Legislation to radically change unemployment policies nears completion

February 02, 1994|By Boston Globe

WASHINGTON -- The Clinton administration is drafting legislation that would make radical changes in the nation's labor policy, junking the current unemployment insurance system and an array of job training programs in favor of new "One-Stop Career Centers" designed to match skills and training with the needs of competitive U.S. industries.

The Workforce Security Act of 1994 is in the final drafting stages and scheduled to be introduced in Congress later this month. A Jan. 19 outline of the plan, obtained by the Globe, contains the details of an ambitious initiative that seeks to transform the lives of out-of-work Americans, and may gore some powerful bureaucracies and interest groups.

Scorning the current unemployment insurance system which, according to the Labor Department outline, "places more emphasis on documenting" that the jobless are "going through the motion of job search" than finding them lasting re-employment, the plan seeks to persuade Congress that a $3 billion program of "one-stop" career centers should replace the "fragmented" and "haphazard" existing system.

The Jan. 19 outline is not final, but is the latest version of the proposal and -- said congressional aides -- unlikely to change much before the bill is introduced. It includes such innovations as:

* SWAT-like "rapid response" efforts, to channel re-employment services to locales or industries hit hard by large-scale layoffs;

* Re-employment cash bonuses, to reward energetic workers who find new jobs quickly;

* Cash benefits for would-be entrepreneurs, which would let out-of-work recipients continue to draw government checks as they start small businesses, patterned in part on a Massachusetts self-employment demonstration project;

* The payment of partial "short-time" benefits, now in use in several states, to employees whose hours have been reduced. With such benefits, the administration hopes to encourage hard-pressed firms to shorten hours for all employees, rather than laying off workers permanently;

* Implementation of a national job data base, to let workers know what training they need and employers know what trained workers are available;

* Curtailment of a number of job training and assistance programs, adopted by past Congresses in response to regional and special interests. Such programs channel help to specific classes of unemployed workers who come from disadvantaged backgrounds or lose their jobs because of defense downsizing, environmental restrictions, the impact of trade measures and general economic restructuring;

* The creation instead of "one-stop career centers," run by either private or public entities, that would provide counseling and flexible long-term training choices to jobless Americans, and pay them for up to 18 months while they train.

The career centers may evolve in time into full-service job placement services for employed workers as well. Unlike today's unemployment offices, they would be held to performance standards like the number of workers placed in permanent jobs, customer satisfaction, etc.;

* Waivers that would let states provide benefits and training to displaced homemakers -- women suddenly thrust into the work force by divorce, or loss of an employed spouse.

As a whole, the Clinton administration hopes to junk the subsistence programs of the current unemployment insurance system, which were crafted in past decades to tide the jobless over in times of temporary layoffs caused by cyclical economic down turns. Such cycles still cause pain, but are now overshadowed by the deaths of entire industries due to structural changes in a worldwide economy, from which long-term or permanent unemployment often results. About three out of every four laid-off workers are permanently laid-off, the Labor report says: the highest proportion since tracking began.

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