08/29/2012 09:00 am ET Updated Aug 29, 2012

Sectoral Training For Jobless May Streamline Programs With Links To Growing Industries

Being jobless in America is scary right now: about 12.8 million people are fighting for 3.8 million open positions. The Great Recession accelerated the loss of the last good-paying, low-skill jobs that survived the free-trade agreements of the 1990s. And Congress has heaped on the pain, cutting long-term unemployment benefits for millions.

Hope, where it has come, has been in fits and starts. With the November general elections and the so-called "fiscal cliff" looming over Washington, national politicians can probably be counted upon for little to address the jobs crisis before the year's end. But there could be progress on another front: improving state and local job training programs that are supposed to help workers get back on their feet.

Such programs have come under increasing scrutiny as millions look for work. Critics on the right, including Oklahoma Sen. Tom Coburn and Mitt Romney, have derided the alphabet soup of state and federal programs that provide training. Some on the left have suggested that some programs supposed to serve as a "bridge" between unemployment and work offer employers free labor without proven results. Nevertheless, among those who study the field, there does seem to be an emerging consensus about one thing that can be done to improve job training.

Called sectoral training, the new model represents a simple but definite break with the past. Worker training in the United States has traditionally been up to the individual. The unemployed pick and choose what appeals to them. The problem is that many people have little information about what jobs there are out there, sometimes because of poor counseling at unemployment centers.

Sectoral training focuses only on quickly growing industries. like health and technology, that seem to pay well. In many cases, it brings together local community colleges and businesses.

"We've probably done more experimenting with job training programs than any social program in history," said Lawrence Katz, a former chief economist at the Department of Labor during the Clinton administration who is now an economics professor at Harvard.

"Good ones can produce high benefit-cost ratios ... which may look as good as say going to college for a year in less-advantaged people," Katz said. Bad ones, on the other hand, can look "just like musical chair games, placing one person in a job that someone else might have gotten."

In 2009, federal agencies spent $18 billion on 47 different employment and training programs, according to the General Accounting Office. Many of those services, which ranged from disabled veterans' outreach to assistance for workers who have lost jobs because of offshoring, are in turn provided through 3,000-odd "one stop" career centers, the descendants of the unemployment offices of yore.

Some of those one-stops do little more than process unemployment insurance claims and provide computers to search job listing websites.

"Employers are very, very skeptical of the public workforce system. Most of them avoid it like the plague," said Harry Holzer, a professor at the Georgetown Public Policy Institute who also worked in the Clinton Department of Labor. Often, said Katz, the local workforce investment boards overseeing the system are "dominated by local low-wage employers who are just looking for cheap labor."

But other boards take pains to connect the unemployed to training that may lead to careers in good-paying jobs. Increasingly, community colleges are also getting in on the act, talking to local employers about what they need out of students, and rethinking Pell Grants as a kind of retraining program.

"There needs to be kind of much more emphasis on long-term preparation for work in careers," said Jim Jacobs, president of the Macomb Community College in Michigan. "In my opinion a great deal of the monies presently used in quote-unquote job training tends to be far too short-term, and really things that should be done by employers and the private sectors."

Michigan's former governor, Jennifer Granholm, a Democrat, launched a program called No Worker Left Behind just as the economic downturn was beginning. It was meant to draw together many of the state's disparate training funding streams, from the Trade Adjustment Act to the Workforce Investment Act to Pell Grants, to offer retraining to as many dislocated workers as possible..

As Granholm recalled, her pitch was "Have I got a deal for you: the first 100,000 workers who come through the door of the Michigan Works! agency, we will provide you two years of training while you're on unemployment."

"But the catch is you have to agree to be trained in an area of need. We will not pay for you to get a community college degrees in political science and French," said Granholm. She added with a laugh that those were her degrees.

The program was extremely popular. But whether it helped workers find jobs is an open question. initial results were mixed, and longer-term studies have yet to be completed. But it did succeed on at least one count: 74 percent of the people who received assistance through the Workforce Investment Act in Michigan received in-depth training of a year or longer, compared with 24 percent nationally.

Studies of job training in general, however, point to positive signs for sectoral training. In Washington State, workers who went through training in "high-return," technical fields made on average $4,000 more than before. And a study commissioned by the Mott Foundation, which supports sectoral training, found that participants who were randomly assigned to intensive sectoral training made 18 percent more than those who were left to their own devices.

Ultimately, there is only so much that job training can do in a weak labor market. But channeling workers to where the jobs are may help.

"If you want to create a private sector that creates good-paying jobs, not just service-sector jobs, you need more of this stuff," said Holzer.

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