Retraining Isn't the Answer

Forgive me for going anecdotal for a moment.  In 1995, having already lost two jobs to the recession and my affinity for parlous startups, I took a job as an administrative assistant at a non-profit.  This had its upsides--the work was light enough for me to complete the worst novel ever written in the English language during my spare time.  But it was tedious and offered few prospects for advancement.  Like most non-profits, this one had a flat management structure:  there were senior men who had been hired in from outside, and junior women who did their typing and filing.

It was not my cup of tea.  On the other hand, I did like to eat regularly, and there were surprisingly few more lucrative opportunities for recently minted English majors.

Thus did I make one of the best and worst decisions in my life:  I signed up for a course to become a CNE--a Certified Netware Engineer.  I'd done some light network administration at the startup, and I thought I'd like to make a career of it.

The IT types among my readers are cringing.  No one gets hired because they took some low-rent course and passed a computer adaptive test.  Indeed, back in the day, hearing someone officiously announce that "I'm a CNE" was a warning sign not to let them anywhere near your network.  It's like having a job applicant hand over their eighth-grade graduation certificate.  Of course, everyone qualified has one to stick on the resume, but they don't talk about it, because it's not even a basic qualification.  Anyone whose main qualification is a CNE knows just enough to be extremely dangerous.

But I didn't know that at the time.  I financed a $3,500 course on credit cards, and dutifully trooped off to class four evenings a week.  I passed all the tests.  Then I found out what any professional could have told me:  without actual work experience, no one would hire me.

My classmates were all in the same boat.  Lik me, they had found themselves in career dead-ends.  Unlike me, they weren't 22-year-olds who could live at home.  They were people who had been made redundant by technology or competition:  payroll machine operators, verizon line workers, office managers, various salesmen, secretaries who could type 100 wpm in an era when bosses were increasingly doing their own typing.

I got super lucky.  The place where I'd trained was doing a corporate training startup, and they needed someone who could a) type b) work for low pay and c) futz with the network.  The startup lasted for three months, then, like my jobs before, shut down.  But now I had job experience.  It was the tech bubble.  I was laid off for less than twelve hours:  I found out at ten, called an employment agency at 10:45, went on my first interview at 1:00, had two job offers by that evening, accepted one on Friday, and started my new job on Tuesday at a 30% bump in salary.

The rest of my class, nine months later, was mostly still looking.  One other guy had found a job in technology.  The others had wasted $3,500 and five months.

This is basically typical of job retraining.  Students are overoptimistic.  Schools encourage them in their folly while collecting checks.  And employers demand real-world experience that training can't give.  It works best on people near entry-level, and those with complementary skills.  But that rarely describes the people most in need of retraining, like displaced autoworkers who have spent decades at semi-skilled labor no longer in demand.

Government programs do no better, possibly because they can't run trucking schools and electrician training programs themselves, so they end up contracting out to private parties like the school I attended (which did a lot of BOCES training for the state of New York) or hybrid institutions like community colleges.  Educational output is hard to measure:  much depends on the student themselves.  So we tend to measure inputs instead.  Or we measure outputs--"are they employed six months after graduation?"--without controlling for quality of the jobs. 

So I'm not surprised to find out that when you actually do try to measure the impact on student lives, government training programs have a dismal record.  This comports with our experience in the 1980s, when we tried to retrain people out of the rust belt, and the 1990s, when we tried to do the same for people displaced by trade.  Yet whenever we experience a dislocating crisis like the auto collapse, all the pundits are out again calling for job retraining.  They're not stupid or disingenuous; they just don't have any better answer for a very tough question.

But given my own experience, it strikes me that we might do better by targeting employment--offering employers a subsidy for hiring displaced workers into a job that pays $10 or more an hour.  For skilled work, you might need to pair this with training.  But that would give the workers what they actually need--a job on the resume and a new skill--rather than a useless diploma.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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