Congressional conferees are working out differences in the recently passed House and Senate job training reform bills. The House-passed legislation, the Employment, Training, and Literacy Enhancement Act of 1997 (H.R. 1385), would amend current job training laws; the Senate bill, the Workforce Investment Partnership Act (S. 1186), would replace those laws. Both bills would consolidate over 60 job training and education programs into three main block grants to states and localities for adults, dislocated workers, and youths. Both bills passed by substantial margins: 343 to 60 in the House and 91 to 7 in the Senate.

The bills include improvements over the current program, including providing states with greater flexibility to develop innovative programs and enabling states to use vouchers for programs that train adults. Such modest reforms, however, are far outweighed by the continuation of ineffective national programs, the small amount of rigorous control group evaluations, and the unnecessary expansion of federal spending.

Instead of throwing more good money into failing programs, Congress should identify the problems correctly and address them directly. Reforming basic education (for example, through school choice), reducing illegitimacy and strengthening families, reducing crime in the inner cities, and lowering the cost of hiring employees through lower payroll taxes and regulatory reform would strengthen the ability of all Americans to find gainful employment far more effectively than job training programs do.

Improvements in the House and Senate Bills

Despite significant shortcomings, both bills take important steps toward the reform of federal job training programs. They do this by providing for:

• Vouchers. Both bills contain provisions that would allow adults to use vouchers (called individual training accounts in the Senate bill) for training. These vouchers will enable individuals to exercise consumer choice and introduce competition among providers.

• Greater state and local flexibility. Both bills consolidate over 60 existing education, training, and employment assistance programs into three block grants to the states. This consolidation would simplify the existing maze of federal programs that have conflicting rules and administrative structures and offer the states greater flexibility to develop innovative programs. The Senate bill also would expand the Work-Flex program to all states, providing governors with the authority to waive burdensome statutory and regulatory provisions.¹

• Participation of state legislatures. Any funds received by a state under both the Senate and House bills would be subject to appropriation by the state legislatures. This requirement would involve elected state officials more actively in the debate over job training programs.

Key Differences Remain Between the House and Senate Bills

Several key differences between the House and Senate bills remain to be worked out in conference. They include:

• Substance abuse testing. The Senate bill contains a provision that would make sure participants in federally funded job training programs are drug-free; the House bill does not. Most private-sector employers already test job applicants and employees for substance abuse. If a government job training program cannot send prospective private-sector employers applicants that are drug-free, it will have wasted taxpayer money. Moreover, those people who take the responsibility for their lives to be drug-free are the most likely to complete their training programs successfully.

• Separate federal funding of school-to-work programs. The Senate bill contains a provision that would prohibit the use of funds appropriated for programs covered by the bill to be used for the school-to-work program. A bill reforming federal job training programs should not be used as a backdoor way to extend federal funding of the school-to-work program beyond its 2001 sunset date.

• A prohibition on federal control over private, religious, or home schools. At a minimum, the federal government must curb its continued growth in education and job training programs. The Senate bill contains a provision that explicitly would prohibit federal bureaucrats from regulating or controlling private, religious, or home schools through the voucher program in the bill. The provision in the House bill applies only to home schools.

Fundamental Problems Not Addressed
in Either the House or the Senate Bill

There also are two fundamental problems common to both bills. The bills would:

• Maintain ineffective programs. Reforming the maze of federal job training programs must involve more than consolidation. Congress must recognize, first, that most job training programs do not work. The Job Training Partnership Act (JTPA) program already is administered as a block grant program to the states, and it has produced dismal results.² Both the Senate and House bills also would preserve the Job Corps--the government's most expensive job training program--despite serious questions raised about the program by the U.S. General Accounting Office (GAO).³ And both bills would maintain the summer training and employment program despite its disappointing results.⁴

• Fail to determine whether programs work. Sadly, most agencies cannot verify that their programs are working.⁵ A report from then Secretary of Labor Robert B. Reich, for example, admitted, "[T]here are many areas where little thorough and reliable evaluation evidence is available."⁶ The GAO found almost 40 percent of federal job training programs could not provide an accurate count of how many people they served each year, and most programs lacked outcome data.⁷ Less than 50 percent of the programs collected data on whether their participants obtained jobs after completing the program. Only 26 percent collected data on wages earned. Only a handful of programs could tell whether participants would be most likely to achieve the same job placement outcome without the program. Historically, performance measures have been the more common, but unsatisfactory, means of determining whether these programs work. Results from performance measures, particularly negative ones, are too easy to manipulate and rationalize.

What Congress Should Do

Although the House and Senate bills contain some improvement over current law, four changes would strengthen the bills significantly and enhance Congress's ability to hold these very expensive programs accountable in the future for producing real results--or face termination. Specifically, these changes are to:

• Require the elimination of programs that do not work. Congress should require the Secretary of Labor to evaluate the Job Corps rigorously and close the most wasteful and ineffective Job Corps Centers.⁸ The conference report reforming job training programs in the 104th Congress contained a provision calling for a review and closure of the ten worst Job Corps Centers. Congress also should curb the continual increase in funding until it can be shown that existing tax dollars are being spent effectively. Since 1994, spending on the dislocated worker program has increased by 28.0 percent, while the number of permanent job losers has declined by 33.1 percent.⁹

• Increase the number of control group evaluations to help to determine whether programs work. Control group evaluation studies would tell Congress, the states, and taxpayers which programs are working--and which ones are not. Considering the dismal record of the U.S. Department of Labor (DOL) in developing its own performance measures under the Government Performance and Results Act, national and state control group evaluations take on greater importance.¹⁰ Performance measures alone can be manipulated easily by those with an interest in holding on to federal job training money. For example, not once in the DOL's strategic plan are objective control group evaluation studies mentioned, and there is no discussion of closing ineffective programs and shifting resources as a strategy for improving effectiveness. If federal funding for job training is to continue, a substantial number of rigorous control group studies of these programs must be required. Without such studies, taxpayers never will know whether they are funding effective programs or just throwing good money after bad.

• Enable states to privatize employment and training services and truly stress work-first. Privatizing employment and training services would introduce another element of competition among providers and improve the assistance provided to all participants. The primary focus of state programs should be placing people in jobs, including referrals to temporary employment agencies. This should be the only core or essential service that states are required to provide. On-the-job training is the best preparation for a better job. In fact, within JTPA, immediate job placement is one of the few services yielding positive results.¹¹ All other services should be optional for the states. Existing information resources, such as newspaper want ads and media outlets like the Internet, should be used to provide participants with local, state, regional, and national employment opportunities. Large new labor market information systems are not needed.

• Acknowledge the U.S. Constitution enumerates no federal role concerning education and job training. Like the school-to-work program, federal funding for job training programs should be phased out over the next ten years.

Conclusion

Even though billions of dollars are spent on government job training and public assistance programs annually, it is too much, too late, and with too little effect. The funding now being considered would amount to a short-term fix--a "Band-Aid" approach that would do little to address the real reasons that many Americans cannot find work easily. What is required is a fundamental change in the philosophy of why and when job training is needed.

Congress soon will have the opportunity to reform federal job training programs. Even though both the House and Senate bills contain some improvements over current law, four changes would strengthen the bills significantly: closing down programs that do not work, substantially increasing the number of rigorous control group evaluation studies, allowing states to privatize employment and training services, and phasing out federal spending over a ten-year period.

-- Mark Wilson is a former Labor Economist at The Heritage Foundation.

Endnotes

1. The current Work-Flex program is limited to a six-state demonstration.

2. Mark Wilson, "Reforming the Federal Job Training Programs: How Congress Can Avoid Previous Failures," Heritage Foundation F.Y.I. No. 151, September 30, 1997.

3. U.S. General Accounting Office, "Job Corps: High Costs and Mixed Results Raise Questions About Program's Effectiveness," GAO/HEHS-95-180, June 30, 1995.

4. Mark Wilson, "Welfare Reform and Job Training Programs: What Congress Doesn't Know Will Cost Taxpayers Billions," Heritage Foundation F.Y.I. No. 61, August 16, 1995.

5. U.S. General Accounting Office, "Multiple Employment Training Programs--Major Overhaul Needed to Reduce Costs, Streamline the Bureaucracy, and Improve Results," GAO/T-HEHS-95-53, January 10, 1995.

6. "What's Working (and what's not): A Summary of Research on the Economic Impacts of Employment and Training Programs," U.S. Department of Labor, January 1995, p. 64.

7. U.S. General Accounting Office, "Multiple Employment Training Programs--Major Overhaul Needed to Reduce Costs."

8. There are currently 110 Job Corps Centers scattered throughout the United States.

9. Office of Management and Budget, Budget of the United States Government, Appendix, various years. Also U.S. Department of Labor, Bureau of Labor Statistics, Internet site, http://stats.bls.gov/cpsatabs.htm.

10. The grade received by the Department of Labor's strategic plan is alarming. Congress gave the DOL plan only 6.5 points out of a possible 105--the lowest for any department. For a complete copy of the report see "The Results Act: It Matters Now," http://armey.house.gov/results/welcome.htm. See also U.S. General Accounting Office, "The Results Act: Observations on Department of Labor's June 1997 Draft Strategic Plan," GAO/HEHS-97-172R, July 11, 1997.

11. U.S. Department of Labor, Employment and Training Administration, The National JTPA Study: Title II-A Impacts on Earnings and Employment at 18 Months, 1993.