'Bundling' of unemployed prohibited
By Patrick Condon
Associated Press
DES MOINES, Iowa — Across the country, thousands of laid-off workers — many of them from smaller companies in thinly populated states — stand to lose job-retraining opportunities because of a little-noticed change in the way the government pays for such programs.
Associated Press
The new Labor Department rules, adopted this year, bar the longtime practice under which states "bundled" small groups of laid-off workers from separate companies to reach the threshold of 50 employees needed to obtain training dollars.
Jeff Brockett worked for the railroads for 26 years before he was laid off in 2003. He now works at a factory. A change in the way the government pays for job programs could keep thousands of workers from retraining.
The rule change could make it more difficult for workers who lose jobs at small companies to get training help. Thinly populated states will be hardest hit, because many people there work at smaller companies.
"In the past couple of months that's become an issue for us," said James Hardway, spokesman for Hawai'i Department of Labor and Industrial Relations. Federal officials recently rejected an effort to bundle together employees from two separate O'ahu companies to reach the 50 employee threshold, Hardway said.
The change comes as Hawai'i labor officials are dealing with a decrease in federal money — from $12 million to $9 million — to quickly help unemployed workers with training programs and other efforts, Hardway said.
State labor officials are particularly concerned about the effect on Kaua'i, which has lots of small companies and is struggling with a $30,000 budget deficit for its rapid response efforts, Hardway said.
"There are lots of small businesses everywhere in Hawai'i," Hardway said, "but for Kaua'i it just compounds the problem they're already having."
Jim Hirsch, division director for workforce development at the North Dakota Department of Commerce, said: "I'm very worried about it, what this change could mean."
The national emergency grants, as they are known, have been used to help workers at shuttered manufacturing plants learn new skills — on computers, in healthcare or in trades such as welding. The department gave $614 million in such grants from 2000 to 2002.
Labor Department officials said the change is meant to make the rules governing the grants simpler and more consistent.
"We have finite resources, so we need to be more efficient and effective in how we administer these monies, so people get the training they need," said Mason Bishop, deputy assistant secretary for employment and training.
Worker advocates said the Bush administration is sending mixed signals, especially since President Bush has been emphasizing retraining as a way to restore lost jobs and has proposed to double the number of Americans who get such help from the government.
"In this kind of economy, they should be bending over backwards to help the states," said Jane McDonald-Pines, a policy analyst with the AFL-CIO in Washington. "Even small layoffs can have a significant effect, especially in a small community."
When a company closes down or lays off workers, only about one-third typically apply for retraining — meaning the new dictate is most likely to affect workers at companies with 150 or fewer employees.
Labor Department officials said the emergency grants should be used for just that — emergencies. Most layoffs, especially smaller ones, should be covered by the base federal appropriations that are made to state workforce agencies, they said.
Those appropriations increased slightly in the current fiscal year, to $1.78 billion from $1.16 billion the previous year. But for the next fiscal year, Bush has asked for just $1.1 billion.
Financing varies by state, depending on a state's unemployment rate, among other things.
David Hollars, executive director of the Centralina Workforce Development Board in Charlotte, N.C., which recently used bundling to land a $1.5 million emergency grant, said he is afraid the Labor Department will give emergency grants only to workers from big companies, because it gives "more bang for their political buck."
"Everyone wants to take credit for helping when there are 300 (or) 400 job losses," Hollars said. "You get the local congressman out there, that's big press."
Advertiser Staff Writer Dan Nakaso contributed to this report.
