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Job Retraining Or False Hope?

Obama recently pledged $8 billion to help community colleges collaborate with local businesses with the end-goal of providing job skills to two million Americans. Funding job-training for the unemployed is a politically savvy move, with retraining being favored by both Republicans and Democrats. However, the Washington Post’s Amy Goldstein questions whether that tactic will bear the fruits it promises.

Despite the recent overall unemployment rate falling to 8.3 percent, the lowest since 2009, Goldstein points out that the long-term unemployment rate is higher than its ever been since the government began to keep track during World War II.

In an evaluation of the Workforce Investment Act conducted by the Labor Department, they found that poor adults who had gone to school with the program’s help had an increase in earnings compared to similarly poor adults who did not.

However, Goldstein reported that in the short term among dislocated workers additional education did not translate into better pay, nor did it increase the students’ chance of getting re-employed.

This runs in counter to the common belief that dislocated workers can find their way back into the labor market with the benefit of retraining and requalification. One study found that retrained dislocated workers were four percent more likely to find a job than those who didn’t take further education, and earned $1,200 more per year.

“It’s not like it’s complete snake oil,” Louis Jacobson—an economic researcher who has examined the question— told Goldstein. “If you think of community colleges as being a tool to higher earnings, they can do a good job. But that doesn’t mean they always do.”