The Young and the Jobless

Cuts to Job Programs Will Stifle Employment Options for Young People

On March 2 Congress approved another short-term spending plan to continue funding the federal government through March 18. Under this latest agreement, the federal government will continue to function at the fiscal year 2010 funding level, with a $4 billion reduction in spending. During the next 16 days congressional leaders will be working to address differences between House Republicans and Senate Democrats over the proposed cuts to domestic discretionary programs for the remainder of fiscal year 2011. These cuts, if approved, will take effect during the remaining seven months of the fiscal year, which ends on September 30.

The stakes are extremely high for low-income individuals and families who frequently rely on these domestic programs to escape economic hardship and find employment. House Republicans have proposed dramatic reductions to employment and training programs within their $61 billion in cuts. The Republicans’ plan would cut or eliminate more than $4 billion from employment training programs. At a time when the nation’s economy is slowly recovering, eliminating or dramatically slashing programs that promote skills building and help dislocated workers get back into the workforce is a dramatic departure from the reality of our current economic situation.

While controlling the nation’s deficit is an appropriate and necessary goal, cutting programs that strengthen our workforce and increase the nation’s productivity is the wrong strategy to implement given the fragile state of our economy. A recent analysis by Donna Cooper, Senior Fellow at the Center for American Progress, showed a number of ways congressional leaders could implement more progressive policies that would achieve the same level of deficit control while protecting critically needed job training programs. Cooper estimated that Congress could achieve $4.1 billion in savings simply by eliminating the tax breaks given to the offshore operations of U.S. financial companies.

How will these employment and training cuts impact individuals hardest hit by the recent recession?

Nearly 14 million Americans continue to be unemployed according to the latest Bureau of Labor Statistics employment report. Many have been out of work for more than two years. Reducing employment and training dollars at this point will further limit training opportunities for low-skilled workers and cut their abilities to gain a foothold on the middle class. The proposed cuts could stifle our fragile economic recovery and push more Americans into poverty and economic hardship. Because of the broad nature of the proposed employment and training cuts, every segment of the workforce will be impacted. Seniors, youth, and adults seeking to enter or move up in the workforce will be at risk of losing employment services and job training slots under the Republicans’ plan.

proposed cuts to training programs

The National Skills Coalition estimated that if the proposed employment and training cuts were to pass, more than 3,000 Workforce Investment Act, or WIA, One‐Stop Centers around the country would have to begin the process of closing their doors. WIA One-Stop Centers provide a full range of assistance to job seekers in one location. Services include training referrals, career counseling, and job listings. Closing these centers would likely cause thousands of new job losses, and deny access to the more than 8 million workers who received WIA-funded services at a time when many employers simply cannot find skilled workers to fill available jobs. A 2009 Business Roundtable survey found that 61 percent of U.S. employers said they were having difficulties finding qualified workers to fill the vacancies in their companies.

Of all the groups targeted in the House proposed job training cuts, youth will be the most dramatically impacted. The WIA one-stop system is a major source of job training for youth seeking to move into the workforce. WIA-funded programs provide targeted skills development for youth ages 14 to 21. These programs provide employment and/or post-secondary education through connections between academic and occupational learning. Many of these training opportunities will be eliminated. The proposed cuts also slash more than $300 million from the Job Cops program, which is specifically designed to help disadvantaged youth get work experience and credentials. With more than 20 percent of youth ages 16 to 24 unemployed—an all-time high—these cuts will further balloon unemployment among youth.

Research conducted by the National Urban League Policy Institute shows a dramatic reduction in teen employment over the last decade. Between 2000 and 2009, the share of employed teens was down 40 percent for blacks and 35 percent for whites. Teenage summer labor force participation has also declined dramatically since 2000, going from 52 percent in the summer of 2000 to 38 percent in the summer of 2009. Slashing funding for youth training programs has the immediate impact of limiting the amount of resources low-income employed teens bring into their families, but it also has a long-term impact of slowing the development of their skills, which is critical for future employment and wage advancement.

Creating good jobs must be a domestic priority

Developing innovative workforce policies to help more low-wage workers increase their incomes and move into the middle class is a key strategy of the Half in Ten campaign. Creating these “good jobs” with living wages, employee benefits, and worker flexibility will require new strategies to prepare workers and link them to high-growth industries. Without a strong workforce development system, low-wage workers will continue to face challenges in meeting the new demands of the changing economy. Employers will also face difficulties finding the appropriate workers to meet their needs. If companies can’t find the skilled workers domestically, many will shift their operations to other countries where they can find skilled labor, frequently at a lower cost. One of the fastest ways to reverse this outward flow of jobs is to support training programs for more American workers.

In a statement issued by the House Appropriations Committee Chairman Hal Rogers, he states “The Continuing Resolution represents the largest reduction in non-security discretionary spending in the history of the nation…it answers the calls to right our nation’s fiscal ship.” Cutting programs that were developed to train our workforce, increase employment opportunities, and expand the number of Americans contributing to the nation’s economic productivity is certainly not an effective way to “right our nation’s fiscal ship.” In fact, cutting these programs will further shrink the amount of skilled workers in the workforce and likely maroon us in a lengthy period of low productivity.