NYT: $3B gov’t retraining program as effective as you’d guess

posted at 5:21 pm on August 18, 2014 by Ed Morrissey

To paraphrase the old Tennessee Ernie Ford song — you take a ton of government cash to get job retraining, and what do you get? Several years older and deeper in debt, according to the New York Times, which casts a critical eye on the Workforce Investment Act. The program first came into existence in 1998 and was expanded in the 2009 stimulus bill passed by Democrats, but does it actually help people find work and restore their economic independence? Not really, and the costs more often make situations worse instead of better:

Instead, an extensive analysis of the program by The New York Times shows, many graduates wind up significantly worse off than when they started — mired in unemployment and debt from training for positions that do not exist, and they end up working elsewhere for minimum wage.

Split between federal and state governments — federal officials dispense the money and states license the training — the initiative lacks rigorous oversight by either. It includes institutions that require thousands of hours of instruction and charge more than the most elite private colleges. Some courses are offered at for-profit colleges that have committed fraud in their search for federal funding. This includes Corinthian Colleges Inc., which reached an agreement last month with the federal Education Department to shut down or sell many of its campuses.

The Times’ Timothy Williams walks readers through several anecdotes of utter failure, including one man who ended up $20,000 in debt after getting training to be a cardiology technician — only to discover that no one needed cardiology technicians. He now makes minimum wage at Autozone, a job that he could have had without running up debt for specialty training.

Some of the problems originate with the schools themselves, which don’t always deliver what they promise, but much of it comes from poor guesswork by the government on labor needs. Barack Obama himself emphasized retraining as one of the necessities for transforming the sidelined labor force into the cutting-edge candidates in emerging fields and technologies. Federal and state governments offer grants tied to specific vocational training, including grants that make taxpayers partners with the unemployed who supplement the grants with loans for their training. According to Williams, we have spent the money training thousands of workers for jobs that will never materialize.

Most of them could have done better by staying out of the WIA program:

In some states, data and academic studies have suggested that a vast majority of the unemployed may have found work without the help of the Workforce Investment Act.

In South Carolina, for example, 75 percent of dislocated workers found jobs without training, compared with 77 percent who found jobs after entering the program, according to state figures.

Those who have graduated from these programs don’t usually do much better even when they do find work:

At Central Valley Opportunity Center Inc. in Merced, Calif., of 34 people enrolled in a cooking course in 2012, only three found work, according to school data.

More than one-third of the students who graduated from the center’s welding course and more than two-thirds from its general business course earn less than $20,000 a year, according to school records.

There are a couple of problems with the job-retraining approach. First, the government turns out to be a terrible prophet for labor needs down the road. Second, the issue for the last several years has not been a glut of jobs without qualified applicants, but a glut of applicants for a paucity of open positions. Even if the WIA had overall merit, it would only have sufficient value in the former context, when businesses needed applicants for jobs open now. The WIA would be better aimed at subsidizing employer-based training for jobs that need filling now or in the near future, as a kind of partnership in apprentice work. That would at least ensure that the funding went to real jobs, and not to training centers for jobs that are selected by darts on a dartboard, even if there would be a real danger that taxpayers would just end up subsidizing hiring that would have occurred anyway.

The best solution is to create an economic environment of true growth, which would tighten the labor market and give much more leverage to job seekers. That would mean scaling back regulation and reforming the tax code, neither of which this administration wants to do. Instead, we’re seeing more and more of the chronically unemployed owe their souls to the vocational school.


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Old and Busted : Whip Inflation Now!

New Hotness: Workforce Investment Act!

Both were just as effective too.

BlaxPac on August 18, 2014 at 5:31 PM

Federal and state governments offer grants tied to specific vocational training, including grants that make taxpayers partners with the unemployed who supplement the grants with loans for their training. According to Williams, we have spent the money training thousands of workers for jobs that will never materialize.

You mean all that training I got to be a telegraph operator was wasted?

Bitter Clinger on August 18, 2014 at 5:31 PM

The WIA would be better aimed at subsidizing employer-based training for jobs that need filling now or in the near future, as a kind of partnership in apprentice work.

Yeah, just what we need. Another “public-private” collaboration that ends up funneling billions to campaign donors.

Timin203 on August 18, 2014 at 5:33 PM

“More government!” they scream, year after year after year.

Bishop on August 18, 2014 at 5:34 PM

New Deal now with less fat.

Pegcity on August 18, 2014 at 5:34 PM

The should have trained them in fence building along the southern border.

HumpBot Salvation on August 18, 2014 at 5:36 PM

If only the right people had been in charge.

rogerb on August 18, 2014 at 5:36 PM

If only the right people had been in charge.

rogerb on August 18, 2014 at 5:36 PM

All the sane Adults, you mean?

They all vote Conservative.

BlaxPac on August 18, 2014 at 5:38 PM

“Job Retraining” is always a scam. It’s done to benefit the training organizations who tend to be fellow travelers of the administration. The payoff is political donations back to the politicians.

slickwillie2001 on August 18, 2014 at 5:42 PM

Why not just give seed money grants for those who want to start businesses instead of this apparent farce of money transfers to “training” facilities?

At least some work would then actually occur.

profitsbeard on August 18, 2014 at 5:42 PM

No President has ever done a better job if Killing Jobs than President Job Killer himself.
No President has ever done a better job of Healing Regulations on business than President Regulator himself.
No President has ever done a better job of Agitating race relations than President Agitator himself.
No President has done a better job of…..

Privatize It on August 18, 2014 at 5:43 PM

Since when has the New York Times started reporting actual news?

Cicero43 on August 18, 2014 at 5:48 PM

The WIA would be better aimed at subsidizing employer-based training for jobs that need filling now or in the near future, as a kind of partnership in apprentice work.

Or better yet, the government can stay the hell out of the employment market altogether.

Cicero43 on August 18, 2014 at 5:50 PM

NYT: $3B gov’t retraining program as effective as you’d guess

It will take years to unravel the massive failure that was The Porkulus.

At what point do Lefties just get tired of being wrong so much and just give up?

visions on August 18, 2014 at 5:54 PM

Instead, we’re seeing more and more of the chronically unemployed owe their souls to the vocational school.

And to government loan programs in general, which inflate tuitions at 4-year private schools also. Death by debt at every level.

MT on August 18, 2014 at 5:55 PM

Several years older and deeper in debt.

Sure, plenty of unemployed out there. Look at the bright side. When the young start getting towards those premium earning years, they will get to pay it all back. Forward!!!!

Bmore on August 18, 2014 at 5:58 PM

The problem, you see, is that there was not enough money spent. I blame the republicans and most importantly the terrorist tea party splinter group.

jukin3 on August 18, 2014 at 6:02 PM

Man, this IS an old joke. But with minimal changes it still works.

How do you get $1 Billion boost in the economy by Government action? Easy.
First, allocate $3 Billion dollars.

gekkobear on August 18, 2014 at 6:22 PM

You mean all that training I got to be a telegraph operator was wasted?

Bitter Clinger on August 18, 2014 at 5:31 PM

It’s obvious that you’ve never watched Independence Day.

RickB on August 18, 2014 at 6:28 PM

Obama: “The government is us, and we’re doing things right”

This thing sounds funny, but it hurts too much to laugh.

s1im on August 18, 2014 at 6:34 PM

Any fools knows that $3 billion wasn’t enough to begin with anyway.

antipc on August 18, 2014 at 6:41 PM

The only things these people are good at is wasting money.

crankyoldlady on August 18, 2014 at 6:51 PM

A billion here, a billion there, and pretty soon you’re talking real money!

I wonder what percentage of the $3 billion ended up in Democrat campaign coffers?

s1im on August 18, 2014 at 7:15 PM

All the more reason to “reform” immigration with 5 million amnesty work permits and a doubling of the flood of legal ones.

kd6rxl on August 18, 2014 at 7:20 PM