Last month, the U.S. Department of Labor announced that the Triad of North Carolina would be the recipient of a $15 million grant to better train local workers for globally competitive jobs. Needless to say, many treated the announcement as a windfall for the area.
“We are fighting the battle to stay afloat in the global economy on the home front. Innovation, an achievable game plan, and wise use of resources will be critical. A $15 million check from Washington will be helpful,” wrote the editors of the Greensboro News & Record.
But just how helpful is a matter of debate. Even the Bush administration, while spearheading yet another aggressive federal job-training program, admits there’s no standard to measure the effectiveness of such programs.
The Triad’s grant is part of President Bush’s Competitiveness Agenda, which is part of the federal government’s new focus on regionalism when developing job-training programs. Including the Triad, the Labor Department selected 12 multicounty economic regions from around the country to receive the $15 million in funding, spread out over a three-year period.
Economic development agencies, many of which previously had been focused on marketing efforts designed to attract business and industry to their regions, will soon find themselves in charge of federal money designed to create job-training programs.
“Historically, federal funding has not been focused on regions. This is the first significant rollout of a federal philosophy of economic development that is going to be focused on regions,” said Don Kirkman, president of Piedmont Triad Partnership, the organization that will manage the grant money. “When you don’t have governmental structures or taxing authority organized at the regional level, it’s often hard to find funding for regional initiatives.”
The Labor Department took into account different factors when awarding the grants. Each region had to demonstrate a strategic partnership that is representative of its entire economy. It must also demonstrate that it has a strong team of regional leaders to implement that strategy.
Each region must also be affected by an economy in transformation because of the decline of its economic base.
“I don’t know that there has been a region in the country that has been harder hit by globalization,” Kirkman said. “On the basis of jobs and need, I think we made a very strong case.”
More federal money could be on the way. The Economic Development Administration recently announced that the administration’s 2007 budget includes a 17 percent increase, to $327 million, for programs operating under the initiative.
Kirkman said the partnership’s annual operating budget was $1.5 million, so the $15 million grant represents a significant increase in financial resources.
Funding for regional economic developers such as Piedmont Triad Partnership comes from a variety of sources, since they are not tied to any one county government or municipality. Kirkman said the partnership receives funding from all 12 Triad counties, as well as the General Assembly.
While Kirkman is only taking advantage of money that’s being offered, he realizes it might be difficult to justify such a huge infusion of federal funding. While no one would dispute the effect of factory closings on area workers, unemployment in the Triad nevertheless fell to 4.8 percent in December, down from 5.2 percent in November.
Unemployment rates are also falling in 11 of the 12 Triad counties.
But accountability is a major part of the competitive initiative. Kirkman said the Labor Department is assembling a technical advisory team, composed of national leaders in workforce development, to help ensure that regional economic developers are using federal funds efficiently.
“We’ll be under a microscope,” Kirkman said.
But there are skeptics. One of them is David Muhlhausen, a senior policy analyst in the Center for Data Analysis at The Heritage Foundation. Muhlhausen said Congress has wasted billions of dollars on ineffective job-training programs.
“This is a failed big-government model,” Muhlhausen said in a phone interview. “[The programs] have not shown an ability to raise the wage level of participants. Instead of letting people rely on themselves to improve their skills, they want to do it for them.”
In an article for the Heritage Foundation, Muhlhausen took a look at the history of job-training programs.
Even the famed Works Progress Administration and Civilian Conservation Corps were less than effective, considering the fact that civilian unemployment just before World War II was about the same as it was when the WPA and CCC were created.
Still, support for federal job programs built after the war.
There was the 1962 Manpower Development and Training Act, the 1973 Comprehensive Employment and Training Act, and the even more recent Job Training Partnership Act, which replaced CETA following charges of corruption and mismanagement. The 1998 Workforce Investment Act took over for the JTPA and emphasized more local control.
Muhlhausen was unable to find any hard evidence that job-training programs have had a positive effect on the lives of workers.
For instance, a national JTPA evaluation tracked the progress of adult men and women and male and female out-of-school youths who participated in classroom training, on-the-job training, job search assistance as well as “other services.”
Adult women were the one group who saw their incomes increase, though that impact was “fleeting.”
Along the same lines, a 2001 study on the Job Corps found that the estimated average increase in weekly income was never more than $25.20 since the program was created in 1964.
Furthermore, the Job Corps also had little impact on hours worked. Participants failed to put in a full year’s work, and in many cases participants actually worked less than nonparticipants.
Sam Hieb is a contributing editor of Carolina Journal.