Guest Post: Seven Recommendations to Advance Racial Equity in the Workforce System

COVID-19 brought about the worst economic recession in modern history. With businesses shutting their doors, many of them for good, the unemployment rate remained in double digits for months, labor participation rates fell dramatically, and the economy changed permanently. Due to the histories and present realities of labor market discrimination and occupational segregation, people of color were disproportionately impacted by the recession as they are overrepresented in the jobs hit hardest by the pandemic. While we have started to see a modest recovery, that recovery has been inequitable with people of color still experiencing worse labor market outcomes. While the national unemployment rate is 5.8 percent in May 2021, for example, the Black unemployment rate remains at 9.1 percent and the Latinx unemployment rate is 7.3 percent.

As detailed in the Racial Equity Framework for Workforce Development Funders, there has long been a critical need to address the structural and systemic barriers that prevent people of color from achieving success in the labor market and long-term economic security. The workforce system plays a key role in helping workers build their skills and find employment, especially during hard economic times. Last year, the workforce system provided services to over 4.2 million workers. However, the workforce system itself, as it’s currently structured, perpetuates racial disparities in the labor market. For example, the median earnings of white men who exited from Workforce Innovation and Opportunity Act (WIOA) programs were 58 percent higher ($29,064) than Indigenous women exiters ($18,436) in 2019. Part of the solution must be addressing the structural racism that exists in the workforce system. We need to explore and implement comprehensive frameworks put forward to reform the workforce system, address racism, and advance racial equity.

There is momentum to make this change happen. In the first days of the new administration, Biden signed Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, which called for recommendations on how to address barriers that prevent underserved communities from equitable access to federal programs and services and how to advance racial equity in these services and programs.

Given the administration’s commitment to advancing racial equity, the workforce system has an opportunity to address racial disparities in service provision and labor market outcomes. Racial equity will be achieved in the workforce system when one’s racial identity has no bearing on one’s outcomes.

Achieving racial equity in the economy will require bold legislative action, including raising the minimum wage and strengthening worker protections. However, there are critical steps that federal, state, and local workforce agencies can take today to start addressing the disparities that exist along lines of race. Below are seven recommendations to advance racial equity in the workforce system.

1. Distribute funding equitably to direct more resources to people of color: Workforce boards and local areas can set targets for funding allocated for people of color and benchmarks for equitable service provision based on labor market metrics such as unemployment rates. For example, if Black workers account for 20 percent of the unemployed population in the area, then 20 percent of funding and services should be directed toward Black workers. These targets should apply across all services, including training. 

2. Prioritize workforce services that include wraparound supports: There are systemic barriers that disproportionately impact people of color and prevent them from participating in and benefiting from workforce services, including education and training programs, that lead to good jobs. Numerous studies in community college settings have shown that providing students with a wide range of wraparound supports – including transportation, childcare, and career counseling – improves their performance and subsequent labor market outcomes. Well-studied workforce programs with high impacts on earnings have higher per-participant costs. While there is a desire to keep the cost per participant served low, workforce organizations should prioritize programming that includes supports that are needed to effectively serve job seekers.

3. Provide funding to and partner with organizations led by people of color: To increase access to workforce training and services for communities of color, workforce agencies can fund and partner with organizations beyond traditional workforce providers, particularly organizations led by people of color. This can be done by giving funding preference in competitive grant processes to organizations reflective of communities most in need of services. Additionally, approval and evaluation of organizations on Eligible Training Provider Lists (ETPL) should take into consideration their ability to serve communities of color. Only organizations on these state-approved lists are eligible for federal training funding through the Workforce Innovation and Opportunity Act.

4. Measure the performance of workforce programming by prioritizing the long-term economic security of workers: Education and training programs and career services should be measured by long-term wage gains and employment outcomes of their participants, not just by immediate job placement rates. When solely focusing on job placement, people of color are often provided services that lead to low-wage, low-quality jobs. It is critical that all providers, including eligible training providers, show positive long-term outcomes across racial groups. This will also help to open funding to organizations that are effectively serving those communities. 

5. Set requirements for employer partnerships, contracting, and procurement that raise overall job quality and labor standards: Workforce boards can set standards for the employers with which they partner. These standards can specify the types of employers eligible for partnership and the jobs eligible to receive funding for incumbent worker training, on-the-job training, and other supports based on job quality. Workforce boards can also educate employers on job quality, equity, and inclusive hiring. 

6. Invest in data systems and track disaggregated outcomes: Data infrastructure, particularly at the state level, should be further developed to collect, disaggregate, and analyze the service provision and outcome data of workers that receive services and training. By tracking outcomes disaggregated by race, gender, geography, and other relevant demographics, we can identify disparities where they occur.

7. Diversify workforce leadership and staff and provide training on racial equity: Frontline staff at workforce organizations should be representative of the communities that they serve in order to reduce bias and negative impacts such as occupational segregation. Studies have shown that racialized perceptions of skills perpetuate stereotypes that workers of color are only fit for low-wage work. Workforce organizations should make concerted efforts to recruit, retain, and advance more staff of color. Additionally, staff supervisors should receive antiracism and multicultural competence training to ensure services are designed and delivered equitably. Given their role in deciding which career pathways and key workforce strategies to prioritize, the leadership of workforce organizations and their boards, including workforce investment boards, should reflect the communities they serve, which would require including people of color as well as worker representation.

While Congress is considering legislative changes to the workforce system, the Biden administration as well as state and local workforce agencies can start making changes now to address racial disparities and create a more equitable system. And workforce funders can provide a broad range of supports to help scale and accelerate this work. Together, the recommendations above would move us toward a workforce and training system that addresses racial disparities in the labor market and gives workers, including people of color, the resources necessary to achieve long-term economic security.