Posts Tagged ‘workforce and unemployment’

“The sheer depth of the crisis. . . .” Q&A with Paul Posner

May 6, 2010

Unlike all-too-many observers, Paul Posner hasn’t been looking at the stimulus act in isolation, but in a broader historical framework that we think is illuminating. His insight comes from first-hand experience with past stimulus efforts — first as director of federal programs for the New York City Office of Management and Budget in the mid 1970’s when federal grants helped hard pressed cities deal with the fall out from the oil crisis and unemployment of that era, then at GAO where he served as Director of Federal Budget and Intergovernmental Relations. Posner is currently director of the Master’s in Public Administration program at George Mason University .

How does today's stimulus act compare to the New Deal?

Following is a Q&A with him:

Q. The Congressional Budget Office reports that the stimulus added 2.1 percentage points to GDP growth and created or saved between 800,000 and 2.4 million jobs in its first year.Yet the majority of Americans are apparently against it. How does this reaction compare to the way the public greeted Roosevelt’s New Deal?

PP:  The New Deal stimulus had widespread popular acclaim. Its job creation programs – The Works Progress Administration, Public Works Administration, the Civilian Conservation Corps – enjoyed tremendous popular support, as did President Franklin Roosevelt. Each of these programs developed a strong political following.

Q. We’ve been going through a recession – maybe even a Great Recession. But was the far more extreme unemployment in the 1930s part of the reason the public bought in?

PP: Yes. The sheer depth of crisis characterizing the New Deal made institutional innovations politically possible that were unthinkable before. That generated bipartisan support in the first few years of FDR’s term. The economy grew by nine percentage points a year in the first years of the New Deal, reducing unemployment from 25 percent to 15 percent. Each of the programs developed a strong political following from grateful clients who identified them as a safe harbor in a horrible economic storm.

Q. How different was the political climate?

PP: FDR had enormous personal popularity that translated into support from an overwhelmingly Democratic Congress. But the Republicans of that day, many of whom were progressives, grudgingly voted for many New Deal programs as well. In this administration, no House Republican voted for the initial stimulus and both parties continue to escalate their rhetoric as the November elections approach.

Q. Did President Roosevelt have more solid support from his own party, too?

PP:.  Yes, but the political situation itself has changed. In those days, a popular president had long coattails. Presidents were much more able to carry their own parties to victory and congressional allies took their policy cues from the person who lifted them into office. Seventy years ago most of the electorate voted a straight party ticket.

By contrast, President Obama and most postwar presidents have to cobble together majorities in a more perplexing, challenging party system. Today, increasing shares of the electorate are independents who are prone to split their vote between the President’s own party, Congress and other offices on the ballot. Members of Congress, even in the President’s own party, understand this and keep their distance when the President’s policies might jeopardize their own unique local political coalitions. It’s also more difficult for presidents to find allies on the other side of the aisle. Members of Congress are increasingly influenced not by the median general election voter but the median primary voter and that pulls them away from the center toward the extremes of  the ideological spectrum.

Q. The relationship between the federal government and state or local governments was much different in the past as well. What impact has that had?

PP: Unlike today, the important job programs of the New Deal were direct centralized federal programs. Grateful clients of the programs had trained their hopes on the White House for deliverance. The President reaped considerable short term political rewards. Not only was he able to take credit for the millions of jobs produced, but he was also able to steer rewards to political allies and punish his opponents.

By contrast, the current stimulus is delivered using a highly decentralized structure. The expansion of national policy over the past 65 years has not been carried out by federal bureaucrats, but by a wide range of third parties, mostly state and local officials. In just the first quarter of the program, there were more than 130,000 state and local governments, nonprofits and private firms that received stimulus grants contracts and loans.

Q. How does that affect the political impact?

PP: This system of what I call “third party governance” raises political challenges. The President’s ability to deliver rests on the shoulders of thousands of non-federal implementers, all with different priorities and capabilities. Most critically, the responsibility for the outcome of the programs is highly dispersed and there’s no clear line of sight for the public to attribute credit to the President, particularly since the Governor, mayor and other political figures are likely to be competing for public approbation.

In addition, the strategy for rapid deployment of the stimulus dollars carried distinct political downsides for President Obama. His administration used existing programs and highly professionalized administrative networks to deliver the dollars. That avoided start up problems, but it has made it difficult for the public to differentiate the effects of the stimulus from the day to day effects of existing programs.

Q. Are there other ways that this effort to stimulate the economy has differed from attempts in the past?

PP: This one was enacted remarkably quickly. The 2009 stimulus became law only 14 months after the recession officially began in December 2007. In the past, 27 months have gone by, on average, between the beginning of a recession and the enactment of stimulus initiatives.

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Measures for Workforce Training . . . A Minnesota Audit’s Critique

April 22, 2010

Last week, the Department of Labor announced the availability of $90 million in added Recovery Act funding for on-the-job training opportunities.  “States and their partners will use this funding to create on-the-job training experiences, which will improve the employment prospects of dislocated workers in areas that have been hard hit by the recent economic downturn,” said Secretary of Labor Hilda Solis.

Secretary of Labor Hilda Solis

It seems to us that there needs to be a solid system of measurement that will allow state and federal observers to see the impact this money has. Maybe one has already been developed for this newly revitalized program.

But we sure hope it is better than the federal measures that are currently in place for tracking the success of more traditional workforce training programs. The latter were recently panned in a Minnesota legislative audit, which cited problems that will be very familiar  to long-term government observers who recognize some of the same measurement headaches that afflicted the Job Training Partnership Act back in the 1980s.

The audit mentioned four major issues.

1.       Federal measures allow programs to be selective in whom they help. As the audit says “The measures do not distinguish among clients with different capabilities.” If a workforce training program places a former inmate with little schooling, the accomplishment is viewed as having the same value as  placing a skilled person with a college degree. One program director told the audit crew that her agency “avoided enrolling individuals in the adult program if they appeared unlikely to succeed.”

2.       Gaming program data is easy. The Minnesota audit found that workforce training programs routinely timed the entrance and exit from programs to generate the most favorable results. The fact that there are no rules for establishing when someone enters or exits a program makes it impossible to accurately compare different entities. (If a person gets a job, some service areas wait until the last day of the quarter to decide to exit the person from the program. If he still has a job on the last day of the quarter, the program can count on a record of employment the subsequent quarter – which starts the next day.)

3.       Measurement and evaluation continues to focus on the short-term. There is currently no requirement to look at the impact of the workforce training programs beyond a nine-month period. In our minds, the real goal of training programs is to keep people in jobs, not just get them into jobs in the first place.

4.       There are no requirements to test the impact of programs by comparing individuals who receive services with those who have similar characteristics but didn’t receive services.

The Government Accountability Office has commented on these issues frequently in the past and we know the Department of Labor has tried to make improvements in its approach. But it’s clear from this audit, that there’s a great distance that still needs to be traveled to arrive at a useful way of evaluating workforce training.  In the Minnesota legislative audit, at least one program director characterized federal measurement requirements as “one of the biggest impediments to the effective delivery of workforce programs. “

Youth shall be served. . .

March 22, 2010

The Recovery Act included about $1.2 billion to fund jobs for disadvantaged young people, with a healthy portion going to the 2009 Summer Employment Program. The numbers are impressive. About 250,000 youths received job assistance through the pre-existing Workforce Investment Act in 2008. In 2009, with the stimulus dollars, that number grew to 355,000, of which about 88 percent participated during the summer.

A new evaluation of the summer job program by Mathematica Policy Research paints a generally positive picture of the program and includes a number of lessons learned. Under a contract with the Department of Labor, Mathematica interviewed young people, program staff and employers  and sought information about a variety of topics including the two performance measures required by the Recovery Act and the Department of Labor: an assessment of whether young people achieved a “work readiness skill goal”  at the end of their experience and data on whether they completed their summer employment.  Results for both measures are provided for the fifty states in two appendices at the end of the 148-page report.

The stimulus-dollar-funded Summer Youth Initiative operated by the Wise Workforce Center in Virginia

Some of the most interesting information can be found in the variation of completion rates among the states. While 82 percent of young people completed their summer employment nationally, 11 states had completion rates higher than 90 percent:  Alaska, Connecticut, Florida, Georgia, Kentucky, Maryland, Massachusetts, Oregon, Vermont, Washington and West Virginia. At the low end, seven states had completion rates of less than 70 percent: Delaware, Maine, Montana, New Jersey, New Mexico, North Dakota and Utah. As far as we can see, this data, alone, is fodder for some really interesting explorations as to why young people in some states seemed to stick with their jobs better than others.

The information on work readiness, unfortunately, must be regarded with some caution because a lot of freedom was given to entities in determining how to make this assessment.  In fact, one of the recommendations from Mathematica was that the Employment and Training Administration should provide more guidance on how to measure this in a way that ensures “the use of a valid measure across all local areas.” We’re grateful to Mathematica for pointing this out. It’s long been a frustration of ours to see how much national data is skewed by the fact that it is self-reported, without consistency or sufficient guidance.

Still, even though the comparative state information needs to be viewed with caution, the results bear consideration:

Nationally, 75 percent of the young people who participated in the program over the summer attained a work readiness skill goal, but the variation among states was also great here.  Six states reported that this goal was accomplished by more than 90 percent of participants: Arkansas, Georgia, Maryland, New Hampshire, Rhode Island and Wisconsin. Twelve states reported results under 70 percent:  Delaware, Kansas, Michigan, Montana, New jersey (with a startling 21 percent), North Carolina, North Dakota, Oklahoma, Oregon , Utah, Vermont and Wyoming.

For what it’s worth, we note that only two states made it to the very top tier of both lists: Georgia and Maryland.