Job seekers wait in line to enter a job fair in San Jose. Manufacturers are… (Justin Sullivan, Getty…)
Reporting from Sacramento — Local employment centers will have to start spending more of the $500 million in annual federal funding on vocational training — and less on helping the jobless write resumes, practice interviewing and search for work.
Gov. Jerry Brown signed a bill Thursday that requires local workplace investment boards to divert at least a quarter of the money for their job centers to programs that teach the jobless new skills for the changing economy.
That minimum would rise to 30% in five years. The statewide average now spent on retraining is about 20%.
Brown rejected last-ditch pleas by local government groups and operators of jobless centers to veto the legislation. They said the bill restricts their focus on getting the unemployed in jobs quickly and that it could lead to layoffs at the centers.
The legislation, backed both by labor unions and manufacturers, comes as President Obama barnstorms the country in support of a proposed jobs program that includes retraining.
"We've got to do a better job of retraining workers so that they … are able to go back to a community college, maybe take a short six-month course or a one-year course that trains them on the kinds of skills that are going to be needed for jobs that are actually hiring," Obama said at a town hall meeting in Mountain View, Calif., last week.
Some local workforce investment boards in California devote less than 10% of their federal funds to training, less than they spend on their own operating costs, according to a study the state Senate Office of Research released in May based on 2008 data, the most recent available.
"If we only spend 5% to 10% of these funds on training, it will be hard to achieve long-term employment for out-of-work citizens," said Gino DiCaro, a spokesman for the California Manufacturers Assn. trade group.
The mismatch of skills between what a worker has and what an employer needs often boils down to a lack of basic reading and mathematics proficiency, DiCaro said. The problem is evident in such mechanical trades as steel making and the aerospace fastener industries.
A change in priorities was needed because "manufacturers are telling us they actually have jobs, but the workforce is not trained for the jobs," said Sen. Mark DeSaulnier (D-Concord), author of the bill, SB734.
DeSaulnier said his bill was in line with the practices of other states that have been hit with mass layoffs and slumping housing markets. Florida and Michigan, for instance, require that half of workforce investment board money go to training, Illinois mandates 40%, and Wisconsin 35%, according to the Senate Office of Research.
The other states "have a sense of urgency to get people counseling and on a career track," the senator said.
Angie Wei, lobbyist for the California Labor Federation, agreed, saying, "We've got to do things differently, to make investments in people to get them into work they can make a career of."
Opponents, including the California State Assn. of Counties, Los Angeles County, the Urban Counties Caucus and the Regional Council of Rural Counties, disagreed over the change in strategy.
Officials at the 49 investment boards statewide argued that it's more important to get the unemployed into jobs now by focusing their centers more on resume writing, counseling, Internet searching and other tasks that would help get their clients back to work.
"The demand for services in most areas is immediate employment," said Jennifer Mitchell, policy director of the California Workforce Assn., a lobbyist for the 49 boards.
Many jobless people, Mitchell said, can't afford to live on unemployment insurance benefits while spending months learning new skills.
Workforce board officials also warned that future reductions in federal support combined with a shift in current funding to job training could lead them to pull money from normal operating costs to fund the programs, which in turn could force them to lay off staff or even close some of the state's 222 job centers.
Jan Vogel, director of the South Bay Workforce Investment Board, which operates a job center in Hawthorne, predicted the new law would "hurt local control and cost jobs, not create jobs," and questioned whether the proposed spending changes violate federal law.
The law could cost the state $6.8 million to $10 million a year in increased unemployment insurance expenses, he said, citing a study by Adrian R. Fleissig, a Cal State Fullerton economics professor.
One big cost of putting people into training programs, opponents said, is the extended unemployment benefits they would receive, an expense that could be avoided by quickly connecting them with employers.
However, the California Employment Development Department, which runs the state's unemployment insurance program, said the financial impact from increased funding for training would be "negligible," and it said it could not verify the methodology of the Fullerton analysis.
Illinois officials noted that their switch to more training did not cause a reduction in other job center services, and that training gave clients "a significant employment and earnings advantage."
Not all of California's investment boards opposed the bill.
"Unemployment in the city of Los Angeles is 14.5%. We've lost millions of jobs," said Greg Irish, executive director of the city's board. "Right now, we've got to get people ready when jobs come back."