Job Training Programs: Why Bother?

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The stimulus package was supposed to get people working—in the short- and long-run alike. But based on unemployment figures released last week, the stimulus bill seems to be a lot less stimulating in the real world than it was when drawn up on paper. Has the money been poorly misspent? In terms of job training, that seems like the case. Everyone loves the idea of helping laid-off workers get new skills for new careers, but it turns out that job training programs have been largely ineffectual in helping laid-off workers find jobs.

A Labor Department study showed that a laid-off worker who participated in a federal job training program had nearly the same likelihood of being rehired as someone who did not participate in job training. Read the Times full story here. Why does job training not help much?

Many workers who have lost their jobs are older and had spent their lives working in one industry. In need of a job right away, many pick relatively short training programs, which often have marginal benefits. Job retraining is also ineffective without job creation, a point made by several economists who have long cautioned against placing too much stock in it. Finally, workers trying to pick a new field cannot predict the future of the labor market, especially in a time of economic upheaval.

The job creation thing is a biggie. No matter what skills you have, and no matter how much you pump out resumes and network, you can’t create a job—unless you figure out a way to start a business or otherwise be self-employed. (And if you do that, the next concern is: What about health insurance?) I imagine that many job training programs also teach skills that are outdated; things just move too quickly today.

I’m sure that the quotes in the Times story, from a 58-year-old laid-off automotive engineer gearing up for a second round of job training, hit home with many recently unemployed: “I’m fumbling around in the dark,” he says. “I’m looking for a job that will give me some type of a future.” You can hear the desperation, and I feel for the guy. He’s not even asking for a good future, or a stable future—just “some type of future.”

Stimulus money is paying for this gentleman’s training. What’s yet to be seen is whether or not said training will actually help him get a job. Not even a revamped stimulus bill can guarantee that, though as the WSJ notes, more and more people are calling for the government to double down and put even more money toward a new, pumped-up package. Frankly, I don’t think it will happen, at least not to a significant degree. Why will people buy into a bigger stimulus, when the original is proving to be a disappointment, and an expensive one at that?