NEW WORKER READJUSTMENT LEGISLATION PENDING By JAY HEDGES, Director Illinois Department of Commerce and Community Affairs

A new federal program which proposes to consolidate the dislocated worker program under Title III of the Job Training Partnership Act (JTPA) and the Trade Adjustment Assistance (TAA) program would be offered to all dislocated workers, regardless of the cause of their unemployment. The Worker Readjustment Program (WRAP), introduced over a year ago, is part of the omnibus trade bill pending in Congress. President Reagan's final budget proposes spending authorization for the program at $980 million, a significant increase from the $335 million for similar programs this year.

The measure passed by the House of Representatives last May combined provisions from the Reagan Administration's proposal and the original bill introduced by Chairman Augustus Hawkins. Key provisions of the house bill include:

• Requires a new State Worker Readjustment Council, equally composed of representatives from labor, business, and public and private nonprofit organizations;

• Automatically designates Service Delivery Areas (SDAs) with a population of 200,000 or more as substate service areas — but Governors could designate, or combine, SDAs with smaller population bases;

• Substate grantees selected jointly by the Governor, local elected official(s) and the Private Industry Councils (PICs) — the Governor would prevail if no agreement was reached;

• Requires each state to designate an identifiable dislocated worker unit or office; and

• Allots 30 percent of the funds for basic readjustment services, 50 percent for the worker readjustment program, and 20 percent for a federal readjustment program.

Basic readjustment services included in the House bill are early readjustment assistance, outreach, intake, counseling, testing, assessment, and job placement assistance. States would receive the funds based on the current Title III formula until better data becomes available. Twenty percent of these funds could be reserved by the Governor for rapid response, technical assistance, and discretionary activities. The remaining 80 percent would go to substate areas on an allocation formula prescribed by the Governor. Up to 15 percent of the funds could be used for supportive services.

Worker readjustment training activities include classroom training, on-the-job training, and basic and remedial education. Up to 30 percent could be spent on supportive services, including income support after Unemployment Insurance (UI) benefits exhaust. The Labor Secretary would set annual funding availability targets for states, based on the Title III formula. The Secretary could reallocate unused funds to other states semi-annually. No reference is made to substate reallocations.

The Economic Dislocation and Worker Adjustment Act passed by the Senate would replace Title III of the Job Training Partnership Act. The bill contains three parts: Part A provides adjustment services for dislocated workers; Part B provides for advance notification by employers before they close plants or make mass layoffs; and Part C creates five demonstration programs and authorization for federal discretionary expenditures.

Key provisions of the bill include:

• Required designation of substate areas with 500,000 population or more, but Governors may designate areas with less population;

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• Mandatory 50-percent pass-through of state funds to local areas;

• A reconstituted JTPA State Job Training Council to include 30 percent labor and community-based organizations;

• Seventy-five percent of funds distributed to states by formula, and 25 percent for national activities;

• Required notice whenever an employer with 50 or more full-time employees proposes a shutdown or reduction in force affecting 50 or more employees in any 30-day period; and

• Five demonstration programs — dislocated worker loans, self-employment opportunity, public works, dislocated farmers, and job creation through community development corporations. Currently, Congressional conferees are working on a compromise package. The provisions which continue to be debated are: composition of the state council (new council or SJTCC reconstituted); the population threshold for SDA designation (200,000 vs. 500,000); the Governor's share of funds (40% vs. 50%); mandatory plant closing notification; procedures for substate plan approval by the Governor; and eligibility of displaced homemakers. The President has indicated that he will veto any bill containing mandatory plant closing notification.

Increased coordination will result from provisions of the final bill. The rapid response capability to be established, will require extensive coordination between state agencies, local service providers, and the affected plant employers/employees. This capability will be included to assess the need for and initially provide early readjustment assistance. It also appears that there will be a mandate evidenced at both the federal and state levels emphasizing service to veterans. The compromise language, thus far, would also require that funds made available through the program would be integrated and coordinated with services or payments available through Trade Adjustment Assistance. Finally, WRAP legislation will require linkage at the state level between the unemployment compensation system and the worker readjustment system.

Congress is saying that it will pass a trade bill during this session. Funding at the level of $980 million, although discussed, is unlikely. However, it is possible that funds will increase significantly for worker readjustment over the amount currently available for similar program efforts.

For further information, contact: John Taylor, Manager, Job Training Programs Division, Department of Commerce and Community Affairs, (217) 785-6006. •

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