Economy|Job Training Works. So Why Not Do More?
Job Training Works. So Why Not Do More?
Unemployed after cycling through temporary jobs in insurance, accounting and real estate, Lisa Edwards was considering whether to borrow and go back to college three years ago when she came upon a flier on Flatbush Avenue in Brooklyn. It was for a “women in technology” program offered by Per Scholas, a nonprofit offering low-income workers training in information technology.
Five months later, Ms. Edwards landed on the leading edge of a promising approach to helping embattled workers attain and hold on to a middle-class life in an economy that has devalued the work of all but the best educated.
Ms. Edwards, a middle-age mother of three, emerged from the Per Scholas program with CompTIA A Plus and Network Plus certifications in computers and networking. She first got an apprenticeship at the network operations center of the Metropolitan Transportation Authority. Then she got another at Barclays Bank, troubleshooting the voice recording systems.
Though Ms. Edwards makes several thousand dollars less as a Barclays apprentice than at her last post, at Countrywide, she now has more than just a job. She is on a career path offering a shot at progress.
“In three years for sure I’ll be making two to three times what I am making now,” she told me.
It’s hard to muster enthusiasm these days for the prospects of workers on all but the topmost rungs of the labor market. Wages of high school dropouts are lower than they were at the turn of the century in real terms. The same goes for workers with a high school diploma, and also for workers who went to college but stopped short of a bachelor’s degree.
This stagnation kindles the insurgent campaign of Donald Trump, who promises to somehow fix everything by walling off Mexico and slapping anti-dumping tariffs against China.
An overwhelming majority of economists have panned his “solution” as a distraction — indeed, a surefire way to cripple the economy. Still, the appeal of Mr. Trump’s message underscores the hopelessness of many workers and the helplessness among policy experts struggling to find a fix for a labor market in which it has become increasingly tough to make a living. As manufacturing’s share of jobs dropped to 10 percent from 25 percent over the last four decades, millions have been relegated to a low-paid service economy with no benefits, uncertain hours and little job security.
But are there really no ideas, short of throwing a wrench into the gears of the global economy? Ms. Edwards illustrates a surprisingly simple one: training for skills that are in demand. For some reason, this is a strategy the United States has not pursued earnestly in quite a long time. That looks like a mistake.
MDRC, the New York-based policy analysis group, last week released the preliminary assessment of an experiment called WorkAdvance, commissioned by the New York City government and funded in part by a federal grant. WorkAdvance offered targeted sectoral training programs for low-income workers in New York City, as well as in Tulsa, Okla., and northeast Ohio.
From 2011 to 2013, about 1,300 unemployed or low-wage workers were enrolled in the programs. They included support services like job placement and post-employment counseling on how to move up the career ladder.
But the main twist was the training, targeted at the most promising sectors. Per Scholas and the other nonprofits that took part in the experiment had to link up with employers in their areas to figure out what kind of skills were in demand and might open the door to a career path of rising wages.
Their results were heartening. After two years, participants made 14 percent more on average than workers in a control group, who did not benefit from the new approach. That amounts to $1,945 a year.
Workers who had been on unemployment for a long time when the study started, a group that tends to have a hard time finding a job, had an earnings bump of $2,347 — 21 percent compared with the control group. Notably, the gains did not come only from working more but also from higher wages.
It’s not as easy as it sounds, of course. Per Scholas’s I.T. training managed to bump workers’ wages by 26 percent after two years: an average increase of $3,746 per year. But elsewhere, identifying the proper skills that local employers needed was tricky. St. Nicks Alliance, for instance, which offered training in asbestos removal and other environmental remediation tasks, was caught unprepared by the abrupt slowdown in the construction industry in New York City.
One might think that such an obvious approach — which helps businesses find the workers they need while improving the outlook for America’s beleaguered workers — would be central to any national strategy to improve the workings of the job market.
Some states have invested in sectoral training, offering programs at community colleges and work force development centers to equip adult workers with the skills most in demand in local job markets.
And experiments like WorkAdvance have been done before. The Center for Economic Opportunity, a New York City agency that experiments with strategies to combat poverty, ran an earlier experiment that found promising results from sectoral training programs. An analysis published in 2010 of similar training approaches in Wisconsin, Boston and New York City also suggested promising outcomes.
But why hasn’t the nation invested more heavily in job training? I’m told job training got a bad reputation years ago because it was poorly coordinated with employers’ needs. Workers coming out of training programs had just as hard a time finding a good job as those going in. Why spend the money, the thinking went, if one could get similar results with straightforward job placement services, which are much cheaper?
While change is coming, it is grudging and slow. The Workforce Innovation and Opportunity Act, which Congress passed in 2014 after years of partisan wrangling, amounted to the first revamping of the nation’s core work force programs since the Workforce Investment Act was enacted 18 years ago. It put welcome new emphasis on sectorially targeted training for low-income workers with limited skills.
The entire funding for the act, which includes services like training and job placement, adds up to less than $3 billion.
That looks like a penny-wise, pound-foolish strategy. Sure, training is expensive. The WorkAdvance program cost $5,200 to $6,700 per worker, much more than running a job placement operation. But too often, “job placement” represents little more than a database of available work. It does nothing to help workers develop careers.
By contrast, $6,700 spent to provide one low-wage worker with the skills employers need is a small amount compared with the wage gains she could make in a few years. And there are other savings to keep in mind. More than one-third of workers who entered the WorkAdvance program, for instance, were getting food stamps, which they would not need if they earned more.
Or consider that it costs $31,000, on average, to keep an American in prison for one year. One-quarter of the workers enrolled in the WorkAdvance experiment had a criminal record.
According to the Organization for Economic Cooperation and Development, the United States government spends only 0.03 percent of its gross domestic product on worker training. Denmark, whose policies to bring workers into work have gained praise around the world, spends proportionately almost 18 times as much. France spends 12 times as much; Germany seven times.
Americans’ main problem may not be that there are no solutions for the workers’ plight. It is just easier, not to say more politically rewarding, to scream at the Mexicans and the Chinese.