Huffpost Business
Lila Shapiro Headshot

Obama Budget's Job-Training Plan Is Aimed At Workers, Could Benefit Companies

Posted: Updated:

President Obama's proposed budget for fiscal year 2013 would set aside $8 billion for community colleges to offer more job training in high-demand fields, often in collaboration with companies, who end up employing these students.

The proposal, announced on Monday and nestled within a $800 billion package of labor and infrastructure investments, generated some genuine excitement among those seeking a way out of the current jobs malaise, as well as among community college administrators struggling to keep up with demand from students. The Obama administration says the program could train 2 million workers for high-paying work.

Still, some labor experts had some reservations about the prospect of colleges and businesses teaming up. While Tony Carnevale, the director of the Georgetown University Center on Education and the Workforce, was enthusiastic about the prospect of more training funds, he warned, "You don't want to end up doing product training for employers." Said Carnevale: "The government should take care of getting people qualified to work, not how to sell a particular product for a company."

North Carolina, for example, spent $1 million to develop a custom curriculum at a community college for workers at a Caterpillar plant. The primary beneficiary, The New York Times reported, was Caterpillar itself. If the training is too specific, then workers can end up at square one should their employer close up shop. When a Dell factory in North Carolina closed, nearly 1,000 people were out of work just five years after the state spent close to $2 million on training.

In addition, Carnevale pointed out that the jobs gained through some of these certificate programs don't always pay middle-class wages. About 70 percent of graduates from certificate programs who find employment average an annual salary of $35,000 over 10 years, while 30 percent earn less, said Carnevale, "A lot of these programs don't deliver middle-class wages, and then it's the question of whether or not they deserve funding."

In the best case scenarios, job-training programs at community colleges that collaborate with businesses can help unemployed or underemployed Americans find good work and help businesses find workers with the right skills. More than two and half years since the recession's official end, millions of Americans are disconnected from the labor force -- some 5.5 million have been out of work for more than six months, according to Labor Department figures for January. And more than 2.8 million additional Americans have wanted and been available for work in the past year but essentially have given up looking -- even as some businesses, particularly those specializing in manufacturing or technology, argue that they cannot find qualified employees.

"We need an education system that's more closely aligned with what companies say they are missing," said John Challenger, the chief executive officer of Challenger, Gray & Christmas, an outplacement consulting firm based in Chicago. "We hear this from employers all the time," said Challenger, who added that job-training programs run in partnership with companies could help those Americans hardest hit by the jobs crisis -- those without a college degree.

The White House has said that the budget proposal would train workers for "well-paying jobs in high-demand industries." But which programs and how they would be chosen has not been explained. The funds for community college programs would be administered over three years as well as support paid internships and invest in other on-the-job training opportunities. Several companies already have government-supported training programs, through tax-incentive packages that states offer to lure business.

In recent months, job creation has picked up, with 243,000 jobs added to the economy in January. But average wages remain stagnant even as corporate profits are at record highs.

"If we are going to be using public resources, we can't only hold the workers and the students accountable, we have to hold the business partners accountable," said Anastasia Christman, a senior policy analyst at the National Employment Law Project, which advocates for low-wage workers. "They have to come up with a plan where they're really going to give these people jobs with good wages, career ladders and ongoing job training."

Some educators see the $8 billion as a tiny drop in the bucket, given the need for quality job training and fact that the U.S. community college system has become overwhelmed as a go-to destination for displaced workers and low-income youths, even as state and local government funding is slashed. As HuffPost has reported, support for community colleges has failed to keep pace with demand.

"It could make a small dent," said Mark L. Wallace, director of public affairs and governmental relations at Cerritos College, a community college in Norwalk, Calif. At Cerritos, nearly every job training program, in areas ranging from welding to nursing, has a waiting list.

Those who enter Cerritos' automative technology program, which partners with Ford, General Motors and Chrysler and has a nearly 100 percent placement rate, might graduate to earn from $50,000 to $60,000 a year, according to Wallace. But not everyone interested can get into the program.

California Community Colleges Chancellor Jack Scott praised the president's budget proposal but agreed it wasn't enough. Next year, following state budget cuts, an estimated 200,000 students will be turned away from classes across California's community college system.

"We can move more quickly than any other organization to put training programs together for business and industry," Wallace said. "But we're absolutely jammed through the walls."

Around the Web

The President's Budget for Fiscal Year 2013 | The White House

Analysis: Politics trumps policy in Obama budget -

The Obama Budget -

Obama To Release Budget, GOP To Object To Taxes, Spending ...

Obama budget sets up election-year tax fight

Obama budget sets stage for battle over tax hikes