Toward Order from Chaos

State  Efforts  To  Reform
Workforce  Development  Systems

MDS-1249

National Center for Research in Vocational Education
University of California at Berkeley
2030 Addison Street, Suite 500
Berkeley, CA 94720-1674

Supported by
The Office of Vocational and Adult Education
U.S. Department of Education

January 1999

FUNDING INFORMATION

• ACKNOWLEDGMENTS
• EXECUTIVE SUMMARY
• ACRONYMS
• INTRODUCTION THE GROWING CONCERN WITH WORKFORCE DEVELOPMENT
• SECTION 1: RECENT STATE REFORMS: VISIONS AND STRATEGIES
• SECTION 2: IMPLEMENTATION AT THE STATE LEVEL: THE CHALLENGES OF INNOVATION
• SECTION 3: STATE POLICY AND LOCAL RESPONSES: THE BALANCE OF STATE AND LOCAL INITIATIVES
• SECTION 4: THE COMPLEX ROLES OF EMPLOYERS
• SECTION 5: THE ROLE OF WELFARE "REFORM" AND "WORK FIRST"
• SECTION 6: WHAT IS THE MEANING OF SYSTEM-BUILDING? LINKAGES AND QUALITY
• SECTION 7: UNRESOLVED ISSUES: THE CONTRADICTIONS IN STATE POLICIES
• SECTION 8: THE IMPLICATIONS FOR STATE AND FEDERAL POLICY
• REFERENCES
• APPENDIX A: LOCAL AND STATE PROTOCOLS
• APPENDIX B: LOCALITIES AND STATES EXAMINED

• Related readings for this publication

ACKNOWLEDGMENTS

      Our greatest debt is to the many local and state officials who provided their time and information for this study. They were uniformly helpful in providing not only information about state developments, but also their perspectives about how these changes originated and what they are likely to mean in the future. In addition, many of them read the individual state case studies written in late fall 1997, as well as an initial draft written in spring 1998, checking them for accuracy and balance. There are too many such officials to name individually; we can only hope that we have gotten everything right and have provided a balanced account of state developments.

      We began this research by soliciting advice from several sources about the most appropriate states to examine--that is, about the states that have been most active in reforming their workforce development systems. For their advice, we particularly want to thank Evelyn Ganzglass of the National Governors' Association; Bob Visdos of Network, an affiliate of the American Association of Community Colleges (AACC); Esther Rodriguez of the State Higher Education Executive Officers Organization (SHEEO); and Charlie Lenth of the Education Commission of the States (ECS).

EXECUTIVE SUMMARY

      During the 19th and 20th centuries, a complex system of education has developed in this country. Over a considerably shorter period--since the early 1960s--a different system of workforce development has begun to emerge, including various programs intended to prepare individuals for the labor force. The programs include vocational education, short-term job training, adult education, specific programs for certain populations (like welfare recipients and dislocated workers), state-funded training for specific employers, and the training employers provide themselves--creating a complex and ill-defined system, often charged with overlap, duplication, waste, and sheer confusion.

      Recently, states have taken more active roles in reforming their workforce development systems. This report examines ten relatively active states--Florida, Iowa, Maryland, Massachusetts, Michigan, North Carolina, Oklahoma, Oregon, Texas, and Wisconsin--through interviews with state officials and then with local administrators in at least two localities within each state.

      In general, states have initiated reforms either because of economic decline, because of their own concerns about chaos and duplication in their workforce programs, or in anticipation of federal legislation. While there has been considerable variation among states, most have adopted a state-level administrative or advisory group, with a local or regional counterpart to plan and oversee local services. To be sure, both local and state agencies vary in the programs they include and the power they have, but the overall purpose is to establish more rational state policy and then to implement it at the local level.

      States have also varied in the instruments they use to achieve their goals. Some have made extensive use of institution-building mechanisms, like advisory committees, consolidation of programs, technical assistance to the local level, and efforts to change the culture of local-state relations. Others have invested more in market-like mechanisms: performance measures and standards; performance-based budgeting; competition among providers; competition through subcontracting; voucher mechanisms; and better information to consumers, especially through one-stop centers. The new Workforce Investment Act of 1998 may also encourage vouchers through the Individual Training Accounts it encourages.

      Most states have also recognized the need to stimulate the demand for employment, and have developed a variety of programs (including those providing training for specific employers) to stimulate demand. While there are fledgling mechanisms to coordinate demand-side policies with workforce development, these are still inconsistent in most states. However, the mere fact that policies stimulating employment demand have emerged, and could be coordinated with policies providing more education and training, is a hopeful sign.

      Not surprisingly, states have various challenges in implementing their reformed "systems." The most important of these is the instability which has occurred when new governors have changed policy direction. In contrast, states that have relatively consistent policies with bipartisan support--like Florida, North Carolina, and Oregon--have made the most progress. Other barriers to implementation have included resistance from education providers, inconsistencies in state practices, competing priorities for programs, the continuation of multiple advisory committees and substate entities, and the continued restrictions of federal programs and regulations. Thus, consistent policies, over longer periods of time, are necessary to overcome barriers to implementing a state's vision.

      In addition, the development of active state policies is a departure from the past, when most states were content to let local programs coordinate as they desired--or not coordinate at all. By and large, states have not taken many directive measures, recognizing that local autonomy is both necessary and politically unavoidable. (The one great exception comes in welfare reform, where many states have required local communities to adopt a uniform state approach.) The most common policy has been one of "central guidance, local direction," where the state provides a vision, some guidance, and encouragement through funding for local communities, which, in turn, direct their efforts to plan and coordinate local programs. In this process, the development of one-stop centers has been a great help, since these have required a number of local programs to work together.

      Not unexpectedly, local responses to state initiatives have been mixed. Some communities want to move faster than the state, and complain that state inaction has sometimes thwarted local initiative. Some, on the other hand, do not want to change their practices at all, and resent any encouragement or directive from the state. Overall, however, with much pulling and pushing on all sides, the entire structure of local and state efforts seems to be moving in the direction of greater coordination.

      In these efforts, the roles of employers are widely thought to be crucial. Employers can play many different roles in workforce development, and states have adopted a variety of policies encouraging their participation. On the other hand, the tendency of some states to concentrate on welfare recipients has discouraged employers, who generally want to have little to do with this group; and inconsistencies in state policies have contributed to confusion over employer roles. This remains an area where substantial improvement is possible.

      Many states had begun their reform efforts in anticipation of federal consolidation of vocational education, job training, and adult education in 1996. But consolidation did not pass; instead, Congress enacted a substantial reform of welfare, instituting many practices to get welfare recipients into employment as quickly as possible--the philosophy of "work first," as distinct from the belief in employment and training that underlies the workforce development system. In many states, education and training programs have welcomed the transformation of welfare agencies from places which merely certify individuals eligible for benefits, to ones that try to move welfare recipients into independence. However, in several ways, welfare reforms have undermined the efforts to improve workforce development systems. They have undermined the rhetoric about high skills and high wages, since they usually provide very short and low-level training. They have reversed the tendency to develop holistic and universal approaches, since "work first" efforts generally provide limited services to the welfare population only. They have distracted local and state policymakers, and, in some places, changes meant for welfare recipients have driven changes for the nonwelfare population as well. The welfare-related changes have also alienated employers and exacerbated local-state tensions. While it is too soon to know what the ultimate effects of welfare reform will be, its spillover into other dimensions of workforce development have been largely negative.

      States mean different things when they reform their workforce development systems. In the variety of state efforts, we can discern a rough hierarchy of efforts to link programs. These range from information-sharing among programs, to referrals of individual clients or students, to joint service delivery where programs collaborate in providing employment services. Joint planning, the deliberations around one-stop centers, and various state inducements have all helped local and state programs move up this hierarchy of coordination, while shifts in state policies and the preoccupation with "work first" have stalled these efforts.

      A different dimension of system-building is the improvement of the quality of individual programs. It is much easier to coordinate programs that are of high quality; conversely, other programs do not like to work with those perceived to be of low quality. Many states are trying to improve quality through performance measures, while others--notably North Carolina--have increased technical assistance. In general, however, dimensions of quality have not been especially prominent in state reforms, and most local and state officials could not provide well-considered conceptions of quality or name exemplary programs. This remains a central issue to address in the future.

      Other unresolved issues include the continued separation of education from training, the difference between the rhetoric about a skilled workforce and the reality of low-quality programs, and the debate between institutional versus market-like approaches to reform. However, compared to a decade ago, there is considerably more discussion of all these issues. The reforms that states have tried so far have clarified the options they face, and federal policy--particularly in the Workforce Investment Act of 1998--is likely to encourage further state efforts at coordination. To be sure, the development of coherent workforce development systems is far from inevitable--after all, some states have reversed their progress, others have barely begun, and there is considerable skepticism that greater coordination is worth its political costs. Nonetheless, the direction of movement toward more coherent systems is unmistakable.

ACRONYMS

AFDC	Aid to Families with Dependent Children
ATC	Advanced Technology Center
CBO	Community-based organization
CET	Center for Employment Training (San Jose, California)
CETA	Comprehensive Employment and Training Act (1973)
DBED	Department of Business and Economic Development (Maryland)
DHR	Department of Human Resources
DOL	Department of Labor
EDJT	Economic Development Job Training Program (Michigan)
ES	Employment Service
ESL	English as a Second Language
FETPIP	Florida Education and Training Placement Information Program
FSETP	Food Stamp Employment and Training Program
GWIB	Governor's Workforce Investment Board (Maryland)
HRIC	Human Resource Investment Council
HS/HW	High-Skills/High-Wages initiative
ILO	International Labor Office, Geneva
ITAs	Individual Training Account
JOBS	Job Opportunities in the Business Sector (1988)
JTPA	Job Training Partnership Act (1981)
MESA	Michigan Employment Security Agency
MJC	Michigan Jobs Commission
MOS	Michigan Opportunity System
NCRVE	National Center for Research in Vocational Education (University of California, Berkeley)
NSSB	National Skill Standards Board
OECD	Organization for Economic and Cultural Development (Paris)
OJT	On-the-job training
PIC	Private Industry Council (JTPA)
RAB	Regional Advisory Board (Iowa)
REB	Regional Employment Board (Massachusetts)
RWQC	Regional Workforce Quality Council (Oregon)
SDA	Service Delivery Area (under JTPA)
SJTCC	State Job Training Coordinating Council (under JTPA)
SOICC	State Occupational Information Coordinating Committee
STW	School-to-work programs, especially as funded by the School-to-Work Opportunities Act of 1994
TANF	Temporary Assistance to Needy Families
TCWEC	Texas Council on Workforce and Economic Competitiveness
TWC	Texas Workforce Commission
UI	Unemployment Insurance
VET	Vocational education and training
W2	Wisconsin Works!
WAGES	Work and Gain Economic Self-Sufficiency
WDB	Workforce Development Board
WDI	Workforce Development Institute
WIA	Workforce Investment Act of 1998
WQC	Workforce Quality Council (Oregon)
WtW	Welfare-to-Work

INTRODUCTION

The Growing Concern With Workforce Development

      During the 19th and 20th centuries, an imposing system of public and private education developed in this country. After two centuries of slow changes, the result is a complex of schools, colleges, and universities, larger than in virtually any other country. This system is marked by substantial regularity, with specific institutions (high schools, say, or community colleges) relatively similar across the country and with well-established patterns of progression among institutions--almost as if it were developed by a grand vision. But there has never been such a vision. Instead, a much more fragmented process has built this structure--local institutions starting and stopping, fifty states developing their own approaches, and the federal government providing smaller amounts of support. Over the years, millions of citizens, educators, policymakers, and reformers have pulled and tugged at different components, reforming institutions, creating linkages among them, and molding the complex system we now have.

      Over a considerably shorter period of time--little more than three decades--a different system of occupational preparation has begun to emerge in much the same way, from state and federal support, local experimentation, and considerable wrangling about the results. This "system," as befits its relative youth, is not as settled as formal education has become. Its purposes are often muddled, its institutions and programs are more fluid and varied, the linkages among its components are largely undeveloped, its boundaries are murky, and its effects are much less clear. The variations among localities and states are even more substantial than they are in the education system, with differences shaped by the relative power of governors and legislatures, the balance of local and state funding and authority, local and state economic conditions, and population characteristics. This complex of programs includes postsecondary vocational education, adult education, short-term job training programs (including some for specific populations such as dislocated workers or welfare recipients), private providers of training, and training for the existing workforce. (As we will see, the boundaries of this system--which programs are considered part of it, and which are not--are fluid and vary from state to state.) This system has emerged in part because existing education programs have not met certain needs, and so there is substantial demand for the services provided by workforce development programs. But the chaotic nature of this system of workforce development has been an endless source of frustration for individuals trying to gain access, for employers looking for well-trained workers, and for policymakers trying to understand--and perhaps even improve--the system.

      In this monograph, we examine one moment in time, within the longer evolution of workforce development, by analyzing ten states--ten relatively active states--that are trying to reform their education and training systems. The changes that are being attempted are illuminating both because they illustrate the variety of approaches that localities and states can take, and because their successes and failures indicate which reforms might improve effectiveness and which are counterproductive. But no one should have any illusions that any single vision will emerge, or that any state can be completely consistent. Even as clarity is emerging in some states, the process is complex, slow, and incomplete; as a policymaker in Oklahoma described the problem, "You can't eat an elephant in one bite." And the process of reform continues: Even though we hope that our general conclusions are correct, the details of what states are doing are already out of date.

The Growth of the Elephant: Defining the Workforce Development System

      We first need to define the systems that we will examine and that states are trying to reform. The programs[1] we examine all intend to provide individuals with the competencies necessary for employment; unlike education, they are usually unconcerned with political, moral, and intellectual purposes. The vocabulary by which this emerging system is described varies; sometimes state officials refer to it simply as "training," sometimes as "vocational education and training" (or VET), and increasingly as "workforce development." A conventional history starts with manpower programs established by the federal government in the early 1960s to combat the unemployment and poverty of that period. Establishing a pattern that has contributed ever since to the complexity of the system, the early manpower programs viewed schools and community colleges as inadequate for providing short, job-specific training for individuals who had not done well in their formal schooling. Therefore, services were provided outside the education system, particularly by community-based organizations (CBOs). The early manpower programs proliferated and were then consolidated in the Comprehensive Employment and Training Act (CETA) of 1973. This cycle went around one more time as the Job Training Partnership Act (JTPA) of 1981 consolidated and reorganized these short-term job training programs. Programs such as the development of training targeted towards dislocated workers continued to multiply. Most recently, the Workforce Investment Act (WIA) of 1998 was signed into law in August 1998, a development we examine briefly in Section VIII.

      Another line of development involves education, training, and other services for welfare recipients. First articulated in the 1962 Work Experience and Training program and in the "services strategy" of 1967, this system provided services like child care and transportation so that welfare recipients could find employment. This approach was expanded upon in various welfare-to-work experiments of the 1980s and in the Job Opportunities in the Business Sector (JOBS) program incorporated in the Family Support Act of 1988, providing state and federal revenues for job training, work experience, remedial education, and various supportive services. This cycle, too, has gone around one more time, as the welfare "reforms" embodied in the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 have imposed new requirements to move individuals off welfare, creating new pressures on state education and training systems. (This issue is examined more carefully in Section V.)

      Over time, federal legislation has tended to increase the particular groups eligible for short-term job training programs, including such categories as dislocated workers unemployed because of sectoral shifts, food stamp recipients, those injured on the job and needing vocational rehabilitation, veterans, and a bewildering variety of others. Federal legislation has also tended to go beyond high schools and colleges for the kinds of institutions that provide VET, sometimes because of the understanding that existing institutions have been unresponsive to the needs of populations such as the poor, the unemployed, or the disabled, for example. In addition to short-term programs considered trainingand administered by the Department of Labor, various educationprograms supported by the Department of Education overlap in their purposes.[2] Adult education providing remedial education and English as a Second Language (ESL), vocational education in area vocational schools and community colleges, and grants and loans for higher education students (which support some students in community colleges and proprietary schools) are particularly likely to overlap with job training. Other federal agencies have jumped into the act, including the Department of Housing and Urban Development which supports YouthBuild, a program to train youth in construction skills, and other training efforts for residents of public housing. Still other federal programs, while they do not provide education or training, are related to employment; for example, the Employment Service (ES) has provided information about job vacancies and limited job counseling, and the Unemployment Insurance (UI) provides short-term income support for unemployed workers during a period of job search. As a result of these many strands of development, a bewildering array of programs related to employment and training exist. When the General Accounting Office (1995) examined them in 1995, it counted 163 programs spending $20.4 billion.

      In the meantime, states have elaborated their own programs. Area vocational schools serving both high school students and adults, community colleges serving a multitude of students, and adult education with substantial state as well as federal funding are the most obvious institutions providing education and training for work, and these have expanded substantially since the 1960s--especially community colleges. States have provided their own funds for welfare-related training and supportive services, with federal matching funds under Aid to Families with Dependent Children (AFDC) and, since 1996, with a federal block grant for Temporary Assistance to Needy Families (TANF). Almost every state has enacted a program of training linked to economic development, providing public subsidies for the training of existing employees. Some of these operate through community colleges, as we will see; while others allocate funds to employers themselves or to CBOs. Therefore, like the federal government, states have found themselves with a plethora of programs, some state-initiated and funded, and others largely federal. Like the GAO (1995) report mentioned above, states have often tried to count the number of education and training programs in their own studies of proliferating programs. When North Carolina carried out such a study in 1992, for example, both legislators and the public were amazed to discover that the state spent $800 million on 49 different education and training programs administered by eight separate agencies, and that no one agency has authority over or information about all of these programs. Arizona counted 26 major state and federal programs, under four federal and at least six state agencies, with both the number and funding of programs increasing substantially. In Oregon, a 1989 study by the Legislative Fiscal Office found at least 13 agencies managing 50 separate programs related to job training, retraining, and placement.

      Because workforce development programs have developed in largely unplanned and uncoordinated ways, the boundaries of the system are unclear. Some efforts are essentially private and outside of government responsibility such as the training efforts by firms of their own employees; some are private but weakly regulated such as the training offered by proprietary schools. While these are important components, in this report we concentrate on the public programs established by state and federal governments, since they are the heart of the workforce development systems. In addition, there is substantial overlap between workforce development and education, particularly in community colleges, technical institutes, and area vocational schools that participate in both. Indeed, boundary issues--what's in and what's out of workforce development--are very much at stake, particularly in considering local and state governing mechanisms.

      The multitude of purposes complicates the issues of boundaries. In contrast to most education, which concentrates on preparation beforeindividuals enter employment, the workforce development system includes at least four types of preparation[3]:

1.	Pre-employment education and trainingprepares individuals for initial entry into employment, and is often aimed at younger individuals.
2.	Upgrade trainingprovides additional training for individuals who are already employed, as their jobs change or as they advance.
3.	Re-trainingprovides training so that individuals who have lost their jobs can find new ones, or so that individuals who seek new careers can develop the competencies necessary for other employment.
4.	Remedial trainingprovides education and training for individuals who are in some way at the margins of or out of the mainstream labor force--typically those who have been unemployed for long periods of time, those who are underemployed and in poverty despite employment, and welfare recipients.

      Some institutions in the workforce development system, particularly community colleges, provide all types of preparation; others specialize in one or two. Finally, most of these programs emphasize postcompulsoryeducation and training. While we will sometimes refer to school-to-work programs aimed at high school students because they have been used to bring different providers together, we concentrate in this monograph on programs for adults--again, because they are the core of workforce development.

      When state and federal governments contemplate what they have created, the same complaints emerge over and over. One is simply that the variety of programs and purposes is difficult to comprehend, so that both individuals seeking education and training and employers looking for skilled workers (or seeking to upgrade the skills of existing workers) do not know where to turn. Another is the concern with the duplication of services and the consequent wasting of public funds. While complaints about duplication and waste are often exaggerated,[4] policymakers are understandably disconcerted when they see several programs providing similar job training, or when adult education, community colleges, and job training programs all provide remedial education in different forms. A third potential problem is that individuals may need several complementary services but be unable to find them in one place; thus, someone who needs vocational skills, remedial academic skills, and supportive services like child care may be unable to get all three from one program. From an administrative perspective, the need to adhere to detailed federal regulations or, even worse, to obey several conflicting sets of state and federal regulations, may force programs to become rigid, bureaucratic, unresponsive to local conditions, and generally ineffective. A final concern is that certain programs and institutions may be of low quality, partly because they have never faced any competition or mechanisms of accountability and partly because they may be poorly designed in the first place.

      The process of creating new programs has formulated some self-correcting mechanisms intended to foster coordination. At the federal level, the consolidation of training programs in CETA in 1973 and JTPA in 1982, and most recently the WIA of 1998, reflected in part the exasperation with the proliferation of training programs. JTPA has allocated funds specifically for the coordination of vocational education and job training, and federal legislation often requires agencies to approve the plans of others. In a similar vein, the 1992 JTPA amendments encouraged states to develop Human Resource Investment Councils (HRICs) to plan and monitor federal training funds for job training, vocational education, and adult education. In an effort to cut the Gordian knot of proliferating programs once and for all, Congress contemplated a consolidation of vocational education, job training, and adult education funds in 1996, a process that would have virtually eliminated federal regulations and would have allowed states to fashion their own systems combining state and federal resources. The 1996 efforts failed, however, and the most recent Congressional efforts--the WIA of 1998, and legislation for vocational education being considered in fall 1998--maintain the divisions in funding among job training, vocational education, and adult education.

      At the state level, frustration with the chaotic system has led many states to begin their own forms of coordination or consolidation; other states initiated consolidation in anticipation of federal workforce legislation, as we shall see in Section I. Indeed, the pace of state interest in reform has increased considerably. Ten years ago, most states were content simply to follow federal regulations about coordination and spend federal coordination funds, but they rarely added any initiatives of their own; they generally allowed local control. Most successful forms of coordination and most program innovations were local, with local officials vociferous in their complaints about both state and federal constraints.[5] Currently, however, a number of states--including the ten we examine as well as many others with new advisory committees, state HRICs, and super-agencies overseeing both education and training programs--are experimenting with state policies designed in some way to consolidate, coordinate, or otherwise reform their education and training systems.

      The time is ripe, therefore, to examine these state activities, to understand what they are and to examine what influence they have on local programs. In emphasizing statereforms, we are implicitly assuming that state rather then federal initiatives will continue to dominate. Partly this reflects the political realities of the past several decades, when federal legislation has increasingly provided states with the authority to make decisions through various block grant and consolidation proposals. Even where federal funding and regulations persist, waivers of federal regulations have become increasingly common, and even (as we will see in the case of Oregon) institutionalized in durable agreements. The importance of states also comes from the fact that most programs considered education--including postsecondary vocational education in community colleges, as well as adult education--to be largely the responsibility of the states, so that creating a coherent education and training system requires the active engagement of state governments.

      We can have no way of knowing whether developments in state workforce development systems will continue to parallel those in education. We may be witnessing a period of rationalization and system-building based on state initiatives that will eventually result in better articulated programs and more effective systems, though it is also possible that the state reforms we examine reflect only temporary interest on the part of a few states. As we will see, some states have made substantial progress only to have a new governor change course abruptly, or a new priority (like welfare "reform") supersede earlier innovations. But we can at least see some directions that, if developed consistently over the coming decades, could well create much more coherent and effective workforce development systems. The direction of change is unmistakable: the structure of local and state efforts is moving in the direction of greater coordination and coherence, even if, as in the development of the education system, it is uneven and varied from state to state.

The Methodology and Scope of Our Inquiry

      Initially, we chose ten states to examine, drawing upon our own knowledge of state developments[6], on information from other national organizations, and on preliminary phone calls to a few states whose reforms were unclear. We were looking for states that had made a conscious effort to reform their workforce development systems in some way, that had emphasized reforming more than one or two programs, and that had ideally been engaged in reform for several years. We also wanted a variety of states, and a variety of approaches to reform. We ended up rejecting several widely cited states with planning councils that were advisory only and relatively powerless, and states that were in the midst of political upheaval precluding any real reform. The following were the states we chose:

1.	Florida, which began its reforms in the late 1980s and has consistently promoted a series of performance-based and market-like reform mechanisms.
2.	Iowa, which also began its reforms over a decade ago and has been making steady progress, specifically with innovations in funding economic development.
3.	Maryland, which had begun a series of reforms under the Governor's Workforce Investment Board (GWIB) dating from the late 1980s, and then reversed course.
4.	Massachusetts, which had begun a series of reforms in the mid-1980s, interrupted them during a period of economic decline, and then resumed reforms in very different ways under Governor William Weld.
5.	Michigan, which developed the innovative Michigan Opportunity System in the early 1990s and then reversed its efforts from a bottom-up, client-oriented system to a top-down, employer-driven system, more concerned about welfare and business pressure for short-term, job-specific programs.
6.	North Carolina, which has followed an economic development policy since the late 1950s, with novel approaches to both workforce development and its community colleges.
7.	Oklahoma, which has adopted a unique voluntary approach to coordination.
8.	Oregon, which has a strong reputation as a state emphasizing workforce development, fostering collaboration, and implementing innovations (like the Oregon Option and Certificates of Initial Mastery).
9.	Texas, which began its efforts in 1989-1991 with several studies and then consolidated numerous programs in the Texas Workforce Commission.
10.	Wisconsin, a strong-governor state that has been widely cited as being in the forefront of workforce development reforms, but has since turned its attention to welfare reform and "work first."

      In addition, several individuals suggested that we visit Arizona, particularly to look at the variety of activities in the community colleges there. Arizona has concentrated on economic development and establishing one-stop centers as joint planning mechanisms. The Maricopa County Community College District provides an interesting case of community colleges playing central roles in a local workforce development system, and so we will mention it from time to time.

      These states are not a random sample of states, but they do display considerable variation. They span all regions of the country, and most of them include a mix of urban and rural populations. Several (Massachusetts, North Carolina, Oregon, and Wisconsin) have enjoyed particularly low unemployment rates recently; none of them is a particularly high-unemployment state, though Texas has pockets of very high unemployment in the Rio Grande Valley (along the Mexican border). Several (Florida, Iowa, Massachusetts, North Carolina, and Oregon) have been engaged in reforms for a decade or more; while others are newcomers. Several (like Iowa, Michigan, North Carolina, Oregon, and Wisconsin) are states with strong governors, while Oklahoma and Texas are widely recognized to be weak-governor states. For our purposes, they are sufficiently varied so that any conclusions are unlikely to depend simply on the particular sample chosen.

      In each of these states, we interviewed state-level officials responsible for community colleges and technical institutes, JTPA, one-stop centers, welfare-to-work programs, adult education, and state-funded economic development initiatives, and we interviewed officials of any state-level coordination councils or super-agencies. In addition, we spoke with legislative staff for the committees with responsibility for education and training. These interviews were designed to clarify the origins, structure, and effects of any reforms, the political issues at the state level, and the problems in implementing state initiatives. (The protocols for these interviews are included in Appendix A.) They provided good overviews of state reforms and a variety of perspectives, though officials tended to be descriptive rather than evaluative, and many could provide neither historical nor comparative perspectives across states.

      In order to get a local perspective on state reforms and on the balance of local and state initiatives in these reforms, we chose two communities in each state to visit. We chose these communities using several criteria. We included at least one community that was reputed to be well along in implementing state initiatives, based on information from state officials; we sometimes included a local community with a reputation for strong local coordination, regardless of whether it developed in response to state initiative or was locally developed. We also tried to pick a typical or dominant urban area (like Baltimore or Boston) and a more rural area (or, in the case of Massachusetts, a smaller city). Appendix B lists the local communities we examined. We interviewed the heads (or other knowledgeable individuals) of local community colleges; adult education programs; the JTPA administering agency; welfare offices; local or regional coordination boards; and, where they existed, one-stop centers. These interviews concentrated on local perceptions of state reforms, the nature of local changes, and the balance of local and state initiatives. The protocols are contained in Appendix A. Because we guaranteed confidentiality to those we interviewed, we do not identify any of them when we quote them except by a general description.

      A third component of our study did not work well. At both the local and state levels, we asked officials to nominate exemplary programs (see question 9 in both protocols). Our purpose was both to get some idea of how local and state officials conceive of quality, and to gather nominations for exemplary programs that we might then examine more carefully.[7] As it turned out, most local and state officials could not respond in an informed way to this question (see discussion in Section VI). Aside from legislative requirements--enrollment targets, or performance measures in JTPA, for example--they had few clearly defined ideas of what high-quality programs might be. They generally did not spend enough time visiting programs to be knowledgeable about their core components.

      Not surprisingly, we found substantial variation among the ten states we examined. Some--particularly Florida, North Carolina, and Oregon--have made real progress in a relatively consistent direction over a number of years. Others are making progress, but at a much slower pace; still others have changed course so that earlier changes have been undone, or contradicted by new directions. But we remind readers that, regardless of the progress they have made, these ten states are among the most active in the country. If many of these states have failed to change very much, we suspect that this is doubly true for most of the 40 states we did not observe.

      The workforce development system is a moving target, and some of our facts are already out of date. We interviewed local and state officials in the summer and fall of 1997, and checked our conclusions in winter and spring of 1998. However, particularly in states with fast-moving developments like Florida, some of the policies we describe have already been superseded by others, or problems in implementation have been overcome, or other changes have developed. For example, in Massachusetts, Governor Weld reorganized state government in fall 1997 and created a new agency--the Department of Labor and Workforce Development--with responsibility for many programs (see Table 1); the Massachusetts Jobs Commission, which had previously been quite influential, is no longer setting the policy agenda for the state. And such changes will continue to take place in almost all the states we examined. We, therefore, place our emphasis not on the small details of different local and state practices, which are bound to change, but on the larger patterns among these ten states.

      In Section I, we describe the overall visions and practices that states have created, examining the difficulties in implementing these visions in Section II. Section III analyzes the local-state relationships in the ten states. Section IV then details the roles of employers, whose participation is often seen as critical. Section V examines the special place of welfare "reform," which has been particularly damaging to state efforts to create coherent workforce development programs. In Section VI, we summarize the different meanings of coordination and system-building, presenting a hierarchy of coordination efforts as well as highlighting issues of quality. Section VII clarifies the contradictions in state policies, pinpointing the special difficulties that have affected many states. The final section outlines the implications for state and federal policy, including a note on the likely effects of the WIA of 1998.

SECTION  1

Recent State Reforms:
Visions And Strategies

      Our ten states have taken different directions in reforming their workforce development systems. Fortunately, that variety is instructive about the efficacy of different approaches. In this section, we concentrate on what states have intended to do, leaving the implementation issues to Section II and the effects on local programs to Section III. We first review what caused states to initiate reforms. We then describe the reforms themselves and the mechanisms, or "instruments," that states have used to change their workforce development system. The progress that states have made turns out to depend heavily on the stability and consistency of their efforts over time, as we clarify toward the end of this section, and so the importance of political factors is clear.

The Impetus for Reform

      During the 1980s, very few states had thought much about reforming their workforce development systems in systematic ways. Since then, several developments have prompted states to become more active:

• Declining economic conditions forced some states to take a more active role in improving their economies, and enhancement of education and training became one of the policies to reverse declining conditions and enhance competitiveness. For example, Oregon's timber and wood processing industries suffered badly in the 1980s, and unemployment rose into double digits. In response, a strategic planning process led by Governor Neil Goldschmidt produced a 20-year plan,Oregon Shines,with workforce development as one of its three priorities. Massachusetts released a report called Choosing To Compete,also stressing the role of education and training. Similarly, the decline in Iowa's agricultural base, along with a major reorganization of state government, caused the Department of Economic Development to prepare a strategic plan to include business and industry, educational institutions, and local economic development officials. The initial plan, New Opportunities for Iowa,released in 1987, included various recommendations to refine the state's education and training programs. And when Arizona identified ten economic clusters for recruitment and expansion in the early 1990s, education was earmarked as one of seven mechanisms to achieve this kind of economic development.
  
  
• Some states discovered on their own the bewildering variety of workforce development programs, and took steps to reduce the chaos and duplication well in advance of any federal initiatives. For example, a study conducted in 1985 by the Wisconsin Department of Industry, Labor, and Human Relations found over 40 programs scattered in 12 agencies. In response, Governor Tommy Thompson created the Wisconsin Jobs Council in 1987 to develop a framework for coordination and began supporting Job Centers, which were early versions of one-stop centers. The earlier mentioned studies in Arizona, North Carolina, and Oregon are other examples.
  
  
• Some states began their coordination efforts in anticipation of federal consolidation in 1996. In Oklahoma, a weak-governor state, state agency directors had been discussing the need for some kind of coordination; the prospect of federal consolidation strengthened their resolve to initiate a voluntary Workforce Quality Compact starting in January 1996. Their efforts have continued with gubernatorial support despite the failure of federal legislation.
  
  
• Some states reflect a mixture of influences. In Texas, for example, a legislative mandate and some "good government" Republicans recognized the lack of coordination among programs and generated several reports in the early 1990s. Legislation was then introduced in 1993 and finally passed in 1995, spurred in part by anticipation of consolidation. The reforms enjoyed bipartisan support, first with a Democratic governor (Ann Richards) and a Democratic legislature in 1993, and then under a Republican governor (George Bush Jr.) and a more mixed legislature in 1996.

      To some extent, the states that began their reforms in anticipation of federal consolidation were left high and dry when consolidation failed to pass. They found themselves trying to coordinate federal programs but still operating under federal rules and regulations. For example, the Texas Workforce Commission's (TWC) effort to provide ES funds to local agencies, to use as they saw fit, was thought by Texas policymakers to require permission from the regional office of the U.S. Department of Labor, which refused this permission. More generally, state efforts to develop flexible programs that are oriented to employer needs and reliant on employer advice have been impeded by the continuation of federal rules and regulations. As a community college administrator in Florida mentioned, "It's really hard to tell someone at Southern Bell we can't do that because our regulations won't allow it, or we must wait for approval which takes four to six weeks." However, we note that the federal efforts at consolidation have still had a positive effect on reform because they have forced states to consider what they might do if they were free of federal regulations.

Overall State Strategies

      The dominant state strategy can be simply described, though it has an infinite number of variants. In general, a state agency or office is created with a certain set of statewide responsibilities. Then--partly because state offices can rarely be in close touch with local labor market conditions--local or regional counterparts are established with responsibilities for implementing state policy in local labor markets. For example, in one of the earliest such efforts, Massachusetts created the Massachusetts Jobs Council in the late 1980s to review all work-related education and training programs, replacing the State Job Training Coordinating Council (SJTCC). Then Private Industry Councils (PICs) were transformed into Regional Employment Boards (REBs) in each of the 16 Service Delivery Areas (SDAs), with a wider range of responsibilities than PICs had. Similarly, Michigan created a HRIC called the Governor's Workforce Commission, an advisory body with administrative responsibilities carried out by the Michigan Jobs Commission; then local Workforce Development Boards (WDBs) were created to plan the allocation of funding for workforce development. Oregon has the state Workforce Quality Council (WQC), with 15 regional councils. Texas initiated the TWC, replacing the Texas Employment Commission and incorporating other programs such as JTPA, JOBS, and child care, along with local WDBs. In North Carolina, the governor created the Commission on Workforce Preparedness by executive order, abolishing the state councils for vocational education, JTPA, and basic skills and literacy. Most of these local and state bodies were created by legislation, replacing earlier SJTCCs with HRICs and expanding their mandates. A few--for example, advisory councils like Michigan's Governor's Workforce Commission, and North Carolina's Commission on Workforce Preparedness--were instituted with executive authority.

      One other exception to the pattern of legislatively developed state councils is the Oklahoma approach, which is a voluntary effort so far. In January 1996, a group of state agency heads began meeting to start addressing the obvious need to coordinate the state's programs, regardless of what the federal government did. Based on "on-the-street research" about other state efforts, the participants decided not to seek formal consolidation because this just creates "another layer of government, bureaucracy, and cost--plus people don't like to be taken over, and that's a takeover, and in most cases we found it was a hostile takeover." Instead, the group formed the voluntary Workforce Quality Compact, which met informally on Saturdays and developed a "Memorandum of Agreement Regarding the Creation of Oklahoma's Workforce Development System" in June 1996. The state group hopes to develop at least 21 local Compacts to bring together various education and training providers, but--since there is no legislation with enforcement power--these local Compacts must be voluntary, at least for the moment.

      While the overall pattern of a state agency with local counterparts is widespread, they vary substantially from state to state in their responsibilities, their influence, and the programs they incorporate. (Table 1 summarizes many of these differences among states.) One important distinction is between state agencies that are advisorywith responsibilities for planning and oversight, and those that are administrative,with the authority to allocate funds. In some states, both an advisory council and an administrative agency coexist. For example, Texas has the advisory Texas Council on Workforce and Economic Competitiveness (TCWEC) alongside the administrative TWC; and in Michigan, the Governor's Workforce Commission is advisory and the Michigan Jobs Commission (MJC) has administrative responsibilities. In North Carolina, the Interagency Coordinating Council, comprised of representatives from state agencies, provides advice to the Governor's Commission on Workforce Preparedness, which is comprised mostly of businessmen (sic).

      In general, advisory councils are less powerful and influential than administrative agencies. Several states with purely advisory state councils were not included in this study when it became clearer that the councils were powerless; and Oklahoma's voluntary efforts have found it difficult to make changes at the local level. But some advisory councils have considerable power nevertheless; for example, while Michigan's Governor's Workforce Commission is strictly advisory, its creation by the governor and its roles in reviewing state policy and in approving local workforce development plans have made it highly influential. In contrast, administrative agencies often have their hands tied, and therefore have less authority to reform programs than one might expect.

      State-level agencies vary substantially in the programs they include, and in their real authority over these programs. For example, the TWC was originally conceived as an agency that operated an integrated job training and employment-related education system; but, in practice, the TWC includes JTPA programs; the ES, which DOL claims cannot be integrated with other programs; the JOBS program, which because of the state's emphasis on "work first" provides minimal education and training; the UI system, which provides income support for the unemployed but has little connection with education and training; the Child Care Management System, which consolidates child care services from various other programs but again has little to do with training; and several smaller programs like the Food Stamp Employment and Training Program (FSETP) and the Senior Texans Employment program. TWC has placed different programs in separate administrative divisions so that the decisions across programs that might enhance coordination are difficult to make. Furthermore, the large education programs--adult education, the community colleges, and vocational rehabilitation--are under TCWEC's purview for planning and evaluation, but they continue to be administered independently of TWC. In effect, then, TWC has gained the authority to coordinate JTPA with a number of small and peripheral programs, but, in general, the large programs it consolidates are either too dissimilar to coordinate to any great extent, are protected by continuing federal regulations, or have been insulated by administrative structures.

      Similarly, in Maryland, the Governor's Workforce Investment Board (GWIB) has limited administrative authority, and administrative power rests with separate state agencies. Unlike other states (including Michigan), the current governor has been unwilling to put his authority behind the GWIB, which, therefore, has neither statutory nor political influence. In addition, all but one of the community colleges are locally directed, with relatively weak state oversight (as is true in most states), again making it difficult to coordinate across state agencies.

      In the dominant pattern, local or regional councils are responsible for carrying out policy at the local level and, therefore, are responsible for creating the "system" that potential clients (or students) and employers encounter. At this level, a number of metaphors govern what localities and states are trying to accomplish, which, like all metaphors, provide a simple though incomplete vision of what a state is trying to accomplish. One is the image of the "seamless system." In Iowa, this means that the provision of a variety of services to particular individuals is invisible to them, even though the provider agencies themselves may have to go through substantial contortions to combine services from different programs with different eligibility and regulations. The idea is the same in North Carolina's one-stop centers:

We don't talk to clients about programs, but it is up to our staff to find the pots of money that might pay for child care, transportation, which part the client should invest in. We keep up with changes in regulations.

      Other popular metaphors have relied on the imagery of doors. In Michigan, the notion of "no wrong door" implies that, no matter what state agency individuals first approach, they will be directed to the appropriate provider; Michigan has called its one-stops No Wrong Door Centers and, similar to Oklahoma, has specified three models for achieving this: (1) one-stop integration, in which agencies are physically located in the same building as well as being linked electronically; (2) multiple points of entry, in which agencies are linked electronically, even though they are separated geographically, and may serve as feeders to other programs; and (3) the hub and cluster plan, in which there is a main center of co-located programs as well as programs located elsewhere that refer clients to the "hub." During the 1980s, Massachusetts developed a similar image of "one system, many doors," assuming that individuals finding their way to any program could get the right information about appropriate services (Grubb, Brown, Kaufman, & Lederer, 1990b, p. 24).

      Florida has developed a "zipper" metaphor to describe its coordination effort which links agencies together at both the local and state levels:

Consolidation is trickier . . . . We decided not to strip the money out of the agencies and we decided to encourage the agencies to collaborate at the state level. At that point, you say that an employee over at Labor, for example, is going to have a stake in the success or failure of an employee over at the Education Department, and they will both share what is the interest of two or three agencies at the local level working together. This is called the "zipper" strategy.

It translates the same way locally. What you've got at the local level are . . . the boards and commissions that are responsible for strategy and policy. So, we've had to link them together with the "zipper." Mainly what we try to do is to have some kind of linkage at each level that tends to move people in the direction of succeeding if they collaborate well, and without a frontal assault on any one institution try to press them toward adopting the best outcome strategy.

      A third pattern has focused on creating a single point of entry to a state's system. In most states, one-stop centers provide the single point of access. In Massachusetts, the local REB is the central agency that charters the regional one-stop center, which is supposed to be the central point to which all individuals and employers come for referral to any services they need. The creation of a single point of contact is a response to the criticism that the proliferation of programs has made the system so confusing to its potential clients that they cannot find their way to the programs they need. Something similar may be achieved when programs systematically refer individuals to one another. In North Carolina, for example, one local official noted,

Our staff pick up the phone and call other agencies and say, "We think we have a good referral," and we set up an appointment right then. Some agencies have said, "If you get a person in your chair that is a good referral, call us and we will come right out." These are not written in contract agreements, but that is part of our customer perspective.

      The ability of local councils or boards to achieve "seamlessness," or to act as a "door" to all other programs, depends on the responsibility and authority given to these local entities. When certain programs are outside the scope of local responsibility--as is usually the case with the major education programs, as we will see--then local workforce development councils do not formally have the ability either to refer individuals to education, to create vertically integrated programs (e.g., from short-term job-training to longer-term education), or to craft a multiple-services strategy that relies on the extensive resources of programs outside their scope of authority.

      Michigan has taken a new approach in designating three tiers of programs for which the local WDBs are responsible. Tier One programs are under direct control of local WDBs, and, in addition, must be accessible through the No Wrong Door Centers. Local WDBs have only planning authority over Tier Two programs, and only some of these programs must be included in No Wrong Door Centers. Finally, local councils or boards are expected to use their local knowledge and contacts in the community to influence Tier Three programs, which include those that are less directly related to workforce development (like K-12 education and public transportation). The designation of three tiers, therefore, defines a continuum of local control, with local boards having the most authority over Tier One programs and the least over Tier Three.

      In practice, many states are relying heavily on one-stop centers as the linchpin of local coordination.[8] Very often, local workforce development councils have been given responsibility for one-stop centers as a way to begin the process of local coordination, thereby melding a federal initiative with a state process. These centers, initiated in 1994 by the DOL, represent the federal government's most substantial effort to coordinate disparate federal programs. In a system where resources are usually committed to direct services and cannot be reallocated to a coordination role, federal funding for one-stop centers represents some of the only funding for system-building activities. However, it is crucial to identify precisely what these centers do because the rhetoric around them is much more expansive than the reality of what they accomplish. In general, we found that one-stop centers at the local level do one of three things[9]:

1.	Information:By far the most pervasive role of one-stops is simply to provide information about the services available in a local area. Often these are described as "self-service," which means that individuals can gain access to descriptions of local programs and to labor market information--frequently in computer-based archives--that they use on their own, without much guidance from a counselor or caseworker. Much less often, one-stop centers provide workshops about how to use such information, or provide direct help in locating information--particularly to specific client groups like welfare recipients. The provision of information in one place, particularly where information has been hard to find, is a step in the right direction, and is crucial in states that are beginning to use market-like mechanisms that presume a well-informed "consumer" of education and training. But whether the least sophisticated individuals searching for education and training programs can find their way to one-stop centers, and whether they can take advantage of information resources (particularly unfamiliar computer-based resources) without help, are difficult questions that have rarely been asked, much less answered.
2.	Co-Location:A smaller number of one-stop centers co-locate offices of education and training providers in one space. This provides information about the services available, but it represents a step forward because an individual can get personal information and advice (rather than merely text- or computer-based information), can ask questions and explore alternatives, and can fill out applications on the spot. Co-location still places the burden on the "consumer" to find the one-stop center and decide among the services available, but it provides much richer information resources. For example, Iowa's network of workforce development centers was established to provide a range of services in a customer-oriented, business-like atmosphere. These centers, about half of which are administered by community colleges, provide customers with various services (including basic skills) through agencies such as Promise Jobs, JTPA, ES, Veterans Employment Services, Senior Services, UI, and Vocational Rehabilitation. Often adjunct services, such as Goodwill, Green Thumb, and other CBOs, occupy space within the center, providing customers with a true one-stop opportunity for services.
3.	Service Coordination:A still smaller number of one-stop centers have started to coordinate the services in their area. For example, the Newmark Center in Oregon coordinates services provided by Adult Basic Education, Adult and Family Services (the TANF program), and sixteen other public and private agencies within a single building. All these programs participated in developing the mission of the center, which focuses on accessibility, convenience for clients, and providing multiple services in addition to training (like child care and family abuse prevention). Individuals seeking assistance fill out a common in-take form and attend orientation sessions that provide an overall view of all services provided and then direct individuals into particular classes or programs. The philosophy of the center emphasizes "really looking at the whole aspect of moving people into first jobs and then self-sufficiency."

      However, the number of one-stop centers that play a role in coordinating services is still small. In most cases, the local councils are still feeling their way, learning about local participants and programs, and they lack both the moral authority and the administrative power to require coordination. In some cases, state bureaucracies seem to have impeded the development of one-stop centers. In Maryland, for example, some local job training officials were disappointed in the state's one-stop system, and viewed the state bureaucracy as an impediment to greater integration of local efforts. They also viewed the state's welfare initiative as "not helping the system work better together."

      As we will see more clearly in Section III, the development of locally coordinated systems is something that, as local administrators all acknowledge, requires a long period of time. Stability in program rules and regulations; good personal relationships among administrators; programmatic flexibility; and, ideally, support from the state level are all necessary (Gula & King, 1990). It is, therefore, unrealistic to think that one-stop centers, which are relatively recent and provide limited funding without any direct leverage over other programs, can instantly improve local coordination. As a mechanism to enhance information about existing programs, and as a process for getting local programs to begin working together, they are universally regarded as steps forward. But if they are confined to a role in information provision, then they will never be the mechanisms of coordination that most states envision.

The Instruments of State Policy: The Variety of Approaches

      In reforming their unwieldy systems of workforce development, states have used a variety of mechanisms. In this section, we contrast several different approaches to state action: institutional approaches that try to strengthen the quality of public institutions, as distinct from market-oriented approaches that use competition and other market-like mechanisms to induce change; and mechanisms that use various inducements, including funding and technical assistance, contrasted with those that try to impose change via mandates, sanctions, and other punitive measures.

Institutional Versus Market-Like Mechanisms

      A decade ago, most efforts to improve state systems emphasized institutional mechanisms of change--efforts to improve the quality of public programs and the connections among them, through public policy that required government programs to reform in particular ways. Since then, a greater interest has developed in the policies that mimic markets instead, through price-like incentives for programs to change through competition, and through voucher-like mechanisms that make consumers rather than governments the real decisionmakers. The rise of market-like mechanisms has been due, we surmise, to dissatisfaction with the slow pace of reform via institutional mechanisms, and to the ascent of free-market ideologies over faith in government.

      Among the institution-building mechanisms that states commonly use are the following:

• Advisory committeesare designed to provide information to programs, particularly about what employers want most. Following the example of PICs, a clear trend is to require the majority of advisory committees' members to be from the private sector. For example, Florida's regional WDBs require 51% participation by local business leaders at the Chief Executive Officer (CEO) level. These regional WDBs also have the option of including the local WAGES (Work and Gain Economic Self-Sufficiency) Board, and often use the same membership to address the needs of welfare recipients as well as the local workforce. In other cases, business groups have a substantial influence. In Maryland, for example, the Business Roundtable has been particularly active in informing the state's school-to-work (STW) efforts.
  
  
• Consolidation may improve the quality of public institutions by allowing particular state agencies to make decisions involving more than one program, so that judgments can be made about relative strengths and weaknesses, and about appropriate patterns of cooperation or integration. Of course, as we pointed out above, the effectiveness of consolidation depends on which programs are included and excluded, on whether some programs included cannot be changed for political or regulatory reasons, and on whether a consolidated state agency, in fact, makes joint decisions--rather than programs in different divisions being administered separately as in the TWC
  
  Oregon has taken the idea of consolidation one step further by making all state decisions with crossfunctional teams. These teams have representation from all the major state agencies concerned with workforce development, on the assumption that "by combining together we have better results than we do alone." Teams focus on particular issues to do "the detailed policy work that's necessary, rather than throwing people together and hoping it works out." Each state agency has members on such crossfunctional teams; for example, the Human Resources team in the Office of Community College Services represents community colleges in all initiatives, and thereby develops expertise on statewide issues. These teams have developed the state's plans for innovations like the WQC, one-stop centers, STW, and welfare reform. In addition, state personnel tend to work in several agencies during their careers, again supporting crossfunctionality in their approaches to decisions.

• Technical assistance,or advice from state agencies to local providers, is comparatively rare. Technical assistance presumes that state agencies have developed some expertise about quality to share with local agencies, and--as we will see in greater detail in Section VII--state officials often have little idea about the key components of a "good" education or training program, aside from those expectations embedded in state performance measures. However, North Carolina has increased its technical assistance, particularly in the form of staff development provided through the Workforce Development Institute (WDI), as described in Box I.2. Oregon has also developed staff training for program managers on various statewide priorities; this provides not only information about emerging issues but also a "signal that everyone needs to change in order to be successful." Maryland has provided professional development through its Department of Education, and convened local leadership to provide opportunities for shaping strategies, under the assumption that it is a local responsibility to define models of high-quality services. In addition, the Department of Human Resources (DHR), which oversees welfare reform, describes itself as a "technical assistance/consulting unit and partner" rather than a monitoring agency, and has provided some support services, initiated pilot projects around collaboration, and facilitated local partnerships.
  
  State agencies are in good positions--certainly better than local programs--to collect information about effective practices around the state (and from other states), to evaluate claims of effectiveness, and to disseminate information about these practices. However, technical assistance requires a different kind of expertise than the "traditional" state activities of approving, monitoring, and coordinating local plans, and many state agencies have found it difficult to make the shift. While a few states are trying to be more service-oriented rather than regulatory, this approach to improving quality has been tried in only a few states.
  
  As states move toward greater accountability, technical assistance becomes, somewhat paradoxically, more important. If programs are held accountable to state standards, but lack the capacity to change, then accountability can only identify poorly performing programs without improving them--a politics of humiliation rather than improvement. But if local programs can develop the capacity to change through technical assistance, then accountability can stimulate improvement in the workforce development system. In effect, there are two tenets of the new approach: there shouldn't be public funding without accountability; and, in turn, there shouldn't be accountability without technical assistance. Or, to put it simply: no funding without accountability; no accountability without technical assistance.
  
  
• Cultural changelies at the heart of Oregon and Oklahoma's efforts. In Oregon, the state is trying to move away from a traditional model--funding for relatively specific services with regulation and compliance review to make sure that funds are appropriately spent. In its place, the Oregon Option has articulated a "redesigned system" with four principles: (1) focusing on results rather than inputs; (2) promoting integration of services across agencies; (3) investing in prevention; and (4) delegating responsibilities for service to front-line, local providers. The approach may be described as one of policy leadership, rather than mandated coordination or consolidation. As one state official noted, what the state has done is to "make the most of the state policy leadership's interest in a quality workforce in Oregon through the influence of how we make decisionsrather than how we organize." This vision provides greater authority to local WQCs, under the assumption that they can be more effective in following these four principles rather than simply obeying regulations.
  
  Similarly, in Oklahoma, the state Workforce Quality Compact has developed a set of principles and goals that each member agrees to, though there are no sanctions except peer pressure. The principles represent an effort to get all state agencies--and, over the long run, local programs--to operate in different ways. These are cultural changes because they attempt to influence the basic approach of local and state agencies without coercion; they do not rely on the usual model of funding and regulation, and there are no sanctions if local governments do not comply.

      Increasingly, however, market-like mechanisms have become popular--mechanisms that try to mimic the incentives in markets, where profit incentives, competition and customer choice, and the fear of going out of business increase the effectiveness and efficiency of providing various goods and services. Among the most widely used market-like incentives are the following:

• Performance measures and standards create measures of performance--often, in workforce development programs, placement rates, earnings levels, or rates of leaving welfare--and then establish appropriate standards that local programs should meet. First introduced for JTPA in 1983, measures and standards simultaneously provide information to policymakers about performance, to administrators for use in program improvement, and to consumers about effectiveness. They shift the emphasis from inputs to outcomes--at least in theory. Florida has developed one of the most extensive system of performance measures, described briefly in Box I.3--as befits its continuing interest in creating market-like incentives for high performance--and has now moved to performance-based funding. North Carolina has urged the formation of a state skill standards board through its Workforce Preparedness Commission.
  
  However, performance measures can be valuable even if they are not used as the basis of funding. Texas has developed a system to evaluate and manage its workforce system, enacted in 1997, that applies to all education and training in the state, not just JTPA or TWC-administered programs. Based on a project carried out in six states by the National Governors' Association (Trott & Baj, 1996), and work by the LBJ School's Center for the Study of Human Resources (King & McPherson, 1997), two key performance measures have been adopted for every program in the system: (1) employment rates and (2) post-program earnings measured by UI wage record data.[10] For the moment, these measures are being used only to monitor strengths and weaknesses in the state system, not to fund or eliminate programs. Yet another example is Oregon, which developed a set of performance measures in 1989 for statewide priorities such as education, economic development, and environmental protection. Called benchmarks, the measures provide a common language to determine progress. Despite this system of measures, state agencies in Oregon do not allocate funding based on local performance as Florida does.

• Performance-based budgeting is the next logical step once performance measures have been created. In a sense, JTPA incorporates performance-based funding because programs that fail to meet their performance standards two years in a row face reorganization of the PIC. In practice, however, states rarely impose these sanctions, and they affect organization rather than funding.
  
  In the ten states we examined, Florida has gone the furthest to implement performance-based budgeting for its community colleges. In 1996, colleges "contributed" $12 million (out of a $40 million discretionary fund), and colleges could then earn these funds back on the basis of students completing associate degrees and vocational certificates, with double incentives for economically disadvantaged students, dislocated workers, and welfare mothers. Initially, participation by community colleges and technical centers was voluntary; however, Florida is planning to phase in Performance-Based Budgeting over the next few years, which will make participation mandatory and will increase the amounts subject to performance-based funding to 15% of all funding--though the measurement of performance is still under discussion. In addition, for its welfare "reforms," Maryland has introduced pay-for-performance contracts to private providers at both the local and state levels.
  
  In other states, performance-based funding is still under discussion. In 1995, the Governor's Commission on Workforce Preparedness in North Carolina recommended shifting from enrollment-based to outcome-based funding. The state community college system is conducting a self-study for recommendations about how current funding formulas based on enrollment might be modified by performance-based mechanisms.
  
  
• Competition among providers is a way of breaking up the monopoly of public providers and the supply-driven pattern of education and training programs. Florida has taken this the furthest, with provisions in 1996 legislation that tried to create a level playing field, encouraging competition among programs. If a local provider is not meeting the needs of business, another program (public or private) may offer a similar program and--potentially, at least--drive lower-quality programs out of business. As one community college administrator noted, "Under this bill, there isn't a hiding place for programs of low quality." Similarly, Iowa would like to introduce competition among service providers, with the state government shifting from being a provider of services to being a broker of services provided by a variety of public and private agencies. However, early efforts to introduce competition raised the ire of state employees unions, and progress has been slow.
  
  
• Competition through subcontracting is a mechanism for providing services under more competitive conditions, where public and private providers compete for public funds to provide specific services. Subcontracting has a relatively long history in local and state government, where highway construction, garbage collection, janitorial services, bill collection, and other similar services have been contracted to private firms. In the education and training sphere, a few school districts have made headlines by subcontracting some schools to private firms like the Edison Project, or services to other businesses like Score! and Sylvan Learning Centers. In workforce development programs, local JTPA programs commonly use subcontracting mechanisms, presumably choosing among different bidders for specific services on the basis of price and quality. Currently, subcontracting is being extended to welfare-to-work programs, where certain states (like Maryland and Florida) and localities (like Milwaukee) have subcontracted with private providers for specific services. In addition, as part of its promotion of competition, Florida and Texas are requiring their regional boards to subcontract for services as a way of increasing competition. Many local boards have been designing a "simulated block grant" approach, consolidating separate funding streams (including STW grants, welfare-to-work funds, and HS/HW Incentive Funds) and contracting out the provision of direct services. For example, in Palm Beach and Dade Counties in Florida, Lockheed Martin has contracted to provide case management services for WAGES recipients. Michigan requires its local Michigan Works! boards to subcontract for services, under the belief that this will yield a more efficient delivery system. The core of Massachusetts' coordination policy relies on a subcontracting mechanism: it funds new career centers by redirecting funds away from agencies that have traditionally received them to new centers competitively selected to meet customer needs.[11] The state's experience so far is that, while the one-stop centers established through competition are of high quality, the intra-state conflict created by the process may have undermined their long-run base of support. Similarly, Texas requires its local WDBs to subcontract the management of its One-Stop Career Centers, and in Dallas County that provider is Lockheed Martin, a private, for-profit firm. The common statement that governments are turning into brokersof services, rather than direct providers,is usually a reference to the increasing use of subcontracting.
  
  
• Voucher mechanisms are ways of providing individual consumers with the purchasing power necessary to make choices. These vouchers, of course, have little effect if choices do not exist, and, therefore, their effectiveness depends on the existence of competition among public and private providers. The largest voucher mechanisms in the national education and training system include federal grants and loans to postsecondary education, including Pell Grants to low-income students, the new Hope Tax Credits, and the Lifelong Learning Credit, all of which can be spent in community colleges and proprietary schools (but not for adult education or short-term job training). The WIA of 1998 also places greater emphasis on Individual Training Accounts, which may turn out to be like vouchers. Voucher-like mechanisms have been contemplated at the state level as well, including a pilot voucher project under JTPA in Baltimore that provides "customized management accounts" to eligible clients, allowing them to select among training providers with a lifetime cap of $7,000 per individual.
  
  
• Consumer information is a widely accepted requirement of market-like systems, since uninformed consumers cannot possibly make rational choices. One-stop centers are the most obvious mechanisms for increasing consumer choice. In addition, several states are planning to make information available from their performance measures. However, it is important to note that one-stop centers and other public sources of information usually refer individuals only to certified public providers, rather than to a broader array of providers as a true voucher system would (Barnow & King, 1996). It is possible, however, that this will change under the WIA.
  
  
• Other market-like policies outside the realm of education and training programs include tax incentives for business and regulatory relief, both of which figured prominently in Governor Engler's reforms in Michigan. The tax mechanisms included the creation of tax-free Renaissance Zones in economically depressed areas, with businesses being promised ten to fifteen years exemption from local and state taxes. However, the effect of such policies on education and training programs is indirect and difficult to trace, and, in any event, is contingent on whether such policies have any effect at all, which is often quite doubtful. Particularly in market-oriented states, workforce and economic development can be promoted through tax and regulatory mechanisms rather than--or in addition to--interventions into education and training programs.

      There is, of course, a long history of debate about the efficacy of each of these mechanisms of state policy. Many of the debates restate the conventional claims for and against market mechanisms, without providing much empirical evidence about how they operate in practice, particularly in the education and training field. In the case of subcontracting, there is evidence that the presumed efficiencies of subcontracting are often illusory, since the costs of contract monitoring often outweigh any savings. In the areas of education and training, the evidence from England--which has tried a broad variety of market-like mechanisms under the Thatcher and Major governments--indicates that such devices do not increase the exercise of choice except among the most sophisticated and well-informed consumers, and that they tend to exacerbate inequalities just as their opponents in this country claim (Finkelstein & Grubb, 1998). We note, therefore, that many arguments in favor of market-like mechanisms are really untested claims--though state practices are now providing opportunities to evaluate these claims.

      Of course, some states combine both mechanisms of institutional improvement and market-like practices. One-stop centers are examples of mixed policies since they provide information to consumers, both directly and through co-location, but they may also facilitate coordination--a form of institutional improvement--through co-location and through more direct activities with providers. Performance measures can be ways of improving consumer information and choice, though when they are used exclusively by state administrators to scrutinize local programs they are primarily mechanisms of accountability rather than consumer information.

      In general, states have been moving toward greater use of market-like mechanisms, though only a few states have adopted the most powerful forms: competition and performance-based funding. The ten states we examined can be roughly placed along the continuum depicted in Figure 1. At one extreme, Oregon has depended almost entirely on institution-building practices, including some consolidation; coordinated services for

welfare clients provided by JTPA and community colleges; crossfunctional teams to develop new state initiatives, described above; the development of indicators of quality (e.g., customer satisfaction, retention, and skill gains), not for punitive or funding purposes but to signal the need for improving quality; the development of statewide benchmarks, used not for mandates and sanctions but to "create an environment that supports performance and measurement," a "shared set of expectations" (Oregon's Benchmarks: Setting Measurable Standards for Progress,1991, pp. 1-2); and the development of long-range plans (like the 20-year strategic plan in Oregon Shines[1989] and Oregon Shines II[1991]), recognizing that workforce development and coordination are complex issues requiring long periods of time and stable leadership. In general, Oregon tends to distrust competition and other market-like mechanisms as methods of driving reform. Several pilot projects using market mechanisms--focusing on vouchers and competitive purchase of services using JTPA funds--have been tried, but the dominant sentiment is that "throwing it open to competition gets us just another version of chaos."

      At the other extreme, Florida has consistently followed the approach of enhancing market-like mechanisms. It has introduced competition into the system by developing three tiers of performance measures, which are at different stages of development and still require refinement:

1.	Customer outcomesas measured by employment in an occupation, demonstrating growth, continued employment, reduction in and elimination of public assistance, employer satisfaction with level of preparation, and return-on-investment.
2.	Program outcomeswith specific outputs in each of the four workforce strands: STW, welfare-to-work, one-stop centers, and the HS/HW initiative. Each component will calculate such output measures as the number of dropouts, leavers with marketable skills, program completers, and job listings filled.
3.	Program measuresthat measure services to enrollees, service recipients, and individuals moving among service components.

      In addition, Florida has forced all public and private providers of VET to compete with one another; it has had performance-based funding in vocational education since the late 1980s,[12] now extended to community colleges as described above and being phased into other VET programs; the state's Jobs and Education Partnership is developing still other performance indicators, to be used to develop future strategic plans; and FETPIP, which links records from various institutional sources, and provides information on outcomes. The state has been quite consistent, over more than a decade, in developing these market-oriented initiatives and--while it still has a range of more institutional mechanisms, including a local-state structure to administer programs like STW and one-stop centers--it uses a wider variety of market-oriented mechanisms than any other state.

      In between, as Figure 1 indicates, states use a wide combination of institutional and market-oriented mechanisms. For example, North Carolina has placed great emphasis on its technical assistance, but it has also stressed information through one-stops as a way of enhancing coordination among programs. In general, many of these states are moving toward limited coordination of programs (particularly those considered trainingrather than education) and reconstituted advisory committees on the institutional side. At the same time, many have adopted outcome measures and information provisions (particularly through one-stop centers) on the market-oriented side. Whether through planning or happenstance, most states have avoided the extremes of one approach or another, preferring a mixture of policies to improve their workforce development systems.

      We stress, then, that states have developed a variety of approaches to reform and coordination. Aside from the nearly ubiquitous use of a state-level agency with local or regional counterparts, there is hardly a single practice that has been adopted by all these states, and it is certainly incorrect to think that simple consolidation--the combination of programs with some incorporated into others--is a dominant strategy. Furthermore, the exceptions--the innovations that particular states have undertaken, like North Carolina with its technical assistance, Florida with its market orientation, and Oregon with its array of institutional mechanisms--are in many ways more interesting than the common practices. There is certainly no notion among the states that one size fits all--even in a relatively limited number of states.

Economic Development Efforts: Recognizing the Demand Side

      In addition to reforming their workforce development systems, many states have initiated policies to stimulate the demand side of the labor market. The underlying logic is that developing a more educated labor force, without increasing the demand for well-trained workers, is likely to be ineffective. Among the most important demand-side strategies are the following:

• Most states have programs to provide short-term customized training to specific employers, partly as a way of luring employers from out of state or keeping existing industry from leaving. Many of these take the form of state grants for firm-specific training, often operated through community colleges. In Maryland, the Department of Business and Economic Development (DBED) is collaborating with the DHR to assist businesses locating in Maryland, doing "whatever is needed to get businesses to locate here," and has also initiated collaboration with local SDAs and Job Service offices to assist with corporate expansion and recruiting. Iowa has taken a novel approach in allowing its community colleges to float bonds for firm-specific training; the bonds are then paid off by earmarking the income taxes paid by the corporations participating. This is essentially a way of allowing local colleges and employers, rather than the state legislature, to determine the spending for such activities, and Iowa's efforts are thus better funded than in most states.
  
  
• North Carolina has been particularly active in promoting economic development as the goal of all state policies, and has created community colleges that are specifically active in occupational education, in workforce training for employers, and in providing training for JTPA and welfare clients. Numerous community colleges have become active in such workforce development activities, including small business development centers funded by state resources in Oregon and North Carolina, providing information and (if necessary) training to small businesses about new technologies, business procedures, quality requirements, health and safety issues, and other issues relating to profitability that might otherwise escape their attention.[13]
  
  
• As part of its efforts to diversify the state's economy, Oregon's Economic Development Department has designated Key Industries, and each local Regional Strategies Board has selected three of these to emphasize in its six-year economic development plan. Some Key Industries have formed industry associations that, in turn, have become important in communicating sectoral needs to providers of education and training. For example, the Semiconductor Workforce Consortium of Oregon and Southwest Washington has defined a standardized set of job skills and developed industry-specific courses at the high school and community college levels. Several other associations are developing their own statements of skill requirements, and the state has begun to develop a database that would give VET providers access to information about job openings described by standardized skill and training requirements.

      There are, then, some steps being taken by states to stimulate demand for well-trained workers as well as to supply more education and training. Like state efforts to reform workforce development systems, these demand-side strategies hardly existed a decade ago. However, the effectiveness of these policies remains unclear. Many of these are still efforts to engage in "smokestack chasing," or efforts to lure mobile industry from other states--a tactic that is not very effective. In many cases, states do not discriminate between cases that might justify public funding for training and cases where employers should provide their own training because there are unlikely to be public benefits; often, a great deal of state money is being spent to little effect.[14] Certain other policies seem more promising, like the Oregon efforts to organize industry associations, but these are still not widespread. Finally, some community colleges' efforts in economic development (including small business centers to improve the efficiency and longevity of local businesses) provide help to employers while they supply any necessary training to new employees (Grubb, Badway, Bell, Bragg, & Russman, 1997). For example, the Maricopa Community College District brought together employers in several sectors, and now promotes its Semetech Network of semiconductor producers and suppliers:

We tend to be the state's neutral meeting ground for a number of employers. Instead of competing with one another, they're working together with us in a safe zone to pool resources in order to develop the technical capacity in our community to serve them with employees. Instead of stealing employees from one another, they work with us to develop technical capacity within their firm to train their employees. We focused on areas of mutual concern, mainly marketing the industry as a viable career. We needed students in the front door, and the firms needed students out our back door, so we cooperated.

      In such approaches, the conditions for economic expansion are effectively coordinated with the provision of an educated workforce.

In addition, economic development efforts in most states are not well-coordinated with education and training. Usually they take place in different departments. In Maryland, for example, Governor Glendenning's administration has deliberately separated economic development from employment and training: job training is administered by the Department of Labor, Licensing, and Regulation, while the new DBED handles all economic development. There is no consensus within the state about the rationale for this division, and many administrators are simply mystified. In Michigan, the extensive economic development efforts through Renaissance Zones and the Economic Development Job Training Program are uncoordinated with workforce development. As one researcher mentioned about the division between the Economic Development Service Division, which routinely calls on businesses but fails to develop job slots for JTPA clients, and the Workforce Development Division,

In theory, the workforce development people within the Job Commission essentially run their own programs, and they don't interact with the people who are calling on business. It's a sham. It's an agency running economic development and workforce development in parallel, without any synergy between them.

In theory, the great variety of state-funded training for employers supports economic development and, therefore, employment demand, while the training simultaneously creates the supply of trained workers necessary. In practice, however, states have given little thought to the conditions under which such programs stimulate demand and, therefore, they often provide subsidies for training (supporting the supply side) without enhancing demand.

      In general, therefore, there are no mechanisms in place to match supply with demand, even in a rough way. For example, most states would like to see high-productivity, high-wage employment move in or expand, but that is inconsistent with the need for more jobs for the least skilled welfare recipients going through "work first" programs. Similarly, most states have paid more attention to coordinating their short-term job training programs, but these are again aimed at relatively low-level jobs rather than the high-productivity jobs that most states want. Most states continue to talk about the skill requirements of the 21st century, and most state reports have a section repeating the need for higher-order skills, communications skills, and problem-solving abilities, as well as better preparation in basic verbal and mathematical competencies. However, aside from STW initiatives and standards-based reform in K-12 education, there has been almost no attention in state efforts to the kinds of curriculum and teaching methods that would ensure that such competencies are taught, especially in the short-term job training programs and in "work first" programs that provide no education or training whatsoever. At several different levels, therefore, there is a real mismatch between the emphasis of state economic development efforts and the reforms in workforce development systems.

      As always, there are important exceptions, usually in conditions where the same program participates in both economic development and in providing education and training. For example, small business centers in community colleges often identify technology and training needs within small firms, and also identify sources of supply. The area vocational-technical centers in Oklahoma support economic development by providing firm-specific training, and they have become one of the main strategies to attract business into particular regions of the state. The Regional Strategies Boards in Oregon identify Key Industries for local areas, and then are expected to link with regional WQCs to develop integrated plans for both workforce and economic development. In Maryland, DBED is trying to better integrate its economic development with education and training needs, trying to bring a business focus and demand orientation to the workforce development system. Texas has a process of identifying labor market information into planning models issued by local boards and community colleges; this process is intended to help them choose high-demand occupations and industries. Iowa community colleges can both identify needs for training among new and expanding industries and provide that training directly. North Carolina has tried to integrate the two by including community colleges whenever there are efforts to lure industry to the state; as a local official noted, "Economic development used to be location; now it's education." This is often accomplished by creating job training programs within community colleges, both through the short-term noncredit vocational programs called occupational extension and through special centers. As one administrator said,

We try to sell a unified vision of what economic development means in Columbus County, including an industrial park, good-paying jobs, and our Industrial Skills Training Center we built with the community college. The lack of a skilled workforce is a weakness when we try to attract new industry.

      Baltimore County provides an interesting local example of the integration of demand-side and supply-side policy. In the past, the Baltimore County office had created "speculative" training programs, without having jobs in hand. Now, they initially meet with employers through economic development partnerships, and then develop customized training programs to ensure that trainees have the competencies employers need so that they will be hired. The office contracts out its training to outside providers, believing that it can thereby serve better as an "honest broker," bringing together a range of services (including training) for employers.

      There are, then, a number of fledgling efforts to coordinate demand-side and supply-side policies. In the absence of such mechanisms, states are all too likely to engage in economic development efforts that bear little relationship to reforms in workforce development systems.

      On a more positive note, however, these state economic development strategies are quite new. Just as coordination among education and training programs takes considerable time, it may be unrealistic to expect that economic development efforts are at this point well-integrated with education and training reforms. As states continue to develop their "systems," however, this is one form that future coordination could take.

SECTION  2

IMPLEMENTATION AT THE STATE LEVEL:
THE CHALLENGES OF INNOVATION

      In the previous section, we outlined the strategies and visions that states have articulated. Putting these visions in place has not always been easy, however, since they require departures from past practices and new ways of working. The power of entrenched bureaucracies and established constituencies to resist change is an old story in both state and federal policy, and the education and training arena is certainly no exception--particularly because the proliferation of programs that has caused problems in the first place has created small armies of resistance to rationalized policies. In this section, we outline some of the major challenges states have faced in reforming their workforce development systems, some of which are essentially unresolved.

      Of course, many implementation problems have stemmed from old-fashioned errors of one kind or another. For example, the Texas Workforce Commission (TWC) suffered from poor leadership choices in the early stages, a sluggish start-up, and unclear and inconsistent guidelines to local boards, all causing a delay in getting started. The state's plans were quite ambitious, and a report noted that "such massive reforms can take years to fully implement" (King & McPherson, 1997, p. 43)--a point we make in this section about the need for stability and longevity in state efforts. Such problems are familiar in virtually every area of government, and we have nothing special to say about them: incompetence and instability will always undermine changes, no matter how well-designed. Instead, we outline a number of implementation problems specific to workforce development that appear to be systemic, that have occurred in several states, and that will continue to occur in others if efforts to anticipate such problems are not made.

The Importance of Stability

      While many states have developed a local-state structure for workforce development programs, there are remarkable differences in the progress states have made in implementing their visions. The most crucial element in this development is simply the longevity and stability of state efforts. The states that have pursued improvement relatively steadily, despite changes in state political leadership, are usually well-ahead in the implementation of system-building. In contrast, those states that have changed course dramatically are well-behind. States that are essentially new to these efforts (like Oklahoma and Texas) face significant challenges, given the difficulty of the process and the need for sustained efforts.

      The best examples of states that have stuck to a basic strategy over relatively long periods of time are Oregon, North Carolina, and Florida:

• Oregon first developed a 20-year strategic plan under Governor Neil Goldschmidt in 1989, and it has been continued under Governor Barbara Roberts (1991-1995) and now under Governor John Kitzhaber. In addition, while debate about workforce development has been political--in the sense that it has involved substantial political interests and values, particularly since the late 1980s--it has not been partisan; Democratic governors have worked well with local Republican employers as well as an influential Republican Senator (Mark Hatfield), creating goals that all groups embrace; maintaining a stable and diversified economy; maintaining the quality of life, rather than becoming another California "or even Seattle"; investing in strong public institutions rather than creating "unhealthy" competition; and improving the effectiveness of what had been viewed as "a $265 million rathole" of state and federal programs (as one state official phrased it). The process of creating federal waivers and of establishing benchmarks for progress has continued steadily over the years.
  
  
• North Carolina has displayed a consistent commitment to economic development as a goal driving all other policies. It first provided customized training for new and expanding industries in 1958, and has elaborated such firm-based training since then. Its community colleges are focused on workforce development to an extent matched in few other states. The current governor, Jim Hunt, has been in office for four terms, interrupted by one term of a Republican governor who continued Hunt's initiatives, in particular working hard to systematize the various workforce development programs. As in Oregon, there has been bipartisan support for more effective and customer-focused education and training programs, ensuring progress even when the legislature and the governor have been of opposite parties.
  
  
• In addition to its efforts in the 1980s to create a comprehensive economic development plan, the Florida legislature created Enterprise Florida, Inc., a public/private partnership between the state's business, government, and education sectors dedicated to expanding economic development. This partnership, together with strong support from Governor Lawton Chiles and bipartisan legislative support, paved the way for Florida's innovation. The state has consistently followed a path of emphasizing outcomes rather than process, creating both positive and negative sanctions for high performance. More recently, it has adopted a broader variety of market-oriented policies (see Box I.3). In many programs--especially postsecondary education, including community colleges and adult education--Florida has been more directive-oriented than most states, creating coherent state policies where other states have let local control dominate.

      In contrast, several other states have had inconsistent approaches to workforce development, where promising earlier practices have been reversed by new political leadership. In several cases, particularly Wisconsin and Michigan, welfare reform and enthusiasm for "work first" policies have hijacked earlier efforts at reforming state systems:

• Wisconsin has long prided itself on being a leader in workforce development. The Wisconsin Jobs Council (now the Council on Workforce Excellence) was created in 1987, following a report critiquing the proliferation of employment and training programs. It emphasized long-term services for those having trouble finding or keeping employment, rather than "quick fixes."[15] The Wisconsin Job Centers, begun in 1985, were forerunners of one-stop centers. In 1997, 101 human service and workforce development programs were consolidated into the Department of Workforce Development. However, the development of "work first" approaches to welfare (known as Wisconsin Works, or W2) and Governor Tommy Thompson's obsession with replacing welfare with work--what one technical college administrator called "welfare demolition"--are undermining the commitment to education and training as a strategy, and drawing the attention of policymakers away from the majority of clients and students in the workforce development system.
  
  
• In Michigan, Governor James Blanchard created the Michigan Opportunity System (MOS), which restructured government agencies and provided individuals with a computer card allowing them credits for job training or retraining. However, when Governor James Engler won the 1990 election, he threw out the MOS and began instituting a different set of more market-oriented reforms. His efforts at reforming state government were spearheaded by the Michigan Jobs Commission (MJC) that consolidated more than 30 economic and workforce development agencies, with local Workforce Development Boards (WDBs) (covering the regions of the former SDAs) given responsibility for all Tier One programs. Engler also created tax-free Renaissance Zones intended to attract business from across the country and retain existing industry--c