Investing in What Works to Help Americans Get Back to Work

The Obama Administration has consistently emphasized the need to evaluate programs and use evidence of what works to drive federal investment. It’s how we make sure that taxpayers are getting the most for their dollars. Today, we can see another example of what this means in practice with the announcement by Secretary of Labor Hilda Solis that approximately $150 million is being awarded to 26 states and local communities from the new Workforce Innovation Fund. This new Fund, proposed by the President and first funded by Congress last spring, will help spur the development of more effective ways to connect Americans with the training, education, and other services they need to succeed in the workforce.

Thousands of Americans will benefit from these 26 grants, which are being made across the country, from Gainesville, Florida to Tacoma, Washington. A consortium of 10 cities and counties led by Baltimore County, Maryland will be developing accelerated programs for low-skilled workers that integrate basic education (including English language instruction) with specific training for health care jobs. In the state of Ohio, a Workforce Innovation Fund grant will be used to tie together the patchwork of existing programs into a streamlined, Internet-based system that workers can easily access. And in California, three counties are banding together to provide more effective services to disconnected youth, and connect them with the educational and employment opportunities they need to succeed in life. These initiatives will be evaluated carefully, to determine if the strategies they are using are indeed effective. Proven strategies will then be shared with other communities so they can be replicated and lead to better outcomes and use of public resources, including federal funds provided through the Workforce Investment Act.

The Department of Labor also announced today that $20 million will be available in the coming months for cutting-edge “Pay for Success” strategies. Under this model, private-sector entities invest in programs with a strong evidence base, and agree in advance with their partner in government on the desired results, such as getting and keeping good jobs. If they deliver the results, the private sector is paid for that success. But if not, the private investors bear the cost of that failure, and taxpayers aren’t stuck with the bill. With this kind of “skin in the game,” the private sector has a powerful incentive to help make sure programs deliver results. And government is able to leverage private capital to invest in building the skills of American workers.

A number of innovative cities and states already are exploring Pay for Success strategies. Congress is showing interest as well; the recently-released Senate Labor-HHS appropriations bill provides additional flexibility, requested in the President’s Budget, to support Pay for Success approaches to federal financing.

It is initiatives like these that are developing evidence-based strategies to get Americans back to work with the skills they need to succeed that the Administration is supporting and investing in so that we have a government that works – and gets the job done efficiently and effectively.

Martha Coven is Associate Director for Education, Income Maintenance, and Labor