Retraining the work force

Retraining the work force only makes sense when the job pool is expanding or at least shifting, i.e. old jobs in shrinking sectors are being replaced by at least as many new jobs in expanding sectors. But when the job pool is shrinking as it is today, those who lose a job today can’t have another one tomorrow without displacing someone else. And as Mish Shedlock points out:

It should not take a genius to conclude job training cannot possibly work. There are so many qualified, experienced, out of work individuals that few if anyone would hire a GM welder retrained in JAVA programming for a programming position. Moreover, no one would hire a banker as a welder. Nonetheless, president Obama and colleges are both touting such retraining as a way to get a job.

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 etc can be retrained and compete against those with 20 years experience and still out of a job is absurd. […]

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.

The government already knows this. Consider this from an article on job retraining:

Nonetheless, a little-noticed study the Labor Department released several months ago found that the benefits of the biggest federal job training program were “small or nonexistent” for laid-off workers. It showed little difference in earnings and the chances of being rehired between laid-off people who had been retrained and those who had not.

In interviews, the authors of the study and other economists cited several reasons that retraining might not be effective. Many workers who have lost their jobs are older and had spent their lives working in one industry. In need of a job right away, many pick relatively short training programs, which often have marginal benefits. Job retraining is also ineffective without job creation, a point made by several economists who have long cautioned against placing too much stock in it. Finally, workers trying to pick a new field cannot predict the future of the labor market, especially in a time of economic upheaval.

So, why the emphasis on job retraining? Consider this comment on Mish’s weblog from tigerlily:

As an unemployed Michigan worker currently in the WIA [Workforce Investment Act]program, I wanted to share a few thoughts. My retraining is to update an out of date certification that I haven’t used in 20 years. After 7 months of unemployment, I will be back to the workforce soon and listed as a WIA success story.

I likely would have figured out a way to do my training on my own, but journeying though the government system was a learning opportunity in itself. I gained tremendous respect for all of the desperate workers who have seen their world fall apart, and also respect for the government employees that are trying to find work for them.

That said, I also think the WIA program is likely to gain the most employment for those who work at local community colleges or those that work in the for profit vocational education business. Most of the displaced workers were being directed towards the same jobs requiring the shortest amount of training at vocational schools that charged more than most private colleges. Sadly, the cost of many of these programs was beyond the covered WIA funding and many people were taking out additional student loans.

The biggest growth our community is in the explosion of these programs, not real jobs for displaced workers. I’ve met many workers who when finished with their training are competing against a huge pool of candidates for too few jobs again. Obama’s hope of retraining the workforce is noble, but in reality, unskilled workers in their 50s even with retraining are not going to be the first choice of employers.

The sense I got of the Michigan Works program is that it is a way to keep desperate people hopeful and busy and also give them a potential way to extend their unemployment benefits. Nobody wants to tell the truth that the gig is over for most of us 50 somethings and that we better retool our lifestyles and retirement plans, not just our jobs. Our tax dollars could be much better spent on programs to teach these same workers to start small businesses or to provide financial planning assistance to help them figure out how to stretch what dollars they have left. [Emphasis added]

Lots of common sense packed in there. I especially like the last bit; whether for profit or out of the goodness of our hearts, we ought to think about teaching people to deal with their unexpectedly reduced circumstances, rather than preparing them for a future economic climate that is mostly wishful thinking.

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