The Workforce Investment Act

Amazingly, many citizens still believe that government programs will solve all the nation’s problems.

Many politicians—both Democrat and Republican—think it’s a great idea to provide vocational training for laid off workers. They voted for the Workforce Investment Act. It must have looked great on paper. Who wants to be against investment in the future of our workforce?

The act dates to the Clinton administration. According to the New York Times:

The law was enacted in 1998 and expanded in 2009 as part of the federal economic stimulus package. As the economy has improved — which has led more of the long-term unemployed to try to re-enter the labor market — training and apprenticeships have become a central component of the Obama administration’s plan to match the unemployed with job openings. About 21 million jobless people entered retraining in 2012.

Obviously, the word “investment” has become the preferred euphemism for government spending.

But, if it was an investment, we should want to know how well it has paid off.

In practice, the Times reports, the act has left people jobless and in debt.

Here is the New York Times account of one participant in one government program:

When the financial crisis crippled the construction industry seven years ago, Joe DeGrella’s contracting company failed, leaving him looking for what he hoped would be the last job he would ever need.

He took each step in line with the advice of the federal government: He met with an unemployment counselor who provided him with a list of job titles the Labor Department determined to be in high demand, he picked from among colleges that offered government-certified job-training courses, and he received a federal retraining grant.

In 2009, Mr. DeGrella, began a course at Daymar College — a for-profit vocational institute in Louisville — to become a cardiology technician. Daymar officials told him he would have a well-paying job within weeks of graduation.

But after about two years of studying cardiovascular physiology and the mechanics of electrocardiograms, Mr. DeGrella, now 57, found himself jobless and $20,000 in debt. He moved into his sister’s basement and now works at an AutoZone.

Obviously, this case is anecdotal. To its credit the Times did the hard reporting on the program. Its conclusions are not encouraging:

Instead, an extensive analysis of the program by The New York Times shows, many graduates wind up significantly worse off than when they started — mired in unemployment and debt from training for positions that do not exist, and they end up working elsewhere for minimum wage.

Split between federal and state governments — federal officials dispense the money and states license the training — the initiative lacks rigorous oversight by either. It includes institutions that require thousands of hours of instruction and charge more than the most elite private colleges. Some courses are offered at for-profit colleges that have committed fraud in their search for federal funding. This includes Corinthian Colleges Inc., which reached an agreement last month with the federal Education Department to shut down or sell many of its campuses.

The Times examination, based on state and federal documents, school and court records, and interviews, shows that some of the retraining institutions advertise graduation and job-placement rates that often do not hold up to scrutiny.

The idea of dividing responsibility between federal and state officials was to give local and state authorities more power in helping the unemployed in their areas. But the unemployed who sign up for training are often left to navigate a bureaucratic maze with almost no guidance. To avoid any appearance of favoritism, federal job counselors are not allowed to recommend schools to job seekers, leaving many of the unemployed to unwittingly select institutions that are expensive, have a history of legal trouble or are academically substandard.

There is, for example, no mechanism for students to check in with counselors to gauge their progress or determine whether the training program is a good match. States say they investigate complaints and audit programs with poor outcomes, but students say they tend not to register formal complaints about a program’s quality.

The story is long and detailed. I cannot do it justice here.

It is great journalism, something we should always applaud.