The Critical Question: How Many Will Succeed in the New Economy?
March 17, 2017
In the Michigan of the 1950’s , 1960’s and 1970’s a young person could go to work in an auto plant right out of high school and make enough to buy a house and a cottage up north, support the family and send the kids to college, while looking forward to retiring in relative security. The UAW made sure of that.
Then things changed.
From 1994 to 2016 Michigan lost 199,230 manufacturing jobs (or 25 percent),according to the Bureau of Labor Statistics.
But we have recovered, right?
The December 2016 unemployment rate in Michigan was 5% according to the Michigan Department of Technology, Management and Budget. The US rate was just 4.7% (both seasonally adjusted). The stock market is flirting with record highs.
There is widespread, indeed nearly universal, agreement among academics and corporate executives about significant facts of our current American economy. It is producing consistent corporate profits, which the soaring stock market recognizes.
It is also producing plenty of jobs, of two kinds: Jobs for the uneducated, who are barely eeking out a living, and well‐paying skilled jobs, which are going begging. The demand for skilled workers is high, but the supply is low. Writing in the M.I.T. Technology Review, Brookings Institution’s Mark Muro observes:
“Since 2000 alone, millions of workers have lost manufacturing jobs paying $25 per hour plus health and retirement benefits. Often the only alternatives were service sector jobs without benefits, paying $12 an hour. In fact, the total inflation-adjusted output of the U.S. Manufacturing sector is now higher than it has ever been.” But, “the return of more manufacturing won’t bring back many jobs, because the labor is increasingly being done by robots. …[I]n 1980 it took 25 jobs to generate $1 million in manufacturing output in the U.S. Today it takes five jobs. …[N]o one should be under the illusion that millions of manufacturing jobs are coming back to America.”
Writing in the New York Times in February, Ruth Graham observed:
“There’s a strange disconnect between two of the big narratives about the American bluecollar work force right now. In one story, there is a population of unemployed and underemployed working class adults for whom wellpaying work seems increasingly out of reach; their jobs have gone overseas or become automated, and they find themselves working retail, or not working at all. But an apparently conflicting story comes from American employers, which have been insisting for years that they have a hard time finding workers to fill many skilled bluecollar jobs.”
The unemployment numbers bear this out. The unemployment rate for college graduates 25 – 34 years old is two percent. For those without a degree it is eight percent.
These facts lead to an obvious conclusion, which is also widely shared: Large numbers of workers (and potential workers) must be brought up to skill levels that fit into the increasingly technological job market of today and tomorrow.
Whether it is called “job training” or “skills education” or something else entirely, there is an almost desperate need for successful programs. The political will to pay for these programs has existed for decades, and it is bi-partisan. Congress passed the Job Training Partnership Act in 1982, providing for job training grants to local governments and other institutions. In 1998 it was repealed and replaced by the Workforce Investment Act which attempts to simplify the often-bewildering melange of local, state and federal programs, encompassing them in one-stop career advancement centers.
Failures, Studies & Solutions:
As the importance of job-training has become obvious, the field has become the focus of increasing academic study. It is now going on 35 years since the enactment of the Job Training Partnership Act. Hundreds of job training programs have come and gone. Most of them created disappointing results. But some suceeded. Researchers are sifting through the wreckage, hoping to discover the features that separate the successful programs from the rest.
The research is ongoing, but some patterns have begun to emerge:
“…coordination with local industry, ideally touching on everything
from curriculum to recruitment, is now seen by policy experts as a crucial dividing
line between programs that work and those that don’t. …”
There is mounting evidence that these “demand-driven” training programs (as they are sometimes called) work. Ruth Graham cites, “A 2010 study of three such programs [which] found that enrollees were earning almost 30 percent more than a control group two years after they began the program and were significantly more likely to be employed.”
One size does NOT fit all. Some students (particularly high school dropouts) need remediation for the most basic skills, like reading. Some even need to learn new life skills like showing up on time every day, even when they don’t feel like it. At the other end of the spectrum, there are well-prepared students who would have continued their schooling all along but had to quit for economic reasons.
Basic support services
Simply in order to continue training, many participants needed help with things like child care and transportation. Providing these services had a measurable positive impact.
In their 2014 meta-study, What Works In Job Training: A Synthesis of the Evidence, the U.S. Departments of Labor, Commerce, Education and HHS looked at previous research on job training. Among their findings:
“Accumulating experimental evidence points to positive impacts of employment and training programs that provide generous financial rewards to those who meet certain work and training performance standards. “These rewards typically involve providing a flat amount contingent on meeting performance standards, such as initial entry to employment, specified levels of weekly work hours, months employed, entering and completing various segments of training, and maintaining some threshold level of performance in training programs (e.g., grade point average).”
I think two conclusions emerge pretty clearly: First, if all those well-paying, high-tech jobs continue to go unfilled, they will increasingly beome a drag on growth of the U.S. Economy. Second, we face a stark choice. Either we successfully “train up” U.S. workers to fill those jobs, or they will be filled by non-U.S. workers—abroad or here at home—by immigrants.
is the author of Wounded Warrior, a recently published biography of former governor and Supreme Court justice John Swainson. He is also a retired Ingham County Circuit Court Judge and former legal advisor to Gov. James J. Blanchard.