Retraining Workers

January 20, 1995|By TRB

Washington -- When Bill Clinton, with the help of Robert Reich, made worker retraining the signature theme of his 1992 campaign, he was reacting to the dim job prospects that low-skill laborers face in America.

A quintessential New Democrat proposal, the idea was to let the market operate -- but to soften the blow on redundant workers by preparing them for higher-skill jobs. Yet after Mr. Clinton won, he barely pushed retraining. Like welfare reform, it took the back seat to health care.

Until the midterm elections, that is. Last week the president tried to win back his white male constituency by disinterring his retraining theme. This time, it had a more conservative flavor: Instead of new programs, the president offered ''Skill Grants'' -- training vouchers worth up to $2,620 a year -- for displaced workers to use in the private sector. A major imponderable, though, is whether the whole idea of retraining actually works in practice.

Yes, there have been successes. In 1990 a Michigan research institute conducted a survey of state retraining programs. It found an average post-retraining wage gain of 8 percent for men and 34 percent for women. But there's also plenty of counterevidence.

The most applicable recent study was conducted by Mathematica Policy Research, a retraining program for high-wage manufacturing workers laid off because of international trade. What seems like the study's main limitation -- it studied mostly older workers with long tenure -- makes it a good measure of how retraining will help Mr. Clinton's target population. Mathematica concluded that trainees were no more likely to be employed and earned no more on average than non-trainees.

Differences in design might explain why some training programs seem to work better than others. James Heckman, a University of Chicago economist, believes that programs that focus on young people produce higher returns than those that include everyone. Unfortunately, he estimates that providing enough training for all workers to attain a 1979 wage level would cost the government $1.7 trillion.

The administration hopes its voucher scheme could provide more training less bureaucratically. The trouble here is, as the Progressive Policy Institute's Kathleen Sylvester notes, many of the most successful programs involve a high level of government hand-holding. There's no consensus on what the details of an ideal training program should be.

There's even no agreement on whether training should be a continuous process conducted by private companies and subsidized by the government; or whether it should be restricted to displaced workers in between jobs. Mr. Reich thinks the former is the answer. The lack of such skills training, he rTC contends, has hampered American industry and worsened inequality.

More prosaic types view the problem as a simpler one: how to link up displaced workers more efficiently with new jobs. Many traditional industries, with little in the way of retraining and much in the way of inflexible work patterns, are among the most productive in the America. All that's needed, the skeptics argue, is fine-tuning.

The president has more than fine-tuning on his agenda. ''We discovered that we could collapse 50 of these programs and just give you the money if you're eligible for it, and it would make people who are eligible able to get a chit, a voucher for education only,'' he argued last week.

The first part -- consolidation -- makes sense. Last year the General Accounting Office counted 154 federal job-training programs, many of which were tiny and defended only by public-employee unions.

But providing vouchers indiscriminately might well be destructive. According to Gary Burtless of the Brookings Institution, pure voucher programs reduce earnings among the people to whom they are offered. The target population for worker retraining is composed disproportionately of high school drop-outs -- people short-sighted enough to pass up a free public education. ''It's an awfully heroic assumption that they're going to spend money wisely,'' Mr. Burtless says.

He has a point. Much of the money saved by consolidation should be devoted to guidance services, and vouchers targeted at those populations most likely to benefit from them. This is not as hard as it sounds. Maryland's Division of Employment and Training is experimenting with computer software that uses educational, work and welfare histories to identify those displaced workers who would most benefit from retraining.

In all this, however, it's important to recognize that even the most effective retraining measure won't solve the trauma of social and economic transformation. President Clinton should be honest about this. Yes, we should do what we can to help displaced workers learn the skills to find new and better jobs. But if he oversells retraining, Mr. Clinton could face a backlash among the very middle class he hopes to regain. Better to hold back and experiment -- and establish worker retraining as the potent little treatment it might yet become instead of the panacea it clearly isn't.

TRB is a column of The New Republic, written this week by Dante Ramos.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.