Georgia Works May Work, But It Sure Doesn’t Pay

It is almost 4 years since the economy first sank into recession and the job market is still a disaster. Over 25 million workers are unemployed or underemployed. More than 6 million fall into the ranks of the long-term unemployed who have been without work for over six months.

President Obama has promised new proposals to spur job growth in his speech today. At this point, an anxious public is looking for bold leadership to address the lingering effects of the economic downturn and a plan that can help millions get back to work in middle class jobs.

Early signs suggest this hope may be disappointed. All the evidence indicates that the problem is weak demand — there are more than four unemployed workers for every job opening — yet the President seems intent on focusing on supply. Apparently, job training is going to be at the center of his plan.

This shouldn’t be a surprise. In Washington it is much easier to blame unemployed workers for their supposed lack of skills than to blame the bankers whose avarice fueled the housing bubble that eventually brought down the financial system and the economy with it. Creating training programs is also easier and cheaper than creating jobs.

The President is said to be impressed with the Georgia Works program, a voluntary program that assigns workers to a workplace for six weeks of training by an employer. The program doesn’t cost employers anything and it costs the government very little. The reason it’s so cheap? Workers are unpaid – they simply get their unemployment benefits plus a small stipend of $240 to cover travel costs.

The problem to which this is a solution, or so we are told, is that too many unemployed workers lack ‘middleskills’ – skills that require more than a high school degree but less than college. A report released last week by the National Skills Coalition claims that Southern states are suffering from a shortage of workers with ‘middleskills’ to fill a range of good paying jobs. The report argues that the recession has accelerated the shift to a knowledge-based economy. It identifies “thirty middle-skill jobs the American South can’t live without.” The jobs include nuclear technicians, aircraft mechanics, electricians, plumbers, operating engineers, nurses, dental hygienists, respiratory therapists, diagnostic medical sonographers and 20 more, paying between $31,000 and $68,000 a year.

The report provides no evidence, such as rapidly rising wages for these middle-skill jobs, that employers in the South can’t find workers with these skills. But let’s ignore this inconvenient fact for the moment and examine the kinds of jobs the Georgia Works program trains participants for.

A review of data for the Georgia Works trainees who found employment between November 24, 2009 and September 30, 2010 shows two-fifths found jobs doing general clerical work. Hundreds more found jobs as non-professional child care workers, janitors, retail sales persons, restaurant and fast food workers, hotel clerks and maids, or drivers and chauffeurs. In total, 70 percent of the trainees hired after the end of the training program found employment in these or similar low-wage jobs.

The list of higher-paying jobs that trainees found after completing the 8-week Georgia Works program includes child care teachers, auto repair workers, social workers, barbers and attorneys. These are not jobs that can be mastered in six weeks at a workplace, working under the employer’s watchful eye. In other words, at best a small fraction of Georgia Works alums graduate into middle-class jobs as a result of the training received in the program.

There is nothing wrong with using a period of high unemployment to provide workers with meaningful training for jobs that pay high wages . But the Georgia Works program seems ill-equipped to do this. We should be under no illusion that even excellent training programs will solve the nation’s short-term unemployment problem. It will take strong demand to encourage employers to create ‘middleskill’ jobs – and restraints on corporate greed to assure that those jobs are fairly paid.

In his jobs speech today, the President needs to lay out a concrete plan to get the economy on track with robust growth and strong demand for workers. And he needs to tell us what the government will do right now to put people back to work.