Federal Job Training Programs Should Follow ‘Pay for Outcome’ Model

[Geee]

Heritage Foundation

The House Education and Labor Committee on Tuesday will be voting on a reauthorization of the main federal funding for employment and training programs, the Workforce Innovation and Opportunity Act.

Unfortunately, this Democratic draft would move the workforce system in the wrong direction. Instead of making sure employment and training programs get the results that unemployed Americans need, the bill would spend billions more on left-of-center priorities, including boosting union sway and further limiting state flexibility.

After the recession driven by COVID-19, more unemployed people need access to effective employment and training programs.

The U.S. has a record 11.3 million open jobs. During the COVID-19 recession, the workforce participation rate plummeted. In real terms, there are nearly 4 million more people on the sidelines, mainly because of welfare-without-work policies, where people can earn more from government checks than they can from working.

 

And yet, the federal government spends about $18.9 billion annually on all employment and training programs intended to help people who have fallen on hard times get back into the workforce.

But just spending money won’t make the programs work. The reality is that if we want our work-capable neighbors to move off of the sidelines, the pathways to work have to be effective. They’re not now.

In a 2019 report on the overall effectiveness of these government training programs, the White House Council of Economic Advisers concluded that “government job-training programs appear to be largely ineffective and fail to produce sufficient benefits for workers to justify the costs.”