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.