Federal job training and worker assistance programs have been around in the U.S. since the New Deal-era programs implemented by President Franklin D. Roosevelt in the 1930s. The goal seems obvious: to provide opportunities and resources for training and education that will keep Americans employed through recessions, shifting industries and changing technology.
Though noble in their aim, American job training programs have largely fallen short of their goal of keeping workers in the workforce. They often fail to pull in large numbers of participants, and where they have, there is scant evidence that they have meaningfully changed career outcomes or increased job security.
This failure is incredibly concerning, given the moment we are in. The Biden presidential campaign has correctly asserted that climate change is the “number one issue facing humanity,” underscoring the need to shift the economy to clean energy. As such, the campaign’s climate plan necessarily places job creation in the new green economy as one of its top priorities. (Other prominent climate plans, such as the Green New Deal backed by New York Representative Alexandria Ocasio-Cortez and Massachusetts Senator Edward Markey, have similar emphasis on job creation.)
Indeed, that the economic shift necessary to avoid climate disaster will result in job creation, rather than job destruction, is a hopeful notion. If done correctly, communities, workers and the greater economy might truly be better off in a climate-focused U.S. But for an equitable transition to happen, workers need to be empowered to actually do the jobs being created by a green economy, especially in parts of the country that stand to see massive layoffs as fossil fuel and other polluting industries decline. Therefore, it is essential to explore the failure of the current federal job training infrastructure, so that we may search for a meaningful solution that will set the country up for economic and environmental success moving forward.
The Training Problem: Scope, Size and Impact
The major driver behind the creation of job training programs is unemployment. The U.S. unemployment rate has varied widely throughout the country’s history, cycling with the booms and busts of the economy. In recent decades, unemployment has been driven by the growing gap between the skills that employees have and those that employers need, especially as blue collar jobs in manufacturing continue to shrink. Congress has enacted a long string of job training and workers assistance programs in an attempt to fill this skills gap, each with the goal of fixing the shortcomings of the program that came before it. The modern 1998 Workforce Investment Act (WIA), replaced with minor adjustments in 2014 by the Workforce Opportunity and Innovation Act (WIOA), set the foundation for the current system.
But despite a long history, there is little evidence that federal job training programs have ever significantly helped participants land stable, successful jobs in the disciplines for which they’ve been trained. For decades, these programs have faced little evaluation or oversight. But in 2017, the U.S. Department of Labor published a long-overdue review of the WIA, which found that, between 2008 and 2017, WIA-funded training did not conclusively increase earnings or improve employment-related outcomes over 30 months when compared to other forms of employment support. In addition, one in five participants enrolled in training left their program before completing it. As a result, the researchers “did not find training to be cost effective from the perspective of customers, taxpayers, or society as a whole.” They also noted that they expect these findings to hold true for the current WIOA.
In the program year 2019 (July 2019-June 2020), WIOA delivered training services to over 150,000 adults and an additional 65,000 dislocated workers. This means that more than 200,000 Americans each year are receiving training that has not proved effective at actually placing people in long term career opportunities. At the same time, these programs are not reaching nearly as many people as they should to truly bridge the skills gap in the labor market—in September of 2020, about 12.6 million people in the U.S. were unemployed. Even if we understand this number to be inflated by COVID-19-related job loss, training programs are still falling pitifully short of alleviating unemployment in any meaningful way.
Unemployment does not always strike equally, and among particular communities it is often driven by more specific factors, from changing technologies and overseas competition to hiring discrimination and educational inequities. In addition to the general WIOA program, separate job training programs, often run through other federal agencies, are intended to meet these specific challenges. The Trade Adjustment Assistance (TAA) program, for example, is designed to help workers who have lost their jobs due to foreign competition.
But even more targeted programs such as the TAA are less effective than we might hope. A 2016 economic report on the effects of China on the U.S. labor market found that trade-exposed regions in the U.S., exactly the regions the TAA is intended to help, saw an average TAA take-up of only $0.23 per capita when compared to less trade-exposed areas. At the same time, reliance in those same regions on other categories of assistance, such as medical benefits, Social Security and federal income assistance, grew by more than $15 per capita. This suggests that even when the mechanism for job training programs is in place, they do not reach their intended audience, perhaps because of a lack of information or interest.
It is important to consider the implications for the future. To achieve a clean energy future, the nearly 1 million Americans employed in fossil fuel and coal refinement and extraction will see their jobs shifted or phased out, as well as many others in related industries. The Biden climate plan promises to create more than 10 million well-paying green jobs, but that will only prove successful if those in need of employment are equipped with the right skills to take them on. Congress has tried for decades with little success to land on an effective job training infrastructure. The government runs the risk of continuing to pour money into an inefficient program, in a situation where the program’s effectiveness is growing increasingly essential.
Failure Frameworks: Beyond the Markets
Training and education, by definition, generate positive externalities for society, such as more economically secure communities, increased purchasing power and a decreased strain on other poverty alleviation programs such as food and healthcare assistance. Because of this, the private education market will never produce enough of this good to meet the need—indicating a market failure. Federal training programs have stepped in to try to correct this, with the goal of capitalizing on the possible positive externalities.
But, in many cases, federal activity in the market has been unsuccessful at creating training programs for the jobs that communities actually want and need. The WIA report found that WIA-funded training programs regularly failed to align with the needs of local employers: Only half of training participants reported that they found employment because of their training, and only about forty percent of participants who enrolled in training for a specific occupation went on to find a job in that same occupation. This market failure may be due to the government-created nature of these programs, which make their design more closely tied to politicians desire to “do something” about unemployment rather than to the actual demands of the labor market.
Beyond market failure, current federal job training programs are also facing a distributive failure. The WIOA funds 2,400 American Job Centers across the country, which are designed to be one-stop-shops for employment assistance. Participants must meet with a Jobs Center representative to find out if they qualify for WIOA job training. This means they must live near a center, know that it exists, and be able to find transportation there and back. They then need to hope that they live near an eligible training center, which may be run through a local union, college or community center, and be able to afford any costs of training if they are not eligible for payment assistance. This results in an inequality of opportunity and access, skewed toward those located near Job Centers and with access to resources such as the internet, transportation and savings. Given that unemployment is most likely to affect low-income communities of color and other historically disadvantaged populations, it is incredibly likely that those who need job training the most might simply not have the access to the information and resources they need to tap into these programs.
Though it is not the main focus of this analysis, it is also important to note that job training programs have been plagued by government failure. Because they have been studied so infrequently, these programs face little pressure to actually succeed in job placement, leading to bureaucratic inefficiencies. A 2019 GAO report identified 43 different training and employment programs across nine federal agencies, with significant overlap between programs suggesting unnecessary duplicate efforts. Scandals have also been reported from within these programs: In 2011, then-Senator Tom Coburn released a report detailing instances of waste and fraud.
Conclusion: Where We Go From Here
The goal of this memo is not to suggest that job training programs are unnecessary. It is instead to point out that these programs have long suffered from a lack of oversight, community input and innovation that could make them actually effective. If we are to truly tackle climate change in the coming decades, the job landscape of the country will necessarily be affected. It is important to deal with the failings of federal job training and worker assistance programs now, so that going forward we can meet the needs of a new energy economy, avoid worker displacement, and support the communities most negatively affected by climate change.
Featured image source: Unsplash.