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A proposed federal rule change could shutter roughly 20 Michigan Works! job training sites across the state. A proposed federal rule change could shutter roughly 20 Michigan Works! job training sites across the state.

‘Ridiculous’ federal rule change could close 20 Michigan Works! training centers

BY Sunday, June 05, 2022 12:27pm

The Michigan Works! Association, which provides a wide range of services for both job seekers and employers throughout the state, says a proposed federal rule change would strip the agency of significant resources. 

The new rule — proposed by the Employment and Training Administration within the U.S. Department of Labor — would require all 50 states to use only state-merit staff to provide employment services that are funded by Wagner-Peyser Act funds. The Wagner-Peyser Act of 1933 was the first to establish a nationwide system of public employment offices throughout the country. Current Wagner-Peyer funding, which Michigan Works! receives, goes to each state to fuel various employment services. 

Merit employee status refers to the parameters in how employees are compensated and promoted.

Michigan Works! has created a unique model compared to most states. While other states may have one person or party delivering services funded by the Wagner-Peyser Act, Michigan Works! uses the money as one of several federal revenue streams. Others include money from the Workforce Innovation and Opportunity Act and the Temporary Assistance for Needy Families program. This means that hundreds of employees — not all state-merit employees — touch Wagner-Peyser-funded services.

“Our state typically outperforms other Midwestern states as it relates to Wagner-Peyser performance,” said Jacob Maas, CEO of West Michigan Works!, the West Michigan arm of the Michigan Works! Association. “We’d go from about 400 people touching Wagner-Peyser services down to about 100 that would be able to deliver the services.” 

Maas said the structure of Michigan Works! is similar to those of Massachusetts and Colorado. He said Michigan Works! officials will consult with counterparts in Colorado to explore avenues for avoiding the fallout of such a rule change. 

In a letter to employers and economic development organizations around the region, West Michigan Works! said the rule change would close roughly 20 of the 99 Michigan Works! America Job Centers throughout the state. The organization would shed around 220 full-time equivalent employees across its system while scaling back services for both job seekers and employers. 

“We’d have to work with our board to make tough decisions on what to close and what needs to stay open,” Maas said. “Do we look at new locations if we have to close one? We’d use a lot of data to decide what makes most sense, but why do we even have to go through with this in the first place?” 

“The whole thing is just absolutely ridiculous that we have to jump through all these hoops to raise awareness at a time where we should be focusing on re-employment and how we boost the labor force participation rate,” Maas added. “Our employers are struggling to find talent and administratively our attention is focused on all the wrong things right now.” 

A Department of Labor spokesperson could not be reached for comment. 

Michigan’s approach to and structure of workforce development training was set in place in 1997 under former Gov. John Engler. 

Engler delegated responsibility for the delivery of public employment services to local boards, instructing them to administer labor exchange services by contracting with both public or private agencies without permission from the Department of Labor. 

As a result, the Department of Labor sanctioned the state by placing a hold on Wagner-Peyser funds. Engler and the state sued the Department of Labor. Both sides came to an agreement on a framework for administering Michigan’s labor exchange program. Public agencies were then able to administer Wagner-Peyser Act services provided that such agencies utilized a merit-based personnel system. 

Michigan, Colorado and Massachusetts have stood out as demonstration states for their unique structure. Maas said that Michigan Works! is working with federal politicians, namely U.S. Reps. Fred Upton and Deb Dingell, to side-step the rule change. 

“If it was an outcome issue — if we were an outlier in our performance compared to other states — I would understand,” Maas said. “But the rationale they put forth doesn’t make sense. It seems too politically motivated, quite frankly. I’m just hoping common sense prevails and the Department of Labor says Michigan, Colorado, Massachusetts gets to stay demonstration states.”

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