FACT SHEET: President Obama Proposes New ‘First Job’ Funding to Connect Young Americans with Jobs and Skills Training to Start Their Careers
“We need to do everything we can to make sure America’s young people get the opportunity to earn the skills and a work ethic that come with a job. It’s important for their future, and for America’s.”
- President Barack Obama
After the worst economic crisis of our lifetimes, the United States is in the midst of the longest streak of private-sector job growth in our history, with more than 14 million new jobs created during the past 70 months. But for too many young people, getting a first job—a crucial step in starting their career—is challenging. One of the main criteria employers screen for in the hiring process is work experience. Previous experience allows potential employers to call references who can vouch for a candidate and assess what someone can do based on past accomplishments. Additionally, many of the skills employers value most can only be learned on the job. Once a young person gets their first job, it is much easier to get the next one.
In his State of the Union Address, the President made clear that our goal is a growing economy that works better for everybody. The President’s FY 2017 Budget includes nearly $6 billion in new funding to help more than 1 million young people gain the work experience, skills, and networks that come from having a first job. Today, the White House and the Departments of Labor and Education announced the details of that plan, including nearly doubling last year’s budget request for supporting young people who are out of school and work. Major investments of this plan include:
- A New $5.5 Billion Proposal to Open Doors to a First Job. The President’s Budget will propose new investments – nearly double last year’s request – to connect more than 1 million young people to first jobs over the summer and year-round. It would also create a new $2 billion competitive grant program designed to re-connect disconnected youth to educational and workforce pathways.
- Summer Jobs and Beyond Grant Competition. Today the Administration is also taking a new step to connect more young Americans to work with the release of the application for a $20 million Department of Labor grant competition – using existing funds – that will award approximately 10 grants to communities to implement innovative approaches that connect young people to jobs and career pathways.
- New Proposed Investments to Give More Americans Skills for In-Demand Jobs. The President is also proposing in his Budget $3 billion to create an American Talent Compact that would expand talent pipelines in over 50 regions to fill open jobs and attract new jobs from overseas; a $500 million Workforce Data Science and Innovation Fund to create dynamic data sets on jobs, skills, and training to help training providers and workers keep pace with rapidly changing job needs; and a $2 billion Apprenticeship Training Fund to double the number of U.S. apprenticeships.
The President is also calling on businesses to take action to give young Americans with limited resumes a better shot in the hiring process by providing internships, training, mentoring, and job interviews to young people who are not in school or working. With more than five million jobs open today—near the highest levels on record—developing the workforce of the future will be critical for businesses to grow, compete for new markets, and innovate.
Budget Proposals to Help More Young Americans Start Their Careers
When a young person struggles to get their first job, it can have a lasting negative impact on her lifetime income as well as her motivation, pride, and self-esteem. It is also a missed opportunity for the economy as a whole. A 2012 study found that people who endure a spell of unemployment between the ages of 16 and 24 earn $400,000 less over their careers than those who do not. Moreover, they estimate the lifetime cost to taxpayers of the 6.7 million youth who were neither in school nor in work was around $1.6 trillion. The President’s Budget proposals help address these challenges, including with:
A New $5.5 Billion Proposal to Open Doors to a First Job
- A Down Payment on a First Job for Every Young American. The President’s proposal would invest $3.5 billion to create new partnerships with companies and communities to get nearly 1 million young people into first jobs over the summer and 150,000 young Americans who have been out of school and work into up to a year of paid work.
- Funds would be distributed to states through the Workforce Innovation and Opportunity Act youth formula program and be disbursed to localities to cover up to half of the cost of wages for a young person.
- They would require a matched investment from either public, private, or philanthropic funding.
- Additionally, the Department of Labor will work with Treasury to ensure that young people participating in these programs have access to safe and appropriate financial products and accounts, so that they can use their earnings to start building savings and gain money management skills which are critical for their future.
- Community Partnerships to Connect Young Americans to Opportunity. The President’s proposals would invest $2 billion jointly administered by the Departments of Labor and Education to put youth who have dropped out or are most at risk of dropping out of high school on the path to get a diploma and connect to post-secondary education and jobs. Funding would be competitively awarded to communities, in required partnership with local education, workforce, and community organizations. The Departments would encourage proven approaches, such as work-based learning and internships, and re-engagement centers.
A New $200 Million Proposal to Develop & Expand Youth Apprenticeship Programs
- Expanding Apprenticeships for More American Workers and Youth. The President is proposing to dedicate $200 million to support the development and expansion of youth apprenticeships and pre-apprenticeship programs that let young people explore their interests in school through work and classroom-based training before starting a formal apprenticeship. This is part of a broader $2 billion proposal to create an Apprenticeships Training Fund to increase resources for state apprenticeship programs.
New Actions Using Existing Resources
- Summer Jobs and Beyond Grant Competition. Today, the Administration is releasing the application for $20 million in existing funds available through DOL that will:
- Fund innovative models to connect young people ages 16 to 24 with limited or no work experience to summer and year-round job opportunities through partnerships between employers, workforce investment boards, local education agencies, and reengagement centers.
- Go to approximately 10 communities, with priority given to those communities facing high rates of youth unemployment, poverty, crime, and dropouts.
- Build on a recent $17 million DOL investment in Youth Demonstration grants to support disconnected young adults in seven cities, including Baltimore, Camden, Detroit, Houston, Long Beach, North Charleston, and North St. Louis.
- 2016 Summer Opportunity Project. On February 26th, the White House will launch a summer opportunity project and host a workshop that brings together state and local leaders, community-based organizations, private sector and philanthropic leaders, and schools. The project will call on all of these leaders to increase their efforts and investments to bridge the summer opportunity gap for this year and beyond in targeted communities across the country. At the event, we will release a Summer Opportunity Federal Resource Guide to make it easier for local governments and non-profits to identify and navigate Federal programs across agencies.
Broader Proposed Investments in Innovative Training that Lead to In-Demand Jobs
The 21st century American worker faces an increasingly complex and dynamic job market. Globalization, automation, and technological innovation are driving rapid changes in available jobs and demanded skills. The President is proposing a plan to ensure that our education and training systems do more to help workers keep pace as the labor market evolves.
- Creating a Talent Compact to Keep and Attract Jobs to the U.S. One of the main assets a business considers when deciding where to locate and grow is the availability of talent. The President is proposing in his Budget $3 billion in competitive funding to create more than 50 “Talent Hotspots” across the U.S. These Talent Hotspots would consist of employers, training programs, and workforce and economic development leaders that prioritize one sector and make a commitment to recruit and train the workforce to help local businesses grow and thrive, attract more jobs from overseas, and fuel the talent needs of entrepreneurs. This proposal would produce a pipeline of about half a million skilled workers over the next five years.
- Empowering Workers, Training Providers and Employers with Better Information on Jobs, Skills and Training. Supporting a more dynamic workforce requires good data. But today, little information exists about what skills employers are hiring for and what training works best. That is why the President is proposing:
- The creation of a new Workforce Data Science and Innovation Fund. DOL would recruit and deploy a best-in-class team to help states find new ways to use technology and data analytics to improve training programs and consumer choice. And similar to HHS’s Open Health Data Initiative, DOL would partner with the Department of Commerce to develop new open source data on jobs and skills to spur the creation of new products to help match workers to better jobs.
- $40 million in Workforce Data Quality Grants to upgrade state data systems to produce information on the outcomes of training programs for consumers.
- $2.5 million to create a more real-time, dynamic data sets and common language for jobs and skills building upon O*Net (the Occupational Information Network) to fuel the development of new products and services for job seekers.
- Ensuring high-quality customer service for job seekers getting Federal services. Each year, 2,500 American Job Centers (AJCs) help approximately 17 million Americans get back to work and into better jobs. The President’s Budget proposes $2.5 million to develop an easy-to-use tool for workers to quickly view customer satisfaction rating for the job centers in their area and to establish a technology platform that AJCs can use to report on customer service outcomes.
- Providing 21st Century Career Navigation. The President’s Budget will propose $1.5 billion in new resources to states for Career Navigators who will proactively reach out to workers most at risk of not being able to reset their careers after spells of joblessness. Each year, Career Navigators will help more than 1 million people find jobs, matching them to appropriate training programs, and connecting them to the support services they need to succeed.
Building on President Obama’s Record of Progress for Young Americans
- My Brother’s Keeper (MBK) Initiative. President Obama launched MBK in February 2014 to address persistent opportunity gaps faced by boys and young men of color to ensure that all young people can reach their full potential. Since its launch, more than 200 communities have accepted the MBK Community Challenge; more than $500 million in grants and in-kind resources and $1 billion in financing has been independently committed to advance the mission of MBK.
- $100 Million TechHire Grant Competition, Including $50 Million for Young Americans. In November, the Administration released the application for $100 million to expand partnerships that can rapidly train and connect workers with barriers to employment to well-paying, high-growth jobs in information technology and other industries. The Department is accepting applications until March 11th, 2016. Interested applicants can find the application here.
- Engaging Local Elected Officials to Connect Young People and Adults to In-Demand Jobs. Over the years, the Administration has worked with local elected leaders and national organizations, including the U.S. Conference of Mayors (USCM) and the National League of Cities (NLC), on efforts such as the TechHire and My Brother’s Keeper Initiatives. Building on this work and new announcement, USCM and NLC will support the growth, adoption, and creation of promising practices for the expansion of summer opportunities and building partnerships to expand and upgrade training for in-demand jobs in communities across the U.S.