The Great Job Training Fraud

Job seekers look over job opening fliers at the WorkSource exhibit, an effort by government agencies to offer jobs and job training resources at the Greater Los Angeles Career Expo in May in Pasadena.   (Photo by David McNew/Getty Images)

By Roger Bybee

The fact that 80 percent of economists proclaimed this week that the recession is over proves the truth in John Kenneth Gablraith's old joke about the conservatism and uselessness of many of his colleagues: "If you laid all the economists in the world end to end, well, that would probably be a pretty good idea."

Some 15 million Americans are still jobless, and "progress" is interpreted as slowing the pace of job losses.

The need for a second stimulus package—with a sharp focus on the creation of public-works jobs—could not be more obvious when you scan the Depression-level unemployment rate in Michigan and sky-high rates in northern California and South Carolina. Home foreclosures are running at ten times the daily rate as during the Great Depression. A wide variety of social problems—heart attacks, family violence, homicide, among others—increase in the wake of rising unemployment.

In circumstances like these, where it comes down to a choice between meeting the needs of working people or confronting Corporate America, the line of least resistance has been job training.

Job training will prepare displaced workers for the jobs of the future and leave them with a higher level of skills, able to produce and earn more, we are told endlessly by both Republicans and Democrats.

Republicans like to stress the job training approach (even while hypocritically cutting the funds) because it diverts criticism of their corporate sponsors for generating mass unemployment by shifting their investments to finance or off-shoring jobs to Mexico, China, India, and other low-wage sites. Instead, the focus is on the individual worker and his or her failure to gain enough training and/or display proper attitudes.

Democrats, for their part, want to display their concern for displaced workers, and can do so by pressing for training programs, extended unemployment benefits (which now reach only about 43% of laid-off workers compared with 67% during the 1975 recession), and other compensatory programs.

In that way, Democrats are actively engaged in "fighting" for workers displaced by the destruction of our productive capacity through off-shoring family-supporting jobs.

The notion of actually challenging Corporate America over its policies of dis-investment in American production is reserved for election-year rhetoric, and it became a centerpiece of the Democratic presidential primary. Such attacks on off-shoring were eagerly seized upon by a hopeful electorate strongly opposed to off-shoring jobs, but as we see with the Obama administration, the prospects for actual follow-through seem dim.

Instead, we will be fed the "solution" of job training, which is a mixture of ideology and wishful thinking. As Grodon Lafer writes in The Training Charade,

Workers are encouraged not to blame corporate profits, the export of jobs aborad, or eroding wage standards—hat is, anything that they can fight—but rather to look inward for the source of their misfortune and the seeds of their resurrection.

The promotion of individual responsibility for training dovetails neatly with the idea that the interests of labor and capital have converged because of individual competition. As Lafer writes, "The rationale for training is based in the belief that economic competition has changed such that the interests of employment and workers have come into alignment."

These beliefs accompanied and justified a massive shift in government policy from assuming responsibility for full employment to merely providing job training. Moreover, this policy transformation occurred without any more evidence than a few stories  about skilled labor shortages here and there, 

Lafter points out, "The shift from job creation to job training policies was carried out without any reliable information regarding the relationship between the supply and demand for jobs. Intead, the primary unit of argument in employment policy debate has been the anecdote."

Examining the data for the supply and demand for jobs in the U.S. between 1984 and 1996, "the number decently paying jobs was--at best--enough for a quarter of the people who needed them, " Lafer concludes. "If we make more realistic assumptions about the ecoomy, it is clear that the number of good jobs was sufficient for less than one-twentieth of the population in need."

In my city of Milwaukee, economist Marc Levine studied the gap between job openings and people seeking work, and found a shortage of  88,524 jobs—well before the onset of the current recession.

With such a yawning gulf between the number of available jobs and those seeking work--even in "normal times"-- training programs have proven to be largely fruitless in terms of restoring economic stability and dignity to the lives of displaced workers.

U.S. Labor Dept. data showed that “only one in five of the retrained workers were steered into jobs paying at least 80% as much as their old jobs.” (“US Says Its Jobs Training Effort Fails Displaced Job Seekers,” New York Times, Oct. 15,1993).

More recent data confirms the same pattern of a huge differential in earnings between those industries losing jobs and those gaining employment. The Economic Policy Institute calculated that this differential in six Midwest states runs from –34% in Illinois to –19% in Wisconsin and Iowa. 

Moreover, these statistics do not reflect the typical shrinkage of health and pension benefits. Louis Uchitelle’s book, The Disposable American, documents that only 27% of dislocated workers find equal or superior pay and benefits at their new jobs.

Moreover, the situation only figures to get worse given the expansion of off-shorting from blue-collar factory jobs to professional work. Princeton economist Alan Blinder's has estimated that up to 42 million highly-technical U.S. jobs—from computer programming to medical transcription to accounting—are "highly offshorable" to low-wage sites like China, India, and the nations of Eastern Europe (Wall Street Journal, 3/28/07). 

Blinder argues that training and education offer no protection when a job does not require face-to-face interaction:

 "The most important divide is not, as commonly argued, between jobs that require a lot of education and those that don't," the Wall Street Journal notes in summarizing Blinder's findings. "[T]he important distinction is between services that must be done in the U.S. and those that can—or will someday—[be] delivered electronically with little degradation in quality." 

Meanwhile, in Wisconsin, the 31% increase in dislocated workers since 2008 has virtually exhausted available funding. Will anyone dare suggest that the next allotment of funding could be better spent on public-works programs than training?

Facing these harsh realities of the economic situation, the Democrats have a responsibility to come up with a far more dynamic and far-reaching economic program that anything they have so far contemplated.

Job training programs are largely a fraud, and labor needs to remind Democrats forcefully that they are no substitute for jobs.