Local Impacts of Economic Change: Strategic Responsiveness of State and Local Workforce Development Systems to Economic Decline
Elsie Harper-Anderson, College of Architecture and Urban Planning, University of Michigan
Professor Harper-Anderson received funding from CLOSUP's Small Grants Program (FY 2004) for this research project on Local Impacts of Economic Change: Strategic Responsiveness of State and Local Workforce Development Systems to Economic Decline.
The economic boom period of the mid-1990's and subsequent bust of 2001 determined new winners and losers in urban labor markets. Opportunities created by the once expanding economy produced a new assortment of corporate professionals as well as a significant class of service workers. Unfortunately, the turn of the century brought a sudden halt to the new job machine. Effects of the gains as well as the subsequent losses were regionally concentrated in areas with the most economic activity. Consequently, state and local workforce development efforts gained heightened importance as former CEOs and highly educated technological gurus found themselves out of work and either jockeying for positions or seeking new training along side common folk. Workforce development systems were now facing clients and demands for services foreign to the traditional institution of workforce development.
While some Workforce Investment Boards met the challenge with well thought-out, customized service delivery and design strategies, others continued to implement standardized programs which were largely disconnected from the specificities of their local economies and workforces. The ability of workforce development systems to respond effectively to this latest economic shock was intimately embedded in willingness and ability to integrate workforce development systems with economic development efforts and further, to customize strategic design based on the unique features of a given region's economy.
This study examines efforts to link together and customize local workforce and economic development programs. The approach taken is to weave together information from multiple data sources. The investigation utilizes a combination of quantitative and qualitative methods in a multi-pronged approach. Key components of the research design include: the compilation of background regional economic data to assess the impact of national economic decline (2000-2003) on each local workforce development area; a case study design to provide detailed information on customization and partnership decisions at the state and local levels, in a variety of local economic and policy contexts; and a quantitative analysis to understand the influence of regional economic factors, individual characteristics, and policy decisions on the ability of workforce agencies to manage unemployment and meet Workforce Investment Act (WIA) annual performance requirements.
As the U.S. enters a new phase of reauthorized WIA legislation, states and local workforce investment areas are charged with redesigning, or at least updating, their delivery systems. This research underscores the importance of customized as compared to standard delivery systems as the critical ingredient to offsetting the impacts of economic change.
Preliminary findings from this research project include the following:
- Local Workforce Investment Areas in Michigan vary tremendously in terms of the structure of workforce systems and levels of customization.
- The research supports the hypothesis that customization was critical to combating the economic decline that the country was experiencing during the late research period (2000-2003). This was particularly true in Michigan where the manufacturing sector was more impacted than other industries.
- The connection between workforce development and economic development has grown stronger over the last several years and is very prevalent in Michigan.
- In part, the closer relationship is due to many workforce organizations taking on roles which have historically been reserved for economic development professionals.
- Official performance measurement standards used by the Department of Labor do not match very well with local goals and are not reliable indicators of success for Local Workforce Investment Areas.
- Areas where workforce development and economic development are integrated seem to be more effective at achieving their performance goals than those where more separated systems exist.
- However, there is no organized way of disseminating and sharing information on how to connect workforce development and economic development and hence many organizations are reinventing the wheel as opposed to learning from the experiences of their colleagues.
- Several unique models of combining workforce development and economic development exist due to the need for customization based on preexisting institutions and relationships as well as the unique character of each local economy.
- A cluster-based approach with healthy competition tied to collaborative, complementary and innovative development work between firms, organizations and institutions appears to be one of the most prevalent common denominators among the various models of customization.