Last Nov. 8, while millions of Americans flocked to the polls, the U.S. Labor Department slyly released an embarrassing report. The “Workforce Investment Act (WIA) Gold Standard Evaluation,” completed six months earlier, concluded that all of the federal government’s primary job-training programs don’t really work.
Specifically, the study found that the programs are largely ineffective at raising participant’s earnings and are offering services that don’t meet the needs of job seekers or employers.
While the evaluation assessed the programs for adults and dislocated workers, it did not assess programs for youth. This omission is unfortunate. Then again, other scientifically rigorous evaluations have already found youth job-training programs to be ineffective.
This WIA evaluation was delayed and almost did not take place at all. When Congress passed the WIA in 1998, it required the Labor Department to complete an evaluation of the program’s effectiveness by 2005.
The Clinton administration left the responsibility of evaluation to its successor, and the Bush administration ignored the deadline entirely. It didn’t award the contract for conducting the evaluation until President Bush was preparing to leave office three years later.
Those who have followed the “progress” of federal job training programs will not be surprised to learn that these programs continue to be ineffective despite repeated promises of “reform.” About every decade or so, Congress tries to repair the broken job-training system.
The last “fix” occurred in 2014 with the passage of the Workforce Opportunity and Innovation Act (WOIA) — a half-hearted reform measure at best, it merely tinkered around the edge of these programs.
Perhaps there are no reforms that will make federal job training better. Large federal grants distributed for use at the discretion of state and local job-training agencies discourage accountability and efficiency. The actors spending the money are not responsible for raising it. As the late Nobel Laureate Milton Friedman observed, we never spend other people’s money as carefully as we spend our own money.
You have to hand it to Congress for perpetually trying to reform these programs, though. The results of this recent evaluation are very relevant to policymakers today for three important reasons.
First, the evaluation assessed the performance of job-training programs that are very similar to the programs administered today. Despite the “reforms,” WOIA offers the same training services as WIA. Second, the evaluation used random assignment to allocate individuals to varying levels of service, hence the “Gold Standard” in the name of the evaluation.
Third, the job-training sites were randomly selected for inclusion in the study, so the results are nationally representative of the effectiveness of the Department of Labor’s programs.
The training programs did little to raise the earnings of job seekers. The Labor Department is also supposed to offer training in high-demand occupations, and they failed there as well. Despite this mandate, the vocational services provided, according to job-training participants, are unlikely to lead to the intended occupations.
This mismatch between training and landing jobs in high-demand occupations is a clear indication of how the federal job-training system is out of touch with the needs of employers.
While advocates of federal job-training programs are quick to highlight any beneficial impacts (however small), policymakers should also acknowledge when these programs cause harm. The evaluation found that, 15 months after completing training:
- The trainees who received the most extensive services were less likely to obtain health insurance and pension or retirement benefits.
- Participants in vocational training were slightly more likely to leave their training prior to completion compared to similar individuals who received the least amount of services.
- The households of dislocated workers who received the full job-training services earned several thousand dollars less than their counterparts that were offered fewer services.
- Most of those who were offered job training believed their training was unrelated to eventually finding employment.
Such dismal results could explain why the publication was released on the very evening when Americans were eagerly anticipating the presidential election results. Simply put, the Department of Labor’s job-training services are largely a waste of time for the majority of job seekers and an enormous squandering of taxpayer dollars.
The long-term findings of the WIA Gold Standard Evaluation results are expected to be released this year. The final report may already be completed, hidden somewhere deep within the Labor Department.
Given the historical non-performance of federal job-training programs and the department’s fondness for this money pit, we should perhaps expect this report to be released on Dec. 22 — the Friday before Christmas when Americans are frantically focused on Santa Claus and his reindeer, with scant attention paid to what slips out the door in Washington, D.C.