New Jersey Budgets $52 Million to Reconnect 100,000 Disconnected Youth

New Jersey faces a pressing challenge with over 100,000 youth aged 16-24 disconnected from school and work. In Newark alone, an estimated 7,000 young people are out of school and unemployed, with more at risk of disconnection. Recognizing the severity of this issue, the state has made significant investments in workforce development programs aimed at reengaging disconnected youth.

The Urgency of Addressing Youth Disconnection 

Mayor Ras Baraka of Newark paints a dire picture of the youth disconnection crisis in New Jersey in his NJ.com Oped piece:

One hundred thousand. That's right - over 100,000 New Jersey students dropped out of school in 2021, a number that has been fueled, in part, by the COVID-19 pandemic. However, this is not a new phenomenon.- Mayor Ras Baraka

The consequences of youth disconnection are severe and far-reaching. Mayor Baraka warns, "Disconnection from school can often be a determining factor in a young person's life and increases the likelihood that they will experience poverty, poor health outcomes and interactions with the criminal justice system." The financial impact is staggering, with youth disconnection costing New Jersey taxpayers approximately $13.9 billion annually. Looking ahead, Mayor Baraka cautions, "New Jersey will lose $37 billion in wages from the persistence of youth disconnection. That is a burden no New Jerseyan can afford and a loss of potential that no young person deserves."

A Statewide Issue Demanding Action

Mayor Baraka emphasizes that youth disconnection is a pervasive problem affecting communities across New Jersey: "This issue is not confined to a particular zip code or a single county—school disconnection impacts youth across the state." Data from the New Jersey Policy Perspective's State of Opportunity Index reveals that "Cumberland and Essex counties have the highest per capita rate and percentage of youth disconnection, with 23% and 17%, respectively."

Past State Funding for Youth Reconnection

In response to this urgent crisis, New Jersey Gov. Murphy's administration invested $60 million dedicated to workforce development, apprenticeships, and support services. Key programs and investments include:

- Growing Apprenticeship in Nontraditional Sectors (GAINS) Program - $4.9 million to expand apprenticeship opportunities

- Pre-Apprenticeship in Career Education (PACE) Program - $5.3 million to prepare youth for apprenticeships 

- Youth Transitions to Work (YTTW) Program - $2 million to help youth transition into apprenticeships

- Pathways to Recovery Program - $24 million to assist workers displaced by the opioid crisis

- Lifelong Learning Accounts (LiLA) Program - $9 million to provide training and support services

These investments take a multi-faceted approach, with programs like GAINS, PACE, and YTTW directly focusing on apprenticeships and career pathways for youth, while Pathways to Recovery and LiLA support the broader population of displaced workers and young adults facing barriers to employment.

Results and Impact of $60m

The this performance report highlights the impact of these investments through key programs:

Pathways to Recovery Program (June 2019 - October 2023):

- Served 3,592 participants, trained 2,831, helped 2,113 obtain credentials

- Helped 1,885 participants obtain employment, with 1,303 retaining it for 90+ days

- Established 1,539 new employer partnerships 

- Funded by $24 million ($15M state, $9M federal)

JOBS Re-Entry Program (April - November 2023): 

- Served 141 participants, trained 125, provided 116 with credentials

- Assisted 32 participants in obtaining employment, with 15 retaining it for 90+ days

- Funded by $6 million in state funding

LiLA Program:

- Enrolled 35 participants (4 currently in training), who can receive up to $9,600 each

- Funded by $9 million in state funding

The state has also strengthened local workforce boards, connected over 1,700 employers with job seekers, provided incumbent worker training to 20,601 employees, and awarded $1.3 million in training grants.

Challenges with Data, Coordination & Performance

The New Jersey Department of Labor and Workforce Development (NJDOL) has taken several steps to track and improve performance, but also faces some challenges in this area, as discussed in the PY 2022 WIOA Statewide Annual Performance Report Narrative.

Efforts to Track and Improve Performance:

1. Strengthening Performance and Report Data: NJDOL has focused on improving the quality and standardization of data provided by eligible training providers. They are working with partners to modernize the Eligible Training Providers List (ETPL) application process and create a portal for providers to submit data in a consistent, standardized format.

2. Implementing a Quality Assurance Framework: Starting in PY22, NJDOL began calculating official scores on scorecards using data submitted by training providers. The framework establishes performance standards and works with programs to improve their scores and quality.

3. Developing a Local Statistical Adjustment Model (SAM): NJDOL is developing a SAM for use with local area target development and assessments of local area performance, to support continuous improvement.

Challenges in Tracking Spending Performance:

While NJDOL's efforts to strengthen performance tracking and improve data quality are commendable, it is important to note that the current performance reporting does not yet provide a comprehensive picture of the outcomes and impact of the state's workforce investments.

As a result, there may be gaps in the available data and challenges in linking specific investments, like the $60 million mentioned earlier, to measurable outcomes. As NJDOL continues to refine its performance accountability system and works with partners to improve data quality and consistency, stakeholders can expect to see a clearer and more detailed picture of how the state's workforce programs are performing and the impact they are having on participants and employers.

Future State Funding and Pay-for-Performance Initiatives

Governor Murphy's FY2025 budget earmarks $52 million for enhancing workforce capabilities through apprenticeship and specialized support programs. Here is how the funds are distributed:

1. Workforce Development Partnership Initiatives:

- Customized Training Grants: $12 million is allocated to train 40,000 individuals.

2. Apprenticeships:

- Apprenticeship Program: $8 million is designated to support 670 participants.

3. Pre-Apprenticeships:

- Pre-Apprenticeship Program: $7 million targeted at training 700 individuals.

4. Specialized Programs:

- Growing Apprenticeship in Nontraditional Sectors (GAINS): $10 million allocated.

- Youth Transitions to Work (YTTW): $5 million allocated.

- Pre-Apprenticeship in Career Education (PACE): $4 million allocated.

- New Jersey Builders Utilization Initiative for Labor Diversity (NJBUILD): $3 million allocated.

- Career Accelerator Internship Program: $2 million allocated.

- Pathways Leading Apprentices to a College Education (PLACE): $1 million allocated.

- Total Allocation for Specialized Programs: $25 million.

Conclusion

Youth disconnection takes an immense toll on New Jersey - in lost human potential, increased social costs, and billions in lost productivity and tax revenue. The statewide scope of this crisis demands a comprehensive response.

The Murphy administration has laid the groundwork by investing $60 million in programs that attempt to - engaging thousands of participants, helping them gain credentials and employment, and building employer partnerships. The proposed $52 million in new funding will expand on this progress.

However, fully resolving this crisis will require a collaborative, multi-stakeholder approach that goes beyond just workforce training. It truly "takes a village" to reconnect disconnected youth, and no single entity can tackle this complex challenge alone. Schools, community organizations, non-profits, employers, and government agencies at all levels must work together in a coordinated fashion to identify, engage, and support disconnected youth.

Moreover, it's crucial to recognize that many disconnected youth face deeper challenges beyond just lack of skills or credentials. Issues like trauma, mental health struggles, housing instability, food insecurity, and lack of transportation can all be significant barriers to workforce readiness. Effective interventions must address these underlying needs holistically, often through partnerships with specialized service providers.

Strategies/polices relating to Pay‐for‐Performance contracting

Neither the New Jersey State or any local Workforce Development Board area is using pay-for-performance strategies.

To maximize the impact of workforce investments and ensure that the hardest-to-serve populations are not left behind, NJDOL currently is exploring innovative funding models like Pay-for-Performance. They are conducting a feasibility study on contracting approaches that align payment with successful outcomes for harder-to-serve populations. This openness to new models reflects a commitment to directing resources where they can do the most good and incentivizing programs to tackle the toughest cases.

The complexity of the youth disconnection crisis necessitates not just more funding, but smarter funding. It requires strategic coordination to weave together a comprehensive safety net, data-driven decision making to invest in what works, and a willingness to hold programs accountable for meaningful, measurable results. Most of all, it requires a fundamental belief that every young person, no matter their struggles, has potential that deserves to be nurtured.

In the next article, I will share more details about how an Outcome-driven or Performance-based business model could provide a promising framework to better serve the State, its Citizens, and especially its disconnected youth. By tying funding to verifiable results, this approach has the potential to drive much-needed innovation, accountability and systems-level change.

Stay tuned for a deeper dive into how New Jersey could leverage this model to transform lives and build a brighter future for the next generation.

In the mean time.... please like and share so we can draw attention to this urgent challenge. Thank you.