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In this Feb. 14, 2012 photo, people look for work at Job Train employment center in Menlo Park, Calif.

Paul Sakuma, ASSOCIATED PRESS - AP

Federal retraining program often fails, analysis finds

  • Article by: TIMOTHY WILLIAMS
  • New York Times
  • August 17, 2014 - 11:27 PM

– When the financial crisis crippled the construction industry seven years ago, Joe DeGrella’s contracting company failed, leaving him looking for what he hoped would be the last job he would ever need.

He took each step in line with the advice of the federal government: He met with an unemployment counselor who provided him with a list of job titles the Labor Department determined to be in high demand, he picked a government-certified job-training course, and he received a federal retraining grant.

Millions of unemployed Americans like DeGrella have trained for new careers as part of the Workforce Investment Act, a $3.1 billion federal program, but many haven’t found the promised jobs.

In an unusual act of bipartisanship, the program was reauthorized by Congress last month with little public discussion about its effectiveness.

An extensive analysis of the program by the New York Times shows that many graduates wind up significantly worse off than when they started — mired in unemployment and debt from training for positions that do not exist, and they end up working elsewhere for minimum wage.

In 2009, DeGrella began a course at Daymar College — a for-profit vocational institute in Louisville — to become a cardiology technician. Daymar officials told him he would have a well-paying job within weeks of graduation.

But after about two years of studying cardiovascular physiology and the mechanics of electrocardiograms, DeGrella, now 57, found himself jobless and $20,000 in debt. He moved into his sister’s basement and now works at an AutoZone.

Little oversight

Split between federal and state governments — federal officials dispense the money and states license the training — the initiative lacks rigorous oversight by either. It includes institutions that require thousands of hours of instruction and charge more than the most elite private colleges. Some courses are offered at for-profit colleges that have committed fraud in their search for federal funding. This includes Corinthian Colleges Inc., which reached an agreement last month with the federal Education Department to shut down or sell many of its campuses.

The Times examination, based on state and federal documents, school and court records, and interviews, shows that some of the retraining institutions advertise graduation and job-placement rates that often do not hold up to scrutiny.

The idea of dividing responsibility between federal and state officials was to give local and state authorities more power in helping the unemployed in their areas. But the unemployed who sign up for training are often left to navigate a bureaucratic maze with almost no guidance.

To avoid any appearance of favoritism, federal job counselors are not allowed to recommend schools to job seekers, leaving many of the unemployed to unwittingly select institutions that are expensive, have a history of legal trouble or are academically substandard.

When the newly unemployed seek government benefits, their skills and education are assessed at a federal employment office. If there are too few jobs in their current field, they are selected for retraining through the Workforce Investment Act. They choose from among dozens of professions, with each successful applicant receiving a stipend of up to $3,000 a year to pay for the training. The rest typically comes from federal grants and loans.

While government officials defend the retraining program as useful — and clearly it does lead some unemployed people to new careers — neither federal nor state agencies collect data on the number of people who finish job training or earn professional certificates.

As a result, officials acknowledge that they are unable to determine how many students the program has helped find appropriate jobs during the past 15 years.

The law was enacted in 1998 and expanded in 2009 as part of the federal economic stimulus package. As the economy has improved — which has led more of the long-term unemployed to try to re-enter the labor market — training and apprenticeships have become a central component of the Obama administration’s plan to match the unemployed with job openings. About 21 million jobless people entered retraining in 2012.

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