Wednesday, January 03, 2007

Getting Serious About Worker Retraining

Jonathan Cohn has a fascinating article up on the New Republic site touting Denmark as a country that has managed to post world-class economic growth and employment figures despite maintaining (with some important reforms) a generous social safety net. The whole article's worth reading and pondering, but there's one detail in Cohn's account of the Danish experience that especially caught my attention:

Denmark spends more than 4 percent of its GDP on its labor market programs--the most of any country in the n Organization for Economic Cooperation and Development (oecd) and more than 20 times what the United States spends on its worker-training programs
There's been a long-raging debate in U.S. progressive circles over the proper role, if any, of worker retraining initiatives in coping with job loss and other economic dislocations associated with both technological change and with globalization. Those of us from the Clintonian pro-trade persuasion are often accused of advocating better education, and particularly worker retraining, as a substitute for direct government efforts (e.g., trade restrictions) to prevent job dislocations before they happen. Indeed, deriding worker retraining opportunities as a sort of withered booby prize for people who ought to expect their government to protect the jobs they already have is a habit that's recently spread from protectionist circles to many progressive writers and thinkers, mainly because of growing evidence that high skill levels don't necessarily insulate workers from offshoring and other globalization-related dislocations.

I certainly don't think of worker retraining as a silver bullet, and don't intend to get into the general argument over globalization in this post. But as Cohn's article illustrates, before anyone buries worker retraining as one of many strategies for coping with globalization, maybe we should actually try it, because we haven't. For all the talk about worker retraining, the U.S. had never made s significant investment in this resource as compared with other countries. And despite many proposals for overhauling our cramped, uneven and bureaucratized system of training programs, and despite several cosmetic changes (i.e., the Workforce Investment Act, following the Job Training Partnership Act), it's still a mess, and hardly a genuine national commitment.

The Clinton administration is partly to blame for the disconnect between its rhetoric of universal and easily accessed worker retraining resources and the underlying reality. This was, in fact, one of those "investments" that never much survived the initial Clinton budget, with its emphasis on deficit reduction. But in my view, the Congresses, including Democratic-controlled Congresses, of the early to mid-1990s, deserve more of the blame, thanks to their bipartisan deficit reduction strategy of freezing spending on various discretionary programs without setting real priorities among them. A new and robust commitment to worker retraining was one of the casualities of this everything's-equal approach.

There remain plenty of proposals out there for getting serious about worker retraining. Back in 1996, former PPI vice president and Under Secretary of Commerce Dr. Rob Shapiro suggested that the "non-discrimination rule" that denies companies tax write-offs for health care benefits unless they are offered to all employees be extended to training and retraining benefits. And it's not that hard to figure out ways to cut through the bureaucracy and offer workers direct support for retraining, as illustrated by Paul Weinstein's PPI proposal for "New Economy Scholarships."

My fear is that the debate over the role of worker retraining as a response to globalization is blocking investments and reforms in this area that no progressive should oppose. After all, no one pretends that any government action can eliminate job churn, job loss, or the need for individual workers to upgrade their skills. Why deny workers these opportunities? To prove a point about their insufficiency as a total solution to economic insecurity? Beats me.
-- Posted at 2:47 PM | Link to this post | Email this post

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