How to get Maine’s unemployed back to work

By John Dorrer, Special to the BDN
Posted June 26, 2012, at 4:21 p.m.

As the severity of the recession subsides and the calamity of the financial meltdown fades from the news, it is too easy to forget the hardships and challenges faced by Maine workers and their families.

By conventional measures, there are more than 50,000 Maine workers reported as unemployed and more than 100,000 when you include discouraged and part-time workers.

At least half of unemployed residents reported unemployment spells of 15 weeks or longer, and large numbers of Maine workers covered by unemployment insurance exhausted their benefits between 2009 and 2011.

A weak economic recovery at home along with global turbulence is dimming the prospects for many to return to work anytime soon. As a result, the unemployed find themselves with rapidly eroding skills and experience and hence lessened market value.

For recent graduates, labor markets have been unwelcoming for four years now. Their rates of unemployment remain double that of the general population. For those fortunate in landing jobs, initial employment experiences are often not commensurate with training and degrees received.

For postsecondary graduates and dropouts alike, mounting student debts impose additional burdens. As entry-level workers, they now dedicate a growing share of diminished salary and earnings to debt servicing.

Maine teens are reporting less part-time and summer employment and thus fewer young people are gaining critical work experience as part of charting effective and informed career paths. There are serious and unappreciated consequences for these developments with few proposals for action.

The full impacts and hardships of job loss and income inadequacy in Maine largely go undocumented. Thousands move in and out of these statistical tallies over time or are members of households headed by job losers.

Nor do these numbers account for the loss of wealth experienced by many as retirement accounts were significantly reduced and real estate assets devalued.

Over the long term, these setbacks for Maine workers have been accompanied by declining real wages, income stagnation and lackluster job creation.

There certainly are signs of structural mismatch in the labor market where the skills of people looking for work do not match those of job openings. Analysis confirms these structural challenges. A review of job postings shows that Maine employers place a high value on business environment skills, communication, coordination and problem-solving skills.

Contemporary workplaces demand these new skills from all workers as more complex interactions and transactions define work. These new skills are the currency of the labor market.

While some Maine employers are frustrated by not being able to fill critical positions, many workers without necessary and current skills and related work experience are being left behind. Unemployment is most severe, for example, among older, low-skilled and undereducated workers. Their prospects for re-employment are poor at best.

On the other hand, Maine’s advanced manufacturing sector has complained of chronic shortages in attracting entry-level workers and skilled technicians.

So do we simply let the invisible hand do its work and leave it to competitive forces to fix our labor markets and human capital challenges? Will it be sufficient to eliminate “onerous, job-killing regulations” and “cut the taxes for the job creators,” as is the prevailing policy preference at the state and federal level?

History and results suggest otherwise. Our human capital achievements and periods of sustained economic growth have been supported by landmark legislation and forward-looking policies. The Morrill Land Grant Act (1862), the Smith- Hughes Act (1917), The GI Bill (1944), National Defense Education Act (1958), Higher Education Act (1958) and the Manpower Development and Training Act (1962) all contributed to repositioning American workers in large numbers through periods of bold, prolonged economic restructuring.

The reauthorization of the Workforce Investment Act of 1998, a critical answer to these challenging question, remains, however, bogged down in legislative wrangling and debates about the locus of governance as funds are being cut.

We need coordinated human capital strategies to prepare for the next wave of economic growth, including:

• Redesigned federal grant and loan programs to encourage workers at risk of job loss to enroll in programs of study yielding marketable skills and credentials.

• Provisions for more favorable tax treatment for workers and students who invest in skills and credentials to qualify for high-demand jobs.

• More favorable borrowing terms and incentives for workers and students pursuing qualifications in science, technology, engineering and math related occupations.

• Making more effective use of bond issues to establish and support human capital investment funds at the state level aligned with economic development strategies.

•Requiring unemployment insurance claimants to upgrade skills and acquire marketable credentials if they are laid off from dying occupations and industries through more effective coordination of benefits payments and training subsidies.

• Making serious investments in building publicly accessible career and re-employment centers that are funded through performance payments tied to job placement outcomes.

We need strong and decisive leadership from policymakers at both the state and federal level if we are to engineer prosperity as our forbearers have done for us.

John Dorrer is former acting commissioner and director of the Center for Workforce Research and Information at the Maine Department of Labor. He now works on issues of work force development with Jobs for the Future in Boston. He is also a member of the Maine Regional Network, part of the Scholars Strategy Network, which brings together scholars across the country to address public challenges and their policy implications. Members’ columns appear in the BDN every other week.

http://bangordailynews.com/2012/06/26/opinion/how-to-get-maines-unemployed-back-to-work/ printed on August 23, 2014