Congress is finally doing something
about long term unemployment
Updated by Danielle Kurtzleben on June 29, 2014, 8:00 a.m. ET
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Lots of Americans have been filling out job applications for more than a year now. Can job
training help them? Justin Sullivan
Job training plays a curious role in American politics. On the one hand,
nothing is less controversial than calls for a better-skilled workforce. On the
other hand, over the years federal training initiatives have attracted a —
somewhat deserved — reputation as a backwater of inefficient spending and
unaccountable programs. But in late June the notoriously unproductive (
http://www.washingtonpost.com/blogs/thefix/wp/2014/04/10/president-obama-said-the-113th-congress-isthe-least-productive-ever-is-he-right/) Congress actually took an
important step toward making things better with Senate passage of a
bipartisan, bicameral compromise Workforce Innovation and
Opportunity Act (
http://edworkforce.house.gov/uploadedfiles/wioa_sa_hr803.pdf).
It's a revamping of the Workforce Investment Act, the Labor Department's
main job training initiative. The Senate passed it overwhelmingly, 95-3. There
appears to be a good chance (
http://www.politico.com/story/2014/06/federal-workforceprograms-jobs-senate-bill-108310.html) the House will pass the bill, and
President Obama has indicated he'd sign it. And the bill, while hardly a cure-all,
is a step in the right direction.
The problem
The 1998 version of the Workforce Investment Act has some major
problems. It was supposed to be reauthorized in 2003, but fell by the
wayside during the Bush administration and has been on autopilot for over a
decade. Neglected by Congress, its funding has slowly fallen off, even as
politicians pay lip-service to the program's goals — according to data from the
National Skills Coalition, funding for WIA programs (
http://www.nationalskillscoalition.org/federal-policy/federalfunding-tool) has fallen from $4.7 billion in 2000 to around $2.9 billion
today.
A 2011 GAO REPORT FOUND THAT 44 OF 47 WIA
PROGRAMS OVERLAPPED WITH AT LEAST ONE
OTHER PROGRAM
One reason Congress has been reluctant to pony up money is the need for
structural reform. A 2011 GAO report (
http://www.gao.gov/assets/130/125957.pdf) found that the WIA
system was a byzantine maze — 44 of the 47 WIA programs overlapped in
scope with at least one other program. For example, all eight Native
American-focused programs provided seven similar services but had
different eligibility requirements.
On top of all that, WIA features a messy accountability system. Different
programs featured different metrics for different populations. Programs
administered through job centers, which include things like matching people
with jobs and helping them with workplace skills, had different metrics than
adult education programs, which themselves had different metrics than
programs for disabled people seeking help.
What the rewrite fixes
The new bill will strip out 15 programs, 12 of which were unfunded last
year, according to the National Skills Coalition (
http://www.nationalskillscoalition.org/news/latest/wia-explainedpart-one). This represents a compromise between a Senate version of the
bill that had planned to cut 6 programs a House version that would have cut
35. The bill will also streamline other areas, like by drastically cutting
membership on state and local boards that govern workforce development.
Those cuts will mean local business leaders will get greater voices in steering
these boards' decisions, as National Journal reported this week (
http://www.nationaljournal.com/next-america/economicempowerment/employers-role-in-state-job-training-programs-willgrow-20140625).
In addition, there will now be uniform indicators of how well WIA's many
programs are working. The very act of making the data uniform means these
Labor Department programs will finally all be clearly aimed at the same goals
of re-employing Americans.
"It's saying, 'Here's some key things we want these programs working
toward. we want these programs working toward getting people
credentials,'" says Rachel Zinn, director of the Workforce Data Quality
Campaign, an office of the National Skills Coalition that advocates for better
data collection. "It's establishing clearly that there are some clear goals across
programs."
Most importantly, several studies suggest job training programs under WIA
work, though to varying degrees. A 2009 review of job training studies (
http://research.upjohn.org/cgi/viewcontent.cgi?
article=1063&context=confpapers) found that adult job training
programs generally yield substantially higher wages for adult participants (as
opposed to participants in youth programs).
That said, there are so many studies — from the Labor Department, from
academics, from think tanks, all with different degrees of rigor — that figuring
out exactly how helpful the WIA is has been nearly impossible. Some have
found WIA programs to have modestly negative returns on investment.
Ideally, the new yardsticks in the new bill will help solve that problem.
What the bill doesn't fix
One of the federal government's most expensive programs training
programs, Job Corps, remains untouched, though many question its
effectiveness.
Job Corps is a program aimed at disadvantaged youth, age 16 to 24, and
several studies have found that youth programs are among the least effective
in all of WIA. According to that 2011 GAO report, as of fiscal year 2009 that
program spent nearly $1.8 billion on 59,000 Job Corps participants, or nearly
$30,000 per person. One of the biggest studies to date, a 2008 analysis
published in the American Economic Review, showed that while graduates of
the program initially saw wage and employment gains, those wore off after
four years ( http://www.aeaweb.org/articles.php?
doi=10.1257/aer.98.5.1864) for everyone except the oldest participants.
In general, job training programs tend to work better for adults than youths,
says Gary Burtless, senior fellow in economic studies at the Brookings
Institution.
"That doesn't mean that we should reduce our efforts to try to help
[youths]," he adds. "It means we should be much more systematic and careful
in trying different strategies until we find some that work."
The new bill isn't so much an overhaul than a trimming with a few positive
tweaks. The long delay also meant a bill that was created in the day of a
booming, Clinton-era economy grew more and more out of date as the Great
Recession creating a new pool of jobless Americans — the long-term
unemployed who may need entirely new skill sets. For this reason, critics say
the new bill should focus more firmly (
http://b.3cdn.net/servnat/bee295d92e9e972d29_jcm6bxlz5.pdf) on
longer-term investments in workers. As Politico reports, (
http://www.nationalskillscoalition.org/news/latest/file/POLITICO_201406-04.pdf) the bill does set aside 15 percent of funds for governors to use
at their discretion, which may help states to keep their programs up to date.
The way forward
The question is what the end goal should be. In the opinion of Anthony
Carnevale, director of Georgetown's Center on Education and the Workforce,
the new WIOA act should be seen as a "placeholder" until the job training
system is truly overhauled.
In his eyes, there are two main options: massively boost WIA funding or
better coordinate Labor and Education Department programs. Education, he
says, needs to focus less on graduating people from 4-year colleges and
more on making sure people are going into programs, whether two- or fouryear, that help them get into the workforce. Labor, meanwhile, needs to
inform those students' decisions and better track how well educational
programs are readying American workers.
"Either we turn the $6 billion [WIA system] into, say, a $200 billion system,
which we're not going to do, or we use the horse that's available" — that is,
the Education Department — "and we try to teach that horse some new
tricks."
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