In January, U.S. unemployment dropped to 8.5 percent, its lowest rate in nearly two years. Payroll employment increased by 200,000 jobs at the end of 2011 and by an average of 137,000 jobs from October to December, according to The Hamilton Project of the Brookings Institution, a Washington, D.C.-based public policy firm.
Recent research by The Hamilton Project—which seeks to advance America’s promise of opportunity, prosperity, and growth—shows that many American workers face serious difficulties in the labor market despite the improving employment landscape, and those with less formal education and fewer job skills are most at-risk. The median earnings of a high school graduate today are lower than they were in the early 1970s (after adjusting for inflation), and employment rates for this demographic have fallen from 81 percent in 1989 to 71 percent today.
“In today’s increasingly global economy, ensuring workers have adequate skills is critical to putting Americans back to work in good-paying jobs,” says Adam Looney, policy director at The Hamilton Project.
To aid this struggling workforce segment, The Hamilton Project recently released two policy proposals for worker training. “Raising Job Quality and Skills for American Workers: Creating More-Effective Education and Workforce Development Systems in the States” proposes a competitive grant system built on existing training programs for disadvantaged workers. States would receive funding to create training provider and industry partnerships, thereby helping to develop the job skills that hiring employers seek.
The second proposal, “Policies to Reduce High-Tenured Displaced Workers’ Earnings Losses through Retraining,” outlines a U.S. Department of Labor-administered Displaced Worker Training (DWT) program. DWT would aid workers who have experienced severe wage losses after re-employment by providing grants for long-range training.
Department of Labor spending on workforce training has gradually declined since 1985 (despite a sharp spike in 2009 due mostly to the American Recovery and Reinvestment Act). For this reason, Looney urges policymakers to target only the most effective programs: “By directing training funds at programs with a track record of success and engaging employer and industry partners, we can better prepare today’s workers, and future generations, for the global marketplace.”