Story first appeared in the Wall Street Journal.
Last Thursday, President Obama proposed new federal jobs and job-training programs for youth and the long-term unemployed. The federal government has experimented with these programs for almost a half century. The record is one of failure and scandal.
In 1962, Congress passed the Manpower Development and Training Act (MDTA) to provide training for workers who lost their jobs due to automation or other technological developments. Two years later, the General Accounting Office (GAO) discovered that any trainee in this program who held a job for a single day was counted as "permanently employed"—a statistical charade by the Department of Labor to camouflage its lack of results. A decade after MDTA's inception, GAO reported that it was failing to teach valuable job skills or place trainees in private jobs and was marred by an overriding concern with filling available slots for a particular program, regardless of what trainees actually needed.
Congress responded in 1973 by enacting the Comprehensive Employment and Training Act (CETA). The preface to the new law noted that it has been impossible to develop rational priorities in job training. So instead of setting priorities, CETA spent vastly more money, especially on job creation. Notorious examples reported in the press in those years included paying to build an artificial rock for rock climbers, providing nude sculpture classes (where, as the Pharos-Tribune of Logansport, Ind., explained, aspiring artists pawed each others bodies to recognize that they had both male and female characteristics), and conducting door-to-door food-stamp recruiting campaigns.
Between 1961 and 1980, the feds spent tens of billions on federal job-training and employment programs. To what effect? A 1979 Washington Post investigation concluded that incredibly, the government has kept no meaningful statistics on the effectiveness of these programs—making the past 15 years' effort almost worthless in terms of learning what works. CETA hirees were often assigned to do whatever benefited the government agency or nonprofit that put them on the payroll, with no concern for the trainees' development. An Urban Institute study of the mid-1980s concluded that participation in CETA programs resulted in significant earnings losses for young men of all races and no significant effects for young women.
After CETA became a laughingstock, Congress replaced it in 1982 with the Job Training Partnership Act. JTPA spent lavishly—to expand an Indiana circus museum, teach Washington taxi drivers to smile, provide foreign junkets for state and local politicians, and bankroll business relocations. According to the Labor Department's inspector general, young trainees were twice as likely to rely on food stamps after JTPA involvement than before since the training often included instructions on applying for an array of government benefits.
For years the Labor Department scorned the mandate in the 1982 legislation to speedily and thoroughly evaluate whether the programs actually benefitted trainees. Finally, in 1993, it released a study that showed participation in JTPA actually reduced the earnings of male out-of-school youths. Young males enrolled in JTPA programs had 10% lower earnings than a control group that never participated.
The Workforce Investment Act (WIA) replaced JTPA in 1998. Congress required a thorough evaluation of the law's impact on trainees by 2005. At last report, the Labor Department is promising it will be completed by 2015.
In his speech to Congress, Mr. Obama called for funding hundreds of thousands of summer jobs for teens, which he labeled investing in low-income youth and adults. Yet such programs have been blighting work ethics for decades.
The GAO warned in 1969 that many teens in federal summer jobs programs regressed in their conception of what should reasonably be required in return for wages paid. A decade later, it reported that most urban teens were exposed to a worksite where good work habits were not learned or reinforced. And in 1985, a National Academy of Science study found that government jobs and training programs isolated disadvantaged youth, thus making it harder for them to fit into the real job market.
More recently, Mr. Obama's 2009 stimulus package expanded federally funded summer jobs. And so young men and women used puppets to greet aquarium visitors in Boston. Teens in Washington, D.C.'s Green Summer Jobs Corps maintained school-yard butterfly habitats. And summer workers in Florida, the Orlando Sentinel reported, practiced firm handshakes to ensure that employers quickly understand their serious intent to work."
Did any of this investing work? There's no evidence it did.
Mr. Obama also wants a new federal initiative to be based on Georgia Work$, which the president describes as a program in which people who collect unemployment insurance participate in temporary work as a way to build their skills while they look for a permanent job. But Georgia Work$ has produced far more headlines than jobs—fewer than 200 this year, according to a recent article in Politico.
Begun in 2003, Georgia Work$ gives people a chance to train at an employer for eight weeks. They receive no salary but continue collecting unemployment compensation and as well as a $240 weekly stipend from the state of Georgia. Last year, the stipend was increased to $600 a week and anyone who said they needed a job was allowed to participate. After costs exploded, Georgia Work$ was scaled back early this year.
Mark Butler, Georgia's current labor commissioner, stated that the program suffered from a lack of oversight before he took over in January. At last report, only 14% of trainees were hired by employers—a success rate akin to other unemployed Georgians who do not participate in the program.
Earlier this year, the Government Accountability Office reported that there were 47 different federal employment and training programs, costing taxpayers $18 billion a year. There is massive overlap and duplication, and few programs seriously evaluate their impact on trainees.
If federal job training efforts worked, Congress would not have thrown out the programs it has created every decade or so and enacted new ones. In reality, government training has always been driven by bureaucratic convenience, or politicians' re-election considerations. There is no reason to believe the latest round of proposals will be any different.
