Crony Capitalism

Subsidized Job-Training Programs a Hotbed of Crony Capitalism

Some companies benefit while their competitors are left out


If there is one thing that labor-market analysts can agree on, it is that the workforce of today is poorly prepared to perform the jobs of tomorrow. Improving the American education system can solve part of this problem. But that won't help the millions currently unemployed, such as the former construction and manufacturing workers whose old jobs won't be coming back.

It is with these long-term unemployed in mind that Congress is considering reauthorizing the Workforce Investment Act (WIA), which has funded a host of job-training and vocational-education programs across the nation since its passage in 1998. (Though the law expired in 2003, Congress has continued funding its programs through annual appropriations.) The House passed a reauthorization called the SKILLS Act in the spring that would consolidate and eliminate a number of programs funded under WIA. And at the end of July, a different bill passed out of a Senate committee 18–3.

While both bills emphasize better coordination among the 47 job-training programs—which are funded by nine federal agencies—they miss a bigger problem: Neither bill substantively addresses the crony capitalism inherent in the WIA as it's currently structured.