Building New Labor Market Institutions: State Policies that Support Workforce Intermediaries
States and communities are turning to new labor market institutions known as workforce intermediaries in response to a dual challenge: the need to aid low-skilled workers seeking advancement opportunities and the need to aid employers seeking employees who can help them compete in today's economy. However, workforce intermediaries have grown largely on the local level and independently of major national programs or funding streams, responding to the absence in local labor markets of institutions that can adequately serve low-skilled workers and their employers. The time is right for deeper consideration of why states support workforce intermediaries, how they provide that support through policy and programs, and how other states might begin to move in similar directions.
The impressive outcomes from a growing number of workforce intermediaries across the country suggest that these are significant organizations for meeting the needs of low-skilled workers, businesses, and regional economies. For most workforce intermediaries, however, the need to piece together multiple funding streams from direct-service contracts and small foundation grants is a major impediment to their efficient growth, scale, and sustainability. States that wish to improve their economic competitiveness by improving the education and skills of their lower-skilled citizens should seriously consider policies that will promote workforce intermediaries. With this in mind, JFF recommends several principles that can guide state policymakers.