Federal Job Training Follies

August 15, 2011

It’s darkly comical that the same entity responsible for killing countless private sector jobs with its taxes and regulations operates job training programs. Cato has been documenting the failures of federal job training programs for decades, but “do something” policymakers in Washington refuse to accept the reality that they’re not the solution to problems that they help create.

Here’s James Bovard from a 1986 Cato policy paper on “The Failure of Federal Job Programs”:

Federal job-training programs have harmed the careers of millions of Americans, failed to impart valuable job skills to the poor, and squandered billions of dollars annually. For 25 years, government programs have warped work ethics, helped disillusion generations of disadvantaged youth, and deluged America with fraudulent statistics. After spending over a hundred billion dollars on manpower programs we have learned little or nothing: today’s programs merely repeat the mistakes of the early 1960s. Federal programs have reduced the incomes of millions of trainees and have helped create a growing underclass of permanently unemployed Americans.

We can now make that 50 years.

A couple of recent items in the news point to the wastefulness of federal job training efforts. In the first, federal money was used to send North Carolina youths to Walt Disney World for a leadership program. (Talk about a “goofy” use of taxpayer money.) In the second, a $19,155 federal grant was awarded by local officials in Lake County, Illinois to a firm so that it could train and hire one worker. The grant was awarded after officials “struggled to find local employers who wanted to participate.”

A recent Cato essay on federal job training programs cites similar examples compiled by Sen. Tom Coburn’s (R-OK) office, including a Tampa Bay government agency that spent tens of thousands of dollars of federal job training funds on lunches, hotels, flowers, event tickets, and other perks for managers. The essay explains that local officials have little incentive to spend federal funds wisely and end up wasting money just trying to comply with federal red tape:

This sort of waste in federal job training and employment programs has been ongoing for decades. Local administrators of these programs have been known to inflate program accomplishments, overcharge the taxpayer for superficial services, and divert funds to illegitimate purposes… Auditors catch some of the sorts of waste exposed by Senator Coburn, but federal taxpayer money is never efficiently spent when it gets thrown out the door in hundreds of subsidy programs to thousands of state and local governments. State and local governments consider the federal money “free,” and they have little incentive to spend it wisely.

Another problem with doling out federal subsidies to the states is the huge bureaucratic apparatus involved. At the federal level, for example, there are more than 750 well-paid employees in Department of Labor’s Employment and Training Administration (ETA). Or consider this taxpayer expense—the ETA spends about $100 million a year on various research studies and evaluations.

At the state and local levels, federal subsidy programs require a huge apparatus of administrators to follow all the federal regulations and write all the required reports to the federal government. For example, each state must prepare a massive annual “strategic plan” to the Department of Labor in order to receive its Workforce Investment Act funding. These reports, which can be examined at www.doleta.gov/usworkforce/wia, are often more than a hundred pages in length. One can imagine how many administrators in each state are needed to compile these reports every year.

As the essay concludes, federal job training programs should be abolished because they “provide little practical benefit, are duplicative of private efforts, and are not a proper federal responsibility under the Constitution.”


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