Sample Labor Market Bond Act

A.I. Prompt authored by Michael David Simmons

Labor Market Bond Act (LMBA) 

Section 1: Title and Purpose 

• This Act may be cited as the “Labor Market Bond Act of 2025.” 

• Purpose: To authorize the issuance of Labor Market Bonds by the U.S. Treasury to fund nationwide workforce development programs, reskilling, and job placement, and to create a lifetime citizen training wallet. 

Section 2: Definitions 

• “Training Wallet” – A federally-backed, digital account for individuals to access funds for approved training programs. 

• “Approved Training Programs” – Vocational schools, apprenticeship programs, certificate programs, community colleges, universities, and private providers accredited under Section 5. 

• “Labor Market Bond” (LMB) – Treasury-issued debt instrument backed by federal credit and tied to workforce development outcomes. 

Section 3: Eligibility and Participation 

• All citizens and legal residents aged 16 or older shall be eligible for a Training Wallet. 

• Individuals may spend wallet credits only on programs approved by the Department of Labor and the Workforce Investment Authority. 

• Wallet credits may be transferred between states or between programs in accordance with program rules. 

Section 4: Treasury Authority to Issue Bonds 

• The Secretary of the Treasury is authorized to issue Labor Market Bonds up to a total of $500 billion over a 10-year period. 

• Bonds may be sold to institutional and accredited investors. 

• Bonds shall carry a base guaranteed yield of 2% with an additional outcome-linked yield tied to measurable workforce metrics (employment rates, wage increases, domestic production contribution). 

Section 5: Program Certification and Oversight 

• The Department of Labor, in coordination with the Workforce Investment Authority (WIA), shall: 

• Certify and accredit training programs. 

• Monitor program completion, employment outcomes, and ROI. 

• Ensure equitable distribution of wallet funds across regions, industries, and demographics. 

Section 6: Employer Participation and Incentives 

• Employers hiring graduates of LMB-funded programs shall be eligible for tax credits of up to $5,000 per hire. 

• Employers may opt into a federal matching fund to co-invest in regional training programs. 

Section 7: State and Local Pilot Programs 

• The Secretary of Labor shall designate 3–5 pilot states to test program rollout before national adoption. 

• Pilot programs shall include outcome tracking, workforce analytics, and investor ROI reporting. 

• States may provide additional incentives to encourage participation. 

Section 8: Reporting Requirements 

• Annual reports to Congress shall include: 

• Enrollment and completion rates 

• Job placement and wage growth data 

• Investor returns and bond performance 

• Regional economic impact analysis 

Treasury Bond Structure 

A. Bond Characteristics 

• Issuer: U.S. Treasury 

• Bond Term: 10 years (with optional 5-year and 20-year maturities) 

• Denomination: $1,000 per bond 

• Base Yield: 2% per annum, Treasury-backed 

• Outcome-Linked Bonus: Up to 3% per annum if program metrics exceed targets 

B. Outcome Metrics for Bonus Yield 

1. Employment Rate: Percentage of participants employed within 6 months of program completion 

2. Wage Growth: Average increase in wages for program graduates vs. baseline 

3. Domestic Production Contribution: Percent of graduates employed in strategic sectors (manufacturing, tech, healthcare) 

C. Investor Incentives 

• Guaranteed minimum return of 2% 

• Additional 1–3% depending on workforce outcomes 

• Social Impact Recognition: bonds counted toward ESG compliance 

D. Funding Allocation 

• Federal Portion (60%): Distributed to all states based on population-weighted formula 

• State Pilot Portion (15%): Reserved for pilot program states, adjustable based on success metrics 

• Local Program Portion (25%): Awarded competitively to local training providers based on performance proposals 

Pilot State Allocation 

State 

Population % 

Federal Allocation ($B) 

Pilot Allocation ($B) 

Notes 

California 

12% 

36 

5 

Diverse economy, high tech demand 

Texas 

8% 

24 

3 

Manufacturing & energy 

Ohio 

3% 

9 

1.5 

Advanced manufacturing & healthcare 

Florida 

6% 

18 

2 

Tourism, logistics, tech 

North Carolina 

3% 

9 

1.5 

Research universities & biotech 

Pilot Focus: 5,000–50,000 participants per state, scalable based on results. 

Operational and Digital Infrastructure 

Digital Wallet 

• Lifetime account with government-backed credits 

• Accessible via mobile and web portals 

• Tracks skill acquisition, completion badges, certifications 

• Secure identity verification: multi-factor authentication, optional biometrics 

Analytics Platform 

• AI-driven job matching 

• Labor market forecasting to optimize training allocation 

• Outcome measurement for ROI-based bond yields 

Implementation Timeline 

Phase 

Duration 

Key Activities 

Phase 1 

0–6 months 

Draft legislation, Treasury & DoL approvals, digital wallet design 

Phase 2 

6–12 months 

State pilot selection, program certification, investor engagement 

Phase 3 

12–24 months 

Pilot execution, outcome measurement, bond issuance begins 

Phase 4 

24–36 months 

Expansion to additional states, national rollout 

Phase 5 

36+ months 

Continuous improvement, AI optimization, intergenerational deployment 

Conclusion 

This blueprint provides a practical, legislatively viable, and financially attractive path for Labor Market Bonds: 

• Federal legislation provides authority and oversight 

• Treasury bonds attract private capital while linking investor returns to social impact 

• State/local pilots provide proof-of-concept 

• Digital wallets and AI analytics ensure efficiency, scalability, and alignment with labor demand