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The Government's $11 Billion Jobs Program May Not Work The Government's $11 Billion Jobs Program May Not Work

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The Next Economy | Big Questions

The Government's $11 Billion Jobs Program May Not Work

The federal government has spent billions since the start of the Great Recession on a single job-training program, but a new report shows there’s not enough data to know if it helps out-of-luck workers.

Miriam Abrego, 55, picks up fliers advertising jobs at the Foothill Employment and Training July 6, 2012 in Pasadena, California.(Kevork Djansezian/Getty Images)

photo of Stephanie Czekalinski
January 17, 2014

Figuring out the best way to put unemployed people back to work is one of the holy grails of today's political and policy debates. The federal government has spent more than $11 billion since the onset of the Great Recession in an effort to retrain workers or to give them new skills through the Workforce Investment Act. The only problem? Lawmakers do not know if that money has been well spent, or if it's even helped people.

That's according to a recent report by the nonpartisan Government Accountability Office, which shows that there is no way to definitively tell how many people are being trained with the cash; who they are; or what services they received. The federal government spent nearly $2 billion on the program alone in 2013. Yet the data the Labor Department collects from states administering the worker training program are "inconsistent and incomplete," according to the GAO report. "What's at stake is the wise use of taxpayer monies," says Revae Moran, a GAO director who authored the study.

The result is that, in the wake of the worst recession in decades, policymakers, the public, and workers have a muddy picture of the federal program designed to help people develop skills to rejoin the workforce or to bounce back when they lose their job after a factory closes or their shifts are eliminated. Between 2007 and 2009, a record one in six workers reported losing a job, according to a paper from the National Bureau of Economic Research. Between 2007 and 2010, 15 million workers lost their jobs because there wasn't enough work for them to do, according to the Brookings Institution. In December, the unemployment rate was 6.7 percent, according to the Bureau of Labor Statistics—a drop from the previous month caused primarily by people leaving the workforce.

 

Adam Bender of East Pointe, Mich., was among those unemployed. He lost his job as a resource officer in August 2013 when the school where he worked closed. Shortly before Christmas, the 56-year-old waited on two job offers, both the result of completing an eight-week production operator certificate course at Macomb Community College.

Bender, who supports his wife and an adult son with Down's syndrome, visited one of the 25 regional Michigan Works One-Stop centers shortly after losing his job. A counselor suggested he train to work in high-tech manufacturing and referred him to the college. His experience is an example of the potential benefits of worker retraining, as well as the difficulties that the Labor Department faces as it collects data to check on the program's effectiveness.

In the eyes of the Workforce Investment Act, Bender would not have been counted as one of the people who benefited from the program. States classify and count enrolled workers in radically different ways—a problem that complicates the portrait of the government's efforts to help the unemployed. Bender was not counted among WIA trainees in Michigan, but, according to the GAO report, he likely would have been counted differently in other states.

The Labor Department counters GAO's criticism by arguing that it has a "robust" system in place to ensure data quality and to get the states to record the data, according to a letter that the department sent to GAO. More than 2.5 million people found jobs through the Workforce Investment Act between 2009 and 2011, according to the Labor Department's most recent annual performance summary.

But in an era of tightening resources, many policymakers, employers, and workers are asking whether the worker training programs work. A study published recently by the National Bureau of Economic Research shows that some workers in two states, who lost their jobs and received federal government job training, have worse outcomes than those who received only basic job-search help. The study's results are tantalizing, but the scope of the research is limited because so few states participated.

"The results, so far, for training displaced workers are not so great," says Harry Holzer, a professor of public policy at Georgetown University and one of the study's authors. "You really want to know if that's true. That's something that we could know if we had this information."

To those struggling to find work, the data and research issues bedeviling the Workforce Investment Act are frustrating barriers to much-needed services. It's essential that the government give people what they need to find jobs or get retrained because the stakes are high, says Bender. "I think I would still be unemployed" without the training, he said. "I was fortunate." Too bad the government may never know how many others like him it's helped.

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