Testimony of Elissa Silverman Communications and Policy Associate, At a DC Council Committee on Housing and Workforce Development hearing on the “District of Columbia Workforce Intermediary Establishment and Reform of First Source and Living Wage Amendment Act of 2011”


Chairman Brown, thank you for the opportunity to testify today. My name is Elissa Silverman, and I work for the DC Fiscal Policy Institute (DCFPI). DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents. 

Mr. Chairman, thank you for your attention to this important issue. I want to focus on why DCFPI supports the establishment of a workforce intermediary as part of First Source reform, and in doing so, I will concentrate on three points:

  1. Why a workforce intermediary is necessary to maximize First Source
  2. Why a workforce intermediary will enhance’not duplicate or replace’the work of other workforce development agencies and efforts in DC government.
  3. Why the current draft of the bill should be amended to:

·       expand composition of the task force and extend the timeframe for ultimate establishment of the intermediary

·       revise criteria for what constitutes a “good faith effort” to include work with intermediary

·       instruct the mayor to prioritize funding for the intermediary in the budget and give it a stable funding source

First, why a workforce intermediary and why make it part of First Source reform?

The point of having a First Source law is for the District and its residents to reap the maximum benefit from those contractors and businesses who themselves benefit from the District’s considerable financial resources and assistance. As it is currently written, our First Source law concentrates on the documentation, monitoring and enforcement of job creation. Yet it does not acknowledge another element critical in the First Source equation: workforce creation. In other words, it does not address the critical issue of whether there are District residents prepared and qualified to take the jobs created by our First Source law.

Mandating hiring targets and tightening enforcement of those targets will not be effective unless there is a workforce ready and able to take these jobs. That’s why a workforce intermediary is critical: It plays the role of a broker, much like a mortgage broker, making sure there’s coordination and optimization of resources to make the transaction successful for all parties involved. In the housing business, that’s making sure buyers, sellers and lenders all have their needs met. A First Source intermediary would serve much of the same function: Making sure all of the players involved in First Source jobs’job seekers, training providers, employers, and DC government’all work together to make the job creation transaction as successful as possible.

DC is not unique in falling short on First Source goals. The city of San Francisco found itself in a similar dilemma: Job seekers claimed they were unable to access construction jobs created by major public works projects, and city contractors claimed they wanted to hire local residents but couldn’t find qualified candidates.

So in 2006, San Francisco focused not only on job creation but workforce creation by establishing an intermediary. The city created a job placement and training program called “City Build,” which would serve as a pipeline to city contractors.

Second, you might be asking: Doesn’t the District have agencies that already do this?

I cannot stress this enough: A workforce intermediary will enhance’not replace or compete with’other agencies engaged in workforce development.

First of all, a First Source workforce intermediary will focus specifically on how to maximize First Source. The advantage of an intermediary is that it can be more nimble and responsive than a larger public agency. I can’t think of a better example of this than a story I heard from Jason Perkins-Cohen, executive director of the Job Opportunities Task Force, an intermediary down the road in Baltimore. An employer had a problem with all the applicants Perkins-Cohen was sending over for jobs. The problem wasn’t credentials: All the job seekers were trained and had the right skills. The problem was they needed cars to get to the worksites, and none of the job seekers owned a car.

This is where the flexibility and nimbleness of an intermediary became an advantage. The Job Opportunities Task Force was able to coordinate cars for the workers, without a cumbersome procurement process.

Lastly, a few suggestions. DCFPI believes the current draft of the bill should expand the composition of the workforce intermediary task force, expand the timeframe for establishment of the workforce intermediary and revise the criteria for what constitutes a “good faith effort” for First Source compliance. It should also instruct the mayor to designate a stable funding source for the intermediary.

In order for the workforce intermediary to be as effective as possible, it must have support and buy-in from the employer, labor, and job training communities.  We therefore recommend that the legislation expand the task force to include the following members:

  • Two employers or representatives of business organizations, one appointed by the Mayor and one appointed by the Council Chairman
  • Two representatives of job training organizations, one appointed by the Mayor and one appointed by the Council Chairman
  • A representative of organized labor, appointed by the Mayor 

Part of strengthening our First Source law should be to clearly define what constitutes a “good faith effort” to hire DC residents. In our view, active cooperation by an employer with the workforce intermediary should be a required element of satisfying the “good faith” standard under the First Source law.

We are concerned that the proposed District of Columbia Jobs Trust Fund, funded in part by fines imposed for violations of First Source agreements, will prove to be an inadequate and unreliable funding source for the intermediary. Even if there is an increase in the assessment of monetary penalties due to heightened First Source enforcement, the amount of any such penalties will remain too variable and uncertain. We believe that the First Source intermediary should have a stable funding source and be prioritized in the budget.

Finally, Chairman Brown, we hope you will still push the executive to finalize Living Wage regulations. Passed in 2006, the Living Wage Act requires contractors who receive city assistance greater than $100,000 to pay a living wage to workers, which in 2010 was $12.50 per hour. Yet almost five years later, the District has yet to finalize the act’s regulations. DCFPI urges DOES and the Gray administration to take quick action to fully implement this important law.