As Demand For Job Training Programs Increases, Federal Funding Decreases

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As the demand for job training services continues in the face of high unemployment, federal funding for these programs has actually decreased

We’ve talked a lot recently about the so-called “skills gap” in New Hampshire vis-à-vis the manufacturing sector.  In a nutshell, the state’s fabricators say they have lots of openings for skilled labor, but not enough people are qualified to fill them.  Now, Motoko Rich reports for the New York Times that other sectors are demanding skilled and semi-skilled workers–and meeting with shortages, too.  Part of the problem, she writes, is that as demand for training programs has increased with unemployment over the years, the supply of federal funding for them has gone down dramatically:

“The Labor Department announced on Friday that employers had added only 120,000 new jobs in March, a disappointing gain after three previous months of nearly twice that level. But with 12.7 million people still searching for jobs, the country is actually spending less on work force training than it did in good times.

Federal money for the primary training program for dislocated workers is 18 percent lower in today’s dollars than it was in 2006, even though there are six million more people looking for work now. Funds used to provide basic job search services, like guidance on résumés and coaching for interviews, have fallen by 13 percent.

Political fights have focused primarily on extensions of unemployment insurance, while the cuts in funds for training have passed with little debate and little notice.

At the peak in 2000, the federal government was spending more than $2.1 billion a year in today’s dollars for training programs aimed at dislocated workers under the Workforce Investment Act. Stimulus funds added close to $1.5 billion over two years, but now annual spending has receded to about $1.2 billion.”

Rich writes that the Obama Administration is tinkering with combining two federal programs, the “general dislocated worker program” and the Trade Adjustment Assistance program, which targets workers whose jobs went overseas.  The Trade Adjustment program has a hefty $575 million yearly budget, but not a lot of people qualify.  So that could be more money in the general job training pot.  Meanwhile, President Obama is also proposing another $2.8 billion in annual funding for training programs. Whether that funding actually passes muster with Congress is a separate matter.  Rich reports majority Republicans are pushing a plan that “calls for reductions in a broad category that includes job training.”

But, Rich points out, the effectiveness of these programs is a matter of debate.  She sketches out two key lines of thought.  First:

“‘Traditionally, we have found that job training has not been very effective for people who have lost their job recently,’ said Kenneth R. Troske, an economist at the University of Kentucky in Lexington. Research suggests it delivers better returns for people with checkered job histories, or for people from extremely low-income backgrounds.”

Second:

“Training advocates say that paying for education yields a better return than simply continuing to pay unemployment benefits. Marlena Sessions, chief executive of the Workforce Development Council of Seattle-King County, said that every dollar spent on training dislocated workers in 2009 returned about $8.70 to the local economy as people found new jobs and increased their spending.”