one-service
experience shows great promise.
Table 7.
Different Approaches to Similar Issues
Are Evident in Economic and Workforce Development
Economic Development Workforce Development
Focused on aiding collective prosperity
through high-wage industries and quality
of place
Focused on aiding individual prosperity
through jobs
Serving business directly with workforce
development as a specialized service
Serving people first
Targeted industries All industries
High visibility Low visibility
Leaders in such issues as arts and culture,
center cities, and education reform
because of the connection to the economy
Less involved in community initiatives
beyond workforce
Source: Morrison Institute for Public Policy, 2003.
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
way of thinking, economic development and workforce development
both should be seen as matchmakers, and have been in his locale.
Together, the fields “have the ear of industry” as well as the capacity to
find and prepare people in the community. As bright as the possibilities
are, though, making the different cultures compatible remains a
necessary step. (See Table 7.)
The issue of the hollow mantra to many stemmed not just from
different roots and cultures, but from the way in which the missions
and functions of Arizona’s agencies differ. (See Table 8.)
Table 8.
Missions and Functions of Arizona
Agencies With Major Workforce Interests
Arizona Department of Commerce
Mission Through leadership and collaborative partnerships, our mission
is to create vibrant communities and a globally competitive
Arizona economy.
Function ! Economic development
! Workforce policy
! Economic research and analysis
! Community development
! Business-based worker training
Arizona Department of Economic Security
Mission The Arizona Department of Economic Security promotes the
safety, well-being, and self-sufficiency of children, adults, and
families.
Function ! Economic and demographic research and analysis
! Regulatory oversight in some areas
! Income support
! Human services
! Matching people and jobs
! Fiscal management, program monitoring, and technical
assistance
! Local workforce staff training and policy updates
Arizona Department of Education
Mission To ensure academic excellence for all students.
Function ! Academic learning for youth
! Learning standards
! Workforce preparation and skills training
! Literacy training and adult education
! English language training
Source: Morrison Institute for Public Policy, 2003.
Figure 6.
More Than 6 out of 10
Arizonans Are of Working Age
Arizona Population by Age Group
5 to 15 years
17%
Under 5 years
8%
25 to 64 years
49%
16 to 24 years
13%
65 and above
13%
Source: Census 2000
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Still Four Arizonas: Urban, Rural, Border, and Reservation
Studies commissioned by the Arizona Department of Commerce
show the economies of the state’s urban, rural, border, and
reservation regions still to be worlds apart. Substantial economic
differences lie at the heart of concerns over workforce allocations,
incentives, technical assistance, and programs and the fact that
some local areas have great programs tied to economic
development, while others have trouble operating.
Perception of Low Priority for a High-Impact Issue
“Workforce development has been a stepchild in Arizona.�� Many of
those interviewed echoed this dramatic statement and voiced
frustration with the “lip service” given to an issue that is critical to
economic competitiveness. The programs and expertise available to
improve the labor force reportedly have long been undervalued
despite workforce and economic trends, such as:
! disappearance of low-skill jobs
! findings of statewide economic studies
! concerns about shortfalls in education and skills
! changes in state demographics
! an aging workforce
! projected labor shortages
Dissatisfaction with Data
Information about jobs, firms, and skills is fundamental to workforce
programs, but widespread dissatisfaction was evident with Arizona’s
Table 9.
Four Regions Make Up Arizona and
Each is Different Economically
Region Population Labor Force
Unemployment
Rate
Arizona 5,469,750 2,493,894 5.8%
Urban Total 4,186,795 2,010,717 5.1%
Rural Total 952,315 361,888 6.3%
Border Total 330,640 121,289 15.8%
Reservations Total 118,448 33,254 18.2%
Source: U.S. Census Bureau and Arizona Department of Economic Security.
Substantial Numbers for
Workforce Development
More than 33,000 Arizona students
drop out of school each year.
Career and Technical Education
counted 126,000 students in 2002.
In Fall 2002 community colleges
enrolled 192,090. The state’s public
universities tallied 113,869 students
with approximately one-quarter
graduate students and three-quarters
undergraduate.
As many as 170,000 Arizonans
enrolled in private career-training
programs in 2002.
Approximately 32,000 public
assistance recipients participate in
Jobs, Arizona’s major welfare-to-work
program anually.
More than 20,000 new or incumbent
workers participated in programs
supported by the Arizona Job
Training Program in the past year.
Sources: Arizona Department for Economic
Security, Arizona Department of Education,
Arizona Department of Commerce, Arizona.
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
traditional labor market research capacity. As a result, the desire to
“train for the jobs of the future” and be “proactive” about training is
easily frustrated. This sentiment came out as well in the Statewide
Economic Study and other reports. To compensate, localities have
moved to fill the gaps. For example, Yuma funded a local labor force
survey. Maricopa Community Colleges, Phoenix Workforce
Connection, and Maricopa Workforce Connection contracted with
ERISS for labor market surveys and consumer-friendly presentation
of occupational demand data. Surveys of tech-related firms by the
Southern Arizona Technology Council and the University of Arizona
Economic Development office are providing more information.
In addition, several of those interviewed noted that Arizona knows
too little about its workforce and employers because of the policies
and practices of long-term programs. Plus a lack of human and
financial resources also has hamstrung research programs at a time
when timely information is needed for effective, innovative
operations. For example, projects to mine unemployment insurance
data have been started, but they move too slowly without sufficient
support.
The Arizona Workforce Informer web site recently introduced by the
Arizona Department of Economic Security’s Research Administration
will make state and local-level labor and business information more
accessible and useable. But too few dollars and people are
available to those with good ideas for understanding Arizona’s
situation and the experience to develop sufficient capacity to do so.
Arizona is part of a multi-state consortium for the Workforce
Informer, but the debut of the web site surprised many who had
been looking to the Virtual One Stop to be the gateway to
employment and workforce information. While the perceived
duplication can be mitigated, the new program struck many as
another instance of poor communication and coordination.
Another source of data dissatisfaction is the reportedly outdated
system of performance tracking from the Arizona Department of
Economic Security’s Workforce Development Administration. Doubts
about accuracy, slowness, and secrecy — plus the significant
number of recordkeeping requirements — frustrated administrators.
A Communication Gap in the Face of Substantial Interest
With WIA, “we’re not on our feet yet.” This outlook related to what is
perceived as a lack of communication between the state and local
bodies involved in workforce development. But that was not the only
communication gap. With so many audiences for workforce and
economic development, the number of groups already, or wanting to
be, involved is diverse and substantial. For example, the Governor’s
Council on Innovation and Technology has a workforce committee,
as does the Arizona Technology Council. A legislative committee is
Business Invests in
Training — But Less for
Low-wage Workers
Business and industry provide
approximately half of work-related
training courses taken by adults.
Technical/vocational schools,
community colleges, and business/
industry associations, and consultants
are the top providers if companies go
outside for assistance. Unfortunately
training opportunities are not evenly
distributed in the workforce. Lower-skilled,
less-educated workers receive
less workplace training despite the fact
that they may have the greatest need
for it.
Companies that do focus on providing
equal training to low-wage workers
usually realize bottom-line benefits
such as better employee retention,
improved customer satisfaction, and
increased operation efficiency. Medium
to large firms, the health care industry,
family-owned, or privately held
companies, and nonprofit organizations
are most likely to provide training for
low-wage workers. These
organizations are also more likely to
take advantage of government-sponsored
training programs. The
lowest-wage workers most often need
training in basic skills, English,
computer/IT, problem-solving, and
interpersonal relations.
Source: Workplace Education for Low-Wage
Workers, Upjohn Institute, 2003.
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
Table 10.
Prominent or Potential Players in Workforce Development in Arizona Are Numerous
Players Current Participation Highlights
Arizona Department of Economic Security WIA operations, administration of unemployment insurance,
veterans programs, JOBs, and labor market information
Arizona Department of Commerce Workforce policy, Council administration, economic
development, economic information
Arizona Department of Education Career and Technical Education and WIA eligible training
providers list
Maricopa Community Colleges Center for Workforce
Development
Customized training for high-demand and emerging industries
Community colleges statewide Occupational training in traditional and customized formats
Southern Arizona Institute for Advanced Technology Customized training for high tech and other firms
Arizona Industrial Commission Manages workers compensation and other labor regulatory
programs
Arizona Association for Economic Development Represents economic developers statewide
Has a standing workforce development committee
Arizona Business & Education Coalition Linking business and education leaders for quality
enhancement of school quality
WESTMARC Economic and community development for 15 communities in
western Maricopa County
Greater Phoenix Leadership Business leadership in specific issues
Greater Phoenix Economic Council Business attraction partnership for metro Phoenix
Greater Tucson Economic Council Business attraction partnership for Tucson region
Greater Flagstaff Economic Council Business attraction partnership for Flagstaff area
Greater Yuma Economic Council Business attraction partnership for Yuma area
Arizona Workforce Development Association Statewide organization of professionals who work in workforce
development programs
Arizona Chamber of Commerce Statewide business and economic development organization
Northern Arizona Council of Governments & other COGs Program operators in workforce and economic development
Commerce and Economic Development Commission Planning and policy for economic development and economic
information
Governor’s Council on Innovation & Technology Economic development based on science and technology
Governor’s Council on Workforce Policy Advisory body on workforce policy and system
Arizona Technology Council & Southern Arizona Technology
Council
Business organizations to promote technology firms and tech-based
economic development
Plastics Cluster & others Promotion and expansion of cluster firms
Arizona Community Action Association Promotion of career development
Private, nonprofit community organizations & faith-based
organizations
Provision of employment services; Advocacy for affordable
housing, child care, health care, and other employment-related
issues
Source: Morrison Institute for Public Policy, 2003.
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Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
now studying change to career and technical education. An Arizona
Chamber of Commerce committee reportedly is exploring ways to
make economic and employment data more accessible while other
business groups, such as Greater Phoenix Leadership, are in the
forefront of educational initiatives. This interest level stands in
contrast to the perceived low visibility of workforce programs and the
outlook that many undervalue them. (See Table 10.)
Another aspect of the communication gap was brought out by
several business representatives. No one questions K-12’s
importance in the state’s economy or workforce development.
However, to the frustration of these entrepreneurs, K-12 often
seems to be the only workforce-related topic discussed. This
tendency hurts workforce development programs because it limits
interest among those who are “looking for results” now. For
employers and entrepreneurs trying to solve immediate problems, a
K-12 focus signals that workforce programs have nothing to offer
them. This situation also highlights the fact that most know little
about the broad range of workforce programs and the ages and
stages of careers.
Stuck With the Status Quo
Taken as a whole, the state’s workforce development system can be
described as stuck in transition. Arizona, at times, has been on the
leading edge of integrating workforce and economic development.
However, the promise and possibilities of those times generally have
gone unfulfilled while other states have moved ahead.
Unfortunately, more of the same will not allow Arizona to finish the
creation of a workforce system that puts public programs to work as
needed to prosper in the knowledge economy. If workforce
development is to be the powerful economic tool it needs to be,
changes in governance will have to address:
! frustration with what should be compared to what is
· ! shortcomings of state-level structures
! hunger for innovation
Other states have been in Arizona’s position and done much to get
moving again. As shown in the next section, many ideas from across
the U.S. apply to various Arizona issues.
Take Note of Retraining
In the 1970s, when General Motors laid
off workers, it was temporary. Today,
companies are more likely to eliminate
the jobs altogether through automation
or outsourcing. A study by the Federal
Reserve Bank of New York found that
three-quarters of all jobs today are in
industries that have seen some version
of structural change in the last few
years, vs. 50 percent in the 1980s. What
does this mean for cities? Time to
invest in community colleges. Reason:
When they do return to work, many
adult workers will do so in entirely new
lines of employment. Manufacturing
has cut 645,000 jobs in the past year,
but health care is up by 248,000 jobs.
You don’t go from sales clerk to
pharmacist assistant without
considerable retraining. Stands to
reason, then, that the cities that will
rebound the soonest will be those with
the best adult-education systems.
— Otis White, October 2003.
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Morrison Institute for Public Policy
Table 11.
Summary of Arizona’s Current Workforce System Issues
Issue Impact
Frustration With What Should Be Compared To What Is
Workforce Development is Economic
Development: Arizona’s Hollow Mantra
! Workforce development will be more
marginalized
! Resources underutilized
! Prosperity suffers
Low Priority for a High-Impact Issue ! Workforce not a player in economic growth
! Frustration among state and local players
! Less collaborative project development
Frustration Engaging Business ! Limits system and services, especially in
emerging areas
! Limits resource development
! Reduces emphasis on workforce programs
as economic development
! Businesses involved will burn out
Hunger for Innovation
Lack of Vision and Goals Beyond Basic
Performance Measures
! Arizona needs organizing principles as first
step to revamped governance
Shortcomings of State-Level Structure
Who’s Who at the State Level? ! Reduces outcomes for people, businesses,
and governments
! Time spent relearning instead of innovating
Limited State-Level Leadership ! Opportunities missed
! Continuous improvement not a reality
! Arizona serves federal programs, not the
other way around
Workforce Regions Not Synonymous with
Economic Regions
! Workforce areas may be left out of
economic development plans
! Multiple sets of boundaries create artificial
barriers
Dissatisfaction with Data ! Employment trends and opportunities go
untapped
! Lack of information becomes a barrier
Source: Morrison Institute for Public Policy, 2003.
Keys to Employer Services
The Corporation for a Skilled
Workforce and Leaders in Excellence
conducted a study in 2002 among 20
centers and 12 boards. The study found
that unified account representatives
and contact management systems are
vital. Account representatives serve as
a single point of contact for business
clients and manage all employer
services for the one-stop. Contact
management systems enable account
representatives to access and update
all relevant information about business
clients in a single, comprehensive
database. Other factors include:
Having a “never say no” attitude to
employers
Unifying employer services and
measuring employer satisfaction
with the entire bundle
Concentrating resources on the
industries with the greatest impact
Using fee-supported services to
complement free services
Involving business clients in service
design and customizing help at
every opportunity
Source: Benchmarking One-Stop Centers, 2002.
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Leaders and workforce professionals wrestled for years with whether
workforce development should be organized around services for
people or assistance to employers and economic development.
Today’s economic environment, of course, has laid that debate to
rest and put a premium on structures that work like the economy
does. The most far-reaching workforce development efforts
concentrate on where public investments will make the biggest
contribution to agreed-upon goals. In addition, they draw on
innovations and are highly communicative, productive, flexible,
collaborative, and adaptable.
So, what specific governance ideas can Arizona garner from other
states that will help to remake the state’s system in the economy’s
image? While states have faced similar issues, their governance
responses have been quite individual, and numerous states
continue to look for assistance with governance and other issues. In
fact, researchers have noted that no one governance model has
emerged as “the” way. University of Texas labor economist
Christopher King, who has written extensively about state
structures, notes six current approaches to updating workforce
efforts, including:
! Enhanced Coordination
Institutional Restructuring
Consumer-Driven Strategies
Blended Strategies
Service-Based Strategies
Other Strategies
— Encouraging or requiring
greater service coordination (as seen in the 1993 Texas
legislation)
! — Eliminating agencies and
consolidating programs (Florida, Oregon, Texas, and Utah)
! — Empowering customers,
enhancing market forces, labor market information
(Michigan)
! — Restructured agencies,
consolidating programs, mandating greater coordination
(Florida)
! — More seamless, functionally
oriented services; web-based, self-directed services (Utah)
! — More pro-active, creative use of such
options “work-flex” provisions and waivers (Texas)
Arizona long ago chose “enhanced coordination.” Across the
country, though, states have implemented a combination of ideas or
GOVERNANCE IDEAS ACROSS THE U.S.
WIA must be viewed as an attempt to
bring about what has long been viewed
as desirable: the centralization of
information and other reemployment
services to promote employment.
– Stephen Woodbury, W. E. Upjohn
Institute for Employment Research,
2000
Can’t Stand Still: Issues and Ideas for Workforce Governance in Arizona
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Morrison Institute for Public Policy
started with coordination and evolved over time. The
experimentation spotlights three questions at the heart of
governance:
! What is best for workforce and economic development
customers?
! How can programs contribute to employer services and
complement other efforts?
! What principles and structures will support high-quality
local services that meet employer and community needs
and work hand-in-hand with the entire state’s economic
priorities?
Approximately two-thirds of states answered these questions by
moving U.S. Department of Labor programs under one roof. Others
combined Labor programs with adult education, career and
technical education, and community colleges. Others developed new
agencies. A variety of states have put local workforce boards in
charge of employment funds for welfare recipients and programs
besides the WIA. Others have started by working to create common
cultures among various types of practitioners. Integrating dollars
has been done less often, however, even when one a
Arizona State Government Publications
