DC First Source Act Ripe For Reforms — And May Get Them

Over the years, I’ve come to feel that District of Columbia officials are better at making new policies than at making sure that existing policies work.

We have some very enlightened policies on the books. We’ve had neither the oversight nor the ongoing budgetary commitments to produce the outcomes their sponsors and supporters envisioned.

The occasion for this admittedly gross generalization is the District’s First Source Employment Agreement Act.

Under the Act, most employers that receive at least $100,000 in contracts or other financial assistance from the District must make a “good faith effort” to fill 51% of all new jobs and new apprenticeship and trainee positions their funded projects create with District residents.

The Act was passed in 1984. Yet more than 70% of jobs in the District are reportedly held by non-residents.

This is hardly a recent development. In 2008, the DC Fiscal Policy Institute and DC Appleseed reported that “typically” only one of every three jobs in the city was held by a D.C. resident.

The single most important reason is a persistent mismatch between the qualifications a relatively high percentage of local jobs require and the qualifications many lower-income residents have.

The District is, after all, a high-education/high-skills job market. Yet, according to the latest census data, nearly a third of D.C. residents ages 25 and older have no more than a high school diploma or GED. For younger working-age residents, the figure is just shy of 40%.

But you don’t need to know calculus or comma rules to work on a construction crew. Though many of the jobs do involve some technical skills, you could probably learn them through an apprenticeship or informal training arrangement.

Which brings us to the second reason that $34 of every $100 earned in the city goes home to be taxed in Maryland or Virginia. The DC Department of Employment Services hasn’t effectively enforced the First Source Act.

Last August, the District Auditor reported that only four of the sixteen real estate development projects reviewed met the 51% hiring goal. The reason, she said, was that DOES hadn’t monitored the projects.

The department said it didn’t have the staff to do it — a fine example of the gap between good policy ideas and the funding to implement them.

Yet it seems also the case that better enforcement won’t be enough to ensure that our taxpayer dollars provide more and better job opportunities for District residents.

The First Source Act frames requirements in ways that allow covered employers to demonstrate good faith without actually hiring anyone who lives in the District — qualifications notwithstanding.

For example, the 51% jobs goal refers to new hires. So a contractor can bring in a crew from another jurisdiction, even if the members are temporary employees.

More importantly, DOES isn’t an effective “first source,” i.e., the resource a covered employer must use before hiring through other recruitment methods.

Employers complain that the job seekers in the First Source registry don’t have the skills needed for the jobs they’re creating. And they’re probably generally right because DOES doesn’t reach out to candidates who might be qualified. Nor does it help local training providers tailor their programs to employers’ specific needs.

A coalition of nonprofit employment and workforce development experts has produced a policy brief that recommends, among other things, the establishment of a “workforce broker” within the D.C. government.

Basically, this entity would act as an intermediary between employers, residents and organizations that provide training.

It would secure detailed job creation plans and hiring schedules from covered employers well in advance of projected hiring dates. It would then coordinate relevant job training with local providers and community-based organizations.

It would also carefully screen candidates and make referrals to employers, thus increasing the likelihood that they could hire qualified, work-ready residents if they wanted to.

DC Council Chairman Kwame Brown, joined by Councilmembers Michael Brown and Harry Thomas, has introduced a bill that would create such a workforce intermediary.

It would also make some other important changes in the First Source Act — among them, a new set of percentage goals based on work hours, rather than new hires, and heftier fines for noncompliance.

The bill is a good step toward narrowing the gap between the work opportunities our taxpayer dollars create and the benefits that accrue to District residents — and District revenues.

But I think it will need some significant revisions if it’s going to be not just one of those good policy ideas, but a policy that works as intended.

We’ll undoubtedly hear about these next Monday at the Committee on Housing and Workforce Development’s hearing on the bill. It’s scheduled for 10:00 a.m. in Room 120 of the John A. Wilson Building.

CORRECTION: After I posted this, I learned that it might not be altogether accurate to refer to out-of-District workers on a construction project as temporary employees. I’m told that construction contractors generally have a pool of workers they call on as needed. So the workers can be considered ongoing employees, though they don’t necessarily work for the contractor continuously.

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3 Responses to DC First Source Act Ripe For Reforms — And May Get Them

  1. [...] First Source reforms in the works. [P&P] [...]

  2. [...] admin posted about this interesting story. Here is a small section of the postThe District is, after all, a high-education/high-skills job market. Yet, according to the latest census data, nearly a third of D.C. residents ages 25 and older have no more than a high school diploma or GED. For younger working-age residents, the figure is just shy … A coalition of nonprofit employment and workforce development experts has produced a policy brief that recommends, among other things, the establishment of a “workforce broker” within the D.C. government. … [...]

  3. [...] initiative DCFPI cites is the recently-established workforce intermediary pilot. When/if implemented, the intermediary would get training programs better tailored to local [...]

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