Rationale for Proposed Performance Levels
Requested Performance Goals for Workforce Investment Act Title IB Programs and Wagner-Peyser Act Program for Program Years 2007 and 2008
In accordance with TEGL 19-06 “Negotiating Performance Goals for Workforce Investment Act Title IB Programs and Wagner-Peyser Act Programs for Program Years 2007 and 2008” Maryland is submitting its proposed performance standards. This proposal includes both the requested standards, as well as addressing numerous issues that have and will continue to impact the State’s performance. Since Maryland is a Common Measures Waiver state, the submission covers the 9 WIA measures and the 3 Wagner-Peyser measures.
Maryland’s integrated workforce investment system supports the Employment and Training Administration’s (ETA) approach to workforce development, including the alignment of service delivery strategies with the demand-driven goals designed to meet the workforce investment system customer’s needs. We realize that an important component in the system’s program administration is performance accountability with the Common Measures at its core. The Department of Labor, Licensing and Regulation conducted an analysis of the available program performance data, as well as state economic, demographic factors and a review of the available Government Performance and Results Act (GPRA) published goals, during the development of the proposed performance goals for WIA and Wagner-Peyser for PY 07 and PY 08.
The analysis conducted was somewhat problematic for two reasons. First, for a number of measures, e.g. Literacy and Numeracy Gain, limited historical data is available. But more importantly, for historical data to have validity as a predictor of future performance, one must assume a relatively stable environment. The workforce development environment in Maryland has been anything but stable, and the changing variables need to be considered in determining realistic standards. The following section will delineate those changes.
Changes to the Populations
In May of 2007 the US Census Bureau issued their population demographic changes for the period 2000 to 2006. There were substantial changes, Maryland’s Hispanic population increased by 48%, its black population increased by 10%, while the percentage of non-Hispanic Whites actually fell. What is the potential impact of these shifts? The American Community Survey statistics report significantly higher estimated unemployment rates for Black or African Americans (10.5%), Persons of Hispanic or Latino Origin (8.1%). Other studies have shown that many of these minorities don’t even show up in the unemployment statistics since they are not attached to the labor market. Maryland has an increasingly diverse and harder to serve population.
In addition to the overall population changes, Maryland has made programmatic changes that have significantly changed the customers served and consequently this has affected performance.
Both the State and many of the local areas recognized that services to ex-offenders area priority. Each year approximately 14,000 inmates are released from Maryland’s prison and another 50,000 are put on supervised probation. The limited job opportunities and skills of this population lead to high rates of recidivism. The most recent recidivism rate for Marylandinmates is 50% and for probationers the rate is 34%. The State, the City of Baltimore, Anne Arundel and MontgomeryCounties established programs in PY 05that targeted ex-offenders. These programs have brought the targeted population into the programs. In PY 04 only 457 of the new participants were ex-offenders, by PY 05 the new participants that were ex-offenders had increased to 3,311, more than a seven-fold increase. This population is very difficult to serve and less likely to have positive outcomes. Most employers are extremely hesitant about hiring ex-offenders. And it is not just the criminal record that is a problem, a large percentage of the offenders have limited education and substance abuse issues. One of the issues that involve substantial staff resources is just getting the ex-offender the documentation necessary to get a job. With the various safeguards put into effect post 9/11, it is extremely hard to get the identification documents for this transient population.
Maryland has moved toward implementing the USDOL youth vision targeting the youth populations most in need. We are now working with a harder to serve, out-of-school population. Prior to implementing the DOL youth vision, the majority of youth served in the State were in-school youth. The most recent data shows that 66% of our youth are now out-of-school. And 88% of these youth have been tested as basic skill deficient in reading and/or math.
Maryland has historically reported a low percentage of Unemployment Insurance (UI) claimants served. In PY 05 only 3% of the total participants were reported as UI claimants. It was discovered that the claimants served through the Worker Profiling and Reemployment Services (Maryland’s EI program) were being picked up in the total participants count, but they were not being identified as unemployed claimants and therefore were not included in any of three Wagner Peyser performance measures calculations. The problem was fixed and during the most recent quarter 24% of the participants were claimants. It is important to remember that because of their occupation, education, work experience, and local economic conditions, these individuals have been identified as being least likely to become re-employed and stay employed.
Maryland is a very bimodal state when it comes to socio-economic factors. We have some of the wealthiest jurisdictions in the country, but we have others that have high unemployment and poverty. The decision was made to target Wagner-Peyser staff resources to those areas with the greatest need. Four of Maryland 12 LWIAs (BaltimoreCity, Western Maryland, Upper and LowerShore) have relatively high unemployment rate, high poverty rates, and low wages. 52% of the total WP participants come from the targeted areas, and these areas have an average unemployment rate of 5.5%. The other 48% of the participants came from non-targeted areas, which only had an average unemployment rate of 3.5%. The four targeted areas only account for about 20% of the civilian labor force. The State could improve its performance by serving those less in need, but we do not feel this is consistent with DOL policy.
Substantial Reduction in Resources
While Maryland agrees with the concept of continuous improvement, we also recognize the difficulty of achieving itin times of rapidly falling funding levels. The integration of Maryland WIA and Wagner-Peyser programsplus the increased use of technologyallowed us to keep up with the WIA funding cuts and meet set performance levels. However, with continuedfunding decreases, it is unlikely we can maintain the past rate of continuous improvement. The graph below shows the increase in GPRA goals compared to the falling WIA funding for both Maryland and the Nation.
In addition to substantial State cuts, because of the triggers in the WIA funding formulas, there have been significant shifts of funds within the State. Much of the funding is now going to areas with high unemployment and lower average paying jobs. This funding shift is impacting our ability to maintain the performance exhibited in past program years.
The graph only represents formula funding; there have been substantial reduction in discretionary grants. From PY 01 through PY 04 Baltimore City received a $50 million dollar Youth Opportunity Grant. The grants allowed them to increase both the quality and quantity of services. From the PY 01 through PY 04 Maryland also had substantial discretionary resources to serve special dislocated workers populations through the Metro Tech and H-1B grants. These grants were focused on IT and high technology. Much of the population served had substantial education and skills, and significant resources were available for upgrading and re-training. As a result there was substantial growth in the State’s Dislocated Worker’s Average Earnings. Now that funding is no longer provided for these programs, the dislocated workers we serve have less education and skills, and we are able to provide less training.
Limitations in Wage Reporting
There are four factors that make obtaining retention information from wage record data more difficult for this State.
1)Maryland has one of the lowestpercentages of people working in covered employment. An analysis was done comparing the ES 202 payroll and employment data with the US Department of Commerce Bureau of Economic Analysis (BEA) data. While 202 data only includes those in covered employment, the BEA data includes all those working in the State. The table below shows the percentage of covered employment for the States in the Region and a number of States with roughly the same sized labor force as Maryland.
Percent of Jobs in Covered EmploymentMaryland / 75.3%
Delaware / 79.9%
Pennsylvania / 78.8%
Virginia / 76.4%
West Virginia / 77.2%
District of Columbia / 83.5%
Arizona / 78.0%
Minnesota / 77.0%
Missouri / 75.5%
Wisconsin / 79.0%
The 24.7% of uncovered jobs in Maryland represents over 750,000 jobs for which we have no wage records.
2) Maryland has one of the highest percentages of people commuting out-of-state to work. The table below provides a comparison on the data element.
Percent Commuting Out-of-StateMaryland / 17.4%
Delaware / 11.5%
Pennsylvania / 4.6%
Virginia / 9.1%
West Virginia / 11.2%
District of Columbia / 27.0%
Arizona / 1.7%
Minnesota / 2.0%
Missouri / 5.3%
Wisconsin / 3.8%
Maryland is very dependent on getting reliable and useful wage record data from other states. While there has been some improvement in the quality of Wage Record Interchange System (WRIS) data, there are still a lot of problems. Many states refuse to include WRIS data in their performance reporting because of its unreliability. Of course when only 2% of your residents are working out-of-state, excluding WRIS data is not a big issue. But, when close to 1 out of every 5 people work outside the state, you cannot afford to exclude this alternate data source.
3) Maryland has one of the highest percentages of people working for the federal government; both military and civilian. The percentage of Marylanders working directly for the Federal government is over two and half times the national average. While we have begun receiving Office of Personnel Management (OPM) wage data, we have yet to receive reliable data from the Department of Defense or the US Postal Service. This again means substantial missing wage record data.
4) Maryland has the highest percentage of people working for national security agencies, which neither report wages nor confirm employment. A recent Washington Post article named the National Security Administration (NSA) as Maryland’s largest employer. NSA has an estimated 55,000 employees with an annual payroll of almost $5 billion dollars. Not only is NSA currently the largest employer, it is estimated that they make substantially more new hires. This is due to two factors: NSA has had and will continue to have significant post 9/11 expansion, and they must replace a large number of baby boomers who are eligible for retirement. It is extremely frustrating to know that data on a major source of our new hires, especially in good paying jobs, is not available. In addition, the use of supplemental data to confirm employment is not possible, since NSA will not confirm it, and their employees are prohibited from confirming it. In addition the Department of Homeland Security refuses to report earnings.
Proposed Standards
In general,the State believes that the previous standards have been set too high. In PY 05 Maryland exceeded 12 of 17 WIA measures and met the other 5. Based on the 2nd quarter of PY 06,Maryland is only exceeding one WIA standard, and that is only based on one person in the measure. The State is meeting the other 8 WIA standards and failing all 3 Wagner-Peyser standards.
The following table reflects the State request for PY 07 and PY 08.
Performance Measures / PY 07 / PY 08Entered Employment Rate / Adults / 80% / 80%
Dislocated Workers / 88% / 88%
Labor Exchange / 59% / 59%
Retention Rate / Adults / 85% / 85%
Dislocated Workers / 86% / 86%
Labor Exchange / 79% / 79%
Average Earnings / Adults / $11,600 / $11,600
Dislocated Workers / $15,500 / $15,500
Labor Exchange / $11,600 / $11,600
Youth Attainment of Degree or Certificate / 50% / 50%
Youth Placement in Employment or Education / 60% / 60%
Youth Literacy/Numeracy Gain / 51% / 51%
The standards requested for three Adult, the three Dislocated Worker Measures, and the Wagner-Peyser Average Earnings are higher than those established for the Government Performance and Results Act (GPRA). The Wagner-Peyser Entered Employment Rate and Employment Retention Rate request are below the GPRA for the reasons discussed earlier.
Currently there is no GPRA for the youth measures. Except for Literacy and Numeracy, the request is based on data from the last 7 quarters. Based on that performance we have raised the Youth Attainment of Degree or Certificate and asked for a lower Youth Placement in Employment or Education. We have kept the Literacy and Numeracy standards the same because we do not have enough information to make any informed request, through the 3rd quarter only 15 people statewide were included in the measure. We may need to revisit at a later date once more data becomes available.
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