Training Is the Key?

I have made no secret of my skepticism of the idea that the reason that the number of unemployed, underemployed, and discouraged workers is so high is that the workers who are available don’t have the education, training, and skills necessary for the jobs that available. That structural explanation for unemployment is, however, the view embraced by Democrats and Republicans, by Obama and Romney.

This morning in the Washington Post reporter Amy Goldstein looks at the explanation more closely and finds it leaves much to be desired:

The idea of teaching new skills to laid-off workers is a rare economic policy on which the two major political parties agree, eager as they are to offer a salve for unemployment. During the first presidential debate this month in Denver, Obama praised the “great work” that community colleges are doing “to train people for jobs that exist right now.” The GOP nominee, Mitt Romney, said federal money must help workers “get in the training they need for jobs that will really help them.”

This unlikely bipartisan agreement fits with an abiding cultural belief, since America’s founding, in the United States as the land of personal reinvention. And it keeps faith with a deep-etched understanding that education is the key to upward mobility.

But does retraining actually work?

[…]

In the end, I found certain successes. But most of what I discovered was sobering. The transition from a factory culture to college life to a new career turns out to be far more complicated than the political rhetoric hints at. Students arrive grieving lost jobs and shattered lives, panicky to regain their old wages however they can, rusty at writing and math, often having no idea even how to turn on a computer. Two-thirds do not graduate. And with or without a degree, new work at good pay has proved elusive for many.

What I found, in other words, suggests that even if the U.S. economy is gradually reviving, the bruises to individual workers and individual communities can be deeper than what job training alone can readily heal.

It also fails to account for the newly-minted nurse, medical technician, IT specialist, or engineer who’s unable to find a job because in addition to the skills prospective employers demand years of experience. It fails to account for older workers with plenty of experience but who are overtrained for anything other than the jobs they had but no longer exist. And it fails to account for the nearly 50% of young people living in major urban areas who can’t be induced to graduate from high school on time let alone go on for additional training.

I’ve already made one proposal: a central clearing house where those seeking to bring workers into the country on H1-B or L1 visas can be matched with workers who have the skills and experience they demand and are already here. We could establish apprenticeship programs in which the pay of certain new hires is subsidized until they have the experience their jobs require.

However, the sad reality is that we simply need to be creating more jobs here. I don’t believe that the shortfall in job creation here is due to a lack of consumption here. I think it’s due to a lack of consumption elsewhere, particularly in those countries that are illegally maintaining enormous dollar reserves. Smaller dollar reserves and more consumption in China, Japan, Germany, Switzerland, Russia, and Brazil will mean more jobs here. Relaxing some of the many barriers to job creation here might be a nice idea, too.

We shouldn’t be waiting for the crisis to hit before putting programs into place. As Ms. Goldstein suggests, once the crisis has struck it may already be too late for far too many people.