February 27, 2008
RALEIGH – North Carolina plans to spend more than $49 million of state tax revenue and oversee spending of more than $475 million on job training and placement programs in the next budget year, even though researchers consistently call such government programs wasteful, inefficient, and sometimes counterproductive. That’s a key finding in a new John Locke Foundation Spotlight report.
“The research literature on government job-training programs is clear,” said report author Jon Sanders, JLF Policy Analyst and Research Editor. “Evidence of waste and inefficiency is so strong that many researchers have moved beyond the question of the value of government programs to focus instead on why they do so little good.”
Sanders’ report suggests North Carolina government could improve job training by consolidating programs, reducing obstacles to school choice, and getting out of the way of private training options. That’s because ineffective government programs contrast sharply with private job training, Sanders said. “Researchers continue to find that private providers of job training yield strong, positive results.”
Twenty-seven government training and placement programs in North Carolina span 13 state departments and divisions, Sanders said. “When you factor in federal, state, and local sources, total state expenditures for job training and placement services in North Carolina topped $476 million in 2005-2006,” he said. “In the budget year that starts July 1, the state plans appropriations of $49.2 million for programs buttressed with federal and local grants. That total does not include any spending on postsecondary education, degree-based training, and receipt-based adult education through community colleges and universities.”
Outcome data for North Carolina’s programs show “only modest benefits,” Sanders said. “Only 29 percent of North Carolina clients in the federal Job Training Partnership Act entered employment as a result of the program,” he said. “After 90 days, just 26 percent still had jobs. The same proportion of Employment Security Commission job office clients were placed in jobs. About 41 percent of Vocational Rehabilitation clients found jobs after completing that program.”
Private and company-sponsored training provided “positive and large” results, Sanders said. On-the-job training offers special benefits to both the employer and the worker. Charitable groups also offer valuable training in areas such as the “soft skills” that make a person employable at any job. These include timeliness, proper attire, good hygiene, and a good work ethic.
Given the limited benefits of government job training programs, the state could benefit from changes, Sanders said. “Consolidating some of the more than two dozen existing job training programs would help improve oversight, and it would also reduce redundancy and some inefficiencies,” he said. “Government should also stay out of the way of job training that works, such as on-the-job training, individual investment in private training and degree programs, and private life-skills and job-training charities.”
Government leaders can also take active steps to improve job training, Sanders said. “For instance, they could remove existing obstacles that block many different kinds of private providers of job training. This includes the field of education, in which the state charter school cap, limited school enrollment options, and forced busing reduce the options that lead to better programs. Government could also take positive action to encourage schools to teach personal responsibility and the importance of ‘soft skills.’”
Throwing more money at existing programs will not improve job training, Sanders said. “When hundreds of millions of dollars are diverted into failing activities, the harm is not only manifest in the wasted time of the participants and the program administrators, but also hidden in the unseen, lost alternative investments of those dollars.”
Jon Sanders’ Spotlight report, “Job Training That Works: Public programs stagnate, while private and charitable training excels,” is available at the JLF web site. For more information, please contact Sanders at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].