Pew Report: Philadelphia Workforce Development System Suffers From Low Use by Employers and Mediocre Results for Job Seekers

Over the last four years, half a billion dollars in public funds were spent in Philadelphia in the name of workforce development, helping residents get jobs or skills and employers find workers to sustain or expand their businesses. In 2011, roughly 1 in 10 working-age Philadelphians sought help from this public system, run by two nonprofit corporations—the Philadelphia Workforce Development Corporation and the Philadelphia Workforce Investment Board Inc.—that are led by city appointees.

With many Philadelphians still looking for jobs, The Pew Charitable Trusts' Philadelphia Research Initiative examined the system's operations and performance in comparison to others in Pennsylvania and nationwide. The study covers a period before, during and after the recent recession leading up to a restructuring of the system, which is now underway.

The Pew report, Philadelphia's Workforce Development Challenge: Serving Employers, Helping Job Seekers and Fixing the System, found that the system has suffered from a cumbersome leadership structure, low utilization by local employers, and mostly average or below-average performance in helping job seekers get jobs and keep them.

“State and local officials may not be able to do much about the national and global economic forces shaping the job market in the city,” said Thomas Ginsberg, project manager of the Philadelphia Research Initiative and primary author of the report. “But our research indicates that the quality of workforce development services is within their power to improve.”

Among the key findings are:

• Only 12 percent of Philadelphia's employers—compared to a 25 percent average in the rest of Pennsylvania—are registered to use the system, and most local employers are unaware of its services. Regular users expressed satisfaction with it, but others were unhappy with applicant-screening and other services for employers. A third of the system's own private-sector board members in recent years have not used it.  Although employers can get advice without registering, registration is a key indicator of the system's ability to connect employers with workers.
• The system sometimes has lacked communication and follow-through with job seekers to help them make choices or find services. At the same time, more job seekers have sought help in recent years, straining the system's ability to serve them. The biggest programs—the Employment Advancement Retention Network (EARN) for public-assistance recipients and CareerLink for job seekers at large—reported 107,800 users in Fiscal 2011, which ended June 30,  an increase of 19 percent from Fiscal 2008. Roughly 26,300 of those people received hands-on training or other intensive career support, an increase of 21 percent.
• Through Philadelphia's EARN Centers, 4,160 welfare recipients founds jobs in Fiscal 2011. They represented a small fraction of this struggling population, which overall found paid employment 25 percent of the time they went through an employment or training program in Fiscal 2011. The average in the rest of Pennsylvania was 31 percent. Philadelphia welfare recipients retained those jobs 52 percent of the time, compared with 55 percent elsewhere in Pennsylvania.
• Through the CareerLink network, the job-placement rate for Philadelphia adult job seekers not on welfare was 59 percent—representing about 2,500 people—in the 12 months ending September 2010, the last period available. This compared with 72 percent average in other parts of Pennsylvania.
• In relation to comparable big cities and regions around the country, Philadelphia's performance was below average in some measures, average or slightly above in others.  Workers who had been laid off or faced layoff were less likely to get jobs after going through programs in Philadelphia than they were in the cities of Baltimore, Chicago and St. Louis, although they held onto those jobs at about the same rate as elsewhere. (The other areas studied were the Baltimore, Chicago, Cincinnati, Cleveland, Kansas City, Mo., St. Louis, San Diego and Tucson metropolitan regions, chosen mostly because of their similarity to the Philadelphia region in unemployment rate, educational attainment and occupational profile.)
• For the four fiscal years ending June 30, 2011, the combined annual budgets of the Workforce Investment Board Inc., the Workforce Development Corporation, and a third organization responsible for youth programs, the Philadelphia Youth Network Inc., totaled $493 million. Their combined full-time staffs numbered between 245 and 289 people. In the current fiscal year, 2012, cuts in federal and state funds, on top of the expiration of federal stimulus funds, have reduced their combined budgets by about 50 percent and positions by about 43 percent.

Any workforce development program, no matter how well run, would struggle in Philadelphia and most of the core cities of the comparison areas due to a fundamental mismatch between the education and skills of workers and the demands of local employers. Philadelphia has far more low-educated job seekers than it has low-skill jobs suitable or available for them. The job situation is not as bad for better-educated workers.

The system is now undergoing a restructuring designed to make it more efficient and effective in meeting the needs of job seekers and employers alike. Workforce development officials say progress already is being made in addressing some of the concerns raised in this report and in other studies commissioned by the system itself.

An interactive display showing the data from the comparison areas is available at www.pewtrusts.org/philaresearch.

About the Report
Philadelphia's Workforce Development Challenge was written by Thomas Ginsberg, project manager of Pew's Philadelphia Research Initiative. It is based on extensive interviews, internal audits and a comparison of performance statistics in Philadelphia and other systems. All job-placement and job-retention statistics are based on uniform data collected by the U.S. Department of Labor, the Pennsylvania Department of Public Welfare, and the Pennsylvania Department of Labor and Industry.

About The Philadelphia Research Initiative
The Pew Charitable Trusts' Philadelphia Research Initiative provides timely, impartial research and analysis on key issues facing Philadelphia for the benefit of the city's citizens and leaders. Pew is a nonprofit organization that applies a rigorous, analytical approach to improve public policy, inform the public and stimulate civic life.www.pewtrusts.org/philaresearch