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Wall Street Journal
October 13, 2003
Clues to the Cure For Unemployment Begin to Emerge
One-Stop Career Centers And Cash Incentives Yield Successful
Job Searches
Three years ago, John Maynard lost his $10-an-hour job at a Belfry, Ky., coal
mine. "They sold the mine and didn't give us any warning," he says.
He asked his wife to inquire about night classes at the local community college.
None were available, but there was a daytime program in servicing electronic
and electrical equipment. "She said we'd try to make it on one income if
I'd go back to school," he says.
So he did. But first he stopped by Pike County JobSight, one of 1,900 "one-stop
career centers" across the U.S. created by Congress in 1998 to serve as
worker first-aid stations. The center steered him to a "dislocated workers"
program that covered two years of tuition and books at the community college,
plus about $5 a day for gas and food, for a total of $4,156.
After finishing school in May 2002, he took a night job tending the electricity
at an industrial bakery, then found a day job at a hospital. Then last fall,
the college called -- with a job offer. "I thought they were joking,"
he says. "I'm just a country boy." Today, Mr. Maynard, 39 years old,
earns $31,000 a year teaching electronics at the Big Sandy Community and Technical
College program from which he graduated.
Sometimes, the system works.
A dynamic economy continually throws off workers as industries are made obsolete
because of evolving technology, globalization or changing consumer tastes. It
constantly creates new industries and jobs. But even in good times, the displaced
workers often aren't the ones who find new job opportunities.
These are not good times. The U.S. economy is growing again, yet it has been
unusually slow to add new jobs. The Bureau of Labor Statistics says new and
expanding businesses added fewer jobs in the fourth quarter, 7.75 million, than
in any quarter since 1995. Shrinking or shuttered businesses cut 70,000 more
jobs than that. One in every five unemployed Americans has been out of work
for more than six months. The result is an economic recovery that doesn't feel
like one to many workers and increasing pressure on politicians to do something
about "the jobless recovery."
There are some winners, such as Mr. Maynard. But there are plenty of losers.
Among them are the people profiled in this series: the 57-year-old laid-off
steel worker without health insurance, the 30-year-old executive who lost a
$94,000 job and took one that pays half as much, and the Pennsylvania factory
workers who can't find a factory to work in.
Perhaps the best cure for their woes would be a return to the unusually strong
economy of the late 1990s, when unemployment fell so low that employers couldn't
be picky. President Bush and Federal Reserve Chairman Alan Greenspan are working
on that, arguing that tax cuts and interest-rate cuts are more effective remedies
than government worker-aid programs.
Because that medicine is working so slowly, others seek to protect workers
by blocking job-threatening advances in trade, technology or competition. But
that strategy would arrest the very forces that have improved the lives of Americans
over the past 50 years.
So the pressing questions are these: Besides getting the economy going again,
what can society do to help workers who played by the rules but are victims
of economic progress? How can it help them find good jobs and learn the skills
to do them? How does it assist workers too old to learn new trades?
Decades of experimentation offer plenty of examples of failed government programs.
Federally run training programs, often created in response to the government's
own flawed projections of job vacancies, don't work well. They proved easy to
start, expensive to operate, discouraging in results and politically tough to
kill.
But other things do work, including prodding unemployed workers to really look
for jobs. Offering them services such as advice, access to resume-writing software,
tips on using Internet help-wanted sites and workshops on interviewing for jobs
is cheap and actually helps. Trials in several states also suggest that unemployed
workers who are given cash incentives to find work get jobs faster.
For those jobless workers who need something more, giving them the money to
go to community colleges or attend other training programs specifically tailored
to meet local employers' needs also appears to pay off. But the government has
been unwilling to spend enough to meet the demand for such training, particularly
in today's weak labor market.
The plight of workers displaced by technology or trade isn't new. Nor is the
urge to offer them a helping hand. In the 1950s, Americans were terrified that
automation would result in unemployment. Congress held hearings and the Ford
Foundation commissioned reports. Pennsylvania launched a training program for
the unemployed in 1952. Seven years later Armour Meat Packing Co. agreed to
put 14 cents for every 100 tons of meat shipped into an "automation fund"
to pay for retraining.
In 1962 Congress put the first big money behind training the unemployed. "For
too long a time we have paid lip service to our nation's manpower problems without
doing anything significant to solve them," President Kennedy said at the
time. "Now we have a potent tool which can be used effectively against
unemployment and for the promotion of a highly skilled labor force throughout
the entire nation."
Since then Congress repeatedly has expanded and reorganized worker-aid programs.
It has added programs aimed specifically at welfare recipients, Native Americans,
disabled veterans and workers hurt by imports, ignoring economists who counsel
against such targeting.
Congress replaced the 1962 Manpower Training and Development Act with the Comprehensive
Employment and Training Act in 1973, replaced that with the Job Training Partnership
Act in 1982 and replaced that in 1998 with the Workforce Investment Act.
Each bill was described as a move to consolidate redundant programs, move decision-making
to state and local levels and forge closer ties with employers. Today, the congressional
General Accounting Office says, the federal government has 44 separate training
programs administered by nine federal agencies that spend about $12 billion
on employment and training each year.
The one consistent government lifeline to the jobless is unemployment benefits,
which in the fiscal year that ended Sept. 30 cost about $52.7 billion. Economists
and others have expended considerable effort trying to figure out the optimal
amount of unemployment insurance. If benefits are too generous, people don't
look for work or accept available jobs.
That's the lesson learned in Europe, where unemployment is persistently higher
than it is in the U.S. "In Europe, we've tended to allow people to live
on benefits for too long without putting enough pressure on them to take existing
vacancies," says Richard Layard of the London School of Economics. The
other option is to make benefits miserly and "starve people back to work,"
as Mr. Layard puts it, which is what he believes the U.S. does.
In this country, roughly a quarter of those who quit their jobs or are laid
off are ineligible for unemployment benefits, often because they've worked part-time
or haven't earned enough to be part of the system.
Most people who are eligible collect an average of about $250 a week for up
to 26 weeks in ordinary times, often longer in times of high unemployment like
these. A few experiments by states suggest that workers find work a bit faster,
and thus save the government money, if offered a bonus of between $500 or $1,000
for finding a job. But few states are doing that now.
President Bush, as part of his economic-stimulus plan, earlier this year proposed
giving workers deemed most likely to remain unemployed as much as $3,000 to
spend on counseling or training -- or to keep if they found a job quickly. But
Congress didn't bite, largely because of arguments over details, financing and
whether it was the sort of stimulus that the economy needed at the moment.
Less controversial is a bipartisan push to merge unemployment-benefit offices
with those that provide job-hunting advice or training. The idea is to create
one-stop career centers, like the one Mr. Maynard visited in Pikeville, Ky.,
which is among 14 identified by the General Accounting Office as a model.
Mable Duke, director of the nonprofit organization that runs the Pikeville
center, says that federal law offers flexibility that many other programs haven't
taken advantage of yet. When a new restaurant fretted that it had trouble keeping
workers because it required them to work rotating shifts, Ms. Duke's agency
devised a way to find workers comfortable with such a routine. The organization
asked applicants to attend orientation and job-shadowing sessions -- at 6 a.m.
one day, 2 p.m. another and 10 p.m. on a third. That quickly winnowed out those
who couldn't handle the work schedule.
One significant, and largely unforeseen, development over the past decade is
the growing role of temporary-help firms, as a way for the unemployed to find
work and for employers to try out prospective hires.
Mary Whalen, 53, lost her job as an accounting assistant at a five-person Milwaukee
accounting firm the day before Thanksgiving 2002. Her firm needed to cut costs
after its health insurer raised premiums more than 30%, she says. Through a
brochure publicizing a job-hunting seminar, she found a one-stop career center
in Milwaukee. A job counselor offered to call Manpower, the temporary employment
agency, for her. "I don't think I would ever have considered that,"
Ms. Whalen says.
About six months after losing her job, she began working for Manpower as an
accounts-receivable clerk at Rockwell Automation Inc. for $12 an hour, $1 an
hour more than she had been making, but without health insurance. Co-workers
have told her that the company often hires temps as permanent employees after
a year or two, she says.
With a two-year degree in accounting and experience, Ms. Whalen has skills
that employers need. Other unemployed workers don't. Retraining seems like a
common-sense solution, but doing it well has been a vexing problem for decades.
The problem, says Lawrence Katz, a Harvard economist who worked in the Labor
Department during the Clinton years, is that "we've developed a hodge-podge
of fairly ineffective programs, like the ones for which you qualify only if
you get displaced through trade, defined in a certain way that means union workers
are more likely to benefit."
Recently, the government has begun to move, albeit haltingly, toward providing
unemployed workers with vouchers or grants that allow them to buy training from
public or private providers. The Bush administration says it wants to fold funding
for several existing federal programs into grants to states to improve flexibility
and efficiency.
Administration critics charge that is just a way to spend less despite the
growing number of workers in need. Not so, says Labor Secretary Elaine Chao.
"We are great at rendering social services," she says. "We need
to improve in terms of actual job placement. We provide a great deal of training,
but the training may not always result in a real job."
University of Chicago economist James Heckman, a Nobel laureate and a skeptic
of government programs, says that when it comes to government training, "there
are very few success stories." But he adds, when training is "related
to basic education, like if you send somebody young to a community college to
learn a basic skill, the returns are positive."
That's why some economists are encouraging programs that give jobless workers
a seat in a community college or other training programs. In Oregon, Portland
Community College has added intensified training programs for dislocated workers
to its curriculum.
When times were good, Sue Caswell earned $65,000 a year as a sales engineer
for various electronics companies on the West Coast. Then in March 2002 she
was laid off by Radar Electric Co., a regional distributor of electromechanical
parts. At age 50, she had a hard time finding a job, especially in the depressed
electronics business. An aptitude test she took at a one-stop career center
pointed her to health care, one of the few industries that seem to be hiring.
Ms. Caswell, who is separated from her husband and raising a 12-year-old daughter,
was intrigued, but says she told the counselor that she didn't have a lot of
time to devote to training. The counselor sent her to Portland Community College's
phlebotomy program, so she could learn how to draw blood. She qualified for
federal dislocated-worker grants to pay tuition and collected $400 a week in
unemployment benefits while in school. Ms. Caswell finished the 12-week class
and a three-week internship in June, only to find that prospective employers
demanded a year's experience.
But she was persistent, taking her résumé along when her daughter
had blood drawn at a local hospital. After months of silence, the hospital called.
She began work on Sept. 29 at Tuality Community Hospital in Hillsboro, Ore.
The job pays only $11.31 an hour, "pretty much the bottom of the pile,"
she says. "If I was not so motivated to change fields, I'd be discouraged.
I'm not." Once she finishes probation, she'll be eligible for tuition assistance
and she plans to return to school part time and move into a higher-paying job.
Several states are paying more attention to protecting existing jobs. For the
past decade in Rhode Island, a small fraction (0.21% of wages) of the unemployment
tax collected from employers has been diverted to a fund overseen by the state's
Human Resource Investment Council. Employers can tap that $9 million-a-year
kitty for training.
Like many small manufacturers, Pilgrim Screw Corp., a Providence, R.I., maker
of aerospace fasteners, did barely any training a decade ago, says Gary Grove,
its president. But, he says, "We needed to figure out how to compete in
a world in which manufacturing jobs are leaving the country in droves."
When Lockheed Martin Corp. insisted that suppliers such as Pilgrim train their
workers statistics-based quality-control techniques, Pilgrim and a few other
companies banded together to hire a consultant to save money. That led to the
creation of a manufacturers' training consortium, funded in part by $700,000
from the state over the past five years.
Even optimistic observers doubt that much can be done to help many workers
approaching retirement who lose their jobs and are looking for comparable work.
One option is to offer them a kind of "wage insurance." The idea is
to supplement their wages if they take a job that pays much less than their
old one. Another possibility is to subsidize health insurance that often disappears
with a job, and essentially help these workers get by until they reach retirement
age.
The government took a step in this direction last year with the creation of
the Health Coverage Tax Credit, which pays 65% of health-insurance premiums
for workers who lose their jobs because of trade or whose pension plans have
gone bust. Proponents see it as a big step toward a strengthened safety net
for older, displaced workers.
The program is making a big difference to Kenneth Kyle, a 59-year-old disabled
former employee of the railroad at Bethlehem Steel Corp.'s Sparrows Point plant
in Baltimore. For the first few months he was out of work, the company charged
him $346 a month for health insurance. Then Bethlehem was sold, and it stopped
paying its share of his insurance as of March 30. As required by law, it allowed
him to buy it for $1,064 a month, but that's a lot for a worker with a $1,134
a month pension and a wife who works part-time at Wal-Mart.
He paid the premium for four months, then switched his coverage when Maryland
inaugurated a new program for people who haven't any place to turn for health
insurance. Now, using his federal tax credit, he spends $366 a month for health
insurance.
But expanding such programs has proved to be difficult, in part because workers
who benefit and their unions are unenthusiastic. Explains Gene Sperling, a former
economic adviser to President Clinton: "They say, 'We don't want burial
insurance. We want new jobs.' "
The Daily Independent
October 11, 2003
Expert Thinking vital to learning
Downtown conference draws about 500 to Ashland
ASHLAND The electronic lures of modern mass culture sap interest in learning
and make teaching more difficult, an education expert said Friday.
"Contemporary teaching seems to be losing the battle," said Vincent
Ruggiero, emeritus professor of humanities at the State University of New York
at Delhi.
Emphasis on critical thinking could change the course of the battle, said Ruggiero,
speaking to teachers and university professors on the first day of Ashland Community
and Technical College's Teaching/Learning Conference.
For education reform to work, educators need to identify problems, figure out
how to solve them at the institutional level and find effective ways to teach
in the meantime, he said.
Emphasis on thinking is the key, but the self-indulgence, impulsiveness and
instant gratification that are hallmarks of recent mass culture all discourage
thought, he said.
One culprit is what Ruggiero calls "mindstuffing," or emphasis on
accumulation of information. Rather, he said, teachers should stress thinking.
He also advocates return to traditional notions of truth as objective rather
than subjective and scoffs at the idea that self-esteem promotes achievement.
Teachers can promote thinking and still cover the material by designing "thinking
challenges" into the coursework and developing "a thinking atmosphere."
The demands of modern education lead to some of the faults Ruggiero outlined,
according to Mary Wittrock, a professor of business studies at Gateway Community
and Technical College in the Covington area. "I think teachers are guilty
of mindstuffing, because there is so much we have to teach. The information
has increased so profoundly."
Ruggiero's talk was part of two days of intensive sessions at the conference,
which drew about 500 people to downtown Ashland.
The sessions send teachers back to the classroom with renewed enthusiasm, said
Jessie Singleton, who specializes in early childhood education for the Ashland
Independent School district.
"I can take these strategies back to the classroom," Singleton said,
following a session on differentiated instruction, which means teaching to children
with diverse needs.
She'll also use what she learns at the conference in consulting work she does
with 33 other Kentucky school districts.
The payoff for Donna Suman is "learning new ways to teach," she said.
"I'm hearing some innovative things I can take to the classroom,"
said the Crabbe Elementary third-grade teacher.
Some are as simple as a technique she described for tired children at the end
of a class: Have them turn their chairs around with the backs facing the desk,
kneel on the seats bending over the desk, and write the answer to the last problem
in that position. That way, they can bend and stretch and relieve their weary
limbs, she said.
The conference continues today.
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