White House Fact Sheet: Worker Adjustment Initiative

The President today announced a new, comprehensive $10 billion worker adjustment initiative to assure that American workers have the training and skills they need for employment security today and into the next century.

The President's proposal features:

Universal coverage. All dislocated workers would have access to basic transition assistance and training support.

Skill grants. Vouchers of up to $3,000 would be available to help meet the costs of providing new skills and training for dislocated workers.

$10 billion in Federal funding. The plan almost triples the resources currently devoted to skill training and worker adjustment -- to $2 billion a year in each of the next 5 years. This level of funding is sufficient to ensure that workers anticipated to need these adjustment services will have access to those services.

The Problem

Three related developments have created the need for a flexible, adaptable, well-trained, and highly-skilled workforce in the United States.

First, world trade is expanding and promises to continue to expand during the coming decade. The United States has been at the forefront of this effort through the Uruguay round GATT negotiations and the North American free trade agreement. Expanding trade brings with it great opportunities for exports and job creation. But, it also brings with it the need for adjustment as nations concentrate on what they do best.

Second, the pace of technological change has accelerated. Computers and innovations in production technology have sharply increased manufacturing productivity. Technological advances are reducing the need for certain skills and increasing the need for others.

Third, the end of the cold war provides the U.S. with an historic opportunity to reevaluate and revise its national security requirements. This development inevitably involves redeploying resources, including human resources, from the defense to the civilian economy.

These changes create new opportunities; they also involve adjustments. Adult workers who lose their jobs need the training and skills that will allow them to adjust and adapt in a dynamic economy, to make the transition to new industries and occupations, and to compete successfully in the global marketplace.

The problem and the challenge is how best to facilitate the development of a dynamic, well-trained workforce that will keep the U.S. globally competitive.

The President's Proposal

In January, the President announced a comprehensive, streamlined Federal job training system that provides "one-stop shopping" for job training services in every community. This structure is designed to meet the Nation's workforce needs into the next century.

Building on this plan, the President proposes to complete the restructuring of Federal job training programs by replacing the current dislocated worker adjustment programs under the Economic Dislocation and Worker Adjustment Assistance (EDWAA) and Trade Adjustment Assistance (TAA) Acts with a new $2 billion a year comprehensive retraining and transition assistance program.

The Department of Labor's new Advancing Skills through Education and Training Services (ASETS) program will assist all dislocated workers, including those who may change jobs or careers as a result of the North American free trade agreement (NAFTA), as well as other workers in changing industries who need training in new skills.

The President's proposal would serve: workers who have lost their jobs, workers who have been notified their jobs are being terminated, and workers employed in industries experiencing significant changes and work force adjustments who fear job loss in the future.

Dislocated workers would be eligible to receive three types of assistance: transition assistance, to help them find and secure new employment. This includes: skills assessment, counseling, job search assistance and job referral services; training assistance, in the form of skill grants, for those workers who want and need retraining and skills development; transition income support, where necessary, for workers completing retraining.

Program Funding

The President's program would be funded at $10 billion over the next 5 years -- $2 billion annually -- and structured as a capped mandatory program to ensure continuity of funding. At this funding level, an estimated 1.2 million workers could be served annually. Two-thirds of the total annual funding ($1.3 billion) would be allocated to the States. These funds would more than triple the resources now available to States through EDWAA to respond to dislocations. States would provide basic transition assistance service and skill grants for training to dislocated workers regardless of the cause of dislocation, including trade and NAFTA-related employment changes, defense adjustments, etc. One-third of the total annual funding ($670 million) would be retained by the Secretary of Labor for discretionary allocation for uses of national priority. At least $335 million a year would be reserved specifically to respond to NAFTA-related dislocations. The balance would be reserved to respond to multi-state and industry-wide dislocations (e.g., defense-related layoffs and environmental impacts). This triples the existing funding for these programs. If NAFTA-related dislocations require more funding, the Secretary may shift the allocation to as high as the full $670 million per annum. Likewise, if NAFTA dislocations require less, as is likely to be the case, the Secretary may shift those resources to other priority dislocations.

Transition Assistance

Every dislocated worker would be eligible to receive basic transition assistance, including: an assessment of their current skills, counseling, help in resume preparation and interviewing skills, job search assistance and job referral services.

Skill Grants for Training

In addition to basic transition assistance, many dislocated workers may need to develop additional skills or upgrade their current skills. The President's proposal would provide dislocated workers with a skill grant in the form of a voucher. Grants would be awarded in amounts up to $3,000 per year. Workers would be eligible for the grants for up to 2 years. The grant could be redeemed at any qualified college, junior college, community college or public or private trade school or training institution. Workers would have the freedom and flexibility to choose the type of training that would best meet their needs and aspirations.

Funding priority for individuals applying for the skill grants would be: (1) currently dislocated workers; (2) soon-to-be dislocated workers; (3) workers employed in industries experiencing significant work force adjustments who fear future dislocations.

Transition Income Maintenance

Dislocated workers who enter training early in their unemployment, have exhausted their unemployment insurance benefits, and need income support to complete their training will be eligible to receive transitional income maintenance.