Job Retraining For the Unemployed: A Popular Fix that Might Not Work
Washington Post, February 18, 2012
For the rollout of its 2013 federal budget, the White House could have chosen a medical lab, an electric-car factory or a symbol of any other key item in its spending plan. As it turned out, President Obama jogged into the gym of Northern Virginia Community College to deliver his budget message this past week. "I've been here so many times," he deadpanned, "I'm about three credits short of graduation."
The final budget proposal of Obama's term would devote $8 billion to help community colleges collaborate with local businesses to try to equip 2 million Americans with, as the president put it, "skills they need to get a job right now." And the bit of stagecraft on the Annandale campus attests to the administration's love affair with the nation's nearly 1,200 two-year colleges — as a steppingstone, in an era of unparalleled long-term unemployment, to improve prospects for U.S. workers and, in turn, the president's electoral fortunes.
This latest idea, for a Community College to Career Fund, follows a familiar theme. There was $12 billion for community college training grants (later sliced by Congress to $2 billion) in the president's economic stimulus plan in the winter of 2009; a White House Community College Summit in the fall of 2010; and just five months ago, $5 billion to renovate community colleges in the administration's most recent jobs proposal.
As the president and his Republican opponents see eye to eye on little else, offering government subsidies to teach unemployed workers to do new jobs stands out as an economic policy on which they agree. GOP presidential candidates Mitt Romney and Newt Gingrich favor retraining efforts. So does House Budget Committee Chairman Paul Ryan (R-Wis.), the architect of a conservative vision for the nation's fiscal policies. "Equipping workers with the skills and tools they need is a proper role for the federal government to assist with," Ryan's spokesman told me the day Obama's budget came out.
Yet, the widespread confidence that going back to school is a sure path out of unemployment rests on a shaky foundation. The research on the effectiveness of federally supported job retraining at community colleges is fairly thin, and the studies that exist offer no clear evidence on the central question of whether it really works.
That question is quite important: While U.S. unemployment overall has fallen lately — to 8.3 percent last month — long-term unemployment is lingering. More than two in five unemployed Americans (5.5 million total, as of January) have been unable to find a job for six months or longer. That rate, essentially unchanged for the past year, is higher than at any other time since the government began keeping track around World War II.
The lack of solid evidence for retraining has been pointed out by the Government Accountability Office. In a January 2011 report, the GAO noted that the number of federal employment and training programs for dislocated workers — people knocked out of jobs who are unlikely to find similar ones — and others had swollen lately to 47. "Little is known about the effectiveness of most programs," the report said.
Just over four years ago, the Labor Department commissioned the first rigorous evaluation of its largest retraining program, the Workforce Investment Act, which pays for dislocated workers, as well as poor adults, to go to school.
Most of them go to community colleges. The study, based on data from a dozen states, found that poor adults who had gone to school with the program's help had an increase in earnings, compared with similar people who had not. But among dislocated workers, additional education did not translate anytime soon into better pay or a greater chance of getting a job. For a while, these laid-off workers actually earned less than people who hadn't gone back to school and, even though they eventually came out slightly ahead, they never benefited as much as the poor adults. And the data for this evaluation came from before the recent recession, when jobs were easier to find.
Other findings have been a bit more sanguine. A study in Washington state showed that dislocated workers who retrained were 4 percent more likely to find a job than those who did not, and they earned $1,200 more per year. And a couple of studies have found that retraining can yield better wages and chances of getting work if dislocated workers go to school long enough and prepare to enter fields such as information technology or some health careers.
"It's not like it's complete snake oil," said Louis Jacobson, an economic researcher who has examined the question. "If you think of community colleges as being a tool to higher earnings, they can do a good job. But that doesn't mean they always do."
Anthony P. Carnevale, director of Georgetown University's Center on Education and the Workforce, says retraining can't always overcome a scarcity of jobs. In his budget speech, the president portrayed the problem as a straightforward mismatch. "You know," he told his audience of hundreds of students on Monday, "there are companies looking to hire. You just need to figure out how to acquire some of the specific skills, the specialized skills that the companies need."
That skills mismatch, while real, is not the whole story, Carnevale says. At the moment, he points out, the country has 3 million to 4 million job openings.
But if you add up the people who are unemployed, in part-time jobs because that's all they could find or so discouraged that they've quit looking for work, he says, the country has more than 20 million people who could use a job.
And the idea of entrusting community colleges with the futures of laid-off workers has another wrinkle: pressures bearing down on the schools themselves. During the past few years, many community colleges have been hit by economic hard times. Their enrollment nationwide has soared by nearly one-fourth over the past five years, yet many have suffered deep budget cuts by state and local governments. Those pressures have coincided with prodding by some states and advocacy groups to improve graduation rates that are distressingly low; by recent estimates, fewer than one in three students who go to a community college have completed a program three years later.
For these stressed-out institutions, laid-off workers can pose challenges. Compared with 18-year-olds, they more often have family responsibilities that interfere with class schedules, are more likely to require financial aid and are more prone to need help with basic reading, writing and math. The cumulative effect, Carnevale believes, is that, for some colleges already stretched thin, an older adult, out of work and out of school for years, is hardly the ideal student.
Even so, he and other experts suspect that the president's new $8 billion proposal, if adopted by Congress, could turn out to be a good thing. A main reason lies in some fine print: The White House is calling for a system of bonuses in which community colleges could be rewarded with extra money if their dislocated workers graduate and find jobs. That arrangement might nudge the schools to become more accountable, if they were compelled to reveal whether they were in fact helping people who desperately needed work.
Three hours after Obama spoke in the Northern Virginia Community College gym, his labor and education secretaries, whose departments would split the new program's cost, were on a conference call with reporters, peddling the White House's latest show of faith in community colleges. "A core part of this strategy is to educate ourselves to a better economy," said Education Secretary Arne Duncan.
What exactly, I asked, did the fine print about bonuses mean? How much extra money could the schools get? And could schools skip the bonuses and avoid disclosing how their laid-off-workers-turned-students fared? Duncan said the details were still being worked out. So for now, job retraining is the popular fix whose real value — for politicians and the nation's unemployed — remains inconveniently murky.
Amy Goldstein, a reporter on The Washington Post's national staff, is on leave as a fellow at the Radcliffe Institute for Advanced Study, where she is examining long-term unemployment in the United States.