(Pres. Obama states his administration will continue focusing on creating more Jobs.)
Retraining Roulette: New skills, No New Job
Re-tooled workers find that hitting a "moving target" no sure thing in a Recession.
In a massive makeover of the U.S. work force, hundreds of thousands of laid-off Americans are undergoing federally subsidized retraining designed to provide them with the skills and education to land new jobs.
For some, it already feels like an exercise in futility.
“I’ve tried and tried (to find work) and it’s discouraging,” said Jama Eisman, 49, of Elkhart, Ind., a laid-off recreational vehicle worker and single mom who has been looking for a job — any job — since she graduated from a six-month information technology program in early August. “... A lot of places they have signs on the doors saying they’re not even accepting applications.”
While looking for work in economically battered northern Indiana is especially daunting, Eisman’s story underscores the high stakes riding on the retraining initiative for workers and for the nation.
Eisman said she fears she will lose the home she shares with her three sons — D.J., an 18-year-old high school senior, Michael, 15, and Eric, 11 — when her unemployment benefits expire on Nov. 1, unless Congress passes another extension.
“My child support pays for my house payment, and I pay for everything else,” the divorced former factory worker said. “I won’t make it.”
Many thousands of laid-off workers have found work during the recession after being trained in new occupations. But thousands of others are finding it can be difficult to hit a moving target when jobs are still shifting and vanishing.
And the complexities of the sprawling retraining program go well beyond forecasting the job market.
Fundamental questions are being raised about re-training, even as it has quietly emerged as a linchpin in the federal government’s recession-fighting strategy. Chief among them: Do retooled workers fare better in their searches or land better jobs than those who spend their time hitting the bricks and knocking on doors?
Like many other aspects of the Re-training program, the answer is far from clear.
The US Labor Department and other supporters say the effort is critical to help the U.S. pull out of the recession and produce a skilled work force capable of holding its own against foreign competition.
But critics say the re-training program, created by the 1998 Workforce Investment Act (WIA), is run by a tangled bureaucracy and actually makes little, if any, difference in helping laid-off workers reassemble their lives.
"It's ... a morass"
“It’s really a morass,” said Joe DiLaura, a former spokesman for the Indiana Department of Workforce Development now with the Friedman Foundation for Educational Choice in Indianapolis. “It’s not anything Indiana officials are doing. It’s the way the federal business is set up. Congress pours a boatload of money into a convoluted system of regional work force boards, which means a lot of staff and a lot of overhead. It’s well meaning, but I don’t know that it’s really getting the job done.”
The US Labor Department data shows that 258,000 American workers have been retrained in the past two years under the WIA’s Dislocated Worker Program — the main aid program under which workers return to school to pursue new careers.
Overall, the program provided some type of service, ranging from career counseling to retraining, to 666,313 jobless workers in fiscal 2008 — a 66 percent increase over the previous year.
Funding for the Dislocated Worker Program has been on a similarly steep ascent. Nearly $3 billion was budgeted for fiscal 2009, including extra funding for retraining included in President Barack Obama’s Federal Stimulus package.
Tens of thousands of other jobless Americans receive retraining benefits under the Trade Adjustment Assistance program, which helps workers who lost jobs due to global trade, or National Emergency Grants designed to help workers in a hard-hit region or industry.
“Workforce Investment Act training gets dislocated workers back into the work force more quickly than their peers who do not take part in such programs,” Jane Oates, assistant secretary of labor for employment and training, said in a statement provided to msnbc.com. “This fact does not, however, prevent us from striving to continuously improve publicly funded work force programs to maximize the return on these investments.”
The department also cites statistics indicating that retrained workers on average made 104 percent of their pre-training earnings in fiscal 2007, the most recent year for which figures are available.
Study finds little benefit
But a study commissioned by the Labor Department and released without fanfare in December reached the opposite conclusion, finding that retraining does not significantly improve earning power.
Co-author Kenneth R. Troske, chairman of the Economics Department at the University of Kentucky, said the discrepancy exists because the government compares the workers’ earnings immediately prior to entering retraining — after they have lost their jobs or suffered some other employment setback — to their paychecks after completing their courses and finding work. He and his fellow researchers, on the other hand, looked at how workers in 12 states who underwent retraining fared when compared with similar jobless workers who didn’t.
Their findings were disheartening. “Those who enter training experience large earnings losses relative to those who do not in their first two years after program entry,” the study found.
Earnings of retrained workers eventually did overtake those of non-participants, but even then, “The gains from participation are, at best, very modest,” it said.
Troske said the biggest reason retrained workers lag behind is simple: “When you’re participating in the program, it’s harder to find a job than someone who isn’t. Even if you’re not being charged tuition, you’re still giving up the opportunity to do meaningful work.”
But Teresa Voors, the commissioner of Indiana’s Department of Workforce Development, said that workers are approved for retraining only after other options for getting them back to work have been explored.
“The process isn’t necessarily about getting them into retraining; it’s about helping them find the proper career path,” she said. “That could be as simple as helping them rewrite their résumé, getting them on our Web site and helping them find a job, getting them started networking to find another job or maybe enrolled in a few workshops.”
Voors speaks from considerable experience.
The WIA-funded program administered by her department has seen a huge surge in demand for training and other services, which also are provided to disadvantaged youth and adult workers. The program has grown more than sevenfold in three years, skyrocketing from 39,001 participants in fiscal 2006 to 296,477 in fiscal 2008. In fiscal 2007, the most recent year for which spending figures are available, the department spent $117 million to provide services to 101,616 workers, or about $1,150 apiece.
A significant portion of that demand springs from Elkhart County, the heart of the RV industry. With an unemployment rate of 16.7 percent — well above the national average of 9.7 percent — the county has yet to see signs of the economic recovery that many economists say is beginning to take root.
When the layoffs were at their peak late last year, local WorkOne centers were frequently scenes of chaos and frustration.
Vicki McGlinsey, 42, who worked for an RV supply company before losing her job, said it took her six full months to get approved for retraining. The process was so aggravating that, at one point, after being told to return for yet another appointment, “I sat in the living room and bawled,” she said.
After the contractor responsible for running the centers was replaced, the situation improved, said McGlinsey, who is now retraining for a career as a computer technician at the commercial Maple Training school in Goshen.
She is one of thousands of laid-off workers in Elkhart County who have settled into retraining routines, and are busily learning the ropes for a wide variety of jobs — everything from operating computerized manufacturing machinery and repairing computers to providing medical care and styling hair and applying makeup.
Among them are approximately 1,100 RV workers who entered programs under a $10.4 million National Emergency Grant from the Labor Department. Of those, 300 are pursuing associate degrees, 700 are seeking vocational certifications and more than 100 are in programs leading to a professional license, according to a breakdown provided the state.
Their chosen new careers: 250 are training in IT; 240 in health care; 220 in advanced manufacturing disciplines; 100 as commercial drivers; 85 in business or accounting; 28 in heating and air conditioning; 17 paralegals; and the remainder in niche fields.
Denise Sexton, 41, of Elkhart, is one of the many former RV workers who is pursuing a medical career, banking that surgical assistants will still be in demand when she completes the two-year certification program.
But with her jobless benefits due to end in January, her husband working only part-time delivering RVs and their savings nearly gone, Sexton is mapping out her education like a military campaign, examining every possible option to ensure that she can finish.
“The way it looks right now, I’ll have to work a part-time job somewhere,” she said. “I’m in the process of applying for a Pell Grant … It’s either get some grant money somewhere or take a loan out.”
Sexton, who has maintained a straight A average so far, says failure is not an option.
“I’ll do whatever I have to do to get through school,” she said. “I’m not giving up my degree.”
Even if she does obtain the certification and can find a job, there are no guarantees it will be in a surgery room.
Indiana's most recent WIA report to the Labor Department indicated that almost half of the workers who completed retraining and found work did so in other fields.
And until the local economy improves, retrained workers will likely have a difficult time finding jobs no matter what new skills they have picked up, said Grant Black, an economist at Indiana University, South Bend.
Black said Elkhart County is continuing to shed jobs across virtually every employment sector, notwithstanding recent declines in its unemployment rate, which he attributes to a shrinking labor force rather than job creation. He said it's unclear whether the smaller work force is due to people leaving the area or giving up looking for work.
“I think even if you had perfectly trained people, where are they going to go?” he said.
That’s one of the questions that case workers with Indiana’s WorkOne program attempt to answer before approving retraining plans. But it’s hard to predict when specific industries will begin growing again, and how many jobs they might create, said Dwight Grieser, a Goshen businessman who sits on the Northern Indiana Workforce Board, overseeing Elkhart County and the surrounding region.
“I know that at our board meetings, that question always comes up and people always wonder, ‘What’s needed in Elkhart County? What’s needed in St. Joseph County ... if they’re willing to drive 40 miles to get a job?’” he said.
The lack of accurate forecasts can have serious consequences. Travis Wagner, 31, a laid-off RV worker from Freeman, Ind., discovered that after signing up for a one-year advanced manufacturing program — a field identified by Indiana Gov. Mitch Daniels as having "a lot of great jobs waiting" in September, when he announced the grant for retraining RV workers.
Now Wagner said he’s “less and less” confident he’ll be able to find work with one of the local orthopedics manufacturers the program is designed to support. That's because former RV workers have flooded classes at the same time the companies have been announcing layoffs, he said.
But Thomas Snyder, president of Indiana’s statewide Ivy Tech Community College system, which runs the manufacturing program, said graduates will emerge with “transferable skills” that can be applied to many occupations, not just building artificial joints.
And longer term, he said, such training is critical to efforts to “re-engineer Indiana” as a manufacturing state with a highly skilled work force. “If we lose this industry, it would not be to another state,” he added ominously.
Louis Uchitelle, a New York Times labor reporter and author of the book “The Disposable American: Layoffs and Their Consequences,” scoffs at such arguments.
He says retraining ignores the decreasing demand for certain occupations — especially in manufacturing — as jobs continue to disappear overseas.
“It’s a supply-side approach,” he said. “People are told that there are good jobs out there and it’s incumbent on them to acquire those skills to land those jobs. That was never the case, even in the salad days of job creation, and it certainly isn’t the case now.”
Meanwhile, as the retraining debate continues in classrooms, boardrooms and government offices, the jobless of Elkhart County are making decisions upon which their future well-being will hang.
Some have retrained for a new job only to return to the relative security of work in the cyclical RV industry.
Among them is Adrian Jimenez, a 30-year-old RV worker from Bremen, Ind., who received certification as an operator of CNC (computer numerical controlled) machines after completing a six-month course at Ivy Tech. But with no job offers after several months and a second child on the way, he couldn’t say no when his former employer, Monaco Coach, offered him his job back on the factory floor.
"I really never got to use my training at all," he said, adding that he is instead lining up side jobs as a Spanish-English translator, just in case.
Others, like Kevin Avery of Mishwaka, are taking the cautious approach.
Avery, who lost his job making glucometers for Bayer in April, is carefully analyzing the job market before deciding where to cast his retraining lot. He has that luxury because he had a union job and will continue to receive severance payments until mid-December.
“At my age, you’ve got to find something in demand,” he said. “I’ll be 56 in January, so what can you get in a year or two that will give you another 10 years of work? Whatever you decide, it’s got to be something you can walk out of the training and into a job.”
Still others are preparing for new careers in which, assuming they find work, they will make much less than they did before.
Cindy Koehler of Elkhart, who worked as a saleswoman for an RV supplier, is now training for a career as a cosmetologist at the Vogue Beauty in College in Elkhart. According to state statistics, cosmetologists in Indiana earn a mean hourly salary of $9.97, or $2.52 an hour above the state’s minimum wage.
That’s not a big concern for Koehler, who expects to graduate in December after her 10-month training, because she expects to have increased job satisfaction.
“I’m a people person, and I really like the way it makes me feel when I make someone feel better about themselves,” she said.
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Sources: MSNBC, The Elkhart Project, CNN, Recovery.gov, US Dept of Labor, Google Maps
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