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Introduction

Many reports have detailed the race and class employment disparities that exist in Minnesota (See Note 1). Many reports have also made economic and moral cases for addressing those disparities and recommended specific policy changes to do so. This is the first report to examine statewide disparities specifically among participants in workforce development programs administered by the Minnesota Department of Employment and Economic Development (DEED) and targeted to low-income and recently laid-off adults and the first to engage workforce professionals from around the state regarding approaches and recommendations to addressing those disparities.

The primary intended audience for this report is workforce development professionals, managers, and policymakers. The programs reflected in this report are only a piece of the entire workforce system, which also includes programming for youth and people with disabilities. Additional research can investigate disparities in these programs as well as the unique role they play in promoting equity.

The intent of this report is to synthesize previous recommendations with views from the field to help inform the current conversation around DEED’s role in promoting employment equity. DEED staff have begun planning for a system-wide approach to addressing racial and class disparities. This planning process is engaging local partners (from workforce service areas as well as from independent workforce agencies), who have a unique perspective on the feasibility of various approaches and strategies in their own context (See Note 2).

DEED does not currently mandate specific policies or actions on the part of local partners in terms of explicitly addressing racial and class disparities (See Note 3). Local partners have varying approaches to addressing disparities within their service area, and this report does not provide a comprehensive assessment of what each local agency is doing to address disparities.

The Minnesota Department of Health published a strong racial equity message in the 2014 report Advancing Health Equity in Minnesota. One key message of the report concerning structural racism applies equally to programs under DEED oversight:

“Structural racism — the normalization of historical, cultural, institutional and interpersonal dynamics that routinely advantage white people while producing cumulative and chronic adverse outcomes for people of color and American Indians — is rarely talked about. Revealing where structural racism is operating and where its effects are being felt is essential for figuring out where policies and programs can make the greatest improvements.”

This report is intended to aid in this conversation.

Understanding How DEED Programs Can Impact Minnesota’s Disparities

How does the information in this report fit within the larger context of state-wide employment disparities?

Answering that question requires understanding who would participate in the Dislocated Worker, Workforce Investment Act (WIA) Adult, or Adult Workforce Development programs (See Note 4). At the most basic level, the vast majority of adult workforce development participants would be considered to be in the labor force—that is, working or actively seeking work. Indeed, multiple counselor survey respondents reported that one reason otherwise eligible individuals are not enrolled into these programs is because they are seeking part-time rather than full-time work (See Note 5). Because of this, the program is not likely to have an impact on labor participation rates, which do vary by race (See Note 6).

Participants in Dislocated Worker are almost universally unemployed or on layoff notice (the basic eligibility criteria for that program is having been laid off through no fault of their own). Participants in the Adult programs may be unemployed or underemployed. As the broad goal of all of these programs is to help participants find good-paying jobs, we would expect them to help lower the unemployment rate. To understand how these programs can impact the state’s unemployment statistics, we also need to address outreach and access to workforce development programs.

In general, the racial breakdown of Dislocated Worker participants roughly mirrors the racial breakdown of the state’s working age population, while Adult program participants tend to be less white than the state as a whole. However, the ideal comparison group for this type of back of the envelope analysis is probably not the state’s working age population but rather the eligible population in need of services, which is harder to define and measure.

Because these programs are held to employment outcome standards, service providers do need to assess whether applicants will successfully finish the program before enrolling them. Counselors report that applicants to these programs need to complete an average of three formal steps before enrolling in the program, such as attending a workshop, filling out an application form, or meeting one-on-one with a counselor.

One program manager explained the screening process in this way:

“If you're picking the best of the best so you get your outcomes, are you truly closing the racial disparity gap? Probably not. So, we don't want to say ‘You don't have an 8th grade education so we're going to disqualify you’. But we do want to carefully screen people to make sure that they're ready to earn and learn, … so we do a lot of qualification.”

This suggests that workforce development participants may have higher motivation than the un- or under-employed population in general. Moreover, the number of participants served by these programs is much smaller than the number of Minnesotans unemployed at any given time. For instance, the number of unemployed Minnesota residents in April of 2015 was 114,000, compared to 10,000 participants served in Dislocated Worker, WIA Adult, and the Adult Workforce Development programs in that same month.

All of this suggests that, while these programs will never single-handedly eliminate employment disparities, they do play an important role in Minnesota’s economy and have the potential to promote employment equity in the state.

The Net Impact project will be an important part of the conversation around evaluating how effective our current workforce development programs are at reducing employment disparities. This ongoing project, developed under the direction of the Governor's Workforce Development Council, provides the first look at the real impact Dislocated Worker and WIA Adult are having on participants in Minnesota. It uses a rigorous evaluation method that can control for mitigating factors and can examine differences in impact across participant groups, including by race and class.

Initial results indicate that both Dislocated Worker and WIA Adult have a positive impact on both white and Black or African American participants' employment potential and earnings (See Note 7). The impact for the two groups is about the same in the Dislocated Worker program, but WIA Adult appears to benefit Black or African American participants much more than white participants. This implies that the WIA Adult program is reducing employment disparities among the people it serves, at least for the cohorts in the study.

Notes

  1. For example, Wilder Research, through the Minnesota Compass project, has been collecting resources around disparities, including an extensive library of reports on the topic.
  2. For more information on how to engage with DEED in this conversation, see Get involved.
  3. DEED does require each contracted agency to address disparities in their workforce planning documents. 
  4. For information on each of these programs, view the state Dislocated Worker annual report, the Workforce Investment Act annual report, and the state Adult Workforce Development pilot program report.
  5. Read a note on programmatic wording in Appendix A. Read about our qualitative research methodology in Appendix B.
  6. See the American Community Survey estimates of employment status in Minnesota by race and Hispanic or Latino origin by searching for table S2301 and geography Minnesota.
  7. On average, Black or African American participants in WIA Adult double their income, while white participants see an increase of about 50 percent. See the full project report Smart Investments, Real Results. Too few participants in this study identified with other racial and ethnic groups to provide reliable statistical estimates for those populations.
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