The state-sponsored program to train workers who are in danger of being laid-off is successful less than half the time. That’s according to a report released by the Idaho Department of Labor, the agency that oversees the workforce development training fund.
The grant program reimburses businesses that apply for help with the cost of training its existing employees or new hires. It’s paid for by a three percent tax on businesses. To qualify, a company must pay at least $12 per hour and include health benefits. A majority of their product or service must be sold out of their region, or be in the health care field.
The department’s report looks at the workforce development training fund from 2000-2009. It finds of the 160 contracts approved over that time period, 40 percent were rated ‘effective’, while 33 percent were ‘ineffective’.
In the department’s report, each of the 160 company contracts analyzed were scored based on seven factors:
- The average wage after two years of training was above or below the all-sector average of $23,112.
- The average wage increase two years after training was above or below the all-sector average of 6.2 percent.
- The proportion of trainees receiving wage increases was above or below the all-sector average of 57.2 percent.
- The rate of initial unemployment benefit claims was above or below the all-sector average of 27 percent.
- The rate of permanent layoffs was above or below the all-sector average of 18 percent.
- Job retention percentage was above or below the all-sector average of 85.4 percent.
- The cost of training was above or below the all-sector average of $1,671 per worker. – Idaho Department of Labor
As StateImpact has reported over the last year, the workforce development training program isn’t a guarantee more jobs will be created or retained in Idaho. Eleven of the companies that have received a total of $5.3 million in training grant reimbursements no longer exist in Idaho. That’s according to our own analysis, and dates from the program’s creation in 1996 to today.
Still, the training dollars are among Idaho’s most frequently used incentive programs. Department of Labor Director Roger Madsen said in a press release, “this program has proven its worth by enhancing the skills of Idaho workers so they can compete in an evolving technical and global economy.”
The Department of Labor says they’ve granted $62 million to more than 200 companies over the last 16 years through this incentive program. Through August 2012, nearly $40 million has been reimbursed to employers.
Labor spokesman Bob Fick says the department doesn’t have further plans for this report, nor does he know when or if it will be updated. He says, “it’s there for anybody who wants to read it.”