In lieu of an abstract, here is a brief excerpt of the content:

95 5 Stop Shovelling A New Workforce Development Strategy to Promote Regional Prosperity Joel A. Elvery Federal Reserve Bank of Cleveland Workers laid off in the declining industries of Rust Belt cities are often targets of the nation’s workforce development system. Additional training, it is thought, will help these workers find new jobs requiring their newly acquired skills. However, this is a “needsbased ” approach; those workers perceived to have the greatest need are offered training. Perhaps, instead, the system should target displaced workers who are most likely to advance in occupations (those possessing interest and aptitude), thereby eventually creating openings for lower-skilled workers, i.e., job chains. Workforce development policy in the United States has been driven by goals, rather than by what is achievable. The main focus has been to help people with few skills enter or reenter the labor market. The programs implemented to achieve those goals, however, have had limited success. The simple truth is that many low-skilled workers have a difficult time finding work because they cannot keep up with advances in the economy. This has been especially problematic in the manufacturing centers of the Rust Belt, where many jobs have been lost to automation and competition from other regions. Even if low-skilled workers could be trained for in-demand occupations, the number of openings at any time is much smaller than the number of people who are unemployed or working for low wages (Lafer 2002). This means that job training for the least skilled has limited ability to reduce poverty. As an analogy, the labor market for each skill group is like a bucket. The bucket for the lowest skills is large, but it is completely full and Bowen.indb 95 Bowen.indb 95 12/16/2013 2:13:58 PM 12/16/2013 2:13:58 PM 96 Elvery shrinking relative to the other buckets. Workforce development organizations have historically focused on helping individuals enter this portion of the labor market. This emphasis continues today with the tiered service system of the Workforce Investment Act (WIA), where people are only eligible for intensive training if they have proven to be unable to find work at pay near that of their prior position. Consequently, training resources are targeted to people who have difficulty finding work and, except during recessions and their aftermath, these individuals are typically low skilled. The training available is generally too little to move these participants beyond entry-level positions. While a lucky few find a way to stay in the labor market, most spill over the side of the bucket. This effect discourages the many unlucky training participants who remain unemployed and wastes public resources. It is time to stop shoveling more individuals into low-skilled markets . We must recognize that poverty reduction is only one potential goal for workforce policy; increasing the efficiency of labor markets and the level of individuals’earnings are also good objectives. The most effective way to achieve these aims is to orient our workforce system toward facilitating advancement into occupations in which the vacancies outnumber the applicants. Job training dollars should be targeted to individuals based on interest and aptitude, not need. While this strategy would not directly assist the poorest individuals, it would have the potential to create job openings for them. As people advance in their careers, their prior positions will open up, which could create a job chain that results in openings for low-skilled workers. In addition, the productivity and income increases connected to job advancement would create economic growth. This means that an advancement-centered workforce system could better achieve the goal of the current system: to increase the number of low-skilled individuals who are working. Reorienting the workforce system to promote advancement into open positions is especially important for metropolitan areas (metros) in the Rust Belt. In the last 50 years, the growth of regions has been closely tied to the education level of their population (Shapiro 2006) and there is every reason to believe that this will remain true (Moretti 2012). The Rust Belt has suffered large, long-lived manufacturing job losses both from 1970 to 1985 and again from 1998 to 2003. These losses have generated a negative cycle that is difficult to interrupt. First, population declines; one estimate finds a metro’s population declines by Bowen.indb 96 Bowen.indb 96 12/16/2013 2:13:59 PM 12/16/2013 2:13:59 PM [3.145.186.6] Project MUSE...

Share