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.
National Journal
Stephanie Czekalinsk
Jan. 17, 2014, midnight

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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