Anti-Recession Training

As long as we provide unemployment insurance to people when they don’t have jobs, reasons The Atlantic’s Derek Thompson, why not also provide them with some money for retraining? Maybe then they can make more money once they eventually get jobs.

This comes from a rather surprising, and disturbing, point made by Motoko Rich in the New York Times last week: of all the people who lost their jobs in the Great Recession only 7 percent have subsequently obtained jobs with the same or better salaries.

As Thompson writes:

How do we fix this, besides sitting back and waiting for the economy to grow again? Pay laid-off workers to learn new skills. It’s a bit like unemployment insurance, which hands money to the jobless provided that they look for work, but for retraining.

The Hamilton Project at the Brookings Institution looked into this and proposed giving the unemployed money for retraining and living expenses.

It certainly looks promising, and it resembles a policy proposed by Jamie Merisotis and Stan Jones in this magazine last Spring, but the proposal might need a little work.

Part of the problem is that while it’s true people with more education make more money, it’s not entirely clear that going back to “gain more skills” results in dramatically better employment prospects. The jobs may simply not be out there now. Indeed, that’s what a recession is.

While there’s probably nothing wrong with a little additional training, there’s little evidence presented here that laid off people who get more training actually manage to then get jobs that are equal or better than the ones they lost due to the recession.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer