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