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
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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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