U.S. Faces Uphill Battle in Retraining the Jobless

August 6, 2012

The effectiveness of workforce training has been debated since 1962, when Congress poured federal money into the Manpower Training and Development Act. The Workforce Investment Act (WIA), passed in 1998, was the latest iteration in a line of policies hoping to correct mismatches in the labor market by retooling workers from the jobs they had for the jobs they could have, says the Wall Street Journal.

While President Obama has repeatedly cited government-sponsored workforce training as a central linchpin to his economic framework, the success rate of such endeavors is very much up for debate.

  • The federal government spent about $18 billion on training and job-search programs, running 47 separate programs offering training, in the year ended September 2009, the most recent tally by the Government Accountability Office.
  • In the year ended June 2011, 78 percent of the 110,776 people who went through the dislocated-worker training program said they wound up with jobs within three months, according to Labor Department surveys.
  • Only about 38 percent, however, told the Labor Department they landed the kind of jobs for which they were trained.

Furthermore, in addition to their lackluster performance in placing training enrollees into careers that use their skills, government workforce training programs suffer from a number of debilitating conditions.

  • Lawrence Katz, a Harvard University labor professor who studies job training, says federal agencies dole out cash to training programs "on a very haphazard basis."
  • He emphasizes that government programs are often mistaken about the prospects of certain industries, resulting in programs dedicated to provide training for jobs that don't exist.
  • The wind industry serves as a prime example of this government failure: while employment in wind energy firms was made a priority of job training under President Obama, the sector has shed some 10,000 jobs since 2009, according to the American Wind Energy Association.
  • Moreover, government programs routinely fail to assess their own success rate; for the WIA, only one post-completion survey was conducted (three months after completion) with no subsequent follow up.

Source: Ianthe Jeanne Dugan and Justin Scheck, "U.S. Faces Uphill Battle in Retraining the Jobless," Wall Street Journal, August 1, 2012.

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