In the Midwest, we hear a lot about retraining. A lot of the money for retraining and other job services comes from the federal government, through the state…to local programs like this one in Jackson, Michigan.
Sfx: milling machine
Sparks fly as Ron Waldon grinds the surface off a steel block. Soon he’ll learn to program computerized milling or c-n-c machines. It’s a hot skill for someone who’s had a rough few years.
WALDON: Aw man, ups and downs, I lost the job, lost the house…
Temp work here and there…nothing steady.
WALDON: Suddenly, you’re just not part of society anymore without a job. You lose that independence or that self-worth, I guess.
Todd Debenedet is also retraining.
DEBENEDET: You can only mow the lawn so many times you can only walk the dog so much. And getting back to work and being like he said a productive society member would be very important.
Personally important, for sure. But what is the economic impact for the public? There’s a big debate right now about how effective these programs are, how many there should be, and how involved government should get. Which all led to a near death experience for the main source of workforce development funding. Ron Painter is CEO of the National Association of Workforce Boards.
PAINTER: In the last budget cycle that was introduced, the House Republicans zeroed out the Workforce Investment Act. So that was a pretty clear signal that we had a lot of explaining to do.
QUINN: Well, after my stomach settled a little bit, I actually started saying what do we need to do?
Christine Quinn is president of South Central Michigan Works, where 100 thousand people sought job services last year …and that’s just from three counties. Their funding survived, but not unscathed. And Quinn decided the old performance metrics weren’t enough. She wanted a tool to show whether benefits to the public outweigh costs to the taxpayer.
QUINN: Somebody wants to see what that dollar value is. It’s not necessarily touchy feely, it’s not the fact that you see somebody get a job who has who has been struggling for so long, which is important. But we also have to have the hard data too.
South Central Michigan Works just released a benefit-cost analysis of their programs for 2009. It says every public dollar spent should generate $1.22 in benefits over a decade. The state of Ohio may go even further. It recently completed a pilot project measuring return on investment for its dislocated worker program. This kind of study analyzes not just wages earned, but things like reductions in unemployment compensation or food assistance. And it’s hard to do well.
HOLLENBECK: If I were administrator of the day, I would not do it by return on investment. I understand I’m kindof shooting myself in the foot.
This foot-shooter is Kevin Hollenbeck, vice president and senior economist at the Upjohn Institute in Kalamazoo. And he’s actually one of the guys who’s written the book on measuring the returns of workforce development programs.
But he says measuring return on investment involves a lot of assumptions about what would’ve happened to people if they had never encountered these programs. And how much money they would have earned. And that means analysts … and policymakers … could end up comparing very different things. Instead, he’d like to see more research on what kind of assistance really helps.
HOLLENBECK: In my work, we more or less treated the program like a black box. People came in, something happened, and then there was a result. And the something happened, we really haven’t done a lot of research on what’s best for whom.
And as for outcomes, Kevin Hollenbeck says a good consistent measurement of plain old earnings is the way to go. For Changing Gears, I’m Kate Davidson.
