Federal Funds to Train the Jobless Are Drying Up
By MOTOKO RICH
With the economy slowly reviving, an executive from Atlas Van Lines recently visited Louisville, Ky., with good news: the company wanted to hire more than 100 truck drivers ahead of the summer moving season.
But a usually reliable source of workers, the local government-financed job center, could offer little help, because the federal money that local officials had designated to help train drivers was already exhausted. Without the government assistance, many of the people who would be interested in applying for the driving jobs could not afford the $4,000 classes to obtain commercial driver’s licenses. Now Atlas is struggling to find eligible drivers.
Across the country, work force centers that assist the unemployed are being asked to do more with less as federal funds dwindle for job training and related services.
In Seattle, for example, the region’s seven centers provided training for less than 5 percent of the 120,000 people who came in last year seeking to burnish their skills. And in Dallas, officials say they have annual funds left to support only 43 people in training programs, nowhere near enough to help the 23,500 people who have lost their jobs in the last 10 weeks alone.
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.
The cuts “make it harder to meet the employers’ needs,” said Michael Gritton, executive director of KentuckianaWorks, which oversees four government-financed job centers in Louisville. “And obviously you have these individual customers who are asking for help to climb back into the middle class and you can’t help them either.”
Employers who want to hire often complain that the jobless do not have the necessary skills. In such an environment, advocates for workers say that cutting funds for training and other services makes little sense.
“We should be spending significantly more than we were spending five years ago,” said Andy Van Kleunen, executive director of the National Skills Coalition, a nonprofit group that promotes investment in training. “And even then we would not be catching up to the demand.”
Jack Griffin, president and chief operating officer of the Atlas World Group, said that finding drivers should be easy given the national unemployment rate of over 8 percent. “You would think they would be lined up at our door,” he said.
Atlas recently lowered the number of driving hours required and is offering a signing bonus of $3,000. Mr. Griffin said the company would consider training applicants itself if they would “sign a piece of paper saying that when they graduate they will come to work for us for two years.”
To bolster training and other services for jobless workers, the Obama administration recently proposed consolidating two programs. The general dislocated worker program paid for under the Workforce Investment Act would be combined with the Trade Adjustment Assistance program, which provides training and other benefits to workers who lose their jobs because of foreign competition.
The trade program, which has an annual budget of $575 million, is typically more generous, but narrow in eligibility. The combined program would make all funds available to anyone who had lost a job, regardless of the reason.
In his latest budget proposal, President Obama also requested an additional $2.8 billion a year for job training over the next decade. “Even in this very tight budget,” said Gene Sperling, national economic adviser, “the president felt that there was an imperative to call right now for a more simplified and effective training system” that also had an increase in funds.
Whether Congress is willing to consider more aid is uncertain. The federal budget endorsed by House Republicans calls for reductions in a broad category that includes job training.
The constraints are dispiriting for people like Jacqueline Francis, who was laid off from a job in human resources about a year and a half ago. Since then, she has followed the all-too-familiar drill of sending out résumés and cover letters that are never answered.
With her savings depleted, she wants to return to school and switch careers. Ms. Francis, a divorced mother in Louisville with a daughter in high school and a son in college, has pinpointed nursing, a field she considers most likely to provide employment.
Last month, she visited a job center run by KentuckianaWorks only to learn that the $240,000 allocated for health care training had been spent.
“I could have cried,” Ms. Francis said. She said she would apply for financial aid at the local community college and sell items in her wardrobe to pay for a nursing degree. “I want to better my situation,” she said.
Local employers say they also feel the pinch. “We depend on those dollars to help us with training for more entry-level positions,” said Tony Bohn, chief human resources officer at Norton Healthcare, which operates more than 100 doctor’s offices in the area.
It is not always easy to measure whether job training helps, or to what degree.
“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.
The Labor Department is paying for a study of training programs by the Workforce Investment Act at 28 locations across the country, but the research will not be complete until 2015.
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.
Some economists say that previous studies of the cost-effectiveness of training have focused too closely on a worker’s starting income after completing a certificate or degree program as a measure of success.
Ken Harris, a 39-year-old former assembly line worker at a General Motors plant in Dayton, Ohio, financed part of his nursing degree with federal funds. He started a job this year at an emergency room in Cincinnati. At his hourly wage, he says that he will earn an annual salary of about $55,000, with the potential for more, compared with the $74,000 he earned after 15 years with G.M.
But he has peace of mind that he is not likely to lose his job. And he is having more fun. “At G.M. you did the same thing every 48 seconds,” Mr. Harris said. “In the nursing job, you don’t know what’s going to walk in the door.”
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