Elaine Santiago lost her job in July 2020 after 23 years at one of the nation’s largest accounting firms. “It was a mass layoff,” she said. “ It was a shock.” Eight months later, Santiago hasn’t found a full-time position. She’s pulled together a collection of consulting gigs in marketing (what she had done for so many years) as well as publicity. She’s also substitute teaching at a public school near her home in New Jersey. “It’s been very difficult,” said Santiago, a single mom in her 50s.
Workers like Santiago will welcome the short-term help included in the $1.9 trillion pandemic relief bill that is all but certain to be signed this week by President Joe Biden. In addition to $1,400 stimulus checks for most Americans, the American Rescue Plan extends enhanced unemployment benefits, due to expire on March 14, and provides more than $40 billion for assistance with food, rent and mortgage payments. This vital package is an admirable first win for the Biden presidency.
But there’s an important omission in the plan: the lack of new investment in job training and career help for workers like Santiago. For millions of Americans whose jobs may never return, the Covid package is a balm, not a cure.
Earlier pandemic relief packages have included just $345 million on job training and other assistance for displaced workers, according to the House Committee on Education and Labor, compared to nearly $6 billion appropriated during the Great Recession. The American Rescue Plan provides no new money for job training and career services for unemployed Americans, despite the efforts of a group of Democrats led by House Education and Labor Committee Chairman Rep. Bobby Scott (D-Va.).
“So far the focus has only been on relief and not how to reconnect people to jobs,” said Annelies Goger, David M. Rubinstein Fellow at the Brookings Institution. “It’s very worrying.”
While the U.S. unemployment rate is seemingly in decline -from a peak of 14.8 percent in April to 6.2 percent in February – bad news lurks beneath these hopeful numbers. That’s because the official unemployment rate counts only those who are actively looking for work – not those who’ve dropped out of the labor force. The share of Americans participating in the workforce – 61.4 percent – is at its lowest since the mid-1970s, and among women, it’s at crisis levels. Among the 10.0 million Americans who are officially unemployed – 4.1 million people have been out of work for longer than six months. Another 6.9 million people not actively looking for work say they want a job, while an additional 522,000 Americans are what the government calls “discouraged workers” who believe jobs aren’t available. Just 15 percent of unemployed Americans are “very optimistic” about finding a job soon, according to the Pew Research Center.
This exodus from the labor force is why the Federal Reserve says the “real” unemployment rate is closer to 10 percent. “We are still very far from a strong labor market whose benefits are broadly shared,” as Federal Reserve Chairman Jerome Powell said in February remarks to the Economic Club of New York.
Some might argue that jobs lost in sectors like hospitality, food service, and travel will rebound post-pandemic, but government estimates say otherwise. Job losses for as many as 3.5 million Americans are permanent, according to Bureau of Labor Statistics (BLS) data. Covid has also accelerated the trend toward automation, which means even more job loss, especially among lower-skilled positions that are particularly susceptible to mechanization. A recent World Economic Forum survey found that 43 percent of employers worldwide expect to reduce their workforce as they automate. By 2025, the study found, “85 million jobs may be displaced by a shift in the division of labour between humans and machines.”
Forward-thinking and resilient as Americans typically are, workers have already sensed these fundamental shifts in the job market. As many as 66 percent of unemployed Americans have “seriously considered” changing their careers, according to Pew, while a February 2020 survey by the SkillUp Coalition and the Charles Koch Foundation finds that more than half of workers under 40 believe they’ll need new skills. Ultimately, many Americans may find they have no choice. Even before the pandemic, Americans were switching jobs and careers at an accelerating pace. In 1983, nearly two-thirds of men in their 50s had worked for the same employer for 10 years; in 2018, that share was less than half. For all workers today, according to BLS, median job tenure is just 4.1 years.
Unfortunately, the federal government hasn’t kept up. The current federal workforce system dates to a time when many workers made their careers at a single employer and globalization had not yet caused mass disruption.
As a result, the government provides Americans with few resources for reinventing themselves effectively.
For one thing, federal training programs need streamlining and modernization. Anyone looking to take advantage of what’s available must navigate a welter of 43 separate programs run through a confusing patchwork of federal, state and local agencies. Federal “one-stop” job centers nominally bring these efforts together under one roof, but many programs, like Trade Adjustment Assistance (TAA), are narrowly targeted to specific sets of workers, limiting their reach and creating red tape. “There’s a lot of resources wasted trying to figure out who’s eligible for what,” said Brookings’ Goger. “When I talk to folks at job centers, people tell me they spend half their time on compliance.” In fiscal 2018, the Department of Labor reported that while 76,902 workers were eligible for TAA help, fewer than half actually received program benefits and services.
Workers also don’t have ready access to information about the kinds of jobs or educational opportunities they should pursue. “The data are out there, but it’s not very actionable,” says Marni Baker Stein, Provost and Chief Academic Officer at the online nonprofit Western Governors University, which caters largely to working adults. “What are the skills in demand? What credentials are in demand? What are the pathways to the skills and credentials to build a career, where are they located, and how do I find them?”
Affording training and education is another obstacle. While the federal government subsidizes job training for low-income adults and the limited numbers who qualify for programs like TAA, mid-career adults get no help. Elaine Santiago said that’s why she opted out of pursuing an online certificate program in nonprofit fundraising at Boston University. “I think it was about $1900 … it cost too much money,” she said.
Pell Grants for higher education are only available for students enrolled at least part-time and can’t be used for short-term training programs. Workers can also lose unemployment benefits if they enroll in school or training programs that don’t fit strict limitations. Virginia, for example, allows the receipt of benefits only if schooling “takes place during evening hours, only on weekends, or is self-directed.” While the purpose of requirements like these is to ensure that people make themselves available to work, it also means workers can’t afford to get skills that could lead to better jobs. The lack of options could be one reason that for-profit colleges are once again seeing surging enrollments, raising concerns of spiraling student debt.
If Biden wants a durable recovery, he’s going to have to get Americans displaced by the pandemic back to work. In the meantime, people like Elaine Santiago are hoping for a lucky break. “It gets pretty hard, and some days are really bad,” said Santiago, who says she’s applied to about 230 jobs so far. “But I’ve gotten these gigs so I consider myself one of the fortunate ones. There’s a lot of tough stories out there.”