July 20, 2010 | Read Time: 4 minutes
Unemployed and low-skilled workers can significantly bolster their earning power by participating in job-training programs that are developed in collaboration with specific industries, like construction and health care, a new report suggests.
The report, based on a study of sector-based training programs in three cities, found that participants in the programs earned an average of 29 percent more than a control group—an additional $337 per month—in the year after they began the training. The sector-based trainees also worked more hours and were more likely to obtain a job with benefits than the control group, according to the report.
The report, by Public/Private Ventures, a nonprofit organization, may add to the rapid adoption of sector-related job training. The National Skills Coalition, a Washington group that advocates for greater investment in work-force education, says that such partnerships are already active in 40 states, and the National Fund for Workforce Solutions, a collaboration of 200 foundations, emphasizes sector-based training at its sites in 23 cities.
U.S. Rep. David Loebsack, a Democrat from Iowa, recently cited early findings from the data on which the new report is based in arguing for passage of legislation that would expand the Workforce Investment Act to help states and local jurisdictions create jobs partnerships around various professions. The legislation passed the House of Representatives on Monday and now moves to the Senate.
Rigorous Screening
While the new study focuses on three relatively small programs, it identifies five common elements that likely contributed to the success of the programs, including adaptability, a strong link to employers, and a rigorous screening process for participants.
“It’s very easy for someone to say, ‘We have a sectoral-employment strategy,’ particularly when more money may be coming from Washington,” says Nadya K. Shmavonian, the president of Public/Private Ventures. “We really wanted to make sure we were doing this with our eyes wide open, to help scale the positive findings in the study.”
The study tracked sector-based training programs in three cities. The Wisconsin Regional Training Partnership, an association of employers and unions in Milwaukee, provided short-term training in construction, manufacturing, and health care, primarily to African-American men and women. Jewish Vocational Service of Greater Boston provided training in medical billing and accounting to a diverse group that included refugees, immigrants, and welfare recipients. Per Scholas, a charity in New York, provided training in maintenance of computer equipment and networks to a group that was mostly men, many of whom were foreign born.
The study is the first to look at sector-specific training programs through a “random-assignment” approach. The nearly 1,300 people who had applied for one of the three programs and met its eligibility criteria were divided into two groups—half were randomly selected to participate, and the other half, the control group, were not.
On average, the program participants had worked only seven months in the year prior to the training, earning less than $10,000. About 40 percent of them previously had been incarcerated.
Earnings Differed
The sector-related programs had a positive impact on earnings for all the subgroups that the study examined, including men and women, African Americans, Latinos, immigrants, people who had been formerly incarcerated, and young adults.
But the programs were not uniformly successful in raising earnings. For example, the young adults (between 18 and 26) who participated in programs in Boston and New York saw earnings gains compared to the control group, but the young adults in the Wisconsin programs did not. The Wisconsin programs were shorter—generally lasting just two to eight weeks—compared with three to five months for the other two programs.
Sheila M. Maguire, vice president of labor-market initiatives at Public/Private Ventures, and an author of the report, speculates that the support services for the younger workers may not have been as strong at the Wisconsin program.
Ms. Maguire says a common element among the three programs is their nimbleness and entrepreneurial spirit. In addition to identifying employers’ needs, and screening for suitable program participants, the organizations must have the fund-raising prowess to find money for the training and then hire the staff needed to provide the training.
“That brokering role is an absolutely essential part of making these programs work,” Ms. Maguire says.
The study, “Tuning In to Local Labor Markets: Findings From the Sectoral Employment Impact Study,” was supported by a grant from the Charles Stewart Mott Foundation. The study is available on the Public/Private Ventures Web site.
