New Federal Rule Would Have Catastrophic Consequences For Michigan’s Businesses and Talent

Michigan is facing a workforce crisis, and not the one currently affecting job seekers and employers. The United States Department of Labor Employment and Training Administration has proposed a Wagner-Peyser Staffing Act rule that would have catastrophic consequences for Michigan’s businesses and talent.

The Wagner-Peyser Staffing Act proposed rule as written by the U.S. Employment and Training Administration would remove the State of Michigan’s authority over its workforce system service delivery model, leaving employers and job seekers with a disjointed, less efficient structure.

Michigan Works! Agencies, including Michigan Works! Southwest, use Employment Service (Wagner-Peyser) funding to meet the needs of employers and job seekers.

“These services and funds are integrated into everything Michigan Works! does. Employment Service is the foundation of the system,” said Ryan Hundt, Chief Executive Officer of the Michigan Works! Association. “Without these core services and funds, at least 20 of the 99 Michigan Works! American Job Centers will be forced to close, primarily those serving rural communities.”
Michigan residents who are most vulnerable including refugees and immigrants, veterans and youth would encounter forced discontinuation of critical workforce services.

A dramatic reduction of business services to the 32,000 Michigan employers served annually, including decreased assistance filling job openings, reduction and elimination of job fairs, cutting of industry-led collaboratives, and decreased or no access to job training programs would occur.

A survey of the 16 Michigan Works! Agencies, compiled with state and federal performance data, found if the proposed rule is implemented:

• 80% of Michigan Works! Agencies would be forced to reduce services to veterans.
• 62% would have to eliminate and 18% would have to reduce immigrant and refugee navigator services.
• 63% would have to eliminate and 31% would have to reduce services for formerly incarcerated people.
• 86% would have to reduce the more than 9,000 career awareness events – mostly for youth and college students – including the award-winning MiCareerQuest events.

For Michigan Works! Southwest, that means significant decreases to much needed employer and job seeker services locally, including possible service center closures.

If implemented, the new staffing rule would also result in job loss in the system, estimated at the loss of 220 full-time equivalents. This total loss of Wagner-Peyser funding would result in staffing funds that are currently distributed among more than 400 staff with different skills and specialties being cut down to 100 full-time state merit staff who will each have to assume a caseload of nearly 1,000 people a year without the direct connections to other programs or funds to serve them.

“At a time when employers are struggling to find workers, we should be laser focused on reemployment, not distracted with proposed rules that would instead disrupt services for job seekers and decrease the opportunity to meet the talent demand,” said Jakki Bungart-Bibb, Director of Michigan Works! Southwest.

A public comment period is open until June 21. To comment, people can visit the Federal Register website, www.regulations.gov, and search for Wagner-Peyser.

“Share your experiences,” said Hundt, “And take action to protect those who protect and support so many others in our community.”