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Policy Report: Increasing Use of Dislocated Worker Funds

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Dislocated Worker funding could provide a significant resource for grantees of the Bay Area Workforce Funding Collaborative (BAWFC, or Workforce Collaborative) and other sector initiatives. In 2004, the Workforce Collaborative and the State of California's Employment Development Department (EDD) made $1 million of State Dislocated Worker funds available to Workforce Collaborative grantees. However, grantees were unable to use hundreds of thousands of Dislocated Worker funds. Rather than benefiting Bay Area employers and workers, the unused funds went back to the State.
To better understand the problem and potential solutions, BAWFC contracted with the National Economic Development and Law Center (NEDLC) to investigate Dislocated Worker funding. Our report begins with a brief description of federal funding for dislocated worker services. We then review the ways in which California uses the Dislocated Worker funding it controls. Next, we focus on the challenges and opportunities, including new opportunities related to the use of Dislocated Worker "formula" funding provided directly to local Workforce Investment Boards (WIBs).