Adult, Dislocated Worker, and Youth Activities

On January 2, 2018, the U.S. Department of Labor (USDOL) approved the first waiver below for the State of Michigan through June 30, 2020.  In addition to seeking renewal of all existing youth waivers, the Department of Labor and Economic Opportunity (LEO) requested the consideration for re-approval at a rate of zero percent for the Statewide Activities portion of the first waiver (bullet three), which was approved on February 13, 2020.  The additional waiver request identified below associated with the State workforce development board membership requirements was approved on February 13, 2020.  The requested waivers below were approved through June 30, 2020. 

1. A waiver from the Workforce Innovation and Opportunity Act (WIOA) Section 129(a)(4)(A) and 20 Code of Federal Regulations (CFR) Part 681.410, which require not less than 75 percent of funds allotted to states under Section 127(b)(1)(C), reserved under Section 128(a), and available for statewide activities under subsection (b), and not less than 75 percent of funds available to local areas under subsection (c), shall be used to provide youth workforce investment activities for Out-of-School Youth (OSY).  This waiver was approved by the USDOL on January 2, 2018. 

Statutory and/or Regulatory Requirement(s) to be Waived

Specific impacts of this waiver include: 

• A waiver of the requirement to expend 75 percent of WIOA Title I Youth State-level formula funding on the OSY population.  Michigan received prior approval to lower this amount to 50 percent.  Michigan seeks to renew this waiver at 50 percent.
   
• A waiver of the requirement that local-level WIOA Title I Youth funding must meet the 75 percent minimum expenditure requirement.  Michigan received prior approval to lower this amount to 50 percent.  Michigan seeks to renew this waiver at 50 percent.
   
• A waiver of the statutory requirement to expend a minimum of 75 percent of Statewide Activities funding on the OSY population.  Michigan received prior approval to lower this amount to 50 percent to allow flexibility of funding for special projects for youth that meet the vision and mission of the State.  Michigan is requesting to eliminate this minimum percentage entirely for Statewide Activities funding to allow maximum flexibility of funding to support evidence-based special projects that meet the vision and mission of the State.

 Every local Michigan Works! Agency (MWA) is meeting or exceeding the 50 percent OSY expenditure minimum for Appropriation Year 2018 WIOA Youth funding in compliance with the waiver approved in January of 2018.  The implementation of the previous OSY waivers has not negatively impacted state or local area performance outcomes, as evidenced in the following comparison of Program Year 2018 data: 

• Employment Rate 2^nd Quarter after Exit
  • Negotiated Rate: 72 percent; All Youth: 82.5 percent; OSY: 82.5 percent
• Employment Rate 4^th Quarter after Exit:
  • Negotiated Rate: 72 percent; All Youth: 80.2 percent; OSY: 80.5 percent
• Credential Attainment Rate:
  • Negotiated Rate: 60 percent; All Youth: 74.8 percent; OSY 73.9 percent
     
    The State tracks these expenditures quarterly and annually in the Management of Awards to Recipients database.  Should any area be identified as at-risk following a quarterly review, technical assistance is available and immediately provided.  Contracts were already in place based on the statutory 75 percent out-of-school minimum when the current waiver was granted.  Changes to program planning and contracts take time to implement, so the effects of the waiver will also take time to evaluate.
     
    Local MWAs have expressed support and appreciation of the OSY waiver awarded in January of 2018.  Further, local agencies have expressed support for additional flexibility of Statewide Activities funding for innovative and evidence-based programming, such as the initiatives described in this waiver request.
     
    Actions Undertaken to Remove State or Local Statutory or Regulatory Barriers
     
    There are currently no state or local statutory or regulatory barriers to implementing the requested waiver.  Current State of Michigan laws, regulations, and policies follow federal law, regulations, and guidance.
     
    State Strategic Goals
    The State seeks to achieve the following strategic goals:
     
    Increase flexibility of WIOA Statewide Activities funding to support:
     

• The implementation of evidence-based programs and strategies;
• Progress toward closing the economic equity and access gap;
• Meeting Governor's statewide post-secondary education goal of 60 percent of Michigan residents completing a post-secondary certificate or degree by the year 2030;
• Placing more of Michigan’s citizens on the path to high-wage skills; and
• Increased college readiness. 

These strategic goals align with the State’s WIOA Unified Plan.

Projected Programmatic Outcomes Resulting from Implementation of the Waiver

Increase Services to at-risk Youth in our Local Communities, Despite their Educational Status

Michigan can no longer rely on school counselors to keep students connected.  According to the American School Counselor Association, Michigan has a ratio of 729 students to one counselor, the third worst ratio in the country.  The Association recommends a ratio of 250 to one.  To help address this dilemma, the State of Michigan is requesting increased flexibility of WIOA funding to implement a statewide program focused on providing a comprehensive set of services to all youth, including those designed to keep In-School Youth (ISY) attached to the education system to improve their rate of success in achieving educational and career goals.

Forty-four percent of Michigan students are low-income.  The ability to reach more youth while they are still attached to an educational institution gives LEO the chance to reduce the impact of high-risk factors, including poverty, while providing an opportunity to earn valuable wages for youth and their families.  Flexibility of funding will increase Michigan’s ability to provide equitable resources to meet the needs of all youth populations to ensure they have access to quality career exploration and work experience opportunities.  Approval of this waiver will provide greater opportunity to serve youth who are struggling on the path to finish high school and continue on a pathway toward multiple career and educational opportunities, such as entering a Registered Apprenticeship program, earning an associate’s and/or a bachelor’s degree, and obtaining sustainable employment.   

Support for Evidence-based Dropout Prevention and Re-engagement Programming

In Michigan, nearly 11,000 youth drop out of high school every year.  Michigan’s youth are graduating at a rate that is 4.4 percent lower than the national average, ranking Michigan in the bottom ten states nationally.  Without a diploma, individuals are 33 percent more likely to be unemployed, almost twice as likely to live in poverty, and 67 percent more likely to be incarcerated.  Moreover, 77 percent of the jobs in Michigan require a minimum of a high school education, and Michiganders who do not complete high school are four times more likely to lose their job to automation.  It is crucial to the future of our state’s youth to engage them prior to disconnecting from an educational institution. The expected quantitative outcome of the approval of this waiver request is the ability to provide up to an additional 2,000 young adults with dropout prevention and recovery services. 

Statewide Activities funding will augment youth formula funds to implement a robust
drop-out prevention and re-engagement program.  The program is targeted to the most at-risk and disadvantaged youth in danger of dropping out of school and those who already have dropped out of school.  “At risk of dropping out” includes students who are credit deficient, have repeated a class, maintain a grade point average at or below a cumulative 1.5, score poorly on assessment tests, are often truant from school, are involved in the court system, are currently involved in gang activity or are likely to join a gang, as defined by local authorities.  

The ultimate goal is for youth to receive a high school diploma or recognized equivalent, secure a quality entry-level job in the workforce, pursue post-secondary education, and/or seek career advancement opportunities.  By retaining and re-engaging youth in education, this waiver request is consistent with Governor Whitmer’s statewide post-secondary education goals to achieve 60 percent of Michigan residents completing a post-secondary certificate or degree by the year 2030 and to increase college readiness for Michigan’s next generation of talent.

 Jobs for Michigan’s Graduates (JMG) is a proven partner in this effort.  As the state affiliate of the national Jobs for America’s Graduates organization, the programming has 40 years of demonstrated outcomes in ensuring our country’s most at-risk youth graduate from high school, enter post-secondary education, and/or transition into meaningful employment.  In the 2018-2019 program year, JMG served 3,000 Michigan youth hailing from 245 Michigan cities, villages and towns.  Of the youth served, 64 percent were minorities, 80 percent were potential first-generation college students, and 69 percent were economically disadvantaged.  

The JMG program boasts the following successes that show tremendous potential to positively impact youth: 

• Seven consecutive years of graduation rates that are 90 percent or higher for all dropout prevention services, with a 95 percent graduation rate from the Class of 2018.
• 85 percent or more of graduates going on to employment, post-secondary education, or the military annually since 2013-2014.
• An average statewide graduation rate that exceeds the state average by 15 percent over a five-year period.

 For Michigan to remain competitive nationally in job retention and growth, it must continue to address the low graduation, post-secondary education attainment, and employment rates of youth within the state.  The JMG program equips youth with the skills to overcome their barriers and win in education, employment, and as citizens.  The JMG specialists deliver engaging and outcomes-based services to youth, giving them a reason to stay in or return to school.  Core program components include competency education, leadership development, mentoring, post-secondary education and training placement, and follow-up services.  JMG has proven a strong complement to WIOA Youth programming, providing a service delivery model that drives positive outcomes for Michigan’s most in-need youth. 

 Support for Summer Young Professionals Program

Michigan aligns with the WIOA in support of an increased focus on work experience for youth and envisions a public-private partnership designed to reduce youth unemployment by introducing under-represented young adults ages 14-24 to the world of work while providing participants and their families with income.  Combined services will place young adults on the right path to gain the skills necessary to achieve life-long economic self-sufficiency.  As such, Michigan will be piloting a statewide summer youth employment program in 2020.  Increased flexibility of Statewide Activities dollars will result in improved efficiency and effectiveness of services to at-risk youth in our local communities, despite their educational status.  The expected quantitative outcome of the approval of this waiver is the ability to provide up to an additional 900 young adults with summer employment opportunities. 

Local programs will provide career services and employment opportunities in partnership with One-Stop centers and under the direction of local Workforce Development Boards.  Business Service Teams will play a crucial role in recruitment of employers, with a focus on key in-demand industries, such as Information Technology, Construction, Health Care, and Manufacturing.  Resources will be leveraged with additional funding partners, such as Wagner-Peyser funding to assist with activities such as recruitment, resume assistance, career preparation, and job fairs.

 Data from the American Community Survey states the national unemployment rate for young adults aged 16 to 24 for the five-year period of 2013 to 2017 was 14.1 percent.  Michigan’s youth unemployment rate for individuals aged 16 to 24 was a full percentage point higher at 15.1 percent for the five-year period of 2013 to 2017.  Non-metro counties have a slightly lower youth unemployment rate of 13.9 percent, while metro counties have a higher youth unemployment rate of 15.4 percent.  In 2018, Michigan was ranked 33rd nationally in youth joblessness.  While youth joblessness has moderated, the rate was still more than double the State’s overall rate of 4.1 percent.  This data reflects a significant need for progress in the creation and expansion of opportunities for youth employment in Michigan.  

A higher than average jobless rate for 16- to 24-year-olds is expected and reflects a combination of factors including competition from older, more experienced workers and structural challenges like skills mismatches.  In 2018, only 58.8 percent of Michigan youth were participating in the labor market.  However, this number is bolstered by older youth aged 20 to 24, with a participation rate of 76 percent.  As expected, younger youth ages 16 to 19 were less active in the labor market, with participation rates near 40 percent.  One important reason that explains why so many youth are not participating in the labor market is engagement in educational activities.  Flexibility of Statewide Activities funding will allow Michigan to serve more youth who may benefit from valuable summer youth employment while expecting to return to school in the fall.

What are the projected outcomes of the waiver for the local areas moving forward?

In summary, the projected outcomes of the waiver for local areas to lower their minimum OSY expenditures to a rate of 50 percent includes increased flexibility to serve Michigan’s most vulnerable youth, despite their educational status.  This waiver will reduce the impact of high-risk factors for Michigan’s youth, including poverty, provide equitable resources despite school status, provide greater opportunity to serve youth who are struggling on the path to finish high school and continue on a pathway toward multiple career and educational opportunities, and provide opportunities to earn valuable wages for youth and their families.  This waiver request is consistent with Governor Whitmer’s statewide post-secondary education goal to achieve 60 percent of Michigan residents completing a post-secondary certificate or degree by the year 2030 and to increase college readiness for Michigan’s next generation of talent.  This waiver has a greater focus on the quality of services local areas will be able to provide to their vulnerable youth populations and provides increased opportunities for leveraging of funding and resources with local school districts, community colleges and universities, and evidence-based dropout prevention programs.

What are the projected outcomes of the waiver for the elimination of the statewide expenditure funds requirement?

The projected outcomes of eliminating the OSY minimum expenditure requirement when providing direct services to youth using Statewide Activities funding will allow Michigan to focus on innovative, evidence-based programming.  Michigan has identified two primary areas of focus for this funding. 

First, the WIOA Statewide Activities funding will augment WIOA Youth formula funds to implement a robust statewide evidence-based drop-out prevention and re-engagement program in partnership with Jobs for Michigan’s Graduates, Michigan’s statewide affiliate of the Jobs for America’s Graduates program.  The expected quantitative outcome of the approval of this waiver request is the ability to provide up to an additional 2,000 young adults with dropout prevention and recovery services on an annual basis.

Second, Michigan plans to implement an annual Summer Young Professionals initiative.  The Summer Young Professionals initiative aligns with the WIOA in support of an increased focus on work experience for youth and envisions a public-private partnership designed to reduce youth unemployment by introducing under-represented young adults ages 14-24 to the world of work while providing participants and their families with income.  This initiative will be piloted in the summer of 2020.  The intention of this initiative is to address Michigan’s higher than average jobless rate for 16- to 24-year-olds.  The expected quantitative outcome of the approval of this waiver is the ability to provide up to an additional 900 young adults with summer employment opportunities on an annual basis.

Given the current economic climate and expected future impacts of challenges related to the coronavirus, flexibility of funding is critical to support Michigan’s efforts to provide proactive and reactive services to best serve our youth population based on need rather than school status.

Alignment with USDOL Policy Priorities

This waiver aligns with the following USDOL policy priorities, as found in the USDOL Fiscal Year 2018 – 2022 Strategic Plan and the WIOA law and federal regulations: 

• The USDOL Employment and Training Administration (ETA) has a strategic objective to create customer-focused workforce solutions for American workers, including development of a strong youth pipeline;
• The ETA has prioritized improvement of the effectiveness and efficiency of workforce development programs, including supporting state and local flexibilities to enable these entities to effectively tailor their workforce strategies to meet their needs;
• The ETA focuses on programs that support work-based learning, skills development, and work readiness while promoting training strategies that lead to credential attainment and closing the skills gap;
• The ETA has prioritized implementation of evidence-based programs and strategies, including adoption of proven programs and strategies;
• The WIOA places a strong emphasis on work experience for youth participants, requiring that 20 percent of WIOA Youth funding be expended on this element;
• The WIOA promotes strong partnerships to leverage resources and increase opportunities for youth; and
• The WIOA prioritizes participant success, as measured by skill gains, entry into and retention of employment or post-secondary attendance, and achievement of an industry recognized credential.

 Individuals, Groups, or Populations Affected by the Waiver

This waiver will ultimately impact Michigan’s at-risk young adult population.  One-Stop center and subcontracted service provider staff, employers, parents, and school counselors will also benefit from the waiver.

 Plans for Monitoring Implementation and Collecting Waiver Outcome Information

WIOA on-site programmatic reviews will include an evaluation of how local waivers are being utilized to ensure programmatic goals and outcomes are being met.  The WIOA State Coordinators dedicated to the administration of the WIOA Youth program will continually examine the effectiveness of waivers throughout the program year.  This strategy ensures that the objectives described above, as well as those outlined in the existing state and local WIOA plans, are consistent with established objectives of the WIOA, and federal and state regulations.

Notice to Local Boards and Public Comment

In accordance with WIOA Section 102(c)(3) and the WIOA Final Regulations at 20 CFR 676.135, the Michigan Department of Labor and Economic Opportunity has submitted a modification to its current WIOA Unified State Plan, which is subject to the requirements outlined in the WIOA Final Regulations at 20 CFR 676.130(d) regarding public review and comment.   

1. A statutory waiver in accordance with the federal WIOA of 2014 at Section 189(i)(3) and the WIOA Final Regulations at 20 Code of Federal Regulations (CFR) 679.600 thru 679.640.  This waiver will assist Michigan to further develop and strengthen its demand-driven workforce development system.

 Statutory and/or Regulatory Requirement(s) to be Waived

A waiver from the state workforce development board requirements outlined at Sections 101(b) and 101(c) of the WIOA of 2014 and 20 CFR 679.110(a)-(c) and (f), which specify board membership, chairperson, and category/sub-category representation requirements.  The membership of the new Governor’s Workforce Development Board may be found in
Appendix III.

 Actions Undertaken to Remove State or Local Statutory or Regulatory Barriers

There are currently no state or local statutory or regulatory barriers to implementing this waiver.  Current State of Michigan laws, regulations, and policies follow federal law, regulations, and guidance.

 State Strategic Goal(s)

The State seeks to achieve the following strategic goals:

• A single, unified vision for workforce development driven by the Governor with input from employers and other key workforce system stakeholders from across the state;
• Greater coordination between state government and employers to meet talent needs;
• Increased collaboration between education providers and the workforce system;
• More job seekers with post-secondary credentials of value to employers.

 These strategic goals align with the State’s WIOA Unified Plan.

 Projected Programmatic Outcomes Resulting from Implementation of the Waiver

The state workforce development board composition provides better support for true engagement of employers and education providers with the state’s workforce development system.  The composition also provides an enhanced opportunity for the creation of innovative solutions to the challenges employers in key sectors are facing.  An increase in Michiganders possessing post-secondary credentials is also anticipated to occur.

 Alignment with U.S. Department of Labor (USDOL) Policy Priorities

This waiver aligns with the following USDOL policy priorities:

• Supporting employer engagement;
• Connecting education providers with employers and the workforce system;
• Improving job and career options and outcomes for all stakeholder groups.

 Greater representation of employers and education providers on the state workforce development board results in programming that more innovatively addresses the state’s talent development needs.

 Individuals, Groups, or Populations Affected by the Waiver

This waiver will ultimately impact all stakeholders who interact with the state’s workforce development system, including, but not limited to, individuals, providers, organizations, and employers.  Implementation of this waiver will result in more efficient and effective services for all stakeholder groups and ensure employers have the skilled workers they need both now and in the future.     

Plans for Monitoring Implementation and Collecting Waiver Outcome Information

In alignment with the WIOA Final Regulations at 20 CFR 679.160, the Michigan Department of Labor and Economic Opportunity has hired staff who assist the state workforce development board with carrying out its required functions.  This staff will monitor implementation of this waiver on a quarterly basis, analyzing the ability of the State to achieve its strategic goals and the state workforce development board to perform its required functions.  Further, the impact of this waiver on the state’s programmatic performance outcomes will be addressed in the State’s WIOA/Wagner-Peyser Annual Report Narrative for Program Year 2019.

 Notice to Local Boards and Public Comment

In accordance with WIOA Section 102(c)(3) and the WIOA Final Regulations at 20 CFR 676.135, the Michigan Department of Labor and Economic Opportunity submitted a modification to its current WIOA Unified State Plan, which is subject to the requirements outlined in the WIOA Final Regulations at 20 CFR 676.130(d) regarding public review and comment.