Raimondo Calls for Outcome-Based Workforce Funding as AI Reshapes Jobs

Workforce systems must shift to outcomes, not enrollment

Former U.S. Commerce Secretary Gina Raimondo is calling for a fundamental restructuring of how America funds workforce training programs, arguing that states should measure success by whether workers secure better jobs rather than simply counting enrollment numbers.

Speaking Thursday at the launch of the Commission on AI and the Future of the American Workforce, Raimondo said existing systems are failing workers despite massive public investment. "We spend hundreds of billions of dollars, taxpayer dollars every year on higher education, state-subsidized higher ed, community colleges, workforce training, unemployment insurance, most of which isn't effective," she said. "We're not getting what we pay for."

The commission, a joint effort between the American Enterprise Institute and Urban Institute co-chaired by Raimondo and former House Speaker Paul Ryan, will spend the next year examining how artificial intelligence affects jobs, wages and workforce development.

Texas already moving toward performance metrics

Texas has already begun implementing the kind of changes Raimondo advocates. State lawmakers recently adopted outcomes-based funding for both public schools and community colleges. School districts now earn additional funding when students meet college, career and military readiness benchmarks, while community colleges receive much of their state funding through measures tied to credentials, transfers and workforce outcomes rather than enrollment alone.

Raimondo argued that AI's arrival should accelerate these reforms. "How do we use this moment of AI disruption to come up with some new ideas that provide better outcomes, so that every American can successfully make it through this transition," she said.

Why it matters

The shift from enrollment-based to outcome-based funding represents a fundamental change in how states evaluate workforce programs. As AI adoption accelerates, regions like North Texas—where employers are rapidly adopting new technologies while workforce boards and community colleges scramble to prepare workers—face immediate pressure to demonstrate that training investments produce tangible results. The commission's focus suggests federal policy may eventually follow Texas's lead in tying funding to measurable employment outcomes.

Employers exploring AI for white-collar work

Raimondo cautioned that better training alone won't solve AI's workforce challenges. Many executives she speaks with are already examining whether AI can handle mid-level clerical, administrative, financial and analytical tasks currently performed by people. "More than half are looking at their mid-level clerical, administrative, financial, analytical 'white-collar jobs,' and they can see AI very effectively doing these jobs," she said.

However, many employers are seeking ways to use AI to boost productivity while avoiding layoffs and helping employees transition to new roles. Drawing on her father's experience losing a manufacturing job during the China trade shock, Raimondo said workers affected by AI will need "a bridge to another chapter of work."

Ryan offered a cautiously optimistic view, noting that AI's arrival coincides with renewed demand for skilled workers in manufacturing, logistics and supply chains. "America is reindustrializing, where there's going to be a renaissance of skilled workers," Ryan said. "The question is, how does that renaissance play out in this new AI augmentation world?"

Uncertainty remains about AI's full impact

The commission's leaders emphasized that no one yet knows which jobs, industries or regions will be most affected by AI. Urban Institute President Sarah Rosen Wartell said the key unknowns are "in what proportion, in what sequence, in what sectors, which roles, and which geographies will be most affected."

Rather than predicting a single future, the commission plans to examine multiple scenarios and release recommendations throughout the year.

These details were first reported by The Dallas Morning News as part of its Future of North Texas initiative.