Report 2004-116 Summary - March 2005

California's Workforce Development System: Although Not Specifically Targeted by Its Programs, White-Collar Job Seekers Receive Employment Services


Our review of California's workforce development programs revealed the following:


According to the Council on Foreign Relations (council), offshore outsourcing, in which U.S. companies shift jobs to countries where wages are lower to cut operating costs, is an increasingly popular practice. The types of jobs vulnerable to offshore outsourcing now include white-collar jobs in the service sector, the council has stated. Based on information from the U.S. Department of Labor, white-collar jobs include those occupations that are considered professional, technical, executive, managerial, administrative or administrative support, or sales.

At a May 2004 hearing, a committee of the California Legislature heard testimony that white-collar jobs are being moved offshore to remote locations at rapid rates. These actions, according to several who testified at the hearing, have created concern that the State may not be able to provide adequate workforce development services to white-collar job seekers.1 Our examination of data regarding unemployment insurance recipients in fiscal years 2001-02 through 2003-04 showed that nearly 50 percent had held white-collar jobs, indicating that a demand for workforce development services likely exists among white-collar job seekers.

The Bureau of State Audits issued a survey to have state entities identify the workforce development programs they administer or participate in and to provide general information about these programs. We received responses from all 225 state entities to which we sent the survey. In summary, 15 state entities administer or otherwise have significant involvement in one or more of 15 workforce development programs for adults. We also identified two other workforce development programs that are federally administered. Given the breadth of occupations covered by the definition of a white-collar worker, it is virtually assured that all 17 programs we identified provided services to at least some white-collar job seekers. However, unless they happen to be a member of a certain segment of the population—such as veterans or refugees—white-collar job seekers are more likely to receive employment services from only four programs: the Workforce Investment Act of 1998 (WIA), the Economic and Workforce Development program, the Carl D. Perkins Vocational and Technical Education Act of 1998 (vocational education act), and the Employment Training Panel program. WIA and the vocational education act are federal programs, while the other two are state programs.

The survey responses also yielded other results. Namely, almost all entities that administer or participate in workforce development programs do not specifically track the cost of providing services to white-collar job seekers or the number of white-collar job seekers served. Further, although five entities that administer some workforce development programs stated that they had strategies to address the retraining and education needs of white-collar job seekers, these strategies actually do not pertain specifically to this group. Rather, they reflect broader programmatic strategies that may include white-collar job seekers. Also, 12 entities that administer or participate in workforce development programs indicated that they maintain and track performance measures. However, none of the measures strictly pertain to white-collar job seekers. Finally, 11 entities indicated that they face barriers to improving their programs. Many barriers identified pertain to limited funding.

Despite the lack of specific information related to white-collar job seekers, we cannot conclude that state entities should amend their existing practices. Our analysis of data from the Employment Development Department shows that white-collar job seekers can and do in fact receive services from California's workforce development programs. Specifically, of the number of dislocated job seekers enrolled in a component of WIA, at least 54 percent had white-collar occupations. Further, white-collar jobs made up nearly 60 percent of the job openings listed on the State's automated labor exchange system. Finally, officials with the California Workforce Association, which is an association for local area boards, and with several local area boards indicated that white-collar job seekers can receive appropriate types of services at one-stop career centers.


The Labor and Workforce Development Agency offered no comments.

1Throughout this report, we use the term "job seeker" to mean those individuals who have lost their jobs or other individuals who are still working but either are looking for other employment or are seeking to upgrade their skills.