Millions of laid-off American workers need new careers, yet the United States gives much less assistance to job seekers than most other countries.
Community colleges could bridge the gap, partnering with employers and innovators in the private sector to train workers for careers that meet local needs and pay middle-class wages.
But they will be unable to do so unless Congress provides financial relief to state and local governments. When they are needed most, these two-year public institutions are themselves in desperate financial straits.
History is repeating itself. In the last recession a decade ago, lower state tax revenue and budget cuts left community colleges unable to meet demand.
Unemployed job seekers turned to for-profit colleges, often with disastrous results. Community colleges have seen budget cuts and enrollment declines this fall, while for-profit online training is growing rapidly again.
The time for action is now. While the U.S. unemployment rate has fallen from its April peak, an increasing share of job losses are permanent rather than temporary. In August, 3.4 million workers lost their jobs for good, compared with only 2 million in April.
Losing a job is almost always harmful, but the economic impact is far more severe when it occurs during a recession. One study found that job loss during a period of high unemployment led to 20% lower earnings more than a decade later, and a cumulative loss of nearly three years of full-time earnings. This is because workers laid off during recessions take much longer to find a new full-time job.
For this reason, job search assistance and training provide an important safety net for displaced workers, yet the United States spends a paltry 0.1% of gross domestic product on so-called active labor market policies, less than one-fifth the average of other developed nations. This is unfortunate, because a recent review of more than 200 studies finds that job training has large, long-term effects on employment, especially during recessions.
Public job training programs should, therefore, increase activity during downturns, not the opposite. Community-college programs were found in the studies to boost income the most because they were well respected and cost less.
In the last recession, for-profit colleges were generally a bad deal for students. Graduates had lower earnings, were less frequently employed and had greater student debt than similar students who attended public colleges.
Yet for-profit schools tend to react faster to employment trends, for example medical technician or computer science programs. Community colleges — and the governments that fund them — should be the main place to train America’s workers, because they are mission-oriented and well trusted.
Broward College in Florida offers one promising model. It has built industry certifications into its curriculum, along with internships and other work-based learning opportunities. This program was started in 2009 with stimulus funding from the U.S. Department of Labor’s Trade Adjustment Assistance Community College and Career Training program.
A scaled-up version of that program could stimulate local economies that have been hit hardest by the pandemic.
Deming, who wrote this piece for the New York Times, is a professor and the director of the Malcolm Wiener Center for Social Policy at the Harvard Kennedy School.