The Department of Labor plays a key role in supporting and funding workforce development programs to help those Americans with barriers to employment. One major source of such funding is through the Workforce Innovation and Opportunity Act (WIOA), which we cover in its own learning guide. Historically, there have been additional funding sources that benefited social enterprises and the people they employ, such as YouthBuild, Training to Work, and Face Forward.
However, the current administration has signaled a desire to significantly reconfigure the structure and amount of available funding for workforce development programs, proposing significant cuts to the Department of Labor budget.
source: Department of Labor
As you can see, many of the programs face significant proposed cuts relative to current, and certainly prior, funding levels. The budget reflects the administration’s pronounced shift towards funding apprenticeship programs. In addition to WIOA funding, it is worth calling out two areas that may particularly affect social enterprises: Reentry Employment Opportunities and YouthBuild.
Reentry Employment Opportunities
Reentry Employment Opportunities (REO) program is aimed at justice-involved adults and youths to help them “obtain employment and/or occupational skills training in industries that offer good wages and opportunities for advancement.”1 In March 2017, the Department of Labor released a Funding Opportunity Announcement (FOA) which incorporated prior re-entry programs Training to Work and Face Forward. It is not unreasonable to expect another FOA for Reentry Employment Opportunities sometime later this year. However, the proposed budget for 2019 cuts funding for such programs by approximately 10% over 2018 levels.
YouthBuild is aimed at helping opportunity youth between the ages of 16 and 24 who are high school dropouts, adjudicated youth, youth aging out of foster care, youth with disabilities, homeless youth, and other disadvantaged youth populations. The aim is to fund programs that give opportunity youth “both the education and occupational skills that will prepare them for employment with a living wage.”2 The proposed budget for 2019 cuts YouthBuild funding by approximately 30% over 2018 levels. This is in line with the administration’s aim to shift the emphasis towards more apprenticeship initiatives for youth.
What to expect
Federal budgeting is a complicated process and we are experiencing unusually high levels of uncertainty with regards to the funding of these programs. The president’s budget proposals are exactly that: proposals. Congress, in turn, will have its say. However given what we know so far, we can reasonably expect them to:
- Try to maintain current WIOA levels
- Expand funding for apprenticeships (increase from approximately $90M to $200M)
- Require the secretary of Department of Labor to release in spring 2018 a “comprehensive plan for reorganizing and consolidating the Nation’s workforce development programs”
Now more than ever, it is important to stay apprised of this process and the changes to come. We will update this learning guide as the situation develops and we learn more. In the meantime, we can recommend some additional reading to learn more about the effects of the proposed cuts:
- National Skills Coalition’s “White House budget promotes some workforce priorities, but includes drastic cuts to key programs“
- Campaign to Invest in America’s Workforce’s open letter