New Federal Rule Would Have Catastrophic Consequences For Michigan’s Businesses and Talent

New Federal Rule Would Have Catastrophic Consequences For Michigan’s Businesses and Talent

Employers and job seekers could be left with fewer Michigan Works! staff and locations to serve them

Flint, Mich. — Michigan is facing another workforce crisis. The United States Department of Labor Employment and Training Administration has proposed a Wagner-Peyser Staffing Act rule that would have catastrophic consequences for Michigan’s businesses and talent.

The Wagner-Peyser Staffing Act proposed rule as written by the U.S. Employment and Training Administration would remove the State of Michigan’s authority over its workforce system service delivery model, leaving employers and job seekers with a disjointed, less efficient structure.

Michigan Works! Agencies, including GST Michigan Works! use Employment Service (Wagner-Peyser) funding to meet the needs of employers and job seekers.

“These services and funds are integrated into everything Michigan Works! does. Employment Service is the foundation of the system,” said Ryan Hundt, Chief Executive Officer of the Michigan Works! Association. “Without these core services and funds, at least 20 of the 99 Michigan Works! American Job Centers will be forced to close, primarily those serving rural communities.”

Michigan residents who are most vulnerable including refugees, immigrants, veterans, and youth would encounter forced discontinuation of critical workforce services.

This rule would cause a dramatic reduction of business services to the 32,000 Michigan employers served annually, including decreased assistance filling job openings, reduction, and elimination of job fairs, cutting of industry-led collaboratives, and decreased or no access to job training programs would occur.

A survey of the 16 Michigan Works! Agencies, compiled with state and federal performance data, found if the proposed rule is implemented:

  • 80% of Michigan Works! Agencies would be forced to reduce services to veterans.
  • 62% would have to eliminate and 18% would have to reduce immigrant and refugee navigator services.
  • 63% would have to eliminate and 31% would have to reduce services for formerly incarcerated people.
  • 86% would have to reduce the more than 9,000 career awareness events – mostly for youth and college students – including the award-winning MiCareerQuest events.

For GST MI Works! that means the services and programs our communities have come to rely on will be reduced or eliminated.  We have thousands of citizens that visit our centers across the region each year.  They not only learn about the available supports to help get them back into the job market, but also about training opportunities that would help advance them in their careers.  These are the very people that our businesses are desperate to reach.  Our programs help make that connection and assist the business with other opportunities to recruit, train and retain their employees.

If implemented, the new staffing rule would also result in job loss in the system, estimated at a loss of 220 full-time equivalents across the state.

The loss of Wagner-Peyser funding would result in staffing funds (that are currently distributed among more than 400 staff with different skills and specialties) being cut down to 100 full-time state merit staff who will each have to assume a caseload of nearly 1,000 people a year without the direct connections to other programs or funds to serve them.

“I can’t imagine what would have happened if our offices weren’t here to help our communities during the pandemic,” said Jody Kerbyson, Chief Executive Officer for GST Michigan Works!.  “We received thousands of calls per day from people struggling to understand the unemployment system and gain access to assistance.  Aside from our work of preparing people for jobs that are available in the region, a great deal of time is spent helping people navigate the unemployment system.  It’s important for them to have a safety net while they search for their next job.  Our Employment Services Career Coaches provide the care and support that people need when facing catastrophic events in their lives such as job loss.”

A public comment period is open until June 21. To comment, people can visit the Federal Register website, www.regulations.gov, and search for Wagner-Peyser.

“Share your experiences,” said Hundt, “And take action to protect those who protect and support so many others in our community.”

GST Michigan Works! is one of sixteen (16) Michigan Works! agencies across the State of Michigan operating workforce development programs designed to assist employers with finding skilled workers and to help job seekers prepare for, find, and retain employment.