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: $1,000 per bond
Base Yield: 2% per annum, Treasury-backed
Outcome-Linked Bonus: Up to 3% per annum if program metrics exceed targets
B. Outcome Metrics for Bonus Yield
Employment Rate: Percentage of participants employed within 6 months of program completion
Wage Growth: Average increase in wages for program graduates vs. baseline
Domestic Production Contribution: Percent of graduates employed in strategic sectors (manufacturing, tech, healthcare)
C. Investor Incentives
Guaranteed minimum return of 2%
Additional 1–3% depending on workforce outcomes
Social Impact Recognition: bonds counted toward ESG compliance
D. Funding Allocation
Federal Portion (60%): Distributed to all states based on population-weighted formula
State Pilot Portion (15%): Reserved for pilot program states, adjustable based on success metrics
Local Program Portion (25%): Awarded competitively to local training providers based on performance proposals
Pilot State Allocation
State
Population %
Federal Allocation ($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