Bipartisan Job Training … Is Either Useless or Corporate Welfare

NPR thinks they are reporting on a feel-good, non-controversial, non-partisan story: “Congress And Biden Aim For Job Training That Actually Leads To Jobs.”

Something pretty remarkable happened Tuesday afternoon in a small windowless auditorium next door to the White House. President Obama signed a new law: the Workforce Innovation and Opportunity Act.

It streamlines and updates the nation’s job training programs and was 11 years overdue. The bill got overwhelming bipartisan support in both the House and Senate.

“Folks in Congress got past their differences; they got a bill to my desk,” Obama said at the signing ceremony. “So this is not a win for Democrats or Republicans; it is a win for American workers.”

No it’s not. That’s like saying public school is a win for American children because a handful survive it.

Job training is either a non-productive boondoggle or, in the case of the few times the government does it right, a form of corporate welfare.

It is often a boondoggle because predicting what skills will be in demand in the future is a risky enterprise. No one knows the future. You can only make a guess—at most an educated guess. That’s why, when students choose a major in college in the hope of having a career, they are often engaged in a form of entrepreneurship. Yes, some people are so sure that they know what they want to do that they don’t consider future income. But most people are hoping to make a living and that affects their choice. It is also risky. A glut of students who choose the same path might mean lower wages because there are so many people qualified for the limited number of jobs.

The government doesn’t have a great advantage in predicting what job training will be needed in the future. When they get it wrong, their job training only benefits the people employed as trainers.

But what about when they get it right? Here is what NPR reported about Brian Alexander, a design engineer who was unemployed.

Though Alexander was a skilled engineer, he wasn’t up-to-date on the latest design software. Through the state program, he applied for a job at XMA Corp. And while the state paid a portion of his salary, XMA helped get Alexander trained on the software he needed to do the job.

“We brought him in, only to find out he was a home run,” said Marc Smith, the company’s CEO.

Within months of coming on board, Alexander was named employee of the month and had a nickname: The Big Tuna.

“A lot of times, it’s hard to get good talent, and that’s why this program has been so good, because we can find people like Brian,” Smith said. “He lives 10 minutes from here. I would have never found him, and if I did, I wouldn’t have been sure he was a good fit or not.”

Alexander’s story made an impression on the vice president.

“So what Brian had, he had all these degrees and all this skill,” Biden said in an interview with NPR. “But he needed a different programming knowledge. And so it took just a little bit of training, and the guy — boom — and he was excited.”

So instead of paying a profitable employee the taxpayers have to shoulder the burden and provide major corporations with free money? Why?

How is it the same kind of people who get righteously indignant about McDonald’s or Walmart employees getting welfare aid to make ends meet approve of the government paying employees’ wages for other companies?

Companies can recruit and train for themselves. By doing it for them at public expense the government is preventing more recruitment and training companies from starting in the private sector. Think of it like public school. Private schools limp along on shoestring budgets. Part of that is efficiency, but it is forced efficiency. By using public funds to run public schools the potential customer base for private schools is depleted. People figure that they are already being forced to pay for public school, so why sacrifice and pay more for what is “free.” Likewise, businesses are being trained to expect the government to provide them with free subsidies related to employment. There is little or no room left for entrepreneurs to offer training for a fee or for a payment from the company to whom they provide trained employees.

Everything the government gives first requires it to either tax or borrow (on the basis of future taxes) from the people. None of the improvements it provides come at too high a price.