 California Gov. Schwarzenegger wants to attack the state’s 12.3 percent jobless rate with a new $500 million training program and incentives for businesses to hire workers. But, the Los Angeles Times reports it’s far from certain whether lawmakers will agree. AnalysisOnline examines why training isn’t always the answer.
The California proposal shares some of the elements of President Obama’s job-creation plans, although in slightly different forms: incentives for business to increase hiring, redirection of more workers to renewable energy occupations, and training (or re-training) programs for unemployed workers.
President Obama announced last May that his administration would work closely with states to assist unemployed people in getting training for new jobs or better jobs (see White House statement).
Job Loss Cuts Deeply
Nationwide, the number of unemployed people has more than doubled (to 15.4 million, as of November 2009) since the recession began in December 2007. Double-digit unemployment exists for all adult men, teenagers, blacks, and Hispanics.
While the unemployment rate for people who have actively sought work in the prior four weeks stood at 10 percent in November, the broader measure including marginally attached and part-time employees (who want to work fulltime) reveals a jobless rate of 17.2 percent.
Renewed hiring traditionally lags even after recovery has begun, economists note, because employers want to make sure there won’t be a relapse of recessionary conditions – a particular worry this time, according to a Sacramento Bee article, “California Faces Sluggish Recovery, Forecast Says.”
Economist Christopher Thornberg, founding partner of Beacon Economics in Los Angeles, believes California will be weak initially, but strong once again in the long term. He’s quoted by the Sacramento Bee.
The latest update on the federal government’s recovery web site, which is aimed at documenting how stimulus funds are spent and their effectiveness, claims that California leads the list in the number of jobs created or saved due to stimulus spending, based on self-reporting by states.
However, at 12.3, California is tied with South Carolina and Nevada forthe third worst state unemployment rate in the nation. And the National Employment Law Project says even that rate doesn’t begin to tell the true picture of the depth of job loss in California because about 22 percent of Californians – almost 1 in 4 – is underemployed, as noted in a San Francisco Chronicle web article.
With such deep job loss, can training programs help significantly? Are there people who cannot be helped through this approach, despite spending a half billion dollars in California and much more nationally?
Limitations of Job Training
Workforce Alliance, an organization that generally supports investments in employee training and education programs, warned in a December 2009 report that, to be successful, job training must be more than just an initial outlay of dollars. The effort needs to be genuine, with follow-up to ensure success, job placement and advances; it needs to benefit people at all skill levels; and, it must offer “the potential for real careers (and long-term employment even after federal investments end) by ensuring that people continue to skill up even after they are employed.”
But, training programs are no panacea. Workforce Alliance notes that “investments in workforce development do not create jobs,” however, there is a strong positive correlation between the educational composition of a state’s workforce and its economic vitality.
Additionally,
“In the long run, no single program will be able to address the educational requirements of every worker and every industry. To remain competitive in the 21st-century economy, we must ensure that workers at all skill levels are able to access the training and supportive services they need to fill emerging jobs, and that businesses are able to find qualified workers in every part of the country.”
Job training programs are supported now, and have been supported in the past, as a way to deal with the U.S. economy’s transitioning from certain types of heavy industries to more information and computer-based business. In theory, it sounds good, particularly for unemployed workers who gain new skills and a feeling of doing something to improve (hopefully) their situation.
But, an investment adviser on the blog Global Economic Analysis raises a logical challenge to such thinking, which is the first of 9 practical considerations AnalysisOnline will raise as possible reasons why job training programs cannot solve the severe unemployment situation in the United States.
He notes:
“Bear in mind, I am all in favor of education, but the idea that 40-50 year old assembly line workers, home builders, mortgage brokers, etc., can be retrained and compete against those with 20 years experience and still out of a job is absurd. President Obama is bright enough to understand this. Yet, instead of telling the truth, Obama is willing to waste billions of taxpayer dollars spreading false hope. Under guise of political expediency, Obama simply cannot tell the truth to those out of a job. The sad truth is the situation is hopeless for many if not most of those who are over 40 and recently lost a high paying job.”
8 Other Reasons Why Job Training May Not Be the Answer
Is a lack of skills – a deficit to be addressed by a few weeks of training at a cost of around $2,000 per person (about what Gov. Schwarzenegger proposes) – the only barrier to getting millions of Americans back to work?
Here are other important considerations that will not be affected by giving workers new skills:
1. Employers are playing it cautious; they continue to face high costs and uncertainties and are seeking to achieve higher levels of productivity with existing workers, rather than hiring.
See the following AnalysisOnline on the Headline articles:
Healthcare Driving Workers Comp Costs; Volatility a Constraint to Business
Job Growth: Both Sides of the Equation
Rebuilding the Economy
Job One: Jobs
2. Attitudes about certain types of employment (“dirty jobs”) are changing, particularly among young people who, as a classification, are suffering some of the highest rates of unemployment.
An article in Tulsa World noted that many welding jobs do not appeal to younger people and remain unfilled. In fact, the problem could reach serious proportions in the coming years:
“The American Welding Society estimates that the industry is losing thousands of skilled welders every year. The deficit could leave more than 400,000 potential jobs unfilled by 2014, the AWS reports. ‘The younger generation doesn't want to get dirty,’ said Mickey McPhetridge, steel-shop supervisor at HydroHoist International Inc. ‘They're all into computers and air conditioning.’"
Training programs won’t help when the appeal of certain jobs just isn’t there.
3. Creating job training programs, frequently directed at lower wage jobs, will not satisfy the needs of highly educated and skilled employees who have lost their livelihoods in this recession. They want and need higher wages than what these jobs – if they are available at the end of training – would offer.
4. People who have a house to sell may face difficulty seeking employment in better job markets because of depressed housing prices and over supply of housing for sale and rent; they may be forced to lose their home, carry a mortgage along with costs of housing in another city, or restrict their job-seeking efforts to a limited geographic range.
5. Some high-demand positions require many years’ of education and training. Even if more investments are made in these areas to address shortages (such as of nurses and doctors), it will be a decade before more of these professionals emerge from the educational pipeline.
See the articles from Fox (nurse shortage) and Hospital Review Magazine (unfilled physician positions).
Investing more money in health, science, and math education is widely acknowledged as a much needed step. In fact, today President Obama announced a $250 million public-private investment in math and science education.
However, many universities, particularly in the allied health fields, are severely constrained by tight budgets and unable to admit more students; in some cases, there is not a sufficient supply of instructors to teach these students – backing up the pipeline for producing more of these highly skilled professionals even further. This aspect of the issue was addressed in a University of Missouri opinion piece.
6. Age is a factor. Baby Boomers – people in their 50s and 60s, who were in the prime of their careers and commanding large salaries – are remaining unemployed longer than their younger counterparts. Job training and learning skills of another industry, which may or may not dovetail with the work they have done their entire lives, may be completely unsuitable for them.
See the April 12, 2009 New York Times article, “Longer Employment for those 45 and Older.”
Further evidence that older Americans are having greater difficulty landing new jobs was reported by the Wall Street Journal: allegations of age discrimination have jumped a staggering 29 percent, but are almost impossible to prove, especially amid recessionary times when so many people are out of work.
7. Job skills are a small part of the full package needed to measure up in the highly competitive job market. Experience is also a big factor; so is the ability of a job seeker to project himself or herself well through superior communications talents – skills not likely to be enhanced through many of the training programs government proposals envision.
These two considerations are addressed in articles here and here.
8. The job application process itself is becoming the job seeker’s worst enemy. Online application systems can give applicants no confidence their resume was even seen, much less considered. Also, these systems and lengthy, arduous interview processes can cause applicants to doubt employers’ intentions and character.
First, job seekers who lack computer skills (and computers) may be out of luck, even after sitting through weeks of training programs, courtesy of government funding. An MSNBC article discussed the trend toward online application for jobs, and the difficulties this presents for many who need jobs.
But, even job seekers with considerable computer savvy are frustrated by the online hiring process and the impression of ambivalence they get from hiring supervisors and managers.
A 2008 Gallup survey found that more than 70 percent of job seekers could mention at least one frustrating aspect of the application process – and many noted several.
It said:
“Job applicants were most likely to mention frustrations regarding the lack of communication prospective employers demonstrated. Whether it was the wait for the results of their application; the length of time between applying, being interviewed, and being hired; or not hearing from the hiring organization at all, 22% of respondents cited a lack of communication as the most aggravating aspect of their job search.
“One respondent said the most frustrating part of the process was ‘when you interview or even just apply, and you don't hear from anyone in the organization for a long time or ever. Couldn't they at least e-mail or send a postcard or a thank-you note for sending in your application, or maybe give you a call and say they are still considering you or that they have made another choice? Something would be nice.’ Other job applicants mentioned feeling that the hiring companies are dishonest when dealing with the rejection process, and that employers are explicitly lying when they say they will call and then never pick up the phone.
“Similar percentages of prospective employees also cite the details of the application (17%) and interviewing (16%) processes as the main frustrations they experienced during their job search. One job seeker specifically said it is hard to cut through the clutter and barriers to screen applicants out when trying to get your foot in the door, while others mentioned applying for jobs online and getting their applications into the right peoples' hands as their main sources of frustrations. These frustrations with applying online are likely to be more prevalent as Internet-based application systems become more common.
“As for the interview process, respondents mention the aggravation associated with the sheer number of interviews and the length of the meetings. But job seekers' disappointments run deeper than just the time they invest. Some mention hiring managers who did not seem interested in applicants' answers during a job interview, while others specifically reference a lack of respect hiring managers and interviewers exhibited.”
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