Existing law establishes the Labor and Workforce Development Agency overseen by the Secretary of Labor and Workforce Development and provides that the agency consists of, among other entities, the California Workforce Investment Board, the Employment Development Department, and the Employment Training Panel. The California Workforce Innovation and Opportunity Act establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of Californias workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. That act requires the establishment of a local workforce development board in each local workforce development area of the state to, among other things, carry out analyses of the economic conditions in the local region.

This bill would enact the Removing Barriers to Employment Act, which would establish the Breaking Barriers to Employment Initiative within the Labor and Workforce Development Agency. The bill would require the initiative to be led by the Secretary of Labor and Workforce Development and authorizes the secretary to assign all or part of the administration of the initiative to one or more entities within the agencys oversight, or to authorize another state agency, under specified conditions, to administer a portion of the initiative. The bill would specify that the purpose of the initiative is to create a grant program to assist individuals who have multiple barriers to employment to receive the remedial education and work readiness skills that will help those individuals to successfully participate in training, apprenticeship, or employment opportunities that enhance skill development that will lead to self-sufficiency and economic stability, and would set forth the goals of the initiative. The bill would require the secretary to develop criteria for the selection of grant recipients, as specified, and would require the secretary, by January 1, 2018, and annually thereafter, to post a report on the agencys Internet Web site that provides a status report on the implementation of the initiative and aggregates information provided by grant recipients. The bill would authorize the secretary, when implementing the initiative, to fund a project that uses a model that was previously funded as a pilot project under certain programs if specified criteria are met. The bill would make the funding of the initiative subject to an appropriation by the Legislature for that purpose and would make implementation of the initiative contingent on the secretary notifying the Department of Finance that sufficient moneys have been appropriated.

Existing law establishes the Labor and Workforce Development Agency and provides that the agency consists of, among other entities, the California Workforce Investment Board, the Employment Development Department, and the Employment Training Panel. The California Workforce Innovation and Opportunity Act establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of Californias workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. That act requires the establishment of a local workforce development board in each local workforce development area of the state to, among other things, carry out analyses of the economic conditions in the local region.

This bill would enact the Removing Barriers to Employment Act, which would establish the Breaking Barriers to Employment Initiative within the Labor and Workforce Development Agency. The bill would require the initiative to be led by the Secretary of Labor and Workforce Development and authorizes the secretary to assign all or part of the administration of the initiative to one or more entities within the agencys oversight. oversight, or to authorize another state agency, under specified conditions, to administer a portion of the initiative. The bill would specify that the purpose of the initiative is to create a grant program to provide funds to workforce investment boards and community-based organizations working in partnership on proposals that assist individuals who have multiple barriers to employment to receive the remedial education and work readiness skills that will help those individuals to successfully participate in training, apprenticeship, or employment opportunities that will lead to self-sufficiency and economic stability. stability, and would set forth the goals of the initiative. The bill would require the secretary to develop criteria for the selection of grant recipients, as specified, and would require the secretary, by January 1, 2018, and annually thereafter, to post a report on the agencys Internet Web site that aggregates information provided by grant recipients. The bill would authorize the secretary, when implementing the initiative, to fund a project that uses a model that was previously funded as a pilot project under certain programs if specified criteria are met. The bill would make the funding of the initiative subject to an appropriation by the Legislature for that purpose and would make implementation of the initiative contingent on the secretary notifying the Department of Finance that sufficient moneys have been appropriated.

Existing law establishes the Labor and Workforce Development Agency and provides that the agency consists of, among other entities, the California Workforce Investment Board, the Employment Development Department, and the Employment Training Panel. The California Workforce Innovation and Opportunity Act establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of Californias workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. That act requires the establishment of a local workforce development board in each local workforce development area of the state to, among other things, carry out analyses of the economic conditions in the local region.

This bill would enact the Removing Barriers to Employment Act, which would require the California Workforce Investment Board to work with the Employment Development Department establish the Breaking Barriers to Employment Initiative within the Labor and Workforce Development Agency. The bill would require the initiative to be led by the Secretary of Labor and Workforce Development and authorizes the secretary to assign all or part of the administration of the initiative to one or more entities within the agencys oversight. The bill would specify that the purpose of the initiative is to create a grant program to provide funds to local workforce investment boards and community-based organizations working in partnership on proposals that will address the needs of persons assist individuals who have multiple barriers to employment, employment to prepare them for receive the remedial education and work readiness skills that will help those individuals to successfully participate in training, apprenticeship apprenticeship, or employment opportunities that will lead to self-sufficiency and economic stability. The bill would additionally appropriate an unspecified amount from an unspecified fund to the California Workforce Investment Board for administration of the grant program. The bill would require the secretary to develop criteria for the selection of grant recipients, as specified, and would require the secretary, by January 1, 2018, to post a report on the agencys Internet Web site that aggregates information provided by grant recipients. The bill would authorize the secretary, when implementing the initiative, to fund a project that uses a model that was previously funded as a pilot project under certain programs if specified criteria are met. The bill would make the funding of the initiative subject to an appropriation by the Legislature for that purpose and would make implementation of the initiative contingent on the secretary notifying the Department of Finance that sufficient moneys have been appropriated.

The California Workforce Innovation and Opportunity Act establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of Californias workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce.

This bill would enact the Removing Barriers to Employment Act, which would require the California Workforce Investment Board to work with the Employment Development Department to create a grant program to provide funds to local workforce investment boards and community-based organizations working in partnership on proposals that will address the needs of persons who have multiple barriers to employment, to prepare them for training, apprenticeship or employment opportunities that will lead to self-sufficiency and economic stability. The bill would additionally appropriate an unspecified amount from an unspecified fund to the California Workforce Investment Board for administration of the grant program.

Date of Hearing: May 11, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2642

Author:(Eduardo Garcia) – As Amended Ver:April 26, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill creates the Breaking Barriers to Employment Initiative, administered by the Secretary of Labor and Workforce Development (Secretary), to provide two year grants to community based organizations (CBOs), to assist individuals with barriers to employment, including providing access to remedial education and work readiness skills necessary to transition to career pathways. Specifically, this bill:

1. Authorizes the Secretary to assign all or part of the administration of the initiative to one or more entities within the agency’s oversight or another state entity, if the other state entity agrees and meets certain requirements.
2. Provides for a lead CBO to use their expertise in remedial education and workforce readiness, to collaborate with a lead workforce board to design a program that supports the transition of participants to career pathways and sector strategies.
3. Requires the Secretary, or his or her delegate, to consult with public and private stakeholders, including nonprofit CBOs, local WIBs, local governments, and other entities that serve individuals who face barriers to employment, to assist in development of the initiative.
4. Makes implementation of the initiative subject to an appropriation by the Legislature, and contingent upon the Secretary notifying the Department of Finance that sufficient moneys have been appropriated and deposited in the Consolidated Work Program Fund (CWPF). Specifies the Secretary is responsible for oversight and monitoring of any funds awarded for the initiative.
5. Requires the Secretary to develop criteria for the selection of grant recipients and for technical assistance to grantees. Specifies the grants are awarded on a competitive basis and evaluated based on the lead CBO's demonstrated capacity to serve the targeted populations. Grantees must specify objectives and measurements to measure success.
6. Eligible grant activities include: English language improvement training, basic skills and adult education, high school diploma and GED acquisition, skills and vocational training, work experience, on-the-job training, stipends for trainees, entrepreneurship training, earn-as-you-learn, industry certifications, preapprenticeship programs, mentoring, and other remedial education and work readiness skills.
7. Requires grant recipients to report to the Secretary annually on the use of funds, workforce training outcomes, and any other information required by the Secretary.
8. Requires the Secretary, by January 1, 2018, to annually post online a status report of the implementation of the initiative, information aggregated by grant recipients, and overall progress of the programs.

FISCAL EFFECT:

1. Administrative cost pressures to the California Workforce Investment Board (CWDB), in the range of $270,000, assuming a $10 million appropriation for this program. This bill is contingent upon a future appropriation from the Legislature. Given the goals and tasks outlined in the bill, assuming a $10 million appropriation seems reasonable. CWDB states they do not believe federal funds could be used for purposes of this initiative.
2. Administrative cost pressures to the Employment Development Department (EDD) of approximately $1.2 million to administer this new grant initiative. Approximately one-third of these costs would be associated with one-time costs to change to the CalJOBS system, since the grant evaluation and performance criteria outlined in the bill do not align with those established for WIOA.

Implementation of this bill is contingent upon sufficient money deposited in the Consolidated Work Program Fund (CWPF) for purposes of the initiative. According to EDD, the CWPF is designated to receive federal funds only and is not an appropriate destination for any state monies appropriated for (or private funds donated to) the Breaking Barriers to Employment Initiative.

COMMENTS:

1. Purpose. According to the sponsor, the California Workforce Association, between current openings and baby boomer retirements, California businesses expect to have 4.4 million middle skill job openings in the next decade. Disconnected populations and populations with barriers to employment comprise a large amount of California’s potential workforce. It is not just a social imperative that we help these people enter into the skilled workforce, but an economic imperative as well. This bill would develop a grant program for which Workforce Boards and Community-Based Organizations would join forces to apply for to break barriers to gainful employment and help fill business needs.
2. Background. The federal Workforce Innovation and Opportunity Act (WIOA) of 2014 reauthorized the nation’s employment, training, adult education, and vocational rehabilitation programs created under WIA. California's Unified Strategic Workforce Development Plan (State Plan) outlines a comprehensive four-year strategy for investing federal workforce training and employment service dollars in a manner that aligns and coordinates six core WIOA funded programs. One of the state goals is in the State Plan is to produce one million "middle-skill" industry valued and recognized postsecondary credentials. "Middle-skill" jobs are those that require more than a high school education but do not require a four-year degree. To meet this goal, the State Plan anticipates doubling the number of people enrolled in apprenticeship programs.

In 2012, there were 1.9 million unfilled middle skill jobs. This number is expected to grow as one-third of middle skill workers retire over the next ten years. According to the author, the competitive grant program created by this bill will build upon key objectives in the State Plan by assisting individuals to obtain the fundamental skills necessary to prepare for work in high priority industries, leverage multiple services to meet a worker's individual needs, and target people who face systemic barriers to employment.

Analysis Prepared by: Misty Feusahrens / APPR. / (916) 319-2081

Date of Hearing: April 19, 2019

ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY

Eduardo Garcia, Chair

ABPCA Bill Id:AB 2642 (

Author:Eduardo Garcia) – As Amended Ver:April 12, 2016

SUBJECT: Removing Barriers to Employment Act

SUMMARY: Establishes the Breaking Barriers to Employment Initiative for the purpose of assisting individuals who have multiple barriers to employment to receive the remedial education and work readiness skills that will help them to successfully participate in training, apprenticeship, or employment opportunities that will lead to self-sufficiency and economic stability. Specifically, this bill:

1. Finds and declares, among other things, the following:
   1. Although the California economy has demonstrated growth through overall lower unemployment and higher job growth, poverty is still an issue concentrated in many of our cities and among many of our citizens. The California Poverty Measure reported in 2015 that 78% of Californians in poverty live in families with at least one adult working, with 69% of those individuals working full time.
   2. With low wages and lack of job skills, this target population falls further behind and cannot escape poverty. There is a need for improved access and funding to provide “career pathway” services, particularly for the poor.
   3. Increased funding for services such as English language improvement training, basic skills and adult education, high school diploma and GED acquisition, skills training, work experience, on-the-job training, mentoring, case management, and more is needed to bridge the gap to gainful employment for these particularly vulnerable populations.
   4. Special emphasis is needed to make sure that programs reach those among us with the most difficult needs with the goal of preparing those persons for training, educational, apprenticeship or employment opportunities.
2. Establishes the Breaking Barriers Initiative within the Labor and Workforce Development Agency for the purpose assisting individuals who have multiple barriers to employment to receive the remedial education and work readiness skills that will help them to successfully participate in training, apprenticeship, or employment opportunities.
3. Authorizes the Secretary of Labor and Workforce Development (Secretary) to assign all or part of the administration of the initiative to one or more entities within the agency's oversight or outside the agency's jurisdiction with the agreement of the state entity to meeting the initiative's requirements.
4. Requires the Secretary to consult with public and private stakeholders, including nonprofit community-based organizations, workforce development boards, local governments, and other entities that serve individuals who face barriers to employment.
5. Provides that initiative funding will be appropriated through the budget act, as specified.
6. Requires the Secretary to develop criteria for the selection of grant recipients that provides for:
   1. Outreach and technical assistance to prospective applicants, especially in rural and small population areas;
   2. A competitive award process that addresses the need for a range of targeted populations and geographic locations to receive training opportunities;
   3. No less than 90% of the funds being used for direct services to the clients who face multiple barriers to employment; and
   4. The lead community-based organization to demonstrate their ability to successfully deliver previous programs to targeted populations they are proposing to serve using the grant funds.
7. Requires each application to have at least one lead workforce investment board and one lead community-based organization. An application that proposes to serve clients across one or more workforce investment areas is required to either:
   1. Document the existence of a current memorandum of understanding with each workforce board within the proposed service area; or
   2. Provide a letter of acknowledgment from each workforce board within the proposed service area.
8. Provides that non-lead workforce development boards within the service area are not required to have a role within the scope of the application and that obtaining the letter of acknowledgement is the responsibility of the lead workforce investment board.
9. Requires applicants to apply for funds to serve one or more targeted populations in one or more neighborhoods, local jurisdictions, regions, or statewide. Each application is required to explain how the proposed training program or service is designed to complement the work of, and integrate the individuals being served with, the workforce development boards within the proposed service area. Targeted populations include:
   1. Youths who are disconnected from the education system or employment;
   2. Women seeking training or education to move into nontraditional fields of employment;
   3. Workers displaced by the movement of an employer or those who are long-term unemployed;
   4. Unskilled or under-skilled, low-earning workers looking to advance into better-paying employment opportunities;
   5. Persons for whom English is not their primary language;
   6. Economically disadvantaged persons who face barriers to reaching training or apprenticeship opportunities for sustainable careers;
   7. CalWORKS participants;
   8. Persons who are incarcerated and soon to be released or formerly incarcerated;
   9. Armed services veterans who face barriers due to skills that are not applicable to employment, training, apprenticeship opportunities in the region in which they live, or because of mental health, health, or other barriers that serve as impediments to those opportunities;
   10. Native Americans or migrant, seasonal farmworkers; and
   11. People with developmental or other disabilities.
10. Requires each grant proposal to explain the specific purpose of the grant funds and define the general methodology and training methods proposed to be used.
11. Specifies that grant funding may be used for, but is not limited to, English language improvement training, basic skills and adult education, high school diploma and GED acquisition, skills training, work experience, on-the-job training, earn-as-you-learn progams, industry certifications, mentoring, and other remedial education and work readiness skills.
12. Requires the grant proposal to identify baseline criteria and metrics by which the overall success of the grant program can be evaluated. The proposal shall also explain the manner in which the progress of the individuals participating in the program will be monitored during the grant period.
13. Establishes the following goals for the initiative:
    1. Individuals who face multiple barriers to employment take measureable steps to remediate education and workforce readiness skills;
    2. Partnerships between community-based organizations and workforce development boards, community colleges, and other providers of quality education and training are demonstratively strengthened in ways that benefit their client's ability to continue to access services and establish career pathways; and
    3. Community-based organizations increase their capacity to achieve and measure results.
14. Requires grant proposals to include a pre-service education and training assessment, which will form the baseline for measuring program performance, consistent with the initiative goals. A prior assessment may be used if, in the determination of the Secretary, its results are accurate and appropriate for the grant proposal.
15. Specifies that measurements of success are to be based on the initiative goals, as relevant to the targeted population and baseline measurements set through the individual client assessment. These measurements may include, but are not limited to:
    1. The number of participants in the program who have completed a high school diploma or received a GED;
    2. The number of participants in the program who have completed a remedial education program;
    3. The number of participants in the program who have completed a work readiness program;
    4. The number of participants who have completed a certified drug treatment or mental health program;
    5. The number of participants who have matriculated to a pre-apprenticeship or apprenticeship program; and
    6. The number of participants who passed the Ability to Benefit test and enrolled into an Adult Education-Career Pathway program, as defined in USC section 484(d)(2)of the 1988 Amendment to the Higher Education Act.
16. Requires that key features of the grant be provided in a memorandum of understanding between the lead applicants and the agency, including, but not limited to, the purpose of the grant, expected outcomes, the oversight and monitoring process, and reporting requirements.
17. Requires that, as a condition of receiving funds, a grant recipient shall agree to provide information to the Secretary, as necessary to meet all reporting requirements.
18. Requires grant recipients to report, at least on an annual basis, and upon completion of the grant period regarding their use of funds, workforce training outcomes, and any other information required by the secretary.
19. Requires the Secretary to post a report on the agency's Internet Web site by January 1, 2018 that aggregates the information provided by the grant recipients, including, but not limited to, the overall success of the grant programs.
20. Authorizes the Secretary to fund a full-scale project that uses a model that was previously funded as a pilot project through the Workforce Accelerator, the Supervised Population Workforce Training Program, SlingShot, or other existing programs to the extent that the goals, measures, and metrics are sufficiently aligned with the initiative. These core components include:
    1. Serving the same client base;
    2. Addressing the needs of individuals who face multiple barriers to employment to receive remedial education and work readiness skills;
    3. Having an end goal of preparing those individuals for further training that results in apprenticeship or middle-skill employment opportunities; and
    4. Having applications jointly filed with one or more workforce investment boards and one or more community-based organizations serving as the lead.

EXISTING LAW establishes the Labor and Workforce Development Agency (Agency) for the purpose of addressing issues relating to California workers and their employers. The Agency is responsible for labor law enforcement, workforce development, and benefit payment and adjudication. The Agency works to combat the underground economy and help legitimate businesses and workers in California through a combination of enforcement and education activities. Departments and other state entities under the Agency include:

1. Agricultural Labor Relations Board;
2. The California Workforce Board;
3. The Employment Development Department, including the Employment and Employment-related Services Program and the National Dislocated Workers Grant Program;
4. Employment Training Panel;
5. The Department of Industrial Relations, including the Division of Apprenticeship Standards; and
6. Public Employment Relations Board.

FEDERAL EXISTING LAW

1. Authorizes the Workforce Innovation and Opportunity Act of 2014 for the purpose of:
   1. Increasing, for individuals in the US, access to and opportunities for the employment, education, training, and support services they need to succeed in the labor market, particularly those individuals with barriers to employment.
   2. Supporting the alignment of workforce investment, education, and economic development systems in support of a comprehensive, accessible, and high-quality workforce development system in the US.
   3. Improving the quality and labor market relevance of workforce investment, education, and economic development efforts to provide America's workers with the skills and credentials necessary to secure and advance in employment with family-sustaining wages and to provide America's employers with the skilled workers the employers need to succeed in a global economy.
   4. Promoting improvement in the structure of and delivery of services through the US workforce development system to better address the employment and skill needs of workers, jobseekers, and employers.
   5. Increasing the prosperity of workers and employers in the US, the economic growth of communities, regions, and States, and the global competitiveness of the United States.
   6. Providing workforce investment activities, through statewide and local workforce development systems, that increase the employment, retention, and earnings of participants, and increase attainment of recognized postsecondary credentials by participants, and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic self-sufficiency, meet the skill requirements of employers, and enhance the productivity and competitiveness of the Nation.
2. Defines an eligible career pathway program, pursuant to the federal Higher Education Act, to mean a program that:
   
   1. Concurrently enrolls participants in connected adult education and eligible postsecondary programs;
   2. Provides counseling and supportive services to identify and attain academic and career goals;
   3. Provides structured course sequences that are articulated and contextualized; and allow students to advance to higher levels of education and employment;
   4. Provides opportunities for acceleration to attain recognized postsecondary credentials, including degrees, industry relevant certifications, and certificates of completion of apprenticeship programs;
   5. Is organized to meet the needs of adults;
   6. Is aligned with the education and skill needs of the regional economy; and
   7. Has been developed and implemented in collaboration with partners in business, workforce development, and economic development.

FISCAL EFFECT: Unknown

POLICY ISSUE FRAME

In implementing the federal Workforce Innovation and Opportunity Act of 2014, California has set aggressive new goals and objectives to guide the state's workforce development system. By 2027, California is committed to producing one million "middle-skill" industry valued and recognized postsecondary credentials and to double the number of people enrolled in apprenticeship programs.

Achieving this goal is important to California remaining competitive within the global marketplace. One of the key challenges, however, are the current labor shortage for middle-skill jobs and the significant number of workers who are not currently ready to take on middle-skill training.

AB 2642 proposes a comprehensive initiative to assist the millions of workers who currently face significant barriers to employment to obtain the remedial education and work readiness skills necessary to help the state meet its goals and to become financially secure and independent.

The analysis includes background on the California economy, the state's growing income inequality, and discussion on why it is important to create new opportunities to assist individuals who face barriers to employment into the workforce. Amendments are discussed in Comment #4 to further clarify the purpose and structure of the Breaking Barriers to Employment initiative.

COMMENTS:

1. The California Economy in the Future: As California continues to transition from the recession, businesses and workers face an economy comprised of highly integrated industry sectors that are also more geographically dispersed. Advances in technology and processes are occurring more rapidly. This is resulting in competitiveness being increasingly defined in terms of speed, flexibility, specialization, and innovation.

Economists have identified nine key trends (see chart) that will most influence the U.S. and California economies. Several of these trends place new and demanding challenges on California's training and workforce system.

Advances in information technology, advanced manufacturing, complex logistical networks, and the need to have more environmentally sustainable products are just a few of the new workforce realities. Even entry-level workers will be expected to have important soft skills, such as the ability to work in teams, actively listen, communicate effectively with co-workers and bosses, and be able to negotiate workplace needs in a positive manner. Unlike hard skills, which are about a person's ability to perform a certain task or activity, soft skills provide the tools necessary to learn and advance in the state's continually evolving workplace environment.

The modern economy has also given rise to a growing need for smaller businesses because of their ability to provide innovative technologies and help other businesses access global markets. While vital economic players, small businesses and entrepreneurs face unique challenges in competing in an increasingly global and interconnected marketplace. Programs and services which may have been designed to serve large companies may need to be retooled to better serve the nearly 90% of businesses that have less than 20 employees. These small and adaptable businesses will have an inherent advantage in the post-recession economy, provided they are able to obtain the skillsets necessary to run a successful business and have access to appropriately trained workers.

Another key economic trend is the rising importance of regional economies as one of the primary drivers of economic growth. The economic foundation of many strong regional economies are innovation-based industry clusters which have the ability to support high-paying jobs, lucrative career ladders, and longer term job stability. Economic researchers have shown that industry clusters rise in areas where local universities, research labs, and competing businesses within the same industry provide a critical mass of skilled workers. Though the economic composition of regions may differ in California, each region has strengths and weaknesses. The effective identification and cultivation of these industry strengths will factor heavily on the future economic success of California's regional economies.

All these changes are occurring at the same time that California and the U.S. confront the social, cultural, and economic impacts of demographic change. The U.S. Census Bureau projects that by 2043 a majority of the U.S. population will be comprised of people of color. In 2014, people of color were already the majority in California, Hawaii, New Mexico, and Texas, with another nine states were close to 50%. The growing diversity within the workforce also represents a significant generational shift of the predominantly white baby boomers rapidly aging-out of workplace.

Many of these new market realities are already coming to fruition and, for now, California’s workforce is underprepared to meet these demands. Decades of underinvestment in public education, afterschool programs, and continuing education programs that feed into career pathways to the state's dominant and emerging industry sectors directly threaten the state's competitiveness. There are still numerous unemployed and underemployed workers in California, while simultaneously, there are businesses reporting that they are unable to find qualified workers to fill empty positions. Strong early education programs, career technology pathways, accessible higher education, and effective and timely workforce development programs are essential to equipping California workers with the skillsets that are in demand.

1. Income Disparities: California's overall economic growth and increase in jobs has outpaced the U.S. in general, often ranking the state within the top five states in terms of its economic condition. This success, however, has not been consistent throughout the state with many regions and certain population groups still experiencing recession-related poor economic conditions.

According to the U.S. Census Bureau, California's poverty rate is 16.4% as compared to a national rate of 15.6%. It is estimated that nearly a quarter of California’s children (22.7%) are living in households with annual incomes below the federal poverty line. Contributing factors to these poverty rates are stagnate wage rates, an increasing concentration of annual income among the highest income earning individuals, and differing job opportunities in the post-recession economy.

A review of the most recent unemployment numbers in the chart below illustrates this expanding pattern of economic disparity between regions and population groups in California.

While the state's unemployment rate for February 2016 (not seasonally adjusted) was 5.7%, some areas of the state had lower rates, while others were considerably higher. San Mateo County recorded the lowest at 3.0% and Colusa County experienced the highest unemployment rate at 21.6%. For the first time in more than a year, Imperial County did not have the highest unemployment rate in the state. Inland areas generally reported unemployment rates above the statewide average. As the chart above shows, Tulare County's unemployment rate was 12.1% and Riverside County was recorded as 5.9%. Coastal areas overall had lower rates than the state's, with Orange County at 4.0%, Los Angeles County at 5.5%, and Ventura County at 5.1%. Under the federal Workforce Innovation and Opportunity Act, high unemployment is considered any rate above 6.5%.

Looking more specifically at different population groups, the data also shows the great discrepancies between the statewide rate and key subgroups, including unemployment among Blacks and Hispanics being 10.8% and 7.4% respectively. For the youngest members of the workforce obtaining quality jobs remains a significant issue, with unemployment among 16 to 24 years being well above the state average, ranging from 20.5% to 10.9%. According to February's figures, one-in-five of California's next generation of workers is unemployed.

Just as the unemployment data shows the growing economic disparities by geography, race/ethnicity, and age, research also confirms that a greater percentage of total aggregate earnings are going to a smaller group of individuals. According to the World Top Income Database, pretax income among those with the highest 1% of income in California comprised 9.82% of total income in 1980 and 25.31% in 2013. These findings could signal a larger issue in that a growing body of economic studies show that large-scale income disparities correlate to shorter periods of economic growth, whereas societies with lower levels of income disparity have larger and longer-term periods of growth.

Achieving job growth within globally competitive industries and addressing the state's growing income disparities may require different community and economic development approaches, as well as more coordinated efforts by industry, labor, nonprofits, and government on a range of issues, including education, workforce training, infrastructure repair and expansion, entrepreneurship, and finance, among others.

1. Creating On-Ramps to Success: The federal Workforce Innovation and Opportunity Act of 2014 represents the most significant shift in federal workforce policy in several decades. Among other requirements, the act mandates that the state develop a plan for making workforce investments, set goals, and report on their progress. Future federal funding will be dependent on the state meeting established milestones leading to these goals.

California's Unified Strategic Workforce Development Plan (State Plan) outlines a comprehensive four-year strategy for investing federal workforce training and employment service dollars in a manner that aligns and coordinates six core Workforce Innovation and Opportunity Act funded programs. The state goal (2017 through 2027) is to produce one million "middle-skill" industry valued and recognized postsecondary credentials. In meeting this goal, the State Plan anticipates doubling the number of people enrolled in apprenticeship programs.

While certainly a laudable goal to guide the state's workforce investment system, achieving those goals will be challenging. Key among those challenges is the significant number of workers who are not currently ready to take on middle-skill training. In 2012, there were 1.9 million unfilled middle skill jobs. This number is expected to grow as one-third of middle skill workers retire over the next ten years.

AB 2642 establishes the Breaking Barriers to Employment initiative, administered through the Labor and Workforce Development Agency, to provide a framework for one or more competitive grant programs. Moneys awarded through this initiative will help to operationalize an innovative model of collaboration between two important workforce partners for the benefit of populations that routinely face barriers to employment.

The program's targeted populations include, but are not limited to, veterans, unskilled and low-skilled workers, out-of-school youth, foster youth, long-term unemployed, individuals with developmental and other disabilities, Native Americans, formerly incarcerated individuals, farmworkers, and other economically disadvantaged individuals.

The Breaking Barriers model is designed to leverage the experience of community-based organizations to work with targeted populations to remediate education and workforce readiness skills and to collaborate with workforce boards to transition clients to career pathways and sector strategies developed by local workforce boards. The authors believe that the initiative will create a career on-ramp for groups that have been historically disconnected from traditional programs.

AB 2642 builds upon key objectives in the State Plan by assisting individuals to obtain the fundamental skills necessary to prepare for work in high priority industries, leverage multiple services to meet a worker's individual needs, and target people who face systemic barriers to employment.

1. Amendments: Staff understands that the author will offer amendments to:
   1. Add legislative intent to clarify that there are multiple career pathways that have been developed by the state, federal, and tribal governments, as well as community based organizations;
   2. Add vocational training, entrepreneurship training, stipends for trainees, and pre-apprenticeship programs to the list of eligible activities for grants;
   3. Clarify that direct services includes staffing to provide those direct services;
   4. Modify the deadline for documenting notification of non-lead workforce development boards from the time the application is submitted to prior to the signing of the grant agreement;
   5. Clarify that either or both of the lead community-based organization or the lead workforce development board may submit the application;
   6. Remove unnecessary descriptors for the targeted populations;
   7. Change the name of the grant contract from "memorandum of understanding" to "grant agreement";
   8. Clarify that in the first year of the initiative, the Secretary will provide a status report on the implementation of the grant; and
   9. Make other technical and conforming changes.
2. Related Legislation: Below is a list of the related bills.
   1. AB 80 (Campos) Interagency Task Force on the Status of Boys and Men: This bill would have established a 20-member Interagency Task Force on the Status of Boys and Men of Color. Issues to be addressed by the Task Force would include, but not be limited to, employment and wealth creation, health and safety, education, and juvenile justice. Status: Vetoed by the Governor, 2015. Governor’s Veto Message: How state policy can be tailored to promote the well-being of boys and men of color is profoundly important. These issues, however, are best addressed through concrete actions, not another non-binding commission. The Legislature and the Administration are working on the critical issues raised by this bill, such as the Local Control Funding Formula, healthcare expansion and criminal justice reform. Much more can be done, and I am committed to advancing this work.
   2. AB 288 (Holden) College and Career Pathways: This bill authorizes the governing board of a community college district to enter into a College and Career Access Pathways (CCAP) partnership with the governing board of a school district within its immediate service area, as specified, to offer or expand dual enrollment opportunities for students who may not already be college bound or who are underrepresented in higher education. The goal of the agreements is to develop seamless pathways for students from high school to community college for career-technical education or preparation for transfer, improve high school graduation rates, or help high school pupils achieve college and career readiness. The bill includes specific conditions which must be met prior to the adoption of such an agreement. The authority in this measure sunsets on January 1, 2022. Status: Signed by the Governor, Chapter 618, Statutes of 2015.
   3. AB 931 (Irwin) New Hire Tax Credit: This bill would have expanded the definition of the term "qualified full-time employee" under the new hire tax credit to include a veteran who has separated from service in the U.S. Armed Forces within the 36 months preceding commencement of employment with a qualified taxpayer. Status: Vetoed by the Governor, 2015. Governor’s Veto Message: Despite strong revenue performance over the past few years, the state's budget has remained precariously balanced due to unexpected costs and the provision of new services. Now, without the extension of the managed care organization tax that I called for in special session, next year's budget faces the prospect of over $1 billion in cuts. Given these financial uncertainties, I cannot support providing additional tax credits that will make balancing the state's budget even more difficult. Tax credits, like new spending on programs, need to be considered comprehensively as part of the budget deliberations.
   4. AB 1058 (Atkins) Second Chance Program: This bill establishes the Second Chance Program under the administrative direction of the Department of Corrections for the purpose of investing in community-based programs, services, and initiatives for formerly incarcerated individuals in need of mental health and substance use treatment services. The grant program will be funded through the savings resulting from the implementation of Proposition 47, the Safe Neighborhoods and Schools Act of 2014, and other specified sources. The bill also extends the sunset on the Social Innovation Financing Program until 2022. Status: Signed by the Governor, Chapter 748, Statutes of 2015.
   5. AB 1093 (E. Garcia) Supervised Population Workforce Training Grant Program: This bill expedites the allocation of funding under the existing Supervised Population Workforce Training Grant Program, which is administered through the California Workforce Development Board. Status: Signed by the Governor, Chapter 220, Statutes of 2015. In addition, $1.5 million was authorized in the 2015-16 Budget for additional funding rounds.
   6. AB 1270 (E. Garcia) California Workforce Innovation and Opportunity Act: This bill aligns California statute with the new requirements of the federal Workforce Innovation and Opportunity Act of 2014. The bill sets the foundation for policy changes in 2016 through SB 45 (Mendoza). Status: Signed by the Governor, Chapter 94, Statutes of 2015.

REGISTERED SUPPORT / OPPOSITION:

Support

California Workforce Association (sponsor)

Association of Regional Center Agencies

California Association of Local Conservation Corps

National Association of Social Workers

San Bernardino County

SIATech California

Opposition

None Received

Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090