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Executive Summary #1597 on Jobs, Jobs and Labor Policy

October 1, 2002

October 1, 2002 | Executive Summary on Jobs, Jobs and Labor Policy

Executive Summary: Congress Spends Billions on Ineffective Job-TrainingPrograms

President Bush's proposed U.S. Department of Labor (DOL) budget for fiscal year (FY) 2003 is intended to promote effective programs while reducing or eliminating programs that are unproven or duplicative. However, proposals by the Administration and the Senate fall short of funding effective programs.

  • The Administration proposes $4.975 billion for job-training programs authorized under the Workforce Investment Act of 1998 (WIA) that have not undergone rigorous evaluations to determine their effectiveness.
  • The Administration also proposes spending $1.54 billion on the Job Corps, which it has deemed a "highly successful" program despite evidence that the program has failed either to increase the wages of participants to any substantial degree or to move them into full-time employment.
  • The Senate intends to spend over $5.6 billion on Labor Department job-training programs--a 13.2 percent increase over the Administration's request.

To date, there has been a lack of empirical evidence that job-training programs authorized under the WIA are effective in increasing the wages of participants. Experimental evaluations have been done for two major federal job-training programs--the Job Training Partnership Act (JTPA) and the Job Corps.

The National JTPA Study

The JTPA was found to be largely ineffective in increasing the incomes of participants. Specifically:

  • Classroom training for adult men and women failed to raise the incomes of participants, and other JTPA interventions--on-the-job training and "other services"--failed to raise the incomes of adult male participants.
  • In general, JTPA training had no significant positive impact on the incomes of female and male youths.
  • JTPA programs did not increase the hourly wages of adult men and women, strongly suggesting that in the opinion of employers, JTPA did not increase the skills of participants.

The National Job Corps Study

The findings with regard to Job Corps programs were similarly sobering:

  • The estimated average increase in weekly incomes of Job Corps participants was never more than $25.20.
  • The Job Corps did not increase the incomes of 18 and 19-year-olds, who represent 32 percent of the population served by the program.
  • The Job Corps did not increase the incomes of Hispanics, who represent 18 percent of all youths served by the program.
  • The wages of participants increased by only $0.24 per hour and then dropped to $0.22 per hour.
  • During the course of the study, the average time participants spent working each week never rose above 28.1 hours. Participants never averaged working more than two hours per week more than the control group.
  • Despite costing the taxpayer $16,500 per participant over an average of eight months, the program failed to move a significant number of participants into full-time employment.

The government should cease spending tax dollars on job-training programs that are unproven or have trivially low positive effects for their participants. A substantial portion of the nearly $5 billion designated by the Administration for job training should instead be allocated to decreasing the federal government's budget deficit--which is projected to be $145 billion for FY 2003--or redirected to vital homeland security efforts.

Conclusion

In crafting their version of the Labor, Health and Human Services, Education Appropriations Bill for FY 2003, Members of the House now have an opportunity to rectify the failure of both the Administration and the Senate to curb wasteful spending. Given the return of budget deficits and the high cost of combating terrorism, Congress should reaffirm and act on its commitment to de-fund ineffective programs by:

  • Further reducing funding for WIA programs beyond the Administration's request, and
  • Eliminating the Job Corps, which has failed either to increase participants' wages to any substantial degree or to move participants into full-time employment.

David B. Muhlhausen is a senior policy analyst in the Center for Data Analysis at The Heritage Foundation.

About the Author

David B. Muhlhausen, Ph.D. Research Fellow in Empirical Policy Analysis
Center for Data Analysis

Related Issues: Jobs, Jobs and Labor Policy