Job retraining is the solution, Obama and Romney say. But does it work?
By Amy Goldstein,
This article is adapted from a
longer version first published online by ProPublica, an independent
nonprofit news organization.
In late August, days after becoming the Republican vice-presidential candidate, Paul Ryan stood near center court in the gym at the Wisconsin high school he graduated from a quarter-century ago. “You know, we’ve been hit pretty hard here,” the congressman told relatives, neighbors and a couple thousand others squeezed onto risers for a rally to send him off from the small city of Janesville to the Republican National Convention. “But we are a hardy people, and we will recover from this.”
When Ryan was growing up, the soul of the local economy was the Janesville Assembly Plant, where General Motors started out making tractors and in 1923 began to build cars. In early 2008, when Barack Obama was first running for president, he gave a major economic address near the medium-duty truck line on the aging plant’s second floor, declaring that “if our government is there to support you . . . this plant will be here for another hundred years.”
Two days before Christmas that year, the plant shut down. Nearly 3,000 GM employees were among more than 5,000 casualties of mass layoffs that cascaded through town, washing away jobs at companies that had supplied parts and services to GM, then hitting unrelated businesses that could not withstand the worst economic crisis since the Great Depression.
“I’ve got a lot of friends who lost their job at the plant,” Ryan reminded the crowd in the gym. “One of my buddies, he went to Blackhawk Tech. Afterwards, he got an HVAC contracting degree. And now . . . he’s got a great career, and he’s happy. . . . That’s the kind of thing we need to do: Pick ourselves up, help people who need, give them the job-training skills they [have to] have.”
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?
Janesville, a city of 63,000 near the Illinois line, is a singularly useful place to look for answers. Since General Motors set off the cascade that knocked thousands of people out of their jobs, this community, in many ways, has been doing everything right. Blackhawk Technical College, the small, two-year school that Ryan mentioned, is exactly the kind of place that federal officials and other policy specialists have in mind to help unemployed people get back to work. It teaches students to be welders, IT specialists, medical lab technicians and so forth, relying on partnerships with local businesses to navigate displaced workers into fields in which jobs seem most likely to exist.
But even under such favorable circumstances, I wondered, how easily can a vocational college teach droves of worried laid-off workers a new identity, as well as new skills? More fundamentally, does retraining succeed in places like Janesville, where, despite intense economic-development efforts in the past few years, jobs remain scarce?
Such questions drew me to Janesville a year before its native son would bound onto the Republican presidential ticket. They led me to kitchen tables and back decks, to classrooms and counselors’ offices at Blackhawk, and to state databases of unemployment claims and wage records.
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.
Whether job retraining can be counted on to lift shell-shocked, displaced workers back into the middle class is a question that matters beyond one small college in one Wisconsin city. Even as the nation’s overall unemployment rate has fallen lately, the proportion of laid-off workers unable to find a job for six months or longer has remained stuck at 40 percent. Recent surveys suggest that, three years after the official end of the recession, about one-third of those who became unemployed have pursued some form of retraining — at two-year colleges and elsewhere — in hopes of a new job.
This is not exactly a new idea. Federal support for job training was a tenet of the War on Poverty in the 1960s. And in the early 1980s, the Job Training Partnership Act created the first federal training program to expand from helping the underclass to helping people of any class who were out of a job. Debate used to swirl in academic and policy circles over whether training really helps laid-off people find work. Today, amid the upbeat political rhetoric, that debate has virtually disappeared. No studies had looked at this question using data since the recession began. That is the black hole I wanted to try to help fill in.
Wisconsin’s Department of Workforce Development, an agency two blocks from the state Capitol in Madison, keeps the two main ingredients I needed: records of unemployment claims, showing who had lost jobs; and the kind of wage records kept by every state of every worker’s earnings for every quarter of the year. I asked for these records for Janesville and nearby communities from which Blackhawk draws most of its students.
Like most states, Wisconsin does not like to share such information, but, after months of roadblocks and delays, the agency provided the data. I carried out an analysis with a lot of help from two labor economists: Kevin Hollenbeck, senior economist at the Upjohn Institute for Employment Research in Kalamazoo, Mich., and Laura Dresser, associate director of the Center on Wisconsin Strategy at the University of Wisconsin at Madison. Blackhawk helped, too, providing records of its students and academic information about them.
We found that 1,740 dislocated workers started classes at Blackhawk between the summers of 2008 and 2010, after so many jobs went away. Getting a job after retraining, we discovered, has been quite a problem. Of these people, 541 earned at least some money in every season. An additional 532 were working more sporadically. The rest — nearly 40 percent — didn’t earn anything at all.
Then, we looked at wages. Compared with before the recession, the earnings of those with at least some work dropped, on average, by 36 percent.
The decline in pay that we found among Blackhawk’s retrainees mirrors what has been happening around the country. According to a recent study for the Brookings Institution, workers laid off in the United States between 2007 and 2010, and who had been in their jobs at least three years, can expect to lose at least $220,000 in lifetime earnings.
What is more surprising — because no one else has looked at this question lately anywhere in the country — is that the laid-off people around Janesville who went to Blackhawk are faring worse than their laid-off neighbors who did not. We discovered this striking fact by comparing the dislocated workers who retrained with a larger group of about 28,000 residents, from the two counties where most Blackhawk students live, who had collected unemployment benefits recently and had not gone to the college.
For one thing, the people who didn’t retrain are working more. About half of them had wages in every season of the year, compared with about one in three who went to Blackhawk. An even bigger gap exists in how much those who have jobs are earning. Before the recession, we found, the two groups — the dislocated workers who went to school and the ones who didn’t — were, on average, getting paid about the same. Afterward, the ones who didn’t retrain are earning more. Their pay has fallen by just 8 percent — one-fourth the size of the pay drop among the people who went to school.
Taken together, what we discovered — that laid-off people who retrained at this small Wisconsin college are not faring very well and that they are faring worse, in fact, than their laid-off neighbors who didn’t go back to school — raises more questions. What is going on?
One possibility is that the laid-off people who were best able to get another job did so, while those who were less desirable to employers went to Blackhawk. Or it could be that the advantages from retraining are slow to materialize; people who go from senior positions to entry-level jobs might need years to catch back up. Another possibility is that people who didn’t invest a year or two in education snapped up jobs that were gone by the time the Blackhawk students began searching for work.
At least part of the answer, though, is the stark reality that, at least in places like Janesville, work is still very hard to find.
“It isn’t that training is good. It isn’t that training is bad,” Dresser, the University of Wisconsin labor economist, mused one day. “If you don’t have enough jobs . . . you cannot train your way to victory.”
So what then?
At the moment, alongside the political fervor for retraining, there is a quiet acknowledgment that, at the very least, it must be done better. Mainly, the link between two-year colleges and jobs must become even tighter — even at a school like Blackhawk that has long, sturdy relationships with local businesses. Still, the uncomfortable fact is that more closely targeted training may not be enough.
Obama speaks often of a mismatch between the skills that companies need and those that would-be workers possess. This idea of a “skills gap” holds out the hope that, if unemployed people simply study the right things, they will flow into the workforce. Not everyone agrees. The skills mismatch, while real, coincides with the hard reality that there are not enough jobs for everyone who could use one, says Anthony Carnevale, the director of Georgetown University’s Center on Education and the Workforce.
“Training doesn’t create jobs,” Carnevale told me. “Jobs create training. And people get that backwards all the time. In the real world, down at the ground level, if there’s no demand for magic, there’s no demand for magicians.”
As they tussle over how to create the right economic policies to create jobs, neither Democrats nor Republicans have an incentive to acknowledge the possibility that, in a still-wobbly economy, job retraining — as neatly as it fits into our cultural beliefs — may not always lead laid-off Americans back to their old pay. Or back to work at all.
Amy Goldstein, a Washington Post reporter, is on leave to study Janesville, Wis., as a microcosm of the effects of vanished jobs. The Joyce Foundation, Harvard University’s Radcliffe Institute for Advanced Study, the Woodrow Wilson International Center for Scholars, the University of Wisconsin at Madison’s Institute for Research on Poverty and ProPublica have provided support.