Unemployment Rate

Are Job-Training Programs Worth the Cost to Taxpayers and "Beneficiaries"? NY Times Isn't Sure

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Via Ed Morrissey of the invaluable site Hot Air comes word of this New York Times analysis of the Workplace Investment Act (WIA), a job-training program jointly administered by the feds and the states. It is supposed to help displaced workers retool their skills and get new jobs but the main outcome seems to be wasting taxpayer dollars while plunging unemployed folks into debt for useless associates-degree level courses. The Times introduces us to Joe DeGrella, whose contracting company went belly up:

He took each step in line with the advice of the federal government: He met with an unemployment counselor who provided him with a list of job titles the Labor Department determined to be in high demand, he picked from among colleges that offered government-certified job-training courses, and he received a federal retraining grant.

In 2009, Mr. DeGrella, began a course at Daymar College — a for-profit vocational institute in Louisville — to become a cardiology technician. Daymar officials told him he would have a well-paying job within weeks of graduation.

But after about two years of studying cardiovascular physiology and the mechanics of electrocardiograms, Mr. DeGrella, now 57, found himself jobless and $20,000 in debt. He moved into his sister's basement and now works at an AutoZone.

Since 2009, taxpayers have spent over $3 billion on the program. Congress just reauthorized it, too, despite a spotty record and no clear evidence that it works particularly well. Indeed, the Times notes:

…data and academic studies have suggested that a vast majority of the unemployed may have found work without the help of the Workforce Investment Act.

In South Carolina, for example, 75 percent of dislocated workers found jobs without training, compared with 77 percent who found jobs after entering the program, according to state figures.

Read the whole thing here.

Hot Air's Morrissey wraps up his comments with this:

There are a couple of problems with the job-retraining approach. First, the government turns out to be a terrible prophet for labor needs down the road. Second, the issue for the last several years has not been a glut of jobs without qualified applicants, but a glut of applicants for a paucity of open positions. Even if the WIA had overall merit, it would only have sufficient value in the former context, when businesses needed applicants for jobs open now. The WIA would be better aimed at subsidizing employer-based training for jobs that need filling now or in the near future, as a kind of partnership in apprentice work. That would at least ensure that the funding went to real jobs, and not to training centers for jobs that are selected by darts on a dartboard, even if there would be a real danger that taxpayers would just end up subsidizing hiring that would have occurred anyway.

The best solution is to create an economic environment of true growth, which would tighten the labor market and give much more leverage to job seekers. That would mean scaling back regulation and reforming the tax code, neither of which this administration wants to do. Instead, we're seeing more and more of the chronically unemployed owe their souls to the vocational school.

It's really important, I think, to tally the costs not just for taxpayers in the abstract but individuals in the particular. What could be worse, really, than going through this process and ending up with no usable new skills, a couple of more years out of work, and thousands of dollars in debt? Not much. I've looked around for cost-effective job-retraining programs at various times in the past and have generally come up empty-handed, for most of the reasons outlined by Morrissey. There's no question that his best solution is key, but to the extent that it reduces the apparent ability of elected officials to immediately remedy specific situations (and thus buy votes), it will always come last in politics.

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18 responses to “Are Job-Training Programs Worth the Cost to Taxpayers and "Beneficiaries"? NY Times Isn't Sure

  1. There is no problem so severe that government, by stepping in and setting up a bold new government program, cannot worsen it. Then again, the progs will just point to the for-profit colleges and say that Almighty Big Government, blessed be It forever, is, as usual, blameless.

  2. Jim Bovard spent a while investigating job training programs in the 80s, and the amount of fraud he discovered was pretty astonishing (although, not terribly surprising, I suppose). That experience was one of the things that turned him off from the Repubs, because Reagan and Bush loved them some job training welfare. He discusses all that in his book Public Policy Hooligan.

    1. Oh, and of course nobody in government gave a shit when he tried to report his findings.

  3. Is anything worth the cost to taxpayers?

  4. Wanna make money? Start a job training program.

  5. The real foolishness is this:

    WIA funds are given out to states on a block basis, with additional grant funds handed out to areas experiencing “emergencies”, like plant closings.

    The problem with that is that it directs the funds to the areas with the fewest jobs.

    This reinforces one of the biggest factors creating long-term unemployment – people’s stubborn unwillingness to move.

    If you live in a devastated mill town or in that town where that air freight facility closed up (was it Airborne or DHL?), you can get all the training you want and you aren’t getting a job if you won’t move.

    And moving is the last thing the jobless do when they capitulate. Because it usually means selling a home, relocating children, getting a divorce, leaving behind extended family, whatever. People are stubborn and won’t do it and make excuses why they can’t do it. And these job training programs enable that behavior by connecting the government career center in a devastated area with receipt of the funds.

    What we really should do is give no funds at all to places with high unemployment, and give out money to be used for relocation subsidies in areas with low unemployment. (Actually, we “really” should do nothing, but you know what I mean.)

    1. (was it Airborne or DHL?)

      DHL bought Airborne, so both.

  6. Why is that woman trying to blind that dummy?

    1. Don’t be silly–she’s operating on a robot overlord.

  7. Kevin D. Williamson at National Review has a good take on this:

    http://www.nationalreview.com/…..williamson

  8. This is the kind of thing people need to see. The intentions are all there, which is what people get behind. But the results are lacking.

  9. The best solution is to create an economic environment of true growth, which would tighten the labor market and give much more leverage to job seekers. That would mean scaling back regulation and reforming the tax code, neither of which this administration wants to do.

    Just the sort of thing a racist would say.

  10. One other thing to remember is that the WIA funds are administered by state Departments of Labor and local Workforce Investment Councils.

    So the funds are in fact creating or saving jobs – for state and county employees in the workforce development bureaucracy.

    That means that these programs are wildly successful at creating the only jobs anyone in government is worried about.

  11. “Workforce Investment Councils”

    Good grief that sounds like something straight from Stalinist Russia.

    1. They read the same source material.

  12. But after about two years of studying cardiovascular physiology and the mechanics of electrocardiograms, Mr. DeGrella, now 57, found himself jobless and $20,000 in debt.

    Liz Warren laughs. maybe we need a consumer finance protection bureau that protects consumers from government rackets.

  13. They have been doing job training programs since the 1960s and they have never been effective. The reason for that is that lack of training is not the problem for most of the unemployed. The problem is lack of work history and lack of life skills. Job training programs generally don’t address those issues. You know most people improve your lot in life? One crappy job at a time. The best thing for young people is an entry level low skilled job that allows them to learn what it takes to succeed, establish contacts and develop a track record that shows employers they can be trusted. Of course government bureaucrats and progs hate entry level, low paying jobs and do everything they can to destroy them. And then they wonder why people on the bottom have such a hard time getting ahead.

  14. Isnt the point that “Job Training Programs” provides politicians the ability to throw Jobs to “Trainers” and the State/Federal bureaucracies that manage them?

    in the end, they are all the same = excuses to throw money around and say ‘something was done’

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