Home > Uncategorized > Job Training Expensive? Not Compared to Food Stamps or Prison.

Job Training Expensive? Not Compared to Food Stamps or Prison.

July 9, 2016

Eduardo Porter’s recent article in the NYTimes Economic Scene section champions job training and flags the underfunding our country makes when it comes to job training as compared to our economic counterparts. Using the story of a participant in Per Scholas, a Brooklyn-based nonprofit offering low-income workers training in information technology, Mr. Porter offers evidence like Per Scholas offer a leg up to those who graduate.

As much as I favor the ideas Mr. Porter advances in his article, I fear that he is overselling job training, particularly when he describes those who complete the program as being on “…a career path offering a shot at progress” because she landed an IT job at Barclays. Mr. Porter has presumably noted that “career paths” are few and far between in the workplace and large banks like Barclays are likely to embrace the introduction of technologies that “increase productivity” by eliminating jobs that can be managed remotely by robots. Mr. Porter also presumably understands that corporations who value the bottom line would favor outsourcing IT work to sub-contractors in lower wage foreign countries over paying higher taxes to fund grants to non-profit organizations like Per Scholas. Mr. Porter must realize that bringing programs like Per Scholas to scale— particularly in rural areas and small towns affected by large scale joblessness— is highly unlikely. Last but not least, Mr. Porter must also realize that the biggest challenge to joblessness is the need to create more jobs for those who lack the fundamental skills to gain the IT certifications his exemplary student attained.

I agree with his bottom line, though:

…$6,700 spent to provide one low-wage worker with the skills employers need is a small amount compared with the wage gains she could make in a few years. And there are other savings to keep in mind. More than one-third of workers who entered the WorkAdvance program, for instance, were getting food stamps, which they would not need if they earned more.

Or consider that it costs $31,000, on average, to keep an American in prison for one year. One-quarter of the workers enrolled in the WorkAdvance experiment had a criminal record.

According to the Organization for Economic Cooperation and Development, the United States government spends only 0.03 percent of its gross domestic product on worker training. Denmark, whose policies to bring workers into work have gained praise around the world, spends proportionately almost 18 times as much. France spends 12 times as much; Germany seven times.

Americans’ main problem may not be that there are no solutions for the workers’ plight. It is just easier, not to say more politically rewarding, to scream at the Mexicans and the Chinese.

Maybe one of the candidates running for office will look at the cost-benefit analysis of food stamps and/or prison vs. job training or the economic competitiveness issue implicit in the OECD job training data and conclude that we need to invest more in that area… but instead I expect one candidate “to scream at the Mexicans and the Chinese” while the other candidate sticks to talking points that neglect the underlying problems in our country created by under-taxation and wishful thinking.  

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