Each weekday morning, ex–assembly line workers, struggling single moms, and other job-seekers shuffle into government offices to get help retraining for a new career, to start over as a radiology technician or programmer, perhaps, or finish an associate’s degree. These workforce investment programs are set up to offer workers a chance to jump-start a new livelihood in a sagging labor market. But after decades of plowing billions of workforce investment dollars into federal job training initiatives, it’s still hard to tell how much these programs are helping workers regain their footing in an increasingly precarious economy.
Congress recently reauthorized the main funding law for workforce development, the Clinton-era Workforce Investment Act (WIA), purportedly to invest more wisely in the country’s downtrodden workers. In an apparently bipartisan push to “improve accountability and transparency within the system,” the legislation streamlines coordination between employers and agencies, strengthens oversight of program outcomes and cuts some programs deemed ineffective. But both the training programs and the new reforms amount to small drops in a very deep bucket of labor stagnation.
Moreover, since the reforms do not alter the decentralized structure of the workforce investment system, it won’t resolve the main criticism of WIA—that its investments don’t pay off for workers.
Does the WIA Help or Hinder Prospective Workers?
A recent New York Times report tells the stories of embattled workers who were duped by predatory for-profit diploma mills or sucked into useless vocational courses, with virtually no oversight from federal or state regulators.
In a particularly egregious example, for-profit Corinthian Colleges recently collapsed in the wake of a lawsuit brought by the State of California. The company, which draws most of its funding through federal loans and aid, is charged with unjustly refusing to release data on job placement for graduates, and marketing false promises to “the state’s most particularly vulnerable people—including low income, single mothers and veterans returning from combat.”
The good intentions but sometimes botched outcomes of the workforce investment system could be read as both an argument against government intervention in the labor market, or a sign that Washington has not invested enough.
It’s actually both and neither. Federal data generally show that WIA has yielded concrete gains for many workers in terms of re-employment and boosting wages, even as funding has dropped sharply, from $4.7 billion in 2000 to less than $3 billion today. But the law is limited in its scope and its funding, and helping workers adapt to a volatile and deeply unequal labor market is a challenge that neither government, nor individuals, can overcome with a training certificate.