Creating a Virtuous Circle: Workforce Development Policy as a Tool for Improving the Prospects of America’s Unemployed Workers

In the 2013 State of the Union Address, the president stressed the strong bond between quality education and job security. In keeping with the correlation between investing in workers and resultant economic gain, Elisabeth Jacobs outlines the need for job training opportunities for displaced workers, with a focus on the long-term unemployed, and analyzes ideas behind positive economic reinforcement of, what she terms, the “virtuous circle.” This cycle, Jacobs writes, includes investing in a culture of “lifetime learning,” creating more productive and profitable employees, and therefore improving the prospects of America’s unemployed workers and their families. She also addresses the policies currently in place for serving the unemployed, and offers a set of suggestions for future reforms that would better serve the large population of out-of-work individuals who could be expected to benefit from improvements to the nation’s workforce development policy architecture.

As Jacobs notes, the latest jobs reports suggest that the labor market is continuing its slow but steady recovery. For the first time in three years, the unemployment rate is below 8 percent. The private sector added 5.1 million jobs between 2009 and 2012, and nearly a third of that job growth occurred last year alone. Yet unemployment, particularly long-term unemployment, remains at near-crisis levels. While Washington’s attention has shifted away from jobs and onto deficits, 12.3 million people remain unemployed, 4.7 million have been out of work for six months or more, and over 3 million people have been out of work for a year or longer. These remain historically high figures, and suggest that the labor market’s woes continue to inflict real pain on many American workers and their families.

To combat these troubling economic trends, Jacobs offers the following reforms to bolster the career prospects of the unemployed:

• Funding workforce development services

• Developing approaches to mitigate the (perceived) opportunity cost of training for displaced workers

• Shoring up funding for community colleges, the backbone of the nation’s adult education system

• Incentivizing employer-based training for unemployed workers

• Creating meaningful “bridge to work” programs

• Expanding the availability of wage insurance

• Emphasizing effective evaluation to track performance and better understand results

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